CIT Rejects Bid for Individual Dumping Rate, Maintains Legal Standard of de Facto Control Test

The Commerce Department only needs to show the potential for government control to deny separate rate status to a non-market economy exporter, the Court of International Trade said in a July 6 opinion made public on July 21. "A puppet master is no less in control when the strings are slack," CIT Judge M. Miller Baker said in the opinion. To be granted an individual rate, the respondent must prove that its operations are devoid of de facto government control. Since I.D.I. International Development and Investment Corporation failed to do, it failed to obtain an individual rate, the judge said.

The case stems from the 15th administrative review of the antidumping duty order on frozen fish fillets from Vietnam. Since Vietnam is a non-market economy, all exporters are assigned a country-wide dumping rate unless they can show the absence of government control. To do so, an exporter must pass a four-part test in which it proves that export prices are not set by a government authority, it has the authority to negotiate and sign contracts and autonomy in making management selection decisions, and the proceeds from the export sales are retained by the company itself.

In the review, Commerce said I.D.I. failed the test based on the third factor -- independence in selecting the management of the company -- as evidenced by a government agent on the board of I.D.I. and its corporate parent company. I.D.I. then launched a challenge to this determination in CIT, claiming that it was unlawful for Commerce to only address this third factor of the test.

"Administrative agencies -- no less than courts, private litigants, and the Justice Department’s litigating divisions -- have finite resources," the court responded. "To require Commerce to needlessly address evidence that is no longer material to the task at hand would be at best nonsensical. As the four-part test for de facto control requires the exporter to satisfy all four elements to demonstrate independence, Commerce was entitled to stop there." I.D.I. also challenged Commerce's finding that the government only had the potential to influence management decisions, to which Baker responded by saying this is the only standard it needs to satisfy.

I.D.I. said it proved that it has independence in the other three factors of the de facto government control test. This doesn't matter, Baker said, since the exporter needed to clear all four hurdles to get the separate rate. I.D.I. also said that it independently picks its own management. "Commerce weighed the evidence and reached a different conclusion," Baker responded. "It’s not for the court to reweigh the evidence as [I.D.I.] requests."

(I.D.I. International Development and Investment Corporation v. U.S., Slip Op. 21-82, CIT # 20-00107, dated 07/06/21, Judge Baker. Attorneys: Robert LaFrankie of Crowell & Moring for plaintiff I.D.I.; Kara Westercamp for defendant U.S. government)