Commerce Properly Denied Third Country Sales in AD Case for Duty Evasion, DOJ Says

The record doesn't support the claim that the Commerce Department erred by applying constructed value instead of plaintiff Z.A. Sea Foods Private Limited's third-country sales data to Vietnam when calculating normal value in an antidumping review, the Justice Department said in a Sept. 2 brief at the Court of International Trade. Responding to ZASF's motion for judgment, DOJ said that instead, record evidence actually shows that Commerce reasonably found that ZASF's sales to its Vietnamese customers were not representative, given evidence showing that the customers were processors and exporters of shrimp to the U.S. market (Z.A. Sea Foods Private Limited et al v. United States, CIT #21-00031).

The case stems from the final results of the antidumping administrative review on certain frozen warm water shrimp from India. In the review, Commerce selected ZASF as the sole mandatory respondent. When attempting to establish the company's normal value of its shrimp, Commerce determined that there were insufficient sales in the U.S. to use its American sales data. Typically, this would mean relying on ZASF's sales in a third country, with preference given to the largest third country market. In ZASF's case, this meant Vietnam.

However, Commerce refused to use ZASF's Vietnamese data and relied on constructed value instead. The agency said that there was substantial evidence to find that ZASF evaded antidumping duties through its Vietnamese sales by commingling Indian and Vietnamese shrimp, then shipping these shrimp to the U.S. labeled as being of Vietnamese origin. This transshipping occurred at the hands of one of ZASF's customers, the Minh Phu Group, Commerce said. This led ZASF to argue that Commerce's denial of this third country sales data for evasion of AD duties wasn't based on any evidence (see 2106180040).

With this argument, ZASF is actually ignoring the appropriate standard of review and seeking to have CIT's judgment substituted for that of Commerce's, DOJ responded. "Where the home market is not a viable market to calculate normal value, the statute and Commerce’s regulations allow the agency to use the price of third-country sales to determine normal value only if such price is 'representative,'" the brief said.

DOJ also held that as a matter of fact there is substantial evidence to find that ZASF's Vietnamese sales were not representative. "Commerce explained in the Final Results that '[a]lthough there is no documentation on the record showing that ZA Sea Foods had knowledge that its Vietnamese sales may ultimately be re-exported to the United States, there is evidence which provides serious concerns with using Vietnamese sales as the basis for [normal value],'" DOJ said. Largely, DOJ relied on CBP's finding of evasion as all the evidence it needs to find that the Vietnamese sales are not representative.