CIT Upholds Dropped Reliance on EAPA Case to Reject 3rd-Country Sales in Shrimp AD Review

The Commerce Department properly dropped its reliance on an Enforce and Protect Act case to reject third-country sales in an antidumping duty review, the Court of International Trade ruled in a Dec. 6 opinion. Judge Gary Katzmann upheld Commerce's remand results, which used respondent Z.A. Sea Food's (ZASF's) Vietnamese sales to calculate normal value in an AD review on Indian products. The domestic shrimp industry had argued Commerce should use constructed value because there is no evidence the shrimp sold in Vietnam was consumed by the Vietnamese customers. Katzmann waived the domestic industry's claims "due to the lack of adequate argument."

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 its sales in the U.S. were insufficient 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 originally refused to use ZASF's Vietnamese data and relied on constructed value instead. The agency said 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. One of ZASF's customers, the Minh Phu Group, was responsible for this transshipping, Commerce said, citing a finding in CBP's EAPA case. ZASF argued in court that there was not enough evidence to show ZASF's Vietnamese sales ended up in the U.S. (see 2106180040).

In the case's first opinion, Katzmann sided with ZASF, ruling 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 (see 2204190034). On remand, Commerce found there was insufficient evidence to find that ZASF's Vietnamese sales were unusable for the normal value calculation (see 2207190032). As a result, the agency used normal value instead of constructed value with the Vietnamese sales and lowered ZASF's dumping margin.

"Temptest-tossed but undeterred," as Katzmann put it, the domestic shrimp industry continued to challenge Commerce's position. The industry's arguments are "anchored" around two words in the statute: "for consumption." The petitioner said Commerce should not default to assuming the merchandise was consumed in the third country and the court's remand order did not address this issue, thus it did not preclude Commerce from addressing it.

Katzmann, though, held that the domestic shrimp industry failed to provide "adequate argument." The industry did not discuss case law or Commerce practice interpreting these two key words in the context of third-country determinations. "In essence, Domestic Shrimp’s argument and briefing consist of no more than repeated assertions that the statute should be interpreted and applied in a certain way, without identifying the relevant authorities supporting those bare assertions," the opinion said. "... Therefore, Domestic Shrimp’s arguments flounder in light of its undeveloped analysis on the underlying question of statutory interpretation."

(Z.A. Sea Foods Private Limited v. United States, Slip Op. 22-136, CIT #21-00031, dated 12/6/22, Judge Gary Katzmann. Attorneys: Robert Gosselink of Trade Pacific for plaintiffs led by Z.A. Sea Foods Private Limited, et al.; Kara Westercamp for defendant U.S. government; Nathaniel Rickard of Picard Kentz for defendant-intervenor Ad Hoc Shrimp Trade Action Committee)