CIT Remands Vietnam Shrimp AD Case; Zeroing Affirmed, but Refusal to Review Voluntary Respondent Too Broad

August 2, 2012 by Brian Feito|Penalties and Courts

The Court of International Trade accepted the International Trade Administration’s rationale for zeroing in administrative reviews but not in investigations, but again remanded the ITA’s refusal to individually review a voluntary respondent in the 2008-09 administrative review of the antidumping duty order on frozen warmwater shrimp from Vietnam (A-552-802). CIT said the standard employed by the ITA in refusing to individually investigate company Grobest & I-Mei Industrial (Vietnam) Co., Ltd., which may have been eligible for partial revocation if it had been found to have its third consecutive zero AD rate, would render part of the statute useless because it would set so low a bar as to allow the ITA to refuse to individually review voluntary respondents even when such a review would not impose an undue burden.

(CIT first remanded the final results at issue in January 2012, ordering the ITA to (i) explain its differing interpretations of statutory language when it employs zeroing in administrative reviews but not investigations, pursuant to Court of Appeals rulings in Dongbu v. U.S. and JTEKT v. U.S.; (ii) accept Amanda Foods’ separate-rate certification and reconsider Amanda Foods’ duty rate; and (iii) reconsider its denial of individual review for voluntary respondent Grobest. In the remand redetermination at issue in this opinion, the ITA: (i) provided further explanation of its zeroing policy; and (ii) accepted Amanda Foods as a separate-rate respondent and assigned it an AD rate of 3.92%; but (iii) declined to individually review Grobest. See ITT’s Online Archives 12011851 for summary of the January remand. See also ITT’s Online Archives 11040408 and 11071237 for summaries of the Dungbu and JTEKT rulings against zeroing in administrative reviews, respectively.)

CIT Echoes Union Steel Ruling in Finding Zeroing Permissible in Admin Reviews

In its explanation of its different interpretation of the statutory term “dumping margin” in investigations and administrative reviews, whereby the ITA interpreted it to allow zeroing in administrative reviews but not in investigations from 2007-2012, the ITA relied on the same explanation that CIT accepted in the February Union Steel decision. As in the Union Steel case, the ITA argued, among other things, that investigations and administrative reviews are inherently different because investigations serve to capture overall pricing behavior to establish what companies should be included in an AD order, while administrative reviews establish what importers must actually pay in AD duties.

Furthermore, said the ITA, the aggregation and actual “zeroing” of dumping margins occurs after the dumping margins themselves are calculated. As the statute in question only prescribes how dumping margins are to be calculated, and not how they are to be aggregated into actual AD rates, the ITA’s use of zeroing in administrative reviews but not in investigations is permissible.

(See ITT’s Online Archives 12030543 for summary of CIT’s February ruling in Union Steel v. U.S.)

But Standard Used to Deny Review to Voluntary Respondent too Far-Reaching

However, CIT disagreed with the ITA’s logic in once again refusing to calculate an individual rate for voluntary respondent Grobest. The ITA said individual review of Grobest would have been unduly burdensome, referring to 19 USC 1677m(a) to justify its refusal. CIT, however, said that 19 USC 1677m(a) anticipates that the ITA would face some additional burden in reviewing voluntary respondents.

In this case, said CIT, the facts put forward by the ITA did not support the conclusion that individual review of Grobest would have been more burdensome than in any other case. While individual review might have been burdensome, CIT said, it wouldn’t have been unduly so. Furthermore, such an interpretation of the phase “unduly burdensome” would serve to make individual review of voluntary respondents unduly burdensome in any proceeding, CIT said.

CIT Affirms, in part, Remands, in Part; Orders ITA to Calculate a Rate for Grobest

Therefore, CIT affirmed the ITA’s use of zeroing, as well as its treatment of Amanda Foods, but remanded the case for the second time and ordered the ITA to individually review Grobest as a voluntary respondent and, if appropriate in light of the review, consider Grobest’s request for revocation.

(Slip Op. 12-100, dated 07/31/12, Judge Pogue)