Court of International Trade Overrules Commerce’s Refusal to Consider Evidence Regarding Circumvention of Antidumping Duties on Imported Chinese Shrimp
On August 24, the Court of International Trade issued a decision reversing the Department of Commerce’s refusal to consider evidence submitted by the Ad Hoc Shrimp Trade Action Committee documenting substantial circumvention of the antidumping duty order on shrimp imported from China (Ad Hoc Shrimp Trade Action Committee v. United States, No. 10-00275).
The case involves an administrative proceeding to determine the final amount of duties imposed on imports of shrimp from China that entered the United States between February 1, 2008 and January 31, 2009. Over that period, roughly 52 million pounds of Chinese non-breaded frozen shrimp entered the U.S. market. Public records indicate that the amount of these imports claimed to be subject to duties was likely very low.
The Ad Hoc Shrimp Trade Action Committee presented Commerce with extensive evidence documenting widespread circumvention of the trade relief by importers of Chinese shrimp. Commerce refused to consider this evidence when selecting the Chinese companies used to set the antidumping duty rates. Remanding the agency’s final results, the Court found that Commerce had inappropriately disregarded evidence demonstrating misclassification. Much of the information submitted was based on the Southern Shrimp Alliance’s efforts to identify and stop illegal duty evasion schemes.
The Court’s decision has no immediate impact on the duties assessed on Chinese shrimp imports. However, the reversal marks significant progress in addressing the intentional circumvention of trade relief.
“The Court’s decision is another step forward in the Southern Shrimp Alliance’s ambitious goal of eliminating fraud in the shrimp market,” reported John Williams, the Executive Director of the Southern Shrimp Alliance. “Too many importers seem to believe that fraud is an acceptable response to regulatory action. Here, shrimp imports have been mislabeled to evade payment of duties. Similar schemes have been used to frustrate the FDA’s efforts to stop contaminated shrimp from reaching American consumers.”
Earlier this year, in response to litigation brought by the Ad Hoc Shrimp Trade Action Committee and the efforts of the Southern Shrimp Alliance, Commerce eliminated an exemption from the trade relief for “dusted” shrimp that had been the vehicle for millions of pounds of Chinese shrimp to fraudulently enter the United States free of duties. The Southern Shrimp Alliance has also successfully identified transshipment schemes that bring Chinese shrimp into the United States falsely mislabeled as the product of another country circumventing both antidumping duties and the FDA’s Import Alert on Chinese shrimp.
In spite of the plague of circumvention, official U.S. imports of frozen Chinese shrimp have fallen from over 169 million pounds in 2003, the year the Southern Shrimp Alliance petitioned for trade relief, to less than 55 million pounds in 2010. In contrast, other antidumping duty orders on Chinese products have been circumvented to such a great extent that imports grew following the imposition of trade relief. As just one example, an antidumping duty order on imports of crawfish tail meat from was issued in September 1997. In 1996, the U.S. imported over 2.8 million pounds of crawfish tail meat from China. Last year, with the antidumping duty order still in place, the U.S. imported over 35.1 million pounds of crawfish tail meat from China – an increase of over 1,000% from pre-trade relief levels.
The Court’s remand gives Commerce until October 24th to complete and file a redetermination of the agency’s final results.
The Court decision may be viewed: China AR4 CIT Decision