Slip Op. 06-152
UNI TED STAT ES COUR T OF I NTERNATI ONAL T RADE

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__ : TEM BEC , INC., : : Plaintiff, : : and : : GOVERNMENT OF CANADA, : GO UV ERN EM ENT DU QU EBE C, : GOVERNMENT OF ONTARI O, : GOVERNMENT OF ALB ERTA, : GOVERNMENT OF BRI TI SH : COLUMBI A, CANADI AN LUMBER : TR AD E A LLIA NC E, and AB ITIB I- : Before: Jane A. Restani, Chief Judge, CON SOLIDA TED , INC., : Judit h M. Barzil ay & Ri chard K . Eat on, : Judges Plaintiff-I

ntervenors, :

: Consol. Court No. 05-00028 v. : : UN ITED S TAT ES, : : Defen dant, : : and : : COALITI ON FOR FAIR LUMBER : IMPORTS EXECUTI VE COMMITTEE, : : Defendant-I ntervenor. :

_________________

_________________

__ : OPINI ON
Decided : Octo ber 13, 2006 [Cash deposits o n entries of so ftwoo d lum ber from Canad a, the liquidation of wh ich is suspended, refunded to Plaintiff s.]

Baker & H ostetler, LLP ( Elliot Jay Feldman , Bry an Jay B ro wn , John Burke , Rob ert Lewis LaFran kie ) for Plaintiff

Tembec, Inc.Consol. Court No. 05-00028 Page 2

1 

### The parties and the court use the term “implement” to indicate a ction taken by the United States Department of Commerce to “give domestic legal effect” to a determination by Commerce or the United States Inter national Trade Commission. See Tembec I , 30 CIT at __, 441 F. Supp. 2d at 1310, n.10. Arnold & Porter, LLP ( MichaelTod Shor ) for Plaintiff -Intervenor Abitibi-Consolidated, Inc. Steptoe & Johnso n, LLP ( Mark A stley Moran , Alice Alexand ra Kipel , Sheldon E. Hochberg , Michael Thomas Gershberg ) for Plai ntif f-Inter venor Cana dian Lumber Trade Alli ance Exec utiv e Com mittee.
Arent Fox Kintner Plotkin & Kahn, PLLC ( Matthew J. Clark , Keit h Richa rd Marino ) for Plaintiff-I

ntervenor Go uvernem ent du Queb ec. Hogan & Hartson, LLP ( Mar k S. M cCon nell , Craig A nderso n Lew is , Harold D een Kaplan , Jonathan Tho mas Stoel ) for Plai ntif f-Inter venor Gover

nment of Ontari o. Akin, G ump, S trauss, Hauer & Feld, LLP ( Spen cer Stew art Griffith , Bernd G . Janzen , Anne K. Cusick , Jason Alexander Park ) for Plaintiff -Intervenor Governm ent of British Columbia. Weil, Go tshal & Manges, LLP ( M. Jean Ander son , Amy Tross Dixon , Gregory Hu sisian , Jahna Hartw ig , John M ichael Ryan , J. Sloane Strickler ); Wilm er, Cutler, Pickering, Hale & Dorr, LLP ( Randolph D aniel Moss ) for Plaintiff -Intervenor Governm ent of Canada.
Arnold & Porter, LLP ( Clai re Eli zabet h Reade ) for Plaintiff-I

ntervenor Go vernmen t of Alberta.
Peter D. Keisler , Assistan t Attorn ey Gene ral; David M . Cohen , Directo r; ( Jeanne E. Davids on ), Dep uty Directo r; ( Stephen Carl Tosini ), Comm ercial Litigation Branch, Civil Division, United States D epartm ent of Justice; Dean Pinkert , Seni or Atto rney , Off ice of t he Chie f Counse l f

or Impor t Adm inistration, U nited States D epartm ent of Co mm erce; Theodo re R. Posner , Asso ciate General Cou nsel, Office of the United States Trade Representative for Defendant United States.
Dew ey Ballantine, LL P ( Kevin M. D empsey , Alan W illiam W olff , Harry Lewis Cl ark , Dav id Adrian Ben tley ) for Def endant -In terv enor Coal iti on for Fair Lumber I mports Exec utiv e Com mittee.

Per Curi am: On Jul y 21, 2006, t he cour t i ssued its opini on in Temb ec, Inc. v. United
States , 30 CIT __, 441 F. Supp. 2d 1302 (2006) (“ Temb ec I ”), in which i t f ound inva lid the

act ion of the Uni ted St ate s Trade Repres entative (“USTR”) order ing t he impl ementation 1 of a
United State s Int ernati onal Trade Commission (“I TC”) affi rmative t hreat of material injuryConsol. Court No. 05-00028 Page 3

2 In t

his opinion, “Governments of Cana da” re fers to t he Government

of Cana da and t

he Govern ments of Alberta, British Colum bia, Ontario, and Qu ebec.

3 In Timken Co. v. Un ited States , 893 F.2d 3 37, 340 (F ed. Cir. 1990), the Un ited States Court of Appeals for t

he Feder al Ci rcui t hel d that Commerce must

publi sh noti ce of

a dec isi on of this Court that is “not in harmony” with the Com merce’s previously issued final results. See 19 U .S.C . § 15 16a (c)(1 ) (20 00) . Th is is also true fo r a N AF TA pane l decisi on “ not in harm ony” with the results of an ITC threat of i njury determination. See generally 19 U.S .C. § 1516a(g).

4 

### Parties to NAFTA may opt to replace judicial review of certain fina l determinations with review by a

NAFTA arbitral panel. See Feldspar Corp. v. United States , 16 CIT 1067, 1068, 809 F. Supp. 971, 973 (1992). determination arising from imports of Canad ian softwood lum ber into the United States. In that opinion, the court reserved decision on the remed y to be imposed, i.e., the extent to which cash deposi ts made on the import ati on of t he Canadi an mercha

ndise must be refu

nded. Thi s opini on addresses the remedy issue.
Plai ntif f Tembec, Inc . (“Tembec ”), Pl aint iff -In terv enors Ca

nadia n Lumber Tra de
Alli ance ( “CLTA”), an d the Governments of Cana da 2 (col lec tive ly “Plai ntif fs” ); Def endant
United Stat es, a

nd Defenda

nt-Inter venor Coal iti on for Fair Lumber I mports Exec utiv e Committee (“CFLI ”) (c olle cti vely “Defenda

nts” ); a nd the court

allagre e tha

t t he depos its made
on merchan dise that entered the United States aft er the publication of the Timken notice 3 must be ref unded. In i ts a

naly sis, the c ourt no w conclude s tha t bec ause l iqui dati on is suspend ed for most of the entries made on or prior to the Timken notice, they are pr eserved for liquidation in
accordance wit

h the final deci sion of t

he North American Free Trade Agreement (“NAFTA ”) panel. 4 The court, therefore, finds that the ref und of the deposits on such entries is required as
well. As we expla ined in Temb ec I , the court h as jurisdiction to grant this relief.
I. Bac kgro und
The his tory

of t his c ase i s set

out i n the court ’s opi nion i n Temb ec I . What follows is as much of that history as is necessary here. On M ay 16, 2002, the ITC reached its amended finalConsol. Court No. 05-00028 Page 4

5 19 U.S .C. § 1677(3 5)(A) defines “dum ping margin” as “the amou nt by which the norm al value exceeds the export price or constructed ex port price of the subject merchandise.” Subsection (35)(B ) defines “weighted average dump ing margin” as the “percentage determined by di vidi ng the aggr egat e dumping margi ns det ermined for a speci fic exporte r or pro ducer b y the aggregate export prices and constructed export prices of such exporter or prod ucer.” 19 U.S. C. § 16 77(35 )(B)



### .
6 

### A counte

rvailab le subsidy

is prese nt when a gover nment or r

elated a uthority provides a financial contribution to an entity a nd a benefit is thereby

conferred. The statute defines “financial contribution” as: (i) the direct transfer of funds; (ii) foregoing or not collecting revenue that is otherwise due, such as gr anting tax credits or deductions from taxable income; (iii) providing goods or services, other than general infrastructure; or (iv) purc hasing goods. See 19 U.S.C. § 1677(5)(D). determination that the United States softwood lum ber industry was threatened with material injury by reason of imports from Canada. See Softwood Lumber fr om Canada , I nv. Nos. 70 1- TA-414, 731-TA-928 ( Final ) USITC Pub. 3509 (May 2002) . The Unit ed States Department of Commerce (“Commerce ”) i mplemente d the ITC’s dete rminat ion by iss uing t he ant idumping (“AD”) and cou

nter vail ing duty

(“CVD”) orders incor

porat ing i t. Thos e order s were e ffe cti ve upon publi cat ion i n the Federal Regi ster on May 22, 2002. See Certain Softwood Lumber
Products from Cana da , 67 Fed. Reg. 3 6,068 (Dep’ t Commerce May 22, 20 02) (not ice of
amended finaldeterminat ion of sal es at l ess than f air value and notic e of ant idumping order);
Certa in Soft

wood Lumber Produc ts f rom Canada , 67 Fed. Reg. 36,07 0 (Dep’t Co mm erce May 22, 2002) (noti ce of

amended f

inalaff irmat ive c ounter

vail ing duty

dete rminat ion an d noti ce of countervailing duty order) (collecti vely “May 22, 2002 o rders”). That publication served as
notice to the B ureau o f Custom s and B order P rotection (“ Custo ms”) th at it was hen ceforth to

co ll ec t c as h de pos it s f

orth e s ubj ec t me rc ha ndi se equa l t o t he ame nde d we ig ht edav er ag e AD margin 5 and net subsidy rate. 6 See Certa in Soft wood Lumber Produc ts f rom Canada , 67 Fed. Reg. at 36 ,068; Certa in Soft wood Lumber Produc ts f rom Canada , 67 Fed. Reg. a t 36, 070. TheConsol. Court No. 05-00028 Page 5

7 The Uni te d St at es ha s c ol le ct edove r $ 4 bi ll io n i n e st ima te d duti es und er

th e AD/ CVD orders. As of Octob er 1, 2005, Custom s held $1,291,632 ,917.84 in A D cash depo sits under case numb er A-122 -838 and $2 ,898,194,52 1.75 in CV D cash depo sits under case number C-1 22-839. See FY 20 05 An nual Disbursem ent Report: Section III (Nov. 29 , 2005), available at http://ww w.cu stoms .gov/x p/cgov/im port/add _cvd/co nt_du mp/cd soa_0 5/fy_200 5_ann ual_rep ort/ (last visit ed Sept. 25, 2006 ).

8 Pursuant to § 151 6a(g)(5)(B), notice of the final decisi on was to be pub lished within ten days of t he is suance of t

he NAFTA panel deci sion, or by November 4, 2 004. In fac t, pu blic ati on was not m ade until Novem ber 30, 2004. See 69 Fed. Reg. at 65,585 . The notice set forth that “the Depa

rtment must publ ish not

ice of de cisi on . . . which is ‘ not i n harmony ’ with the Departm ent’s results. . . . Publication of this notice f ulfills [this] obligat ion. . . . [T]his notice will se rve to susp end liquid ation of entr ies [m ade] o n or a fter N ove mb er 4, 2 004 , i.e., 1 0 days from the issuance of the Notice of Final Action.” Id. Thus, the court and the parties treat Novem ber 4, 2004 as the effective date, as i t was the last lawful day t hat notice of an adverse decision could be published. dep osits la rgely rem ain in th e Un ited S tates tre asur y. 7
The ITC ’s affirmative d etermin ation w as appealed to a NA FT A pa nel purs uant to A rticle
1904 of t he NAFTA. On September 10, 2004, at t he dir ect ion of

the p anel , the ITC i ssued a negative threat of i njury determination. See Softwood L umber fr om Canada , Inv. Nos . 7 01- TA414, 731- TA-928 (Final ) (Thir d Remand), USITC Pub. 3815, Views on Remand (Sept. 10, 2004) at 13–14. On Oct ober 12, 2004, t he NAFTA panel af

fir med the I TC’s nega

tive thre at of injury determination, and the NAF TA S ecretariat i ssued a Notice of Final Panel Action. See
Certa in Soft

wood Lumber Produc ts f rom Canada , USA-CDA-2002-1904-07, Pane l Deci sion (Oct. 12, 2004) (“final paneldecisi on”). Com merce thereafter published the Timken notice,
refle cting that t

he final panel deci sion was “not in ha rmony” with the I TC’s original injury determination of May 2002 and suspending liquidation of the entries of the subject merchand ise.
See Certa in Soft

wood Lumber Produc ts f rom Canada , 69 Fed. Reg. 69,584, 69, 585 (Dep’t
Com merce No v. 30, 2004). T he effective date of the Timken noti ce was November 4, 2004. 8Consol. Court No. 05-00028 Page 6

9 

### See 19 U.S.C. § 1675.

10 Section 1516a(f)(10) d efines “free trade area c ountry” as:

(A) Can ada for such time as the NAF TA is in force with respect to, and t he Uni ted

Sta tes appl ies the NAFTA to, Ca nada . (B) Mexico for

such t ime as the NAFTA is i n forc e . .
. . (C) Canada for such time as - (i) it i s not a free trade area country under subpara graph (A); an d (ii ) the Agreement [Unite d Stat es-Cana da Free-Trade A greement] is in force with respect to, and the United States applies the Agreement to, Canada. Per io di c r ev ie ws 9 of the M ay 22, 200 2 AD /CV D or ders hav e been req uested. T he results
of these review s have be en appe aled to N AF TA panels or this Cou rt.
II. An alysis
At iss ue is the d ispos iti on of t he cas h deposi ts made on or be fore the p ubli cat ion of the
Timken notice. Sp ecifically, the court m ust determ ine if 19 U .S.C . § 151 6a(g)(5 )(B) co ntrols liquidation of the pre- Timken notice entrie s. Should that be the ca se, ent

ries made on and bef

ore November 4, 2004 wo uld be li quidated i n accordance wit h the May 22, 2002 orders
incor porat ing t

he May 16, 2002 I TC aff irmat ive de termi nati on, rather than the s ubseque nt negative de termi nati on uphel d by t he NAFTA panel. I

n othe r words, the c ourt must dete rmine
whether the u nfai r tr ade l aws: (1 ) require t hat e ntri es made o n or bef ore November 4, 2004, the liqu idat ion of

which ha s been

suspe nded, a

re t o be l iqui date d in a ccorda nce wit h the May 22,
2002 affi rmative unfa ir tr ade orders, even though thos e orders have be en invali dated; or 

### (2) cal l for the liquidation of all unliquidated entries in accordance with the I TC’s Negative Remand Determination. See Certain Softwood Lumber Products from Canada , USA-CDA-2002-1904- 07, Panel Decision (Oct. 12, 2004). Review of AD/CVD determinations involving merchandise from fr ee trade area countrie s, 10 

### such as softwood lumber imported into the United States from Canada underConsol. Court No. 05-00028 Page 7

11 

### The “Agreement” re fers to the United States-Canada Free- Trade Agreement. See 19 U.S.C. § 1516a(f). NAFTA, is governed by

19 U.S.C. § 1516a(g). According to Def endants, where a NAFTA panel review of an I TC final determination is requested, § 1516a(g)(5)( B) controls the liquidation of merchandise subject to the panel’s review:

In the case of a

determination for which binational panel review is requested pursuant to article 1904 of the NAFTA or of the Agree ment, [ 11 ] 

### entries of merchandise covered by such determination shall be liquidated in accordance with the determination of the administering authority [Commerce] or the Commission [ITC], if they are e ntered, or withdrawn from warehouse, for consumption on or before the da te of publication in the Federal Register by the administering authority of notice [the Timken notice] of a final decision of a binational panel, or of an extr aordina ry challen ge comm ittee, no t in harmon

y with that determination

. 19 U.S.C. § 1 516a(g

)(5)(B ). Defe

ndants ma

intain tha t despite t he I TC’s ultima

te determination that there was no injury or threat of injury , Plaintiffs are not entitled to refunds of AD/CVD deposits made on merchandise entered on or be fore November 4, 2004. See Def.’s Mem. 35; Def.-I

nt.’s Reply 46. Defe

ndants base this argument primarily on what they insist is the plain meaning of § 1516a(g)(5)(B ): that the pre- Timkennotice entries must be liquidated “in accordance with the [original] determination of the . . . Commission.” See Def.’s Reply 42 ( characterizing the rule in § 1516a(g )(5)(B) as “the unambiguous te xt of the controlli ng statu te”); see also

Def.-Int.’s Reply

46. We agree with Defendants that, wer e § 1516(a)(g)(5)(B ) to control, entries made on or before the date of publication of the Timkennotice would be liquidated in accordance with the order incorporating the ITC’s initial affirmative determination, even though the ITC reversed that determination in response to the NAFTA panel decision. We further agree that any entriesConsol. Court No. 05-00028 Page 8



### made after the date of publication of the Timkennotice would be liquidated in accordance with Commerce’s order reflecting the final decision of the NAFTA panel. Accordingly , were the court to find that § 1516(a)(g)(5)(B ) governs here, entries of softwood lumber made on or before Novembe

r 4, 2004 would be liq

uidated i n accor dance w ith the May

22, 2002 or

ders, which inc orporat

e the ITC’s May

16, 2002 affirmat

ive thre at of injur

y de terminat ion. Those entries made after November 4, 2004, howeve r, would be liquidated in accordance with the final NAFTA panel decision affirming the ITC’s September 10, 2004 neg ative determination. The issue, then, is whether § 1516a(g)(5)( B) is the controlling statute under the facts of this case. Plaintiffs claim that it is not. According to Plaintiffs, § 1516a(g)(5)(B ) must be read together with § 1516a(g)(5)( C), and that such reading requires the r efund of deposits for entries made before, on, and after November 4, 2004. Pl.-GOC’s Mem. 39 (“The United States must refund all cash deposits on softwood lumber . . . pursuant to the AD/CVD orders.”). They

contend that all entries of the subject merchandise, the liquidation of which remains suspended by

virtue of § 1516a(g)(5)(C), must be liquidated in acc ordance with the October 12, 2004 final NAFTA panel decision re versing the ITC af

firmative determination. Plaintiffs insist that, having prevailed on the merits in the NAFTA review, they must receive the full benefit of their victory . They furthe r assert that such result is consistent with the statutory scheme a s a whole and the legislative history of the relevant provisions. The court
agree s with Plain

tiffs and finds tha t the provisions of § 1516a(g )(5)(B ) do not ap

ply to entrie s, the liquidation of which continues to be suspended under §1516a(g)( 5)(C). Subsection 1516a( g)(5) (C), enti tled “Susp ension of

Liqui dation,”

provides : (i) In gene

ralConsol. Court No. 05-00028 Page 9

12 There w ere three adjustments to the ongoing suspension of liquidation. In it s final deter min ation , the IT C fou nd th reat o f injur y rather than m aterial injury. C ons equ ently, pursuant to 19 U .S.C. §§ 16 71e(b)(2) and 1 673e(b)(2), the suspen sion of liquidation was remo ved for en tries from the date of pu blication of the p reliminar y Com merce determ inations to the da te of publi cat ion of

the f inalITC det ermination, and no duties should have be en assessed on thos e ent

ries . Pri or to t

he is suance of t

he fi nal de termi nati on, t he sus pensi ons of

li quidation in both the AD and the CVD investigations were di scont inued pursuan t t o the last parag raphs o f §§ 1671b(d) (2) and

1673b(d)( 2) beca

use t he permi tte d peri od for a prel iminar y sus pensi on of liqu idat ion ha d expire d. Suspe nsion r esumed upon complet ion of the p rocee dings in May 2002. 

### Notwithstanding the provisions of subparagraph (B ), in the case of a determination described in clause (iii) [§ 1675 administrative review] or (vi) [scope determination] of subsection (a)(2)(B) of this section for which binational panel review is requested pursuant to article 1904 of the NAF TA or of t

he Agr eement, the admin

istering authority [Commerce], upon request of an interested party who was a party

to the procee ding in c onnection with whic h the matte

r arises and who is

a participant in this binational panel review, shall order the continued suspension of liquidation of those entries of merchandise covere d by the determination that are involved in the review pending the f inal disposition of the review. 19 U.S.C. § 1516a(g)(5)(C) (emphasis added). Centr al to the court’s conclusion is its finding that the “continued” suspension of liquidation provided for in § 1516a(g)( 5)(C) acts as the equivalent of an injunction against liquidation and thus halts liquidation until the suspension expires. In reaching

its result, the court recognizes that liquidation of most pre-November 4, 2004 entr ies has be en suspen

ded throu gh the f ollowing steps. 12 

### Pursuant t

o 19 U.S.C. §§ 1671b(d)(2) and 1673b(d)(2), when Commerce issues an affirmative preliminary determination, it must order the suspension of liquidation of all entries made on or after the determination’s date of publication. When the final determination is also affirmative, the suspension remains in place. See Int’l Trading Co. v. United States , 281 F.3d 1268, 1272 (Fed. Ci r. 2002) ( citing 1 9 U.S.C. § 16 73b(d) ( 1988)); see also Fijutsu Gen. Am., Inc. v.Consol. Court No. 05-00028 Page 10

13 

### Sections 1671b(d) and 1673b(d) authorize Commerce to order Customs to collect “provisional measures” upon a preliminary finding of material injury to the domestic industry. As discussed in Tembec I , duties collected pursuant to a provisional measure are to be refunde d if the I

TC’s fina l determi nation fin ds either no injury , or, unde r certa in circumstances, merely

a threat of material injury to the domestic industry. The suspension following a preliminary

determination under §§ 1671b(d) and 1673b(d) is intended to ensure that entries are not liquidated until after the final determination has bee n made.

14 

### The purp ose of a p eriodic review i s to provid

e an opportunity

to make a

djustments

to the duties provided for in AD/CVD orders, based on actual experienc e. “Unlike systems of some other countries, the United States uses a ‘retrospective’ assessment system under whic h final lia bility for antid umping a nd counte rvailing duties is de

termined after me rchandi se is imported.” 19 C.F.R. § 351.212. “If Commerce finds that dumping or subsidization has occurred, and the I TC finds that dumping or subsidization causes, or threatens to cause, material injury to a domestic industry , interested parties, may , each year, upon the anniversary of the original findings, request a [periodic re view] to adjust the dumping or countervailing duty in light of the importers’ a ctual current conduct.” Ontario Forest Indus. Ass’n v. U nited States , 30 CIT __, __, 444 F. Supp. 2d 1309, 1311 (2006) (citing 19 U .S.C. § 1675.). Indeed, in a “‘[periodic] review, Commerce recalculate s the relevant variables to determine whether a foreign country

is continuing the practice of dumping, i.e., selling its merc handise in the United States for less than a foreign like product in its home market.’” Decca Hospitali ty Furnishings, LLC v. United States , 30 CIT __, __, 427 F. Supp. 2d 1249, 1251 (2006) (quoting NTN Bearing Corp. v. United States , 295 F.3d 1263, 1266 (Fed. Cir. 2002)). United States , 283 F.3d 1364, 1380 (Fed. Cir. 2002). 13 

### Notice of this suspension is given pursuant to 19 C.F.R. § 159.58 (2006), which states that: “[u]pon receipt of notification from the Commissioner, each port director shall suspend liquidation . . . on or after the date of publication of . . . [a] Notice of Final Affirmative Antidumping Determination.” 19 C.F.R. § 159.58( a) (inte

rnal quot ations omit

ted). Thi s suspensi on stay s in place until the pe

riod to request a periodic review 14 

### has expired. See gener ally id. ; 19 U.S.C. § 1673b(d)(2). Suspension is further extended upon a request for a periodic revie w pursuant to § 1675 for entries subject to such review. See gener ally 19 U.S.C. § 1 675(a); OKI Elec. I ndus. Co. v. United States , 11 CIT 624, 627, 669 F. Supp. 480, 483 (1987). Therea fter, if the results of a periodic review are appeale d to a NAFTA panel, at a party ’s request, the suspension ofConsol. Court No. 05-00028 Page 11

15 

### Those few pre-November 4, 2004 entries f or which periodic reviews were not requested have been liquidated through a ctive or deemed liquidation. See gener ally 19 U.S.C. § 1504. liquidation continues pending the outcome of the appeal. See 19 U.S.C. § 1516a(g)(5)(C). As to the subject merchandise, the parties agr ee that liquidation continues to be suspende d for a la

rge ma jority of the en tries. 15 

### See Private-Party Pl.’s Resp. Remedy Questions 6 (“Periodic reviews have been re quested, and liquidation has been suspended or enjoined, for entries from May 22, 2002 through November 4, 2004.”); Def.’s R esp. Ct.’s July 21, 2006 Order 6 (“Once periodic administrative re views were requested, the liquidation of pre-November 4, 2004 entries could be suspended only as a consequence of the conduct of those reviews and subsequent suspensions . . . .”); Def.-I nt.’s Resp. Ct.’s July 21, 2006 Order 4 (“To the extent that . . . periodic reviews have been re quested in this case . . . liquidation of those entries remain suspended pending the outcome of the binational panel review.”); Resp. Pl. Gov’t o f Canada , Pl.-I nt. Canad ian Provin

cial Gov’ ts Ct.’s Remedy Questions

4 (“[R]espondents have requested administrative reviews and liquidation of entries cover ed by those reviews remains suspended . . . .”). Defendants do not quarrel with the timing or duration of the suspension of liquidation. They ag ree that a suspension of liquidation has been in place for most of the entrie s from the publication of the ITC final determination forward. See Def.’s Reply 43; De f.’s Resp. Ct.’s July 21, 2006 Order 8. Rather, they argue that the continued suspension of liquidation provided for in § 1516a(g)(5)(C), whic h results from the appeal of a final determination in a periodic review, does not a

llow for w

hat they describ e as “re

troactiv e” relie f. Thus, Defendants contend that this suspension of liquidation does not have the same effec t as anConsol. Court No. 05-00028 Page 12

16 It should be not ed tha

t i n at l east

one pas t i nvest igation , Commerce or dered a ful l re fund of ca sh depos its in re sponse to an advers e NAFTA panel deci sion. See, e.g. , Fresh Chi lle d and Frozen Pork f

rom Canada , 56 Fed. Reg . 29,464 (Dep’t Commerce June 27, 1991) (revoc ati on of countervailing duty order and termination of administrative review 

### ). In Fresh Chilled and Frozen Pork from Canada , Commerce ordered the refund of all estimated duties on unli quid ated en tries follo wing an advers e final NAFTA p anel d ecisi on, no twit hstan ding § 1516a(g)(5)(B). The

re, the ITC origina

lly rendere d an affirmative threat of injury determination, an

d issued a counter vailing duty order. C anadian

responde nts subseq

uently appealed the determination to a NAFTA pane l. The panel reviewing the threat of injury determination remanded to the IT C, and pursuant to that remand, the ITC re ndered a negative threat of injury de

termination. An Extraordinary Challeng e Committee later affirmed the panel’s negative determination. There after, Commerce revoked the counter vailing duty orde

r and instructed Customs “to proceed with liquidation of all unliquidated merchandise without regard to countervailing duties a nd to refund all cash deposits and release all secur ities posted to cover estimated countervailing duties.” Id. injunction entered by this Court. See Def.-Int.’s Resp. Ct.’s July 21, 2006 Order 2 (“[T]he liquidation rule of

§ 1516a( g)(5) (B) must

continue to apply even if l iquidation

is suspende d . . . .”) ; see also Def.’s R eply 43 (“Canada’s in

terpretation ig

nores the express langua ge of the statute

by s uperimpo sing upon the statu te the concept tha

t the eff ective d ate established in 19 U.S.C. § 1516a(g)(5)(B) applies only to the extent that any entries have not been suspended in a subsequent review. I ndeed, acceptance of that interpr etation would grant parties what the statute specifically precludes — a retroactive eff ective date for a panel decision concerning an investigation dete rmination as a consequence of a subsequent administrative suspension.”). 16 

### Despite D efenda

nts’ cont entions, a review o f the leg

islative h istory for subse ctions 1516a(g)(5)(B) a

nd (C) confirms that they were enacted to achieve the goals of prompt liquidation of uncontested e ntries an d the ultima

te liquida tion of contested e

ntries in accordance with final litigation results. Viewed in the c ontext of the law as it existed when the subsecti ons were

drafte d, it becomes appa rent tha t § 1516a( g)(5) (B) ope

rates mor e narrowly than Defendants argue, and tha t the operation of § 1516a(g)(5)(C) is nec essarily broa der.Consol. Court No. 05-00028 Page 13

17 

### While the court need not identify e very instance

in which subsection 1516a(g)(5)(B) , rather than (C), may

control, one example is useful. Where: (1) the original order is negative (e.g. , refle cts a fina

l determi nation of no injury to the dome stic indust

ry ); (2) tha t order is found to be “not in harmony” with a NAFTA panel decision following an appe al; and (3) no periodic review i s requested; § 

### 1516a(g)(5)(B) would a ppear to control and the subject merchandise entered before publica tion of the Timkennotice wo uld thus be liquidated without AD/CV duties.

18 Prior to 1984, periodic review s were automatic. Und er current law, howev er, they must be requested. See Sonco S teel Tube Div., Ferrum , Inc. v. United States , 12 CI T 990 , 99 2, 6 98 F. Supp. 927, 928 (1988) (“Congress amended the l aw in 1984 to make annual re views optional .”). 

### The drafters of

§ 1516a(g)(5)(B) 17 

### and of the simultane ously

enacte d § 1516a( g)(5) (C) intended that a suspension of liquidation, continued by the a ppeal of a periodic review 18 

### to a NAFTA panel, was to act as would an injunction ag ainst liquidation issued by this Court under the same circumstances. Subsections 1516a(g)(5)(B) and ( C), first appeared in the United States-Canada FreeTrade Agreement I

mplementation Act of 1988 (“CAFTA”). See Pub. L. No. 100-449, 102 Stat. 1851 (1988). CAFTA’s Statement of Administrative Action (“US-CFTA SAA”) explains that 19 U. S.C. § 1516a(g) wa s enacte d to refle ct the law relating to appea ls to this Cou

rt as it existed at that time:

Article 1904(15)(d) of the Agre ement requires that the United States and Canada amend their respective laws in orde r to ensure that existing procedures concerning the r efund, with interest, of duties operate to give effect to a final binational panel decision. US-CFTA SAA at 265–66. Congress thus intended that decisions by the newly cr

eated binational panels would result in the same relief with respect to refunds, a s would decisions of this Court. More par ticularl y, t he US-CF TA SAA expla ins that:
In or der to enable a su

ccessf ul plaintif f to rea p the fru its of its victory . . . the statute authorizes the CI T [United States Court ofConsol. Court No. 05-00028 Page 14

19 

### 19 U.S.C. § 1 516a(c) (2) prov ides: (2) Injunctive relief In the case of a

determination described in paragra ph (2) of subsection (a) of this section [“Review of determination”] by the Secretary , the administering authority , or the Commission, the United States Court of International Tra de may enjoin the li qu id at io n o f s om e o r a ll en tr ie s o f m er ch an di se co ve re d b y a determination of the Secretary, the administering authority , or the Commission, upon a request by an intere sted party for such relief and a proper showing that the r equested relief should be grante d under the circu

mstance s. 19 U.S.C. § 1516a(e) then makes court decisions applicable to enjoined entrie s as follows: (e) L iqui dati on in a ccorda nce wit h fi nal de cisi on If the c ause o f ac tion

is s usta ined in whole or in pa rt by a dec isi on of the United States Court of International Trade or of the United Stat es Court

of Appea ls f

or the Federa l Cir cuit

– (1) ent ries of merc handis e of t he cha ract er cove red by

the publi shed de termi nati on of t he Secr etary, the adm inistering auth ority, or the Co mm ission, w hich is ente red, o r withd

rawn fr om warehouse, for c onsumpti on aft er t he dat e of p ubli cat ion i n the Federal Regi ster by t he Secret ary or the admini stering a

uthori ty of a noti ce of

the court deci sion, and (2) entries, the li quidation of which w as enjoined under subsec tion

(c)( 2) of this section, shall be liquid ated in accor dance w ith the final court d ecision in the action. Such notice of the court decision shall be published withi n ten days from t

he dat e of t

he is suance of t

he cour t dec isi on. 

### International Trade ] to enjoin the liquidation of entries of merchandise covered by

certain type s of challenged AD/CVD determinations upon request for such relief and a pr oper showing that the relief should be granted unde r the circumstances. 19 U.S.C. 1516a(c)(2). [ 19 ] 

### Under existing casela w, injunctive reli ef is gr

anted au tomatica lly upon req uest in cases involving challenges to AD/CVD deter minations made during the assessment stage of an AD /CVD proceeding. ZenithConsol. Court No. 05-00028 Page 15

20 Con gress specifically cho se not to pr ovide su ch autho rity, as demo nstrated b y its instruction that “panels will not have equity powers” and that “the injunctive remedy provided by se cti on [1516a( c)(2) ] wil l not be ava ila

ble t o preve nt l iqui dati on.” US-CFTA SAA at 266.

21 

### Such injunc

tions wer e rare because of the le gal sta

ndard re quiring

proof of “irrep arable harm.” Because foreig

n exporters’ and importers’ interests in upsetting unfair trade or ders were protected by

the administrative suspension of liquidation, they did not need injunctive relief at the investigative stage. The domestic industry, which would be opposed to the nonexistence of such orders, could obtain relief going forward and, bearing no duty obligation, likewise could not show irreparable harm in connection with the investig ative stage. See Am. Spring Wire Corp. , 7 CIT at 6, 578 F. Supp. at 1408.

Radio Corp. v. United States , 710 F.2d 806 (Fed. Cir. 1983). However, injunctive relief is rarely , if ever, granted in cases involving challenges to AD/CVD determinations made during the initial investigation stage of an AD/CVD procee ding. See, e.g. , American Spring Wire Corp. v. United States , 578 F. Supp. 1405 (Ct. Int’l Trade 1984). Id. at 265. The legislative history , therefore, indicates that Congress intended subse ctions 1516a(g )(5)(B ) and (C)to provide for the s ame liquid

ation re sults when

appeals were ta ken to a NAFTA panel, as when appea ls of final determinations were taken to this Court. Because a NAFTA p anel wou

ld have no

equity powers, 20 

### however, the devi ce used t o achiev e this res

ult was an in junction- like suspe

nsion of liq

uidation. Hence, because injunction s were “

rarely , if ever, granted” 21 

### when appeals were taken to this Court following final dete rminations at the initial i nvestigatio n stage, i.e., the process l eading to an AD/ CVD order, § 1 516a(g)(5)(B) makes no provision for a suspension of liquidation when such final determinations are appeale d to NAFT

A panels . On the ot

her hand , becau se injunctions wer e viewe d by

Congre ss as automatic when requested following the appe al of a periodic review to this Court, § 1516a( g)(5) (C) make s the “continued” suspension of liquid

ation aut omatic when these results are appealed to a NAFTA pa nel.Consol. Court No. 05-00028 Page 16

22 

### In response to the court’s que stions, Defendants have acknowledge d that “section 1516a(g)(5)(C) reflec

ts the Government’s prior view that a request for an a dministrative review was necessary

to obtain suspension of liquidation, pursuant to 19 U.S.C. § 1516a(c)(2) [providing for injunction of liquidation upon request of an interested party in the context of an appeal to this Court] even if a plaintiff sought review of an issue solely involving the original investig ation.” D ef.’s Re sp. Ct.’s July 21, 2006 O rder 3. T

he other parties a gree w ith this conclusion. See Def.-Int. Resp. Ct.’s July 21, 2006 Order 3 (“That the Congress . . . provided for a statutory e quivalent to court-ordered injunction against liquidation only in the case of binational panel reviews of periodic reviews . . . does a ppear to reflect the U.S. Government’s vi ew of th e c ir cu ms ta nc es un de r w hi ch in ju nc ti on s a ga in st li qu id at io n w er e p ro pe rl y granted . . . .”); Private-Party Pl.’s Resp. 3 ( stating

that a party

“could e nsure its r ight to a full refund by obta

ining a continued suspension of liquidation through the periodic review process . . . by r

equesting a review”); Resp. Pl. Gov’t of Canada , Pl.-Int. Canadian Provincial Gov’ts Ct.’s Remedy Questions 3 (“19 U.S.C. § 1516a(g )(5)(c) reflects . . . that it was necessary for a plaintiff seeking review of a n investigation determination to request an administrative review to obtain continued suspension of liquidation.”). While t he Government’ s vie w was the s ubjec t of sever al di verge nt opi nions in thi s Court betwee n 1984 and 19 98, this po sition wa s eventua lly rejected by the Co urt of A ppeals for th e Feder al Circuit in Asociacion Co lombiana de Ex portadores de Flores v. U nited States , which found that an inju ncti on coul d be sought t o halt li quidation where only

the f indi ngs re sult ing in the anti dumping dut

y orde r were c hall enged. 916 F.2d 157 1, 1575 ( Fed. Cir . 1990) ( “The government , however , see ks to liqu idat e the entr ies for t he ini tia l re view per iod 

### at the or iginal, and now erroneous, level of 4.4 percent, solely because [appellant] failed to request an annual review, in which it

could not have litig ated the validity of that or iginal d umping ma

rgin, to permit the

gover nment to do

so would be

unfair to [appellan t]. Nothing

in the stat

ute suggests that Congress intended to produce such an inequitable re sult.”). Thus, the purpose of the subsections was to codify Congress’s understanding of the law. Subse quent judi cial dev elopment s with res pect to ma

tters app ealed to

this Court c annot, of cours e, chan

ge the meaning

of the sub sections ’ words w ith respe ct to matte

rs appea led to NAFTA p anels. A

n examinati on of con

tempora neous judi cial dec isions, tho ugh, ca n serve t o clarify how

they apply

to the facts of this case. When the subsections were drafte d, there was no disagreement 22 

### that if a p eriodic

review were re quested a

nd an injun

ction gr anted, a ll unliquidated merchandise would be liquidated in accordance with the ultimate determination of: (1) the appeal of the periodic review ; or (2) the appeal of the underly ing AD duty or

der. See Sonco Steel Tube Div., Ferrum, I nc. v. United States , 12 CIT 990, 993, 698 F. Supp. 927, 930 (1988) (“Apparently , there is agreement that where requested annual reviews have notConsol. Court No. 05-00028 Page 17



### been completed before a court dec ision finding an affirmative antidumping determination invalid there is no basis for liquidation with antidumping duties. Therefore, a court orde r totally invalidating an [ag ency’s] original determination, which order occurs in the midst of an annual review, will result in the suspended entries being liquidated with no antidumping duties, e ven thoug h they were e ntered prior to the

court’s decision .”); see also Asociacion Colombiana de Exportadores de Flores v. United States , 916 F.2d 1571, 1575 (Fed. Cir. 1990). Once the first periodic review of an AD /CVD order was completed, an appeal of the r eview determination to thi s Court wou ld result i n the entr y of an injunction aga

inst liquida

tion. This injunction would protect unliquidated entries from premature liquidation and ensure the victor the fruit s of its victory

resulting from its a

ppeals. Under the facts of this case, there ca n be little doubt that Cong

ress inte nded that the suspe nsion of liq

uidation f ound in § 1516a(g)(5)(C), which substituted for a cour t-ordered injunction, would serve to prevent premature liquidation of pre- Timkennotice e ntries. Whi le Defe

ndants ma

y charact erize this as retroactive relief, it is the result that would have obtained upon the e ntry of a c ourt-ordered injunction at the time §§ 1516a(g)(5)(B) and ( C) were enacted. I t necessarily f

ollows that Congress, having intended parallel re medies, intended that the suspension of liquidation provided for in § 1516a(g)(5)(C) would provide the same result following a NAFTA pane l decision, as would an injunction issued by this Court. The absence of any

language in § 1516a(g

)(5)(C) explicitly allowing f or an order of liquidation during , or following the appeal process, further

demonstr

ates tha t Congre ss expected liquidation of all entries subject to a suspension of liquidation to occur in accordance with a NAF TA panel ’s final d etermina tion. I n those situ

ations whe

re no per iodic re view is requested following the entry of an unfair trade order, the suspension of liquidation cea ses, andConsol. Court No. 05-00028 Page 18



### the liquidation instructions of § 1516a(g)(5)(B) g overn. When a periodic review has been request ed, howe ver, § 15 16a(g)(5)(C)

provides no corre sponding

authority for Comme

rce to order liq uidation. The abse

nce of a liquidation provision in § 1516a(g)(5 )(C) wa s not mean t to prevent liquidation altoge

ther. All parties a gree t hat the a uthority to order liquidation is necessarily

implied at the conclusion of an appeal of a periodic revie w, and that all suspended entries are to be liquidated in accordance with the final results of that litigation. See Def.’s Resp. Ct.’ s July 2 1, 2006 Or der 3 (“We agre e that, e

ven thoug h 19 U.S.C. § 1516a(g

)(5)(C) lacks a provision expressly g overning the liquidation of entries following issuance of a NAFTA panel report concer ning a periodic administrative review, liquidation of those entries is governed by

the panel report, provided that the entries are subject to an administrative suspension pursuant to 19 U.S.C. § 1516a(g)(5)(C).”) (emphasis in original). Yet, having conceded the existenc e of a sus pension f ollowing a reque st for a p eriodic review, and having agr

eed that a final determination of a NAFTA pa nel in a periodic review

necessa rily provides authority for Comme

rce to or der liquid ation of r eviewe d entrie s, Defendants nonetheless argue tha t the decision of the NAFTA panel would not apply to all of the suspended entries. See Def.’s Reply 43. Thus, D efendants claim that the suspension of liquidation found in § 1516a(g)(5)(C) is effective f or some purposes, but not for others. That is, Defendant maintains that despite the absence of express liquidation langua ge, § 1516a(g)(5)(C) contemplates liquidation in accor dance with the decision as to matters raised by a periodic r

eview, but not as to issues that impact the underly ing AD/CVD order. The court rejects this argument as inconsistent with the statute, which does not make suc h a differentiation. The argument is also inconsistent with the intent of Congre ss that there be the

same re sults with r

espect t o refunds whethe

r an appe al is take

n to a NAF TA panel

or thisConsol. Court No. 05-00028 Page 19



### Court. As the Government of Canada points out, “[t]he absence of an express liquidation provision in 19 U.S.C. § 1516a(g)(5)(C) demonstrates that, in implementing Chapter 19 of NAFTA into U.S. law, Congress relied upon the principle that a f inal appellate decision applies to all entries of subject merchandise for which liquidation has bee n suspended.” Resp. Pl. Gov’t of Canada, Pl.-Int. Canadian Provincial Gov’ts Ct.’s Remedy Questions 1. The foregoing analy

sis confirms that Congress established a system to account for NAFTA determinations that is both fair and in accord with the goal of enabling “a successful plaintiff to reap t he fruits of its vict

ory .” US-CF TA SAA at 2 65. I f an unfa ir trade order f alls because the underpinning provided by the ITC injury

determination fails, there is no basis for assessing duties to offset unfair trading pra ctices. See Asociacion Colombiana de Exportadores de Flores , 916 F.2d at 1577 n. 21 (“The

flaw in the gove

rnment’s argume nt is that witho

ut a valid antidumpin

g deter mination in

the original orde

r, there can be no valid determination in a later annual review.”). Entrie s, the liquidation of which has been suspended, cannot, then, be liquidated with AD/CV duties under these conditions. The legislative history make s it clear that Congress did not set up a system to retain duties that are not owed. Rather, C ongre ss provide d for a su spension o f liquidat ion to kee p entrie s availa

ble for liquidation in accordance with law.Consol. Court No. 05-00028 Page 20 

### III. Conclusion In apply ing the foregoing a

nalysis to the facts of this ca se, the court holds that liquidation of a maj ority

of the sub

ject entr ies is suspe

nded. As a

result, none of the se suspended entries can be liquidated except in accordanc e with the results of the final litigation decision. Section 1516a(g)(5)(C) controls, and § 1516a(g)(5)(B) is, therefore, inapplicable. Accordingly , all of Plaintiffs’ unliquidated entries, including those entered before , on, and after November 4, 2004, must be liquidated in accordanc e with the final negative decision of the NAFTA panel. Judgment shall be entered ac cordingly

.
/s/Jane A. Re stani Jane A. Res tani, Chief

Judge

/s /J ud it h M . B ar zi la y Judi th M. Barzi lay, Jud ge

/s/Richard K. Eaton Richa rd K. E aton, Judge
Dated this 13th day Octobe r, 2006 New York, NY