Slip Op. 15-43 

UNITED STATES COURT OF INTERNATIONAL TRADE 

DONGBU STEEL CO., LTD., 

 Plaintiff, 

and

UNION STEEL MANUFACTURING CO., 

LTD.,

 Consolidated Plaintiff, 

v.

UNITED STATES, 

 Defendant, 

and

NUCOR CORPORATION, 

 Defendant-Intervenor.

Before: Claire R. Kelly, Judge 

 Consol. Court No. 14-00098

OPINION AND ORDER

[Plaintiffs’ motion for judgment on the agency record is granted.] 

 Dated: May 5, 2015 

Brady Warfield Mills, Donald Bertrand Cameron, Julie Clark Mendoza, Rudi Will Planert, 

Mary Shannon Hodgins, and Sarah Suzanne Sprinkle, Morris, Manning & Martin, LLP, of 

Washington, D.C., for Plaintiff Dongbu Steel Co., Ltd. and Consolidated Plaintiff Union 

Steel Manufacturing Co., Ltd. 

Loren Misha Preheim, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, 

U.S. Department of Justice, of Washington, D.C., for Defendant. With him on the brief 

were Joyce R. Branda, Acting Assistant Attorney General, Jeanne E. Davidson, Director, 

and Claudia Burke, Assistant Director. Of counsel on the brief was Michael Thomas 

Gagain, Attorney, Office of the Chief Counsel for Trade Enforcement & Compliance, U.S. 

Department of Commerce, of Washington, D.C. 
Court No. 14-00098 Page 2 

Timothy C. Brightbill, and Alan Hayden Price, Wiley Rein LLP, of Washington, D.C., for 

Defendant-Intervenor. 

Kelly, Judge: Plaintiff Dongbu Steel Co., Ltd. (“Dongbu”) and Consolidated Plaintiff 

Union Steel Manufacturing Co., Ltd. (“Union Steel”) (collectively “Plaintiffs”) bring this 

action pursuant to 28 U.S.C. § 1581(c) (2012)1 to challenge the United States Department 

of Commerce’s (“Commerce” or “Defendant”) final determination in Corrosion-Resistant 

Carbon Steel Flat Products From the Republic of Korea, 79 Fed. Reg. 17,503 (Dep’t 

Commerce Mar. 28, 2014) (final results of antidumping duty administrative review; 2011–

2012) (“Final Results”) and accompanying Issues and Decision Memorandum for the 

Final Results of the Antidumping Duty Administrative Review: Certain CorrosionResistant Carbon Steel Flat Products from the Republic of Korea; 2011–2012, A-580-

816, (Mar. 24, 2014), available at http://enforcement.trade.gov/frn/summary/koreasouth/2014-06995-1.pdf (last visited Mar. 30, 2015) (“IDM”). Plaintiffs move, pursuant to 

USCIT Rule 56.2, for judgment on the agency record on their claim that Commerce’s 

decision to disregard certain sales made below the cost of production was unsupported 

by substantial evidence and based on a legally erroneous interpretation of the cost 

recovery test in 19 U.S.C. § 1677b(b)(2)(D) (2012).2 Moreover, Plaintiffs argue that 

Commerce’s use of costs incurred outside the period of review (“POR”) was unlawful 

because Commerce does not have authority under the statute to use such costs. 

Defendant argues that Commerce’s interpretation of 19 U.S.C. § 1677b(b)(2)(D) was 

 

1 Further citations to Title 28 of the U.S. Code are to the 2012 edition. 

2 Further citations to the Tariff Act of 1930, as amended, are to the relevant provisions of 

Title 19 of the U.S. Code, 2012 edition. 
Court No. 14-00098 Page 3 

reasonable in light of the unusual circumstance of the review, and that Commerce 

reasonably used cost data for the five and a half months after the POR to calculate the 

cost of production under 19 U.S.C. § 1677b(b)(1). The court finds that Commerce’s 

interpretation of the cost recovery test was contrary to law. Further, while the statute 

grants Commerce the discretion to calculate the cost of production for the below cost 

sales test using cost data outside the POR, Commerce has not adequately explained why 

its resort to such data in this case was reasonable. Therefore the court grants Plaintiffs’ 

motions for judgment on the agency record. 

BACKGROUND

This dispute arises from the operation of two distinct administrative proceedings 

performed in connection with the same antidumping and countervailing duty orders—an 

administrative review and a sunset review. Upon request, Commerce will conduct an 

administrative review at least once every 12 months. See 19 U.S.C. § 1675(a)(1)(A)–(B). 

Annual administrative reviews must be initiated by the last day of the month following the 

month in which the order was published (called the anniversary month), see 19 C.F.R. 

§§ 351.221(b)(1), (c)(1)(i), and normally have a POR that covers “entries, exports, or 

sales of the subject merchandise during the 12 months immediately preceding the most 

recent anniversary month.” 19 C.F.R. § 351.213(e)(1)(i).

Commerce also conducts sunset reviews once every five years to determine 

whether revoking the order would lead to continued dumping (or subsidization) and 

material injury. 19 U.S.C. § 1675(c). Sunset reviews are separate proceedings, distinct 

from the annual administrative reviews. If either Commerce or the International Trade 
Court No. 14-00098 Page 4 

Commission (“ITC”) determines that an order should be revoked, then Commerce 

publishes notice of the revocation in the Federal Register. See 19 C.F.R. 

§ 351.222(f)(2). However, the effective date for revocation is five years from the date of 

the order at issue if it is the first sunset review and five years from the date of any 

continuation order if it is a subsequent sunset review. See 19 C.F.R. § 351.222(i)(2).

In this case, Plaintiffs are foreign respondents that participated in the antidumping 

duty administrative review that led to the Final Results at issue. See Final Results at 

17,503. The review was initiated on September 26, 2012, with a POR from August 1, 

2011 through July 31, 2012.3 See Initiation of Antidumping and Countervailing Duty 

Administrative Reviews and Request for Revocation in Part, 77 Fed. Reg. 59,168 (Dep’t 

Commerce Sept. 26, 2012); IDM at cmt. 1. Separately, on March 11, 2013, the ITC 

published its final determination in the third sunset review on corrosion-resistant carbon 

steel flat products from Korea, revoking the antidumping and countervailing duty orders 

with an effective date of February 14, 2012. Corrosion-Resistant Carbon Steel Flat 

Products From Germany and the Republic of Korea, 78 Fed. Reg. 16,832, 16,833 (Dep’t 

Commerce Mar. 19, 2013) (revocation of antidumping and countervailing duty orders) 

(“Revocation Notice”). See also Corrosion-Resistant Carbon Steel Flat Products From 

 

3 For this review, Commerce found reasonable grounds to believe certain sales of the 

foreign like product were made below the cost of production and therefore undertook a 

cost of production analysis. Decision Memorandum for the Preliminary Results of Certain 

Corrosion-Resistant Carbon Steel Flat Products from the Republic of Korea at 10, A-580-

816, (Aug. 30, 2013), available at http://enforcement.trade.gov/frn/summary/koreasouth/2013-21890-1.pdf (last visited Apr. 28, 2015). 
Court No. 14-00098 Page 5 

Germany and Korea, 78 Fed. Reg. 15,376 (Int’l Trade Comm’n Mar. 11, 2013) 

(determinations).

On March 19, 2013, Commerce published notice that the antidumping order (“ADD 

Order”) in this case would be revoked, but that Commerce would “complete any pending 

or requested administrative reviews of these orders covering entries prior to February 14, 

2012.” Revocation Notice at 16,833. In the Preliminary Results, issued on September 

9, 2013, Commerce shortened the POR for the ongoing administrative review to reflect 

the effective date of revocation, resulting in a new POR from August 1, 2011 through 

February 14, 2012. See Corrosion-Resistant Carbon Steel Flat Products from the 

Republic of Korea, 78 Fed. Reg. 55,057, 55,058 (Dep’t Commerce Sept. 9, 2013) 

(preliminary results of antidumping duty administrative review; 2011–2012) (“Preliminary 

Results”).

In its normal value4 determination for the review at issue here, Commerce only 

considered sales made during the revised POR from August 1, 2011 to February 14, 

 

4 In an administrative review of antidumping duties Commerce determines “(i) the normal 

value and export price (or constructed export price) of each entry of the subject 

merchandise, and (ii) the dumping margin for each such entry.” 19 U.S.C. 

§ 1675(a)(2)(A)(i)–(ii). Commerce calculates dumping margins by comparing the export 

price for each entry during the POR to a normal value reasonably corresponding to the 

same time frame. The statute states that “[t]he normal value of the subject merchandise 

shall be the price described in subparagraph (B), at a time reasonably corresponding to 

the time of the sale used to determine the export price or constructed export price under 

section 1677a(a) or (b) of this title.” 19 U.S.C. § 1677b(a)(1)(A). See also 19 U.S.C. 

§ 1677f-1(d)(2). The normal value may be the sales price in the home market, the sales 

price in a third country, or the constructed value. See 19 U.S.C. § 1677b(a)(1)(B), (4).

Export price is “the price at which the subject merchandise is first sold (or agreed to be

 (footnote continued) 
Court No. 14-00098 Page 6 

2012. See, e.g., Dongbu’s CM Log Database, CD 109 (Sept. 4, 2013); Dongbu’s Margin 

Log Database, CD 111 (Sept. 4, 2013). In conducting its cost of production analysis, 

Commerce continued to use the costs provided by respondents for the original POR, 

which reflected costs of production incurred from August 1, 2011 to July 31, 2012. See 

IDM at cmt. 1. Therefore, the sales considered were limited to those within the shortened 

POR, but the cost database included costs of production incurred after the POR. See 

Commerce’s Antidumping Duty Questionnaire Sections A–E at section D, PD 24 (Nov. 

19, 2012) (asking respondents to report the “actual costs incurred by your company 

during the period of review” for the original POR prior to revocation). In their case briefs 

below, submitted on November 8, 2013, Plaintiffs argued Commerce had violated the cost 

recovery test in 19 U.S.C. § 1677b(b)(2)(D) by testing Dongbu’s home market sales for 

the revised POR against the weighted average cost of production for the original POR. 

Dongbu’s Case Br. at 2, 7, PD 129 (Nov. 8, 2013); Union Steel’s Case Br. at 2–3, PD 130 

(Nov. 8, 2013). See also Mot. Pl. Dongbu Supp. Mot. J. 7, Oct. 2, 2014, ECF No. 27-1 

(“Pl.’s Mot.”); Br. Pl. Union Steel Supp. Mot. J. Agency R 7, Oct. 2, 2014, ECF No. 28-1.5

Plaintiffs also argued that Commerce unlawfully used costs beyond the POR and those 

costs do not reasonably reflect the actual costs during the POR. Dongbu’s Case Br. at 

 

sold) before the date of importation by the producer or exporter of the subject 

merchandise outside of the United States,” 19 U.S.C. § 1677a(a), and constructed export 

price is “the price at which the subject merchandise is first sold (or agreed to be sold) in 

the United States before or after the date of importation by or for the account of the 

producer or exporter of such merchandise . . . .” 19 U.S.C. § 1677a(b). 

5 Union Steel’s motion for judgment on the agency record closely mirrors Dongbu’s motion 

for judgment on the agency record. Therefore, the court will cite only Dongbu’s motion, 

the mandatory respondent below, unless otherwise necessary. 
Court No. 14-00098 Page 7 

8–9. See also Pl.’s Mot 18. Plaintiffs argued Commerce should have requested new cost 

data for the revised POR and should recalculate the dumping margin. Dongbu’s Case 

Br. at 7; Union Steel’s Case Br. at 2–3. See also Pl.’s Mot. 7. In the Final Results, 

Commerce dismissed Plaintiffs’ arguments, finding instead that “the use of the 12-month 

average cost data [wa]s reasonable and appropriate in this situation.” IDM at cmt. 1.

Plaintiffs now challenge Commerce’s determination to use the 12-month cost of 

production data instead of using cost data that reflects the shortened POR. Plaintiffs 

argue the language of the cost recovery test in 19 U.S.C. § 1677b(b)(2)(D) is mandatory 

and requires Commerce to measure the prices of the below cost sales against the 

weighted average cost of production for the POR. Moreover, Plaintiffs argue that 

Commerce was statutorily obligated “to compare home market sales for the POR to costs 

for that same POR in its sales below cost test.” Pl.’s Mot. 21. 

JURISDICTION AND STANDARD OF REVIEW 

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c), and 19 U.S.C. 

§ 1516a(a). “The court shall hold unlawful any determination, finding, or conclusion found 

. . . to be unsupported by substantial evidence on the record, or otherwise not in 

accordance with law . . . .” 19 U.S.C. § 1516a(b)(1)(B)(i). 

DISCUSSION 

Cost Recovery 

Plaintiffs argue Commerce’s cost recovery determination violated the plain 

language of 19 U.S.C. § 1677b(b)(2)(D) because Commerce used a weighted average 

cost of production based on costs incurred outside the revised POR ending on February 
Court No. 14-00098 Page 8 

14, 2012. Defendant argues that despite the language of § 1677b(b)(2)(D), Commerce’s 

interpretation of the statute should govern because it “is based on a reasonable 

interpretation of a statutory provision in light of this case’s highly unusual facts.” Def.’s 

Opp’n Pls.’ Mots. J. Agency R. 6, Jan. 29, 2015, ECF No. 39 (“Def.’s Opp’n”). In effect, 

Defendant argues that because the statute does not specifically contemplate the precise 

factual scenario here, the statutory language requiring the weighted average cost of 

production to be calculated for the POR does not apply.

The question before the court involves the cost recovery test, which provides: 

If prices which are below the per unit cost of production at the time of sale 

are above the weighted average per unit cost of production for the period of 

investigation or review, such prices shall be considered to provide for 

recovery of costs within a reasonable period of time.

19 U.S.C. § 1677b(b)(2)(D). The precise question here is whether Congress 

unambiguously prohibited Commerce from using a period other than the POR to calculate 

the weighted average cost of production to determine which prices provide for cost 

recovery over a reasonable time. In other words, may Commerce interpret the phrase 

“for the period of investigation or review” to mean something other than the actual period 

of investigation or review in a given case. The court finds that, as a matter of law, the 

language of the cost recovery test in § 1677b(b)(2)(D) does not afford Commerce the 

discretion to ignore the POR.

This case involves a question of statutory interpretation. “[T]he ‘starting point in 

every case involving construction of a statute is the language itself.’” United States v. 

Hohri, 482 U.S. 64, 69 (1987) (quoting Kelly v. Robinson, 479 U.S. 36, 43 (1986)). 
Court No. 14-00098 Page 9 

“Absent a clearly expressed legislative intention to the contrary, [the] language [of the 

statute] must ordinarily be regarded as conclusive.” Consumer Prod. Safety Comm'n v. 

GTE Sylvania, Inc., 447 U.S. 102, 108 (1980). “[A]lthough agencies are generally entitled 

to deference in the interpretation of statutes that they administer, a reviewing ‘court, as 

well as the agency, must give effect to the unambiguously expressed intent of Congress.’” 

Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 125–26 

(1999) (citing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 

837, 842–43 (1984)).

In order for Commerce to disregard below cost sales, Commerce must make three 

findings. The statute requires Commerce to determine whether 1) sales of the foreign 

like product were made below the cost of production of that product,6 2) the below cost 

sales were made within an extended period of time and in substantial quantities,7 and 3) 

 

6 Commerce determines whether there are reasonable grounds to believe or suspect that 

there are below cost sales of the foreign like product. After establishing reasonable 

grounds to investigate below cost sales, Commerce calculates the cost of production. 

See, e.g., Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From Brazil, 65 

Fed. Reg. 5554, 5563 (Dep’t Commerce Feb. 4, 2000) (notice of final determination of 

sales at less than fair value). 

7 An extended period of time is statutorily defined in § 1677b(b)(2)(B) as “a period that is 

normally 1 year, but not less than 6 months.” 19 U.S.C. § 1677b(b)(2)(B). “Substantial 

quantities” is defined in § 1677b(b)(2)(C), which provides that 

[s]ales made at prices below the cost of production have been made in 

substantial quantities if-- 

(i) the volume of such sales represents 20 percent or more of the volume of 

sales under consideration for the determination of normal value, or

 (footnote continued) 
Court No. 14-00098 Page 10 

the below cost sales were not made at prices which permit the recovery of all costs within 

a reasonable period of time. The statute provides that if Commerce determines it has

reasonable grounds to believe or suspect that sales of the foreign like 

product under consideration for the determination of normal value have 

been made at prices which represent less than the cost of production of that 

product, [Commerce] shall determine whether, in fact, such sales were 

made at less than the cost of production. If [Commerce] determines that 

sales made at less than the cost of production-- 

(A) have been made within an extended period of time in substantial 

quantities, and

(B) were not at prices which permit recovery of all costs within a 

reasonable period of time, 

such sales may be disregarded in the determination of normal value. 

Whenever such sales are disregarded, normal value shall be based on 

the remaining sales of the foreign like product in the ordinary course of 

trade. If no sales made in the ordinary course of trade remain, the normal 

value shall be based on the constructed value of the merchandise.

19 U.S.C. § 1677b(b)(1). 

Congress explicitly defined when sales provide for recovery of costs over a 

reasonable period of time in the cost recovery test: 

If prices which are below the per unit cost of production at the time of sale 

are above the weighted average per unit cost of production for the period of 

investigation or review, such prices shall be considered to provide for 

recovery of costs within a reasonable period of time.

19 U.S.C. § 1677b(b)(2)(D).8 Prices below the per unit cost of production but above the 

weighted average cost of production for the period of review provide “for recovery of costs 

 

(ii) the weighted average per unit price of the sales under consideration for 

the determination of normal value is less than the weighted average per unit 

cost of production for such sales. 

19 U.S.C. § 1677b(b)(2)(C)(i)–(ii). 

8 There is a slight difference in the wording of 19 U.S.C. § 1677b(b)(1)(B) and 19 U.S.C 

 (footnote continued) 
Court No. 14-00098 Page 11 

within a reasonable period of time . . . .” 19 U.S.C. § 1677b(b)(2)(D). Thus, 

§ 1677b(b)(2)(D) identifies a floor created by the weighted average cost of production for 

the POR and § 1677b(b)(1) precludes Commerce from excluding below cost sales which 

are above the floor from the normal value calculation.9

The court finds that Congress unambiguously prohibited Commerce from using 

cost data for a period other than the POR to calculate the weighted average cost of 

production for purposes of the cost recovery test. The statute explicitly directs Commerce 

to compare “prices which are below the per unit cost of production at the time of sale,” 

with “the weighted average per unit cost of production for the period of investigation or 

review . . . .” 19 U.S.C. § 1677b(b)(2)(D). The language identifies a particular time frame, 

“for the period of investigation or review.” There is no ambiguity in the phrase “for the 

period of . . . review.” The phrase “for the period of investigation or review” can only mean 

the actual period of review established for the review. Whether any other part of the cost 

recovery test may contain an ambiguity is not before the court. The subsection does not 

include any words that would connote a grant of discretion to Commerce to expand the 

 

§ 1677b(b)(2)(D) with respect to the recovery of costs. Section 1677b(b)(1)(B) asks 

Commerce to determine if sales “were not at prices which permit recovery of all costs 

within a reasonable period of time." 19 U.S.C. § 1677b(b)(1)(B) (emphasis added). The 

cost recovery test of 19 U.S.C. § 1677b(b)(2)(D) does not say "all costs." Instead it says: 

If prices which are below the per unit cost of production at the time of sale 

are above the weighted average per unit cost of production for the period of 

investigation or review, such prices shall be considered to provide for 

recovery of costs within a reasonable period of time.

19 U.S.C. § 1677b(b)(2)(D) (emphasis added). Neither party has argued that this 

difference has any effect on the issue before the court. 

9 If below cost sales were made at prices below the floor, Commerce has discretion to 

exclude them from the normal value calculation. 
Court No. 14-00098 Page 12 

period from which costs can be calculated. Congress could have chosen words that 

afforded Commerce greater discretion. It did not.

Nothing in the statutory framework contradicts the cost recovery test’s plain 

language regarding the POR. The statute contemplates two distinct inquiries for below 

cost sales and cost recovery. In the below cost sales inquiry, the statute instructs 

Commerce to compare sales prices for the foreign like product under consideration for 

normal value to the cost of production. The cost of production is 

an amount equal to the sum of-- 

(A) the cost of materials and of fabrication or other processing of any kind 

employed in producing the foreign like product, during a period which would 

ordinarily permit the production of that foreign like product in the ordinary 

course of business; 

(B) an amount for [SG&A] based on actual data pertaining to production and 

sales of the foreign like product by the exporter in question; and

(C) the cost of all containers and coverings of whatever nature, and all other 

expenses incidental to placing the foreign like product in condition packed 

ready for shipment.

19 U.S.C § 1677b(b)(3)(A)–(C). Commerce has some discretion in determining what cost 

information to use to calculate the cost of production, but it must come from “a period 

which would ordinarily permit the production of that foreign like product in the ordinary 

course of business . . . .” 19 U.S.C. § 1677b(b)(3)(A); see also Thai Pineapple Canning 

Indus. Corp. v. United States, 273 F.3d 1077, 1084 (Fed. Cir. 2001) (explaining that the 

statutory language in § 1677b(b)(3) and § 1677b(e) does not “specify[] the period to be 

used when determining costs, and no other statute or regulation provides further 

guidance.”). Certain facts may require Commerce to make certain adjustments to the 

cost reporting period. See Thai Pineapple, 273 F.3d at 1085. 
Court No. 14-00098 Page 13 

In the cost recovery inquiry, Commerce compares the sales prices of the foreign 

like product under consideration for normal value to the “weighted average per unit cost 

of production for the period of investigation or review . . . .” 19 U.S.C. § 1677b(b)(2)(D). 

This provision stands in contradistinction to the cost of production, calculated in 

accordance with 19 U.S.C. § 1677b(b)(3), that is to be compared to normal value in the 

below cost sales test. Section 1677b(b)(3)(A) provides for the cost of production 

calculation to include the costs for producing the “foreign like product, during a period 

which would ordinarily permit the production of that foreign like product in the ordinary 

course of business . . . .”10 Likewise, the special rules for the calculation of cost of 

production provide that: 

Costs shall normally be calculated based on the records of the exporter or 

producer of the merchandise, if such records are kept in accordance with 

the generally accepted accounting principles of the exporting country (or the 

producing country, where appropriate) and reasonably reflect the costs 

associated with the production and sale of the merchandise. The 

administering authority shall consider all available evidence on the proper 

allocation of costs, including that which is made available by the exporter or 

producer on a timely basis, if such allocations have been historically used 

by the exporter or producer, in particular for establishing appropriate 

amortization and depreciation periods, and allowances for capital 

expenditures and other development costs.

19 U.S.C. § 1677b(f)(1)(A). Thus, the statutory scheme provides for two separate 

inquiries—a cost of production inquiry for below cost sales, and the weighted average 

 

10 The language in subsections (B) (i.e., “pertaining to the production and sales of the 

foreign like product”) and (C) (“other expenses incidental to placing the foreign like 

product in condition packed ready for shipment”) also confer discretion on Commerce. 

See 19 U.S.C § 1677b(b)(3)(B)–(C). 
Court No. 14-00098 Page 14 

cost of production for the POR in the cost recovery test.11 The language of the former 

provision provides discretion to Commerce, while the latter does not. 

Moreover, the legislative history for the cost recovery test does not undermine the 

plain language of 19 U.S.C. § 1677b(b)(2)(D). Congress made it clear that for the cost 

recovery test, as opposed to below cost sales analysis, it would limit Commerce’s 

discretion to choose a time period. As Congress explained in the Statement of 

Administrative Action (“SAA”),

new section [1677b(b)(2)(D)] specifies when particular prices provide for 

cost recovery within a reasonable period of time. Under current law, there 

is no clear definition of cost recovery — the measure of cost recovery could 

have been based on speculative estimates of future production costs. 

Under the amended law, if prices which are below costs at the time of sale 

are above weighted-average costs for the period of investigation or review, 

such prices shall be considered to provide for recovery of costs within a 

reasonable period of time. 

Uruguay Round Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-

316, vol. 1, at 832 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4170 (“SAA”). This 

 

11 Specifically, 19 U.S.C. § 1677b(b)(1) provides Commerce with discretion to disregard 

sales made at below the cost of production and 19 U.S.C. § 1677b(b)(2)(D) provides for 

the cost recovery test. While Congress provided separately for these inquiries, 

Commerce as a matter of policy chooses to employ the same initial methodology for both. 

See IDM at cmt. 1 (“In a normal case, we calculate the COP in the same way for use in 

the sales-below-cost and cost-recovery tests, based on the annual weighted-average cost 

during the POI or POR.”) So long as that methodology falls within the permissible 

statutory framework, Commerce is free to adopt such a policy. In other words, Commerce 

has the discretion to calculate costs based on the annual weighted average cost during 

the POI or POR. However, it is required to calculate costs for purposes of the cost 

recovery test based on the annual weighted average cost during the POI or POR. If it 

exercises its discretion to deviate from this methodology for purposes of its below cost 

sales analysis, it is not excused from its obligation to use the POR for cost recovery 

purposes.
Court No. 14-00098 Page 15 

statement demonstrates that Congress contemplated, but rejected, the notion that cost 

recovery could be measured with reference to any period other than the POR. 

 Defendant makes several arguments, none of which persuades the court to ignore 

the plain meaning of the statute. First, Defendant argues that the cost recovery test is 

ambiguous due to the unusual facts here, and therefore the court should accept its 

reasonable interpretation of the statute. Def.’s Opp’n 16. As the court held above, the 

cost recovery test is not ambiguous but requires Commerce to calculate the weighted 

average cost of production for the POR. The plain language of the cost recovery test 

does not contemplate any particular factual scenario. It merely defines when Commerce 

must find that below cost prices allow for recovery of costs within a reasonable period of 

time. Commerce does not acquire discretion to sidestep the POR in the cost recovery 

test simply because the cost recovery test does not specifically provide for the situation 

where a POR changes. Moreover, Defendant’s argument proves too much. If a statute 

became ambiguous simply because it was applied to a unique set of facts, there could be 

no unambiguous statutes.

In addition, Defendant argues that other provisions of the antidumping and 

countervailing duty statute, as well as the SAA, suggest the POR language in the cost 

recovery test is ambiguous. Defendant claims 19 U.S.C. § 1675(a) suggests the POR 

should be 12 months and that therefore, the cost recovery test’s reference to “the POR” 

should be interpreted to mean the “12 month POR.” However, the antidumping and 

countervailing duty statute does not define the length of the POR as 12 months. It 

provides that at least once during any 12 month period, if Commerce receives a request 
Court No. 14-00098 Page 16 

for review of an order, it must initiate a review.12 See 19 U.S.C. § 1675(a). Commerce’s 

regulations in 19 C.F.R. § 351.213(e) state that normally the POR will be 12 months. The 

regulations temper Commerce’s discretion to set the length of the POR in each case, but 

Commerce must use that POR consistently throughout the review.

As indicated, Defendant claims that ambiguity stems from the unusual 

circumstances of this case. Def.’s Opp’n 6. Putting aside the illogic of this assertion, 19 

U.S.C. § 1675(c), 19 C.F.R. § 351.218(c)(2), and 19 C.F.R. § 351.222(i)(2)(i) clearly 

envision the situation where the effective date for revocation in a sunset review does not 

coincide with the POR for the annual administrative review. By regulation, an annual 

administrative review and the POR it covers are determined according to the anniversary 

 

12 The statute provides that 

[a]t least once during each 12-month period beginning on the anniversary 

of the date of publication of a countervailing duty order under this subtitle or 

under section 1303 of this title, an antidumping duty order under this subtitle 

or a finding under the Antidumping Act, 1921, or a notice of the suspension 

of an investigation, the administering authority, if a request for such a review 

has been received and after publication of notice of such review in the 

Federal Register, shall-- 

(A) review and determine the amount of any net countervailable 

subsidy, 

(B) review, and determine (in accordance with paragraph (2)), the 

amount of any antidumping duty, and 

(C) review the current status of, and compliance with, any agreement 

by reason of which an investigation was suspended, and review the 

amount of any net countervailable subsidy or dumping margin 

involved in the agreement, 

and shall publish in the Federal Register the results of such review, 

together with notice of any duty to be assessed, estimated duty to be 

deposited, or investigation to be resumed. 

19 U.S.C. § 1675(a). 
Court No. 14-00098 Page 17 

month of the date of publication of the antidumping or countervailing duty order. See 19 

C.F.R. § 351.213(b), (e). Normally, the POR covers the 12 months immediately prior to 

the anniversary month. 19 C.F.R. § 351.213(e). The later an order is published in the 

month, the more time there is between the last day of the POR and the publication date 

of the order. If as a result of the first sunset review, either Commerce or the ITC decides 

to revoke the order, the revocation will be effective on the five year anniversary date of 

the order. See 19 C.F.R. § 351.222(i)(2)(i). If the first sunset review does not revoke the 

order, the effective date of revocation for all subsequent sunset reviews will not be the 

anniversary date of the order. Rather, the revocation date for subsequent sunset reviews 

will be the date that the prior sunset review ordered continuation of the order. 19 C.F.R. 

§ 351.222(i)(2)(i).13 Therefore, if the original order is published any day after the first of 

the month, and the first sunset review revokes the order, the POR in an annual 

administrative review would still differ from the date of revocation by at least one day. In 

addition, both Commerce and the ITC may expedite the sunset review, making the review 

period less than 360 days, or extend the review beyond 360 days, altering the publication 

date for the sunset review’s determination to continue the order. See 19 U.S.C. 

§ 1675(c)(3), (5)(B); 19 C.F.R. § 351.218(e)(1), (e)(2)(i). Therefore, it is not only 

foreseeable, but more than likely that revocation as a result of a sunset review will be 

effective on a date other than the anniversary date of the order. As a result, a gap in the 

 

13 Pursuant to Commerce’s regulations, in a decision to revoke an order made pursuant 

to a sunset review, “the revocation or termination will be effective on the fifth anniversary 

of the date of publication in the Federal Register of the order or suspended investigation, 

as applicable.” 19 C.F.R. § 351.222(i)(2)(i). 
Court No. 14-00098 Page 18 

date of the revocation order and the POR in the annual administrative review is to be 

expected. Commerce might infrequently need to apply the cost recovery test in a situation 

where the POR has changed because there has been a revocation. However, it cannot 

be the case that the occurrence of a circumstance foreseeable by virtue of the statute 

and the regulations would render otherwise clear statutory language ambiguous. 

As a related matter, Defendant’s claim that its interpretation of the cost recovery 

test is reasonable also fails. As the court has already held, the cost recovery test is not 

ambiguous. It requires the weighted average cost of production to be calculated for the 

POR. Therefore, Defendant’s argument that the decision to use costs of production from 

outside the POR was a reasonable interpretation of the cost recovery test because 

“Commerce found that ‘[a]n annual-average cost period provides a better, more accurate 

measure’” of the costs for Plaintiffs’ sales is of no moment. Def.’s Opp’n 15 (quoting IDM 

at cmt. 1); see also Def.-Intervenor Nucor Corp.’s Resp. Pls.’ Briefs 11, Jan. 29, 2015, 

ECF No. 38 (“Nucor’s Resp.”). Similarly, whether or not Commerce has previously used 

costs of production from outside the POR in its cost recovery analysis does not establish 

its legal authority to refuse to follow the plain language of the statute.14 The administrative 

 

14 Defendant claims that it has previously calculated the costs of production using costs 

from outside the POR in the administrative review of certain cold-rolled and corrosionresistant carbon steel flat products from Korea. See Def.’s Opp’n 17 (citing Certain ColdRolled and Corrosion-Resistant Carbon Steel Flat Products From the Republic of Korea, 

66 Fed. Reg. 47,163 (Dep’t of Commerce Sept. 11, 2001) (notice of preliminary results of 

antidumping duty administrative review)). Originally, the POR in that case was from 

August 1, 1999 through July 31, 2000. Commerce revoked the antidumping duty order 

for cold-rolled carbon steel products as of January 1, 2000. Therefore, Commerce

 (footnote continued) 
Court No. 14-00098 Page 19 

determinations cited by Defendant are not currently before the court and do not control 

the court’s determination that the language of the cost recovery test is clear on its face.

Defendant also argues the SAA indicates the cost recovery test is a flexible 

provision. Defendant notes that the SAA provides an exception for adjusting the costs of 

production. Def.’s Opp’n 14. However, as Defendant itself admits, the exception for when 

Commerce may make any adjustment to costs is to be made “before testing for cost 

recovery.” Id. at 14 (quoting SAA at 832, 1994 U.S.C.C.A.N. at 4170) (internal quotation 

marks omitted). Any flexibility provided by this exception specifically occurs before the 

application of the cost recovery test.

Below Cost Sales 

Plaintiffs argue that the use of costs outside the POR is unlawful as a general 

matter because Commerce is required to use costs of production that “reasonably reflect 

the costs associated with the production and sale of the merchandise, during the period 

of review,” and that those costs must be the costs for the POR. Pl.’s Mot. 18–19. Plaintiffs 

argue that there is “no legal basis for Commerce to utilize cost information for the five and 

a half months after revocation for testing whether sales made during the POR can be 

used as normal value for price comparison purposes.” Id. at 18. Defendant argues that 

 

shortened the POR for cold-rolled carbon steel products to August 1, 1999 through 

December 31, 1999. However, the cost data outside the POR was from July 1999, which 

was never included in the POR either before or after revocation. Furthermore, the parties 

there did not contest the use of the cost data from the month prior to the POR. See 

Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat Products From Korea, 67 

Fed. Reg. 11,976 (Dep’t Commerce Mar. 18, 2002) (notice of final results of antidumping 

duty administrative reviews). 
Court No. 14-00098 Page 20 

Commerce acted reasonably when it “rejected using shorter period data because ‘the 

shorter averaging period may reflect erratic production levels throughout the year, and 

improperly result in the exclusion of certain expenses only recorded sporadically during 

the year.’” Def.’s Opp’n 20 (quoting IDM at cmt. 1). Plaintiffs see this as a question of 

whether the statute unambiguously prohibits Commerce from using cost data for five and 

a half months outside of the POR, while Defendant sees this as a question of 

reasonableness. The court agrees with Defendant that 19 U.S.C. § 1677b(b)(1) grants 

Commerce the discretion to include costs outside of the POR in calculating the cost of 

production for its below cost sales analysis. However, the court finds Commerce’s 

explanation as to why it was reasonable on the facts of this case to use costs incurred 

five and a half months after the POR had ended, inadequate.

Congress has provided Commerce with discretion in calculating the cost of 

production. As discussed above, Commerce must use costs for “a period which would 

ordinarily permit the production of that foreign like product in the ordinary course of 

business . . . .” 19 U.S.C. § 1677b(b)(3)(A). Further, Commerce is instructed to calculate 

costs based upon the exporter’s or producer’s records where those records “reasonably 

reflect the costs associated with the production and sale of the merchandise.” 19 U.S.C. 

§ 1677b(f)(1)(A). This language affords Commerce significant discretion to choose what 

cost reporting period to use.15 The language is broad enough to afford Commerce the 

 

15 Defendant-Intervenor argues that 19 U.S.C. § 1677b(f)(1)(A) and 19 U.S.C. 

§ 1677b(b)(1) fail to support Plaintiffs’ position because the provisions only “involve the 

 (footnote continued) 
Court No. 14-00098 Page 21 

discretion to use costs outside of the POR, possibly even up to five and a half months 

outside the POR.

 As the Defendant points out, the SAA further provides: 

Costs shall be allocated using a method that reasonably reflects and 

accurately captures all of the actual costs incurred in producing and selling 

the product under investigation or review. In determining whether to accept 

the cost allocation methods proposed by a specific producer, Commerce 

will consider the production cost information available to the producer and 

whether such information could reasonably be used to compute a 

representative measure of the materials, labor and other costs, including 

financing costs, incurred to produce the subject merchandise, or the foreign 

like product. 

Def.’s Opp’n 21–22 (quoting SAA at 835, 1994 U.S.C.C.A.N. at 4172). Under this 

language, when Commerce evaluates a company’s records to calculate the cost of 

production it must determine if the method used “reasonably reflects and accurately 

captures all of the actual costs incurred in producing and selling the product under 

investigation or review.” It is not implausible that in certain situations, costs incurred 

outside the POR might reasonably reflect and accurately capture the actual costs incurred 

for the merchandise sold during the POR. 

 However, Commerce must explain its decision in this case that the costs incurred 

after the POR reasonably reflect the costs of the product under review. Although 

Commerce’s explanation does not have to be a model of clarity the court must be able to 

 

manner in which costs should be calculated and whether to disregard sales from normal 

value,” and do not address the question of the cost reporting period. Nucor’s Resp. 12. 

These provisions do implicate Commerce’s obligations regarding the cost reporting period 

because they cabin Commerce’s discretion for how to calculate the cost of production in 

the below cost sales test. 
Court No. 14-00098 Page 22 

discern why Commerce believed that costs outside the POR “reasonably reflect the costs 

associated with the production and sale of the merchandise.” 19 U.S.C. § 1677b(f)(1)(A). 

It is not enough for Commerce to summarily conclude that “there is no reason to believe 

that the annual-average cost data is unsuitable or otherwise unrepresentative . . . .” Def.’s 

Opp’n 22 (quoting IDM at cmt. 1) (internal quotation marks omitted). Nor is it sufficient 

for Defendant to argue that Plaintiffs failed to show how Commerce’s choice led to any 

distortion. Id. at 23 (citations omitted). The explanation cannot simply provide any reason 

as to why Commerce would prefer to use this data. Commerce must explain why, in light 

of the statute, it decided to use this data. The statute grants Commerce the discretion to 

calculate costs “during a period which would ordinarily permit the production of that 

foreign like product in the ordinary course of business,” 19 U.S.C. § 1677b(b)(3)(A), and 

to rely upon records that “reasonably reflect the costs associated with the production and 

sale of the merchandise.” 19 U.S.C. § 1677b(f)(1)(A). Commerce must explain how the 

costs used reasonably reflect the costs for the merchandise under consideration in its 

determination of normal value.

 Defendant argues that nothing mandates that Commerce “must use data 

specifically pegged to the review period . . . .” Def.’s Opp’n 22 (citation omitted). While 

the statute affords Commerce discretion to use cost of production data from outside the 

POR, Commerce must still provide an adequate explanation for its decision. As 

discussed above, that Defendant cites other instances in which Commerce has used 

costs from outside the POR does not establish the reasonableness of its decision to do 

so in this case.
Court No. 14-00098 Page 23 

Administrative Burden

 Finally, Defendant contends Plaintiffs raised arguments regarding the cost data for 

cost recovery and below cost sales analysis too late in the administrative proceeding. 

Defendant argues “even if Commerce had agreed with plaintiffs’ position, Commerce 

could not reopen the record because doing so would have impeded its ability to complete 

the administrative review within the statutorily prescribed deadline.” Id. at28.16 As 

discussed above, the cost recovery test requires Commerce to collect the cost data for 

the POR. A clear and unambiguous statute does not give way to administrative 

constraints. Therefore, it is not a matter of whether the administrative burden reasonably 

outweighed the decision to comply with Plaintiffs’ request. Commerce was required to 

follow the statute. It may not disregard the statute simply because to do so would create 

administrative costs. While Commerce has discretion as to how it calculates the cost of 

production for below cost sales, it must explain the reasonableness of its decision, 

however it chooses to proceed in light of the data it collects. 

 

16 In the Issues and Decision Memorandum for the Final Results, Commerce stated that 

if it had agreed with Plaintiffs, it would have had to 

(1) require both respondents to report entirely new product-specific cost 

files, (2) analyze the revised cost data, (3) issue supplemental 

questionnaires seeking additional clarification of the newly reported 

information (if needed), (4) allow a new round of case and rebuttal briefs on 

the new data, and (5) address all comments contained in the newly filed 

case and rebuttal briefs prior to issuing our final results. 

IDM at cmt 1. 
Court No. 14-00098 Page 24 

CONCLUSION 

 In accordance with the foregoing, it is hereby 

ORDERED that Commerce’s determination is remanded for further consideration 

consistent with this opinion; and it is further 

ORDERED that Commerce shall issue a remand determination that is supported 

by substantial record evidence and is in accordance with law; and it is further 

ORDERED that Commerce may reopen the record to collect any information that 

may be necessary to make its determination upon remand; and it is further 

ORDERED that Commerce shall file its remand determination with the court within 

60 days of this date; and it is further, 

ORDERED that Plaintiff shall have 30 days thereafter to file objections; and it is 

further,

ORDERED that Defendant and Defendant-Intervenor shall have 15 days 

thereafter to file responses.

 /s/ Claire R. Kelly 

Claire R. Kelly, Judge

Dated: May 5, 2015 

 New York, New York