CIT Tells Commerce to Review AD Deposits, Affiliation Between US Buyer and Resellers in NSR
The Court of International Trade on June 5 sent back the Commerce Department's new shipper review of exporter Co May under the antidumping duty order on frozen fish fillets from Vietnam after the petitioner, the Catfish Farmers of America, challenged whether Co May's single U.S. sale was bona fide. Judge Jane Restani sent the review back so Commerce can address its "profitability analysis," and specifically, so the agency can look at "antidumping duty expenses and sales between likely affiliated parties."
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Co May requested the new shipper review for a five-month period between 2022-23. Commerce granted the company a zero percent dumping margin, finding that the exporter made one bona fide sale to the U.S. The petitioner challenged this conclusion on multiple grounds, primarily contesting the agency's conclusion that Co May's sale was profitable.
The Catfish Farmers of America said Commerce failed to support its decision not to include AD deposits as a cost when assessing the profitability of the resale of the exporter's products, and the petitioner challenged the reported non-duty expenses of an unnamed customer, dubbed "Customer A," as inaccurate and incomplete. The U.S. said that Commerce followed its longstanding practice of not including duty deposits as costs due to the deposits' "intangibility."
Regarding the duty deposits, Restani said neither party properly explained "why Commerce should or should not deduct duties in evaluating profitability, quite apart from its antidumping duty calculation." The agency should explain "whether it considers the likelihood that this importer would expect that its actual rate would be lower, so that the sale at the reduced rate would likely be bona fide," the court said. If no particularized analysis takes place, Commerce should explain why or "provide such analysis here," the judge said.
However, Restani sustained Commerce's treatment of the non-duty expenses. In this review, the agency was "satisfied with Customer A’s submission of non-duty expenses and concluded that the information provided was reliable," and there's "no allegation of an unacceptable investigation by Commerce," the court noted. Thus, the agency's treatment of the non-duty expenses was supported, Restani held.
The petitioner also challenged the bona fide status of Co May's sale on the grounds that the U.S. customer, Customer A, was affiliated with its resale customers. Specifically, the Catfish Farmers of America pointed to evidence showing that Customer A and all but one of its downstream customers have the same mailing address and that each downstream customer had the same CEO, who is "listed as an employee of Customer A."
Commerce defended its position by arguing that the statute doesn't compel the agency to look at the affiliation status between a U.S. buyer and its downstream customers, and that the evidence supports its finding that Co May made a bona fide sale. At the outset, Restani agreed that there's "nothing in the plain language of the statute that requires Commerce to consider the relatedness of the unaffiliated U.S. customer and its downstream customers."
However, the judge said, under these facts, "Commerce should have considered the affiliation between Customer A and its downstream customers as part of its profitability analysis." Restani said she "struggles to understand how resale profitability for the importer can be determined reliably where the downstream sales are between an importer and related entities." The agency also erred when it said there was "no substantial evidence to support" the petitioner's claim that Customer A was affiliated with its downstream buyers.
"The court remands to Commerce to decide how profitability should be determined when the unaffiliated U.S. customer is closely affiliated with its downstream customers," the court said.
Lastly, Restani upheld the agency's determination that Co May's sales price was "within the range of typical sales." The judge said it was "reasonable for Commerce to compare Co May’s average unit price to that of the other mandatory respondents in the [period of review (POR)]-adjacent administrative review."
(Catfish Farmers of America v. United States, Slip Op. 25-70, CIT # 24-00126, dated 06/05/25; Judge: Jane Restani; Attorneys: Stephanie Bell of Wiley Rein for plaintiff Catfish Farmers of America; Kara Westercamp for defendant U.S. government)