Commerce Drops Reliance on EAPA Case to Reject Third Country Sales in AD Review at Trade Court

The Commerce Department in July 18 remand results submitted to the Court of International Trade found that there was insufficient evidence to deny antidumping respondent Z.A. Sea Foods Private Limited's (ZASF) Vietnam sales for use in calculating normal value. In the AD case, Commerce rejected ZASF's third-country sales to Vietnam for allegedly ending up in the U.S. to evade the relevant AD order -- this position was sent back by the trade court. On remand, the agency used the Vietnamese sales to calculate normal value, ending on a 1.73% dumping rate for ZASF (Z.A. Sea Foods Private Limited v. United States, CIT Consol. #21-00031).

The case challenges the final results of the antidumping duty administrative review on frozen warmwater shrimp from India in which ZASF served 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 Indian antidumping duty orders 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, citing this determination from CBP's EAPA case. This decision led to the respondent's challenge where it argued that there was not enough evidence to show that ZASF's Vietnamese sales ended up in the U.S. (see 2106180040).

The court sided with ZASF, ruling that Commerce failed to back its point that the EAPA case established that ZASF's Vietnam sales made it to the U.S. and were thus unusable. Commerce then came back to the court finding that there was "insufficient evidence to find "that ZA Sea Foods’ third country Vietnamese sales were unrepresentative and unsuitable for use in the calculation of NV." As a result, the agency used normal value instead of constructed value and dropped ZASF's dumping margin. Commerce said it is no longer able to rely on the evasion information to reject the Vietnam sales, so it used them.

The AD petitioner, the Ad Hoc Shrimp Trade Committee, took issue with Commerce's position, arguing that the agency should use constructed value since there is no evidence that the Vietnam sales were actually consumed by the Vietnamese customers. Since the sales were to Vietnamese exporters, they do not qualify as sales to be used for normal value, the petitioner said. In response, Commerce said that there is no evidence to support the petitioner's assertion that simply because the Vietnamese buyers were exporters that the sales were not for consumption in Vietnam.

"Furthermore, while ZA Sea Foods’ Vietnamese customers may have been exporters, we similarly find that there is no evidence on the record that ZA Sea Foods’ [review period] sales to Vietnam were otherwise unrepresentative, other than the U.S. Customs and Border Protection Enforce and Protect Act determination and trade patterns of ZA Sea Foods’ customers that were rejected by the Court in the Remand Order as a basis for Commerce’s finding in its Final Results," the remand results said.