CIT Upholds Benchmark Pick for Vietnamese Land Rent Subsidy
The Commerce Department reasonably used the Thailand Board of Investment's Cost of Doing Business in Thailand 2023 report as a benchmark to determine the benefit for Vietnam's "Exemption or Reduction of Rents for Encouraged Industries" subsidy, the Court of International Trade held on Jan. 8.
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Judge Leo Gordon said that exporter Soc Trang Seafood JointStock Co., respondent in the countervailing duty investigation on Vietnamese frozen warmwater shrimp, appears to really be asking the court to "second-guess Commerce’s selection of data from a record containing multiple flawed but reasonable options" and reweigh the evidence in evaluating the agency's selection. "This the court will not do," the judge held.
The Cost of Doing Business report included, among other things, Thai land rental prices in 2022, information from the Thai Board of Investment's website on rental rates from different industrial zones and an overview of the Thai market prepared by a private company that includes serviced industrial land prices.
Soc Trang Seafood said this benchmark was flawed, since it reflected prices for "logistical warehouses" instead of "raw land." The respondent preferred the use of land rental prices from the Philippine Veterans Investment Development Corporation (PHIVIDEC), a state-run real estate manager. However, Commerce rejected the PHIVIDEC benchmark, since it was undated and thus unclear as to whether it was contemporaneous with the investigation period.
Gordon characterized Soc Trang Seafood's arguments as trying to get the court to reweigh the evidence on the record "in evaluating the reasonableness of Commerce's ultimate decision." Instead, the judge said he agrees with the government that "Commerce reasonably preferred the Cost of Doing Business Report data to the PHIVIDEC Report advocated by [Soc Trang Seafood], which is ‘not dated’ and does ‘not list the dates of the data used to compile the ... listed land lease rates.'"
The court said the agency "plainly explained its rationale for finding" the PHIVIDEC data to be "inferior." Commerce noted that the only date referenced in the data is "calendar year 2016," which is "less contemporaneous" with the investigation period than the Cost of Doing Business report, which covered the investigation period. While the respondent "initially quibbled" with the notion that the PHIVIDEC data was undated, the company ultimately conceded in its reply brief that the data was undated, the court noted.
Nevertheless, Soc Trang Seafood went on to argue that Commerce could still "deflate the data to bring it back in time and make it commensurate with what it should have been in the [period of investigation]." Gordon held that the mere fact that the agency would have to adjust the PHIVIDEC data "demonstrates the reasonableness of Commerce's finding that the PHIVIDEC data was not the best available information on the record for the benchmark precisely because such modification of the data would be necessary for Commerce to rely upon it."
The respondent's "proferred conclusion that 'there is not even a scintilla of evidence to support Commerce’s decision that the PHIVIDEC Report is unreliable,' is incorrect and misapplies the standard of review," the judge said.
Soc Trang Seafood's remaining arguments "all go to establishing and supporting the reliability of the PHIVIDEC data on the record as an alternative basis for the land benchmark," Gordon noted. Due to the court's finding that Commerce reasonably selected the Cost of Doing Business report, the judge said, he "need not reach" the respondent's "other arguments regarding the PHIVIDEC data."
(Soc Trang Seafood Joint Stock Co. v. United States, Slip Op. 26-3, CIT # 25-00030, dated 01/08/26; Judge: Leo Gordon; Attorneys: John Kenkel of International Trade Law Counselors for plaintiff Soc Trang Seafood Joint Stock Co.; Tate Walker for defendant U.S. government; Zachary Walker of Picard Kentz for defendant-intervenor Ad Hoc Shrimp Trade Action Committee; Justin Neuman of Schagrin Associates for defendant-intervenor The American Shrimp Processors Association)