(a) Introduction. In certain circumstances, the Secretary may determine normal value by constructing a value based on the cost of manufacturing, selling, general and administrative expenses and profit. The Secretary may use constructed value as the basis for normal value when: neither the home market nor a third country market is viable; sales below the cost of production are disregarded; sales outside the ordinary course of trade or sales for which the prices are otherwise unrepresentative are disregarded; sales used to establish a fictitious market are disregarded; no contemporaneous sales of comparable merchandise are available; or in other circumstances where the Secretary determines that home market or third country prices are inappropriate. (See section 773(e) and (f) of the Act.) This section clarifies the meaning of certain terms and sets forth certain information which the Secretary will normally consider in determining a constructed value.
(b) Profit and selling, general, and administrative expenses. In determining the amount to be added to constructed value for profit and for selling, general, and administrative expenses, the following rules will apply:
(1) Under section 773(e)(2)(A) of the Act, “foreign country” means the country in which the merchandise is produced or a third country selected by the Secretary under § 351.404(e), as appropriate.
(2) Under section 773(e)(2)(B) of the Act, “foreign country” means the country in which the merchandise is produced.
(3) Under section 773(e)(2)(B)(iii) of the Act, the Secretary will normally consider the following criteria in selecting sources for selling, general and administrative expenses, as well as profit, in calculating constructed value:
(i) The similarity of the potential surrogate companies' business operations and products to the examined producer's or exporter's business operations and products;
(ii) The extent to which the financial data of the surrogate company reflects sales in the home market and does not reflect sales to the United States;
(iii) The contemporaneity of the surrogate company's data to the period of investigation or review; and
(iv) The extent of similarity between the customer base of the surrogate company and the customer base of the examined producer or exporter.
[62 FR 27379, May 19, 1997, as amended at 241206- 89 FR 101764, Dec. 16, 2024]
Notes of Decisions
RHP Bearings, Ltd. v. United States, 83 F. Supp. 2d 1322 (Ct. Intl. Trade 1999).
· cites it 4× “In promulgating its amended regulation 19 C.F.R. § 351.405 to the URAA, which deals with calculating NV based on CV, Commerce determined that it would use aggregate figures of foreign like products to calculate CV profit under the preferred methodology of 19 U.”
Thai I-Mei Frozen Foods Co., Ltd v. United States, 477 F. Supp. 2d 1332 (Ct. Intl. Trade 2007).
· cites it 4× “The preamble to Commerce’s regulations promulgating 19 C.F.R. § 351.405 , which addresses the calculation of normal value based on constructed value and, specifically, the computation of profit for constructed value, addresses the issue of data on sales outside of the ordinary…”
Geum Poong Corp. v. United States, 163 F. Supp. 2d 669 (Ct. Intl. Trade 2001).
· cites it 3× “Second, Commerce did not state, as Petitioners assert, that it lacked profit data for Samyang and Sam Young; rather, it explained that it could not use Alternative Two under the following reasoning: Samyang is the only respondent with viable home market sales ( 19 C.F.R. §…”
Thai I-Mei Frozen Foods Co., Ltd. v. United States, 572 F. Supp. 2d 1353 (Ct. Intl. Trade 2008).
· cites it 3× “The court noted that language in the preamble accompanying the promulgation of 19 C.F.R. § 351.405 (the “Preamble”) stated that, with respect to constructed value determined according to alternative (iii), “depending on the circumstances and the availability of data, there may…”
Atar, S.R.L. v. United States, 637 F. Supp. 2d 1068 (Ct. Intl. Trade 2009).
· cites it 3× “Although Atar does not so state, the court understands Atar’s argument to rely on 19 C.F.R. § 351.405 (2006). In this regulation, which construes 19 U.”
Maverick Tube Corp. v. United States, 2015 CIT 107 (Ct. Intl. Trade 2015).
· cites it 2× “§ 1677b(a)(4); 19 C.F.R. § 351.405 (a) (2014). Constructed value is established by applying a statutory formula, and it includes the sum of the costs of production plus an amount for profit.”
Viraj Grp., Ltd. v. United States, 162 F. Supp. 2d 656 (Ct. Intl. Trade 2001).
“” 19 C.F.R. § 351.405 (a) (2000). In the present case, Commerce calculated Plaintiffs cost of production based on its cost of materials and fabrication for the foreign like product, including the cost of the tolling operation performed by a third party.”
SKF USA Inc. v. United States, 263 F.3d 1369 (Fed. Cir. 2001).
“19 C.F.R. § 351.405 (a). It is Commerce’s methodology for the calculation of the profit component of constructed value that is at issue.”
Slater Steels Corp. v. United States, 279 F. Supp. 2d 1370 (Ct. Intl. Trade 2003).
“§ 1677b(e); 19 C.F.R. § 351.405 (a). Therefore, the lower the cost of production for steel billets, the lower is the Viraj Group’s dumping margin.”
Nsk Ltd. v. United States, 170 F. Supp. 2d 1280 (Ct. Intl. Trade 2001).
“NSK notes that when Commerce revised its regulations to conform to the URAA, in particular 19 C.F.R. § 351.405 , the agency specified it would use “ ‘an aggregate calculation that encompasses all foreign like products under consideration for normal value.”
Husteel Co. v. United States, 2016 CIT 76 (Ct. Intl. Trade 2016).
“§ 1677b(e); 19 C.F.R. § 351.405 (b). In calculating normal value using constructed value, Commerce’s preferred method is to include “the actual amounts incurred and realized, by the specific exporter or producer being examined .”
Bridgestone Americas, Inc. v. United States, 636 F. Supp. 2d 1347 (Ct. Intl. Trade 2009).
“§ 1677b(a)(4); 19 C.F.R. § 351.405 (a). The constructed value is established by applying a statutory formula, and it includes the cost of materials, certain expenses and profits, and packing costs.”
— 19 C.F.R. § 351.405(a) — 1 case
Skf USA Inc., Skf France S.A., Sarma, Skf Gmbh, Skf Industrie S.P.A., & Skf Sverige Ab v. United States, & the Torrington Co., Fag Kugelfischer Georg Schafer Ag, Fag Italia S.P.A., Barden Corp. (u.k.) Ltd., Fag Bearings Corp., & the Barden Corp. v. United States & the Torrington Co., 263 F.3d 1369 (Fed. Cir. 2001).
— 19 C.F.R. § 351.405(b) — 2 cases
Geum Poong Corp. v. United States, 163 F. Supp. 2d 669 (Ct. Intl. Trade 2001).
“Second, Commerce did not state, as Petitioners assert, that it lacked profit data for Samyang and Sam Young; rather, it explained that it could not use Alternative Two under the following reasoning: Samyang is the only respondent with viable home market sales ( 19 C.F.R. §…”
Thai I-Mei Frozen Foods Co., Ltd v. United States, 477 F. Supp. 2d 1332 (Ct. Intl. Trade 2007).
“The preamble to Commerce’s regulations promulgating 19 C.F.R. § 351.405 , which addresses the calculation of normal value based on constructed value and, specifically, the computation of profit for constructed value, addresses the issue of data on sales outside of the ordinary…”
— 19 C.F.R. § 351.405(b)(2) — 1 case
Thai I-Mei Frozen Foods Co., Ltd v. United States, 477 F. Supp. 2d 1332 (Ct. Intl. Trade 2007).
“The preamble to Commerce’s regulations promulgating 19 C.F.R. § 351.405 , which addresses the calculation of normal value based on constructed value and, specifically, the computation of profit for constructed value, addresses the issue of data on sales outside of the ordinary…”
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