Petitioner Says Commerce Reasonably Found Fish Exporter Didn't Make Bona Fide Sale
The Commerce Department reasonably found on remand in a case on a new shipper review that exporter Co May Import-Export Company didn't have a bona fide sale of subject merchandise during the review period, petitioner Catfish Farmers of America argued. Filing comments in support of Commerce's remand decision at the Court of International Trade, the petitioner said the remand determination "fully and appropriately responds to the Court’s opinion" and is otherwise legal and supported by the record (Catfish Farmers of America v. United States, CIT # 24-00126).
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Co May initially requested the new shipper review under the antidumping duty order on frozen fish fillets from Vietnam for a five-month period in 2022 and 2023, and Commerce granted the company a zero percent dumping margin, finding that the exporter made one bona fide sale to the U.S. The Catfish Farmers of America challenged this conclusion on multiple grounds, primarily contesting the agency's conclusion that Co May's sale was profitable.
The trade court agreed with the petitioner, ruling that Commerce didn't adequately explain why it should or shouldn't deduct AD cash deposits in evaluating profitability (see 2506090005). The court also said the agency should have considered the affiliation between Co May's customer, referred to as "Customer A," and its downstream customers, adding that it's unclear how resale profitability for the importer can be determined reliably where the downstream sales are between an importer and related entities.
On remand, the agency flipped its position and found that Co May didn't make a bona fide sale of subject merchandise during the review period (see 2511180046). The agency said cash deposits "may appropriately be considered in the context of bona fides analysis," concluding that the cash deposits were a "commercially significant consideration for Customer A which should be considered in determining whether the underlying sale was bona fide."
In support of Commerce's approach, the petitioner said Commerce reasonably concluded that AD cash deposit rates would impact the potential profitability of Co May's sale. Following the court's instruction, the agency "considered that the potential for substantial AD cash deposits would factor into Customer A’s decision making on whether to source products from Co May." The agency explained that customers wouldn't know whether their supplier would eventually receive a separate AD rate and that, even with the potential for a refund, cash deposits must be posted on entry, "impacting a company's cash flow."
Thus, the agency reasonably found the "potential for large duties and expense of cash deposits weigh against Co May’s sale being bona fide," the brief said.
Commerce also found various facts indicate Customer A and its downstream buyers are affiliated. Customer A and all but one of its buyers share the same address, and that address is the same address of Customer A's CEO. Each downstream buyer also had the same CEO and that CEO is listed as an employee of Customer A.
The petitioner also supported this conclusion. Based on the finding that evidence indicates an affiliation between Customer A and its downstream buyer, and a finding that Co May didn't fully comply with requests about Customer A's downstream customers, "Commerce concluded that there was insufficient evidence to determine that Co May’s resale to Customer A was profitable based on the ultimate resale cost," the brief said.