Opinion ID: 774577
Heading Depth: 3
Heading Rank: 2

Heading: Statutory Landscape

Text: 14 19 U.S.C. § 1677b(f)(1)(A) provides that for purposes of CV calculations: 15 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 . . . 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. 16 19 U.S.C. § 1677b(f)(1)(A). 17 In other words, the statute provides that as a general rule, an agency may either accept financial records kept according to generally accepted accounting principles in the country of exportation, or reject the records if accepting them would distort the company's true costs. Thai Pineapple, 187 F.3d at 1362; NTN Bearing Corp. v. United States, 74 F.3d 1204, 1206 (Fed. Cir. 1995). 18 We turn next to the SAA, which is regarded as an authoritative expression by the United States concerning the interpretation and application of the foregoing statute. The SAA provides: 19 In determining whether a company's records reasonably reflect costs, Commerce will consider U.S. generally accepted accounting principles employed by the industry in question. For example, a company's records might not fairly allocate the cost of an asset if a firm's financial statements reflect an extremely large amount of depreciation for the first year of an asset's life, or if there is no depreciation expense reflected for assets that have been idle. In such a situation, it would be appropriate for Commerce to adjust depreciation expenses. 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. Commerce also will consider whether the producer historically used its submitted cost allocation methods to compute the cost of the subject merchandise prior to the investigation or review and in the normal course of its business operations. Also, if Commerce determines that costs, including financing costs, have been shifted away from production of the subject merchandise, or the foreign like product, it will adjust cost appropriately, to ensure they are not artificially reduced. 20 Agreement on Implementation of Article VI of the GATT, 834-35, reprinted in 1994 U.S.C.C.A.N. at 4172. 21 Neither the statute nor the SAA instructs Commerce as to the methodology it must use to establish depreciation expenses in CV calculations. Consequently, our review focuses on whether Commerce was reasonable in accepting the depreciation methodology of Rima. United States v. Mead Corp., 121 S. Ct. 2164, 2172 (2001) (noting that where the legislative delegation to an agency of interpretive authority is implicit, a reviewing court . . . is obliged to accept the agency's position if Congress has not previously spoken to the point at issue and the agency's interpretation is reasonable.); See also Chevron, U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 (1984); Thai Pineapple, 187 F.3d at 1362; Daewoo Elec. Co. v. Int'l Union, 6 F.3d 1511, 1516 (Fed. Cir. 1993). 22 It is with the foregoing background in mind that we analyze the parties' contentions and the record to assess Commerce's reasonableness in relying on Rima's reported depreciation expense.