Author Question: The Financial Industry Regulatory Authority (FINRA): a. governs the OTC market b. governs the New ... (Read 46 times)

CBme · **on:** Jun 24, 2018

The Financial Industry Regulatory Authority (FINRA):
a. governs the OTC market
b. governs the New York Stock Exchange c. is an independent regulatory authority
d. a, b, and c are correct
e. only a and b are correct

Question 2

Dumping. In response to a petition filed on behalf of the U.S. pineapple industry, the U.S. Commerce Department initiated an investigation of canned pineapple fruit imported from Thailand. The investigation concerned Thai producers of the canned fruit, including The Thai Pineapple Public Co The Thai producers also turned out products, such as pineapple juice and juice concentrate, outside the scope of the investigation. These products use separate parts of the same fresh pineapple, so they share raw material costs. The Commerce Department had to calculate the Thai producers' cost of production, for the purpose of determining fair value and antidumping duties, and in so doing, it had to allocate a portion of the shared fruit costs to the canned fruit. These allocations were based on the producers' own financial records, which were consistent with Thai generally accepted accounting principles. The result was a determination that more than 90 percent of the canned fruit sales were below the cost of production. The producers filed a suit in the U.S. Court of International Trade against the federal government, challenging this allocation. The producers argued that their records did not reflect actual production costs, which instead should be based on the weight of fresh fruit used to make the products. Did the Commerce Department act reasonably in determining the cost of production? Why or why not?

JYan · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

d

Answer to Question 2

Dumping
The court remanded the case for recalculation of the dumping duty margins using either the Thai producers' weight based allocation methodologies or a non output price based cost allocation methodology. The Commerce Department recalculated the producers' costs using the weight based method, and the U.S. Court of International Trade sustained the results. The defendants appealed to the U.S. Court of Appeals for the Federal Circuit, challenging the court's conclusion that the Commerce Department had originally misallocated the costs. The appellate court reversed the lower court's judgment. The appellate court explained that the Commerce Department is the master of antidumping law,' and reviewing courts must accord deference to the agency in its selection and development of proper methodologies. The methodologies relied upon by Commerce in making its determinations are presumptively correct. In this case, the Commerce Department relied on the producers' financial records, which were relatively consistent, allocating about 90 percent of the cost to the canned fruit production. The records were reasonably reflective of their costs because their normal allocation methodologies were used for a number of years. The records were accepted by independent auditors and historically relied upon to present important financial information to shareholders, lenders, tax authorities, auditors, and other third parties because they were consistent with Thai generally accepted accounting principles. The court concluded that Commerce's reliance on the books and records of the producers was reasonable and is supported by substantial evidence.