Commerce Sticks With Calculations on Remand in Mattress AD Case

The Commerce Department made no changes its margin calculations for antidumping respondent Zinus Indonesia in its June 9 remand results an a case involving an administrative review on mattresses from India, with the agency saying that it fully addressed the Court of International Trade's remand order in the case and was not required to change its calculations if it fully explained its choices (PT. Zinus Global Indonesia v. U.S., CIT # 21-00277).

In March, the court found that Commerce had failed to provide sufficient explanation to support its inclusion of mattresses in transit in its calculation of the constructed export price (CEP), as well as the department's adjustments to Zinus Korea's selling expenses to account for actual selling expenses and Commerce's application of the Transactions Disregarded Rule (see 2303210054).

Commerce had originally included mattresses in transit because the record showed that Zinus U.S. had made more CEP sales of subject mattresses “out of inventory” than were actually contained in the warehouse, meaning that some mattresses in transit to the U.S. were sold during the period of investigation. On remand, Commerce said that there is no requirement that a product be imported and physically in a warehouse's inventory before it is considered to be “in inventory” to be sold and included in a CEP sales database.

Evidence showed that Zinus U.S. "must have been treating the in-transit mattresses at issue as 'in inventory,' and available for sale," DOJ said. Commerce also said that it would be inconsistent to treat the in-transit, “in inventory” mattresses differently from the in-transit, “direct shipment to the customer” mattresses.

The court also remanded the issue of Zinus Korea's involvement in the sale of subject mattresses. The court asked Commerce to address treatment of selling expenses under the Korean version of International Financial Reporting Standards (K-IFRS).

Zinus Indonesia showed that it, rather than Zinus Korea, was responsible for more selling activities such as freight arrangements and payments. Commerce explained that the fact that Zinus Korea listed "sales and marketing" as activities along with coordination between the parent company and that its subsidiaries are not specific to sales of mattresses to the U.S. are indicative of Zinus Korea’s role in such sales. Commerce said that it was satisfied that Zinus Korea had reported all expenses associated with U.S., as requested. In addressing the petitioner's comments, Commerce also explained that it does not treat "commissions and fees" as selling expenses when they occur between affiliated parties.

On the issue of how to value material inputs from Chinese affiliated suppliers, Commerce had originally said that the only available record information that could be used to test the arm’s-length nature of the transfer prices from those affiliates was the publicly available Global Trade Atlas data. The court had remanded Commerce's selection of Indonesian trade data as market-based surrogate price information.

Commerce said that although there is a preference to use the data available to the respondent in the country in which its production is located, that was unavailable here. The department said that because actual market import prices into Indonesia were more likely to be available to the Indonesian respondent than market import prices into other countries, it continued to use the market import data for Indonesia, rather than an average of Indonesia’s import data with that of other countries.