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Pages 1--18 from USCIT Slip Op. 99-25

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KOENIG & BAUER-ALBERT AG, ET AL.,
Plaintiff,
v.
UNITED STATES,
Defendant,
and
GOSS GRAPHICS, INC.
Defendant-Intervenor.

Slip Op. 99-25
UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: Pogue, Judge
Consol. Court No. 96-10-02298

(Germany)

[Final results of Commerce's redetermination sustained in part and remanded in part.]
Decided: March 16, 1999
Shearman & Sterling (Thomas B. Wilner, Jeffrey M. Winton, Michael J. Chapman, and Meredith Kolsky Lewis) for Plaintiffs MAN Roland
Druckmaschinen AG and MAN Roland Inc.; Kirkland & Ellis (Kenneth G. Weigel, Carol A. Rafferty, Nancy Kao) for Plaintiffs Koenig &
Bauer-Albert AG and KBA-Motter Corp.
David W. Ogden, Acting Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Boguslawa B. Thoemmes, Attorney, Office of the Chief Counsel for Import Administration, United
States Department of Commerce, Of Counsel, and Randi Rimerman Serota, Attorney, Department of Justice, Civil Division, Commercial
Litigation Branch, for Defendants.
Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Alan H. Price, Willis S. Martyn III, and Leslie Johnson Pujo) for Defendant-Intervenor.

OPINION
POGUE, Judge:
On June 23, 1998, this Court remanded certain
aspects of the Department of Commerce's (" Commerce") determination
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1 In that decision, Plaintiffs Koenig & Bauer-Albert AG
(" KBA") and MAN Roland Druckmaschinen AG and MAN Roland Inc. (" MAN Roland"), respondents in the underlying investigation, and

Plaintiff Goss Graphic Systems, Inc. (" Goss"), petitioner in the underlying investigation, filed separate motions challenging
various aspects of Commerce's determination. The motions were consolidated.

in Large Newspaper Printing Presses and Components Thereof, Whether
Assembled or Unassembled, From Germany, 61 Fed. Reg. 38,166 (Dep't
Commerce, July 23, 1996)( final determination)(" Germany Final").
See Koenig & Bauer-Albert AG v. United States, 22 CIT , 15 F.
Supp. 2d 834 (1998). 1 Specifically, the Court directed Commerce: 1)
to reconsider the decision not to combine MAN Roland's large
newspaper printing press (" LNPP") production costs with those
incurred by its subsidiary, MAN Plamag, and 2) to recalculate MAN
Roland's selling, general, and administrative costs using an
appropriate allocation ratio. See id. at , 15 F. Supp. 2d at
858.

Standard of Review
The Court will uphold a Commerce determination in an
antidumping investigation unless it is "unsupported by substantial
evidence on the record, or otherwise not in accordance with law[.]"
19 U. S. C. § 1516a( b)( 1)( B)( i)( 1994).

I. Combining MAN Roland and MAN Plamag Production Costs
A. Background
Where certain criteria are met, Commerce "collapses" related 2
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companies into one entity, deriving a single, weighted-average
dumping margin for the collapsed entity as a whole. See Asociacion
Colombiana de Exportadores de Flores v. United States, 22 CIT ,
, 6 F. Supp. 2d 865, 893 (1998). Here, during the underlying
administrative proceedings, MAN Roland argued that, because MAN
Roland and its wholly owned subsidiary, MAN Plamag, met the
criteria for collapsing, Commerce "should [have] average[ d] the
labor and overhead rates of both the MAN Plamag and [MAN Roland]
facilities because LNPPs [were] produced at both locations."
Germany Final at 38,187.
In its final determination, Commerce neither outlined its
collapsing practice nor explained why MAN Roland and MAN Plamag did
not meet the requisite criteria. See id. at 38,188. Instead,
without addressing the fact that both companies produced LNPPs,
Commerce stated that "MAN Plamag is an affiliated party to [MAN
Roland] . . . [that] supplies [MAN Roland] with one of the major
production inputs[.]" Id. Commerce concluded, "[ c] ontrary to [MAN
Roland's] assertion, the Department's normal practice is not to
automatically collapse affiliated suppliers and the respondent
company." Id. In its brief, the government argued that it did not
average MAN Roland's and MAN Plamag's costs because MAN Plamag was
not a producer of identical merchandise. See Koenig & Bauer-Albert,
22 CIT at , 15 F. Supp. 2d at 849, n. 7.
This Court found Commerce's response in its final
determination to be insufficient. See id. at 849. Moreover,
because Commerce's "identical merchandise" argument was a post hoc
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2 In Certain Fresh Cut Flowers From Colombia, Commerce
averaged the costs of two related companies it collapsed even though it found that the flowers produced by the two farms were

"somewhat different[.]" Fresh Flowers at 20,497. In Silicon Metal From Brazil, Commerce averaged a company's costs incurred
at different furnaces in part because "other furnaces used to produce non-subject merchandise [could] be used to produce
silicon metal." Silicon Metal at 42,808.

rationalization, the Court did not address it on the merits. See
id. at 849, n. 7. Therefore, the Court remanded the issue for
Commerce to reconsider. See id. at 850. The Court also instructed
Commerce that, if it chose to rely on the "identical merchandise"
argument, it would have to reconcile its determination with Certain
Fresh Cut Flowers From Colombia, 55 Fed. Reg. 20,491, 20,497 (Dep't
Commerce, May 17, 1990)( final determination)(" Fresh Flowers") and
Silicon Metal From Brazil, 59 Fed. Reg. 42,806, 42,808 (Dep't
Commerce, Aug. 19, 1994)( final determination)(" Silicon Metal"). 2
See id. at 849, n. 7.
In its redetermination, Commerce reconsidered the issue, but
again decided not to combine the costs of MAN Roland and MAN Plamag
for purposes of calculating the cost of production. See Final
Results of Redetermination Pursuant to Remand (Dep't Commerce,
Sept. 17, 1998)(" Redetermination") at 3. Commerce maintained that,
pursuant to its "established practice," it only averages a
company's production costs from multiple facilities where the
facilities actually produce identical merchandise. Id. (citing
Open-End Spun Rayon Shingles Yarn From Austria, 62 Fed. Reg.
43,701, 43,703 (Dep't Commerce, Aug. 15, 1997)( final
determination); Canned Pineapple Fruit From Thailand, 62 Fed. Reg.
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42,487, 42,491 (Dep't Commerce, Aug. 7, 1997)( preliminary results
of admin. review); Antifriction Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof From France, 61 Fed. Reg. 66,472,
66,477 (Dep't Commerce, Dec. 17, 1996)( final results of admin.
review)). In addition, Commerce argued that its decision in
Germany Final was consistent with Fresh Flowers and Silicon Metal.
See id. at 5,6.
Finally, Commerce addressed the policy argument advanced by
MAN Roland as support for MAN Roland's position. In its comments
to Commerce's redetermination, MAN Roland argued that Commerce's
practice of averaging a respondent's production costs incurred at
multiple facilities was designed "to avoid an opportunity for a
respondent to escape dumping liability . . . simply because of the
choice of the facility in which the merchandise was produced."
Cmts. of MAN Roland on Redeterm. Pursuant to Remand (" MAN Roland
Cmts.") at 7. In other words, according to MAN Roland, Commerce's
practice is to average a respondent's production costs incurred at
multiple facilities where the various facilities have the
capability to produce the subject merchandise.
Countering MAN Roland's assertion, Commerce stated,
We disagree with [MAN Roland's] argument that, where a respondent has the ability to produce the subject
merchandise at more than one facility, the reported costs should reflect the weighted-average cost of manufacturing
at all facilities. Contrary to [MAN Roland's] assertion, the Department does not weight-average the production
costs incurred for non-identical merchandise simply because the respondent could have produced identical
merchandise at one of its facilities.
Redetermination at 8.
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B. Discussion
In its redetermination, Commerce maintained that it properly
did not average MAN Roland's and MAN Plamag's production costs
because, under its "established practice," Commerce only averages
a company's production costs from multiple facilities where the
facilities produce identical merchandise. See Redetermination at
3. The Court here reviews whether in fact Commerce's identical
merchandise requirement constitutes its established practice in the
context of affiliated parties.
The Court first concludes that Commerce has failed to explain
how its identical merchandise practice is consistent with its
decisions in Fresh Flowers and Silicon Metal.
In Fresh Flowers, Commerce weight-averaged the production
costs of two related companies, Floramerica and Cultivos de Caribe,
that were collapsed for purposes of calculating constructed value.
See Fresh Flowers at 20,497. The Floramerica farm produced
standard chrysanthemums, while the Cultivos de Caribe farm produced
spider chrysanthemums. See id. In its redetermination, Commerce
contended that it averaged the two farms' production costs because
Commerce regarded the two chrysanthemum varieties "as part of the
identical product category, chrysanthemums[.]" Redetermination at
5.
Commerce's position here is not consistent with the reasoning
articulated in Fresh Flowers. There, Commerce explained,
"[ a] lthough the flowers are somewhat different, we consider spider
chrysanthemums and standard chrysanthemums to be the same type and
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therefore calculated one [constructed value] for both." Fresh
Flowers at 20,497. The Court fails to see how the phrases
"somewhat different" and "the same type" can be reconciled with
"identical." Moreover, if, quoting Commerce, it is sufficient for
the purpose of cost averaging that the products produced at each
facility be "part of the identical product category," Commerce has
not explained how different models of LNPPs are not members of an
identical product category, LNPPs.
Similarly, Commerce failed to explain how its decision in
Germany Final is consistent with Silicon Metal. In that
determination, Commerce averaged a silicon metal producer's costs
incurred by different furnaces. See Silicon Metal at 42,808. In
its redetermination, Commerce asserted that Silicon Metal did not
"support . . . [MAN Roland's] contention that the Department
normally computes a weighted-average cost for merchandise that is
non-identical . . . [because there the respondent] produced the
identical merchandise in multiple furnaces during the period of
review." Redetermination at 9.
While Commerce is correct that all the furnaces in question in
Silicon Metal produced the subject merchandise during the period of
review, see Silicon Metal at 42,808, Commerce's characterization of
that determination ignores its stated rationale. In Silicon Metal,
Commerce indicated that it averaged production costs incurred at
multiple facilities to prevent the respondent from being able to
avoid dumping liability through the manipulation of production:
The Department believes that it is inappropriate to
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specifically identify inputs obtained at a lower cost to a particular product or production run. The furnaces
used to produce silicon metal can produce other products that are not subject to review. Likewise, other furnaces
used to produce non-subject merchandise can be used to produce silicon metal. Accordingly, any benefits derived
from the use of a particular furnace relate to all products produced during the period of review.

Id. (emphasis added). Therefore, contrary to Commerce's assertion,
the decision in Silicon Metal did not require that the multiple
facilities actually produce identical merchandise; rather, the
decision was based on the ability to produce the subject
merchandise at more than one facility.
Moreover, Commerce has failed to demonstrate that its
identical merchandise requirement is its established practice in
the context of affiliated parties. First, the determinations
Commerce cited as support for its assertion were all made after its
decision in Germany Final. See Redetermination at 3 (citing Open-End
Spun Rayon Singles Yarn From Austria, 62 Fed. Reg. 43,701,
43,703 (Dep't Commerce, Aug. 15, 1997)( final determination); Canned
Pineapple Fruit From Thailand, 62 Fed. Reg. 42,487, 42,491 (Dep't
Commerce, Aug. 7, 1997)( preliminary results of admin. review);
Antifriction Bearings (Other Than Tapered Roller Bearings) and
Parts Thereof From France, 61 Fed. Reg. 66,472, 66,497 (Dep't
Commerce, Dec. 17, 1996)( final results of admin. review)).
Therefore, Commerce cannot rely on these decisions as support for
its assertion that its identical merchandise requirement was its
established practice prior to its determination in Germany Final.
Moreover, none of Commerce's cites specifically addresses the
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3 The issue in the Austrian Yarn case was whether, for
purposes of the difference in U. S. and home market merchandise adjustment under 19 U. S. C. § 1677b( a)( 6)( C)( ii), the respondent

should report "a different cost of manufacturing for identical yarns due to the fact that different machines produce the yarn."
Open-End Spun Rayon Singles Yarn From Austria, 62 Fed. Reg. 43,701, 43,703 (Dep't Commerce, Aug. 15, 1997)( final
determination). Commerce decided to calculate a single weighted-average cost of manufacturing for the identical yarns because
"the difference in merchandise adjustment is intended to account for physical differences in similar merchandise being compared
and not differences in the production process[.]" Id. (emphasis added). The difference in merchandise adjustment is not relevant
to the issue before the Court. The Thai Pineapple decision Commerce cited was a preliminary
determination that simply stated that Commerce "calculated a single weighted-average cost for products with identical physical
characteristics[,]" without any indication of the context or the issue. Canned Pineapple Fruit From Thailand, 62 Fed. Reg.
42,487, 42,491 (Dep't Commerce, Aug. 7, 1997)( preliminary results of admin. review). Upon review of the matter's final
determination, however, it is apparent that the issue addressed was not whether the costs at separate facilities should be
averaged, but whether Commerce should calculate one average cost for the entire review period or separate costs for each fiscal
year. See Canned Pineapple Fruit From Thailand, 63 Fed. Reg. 7,392, 7,399 (Dep't Commerce, Feb. 13, 1998)( final results of
admin. review). Finally, in Antifriction Bearings, Commerce decided that the
respondent appropriately reported the production costs of a related party. See Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof From France, 61 Fed. Reg. 66,472, 66,497 (Dep't Commerce, Dec. 17, 1996)( final results of
admin. review). There was, however, no discussion of the degree of the parties' affiliation and no indication that the parties'
merchandise needed to be identical. See id. Therefore, the determination does not help resolve the issue before this Court.

question at issue here: whether Commerce only averages the
production costs incurred by affiliated parties at multiple
facilities where the facilities produce identical merchandise
during the period of review. 3
Upon review of Commerce determinations, it is apparent that
Commerce does have a multiple facility cost averaging practice
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where the respondent is a single entity. See, e. g., Steel Wire Rod
From Venezuela, 63 Fed. Reg. 8,948, 8,952 (Dep't Commerce, Feb. 23,
1998)( suspension of investigation)(" Weighted-average costs are used
for a product that is produced at more than one facility . . .
based on the cost at each facility."); Certain Cut-to-Length Carbon
Plate From South Africa, 62 Fed. Reg. 61,751, 61,754 (Dep't
Commerce, Nov. 19, 1997)( suspension of investigation); Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof
From Italy, 60 Fed. Reg. 10,959, 10,962 (Dep't Commerce, Feb. 28,
1995)( final results of admin. review). None of these
determinations indicates, however, that the products manufactured
at multiple facilities must be identical as a prerequisite to the
weight-averaging of production costs.
Moreover, no authority discusses whether or not to average the
production costs incurred by affiliated producers at multiple
facilities. The only context in which such discussion does occur
is in the context of collapsing. See, e. g., Fresh Flowers at
20,497.
As noted in this Court's original decision, Commerce was not
completely responsive to MAN Roland's underlying argument at the
administrative level. See Koenig & Bauer-Albert, 22 CIT at , 15
F. Supp. 2d at 849. There, MAN Roland argued that MAN Roland's and
MAN Plamag's production costs should have been averaged because the
two affiliated companies met Commerce's criteria for collapsing.
See Germany Final at 38,187. Where Commerce collapses two
affiliated companies, it calculates a single weighted-average
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4 The Court's decision in Queen's Flowers addressed
Commerce's practice under the antidumping law as it existed prior to the implementation of the Uruguay Round Agreements Act

(" URAA"), which became effective on January 1, 1995. Commerce decided Germany Final under the current law as amended by the
URAA. See Germany Final at 38,166. This court has recently upheld Commerce's collapsing practice as consistent with the
URAA. See AK Steel Corp. v. United States, 22 CIT , , slip op. 98-159 at 22-23 (Dec. 22, 1998).

dumping margin for the companies as a whole. See Asociacion, 22
CIT at , 6 F. Supp. 2d at 893. In Germany Final, Commerce
described MAN Roland and MAN Plamag as affiliated parties, yet did
not address whether the two companies should have been collapsed.
See Germany Final at 38,188. Instead, Commerce merely stated that
"the Department's normal practice is not to automatically collapse
affiliated suppliers and the respondent company." Id.
This Court has previously held that Commerce has the authority
to collapse multiple parties and treat them as a single entity.
See Queen's Flowers de Colombia v. United States, 21 CIT , ,
981 F. Supp. 617, 622 (1997). 4 Just prior to the issuance of
Germany Final, Commerce outlined its criteria for collapsing as
follows:
In determining whether to collapse related or affiliated companies, the Department must decide whether the
affiliated companies are sufficiently intertwined as to permit the possibility of price manipulation. In making
this decision, the Department considers factors such as: (1) The level of common ownership; (2) interlocking
boards of directors; (3) the existence of production facilities for similar or identical products that would
not require retooling either plant's facilities to implement a decision to restructure either company's
manufacturing priorities; and (4) whether the operations of the companies are intertwined as evidenced by
coordination in pricing decisions, shared employees or transactions between the companies.
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Certain Pasta From Italy, 61 Fed. Reg. 30,326, 30,351 (Dep't
Commerce, June 14, 1996)( final determination)( emphasis added). See
also, Certain Hot-Rolled Carbon Steel Flat Products From Canada, 58
Fed. Reg. 37,099, 37,107 (Dep't Commerce, July 9, 1993)( final
determination); Certain Granite Products From Spain, 53 Fed. Reg.
24,335, 24,337 (Dep't Commerce, June 28, 1988)( final
determination).
In particular, the Court notes the third criterion, which
indicates that, in determining whether to collapse, Commerce
considers the existence of production facilities for similar or
identical products that afford the company the ability to
manipulate its manufacturing priorities. Indeed, in the context of
collapsing, this criterion contradicts Commerce's assertion that it
will only average a respondent's production costs incurred at
multiple facilities where the facilities produce identical
products. See Redetermination at 3. Moreover, it undermines
Commerce's assertion that "the Department does not weight-average
the production costs incurred for non-identical merchandise simply
because the respondent could have produced identical merchandise at
one of its facilities." Redetermination at 8. To the contrary,
whether a collapsed entity has the ability to evade the antidumping
law through the manipulation of production is central to the
question of whether to collapse the related entities in the first
place. See Queen's Flowers, 21 CIT at , 981 F. Supp. at 622
(holding that Commerce has statutory authority "to treat a related
exporter and importer as a single entity in order to prevent price
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or production manipulation.").
In establishing regulations to conform with the URAA, Commerce
codified its collapsing practice. See Antidumping Duties;
Countervailing Duties, 61 Fed. Reg. 7,308, 7,330 (Dep't Commerce,
Feb. 27, 1996)( proposed rules). The new regulation states,
(f) Treatment of affiliated producers in antidumping proceedings--( 1) In general. In an antidumping
proceeding under this part, the Secretary will treat two or more affiliated producers as a single entity where
those producers have production facilities for similar or identical products that would not require substantial
retooling of either facility in order to restructure manufacturing priorities and the Secretary concludes that
there is a significant potential for the manipulation of price or production.

(2) Significant potential for manipulation. In identifying a significant potential for the manipulation
of price or production, the factors the Secretary may consider include:

(i) The level of common ownership; (ii) The extent to which managerial employees or board
members of one firm sit on the board of directors of an affiliated firm; and
(iii) Whether operations are intertwined, such as through the sharing of sales information, involvement in
production and pricing decisions, the sharing of facilities or employees, or significant transactions
between the affiliated producers.
19 C. F. R. § 351.401( f)( 1998)( emphasis added).
Although the collapsing regulation was not promulgated until
May 19, 1997, it had already been proposed on February 27, 1996,
and had been relied upon by Commerce as instructive and consistent
with Commerce's practice and policy before its effective date.
See, e. g., Gray Portland Cement and Clinker From Mexico, 62 Fed.
Reg. 47,626 (Dep't Commerce, Sept. 10, 1997)( preliminary results of
admin. review)( stating that, although the proceeding was not
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governed by the new regulations, 19 C. F. R. § 351.401( f) was
instructive because it described Commerce's current practice and
policy); Certain Pasta From Italy, 61 Fed. Reg. 30,326, 30,352
(Dep't Commerce, June 14, 1996)( final determination)(" While
consistent with our practice on this issue, section 351.401( f) of
the Department's proposed regulations give a new articulation to
the collapsing test."). Therefore, Commerce was aware of the
proposed regulation when it addressed MAN Roland's request to
collapse on July 23, 1996.
In this context, the language of 19 C. F. R. § 351.401( f)
contradicts the practice Commerce here asserts. Commerce claims
that it will only average a respondent's production costs incurred
at multiple facilities where the facilities produce identical
products. See Redetermination at 8. The regulation, however,
expressly states that Commerce will collapse (i. e., calculate a
single weighted-average dumping margin for) two affiliated
producers where "those producers have production facilities for
similar or identical products[.]" 19 C. F. R. § 351.401( f)( emphasis
added); see also Antidumping Duties; Countervailing Duties, 61 Fed.
Reg. 7,308, 7,330 (Dep't Commerce, Feb. 27, 1996)( proposed
rules)("[ I] n rare situations the Department may conclude that a
product that is not subject merchandise or a foreign like product
is sufficiently similar to subject merchandise that the producers
of those products may be candidates for collapsing.").
The regulation also undermines Commerce's assertion that "the
Department does not weight-average the production costs incurred
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5 Commerce cited 19 C. F. R. § 351.401( f) in its
redetermination, arguing that even where Commerce collapses two affiliated companies, it may properly decide not to weight-average

the companies' production costs where the products manufactured by each are not identical. See Redetermination at
4-5. While it is certainly within Commerce's authority to make fact specific determinations, Commerce cannot do so in a way that
is inconsistent with the regulation.
6 Commerce argues that, even if the identical merchandise
requirement is not its established practice, the Court should sustain it because the practice is reasonable, and Commerce gave

the affected parties an opportunity to comment. See Def. 's Response to MAN Roland's Cmts. at 11 (citing Usinor Sacilor v.
United States, 19 CIT 711, 742, 893 F. Supp. 1112, 1139 (1995), appeal docketed, No. 98-1269 (Fed. Cir. Feb. 13, 1998)).
"Commerce has the flexibility to change its position providing that it explains the basis for its change and providing that the
explanation is in accordance with law and supported by substantial evidence." Cultivos Miramonte S. A. v. United States,
21 CIT , , 980 F. Supp. 1268, 1274 (1997). Here, however, it is inconsistent for Commerce to argue that the identical
merchandise requirement is both an established practice and a new practice. Moreover, the identical merchandise requirement is not
consistent with Commerce's collapsing practice as it existed after, as well as before, the determination in Germany Final.

for non-identical merchandise simply because the respondent could
have produced identical merchandise" at more than one facility.
Redetermination at 8. Under the regulation, the presence of a
"significant potential for the manipulation of price or production"
is central to the decision of whether to collapse in the first
place. 19 C. F. R. § 351.401( f)( emphasis added). 5
The Court recognizes that "substantial deference [is] accorded
to Commerce when interpreting and applying its own regulations[.]"
Torrington Co. v. United States, 156 F. 3d 1361, 1363 (Fed. Cir.
1998). Here, however, Commerce's application of the identical
merchandise requirement is inconsistent with 19 C. F. R. § 351.401
and contrary to Commerce's collapsing practice. 6
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See, e. g., Stainless Steel Wire Rod From Sweden, 63 Fed. Reg. 40,449, 40,453 (Dep't Commerce, July 29, 1998)( final
determination); Gray Portland Cement and Clinker From Mexico, 62 Fed. Reg. 47,626, 47,626-627 (Dep't Commerce, Sept. 10,
1997)( preliminary results of admin. review). Thus, it is not apparent that Commerce changed its practice at the time of its
determination in Germany Final.

C. Conclusion
Commerce has not demonstrated that the identical merchandise
requirement is its established practice in the context of
affiliated parties. Moreover, the only context in which the
discussion of whether to average the production costs of affiliated
parties does occur is in the context of collapsing. Here, Commerce
never addressed the threshold question of whether MAN Roland and
MAN Plamag should be collapsed. Therefore, to properly determine
whether MAN Roland's and MAN Plamag's production costs should be
averaged, Commerce should apply its collapsing practice as it then
existed and was later codified at 19 C. F. R. § 351.401( f). Commerce
has not made the required finding. Therefore, the Court remands
the matter for a determination consistent with this Court's
opinion.

II. Recalculating MAN Roland's SG& A Expenses
In the underlying decision, this Court remanded the matter to
Commerce to recalculate MAN Roland's selling, general, and
administrative (" SG& A") costs using an appropriate allocation
ratio. See Koenig & Bauer-Albert, 22 CIT at , 15 F. Supp. 2d at
855.
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In calculating constructed value for MAN Roland's home market
sales, Commerce rejected MAN Roland's submitted cost figures and
relied instead on cost estimates prepared by MAN Roland prior to
the initiation of the instant investigation. See id. at , 15 F.
Supp. 2d at 854. To isolate the SG& A costs attributable to each
LNPP project, Commerce multiplied the total cost of production for
each product by an SG& A ratio, which was equal to the total SG& A
costs for all projects divided by the total cost of production for
all projects. See id.
Inadvertently, however, Commerce used a somewhat inaccurate
allocation ratio. See id. The denominator of the SG& A ratio did
not include the cost of purchased parts worth more than DM 500
while the cost of production to which the ratio was applied
included the cost of purchased parts worth more than DM 500. See
id. Therefore, the resulting SG& A amounts were inflated. See id.
On remand, Commerce corrected the error by multiplying MAN
Roland's SG& A ratio by the total estimated cost of manufacturing,
exclusive of the value of purchased parts costing more than DM 500.
See Redetermination at 10. Thus, the allocation ratio used on
remand is reasonable because the SG& A ratio was determined on the
same basis as the figures to which it was applied.
Commerce followed this Court's instructions in recalculating
MAN Roland's SG& A expenses, and its methodology was reasonable.
Moreover, MAN Roland concedes that the recalculation of SG& A was
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7 MAN Roland argues, however, that, even though Commerce's
SG& A calculation method on remand may be reasonable, "it certainly is not the only reasonable method, and it may not be

the most accurate." MAN Roland Cmts. at 9. "'As long as the agency's methodology and procedures are reasonable means of
effectuating the statutory purpose, [however,] and there is substantial evidence in the record supporting the agency's
conclusions, the court will not . . . question the agency's methodology. '" Budd Co., Wheel & Brake Div. v. United States, 15
CIT 446, 450, 773 F. Supp. 1549, 1553 (1991)( quoting Ceramica Regiomontana, S. A. v. United States, 10 CIT 399, 404-405, 636 F.
Supp. 961, 966 (1986), aff'd, 5 Fed. Cir. (T) 77, 810 F. 2d 1137 (1987)).

"reasonable[.]" MAN Roland Cmts. at 9. 7 Therefore, the Court
sustains Commerce's recalculation of MAN Roland's SG& A expenses.

Conclusion
For the reasons set out above, Commerce's redetermination in
Large Newspaper Printing Presses from Germany is remanded for
reconsideration and explanation consistent with this Court's
opinion. Commerce shall complete its remand determination by
Monday, May 17, 1999; any comments or responses are due by
Wednesday, June 16, 1999; and any rebuttal comments are due by
Thursday, July 1, 1999.
So Ordered.

Donald C. Pogue Judge
Dated: March 16, 1999 New York, New York


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