Two Motions for Judgment Seek Remand in Indian Shrimp AD Case

Two Feb. 6 motions for judgment from domestic petitioners and a foreign exporter both sought, for different reasons, to remand the Commerce Department’s final results in a 2021-2022 review of the antidumping duties on certain frozen warmwater shrimp from India (Ad Hoc Shrimp Trade Action Committee v U.S., CIT # 23-00202).

The exporter, Megaa Moda, argued that Commerce’s calculation of its shrimp’s normal value was marred by failure to allow short-term interest income offsets, while the domestic petitioners said that same calculation failed to take into account allegations that some of the exporter’s home market sales were not actually destined for India.

Megaa Moda, which received a 7.92% AD rate in the review, said in its motion that Commerce failed to follow long-standing practice by not allowing it to use its short-term interest income as an offset of its interest expenses while calculating its products’ constructed value. It said Commerce has “for more than 30 years” allowed a company’s short-term interest income, such as foreign exchange gains and grants, to offset some of its total interest expenses.

During the review, Commerce determined that the company’s foreign exchange gains could be used to offset some of its expenses, but its interest income couldn't be. The grant Megaa Moda received, the exporter said, was related to interest expenses refunded on pre-shipment export financing under an Indian government program. The Reserve Bank of India, through "exporter’s bankers," refunds the exporter 3% of the loans’ interest or charges “lesser interest” of 3% on those loans, it said.

Commerce said the exporter didn't provide proper documentation, and also said it “determined the interest subvention was generated from the refund of interest expenses from export credit, and not from the company’s current assets and working capital accounts,” Megaa Moda said.

However, the exporter said it provided plenty of documentation, including “audited financial statements, cost allocation worksheets, Reserve Bank of India bulletin, explanations from the INDB bank, and bank statements,” which Commerce “failed to adequately consider and weigh.”

The interest grant, meanwhile, stemmed from “loans provided to enhance” Megaa Moda’s working capital, the company said.

“Because the interest expenses paid on the short-term packing credit loans related to Megaa Moda’s working capital, when some of those interest expenses were refunded (because of Megaa Moda’s participation in the interest subvention program), it is axiomatic that such subvention refunds necessarily also related to its working capital and also were short-term in nature,” it said.

Meanwhile, in their own motion for judgment, domestic petitioners Ad Hoc Shrimp Trade Action Committee and American Shrimp Processors Association said Commerce illegally included sales “not made for consumption in the home market” in the same normal value calculation for Megaa Moda.

In a heavily redacted brief, the committee pointed out that during Commerce’s investigations, the domestic petitioner had asked the department to inquire “whether Megaa Moda knew or should have known” that some of the exporter’s sales were intended for export to another market and described how some of Megaa Moda’s sales were “aberrational.” Megaa Moda had denied the allegation, saying it could “safely say the goods were sold domestically in India” because those goods’ packaging was unbranded.

Commerce sided with Megaa Moda in its final results, citing lack of evidence. However, the exporter didn't address the discrepancies the committee had pointed out, nor did it explain how it knew its products with unbranded packaging must be destined for home market sale, the Ad Hoc Shrimp Trade Action Committee and American Shrimp Processors Association said.

“In this review, Commerce accepted Megaa Moda’s self-serving statements instead of analyzing documentary evidence which demonstrated that [certain of] Megaa Moda’s sales … were not made for consumption in India,” they said.