Opinion ID: 767689
Heading Depth: 3
Heading Rank: 2

Heading: Amendment to the Export Price Definition

Text: 38 The addition of the words outside the United States to the EP definition in the 1994 amendments similarly clarified what could be an EP sale. An earlier decision of the Court of International Trade held these words to be ambiguous, finding that it was unclear whether they described the location of the sale or the location of the producer/exporter. See Mitsubishi Heavy Indus., Ltd. v. United States, 15 F. Supp. 2d 807, 812 (Ct. Int'l Trade 1998). The language of the CEP definition leaves no doubt that modifier in the United States relates to first sold. We hold that the term outside the United States, read in the context of both the CEP and the EP definitions, as it must be, applies to the entire transaction at issue. Therefore, the 1994 amendment makes clearer that the critical difference between EP and CEP sales is whether the sale or transaction takes place inside or outside the United States. 39 A sales contract executed in the United States between two entities domiciled in the United States cannot generate a sale outside the United States. Thus, if outside the United States refers to the sale, as the government argues in this appeal, one of the parties to the sale or the execution of the contract must also be outside the United States for an EP classification to be proper. 7 Accordingly, contrary to the holding of the Mitsubishi court, the phrase does not ambiguously refer to either the sale or the producer/exporter; those two things are not separable in this context. The addition of the phrase outside the United States merely clarified what was already evident from the statutory definition prior to the amendments: a transaction in which both parties are located in the United States and the contract is executed in the United States cannot be an EP transaction. 40 In the Final Results, Commerce attempted to circumvent this geographic restriction on the use of EP sales by stating that when the PQ Test was satisfied it consider[ed] the exporter's selling functions to have been relocated geographically from the country of exportation to the United States, where the [U.S. affiliate] performs them. The trial judge's holding that the PQ Test does not contradict the statute because it is a means of defining whether a sale is in essence between a producer/exporter and the unaffiliated buyer appears to make the same point. This relocation concept is contrary to the plain language of the statute. 41 The statute distinguishes CEP and EP sales based on whether the transaction occurs inside or outside the United States. In addition, PQ Corporation precludes relocation of selling activity by holding that the statute provides no mechanism for imputing actual sales by an importer to that importer's related 'foreign manufacturer or producer of the merchandise' so that [purchase price (now EP)] will apply. PQ Corp., 652 F. Supp. at 733. Thus, Commerce's decision to redefine the activities occurring inside the United States as occurring outside the United States makes an impermissible end-run around both the plain meaning of the statutory language and the mandate of the Court of International Trade. Whether this redefinition does or does not perfectly comport with Congress's intent to isolate an arm's length transaction is not for this court to decide. Where Congress has made a clear distinction between the two categories based on the geographic location of the transaction, the agency may not circumvent this geographic distinction by relocating the activities of the U.S. affiliate. 42 Thus, the 1994 amendments made even clearer that an EP sale (or agreement for sale) must occur outside the United States. When, as here, there are contracts showing that the sales at issue took place in the United States between two entities with United States addresses, it is contrary to the plain meaning of the statute for Commerce to continue to use the PQ Test to define the sale as occurring outside of the United States. 43 A sale can be defined as either an EP or a CEP sale; a sale can not be in both categories, nor is there a middle ground. Congress only provided for two categories and those two categories are mutually exclusive. Thus, when the EP and CEP definitions are read together, it is clear that Congress distinguished the categories in terms of the relationship of the parties and the location of the sales. In distinguishing the two, Congress opted for what can be seen as a structural approach to defining EP and CEP sales, not the function-driven approach of the PQ Test. The words chosen by Congress are clear and unambiguous words such as affiliated, sold, and in or outside the United States. 44 Congress's intent to fully define EP and CEP without any delegation to Commerce is further evident when the sections are viewed in the context of the rest of the anti-dumping statute. It is common in the anti-dumping statute for Congress to leave decisions about how to make dumping calculations to Commerce's discretion because of its expertise. (See, for example the discretionary use of the so-called fair-value provision discussed infra.) Accordingly, if Congress had intended for Commerce to use its discretion to determine whether the use of CEP or EP was appropriate, it would have explicitly left that task to the agency as it did with other calculations in the statute. 45 When Congress makes such a clear statement as to how categories are to be defined, neither the agency nor the courts are permitted to substitute their own definition for that of Congress, regardless of how close the substitute definition comes to achieving the same result as the statutory definition. 8 The job of revising statutes is for Congress, not the agency or the courts. 46 Finally, the appellees argue that the PQ Test has been upheld repeatedly by the Court of International Trade. We are not swayed by that argument. First, this court is, of course, not bound by those decisions. Second, the Federal Circuit itself has never addressed the question of whether the PQ Test is consistent with the statute. Third, we are not persuaded that the decisions in those cases have any bearing on the question before this court. Cases decided based on the prior statute, such as Outokumpu Copper Rolled Products v. United States, 829 F. Supp. 1371, 1378 (Ct. Int'l Trade 1993), E.I. DuPont de Nemours v. United States, 841 F. Supp. 1237, 1249 (Ct. Int'l Trade 1993), and Independent Radionic Workers of America, 19 CIT 375 (1995), cannot enlighten our analysis of the new statutory language. In Mitsubishi Heavy Indus., 15 F. Supp. 2d at 813-14, a post-amendment decision, the court affirmed a Commerce decision to classify sales as CEP sales after applying the PQ Test. Thus, while Mitsubishi did uphold the test, it did not uphold its use in a way that was contrary to the statutory language. If there was ever any doubt about how to define EP and CEP sales, Congress's amendments to the statutory language make clear that it is the identities of the parties to the actual sale or agreement to sell, and the geographic location of those parties, that determine whether EP or CEP should be used to calculate the U.S. Price. It is no longer necessary or permissible for Commerce to use the PQ Test to determine if the sales activity has been relocated or if the sale was in essence between the producer and the unaffiliated purchaser because the U.S. affiliate acted only as a communications link between them. In light of the amended language Commerce must now base its decision on the identity and geographic location of the parties to a sales contract. If the contract for sale was between a U.S. affiliate of a foreign producer and an unaffiliated U.S. purchaser, then the sale must be classified as a CEP sale. Stated in terms of the EP definition: if the sales contract is between two entities in the United States, and executed in the United States,it cannot be said to have been outside the United States; therefore the sale cannot be an EP sale. Similarly, a sale made by an affiliate or another party other than the producer or exporter cannot be an EP sale. Thus, we reverse the decision of the Court of International Trade and remand to that court for remand to the Department of Commerce for a redetermination of anti-dumping duties that is consistent with this holding. 47