U.S. antidumping duties on certain frozen warmwater shrimp imported from India are getting another look after the U.S. Court of International Trade (CIT) ordered the U.S. Department of Commerce (DOC) to take a second look at its reasoning for its previous decision.
On 19 April, CIT Judge Gary S. Katzmann ordered the DOC to take another look at how it assigned values it used to determine the antidumping duty on certain warmwater shrimp imports from India. In November 2021, the DOC decided to levy a 7.15 percent antidumping duty on 152 Indian shrimp exporters, and in September 2021, it levied an antidumping duty of 27.66 percent on Elque Group from India – the highest duty for Indian shrimp ever.
Antidumping duties are imposed by the U.S. to avoid having foreign companies selling products in the U.S. for less than its fair value. To levy an antidumping duty, the DOC must first determine what a fair value for the product is.
According to the 23-page ruling by Katzman, that assessment of value is where the DOC erred.
Plaintiffs in a case against the DOC – brought by a number of Indian shrimp exporters, including Z.A. Sea Foods (ZASF) Private Limited and Hari Marine Private Limited – alleged that the DOC was wrong to use a constructed value for its basis for the normal value of shrimp.
The companies argued that the exporters’ use of Vietnam as a third-country market, through which normal value could be ascertained, was valid and the DOC’s rejection of Vietnam sales data “as not representative” was wrong.
The DOC initially argued that sales of Indian shrimp to Vietnam, particularly to Minh Phu Group, effectively constituted sales to the U.S. as Minh Phu product would often get sent to the U.S. – an argument that was partially based on a U.S. Customs and Border Protection Enforce and Protect Act (EAPA) determination. That EAPA determination found that merchandise subject to antidumping orders had been illegally transshipped to the U.S. through Vietnam. That reasoning led the DOC to create a constructed value.
ZASF successfully argued to the court, however, that the DOC didn’t support its conclusions.
“The court concludes that, with respect to the EAPA determination, [DOC] failed to support its conclusion that ZASF’s Vietnamese sales were unrepresentative with substantial evidence,” Katzmann wrote.
The company in question was never directly mentioned in the EAPA, and the court added that the DOC failed “to articulate a reasoned connection between the underlying facts and its conclusion that ZASF’s shrimp exports were comingled and reexported to the U.S. by the Minh Phu Group during the period of review.”
For that, and other reasons, the court determined that the DOC could not fully prove its reasoning for not using Vietnamese sales data as a third country, and ordered the department to take another look at its antidumping values.
“Neither [DOC's] initial assessment of the record evidence nor its subsequent analysis of CBP’s EAPA determination of evasion by ZASF’s primary Vietnamese purchaser provide a rational basis for its conclusion that ZASF’s Vietnamese sales were unrepresentative and thus unsuitable as a third country benchmark,” Katzmann wrote.
The DOC will now have 90 days to review and resubmit its results.
Photo courtesy of the U.S. Court of International Trade
