Opinion ID: 761512
Heading Depth: 2
Heading Rank: 2

Heading: Export Taxes

Text: 14 As noted above, the Russian Federation is considered a NME. AVISMA and SMW reported that they paid Russian export taxes and administrative procedure fees on the magnesium that they exported during the period of investigation. Commerce did not deduct the amounts assessed as export taxes and administrative fees from the USP of the magnesium originating from these two producers. See Final Determination, 60 Fed.Reg. at 16,442. Upon MagCorp's appeal, the Court of International Trade, at Commerce's request, remanded this issue so that Commerce could reevaluate its interpretation of 19 U.S.C. § 1677a, which generally requires the deduction of export taxes from the USP. See MagCorp I, 938 F.Supp. at 905-06. In its Remand Determination, Commerce concluded that its treatment of export taxes was consistent with the language of 19 U.S.C. § 1677a and the general analysis of non-market economies. See Remand Determination, at 6-10; see also MagCorp II, 949 F.Supp. at 872-73. MagCorp challenges Commerce's conclusion because export taxes are a real cost to AVISMA and SMW, and the language of 19 U.S.C. § 1677a may require the deduction of export taxes assessed from the USP. 15 Resolution of this issue requires analysis of the USP provision of 19 U.S.C. § 1677a. In particular, under subsection 1677a(d)(2)(B), the USP of a product will be reduced by the amount, if included in such price, of any export tax, duty, or other charge imposed by the country of exportation on the exportation of the merchandise to the United States. 19 U.S.C. § 1677a(d)(2)(B). MagCorp argues that 19 U.S.C. § 1677a(d)(2)(B) requires Commerce to deduct any export taxes paid from the USP of merchandise under investigation regardless of whether the tax was imposed in a market economy or a non-market economy. However, this interpretation of 19 U.S.C. § 1677a does not comport with the plain meaning of the statute. 16 Significantly, the statute requires export taxes to be deducted from the USP if [the export tax is] included in such price. Because the plain language of the statute does not require all export taxes to be deducted from the USP, but requires deduction of only those that are included in the price of the merchandise, the statute clearly contemplates a situation where the export tax is not included in the price of the merchandise. MagCorp's proposed reading of the statute would give no discretion to Commerce to determine when export taxes should properly be deducted. Under MagCorp's interpretation, any export tax imposed must be deducted from the USP. However, this interpretation would impermissibly read the phrase if included in such price out of the statute. 17 We agree with the interpretation proposed by Commerce in its Remand Determination. In a market economy, Commerce can presume that any tax imposed on the merchandise to be exported will be included in the USP of that merchandise. However, that presumption is not available when the merchandise is produced in a non-market economy. By definition, in a non-market economy, the price of merchandise does not reflect its fair value because the market does not operate on market principles. See 19 U.S.C. § 1677(18) (defining non-market economy). Therefore, no reliable way exists to determine whether or not an export tax has been included in the price of a product from a non-market economy. The plain meaning of the language of subsection 1677a(d)(2)(B) supports this interpretation. Moreover, this interpretation both harmonizes subsection 1677a(d)(2)(B) (deduction of export taxes) with subsection 1677(18) (definition of non-market economy), and gives meaning to every part of subsection 1677a(d)(2)(B), including the clause if included in such price. Statutory interpretations that give meaning to every clause of the statute are to be favored. See Heckler v. Chaney, 470 U.S. 821, 829, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (citing United States v. Menasche, 348 U.S. 528, 538-39, 75 S.Ct. 513, 99 L.Ed. 615 (1955)). 18 Further, this interpretation based on the plain meaning of the statutory language comports with our previous treatment of real costs of production in non-market economies. In Lasko Metal Products, Inc. v. United States, we found that it was appropriate for Commerce to use certain actual costs of production when calculating a USP for a product produced in a non-market economy. See 43 F.3d 1442, 1445-46 (Fed.Cir.1994). But the costs approved in Lasko were based on the amount the Chinese manufacturers [under examination] had actually paid on the international market for the supplies they used. Id. at 1445 (emphasis added). In that case, the costs actually paid by the Chinese manufacturers were costs for supplies purchased on the international market, and not intra-non-market economy expenses as in the present case. See id. at 1445-46. The costs of the factors of production for transactions inside China could not be used to calculate the USP because the available information did not permit the fair market value of those costs to be determined as China was a non-market economy. See id. at 1445. 19 Similarly, the nature of the Russian economy does not permit Commerce to determine whether the export taxes imposed on the exported magnesium were actually included in the price of the magnesium as required by subsection 1677a(d)(2)(B). Export taxes must be treated as an intra-non-market economy expense under these circumstances, making it impossible to determine whether the actual cost of the export tax was included in the price at which the magnesium was sold in the United States. 20 Therefore, we affirm the judgment of the Court of International Trade affirming Commerce's Remand Determination's treatment of export taxes. 21