Domestic Fish Industry Takes Issue With Commerce Remand Granting Byproduct Offsets in AD Case

The Commerce Department failed to substantiate the quantity of fish meal and fish oil byproducts when granting a byproduct offset in a remand of an antidumping case, the defendant intervenor, the Catfish Farmers of America, argued in the Court of International Trade. Opposing remand results in a May 11 filing in CIT, CFA said Commerce's decision to flip its byproduct offset ruling on plaintiff NTSF Seafoods Joint Stock Co.'s fish meal and fish oil products was contrary to agency practice and the law. The decision to grant the offset failed to “substantiate” byproduct production and used “unreasonable surrogates to value NTSF's fish meal and oil by-product offsets,” CFA argued. NTSF agreed with the remand results in its own comments.

The case originated from the 14th administrative review of the antidumping duty order on fish fillets from Vietnam covering 2016-2017 entries. NTSF was selected as a mandatory respondent after the first two candidates were dropped. In the review, Commerce granted NTSF byproduct offsets for fish fat, skin, broken meat and head and bone. The exporter also sought offsets for two other products: fish meal and fish oil, which derive from the head and bone, but Commerce granted the offsets only to the head and bone, saying NTSF sold the head and bone to an unaffiliated company. NTSF sought to prove that for the last three months of the period of review, it maintained control of the fish meal and fish oil after merely transferring the head and bone to an unaffiliated toller for further processing, as opposed to selling it to the processor. In calculating the revised margin for the meal and oil, Commerce relied on surrogate values from Indonesia, as it was the “primary surrogate country in the underlying review.”

CFA is challenging this determination from Commerce, holding that by granting the offsets for the fish meal and fish oil without substantiating the quantity of byproduct produced from subject merchandise, the agency acted improperly. “In simple terms, a respondent must reconcile the amount of scrap (in this case, fish head and bone) generated to the amount of by-product (in this case, fish meal and fish oil) sold,” the trade group said. Using a toller does not exclude a respondent from this requirement, the group argued. The record evidence fails to fulfill this requirement, CFA said.

“Even if Commerce’s decision to grant NTSF by-product offsets for fish meal and oil were reasonable, Commerce’s choice of surrogate values to calculate these offsets was not,” CFA said. According to the trade group, Commerce's reliance on Global Trade Atlas data was improper because the agency routinely rejects this source as a viable surrogate for aquaculture byproducts since they are “generally not international traded commodities.” In particular, the record evidence shows that fish meal and oil byproducts are not generally traded internationally and are not covered by a Harmonized Tariff Schedule code specific to pangasius fish.