DECISION OF VICTOR CARLOS GARCIA MORENO,
CONCURRING IN PART AND DISSENTING IN PART

I. Background

While I agree with much of the Panel's Opinion, my views go somewhat farther than on the analysis with regard to the absolute discretion attributed to the Department of Commerce. I do not agree with the Panel's ruling on the reasonableness of the Authority's discretion in selecting the 109.43 percent margin. In my view the matter should be remanded to the Authority with instructions to determine a fairer and more appropriate dumping rate.

It is perhaps important to stress that I have interpreted the mandate of NAFTA panels as being able not only to ask whether or not the Department of Commerce's determinations are supported by substantial evidence and accuracy of the record itself, but also whether the logical chains of connection which link the record to the final determination can be deemed reasonable and can be supported on the basis of best departmental practice.

It is odd that this appears to be the first time this precise question is arising. That is, when should a Department's authority be considered discretional or arbitrary. I agree that it is not possible to legislate on a discretionary element; however, such an attribution of discretion should have limits, and a rationale.

I clearly understand that binational panels sitting in the United States, as this one, are bound by decisions of the CAFC ¹ in the United States, and do give great weight to precedents issued by the CIT. Indeed, NAFTA panel review of United States Agency actions are quite narrow, but the arguments set out in the key section on the nature of the Department of Commerce's absolute discretion provide an insufficient logical basis to allow it to decide, unilaterally, without informing the interested parties, to exceed the deadlines and to attribute retroactively, a first tier BIA rate that did not exist at the time that the administrative review was to be completed.

Of course, I do not wish to imply that the Department of Commerce does not have the authority to set the time limits for the response; rather, that it is unreasonable to apply a different rate that was approved by the CIT on October 24, 1996, more than one year after the established deadlines for conducting this administrative review, with a result that was prejudicial to the Complainant.

II. Discretionary v. Arbitrary

When I mention discretionary v. arbitrary, I am referring to the fact that if one makes overuse of discretion, it could impair the rationality of the exercise of power. It is a fact that in most international organizations, the tendency is to constrain the authorities so as to avoid the excess use of their powers, or what is often referred to as "Excès du Pouvoir".

Arbitrariness means that the authority, in the use of the powers that the law gives it, can go beyond the existing laws without taking into consideration any norms of general character, which could result in injury on the rights of the individual. The use of discretionary faculties by the authority should be restricted to norms, principles and objective criteria, that should be as inviolable as those who are stipulated in a law or regulations.

In light of the preceding, it is very important to define and limit the discretional faculties of an authority, so as to avoid arbitrary decisions that could affect the interest of the parties or individuals. In this regard, I feel that we should take into account the world tendency to limit clearly the discretionary powers of the authority, that is, to limit the attributions of the authority along the lines that should correspond to the authority, according to the law that gives them this prerogative. In other words, we should take into consideration what is being done in countries with civil law, known as the Principle of Legality. That is to say that the authority should not go beyond what the letter of the law allows, and that the authority should not exceed itself in the use of its powers or attributions. This coincides with the French theory of "Excès du Pouvoir".

In support of what has been said, and in line with the necessity of limiting the discretionary powers granted to the investigating authority, with regard to antidumping and subsidies, the World Trade Organization decided to establish time limits to conduct investigations and arrive at a resolution in a period of a year. The Article 5.10 of the Agreement with regard to the application of Article VI of the GATT of 1994, (Antidumping Code) says the following: "Investigations shall, except in special circumstances, be concluded within one year after their initiation and in any case in a period not exceeding 18 months, counting from the beginning of the investigation".

As well, the Uruguay Round Agreements Act that became effective on January 1, 1995, also mentioned by the other panelists, sets explicit time limits of 245 days for preliminary determinations and 365 days for final determinations, and is subject to special extensions only up to 545 days. ²

In this case, the Investigating Authority should have informed the parties within the period of the 4th Administrative Review, that it was going to exceed the time allocated for the investigation and for its final resolution. It should have provided a reasonable explanation to justify the reasons and/or exceptional circumstances that prevented them to conclude the administrative resolution within the established period.

The world tendency, in this respect, is to create a legal time margin uniformly for all countries alike, so that the authorities involved in administrative investigations, as well as the participating parties, have to abide by the legal terms and times established by legislation. That would allow a better procedural equity between all parties involved, so that both the investigating authority as well as the parties or individuals involved would have the same obligations to comply with the procedural regulations according to the law, and the same responsibilities or sanctions would apply to all parties involved.

Another important factor is the principle of "Delayed justice converts itself into injustice". This principle establishes that the fact that an authority delays its response to a particular petition, or else, that it delays the administration of justice, ends up in a serious prejudice to the parties and thus is similar to a negation of justice.

III. Adverse consequences to the parties

The factor of injury is closely related to the factors earlier mentioned. The fact that an authority infringes upon the principle of legality and the fact that it does not administer its mandate in a fair manner means that it can cause injury to the parties.

In this particular case, it is obvious that the Department of Commerce, by delaying the issuance of its final determination, affected considerably the Complainant. It is also obvious that, as was mentioned in the Administrative Record, as well as in the transcription of the Public Hearing, that if the Department of Commerce had issued its final resolution in the time allotted according to the standard procedures, the highest existing first tier BIA margin of 61.85 percent, not the one of 109.43 percent that appeared more than a year later, would have been applied. It is also correct to say that Cemex was never given the opportunity, during the time of the Administrative Review, to raise an objection to the imposed margin of 109.43 percent. In this respect, I concur with the other panelists that it was inappropriate not to give Cemex an opportunity to reject the 109.43 percent rate applied by the Investigating Authority under the pretense that Cemex had failed to exhaust administrative remedies.

For example, in The World Trade Organization, the time for conducting administrative reviews has been limited to a year, with a clause that says that if it surpasses this time, it should offer reasonable arguments to all parties, but in no case should it exceed eighteen months. We know that the Investigating Authority did not apply the 109.43 percent margin to Cemex’s fourth administrative review until it issued its final results on April 10, 1997 ³ , more than one year after the termination of the regulatory period. Since the use of the 109.43 percent margin was not disclosed to Cemex until April 10, 1997, more than a year after the preliminary results were presented by applying the highest rate in existence of the fist tier BIA rate, which was 61.85 percent, it is correct to say that Cemex lacked the opportunity at any time during the administrative proceeding, to raise an objection to the 109.43 percent margin that was imposed in the final results.

I concur with the other panelists when they conclude that it would be inappropriate to preclude Cemex from contesting the 109.43 percent margin for failure to exhaust administrative remedies.

However, it is well established, in case law, that any reviewable determination may be remanded if it lacks a reasoned basis. See American Lamb Co. v. United States, 785.2d 994, 1003 (Fed. Cir. 1986) citing S. Rep. No. 249, 96th Cong., 1st Sess. 66 (1979); Carlisle Tire and Rubber v. United States, 564 F.Supp.834 (CIT,1983). I feel that in this case the Investigating Authority did not at anytime explain nor offer any logical arguments as to 1) why it had delayed the final determination, and, 2) why it felt that it should use a BIA rate higher that the highest one in existence at the time that the administrative review should have been completed.⁴

On the other hand, I consider that, independently from the principle of deference that is given to the Department of Commerce according to the American legislation, as well as the wide discretional faculty that the Courts gives it, it is not plausible that these attributions could be used in a manner that is excessive, even less so when the exercise of these faculties end up in an adverse consequence to the parties involved.

In Cemex's case, it is obvious that the application of the criterion of the highest first tier BIA is not questionable, given the fact that Cernex did not comply in providing all the information that was requested. In consequence, Cemex was imposed the sanction in accordance with the procedures, that is the first tier BIA, the highest rate then in existence, 61.85 percent. However, it is unjust and contrary to the law that the Department of Commerce, in an irrational and arbitrary manner, exceeded its discretional attributions and applied a first tier BIA that did not correspond to the level in existence at the time that they should have rendered their decision.

In other words, even when the applicable law does not foresee any sanctions for the Investigating Authority in cases in which it does not comply with the established procedures which identify a time limit for the final resolution, it does not entail the authority to take advantage of the situation and administer a rate that was not in place at the time of the established deadlines.

On this point, I consider relevant to cite the case of Intercargo Insurance Co. v. United States, p.391 F.3d (Fed. Cir. 1996) with regard to the criterion that is used by American Courts in referring to errors and procedural mistakes committed by their governmental agencies.

The Federal Courts of the United States have determined that mistakes and errors on a notice of consultation that do not cause any injury to any of the parties, and that do not create confusion, should not be sanctioned, since they are considered as technicalities. The Supreme Court of the United States has determined that in the case of Brock v. Pierce County, 476 U.S. 253(1986) the fact that an Authority does not comply in a satisfactory manner with the procedural terms as established by law, should not deprive the parties from acting within the confine of established procedures.

In the same way, the Supreme Court determined that in the case of United States v. James Daniel Good Real Property, 510 U.S.43 (1993) if a law does not specify the consequences for the failure to carry out the procedures contained in the law, the Federal Courts cannot impose its coercive sanctions.

In our case, it is obvious that the failure of the Department of Commerce to comply with the existing established deadlines has damaged considerably the interests of Cemex, and thus justifies the interpretation of 'contrario sensu' the criterion of Intercargo, that it can not be considered as an "Inoffensive Error" when in reality the interests of the parties are affected.

Accordingly, I would remand the resolution to the Investigating Authority, requesting that they apply an alternative first-tier BIA rate, a rate that was in place at the time of the established statutory deadline for conducting this Administrative Review.

Signed in the original by:

Victor Carlos García Moreno

Issued on the 23rd of November, 1998

¹ The Court of Appeals for the Federal Circuit exercises exclusive appellate jurisdiction over decisions by the Court of International Trade, 28 U.S.C.\1295(a)(1998)

² 19 U.S.C. Section 1675(a)(3)(A).

³ 62 Fed. Reg. 17588 (1997)

⁴ Because the fourth administrative review was initiated prior to the passage of the Uruguay Round Agreements Ace, the administrative review was governed by the statute and regulations in effect at that time.