Certain Frozen Fish Fillets Form the Socialist Republic of Vietnam

A-552-801 POR: 8/1/17 - 7/31/18 Public Document E&C/OV: Team

April 20, 2020

MEMORANDUM TO: Jeffrey I. Kessler Assistant Secretary for Enforcement and Compliance

FROM: James Maeder Deputy Assistant Secretary for Antidumping and Countervailing Duty Operations

SUBJECT: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Issues and Decision Memorandum for the Final Results of the Fifteenth Antidumping Duty Administrative Review; 2017-2018

I. SUMMARY

We analyzed the comments submitted by the petitioners,1 International Development and Investment Corporation (IDI), and NTSF Seafoods Joint Stock Company (NTSF) in the fifteenth administrative review of the antidumping duty (AD) order on certain frozen fish fillets (fish fillets) from the Socialist Republic of Vietnam (Vietnam). Based on our analysis of the comments received, we made changes to the margin calculations for the final results. We recommend that you approve the positions described in the “Discussion of the Issues” section of this memorandum.

Comment 1: Whether to Calculate a Margin for NTSF Comment 2: Selection of Surrogate Country Comment 3: Applying Adverse Facts Available (AFA) to NTSF Vinh Long’s Farming Factors Comment 4: Surrogate Value (SV) for Movement Expenses Comment 5: Net-to-Gross-Weight Conversion for Movement Expenses Comment 6: Whether to Grant IDI a Separate Rate

1 The petitioners are: The Catfish Farmers of America and individual U.S. catfish processors America’s Catch, Inc., Alabama Catfish, LLC d/b/a Harvest Select Catfish, Inc., Consolidated Catfish Companies, LLC d/b/a Country Select Catfish, Delta Pride Catfish, Inc., Guidry’s Catfish, Inc., Heartland Catfish Company, Magnolia Processing, Inc. d/b/a Pride of the Pond, and Simmons Farm Raised Catfish, Inc. (collectively, the petitioners).

II. BACKGROUND

On October 4, 2018, we initiated the fifteenth administrative review of fish fillets from Vietnam.2 On October 22, 2019, Commerce published the Preliminary Results of this administrative review.3 From February 3, 2020 through February 11, 2020, we conducted verification of the questionnaire responses of NTSF.4 On February 13, 2020, we extended the deadline for the final results to April 17, 2020.5 Between March 18, 2020 and March 25, 2020, interested parties submitted case and rebuttal briefs.6 On April 15, 2020, we fully extended the deadline for issuance of these final results to April 20, 2020.7

III. SCOPE OF THE ORDER

The product covered by the order is frozen fish fillets, including regular, shank, and strip fillets and portions thereof, whether or not breaded or marinated, of the species Pangasius Bocourti, Pangasius Hypophthalmus (also known as Pangasius Pangasius) and Pangasius Micronemus.

Frozen fish fillets are lengthwise cuts of whole fish. The fillet products covered by the scope include boneless fillets with the belly flap intact (“regular” fillets), boneless fillets with the belly flap removed (“shank” fillets) and boneless shank fillets cut into strips (“fillet strips/finger”), which include fillets cut into strips, chunks, blocks, skewers, or any other shape.

Specifically excluded from the scope are frozen whole fish (whether or not dressed), frozen steaks, and frozen belly-flap nuggets. Frozen whole, dressed fish are beheaded, skinned, and eviscerated. Steaks are bone-in, cross-section cuts of dressed fish. Nuggets are the belly-flaps.

The subject merchandise will be hereinafter referred to as frozen “basa” and “tra” fillets, which are the Vietnamese common names for these species of fish. These products are classifiable under subheading 0304.62.0020 (Frozen Fish Fillets of the species Pangasius, including basa

2 See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 83 FR 50077 (October 4, 2018). 3 See Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Preliminary Results of the Antidumping Duty Administrative Review and Preliminary Determination of No Shipments; 2017–2018, 84 FR 56420 (October 22, 2019) (Preliminary Results) and accompanying Preliminary Decision Memorandum (PDM). 4 See Memorandum, “Verification of the Questionnaire Responses of NTSF Seafoods Joint Stock Company in the 2017-2018 Administrative Review of Certain Frozen Fish Fillets from the Socialist Republic of Vietnam,” dated March 13, 2020 (Verification Report). 5 See Memorandum, “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Extension of Deadline for Final Results of Antidumping Duty Administrative Review,” dated February 13, 2020. 6 See Petitioners’ Letter, “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Case Brief,” dated March 18, 2020 (Petitioners Case Brief); NTSF’s Letter, “Frozen Fish Fillets from Vietnam: NTSF’s Case Brief,” dated March 18, 2020 (NTSF Case Brief); IDI’s Letter, “Administrative Review of AD Order on Certain Frozen Fish Fillets from the Socialist Republic of Vietnam (08/01/17-07/31/18): IDI Case Brief,” dated March 18, 2020 (IDI Case Brief); Petitioners’ Letter, “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Rebuttal Brief,” dated March 23, 2020 (Petitioners Rebuttal Brief); and NTSF’s Letter, “Certain Frozen Fish Fillets from Vietnam: Rebuttal Brief,” March 23, 2020 (NTSF Rebuttal Brief). 7 See Memorandum, “15th Administrative Review of the Antidumping Duty Order on Certain Frozen Fish Fillets from Vietnam: Extension of Deadline for Final Results of Antidumping Duty Administrative Review,” dated April 15, 2020.

and tra), and may enter under subheading 0305.59.0000, 1604.19.2100, 1604.19.3100, 1604.19.4100, 1604.19.5100, 1604.19.6100, and 1604.19.8100 of the Harmonized Tariff Schedule of the United States (HTSUS).8

The order covers all frozen fish fillets meeting the above specifications, regardless of tariff classification. Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of the order is dispositive.

IV. CHANGES SINCE THE PRELIMINARY RESULTS

We calculated constructed export price and normal value (NV) for NTSF using the same methodology as applied in the Preliminary Results, except as follows:

 We used NTSF’s post-verification databases, which reflect minor corrections from verification, to calculate NTSF’s final dumping margin.  We applied partial AFA with respect to NTSF Vinh Long’s farming factors of production (FOPs). See Comment 3 below.  We made a change to NTSF’s net-to-gross weight conversion factor. See Comment 5 below.  We are relying on only one of two surrogate financial statements used in the Preliminary Results, as this statement is contemporaneous with the period of review (POR). See Comment 2.C.5 below.  We are valuing NTSF’s waste by-product by using an Indian data source.

V. SEPARATE RATES

In the Preliminary Results, we determined that the following companies met the criteria for separate rate status: (1) Can Tho Import Export Seafood Joint Stock Company (CASEAMEX); and (2) NTSF.9 With respect to CASEAMEX and NTSF, we have not received any arguments or information since the issuance of the Preliminary Results that provides a basis for reconsideration of these determinations. Therefore, we continue to find that these companies meet the criteria for a separate rate.

We preliminarily determined that IDI did not meet the criteria for a separate rate. We received comments from the parties regarding IDI’s separate rate eligibility.10 As discussed below, we continue to find that IDI is not entitled to a separate rate.

8 Until June 30, 2004, these products were classifiable under HTSUS 0304.20.6030, 0304.20.6096, 0304.20.6043, and 0304.20.6057. From July 1, 2004, until December 31, 2006, these products were classifiable under HTSUS 0304.20.6033. From January 1, 2007, until December 31, 2011, these products were classifiable under HTSUS 0304.29.6033. On March 2, 2011, Commerce added two HTSUS numbers at the request of U.S. Customs and Border Protection (CBP): 1604.19.2000 and 1604.19.3000, which were changed to 1604.19.2100 and 1604.19.3100 on January 1, 2012. On January 1, 2012, Commerce added the following HTSUS numbers at the request of CBP: 0304.62.0020, 0305.59.0000, 1604.19.4100, 1604.19.5100, 1604.19.6100, and 1604.19.8100. 9 See Preliminary Results PDM at 5. 10 See Comment 6.

VI. DISCUSSION OF THE ISSUES

Comment 1: Whether to Calculate a Margin for NTSF

In our Preliminary Results, we calculated a margin for NTSF relying on the company’s reported data. The petitioners assert that, for these final results, we should apply AFA to NTSF. Specifically, the petitioners assert that Commerce’s verification findings indicate that NTSF’s production data are unreliable and do not reconcile, and further assert that NTSF’s FOP allocations are not properly reported on a control number- (CONNUM-) specific basis.

The Petitioners’ Comments

 NTSF’s FOP data are unreliable and unverifiable, and the company’s Section D11 responses and database must be disregarded. Taken together, these deficiencies warrant the application of AFA.  Several facts, including Commerce’s yield tests at verification, support a finding that NTSF’s material balance is inaccurate. o Yield: The total volume of the whole fish input is lower than the total volume of frozen pangasius fillet products and by-products. In analogous circumstances, Commerce has found this to be a mathematical impossibility and applied AFA.12 Consistent with this precedent, Commerce should similarly reject NTSF’s FOP database, as the material imbalance proves that FOPs and by-products are not accurately presented. o Yield Tests/Adjustments: Commerce’s yield tests at verification show that the by- products and the fillet would have picked up very little water on a per-kilogram (kg) basis. Even when the output weights are adjusted to account for any processing water weight gain, the tests still reveal that NTSF’s reported outputs are greater than its inputs. o Basket Draining: NTSF’s claim that it sprays certain by-products during production, or moves such by-products by water channels from the processing area to the by-products staging area, also does not explain why its reported outputs exceed its reported inputs. In particular, company personnel let the fillets drain before freezing. Thus, any water gains during production due to washing would be offset by pre-freezing draining. o Moisture Tests: Commerce’s moisture tests at verification, of unsoaked and soaked fillets, establish that NTSF’s moisture content is significantly lower than reported. As such, NTSF misreported the net weight variable in its U.S. sales and FOP

11 Section D of the questionnaire is the section relating to FOPs. 12 See Final Determination of Sales at Less Than Fair Value and Critical Circumstances: Certain Malleable Iron Pipe Fittings From the People’s Republic of China, 68 FR 61395 (October 28, 2003), and accompanying IDM at Comment 1; Frontseating Service Valves From the People’s Republic of China: Final Determination of Sales at Less Than Fair Value and Final Negative Determination of Critical Circumstances, 74 FR 10886 (March 13, 2009), and accompanying IDM at Comment 12j; and Final Determination of Sales at Less Than Fair Value; Stainless Steel Sheet and Strip in Coils From Germany, 64 FR 30710, 30714 (June 8, 1999), and accompanying IDM at Comments 19 and 20, (collectively, Steel Cases).

databases. At the very least, Commerce should base NTSF’s FOPs on data that exclude any added soaking weight. o Fiskeriforskning Report: The results of verification, when viewed in light of the yields contained in the Fiskeriforskning Report (a report that surveyed Vietnamese pangasius farming and processing) indicate that NTSF understated its ratio of whole fish to finished fillets, i.e., there is more mass in the finished products than was reportedly utilized in the production process.  NTSF failed to report FOP data on a CONNUM-specific basis with regard to physical characteristics covering size and form. o Size: Commerce found at verification that the same standard yield is assigned to every product within a particular product group, regardless of the size of the finished product. o Form: NTSF’s FOPs are not CONNUM-specific, as the FOPs include products that do not share the same physical characteristics as the merchandise it sold to the United States. Moreover, NTSF applies a variance to adjust for the difference between its standard and actual whole fish yields which includes raw material consumed in the production of non-subject merchandise, as well as in-scope fish that does not go to the United States.  Fish Fat: Commerce’s Verification Report reveals that NTSF based its reporting of this by-product on a set yield, and it is not based on actual production data or amounts set in purchase contracts. Thus, NTSF’s fish fat by-product data are unreliable and unverifiable, which further call into question the reliability of NTSF’s reported total by- product output.  By-Products Reconciliation: NTSF claims to have reconciled its total whole fish input for the POR to its financial statements. However, NTSF makes no such claim with respect to by-product outputs and its financial statements.  Finished Goods Reconciliation: As discussed above, NTSF’s FOP allocation methodology fails to account for added soaking water and incorrectly includes consumption and production data pertaining to non-subject merchandise and fish shipped to non-U.S. destinations. This deficiency prevented Commerce from verifying the total volume of finished goods.  NTSF Vinh Long: Commerce was unable to verify the total POR consumption quantity of harvested fish reported by Vinh Long. Because NTSF’s FOP denominator and standard yield variance adjustment depend upon Vinh Long’s harvested fish data, NTSF’s reported FOP data are also inherently unverifiable on this basis.  Taken together, the above considerations warrant a finding that NTSF’s final margin be based entirely on AFA. As AFA, Commerce should select the highest antidumping duty margin calculated in any segment of this proceeding, i.e., $3.87/kg. Alternatively, Commerce must at least adjust NTSF’s FOPs to account for the verification findings; in addition, Commerce should deny all by-product offsets.

NTSF’s Rebuttal

 The petitioners misconstrue or ignore record evidence which demonstrates the accuracy of NTSF’s FOP data. The data are reconciled, reliable, and verified.

 The petitioners’ assertions regarding an alleged discrepancy in NTSF’s reported yield are not supported by the record. o Yield: As an initial matter, the petitioners’ assertion that the output cannot exceed the input is an argument that does not apply in this context. While this reasoning might apply when examining steel products as in the Steel Cases, the input here is a live animal. The reason the output weight is greater than the input weight is because the fillet and non-fillet products, and the by-products themselves, contain added weight due to water that is routinely sprayed or applied to the fish at various stages of the production process. Commerce’s verification further supported NTSF’s reporting. o The petitioners’ assertion that the products are drained, and thus any water weight is lost, is misleading. First, the draining only applies to the fillets, and not to any by- products. Second, the draining process does not necessarily remove all accumulated water. o Moreover, the small difference between the output and input weight could easily be accounted for by several factors including: (1) Commerce’s yield test did not weigh the by-products in the same manner that NTSF normally weighs them, i.e., after being transported by water to the by-products staging area, and (2) Commerce tested only a small sample, while NTSF’s normal minimum physical testing quantity is 500 kg. o Fiskeriforskning Report: As an initial matter, the survey that the petitioners cite is now fifteen years old. In addition, the survey does not appear to have been an in- depth study of fish processing yields for particular products or specifications. Finally, it is not clear whether the author is actually referencing yields in the portion of the report relied upon by the petitioners. o Yield Tests/Adjustments: The petitioners’ assertions regarding the water weight gained during production are incorrect for several reasons. The petitioners’ calculation of the weight increase is based on the post-freezing weight of the fillet and does not apply to by-products as the by-products are not processed in the same manner as the fillets. Moreover, at verification, Commerce did not weigh the fresh fillets after they sat in chilled water for a long time before freezing, which can lead to a weight gain ranging from 1.9 percent to as much as 3.3 percent. Finally, Commerce only tested about 0.07 percent of the goods passing through the freezing machines in a day. o Using information from verification, with appropriate adjustments, the total output exceeds the input by 1.74 percent rather that the higher weight gain figure suggested by the petitioners. The petitioners’ posited weight gain figure is not accurate for several reasons. First, when properly adjusted to account for information obtained at verification, the data show that in some months there is an excess of whole fish input compared to outputs. Second, the petitioners’ calculation excludes the fish toll processed for NTSF Vinh Long, which Commerce successfully verified, contrary to petitioners’ claim; in fact, when including NTSF Vinh Long tolled product, the differences for the entire POR show that the input weight actually exceeded the output weight. o Basket Draining: The draining in baskets prior to freezing relates only to fillets and not by-products; thus, this procedure does not relate to all water accumulated. In any

case, there is no evidence to suggest that all water on the surface of the fillets piled in baskets would be removed through draining. o Moisture Tests: Regarding the moisture tests performed at verification, Commerce did not follow NTSF’s standard weighing process used during production. This consideration, and the fact that the petitioners appear to rely on an incorrect figure in their characterization of Commerce’s Verification Report, undermines the petitioners’ assertions. Additionally, other information on the record – including multiple tests conducted by a third party – corroborates the moisture content reported.  NTSF did not fail to report FOP data on a CONNUM-specific basis with regard to two physical characteristics: size and form. o Size: The petitioners have not provided any evidence to suggest that consumption rates vary by PRODSIZE of fillet, and past determinations indicate that, where all other characteristics are the same, changes in product size do not result in significantly different yields. o Form: Regarding PRODFORM, NTSF assigned all merchandise a CONNUM regardless of the destination of the merchandise, as per Commerce’s instructions in its questionnaire. Moreover, Commerce noted no discrepancies in its verification report regarding this point.  Regarding NTSF’s reported variance, it is true that NTSF used all products to calculate the POR/company-wide variance. However, the petitioners have essentially insisted that NTSF perform an impossible and unrealistic mathematical exercise to calculate a variance solely for shank fillets. Additionally, the variance merely converts the standard consumption to actual consumption through a miniscule adjustment.  Fish Fat: The petitioners’ argument is based entirely on misconstruing a translated contract for sales of fish meal and fish oil, by-products which are toll produced from NTSF’s general fish waste. Commerce verified NTSF’s fish fat by-product and noted no discrepancies.  By-Products Reconciliation: The petitioners acknowledged that Commerce reconciled NTSF’s whole fish consumption and production data to NTSF’s financial statements, but then they falsely assert that NTSF’s by-products were not reconciled and verified. On the contrary, the by-products verification exhibit linked NTSF’s reported by-products to its financial statement, where Commerce found no discrepancy.  Finished Goods Reconciliation: Regarding finished good production, Commerce reconciled NTSF whole fish consumption and production data to NTSF’s financial statements at verification and found no discrepancy.  In summary, all of the petitioners’ requests for AFA lack support. Commerce fully verified the consumption and production data, and the limited physical testing that Commerce conducted corroborates NTSF’s reconciled factor data. The minor differences observed all are reasonably explained. Moreover, NTSF has cooperated fully, as evidenced by the thousands of pages of evidence supporting the accuracy of the company’s reported data. As a result, Commerce should not alter NTSF’s FOPs in any manner in the final results.

Commerce’s Position: We disagree with the petitioners that NTSF’s reported data are generally unreliable, and, as a result, we have continued to rely on them (except in certain instances) in

these final results. The arguments pertaining specifically to the treatment of NTSF Vinh Long’s farming FOPs are discussed, separately, in Comment 3. Below, we address each of the other items raised in the parties’ briefs. Yield The production of frozen fish fillets involves numerous steps. These include bringing live fish in, bleeding, filleting, skinning, trimming, soaking, sizing, freezing, and packing.13 Throughout the processing of fillets, the products are continually being washed.14 By-products are generated after the filleting (head and bone), skinning, and trimming stages. Thus, the input is whole live fish, and the outputs include: (1) well-trimmed fillets; (2) head and bone; (3) skin; and (4) trimmings.

NTSF originally reported that the sum of its outputs exceeded its inputs by 2.92 percent during the POR.15 At verification, we performed several yield tests where we weighed the output products immediately after each stage, as they were generated. We found that the sum of the weights of the outputs (up to the stage following trimming), yielded a slightly positive result, meaning that the sum of the outputs was greater than the weight of the whole live fish at the beginning of the process.16 Thus, even up to this point, verification had established that the total output weights can, to a small degree, be greater than the input weight for this product, which is contrary to the petitioners’ argument. As a result, the petitioners’ reliance on Steel Cases is misplaced, given that, in those cases, additional weight cannot be gained during the production process. After the trimming stage, the fillets were washed once more and then put into the freezing machines. At verification, NTSF noted that Commerce’s yield test consisted of a small batch that went quickly into the individually-quick-freezing (IQF) machine after the post-trimming washing.17 In contrast, during regular production, large amounts of fillets remain in the post- trimming washing bins waiting to be placed in the IQF machines.18 Due to time constraints, Commerce was not able to fully replicate this production step, i.e., letting the fillets sit in the post-trimming washing bins for several hours. As such, Commerce could not precisely determine the true amount of weight gain from this stage forward in the production process. Regarding the by-products, at verification, Commerce weighed the by-products as they were generated, whereas company officials explained that, during regular production, the by-products gain a small amount of water weight when they are moved from the processing area to the by- products staging area, where they are weighed for NTSF’s records.19 Company officials further

13 See Verification Report at 7. 14 Id. at Verification Exhibit (VE) 7-B. 15 See NTSF’s Letter, “NTSF’s Response to the Department’s Supplemental Sections A, C, and D Questionnaire,” dated July 30, 2020 at Exhibit Q-92; see also NTSF Rebuttal Brief at 8. 16 See Verification Report at 7 and 10; see also Memorandum, “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Business Proprietary Information Memorandum for the Final Results of Antidumping Duty Administrative Review,” dated concurrently with this memorandum. 17 See Verification Report at 7. 18 Id. 19 Id. at 10-11.

explained that this is especially true for trimmings, as they are moved by water channels to the by-products staging area.20 Commerce was not able to replicate this step, i.e., follow the Commerce yield test by-products from the processing area to the by-products staging area, as it would have been very disruptive to the production process. However, it is reasonable to assume that the by-products from Commerce’s yield test would have similarly gained additional water weight had these by-products followed NTSF’s normal procedures. We note that both parties point to reports on the record and proffered their estimations of what the appropriate yield should be. However, given the above analysis, we find that the small difference between the outputs and inputs could reasonably be accounted for by: (1) the fact that Commerce’s post-trimmed fillets did not sit in chilled water for several hours, as is typical; and (2) the fact that Commerce’s yield test did not weigh the by-products in the way NTSF normally weighs them, i.e., after being transported by water to the by-products staging area. Finally, in past verifications, we have seen the output weights exceed the input weight by very similar amounts as NTSF’s experience here.21 As a consequence, we find that NTSF’s experience and yield reporting is consistent with our prior findings.22 Moisture Tests At verification, Commerce performed three moisture tests: Test (1), during Commerce’s yield test conducted during the plant tour; Test (2), soaked fillet from inventory; and, Test (3), unsoaked fillet from inventory.23 However, we subsequently learned at verification that the first two tests were not done in a manner that fully conforms to NTSF’s actual production experience. Specifically, it appears that the fillets may have been patted dry more than is typical in the regular production process.24 Moreover, the product from the Test 1 did not sit in chilled water for hours before freezing, unlike the equivalent procedure when performed during NTSF’s normal production process. Regarding the Test 2, Commerce did not retest this product, as Commerce did in Test 3 when it retested with an unsoaked fillet, due to time constraints. Given these facts, we do not find that the moisture test results are fully representative of NTSF’s actual experience, and thus, do not necessarily undermine the reliability of NTSF’s reporting with respect to moisture.

NETWGTU Given our above findings with regard to yield and moisture testing, we have no reason to believe that NTSF misreported the data in the NETWGTU field in its FOP database. Moreover, NTSF was able to corroborate its reported NETWGTU data with other record evidence, e.g., third party testing certificates corroborating the moisture content reported.25 Finally, given that NTSF’s reporting with respect to NETWGTU is supported by the record, and taken together with all the other successfully verified information, we find that NTSF has met its reporting requirements with regard to NETWGTU, and no adjustment to NETWGTU is warranted.

20 Id. 21 See Memorandum, “Antidumping Duty Review of Certain Fish Fillets from the Socialist Republic of Vietnam: Placing Information on the Record,” dated October 24, 2019. 22 Id. 23 See Verification Report at 8. 24 Id. at 9 and Attachment 1 at Answer (74). 25 Id. at Attachment 1, Answer (74).

Product Size Regarding the petitioners’ argument that NTSF’s whole fish consumption is not CONNUM- specific with regard to PRODSIZE (i.e., the weight band of the fillet), as in the last review, the petitioners have not established with any compelling record evidence that the consumption rate would vary between products that are identical with respect to all characteristics except for the size of the fillet.26 It is true that, for example, larger raw fillets require larger amounts of inputs. However, smaller raw fillets require fewer inputs, and Commerce has yet to see any compelling information establishing that there is any meaningful difference regarding the per-unit consumption of inputs with regard to raw fillet size on an unsoaked basis. Moreover, this comparison becomes blurred as Commerce requires parties to submit FOPs and sales on a soaked basis, not an un-soaked basis. For example, two fillets may be the same size at the end of processing (i.e., after soaking), but the un-soaked weights of those fillets may have been quite different, i.e., one fillet may have undergone significant amounts of soaking while the other may have minimal soaking. In sum, to say that two soaked fillets necessarily consume equal amounts of factors would be misleading and unsupported by the record.

Product Form Regarding the petitioners’ argument that NTSF’s whole fish consumption is not CONNUM- specific with regard to PRODFORM, we disagree. Even though usage rates are expected to differ when the fillets have been processed/trimmed to varying degrees, due to the construct of Commerce’s CONNUM reporting requirements, these fillets are considered to fall within the definition of Commerce’s PRODFORM, i.e., a shank fillet is a shank fillet no matter how much trimming/processing it may undergo.

With respect to the petitioners’ assertions regarding the inclusion of products not bound for the Unites States being including in the FOP reporting, we also disagree. Commerce instructs respondents to report CONNUM-specific FOPs regardless of the ultimate destination of the finished product. NTSF has met this reporting requirement.

Variance Regarding the petitioners’ argument that the variance NTSF applies to its standard consumption includes products other subject merchandise, at verification Commerce verified NTSF’s reported variance and found no discrepancies.27 Moreover, we do not find that the variance has a significant impact on the final FOP, as NTSF applies a factor of 1.000014.28

Fish Fat At verification, NTSF presented minor corrections, including one related to fish fat.29

26 See Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Final Results, and Final Results of No Shipments of the Antidumping Duty Administrative Review; 2016–2017, 84 FR 18007, dated April 29, 2019 (Fish AR14 Final) and accompanying IDM at Comment 2. 27 See Verification Report at 15, 18-19. 28 Id. at 19. 29 Id. at VE 1.

Commerce verified the accuracy of this correction without incident.30 As such, we find that NTSF’s fish fat FOP reporting was reasonable.

By-Products & Finished Goods Reconciliation Given our analysis above, we find that NTSF was able to reconcile its reported by-products and finished goods information to its financial statements.31 We do not find that the testing undertaken at verification undermines these findings.

Given the totality of the above analysis, which is supported by substantial record information, we find NTSFs’ reporting reasonable and have used its reported FOPs32 to calculate a margin, except as noted in Comment 3 below. Comment 2: Selection of Surrogate Country In the Preliminary Results, we relied on India as the primary surrogate country. The petitioners assert that Commerce should select Indonesia, not India, as the primary surrogate country. NTSF argues that Commerce should continue to rely on India as the primary surrogate country. A. Level of Economic Development

The Petitioners’ Comments  Although Commerce ordinarily starts the search for a primary surrogate country with the Surrogate Country List, economic comparability is not the exclusive starting point for selecting a primary surrogate. In some cases, such as where the subject merchandise is unusual or unique (with correspondingly unusual inputs or other unique aspects of the cost of production), Commerce may adopt a different approach.33  In this proceeding, Commerce has previously used Indonesia as a surrogate even when it was not at the same level of economic development as Vietnam, after finding that Indonesia was at a comparable level of development.34

30 Id. at 23. 31 Id. at 14-15, 22-23. 32 As in the Preliminary Results, the only by-product offsets we continue to deny are for fish meal and fish oil which no party argued we should use for the final results. Additionally, we do not agree with the petitioners’ assertions regarding NTSF’s reporting of its fish fat by-product. Although the petitioners assert that the by-product data are not based on actual production, and cite to a translated contract on the record in support of this position, NTSF explained that the contract did not relate to fish fat, and there was a translation error. NTSF’s explanation was consistent with our findings at verification. 33 See Petitioners Case Brief at 32 (citing Import Administration Policy Bulletin 04.1: Non-Market Economy Surrogate Country Selection Process (March 1, 2004) (Policy Bulletin)). 34 Id. at 34-35 (citing Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results of Antidumping Duty Administrative Review and New Shipper Review; 2011-2012, 79 FR 19053 (April 7, 2014) (AR9 Final Results), and accompanying IDM at Comment I.A.; Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results of Antidumping Duty Administrative Review; 2012-2013, 80 FR 2394 (January 16, 2015) (AR10 Final Results), and accompanying IDM at Comment I.A.; Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Preliminary Results and Partial Rescission of the Antidumping Duty Administrative Review; 2013-2014, 80 FR 55092 (September 14, 2015) (AR11 Preliminary Results), and accompanying PDM at 20, unchanged in Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results and Partial Rescission of Antidumping Duty Administrative Review; 2013-2014, 81 FR 17435 (March 29, 2016) (AR11 Final

 Similarly, here, Commerce should select Indonesia as the surrogate country because Indonesia is still comparable to Vietnam in terms of its level of economic development. Indonesia is closer to Vietnam in terms of per-capita gross national income (GNI) in 2017 than it was in the eight prior review periods in which Commerce selected it as the primary surrogate. Additionally, Indonesia and Vietnam both fall within the World Bank’s lower middle income category.35

NTSF’s Rebuttal

 India is economically comparable to Vietnam and is a significant producer of comparable merchandise. Therefore, Commerce reasonably selected India from its surrogate country list.  Commerce properly considered economic comparability as the first step in its surrogate country analysis, because the Policy Bulletin’s exception to this rule only applies in rare circumstances that are not applicable to this case, i.e., where the surrogate country has a relative scarcity of a major non- or little-traded input which precludes the country from being a competitive producer of comparable merchandise.36 Here, however, India is a significant producer of comparable or identical merchandise.

Commerce Position: Because Vietnam is an NME country, when calculating NV, section 773(c)(4) of the Tariff Act of 1930 (the Act) requires Commerce to value the FOPs, to the extent possible, in a surrogate country that is (a) at a level of economic development comparable to Vietnam, and (b) a significant producer of comparable merchandise.37 Section 773(c)(4)(A) of the Act is silent with respect to how Commerce determines that a country is at a level of economic development comparable to the NME country in question. As such, Commerce’s longstanding practice has been to identify those countries that are at a level of economic development similar to Vietnam based on GNI data reported in the World Bank Development Report provided by the World Bank.38 Using 2017 GNI data, Commerce provided parties with a list of potential surrogate countries found to be at Vietnam’s level of economic development, including Bolivia, Egypt, Honduras, Nicaragua, Nigeria, and India.39

Results), and accompanying IDM; Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Preliminary Results of Antidumping Duty New Shipper Review; 2014-2015, 81 FR 5709 (February 3, 2016) (NSR 2014-2015 Preliminary Results), and accompanying PDM at 6-8, unchanged in Certain Frozen Fish Fillets From the Socialist Republic of Vietnam: Final Results of Antidumping Duty New Shipper Review; 2014-2015, 81 FR 44272 (July 7, 2016) (NSR 2014-2015 Final Results), and accompanying IDM). 35 Id. at 35. 36 Id. (citing Policy Bulletin). 37 See Policy Bulletin. 38 See Pure Magnesium from the People’s Republic of China: Final Results of the 2008-2009 Antidumping Duty Administrative Review of the Antidumping Duty Order, 75 FR 80791 (December 23, 2010), and accompanying Issues and Decision Memorandum (IDM) at Comment 4. 39 See Memorandum, “List of Surrogate Countries for Antidumping Investigations and Reviews from the Socialist Republic of Vietnam,” dated August 2, 2018 (Surrogate Country List).

The petitioners note that economic comparability is not always the exclusive starting point for selecting a primary surrogate.40 In certain past reviews of this AD order, Commerce has indeed used Indonesia as the primary surrogate country even when it was not on the non-exhaustive list of countries, due to the other countries on that list not being significant producers of comparable merchandise and/or lacking suitable SV data.41 Unlike those segments, however, and as discussed in further detail below in the “Significant Producer” and “Data Considerations” subsections of this issue, this is not the case in this administrative review. Here, record information shows that India, which is on the list of economically comparable surrogate countries, is a significant producer of identical and comparable merchandise. Further, the record also demonstrates that India has superior data for the primary material inputs (fingerlings, fish feed, and whole fish), which account for the majority of NV. Thus, the situation in the current administrative review is factually distinct from situations in prior reviews where Commerce selected a country as the primary surrogate country even though it was not on the Surrogate Country List.

Irrespective of the above, the petitioners argue that Indonesia is nonetheless at a comparable level of economic development to Vietnam even though it was not on the Surrogate Country List. In particular, they assert that Indonesia is closer to Vietnam in terms of per-capita GNI in 2017 than it was in the eight prior review periods in which Commerce selected it as the primary surrogate. They further argue that, within the World Bank’s economic development strata, in 2017, both Vietnam and Indonesia were classified as “lower middle income” economies.

As an initial matter, neither the statute nor Commerce’s surrogate country selection criteria include, or consider, whether countries have been selected in previous and/or unrelated proceedings. Commerce selects the primary surrogate country for each segment of a proceeding based on the record facts of that individual segment, regardless of whether the potential surrogate countries under consideration have been previously selected as surrogate countries.42 Put another way, each segment of an AD proceeding is an independent segment with separate records which lead to independent determinations. As a result, we have not considered decisions

40 In particular, the petitioners note that the Policy Bulletin provides that “{t}here are also cases in which it is more appropriate for the team to address economic comparability only after the significant producer of comparable merchandise” has been identified. The Policy Bulletin further states that “subject merchandise that is unusual or unique (with correspondingly unusual or unique inputs or other unique aspects of the cost of production), e.g., crawfish, which is produced by only a few countries” may require a different approach. 41 See AR9 Final Results IDM at Comment I.A (noting that, although Indonesia was not on the surrogate country list, “the data considerations, explained in greater detail below, weigh in favor of Indonesia’s selection over any of the countries that were initially identified”); AR10 Final Results IDM at Comment I.A (noting that “data considerations, explained in greater detail below, weigh heavily in favor of Indonesia’s selection over the other countries that were initially identified in the Surrogate Country List”); AR11 Preliminary Results PDM at 20, unchanged in AR11 Final Results (noting that “data concerns related to the primary input of the subject merchandise – whole live fish – support the Department’s determination to select Indonesia as the primary surrogate country”); NSR 2014-2015 Preliminary Results PDM at 6-8, unchanged in NSR 2014-2015 Final Results (noting that “data concerns related to the primary input of the subject merchandise – whole live fish – support the Department’s determination to select Indonesia as the primary surrogate country”). 42 See AR10 Final Results IDM at Comment I.

in past segments of this case in considering whether Indonesia is at a level of economic development comparable to Vietnam in this review.43

Further, regarding the petitioners’ arguments concerning the World Bank’s classification of economies, and the relative GNIs of Indonesia and Vietnam in past administrative reviews, we disagree. Commerce has consistently rejected parties’ arguments to use the World Bank’s reported upper-middle or lower-middle income thresholds or categories for the purposes of determining the level of economic development.44 The band of countries that Commerce selected in this review, in absolute terms, is a reasonable range of countries given the entire worldwide range of GNIs. Furthermore, in past cases, Commerce has rejected the use of relative measures of GNI comparison.45

Thus, for all of the foregoing reasons, we find that Indonesia is not at the same level of economic development as Vietnam. Nonetheless, even if, arguendo, we were to find Indonesia to be at the same level of economic development, for the reasons expressed below in the “Data Considerations” subsection, we would still find India to be a superior choice as the primary surrogate country.

B. Significant Producer of Comparable Merchandise

The Petitioners’ Comments  Indonesia is superior to India in terms of the production of comparable merchandise. The vast majority of Indian pangasius production is not frozen fish fillets and is not Grade A export quality. Therefore, Indian SVs will not produce an accurate or reasonable representation of the value of the major FOPs used by the Vietnamese industry to produce the subject merchandise. In comparison, Indonesia has a substantial processing industry producing frozen fish fillets, and its exports are subject to stringent requirements.  Indonesia is a far larger exporter of subject merchandise as compared with India. This export differential is a function of India’s less developed frozen fish fillet industry. In sum, India has only just started to produce export-quality frozen fish fillets while Indonesia is an established producer and exporter in that market. As such, Indonesia is a better surrogate for Vietnam because it produces export-quality frozen pangasius fillets that compete with the subject merchandise. NTSF’s Rebuttal  The petitioners’ claim that India does not produce frozen fish fillets is false. The record of this administrative review clearly shows that Indian consumers now have access to

43 Id. 44 Id. 45 See Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Final Results of Antidumping Duty Administrative Review, 2011–2012, 78 FR 56211 (September 12, 2013), and accompanying IDM at Comment 1.A.

fresh pangasius “along with frozen fillets due to domestic production of the fish” and that 46 Indian pangasius is sold “whole, chilled or frozen.”  Additionally, in the Preliminary Results, Commerce found that India was a significant producer of comparable merchandise based on the information on the record of this administrative review.  The petitioners’ argument regarding India’s export volume/quality is misleading. A country does not need to be a net exporter to be considered a significant producer for the purposes of being selected as a surrogate country.

Commerce Position: For purposes of these final results, we continue to find that India is a significant producer of comparable merchandise.47 Section 773(c)(4)(B) of the Act requires Commerce to value FOPs, to the extent possible, in a surrogate country that is a significant producer of comparable merchandise. Neither the Act nor Commerce’s regulations provide further guidance on what may be considered comparable merchandise. In prior segments of this proceeding, Commerce has found that the appropriate metric for determining which countries are significant producers of comparable merchandise is to examine which countries are significant producers of frozen fish fillets.48 Although “frozen fish fillets” represent a broader category than in-scope pangasius frozen fish fillets, the category is nonetheless comparable because it allows for the selection of surrogate financial ratios from producers of similar products with similar capital structures. In the Preliminary Results, we found India to be a significant producer of comparable merchandise (i.e., frozen fish fillets).49 Record evidence supports our determination and shows that India is a significant producer of comparable merchandise, as well as identical merchandise (i.e. frozen pangasius hypothalamus fillets).50 Despite the clear record evidence that India is a significant producer of comparable, and even identical, merchandise (in accordance with Commerce’s practice described above), the petitioners have attempted to introduce additional criteria into the mix: (1) “export-quality” production standards that produce “Grade A” pangasius fillets (i.e., white and flaky), and (2) a misplaced reliance on which countries are net exporters. To the first point, the scope of this AD order does not distinguish among grades of subject merchandise. In fact, while various forms of subject merchandise are discussed in the scope, grades are not mentioned. Furthermore, the grade, color, and texture of the fish fillet meat are not considered as product characteristics in the CONNUM buildup. The petitioners’ argument is thus inapposite. As to the second point, NTSF

46 See NTSF Rebuttal Brief at 33 (internal citations omitted). 47 For the sake of completeness, we note that no party disputes the fact that Indonesia is also a significant producer of comparable merchandise. 48 See, e.g., AR10 Final Results IDM at Comment I. 49 See Preliminary Results PDM at 10. 50 See NTSF’s Letter “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam – Comment on Countries with Significant Production of Comparable Merchandise,” dated December 14, 2018, at Exhibits 1-4; see also NTSF’s Letter “Frozen Fish Fillets from Vietnam: Factual Information Submission,” dated September 10, 2019 (NTSF September 10, 2019 Submission), at Exhibit 1; and NTSF’s Letter, “Frozen Fish Fillets from Vietnam: Factual Information Submission,” dated August 27, 2019 (NTSF August 27, 2019 Submission), at Exhibit 2 (citing a publication titled “Current Status of Pangasius (Pangasianondon hypopthalmus) Farming in India,” July 2019 Edition (Fishing Chimes), pages 37 and 40).

correctly observes that the Policy Bulletin does not indicate that a surrogate country must be a net exporter; it merely states that a country that is a net exporter could be considered a significant producer.51 C. Data Considerations

The Petitioners’ Comments  Indonesia provides FOP values that are superior to the values obtained from India.  The record shows that the Indian data for key inputs are not publicly available or even widely circulated. Commerce has rejected these data in the past. In contrast, the Indonesian data are published on a regular, annual basis by the Indonesian Ministry of Marine Affairs and Fisheries and have been regularly used by Commerce.  The Indian data do not represent a broad market average. The data are based on survey responses from only 54 farmers within only two of 13 districts within a single state, Andhra Pradesh.  With respect to fingerlings, the data are deficient because: (1) they are from nurseries located in only two villages (Eluru and Undi) in a single district of West Godavari within the single state of Andhra Pradesh, and (2) there is no conversion factor.52  With respect to whole live fish, the data are deficient because the data for July 2018 reflect an average price from a single harvested farm while the data for August 2017 was the average price for only 11 harvested farms.53  With respect to fish feed, the data are deficient because: (1) they are based on prices from farmers located in two of 13 districts within a single state, and (2) they are less specific than the Indonesian data because they only provide prices up to 32 percent protein/year.54  With respect to all other FOPs, including labor, the limited valuation data available from India are either less specific, less contemporaneous, or less reliable than the data available from Indonesia.55  Finally, with respect to the financial statements, the Indonesian statements are superior to the Indian statements on the record. The first surrogate company, Mulpuri Aqua Processors Private Limited (Mulpuri), was not profitable in the year prior to the POR. The statement for the second surrogate country, MMC Exports Limited (MMC), does not demonstrate that the company produces identical or comparable merchandise. Both financial statements are contemporaneous within only eight of the twelve POR months.56

51 See, e.g., Fresh Garlic from the People's Republic of China: Final Results of the 23rd Antidumping Duty Administrative Review; 2016-2017, 84 FR 35601 (July 24, 2019), and accompanying IDM at 23. 52 See Petitioners Case Brief at 47. 53 Id. at 48-51. 54 Id. at 51-52. 55 Id. at 52-53. 56 Id. at 53-54.

NTSF’s Rebuttal  The Indian data provided by NTSF are the best data for valuing FOPs. The data are publicly available and from the same source that has been used by Commerce in the past.57  With respect to fingerlings, the data represent a broad market average because they are from villages that represent the vast majority of fingerling production in India, and there is no conversion necessary for use as an SV.58  With respect to whole fish, the data represent a broad market average because they are from Andhra Pradesh which accounts for approximately 80 percent of pangasius production during the POR. Commerce has used these data in prior proceedings.59  With respect to fish feed, the Indian data are more contemporaneous and are based on published data, rather than simply affidavits.  With respect to the financial statements, Commerce should continue to use the Mulpuri and MMC statements. Contrary to the petitioners’ claims, Mulpuri does produce comparable merchandise. Additionally, the petitioners incorrectly raise profitability concerns relating to periods other than the POR. Commerce Position: We agree with NTSF that India offers the best available SV information. The Policy Bulletin states that, if more than one country satisfies the economically comparable and significant producer criteria for surrogate country selection purposes, “then the country with the best factors data is selected as the primary surrogate country.” Specifically, the Policy Bulletin explains that “data quality is a critical consideration affecting surrogate country selection” and that “a country that perfectly meets the requirements of economic comparability and significant producer is not of much use as a primary surrogate if crucial factor price data from that country are inadequate or unavailable.”60 Section 773(c)(1) of the Act instructs Commerce to value the FOPs with the best available information from a market economy country, or countries, that Commerce considers appropriate. When considering what constitutes the best available information, Commerce considers several criteria, including whether the SV data are contemporaneous, publicly available, tax and duty exclusive, representative of a broad market average, and specific to the inputs in question.61 Commerce’s preference is to satisfy the breadth of the aforementioned selection criteria.62 Moreover, it is Commerce’s practice to carefully consider the available evidence in light of the

57 See NTSF Rebuttal Brief at 37. 58 Id. at 37-38. 59 Id. at 38-40 (citing Third Administrative Review of Frozen Warmwater Shrimp From the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 46565 (September 10, 2009) and accompanying IDM at 17). 60 See Policy Bulletin. 61 See, e.g., Notice of Final Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances, In Part: Certain Lined Paper Products from the People’s Republic of China, 71 FR 53079 (September 8, 2006) and accompanying IDM at Comment 3. 62 See, e.g., Administrative Review of Certain Frozen Warmwater Shrimp from the People’s Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 76 FR 51940, 51943 (August 19, 2011) and accompanying IDM at Comment 2.

particular facts of each industry when undertaking its analysis of valuing FOPs.63 Commerce must weigh the available information with respect to each input value and make a product- specific and case-specific decision as to what constitutes the best available SV for each input.64 After examining all of the SV choices, Commerce finds that the Indian data on the record are superior and offer the best SV information available. As an initial matter, Commerce has reexamined the issue of the public availability of Fishing Chimes and finds that the information therein, are, in fact, publicly available. NTSF correctly observes that the petitioners’ implication that Commerce does not rely on SV data that are from privately-compiled sources because they may require a paid subscription is simply incorrect. Commerce, in fact, has a longstanding practice of relying on data maintained in fee-based sources.65 Moreover, Commerce has used data from Fishing Chimes previously in another case and did not call its public availability into question.66 In the Preliminary Results, we stated our reasoning with respect to the superiority of the Indian data as follows: First, of course, the Indonesian information is not from the primary surrogate country which we have selected in this case, India. Second, the Indonesian data are not (size) specific with regard to one main input, fingerlings, unlike the Indian data. Moreover, the Indonesian data for the other main input, fish feed price quotes, are only partially contemporaneous with the POR (six months), unlike the Indian data which cover the whole POR. Finally, for another input (whole live fish), the Indonesian data include other species of fish and are thus not species-specific, unlike the Indian data which are species specific.67 (citations omitted) We continue to rely on the above reasons, in conjunction with the discussion below, where we have individually addressed parties’ arguments with respect to the main inputs, by-products, and financial ratios. As an initial point, the petitioners argue that the fingerling, feed, and whole fish data from the Fishing Chimes study are not a broad market average because they are based on survey responses from only 54 farmers within only two of 13 districts of a single state, i.e., Andhra Pradesh. However, Andhra Pradesh is the largest pangasius-producing area of India, accounting

63 See Certain Preserved Mushrooms from the People’s Republic of China: Final Results and Final Partial Rescission of the Sixth Administrative Review, 71 FR 40477 (July 17, 2006) (Mushrooms) and accompanying IDM at Comment 1; see also Freshwater Crawfish Tail Meat from the People’s Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, and Final Partial Rescission of Antidumping Duty Administrative Review, 67 FR 19546 (April 22, 2002) (Crawfish) and accompanying IDM at Comment 2. 64 See, e.g., Mushrooms IDM at Comment 1. 65 See, e.g., Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers from the People’s Republic of China, 69 FR 20594 (April 16, 2004) and accompanying IDM at 43–44 (declining to conclude that a data source is not publicly-available solely because it is collected by a private subscription service, and further stating that Commerce has a longstanding practice of relying on values taken from fee-based sources, including trade publications and the Global Trade Atlas). 66 See Third Administrative Review of Frozen Warmwater Shrimp from the People’s Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 46565 (September 10, 2009), and accompanying IDM at 17 (valuing shrimp larvae using an article published in Fishing Chimes). 67 See Preliminary Results PDM at 11.

for approximately 80 percent of pangasius production during the POR.68 Moreover, the petitioners’ argument regarding the importance of broad market averages is self-contradicting; while they argue that the Fishing Chimes data do not represent a broad market average, they proffer only a limited number of affidavits for valuing fish feed as a purported broad market average in lieu of a published source.69 We address specific arguments pertaining to each factor below. 1) Fingerlings

We find that the Indian SV data for fingerlings are superior in all respects. The petitioners’ arguments against the Indian source are based on the data’s not being a broad market average and the mistaken notion that a needed conversion factor is missing. As to the broad market average criterion, Fishing Chimes indicates that its fingerling data were from commercial nurseries in two locales, which collectively supplied fingerlings to 94.5 percent and 96 percent of the pangasius farms in 2017 and 2018, respectively.70 Additionally, the Indian fingerling data require no conversion because the surrogate source is on a price-per-piece basis and the NTSF FOP data are on a pieces-of-fingerling-per-kilogram-of-production basis. In contrast, the Indonesian fingerling data suffer from two shortcomings. First, as noted above, they are not size-specific. Second, they are also not species-specific.71 2) Fish Feed

We find that the Fishing Chimes study containing the Indian fish feed data shows pricing collected by researchers from most of the pangasius feed producers in India,72 and that this information is corroborated by invoices from another major Indian fish feed supplier.73 In contrast, the petitioners provided a limited number of affidavits obtained for the sole purpose of this administrative review. While we have used information from affidavits in instances where the other SV sources were problematic in some way, affidavits are by their nature self-serving. In this review, there are alternate data from a neutral source in the primary surrogate country that meet all of the SV selection criteria. As to the petitioners’ argument about Fishing Chimes not providing data for feed with a protein content of 35 percent, we note that this type of feed accounted for less than one percent of the fish feed used by NTSF, and the selected SV for feed has a similar protein content, i.e., 32 percent protein content.

68 See NTSF September 10, 2019 Submission, at Exhibit 2. 69 See, e.g., Certain Cased Pencils from the People's Republic of China from the People’s Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 33406 (July 13, 2009) and accompanying IDM at Comment 4a (noting that Commerce favors “a published source that is publicly available” in applying its surrogate value methodology). 70 See NTSF August 27, 2019 Submission, at Exhibits SV-2 and SV-3. 71 See Petitioners’ Letter, “Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: CFA’s Pre- Preliminary Surrogate Value Submission,” dated September 10, 2019 (Petitioners September 10, 2019 Submission), at Exhibit 2. 72 See NTSF August 27, 2019 Submission at SV-2 and SV-3. 73 See NTSF’s Letter, “Frozen Fish Fillets from Vietnam: Response to Request for Surrogate Value Information,” dated February 25, 2019 (NTSF February 25, 2019 Submission), at SV-6.

3) Whole Fish

The record contains one potentially suitable Indonesian source, the 2017 production data from the Indonesian Ministry of Marine Affairs and Fisheries’ One Data website. As noted above, the Indonesian data to value this input are not species-specific74 and are only partially contemporaneous with the POR, unlike the Indian data. Further, we find that the Indian data for this input are in fact a broad market average, for the reasons discussed above. Finally, as NTSF observes, the Fishing Chimes data are corroborated by three other sources.75 Taken together, these factors indicate that the Fishing Chimes data are themselves representative of a broad market average. 4) By-Products

The petitioners point out that the record does not contain Indian SV data to value all by-products. While this is true, it is the only instance where Indian data are lacking. Moreover, we are able to rely on an Indian source for NTSF’s fish waste by-product.76 The fact that certain other by- products are not available in the Indian data is outweighed by the superior options India offers for all of the major inputs. 5) Financial Ratios

Record evidence clearly shows that the Indian surrogate financial company, Mulpuri, produces comparable merchandise (frozen fish fillets),77 despite the petitioners’ claim that it does not. Moreover, the petitioners’ argument about comparable merchandise is particularly unavailing because the financial statement for one of the Indonesian companies they propose as an alternative (Japfa Comfeed) shows that aquaculture represents less than 10 percent of its net sales, and, furthermore, its aquaculture segment description does not mention fish or fish processing, but rather “fish and shrimp feed production, shrimp hatchery and shrimp farming.”78 We, thus, find that bulk of Japfa Comfeed’s activities do not relate to comparable merchandise and that it is not preferable for use as a surrogate financial company. As to the issue of profitability, NTSF correctly notes that Mulpuri was profitable for the fiscal year in question, the time period Commerce considers in evaluating whether a company was profitable. In contrast, the auditors for the other Indonesian company, PT Dharma Samudera Fishing Industries, without qualifying their opinion, noted concerns about the company’s ability to continue as a going concern.79

74 See Petitioners September 10, 2019 Submission, at Exhibit 3. Specifically, Appendix 4, which contains the Statistical Data and Information Centre for the Indonesian Ministry of Marine Affairs and Fisheries, states that “Collection of production data has not been conducted at the species level,” and “Patin production of 319,967 tons includes all types of patin.” 75 See NTSF September 10, 2019 Submission at Exhibit 2; see also NTSF February 25, 2019 Submission, at Exhibit SV-5. 76 See NTSF August 27, 2019, at Exhibit SV-3. 77 See NTSF February 25, 2019 Submission, at Exhibit SV-13. 78 See Petitioners September 10, 2019 Submission, at Exhibit 7. 79 Id.

As to contemporaneity, it is Commerce’s practice to use financial statements for a fiscal year which overlaps during the greatest number of months of the appropriate POR.80 Regarding the Indian financial statements from MMC, the record contains values for the 2016-2017 fiscal year and the 2017-2018 fiscal year. In the Preliminary Results, Commerce used calculated values from the 2017-2018 fiscal year financial statements of MMC. Although these values were contemporaneous with the POR, the data are not complete for the purposes of our analysis. Specifically, NTSF sourced the data from a preliminary results SV memorandum from a proceeding involving frozen warmwater shrimp,81 without placing the underlying financial statements on the record of this review; thus, these financial statements were not subject to direct review and/or comment in this review. Regarding MMC’s 2016-2017 financial statements, even though the record contains the 2016-2017 financial statement for MMC, these financial statements are not contemporaneous because they end prior to the POR. Therefore, as other contemporaneous Indian financial statements are on the record, i.e., Mulpuri’s, Commerce will no longer consider MMC’s non-contemporaneous 2016-2017 financial statements or incomplete 2017-2018 financial statement values for the final results. We note that parties submitted arguments regarding whether MMC was a producer of comparable merchandise above. However, given that Commerce is not using either MMC’s 2016-2017 or 2017-2018 financial statements in its analysis, these arguments are moot. In summary, in this instance, the record contains complete contemporaneous information for the Indian company Mulpuri (2017-2018 financial statements) and Indonesian companies (2017- 2018 financial statements ), which all overlap with the POR for eight months. We have relied on Malpuri’s financial statements to compute the surrogate financial ratios in this review because India is the primary surrogate country. Overall Surrogate Country Conclusion We continue to find that India best fulfills all the surrogate country selection criteria. Accordingly, for these final results, Commerce continues to determine, pursuant to section 773(c)(4) of the Act, that it is appropriate to use India as the primary surrogate country because it is: (1) at the same level of economic development as Vietnam; (2) a significant producer of merchandise comparable to the subject merchandise based on the information available; and (3) provides the best data and information with which to value FOPs, such as direct materials, labor, energy, and financial ratios. Therefore, Commerce has calculated NV using Indian SV data to value NTSF’s FOPs, with the exception of by-products, as noted above.

Comment 3: Application of Partial AFA to NTSF Vinh Long’s Farming Factors.

The Petitioners’ Comments

• Commerce was unable to verify the total POR consumption quantity of harvested fish reported by NTSF Vinh Long. Thus, Commerce has no way of knowing the extent to which NTSF’s aggregate POR harvested fish consumption quantity has been affected.

80 See, e.g., Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Final Results of the First Antidumping Duty Administrative Review and First New Shipper Review, 72 FR 52049 (September 12, 2007), and accompanying IDM at Comment 2A. 81 See NTSF August 27, 2019 Submission, at Exhibit SV-8.

Nor can it verify whether the reported consumption, by CONNUM, is accurate. Thus, Commerce should reject NTSF’s reported data and base its final dumping margin on total AFA.

NTSF’s Rebuttal

 The petitioners do not recommend any adjustment with respect to NTSF Vinh Long’s farming factors. In any event, Commerce does not need to adjust the overall FOPs as the quantity of NTSF Vinh Long production that overlaps with U.S. CONNUMs represents a small percentage of a very small number of CONNUMs in the FOP database.

Commerce Position: Regarding NTSF Vinh Long’s farming factors, at verification, for the first time, NTSF informed us that it did not report the farming FOPs of its affiliated processor NTSF Vinh Long in the FOP database.82 Although NTSF then attempted to provide these FOPs to Commerce, we declined to accept them because they represented significant new factual information. However, we did note that these farming factors are attributed to a certain percentage of the combined harvested whole live fish by NTSF and NTSF Vinh Long.83

Section 776(a) of the Act provides that Commerce shall apply facts otherwise available if necessary information is not on the record or an interested party or any other person: (A) withholds information that has been requested; (B) fails to provide information in the form and manner requested by Commerce; (C) significantly impedes a proceeding; or (D) provides information that cannot be verified. By not reporting FOPs relating to an affiliated fish farm, as requested, NTSF has withheld information that was been requested of it, failed to provide data in the form and manner requested, and has significantly impeded this proceeding.84 Therefore, the application of facts available is appropriate pursuant to section 776(a) of the Act.

Section 776(b) of the Act provides that, if Commerce finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information, Commerce may use an inference adverse to the interests of that party in selecting the facts otherwise available. In so doing, Commerce is not required to determine, or make any adjustments to, a weighted-average dumping margin based on any assumptions about information an interested party would have provided if the interested party had complied with the request for information. In addition, the Statement of Administrative Action explains that Commerce may employ an adverse inference “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.”85 Further, affirmative evidence of bad faith on the part of a respondent is not required before Commerce may make an adverse inference. For example, with respect to Commerce’s reporting requirements, the Court

82 See Verification Report at 16-17. 83 Id. at 17. 84 In the absence of such information, we are unable to calculate NTSF’s dumping margin as accurately as possible. NTN Bearing Corp. v. United States, 74 F.3d 1204,1208 (Fed. Cir. 1995), quoting Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 1990)). 85 See Statement of Administrative Action Accompanying the Uruguay Round Agreements Act, H.R. Doc. 103 – 316, vol. 1 (1994) at 870.

of Appeals for the Federal Circuit (CAFC) has stated that, “while the standard does not require perfection and recognizes that mistakes sometimes occur, it does not condone inattentiveness, carelessness, or inadequate record keeping.”86 The AFA standard, moreover, assumes that because respondents are in control of their own information, they are required to take reasonable steps to present information that reflects their experience for reporting purposes before Commerce.

Accordingly, we have determined that the use of facts otherwise available with an adverse inference is appropriate for the final results with respect to NTSF, because the company failed to report FOPs relating to NTSF Vinh Long until verification, and NTSF had this information in its possession. Thus, we find that NTSF failed to cooperate to the best of its ability in this segment of the proceeding.87

Therefore, the application of facts available is appropriate pursuant to section 776(a) of the Act. Additionally, because NTSF failed to cooperate by not fully reporting its FOP data in its possession, NTSF failed to act to the best of its ability to comply with a request for information. Therefore, we use an adverse inference in selecting the facts otherwise available pursuant to section 776(b) of the Act.

Furthermore, regarding NTSF’s argument that NTSF Vinh Long’s tolled production overlaps with few CONNUMs sold by NTSF to the United States, we find this argument unavailing. NTSF’s farming FOPs for whole fish are not CONNUM-specific, given that whole fish are the starting point for all of the CONNUMs, not just a subset of those reported in the U.S. sales listing. This construct starts with the farming FOP numerator (including FOPs for fish provided by NTSF Vinh Long) divided by the harvested whole live fish denominator (including those same fish). Thus, we disagree with NTSF that these FOPs can necessarily be associated with specific U.S. CONNUMs at this point. NTSF later applies a CONNUM-specific standard consumption and then a variance to report its reported farming FOP. Thus NTSF’s argument that there is little overlap between NTSF’s tolled CONNUMs and the CONNUMs sold to the United States has no bearing on how the farming FOPs are initially constructed, as the initial information (i.e., the FOP numerator and the whole fish denominator) is not limited to a single final product.

As a consequence, as partial AFA, we based NTSF Vinh Long’s farming factors on the highest farming FOPs on the record for each farming factor category, i.e., fish feed, fingerlings, nutrition, medicine, environment treatment, farming labor, and farming electricity.88

86 See Nippon, 337 F. 3d at 1382. 87 See id. at 1382-83 (citing Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed. Cir. 2002), and noting that an adverse inference is appropriate “under circumstances in which it is reasonable for Commerce to expect that more forthcoming responses should have been made.”). 88 See Memorandum, “15th Administrative Review of Certain Frozen Fish Fillets from the Socialist Republic of Vietnam: Final Results Analysis Memorandum for the NTSF Seafoods Joint Stock Company,” dated April 20, 2020.

Comment 4: SV for Movement Expenses

In the Preliminary Results, Commerce calculated the per-unit SV for three movement expenses – international freight, domestic trucking, and domestic brokerage – by dividing the SV contained in Doing Business in India by 15,000 kg, which is the full container shipment weight in that source. We then applied this per-unit SV to NTSF’s reported U.S. sales quantities (adjusted to account for the weight of packing materials).

NTSF’s Comments

 Doing Business in India does not specify whether the weight of the containerized goods is a gross weight or net weight. Therefore, Commerce should use the quantity per invoice from NTSF’s sales database to calculate the denominators for the truck, brokerage, and international freight SVs because each invoice in the U.S. sales file represents a single container of frozen fish fillets.89

The Petitioners’ Rebuttal

 It is clear from Doing Business in India that the price quote is based on 15-metric-ton containers. In addition, NTSF’s own calculations of the surrogate domestic inland freight rate assume the same 15 metric ton container weight.  To use a container weight from another source, when the container weight from the source of the SV itself (i.e., the numerator in the SV calculation) is available, would distort the SV.

Commerce Position: As an initial matter, we note that NTSF made a similar argument in the prior review.90 As in the prior review, we find that mixing NTSF’s internal data (denominator) with the Indian surrogate values (numerator) is not internally consistent and will distort the ultimate value.91 Thus, for consistency and accuracy, the Doing Business India values must be converted using the conversion factors from the same source.

We have consistently found the Doing Business publication to provide the best available information in other prior cases to value freight costs.92 We prefer to value an FOP using prices that are broad market averages because “a single input price reported by a surrogate producer may be less representative of the cost of that input in the surrogate country.”93 The Doing Business publication contains data collected from local freight forwarders, customs brokers, port

89 See NTSF Case Brief at 1-4. 90 See Fish AR14 Final at Comment 4. 91 Id. 92 See, e.g., An Giang Fisheries Import and Export Joint Stock Company v. United States, 203 F. Supp. 3d 1256, 1284 (CIT 2017) (An Giang); and Xanthan Gum from the People’s Republic of China: Final Determination of Sales at Less Than Fair Value, 78 FR 33350 (June 4, 2013), and accompanying IDM at Comment 6-A. 93 See Honey from the People’s Republic of China: Final Results and Final Rescission, in Part, of Antidumping Duty Order Administrative Review, 71 FR 34893 (June 16, 2006), and accompanying IDM at Comment 1.

authorities and traders; thus, it reflects the freight costs of multiple vendors and users and provides a broad market average.94 NTSF’s alternate data do not meet these criteria.

Additionally, NTSF’s argument regarding the basis for the Doing Business figure, i.e., net vs. gross weight, is entirely speculative. The Doing Business report is intended to represent the cost of shipping merchandise, based on certain assumptions as well as responses from survey participants. We see no reason to assume that those costs would be on a weight basis that does not reflect commercial reality – companies shipped packed merchandise, and thus the Doing Business cargo weight assumption applies to such (actual) shipping costs.95

As a consequence, Commerce has correctly calculated the SVs in question by relying on values from a single source. This approach is logical and reflects past practice.96 Therefore, we have continued to follow it for the final results.

Comment 5: Net-to-Gross-Weight Conversion Factor for Movement Expenses

NTSF’s Comments

 In the gross weight to net weight factor calculated by Commerce, Commerce did not convert the gross weight from pounds to kilograms, although it converted the sales quantity (QTYU) from pounds to kilograms. Thus, the factor that Commerce applied was gross weight in pounds per net weight in kilograms. The factor that Commerce intended to apply was the gross weight in kilograms per net weight in kilograms.97

No other party commented on this issue.

Commerce Position: We agree and have made the appropriate changes to NTSF’s margin program.

Comment 6: Whether to Grant IDI a Separate Rate

IDI’s Comments

 In the Preliminary Results, Commerce denied IDI a separate rate.98 There is no legal or factual support for Commerce’s actions. Commerce summarily concluded that IDI had not demonstrated the absence of de jure and de facto government control, without analyzing the multiple submissions IDI placed on the record, including its first separate rate application and multiple supplemental questionnaire responses.99 Commerce appears

94 See Certain Fabricated Structural Steel From the People’s Republic of China: Final Affirmative Determination of Sales at Less Than Fair Value, 85 FR 5376 (January 30, 2020), and accompanying IDM at Comment 4. 95 See Daewoo Elecs. Co. v. United States, 6 F.3d 1511, 1520 (Fed. Cir. 1993) (Daewoo) (explaining that substantial evidence may include “reasonable inferences from the record”). 96 Id.; see also AR9 Final Results IDM at Comment III; and AR10 Final Results IDM at Comment III.A. 97 See NTSF Case Brief at 4. 98 See IDI Case Brief at 3 (citing Preliminary Results PDM at 7). 99 Id.

to have simply accepted the pre-preliminary comments of the petitioners, which were nothing more than unsubstantiated argumentative statements.  Companies seeking a separate rate may rebut the presumption of government control by showing an absence of central government control, both in law and in fact, with respect to export practices. To evaluate whether a company has sufficiently rebutted the presumption of control, Commerce examines the following four factors: (1) whether the exporter sets its own export prices independent of the government and other exporters; (2) whether each exporter retains the proceeds of its sales; (3) whether the exporter has the authority to negotiate and sign contracts and other agreements; and (4) whether the exporter has autonomy from the government in making decisions regarding the selection of its management. Commerce looks at the totality of circumstances to determine whether, and to what extent, the government does -- or does not -- exercise control over the company.  A separate rate applicant is not required to “rebut the potential for government control, but rather actual control by the government entity.”100 The applicant can do so by showing that “the government neither actually selects management nor directly or indirectly involves itself in the day-to-day management of the company.”101  While majority ownership by the government is sufficient to find government control, minority ownership is not. In the case of minority ownership, Commerce must find additional indicia of control before it may find that the government controls the company.102 That is, Commerce must show heightened involvement by the government where there is less than majority government ownership or involvement in the firm’s shareholdings.103  IDI fully documented an absence of de facto and de jure government control over IDI. With regard to a lack of de jure control, IDI certified and demonstrated that there were no laws or regulations controlling its export activities, and that it possessed an official government business license that was valid during the POR (which functions as its export certificate of approval). Accordingly, IDI may export subject merchandise free of government control.104  With regard to the lack of de facto control, IDI certified that: (1) it sets its own export prices without government control; (2) it signs its own agreements (and conducts price negotiations); (3) it independently selects its own management; and (4) it retains the proceeds of its export sales and makes independent decisions about the disposition of those proceeds.105 Further, IDI fully documented these statements by providing supporting documentation, including copies of sales and price negotiation documents, board and management lists, shareholder lists, and corporate documents showing the internal corporate process for selecting management.106

100 Id. at 8 (citing An Giang, 203 F.Supp.3d at 1289-90 (CIT 2017) (emphasis added)). 101 Id. (citing An Giang, 203 F.Supp.3d at 1289-90). 102 Id. (citing Can Tho Import-Export Joint Stock Company v. United States, 415 F. Supp. 3d 1187, 1192 (CIT 2019) (Caseamex I)). 103 Id. 104 Id. at 10. 105 Id. at 9-10. 106 Id.

 Commerce’s preliminary finding that IDI failed to establish a lack of government control in these circumstances is puzzling given that the Government of Vietnam (GOV) has no direct ownership in IDI or its parent company, Company Y.107  Company Y is a publicly traded company, and key decisions of the company are required by law to be made pursuant to the annual shareholder meetings and through decisions of the Board of Directors. Vietnam’s Enterprise Law makes clear that shareholders may participate in decisions through general shareholder meetings. This is true for IDI and its parent company, as company business operations, ownership and governance are directed and approved by the shareholders in accordance with the company charters.108  Not only does the GOV not control IDI or its parent through ownership interests, it also does not control the companies through representation on the boards of directors or through participation in the selection of management positions.  IDI has only one director (Mr. X)109 that held a government position. The position was on a provincial council, and his role as a government official did not impact decision making at IDI in any way. IDI demonstrated that Mr. X was also the sole board member at the parent company that had any involvement in a governmental agency. No other director or manager of IDI or its parent had any relationship with the Vietnamese State Asset Management Company, GOV ministries/agencies, Vietnamese provincial governments, or any Vietnamese local/municipal/village government body or agency.110  IDI provided additional explanation and documentation to show that Mr. X’s responsibilities at the local provincial government were minimal (i.e., he was one of 73 members on the council) and his role largely involved local planning activities relating to the “environment, education, healthcare, etc.”111 IDI further emphasized that Mr. X’s role in the local provincial government has no impact whatsoever on the ownership or operations (export or otherwise) of IDI or its parent. Nor could they, as company business operations, ownership and governance are directed and approved by the General Shareholders’ Meeting in accordance with the company charters.112  The petitioners allege that Mr. X’s (and other board members’) involvement with the Communist party demonstrates control by the government. This is incorrect because party membership is meaningless. Many in the business community in Vietnam are members of the Communist Party. Party members are simply part of a political party, and they work for the interests of the party by, for instance, developing political ideology. The same is true of the party committees within companies like IDI and its parent.113

107 As this discussion relies on business proprietary information (BPI), we have included BPI portions of this discussion in a separate memorandum. See Memorandum, “BPI Addendum – IDI Separate Rate Memorandum,” dated concurrently with this memorandum (BPI Addendum). For ease of discussion, we hereinafter refer to IDI’s parent company as “Company Y.” 108 See IDI Case Brief at 18. 109 See BPI Addendum. 110 See IDI Case Brief at 12. 111 Id. at 12-13. 112 Id. at 13. 113 Id. at 15.

 Commerce should find, consistent with the Court of International Trade’s (CIT’s) precedent, that there is no government control over IDI in this case.114 The Vietnamese government is even less involved in IDI’s activities than it was in the operations of the company that was the subject of the recent Caseamex decision. There, for the Caseamex separate rate applicant, it was shown that the government was the second largest shareholder of the company. Here, the only government connection to IDI is the lone involvement of one board member with a local government agency, without any corresponding stock ownership by the Vietnamese Government.115  As such, there is significantly less evidence of government involvement in IDI as compared with Caseamex. Here, there is not even the potential for control, because the local government in this case has no power to effectuate change in the company.116 It is wholly arbitrary and unreasonable for Commerce to find government control over IDI’s activities under these facts in light of the Court’s finding of no government control in Caseamex.  Not only did Commerce abdicate its legal responsibility and otherwise fail to consider the evidence submitted by IDI, Commerce also unlawfully applied AFA without adequate justification or support. Commerce did so without following all statutory procedures. IDI submitted complete responses to all of Commerce’s many questionnaires and supplemental questionnaires, and it also corrected and explained any inconsistencies, inaccuracies, or omissions in its supplemental questionnaires as soon as it was asked to do so.117  Commerce should reconsider its decision to deny IDI a separate rate in the final results. In doing so, it should consider all of the evidence submitted by IDI and then find that IDI and its parent are not controlled by the GOV and that IDI is entitled to a separate rate in this proceeding.118

The Petitioners’ Rebuttal

 The appropriate legal standard applied by Commerce begins with the rebuttable presumption that exporters in Vietnam are state-controlled. This presumption has been affirmed by the courts.119 The presumption of state control places the burden of proof on a separate rate applicant to demonstrate that the company is able to manage the business, set prices, make contracts, and otherwise conduct commercial operations free from state control.120

114 Id. (citing Caseamex I, 415 F. Supp. 3d at 1187). 115 Id. at 17. 116 Id. (citing Caseamex I at 1194). 117 Id. at 20. 118 Id. 119 See Petitioners Rebuttal Brief at 4 (citing Sigma Corp. v. United States, 117 F.3d 1401, 1405-06 (Fed. Cir. 1997) (Sigma) (upholding Commerce’s application of a rebuttable presumption of state control in NME proceedings)). 120 Id. at 4 (citing Sigma, 117 F.3d at 1405-06.).

 To overcome the presumption of state control, NME exporters must provide evidence to address the factors identified in Sparklers,121 as further developed in Silicon Carbide.122 To find de jure government control, Commerce considers, for example, whether there are government restrictions contained in an individual exporter’s business or export licenses.123 To find de facto control, Commerce considers, for example, whether the exporter’s export prices are controlled by a government authority or whether the respondent has independent authority to negotiate and sign export contracts.124  Where the company has a “minority government shareholder,” the Court has instructed Commerce to consider whether that government shareholder can “influence the appointment of managers and directors and the day-to-day operations” of the company.125 In Caseamex II, the Court found that the record as a whole, including the company’s Articles of Association, established that the minority government shareholder in that case had “no power to effectuate change” by virtue of the express provisions of the Articles of Association.126  Here, though, the record is quite different. At the outset, IDI failed to disclose that a company official was both an elected Vietnamese official and a member of the Communist Party. IDI claims that its initial separate rate application was “comprehensive,” citing the thousands of pages in its submission.127 However, in its initial submission IDI bluntly stated: “None of the managers and board of directors of IDI’s shareholder entities had any significant relationship with any level of the government and/or government agencies.”128 This statement was not true. IDI’s admission came only after its initial claim was challenged by the petitioners.129 By withholding this information, IDI at least failed to cooperate and provided a misleading response.  According to the record, Mr. X has substantial authority and influence over the operations of IDI, through his participation on the board. This is especially true given that other members of the boards of both IDI and Company Y are associated with the Communist Party. In these circumstances, the record evidence establishes substantial government influence over the appointment of company managers and the day-to-day operations of the company. Commerce has typically found that control over the selection

121 Id. (citing Final Determination of Sales at Less Than Fair Value: Sparklers from the People’s Republic of China, 56 FR 20588, 20589 (May 6, 1991) (Sparklers)). 122 Id. (citing Final Determination of Sales at Less than Fair Value: Silicon Carbide from the People’s Republic of China, 59 FR 22585, 22586-87 (May 2, 1994) (Silicon Carbide)). 123 Id. (citing Certain New Pneumatic Off-the-Road Tires from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2014-2015, 82 FR 18733 (April 21, 2017) (Tires), and accompanying IDM at Comment 1). 124 Id. at 4-5 (citing Tires IDM at Comment 1). 125 Id. at 5 (citing Can Tho Import-Export Joint Stock Co. v. United States, Ct. No. 16-00071, Slip Op. 2020-32 at *7 (CIT 2020) (Caseamex II)). 126 Id. (citing Caseamex II, at 5 (finding that “the AoA precludes the minority government shareholder from exercising any independent influence on the Board of Directors or any manager of {the company}”)). 127 Id. at 3, 5. 128 Id. (citing IDI’s October 19, 2018 Separate Rate Application (IDI SRA) at 15). 129 Id. at 7.

of management is a key factor in determining whether a company has sufficient independence in its export activities to merit a separate rate.130  The company charters thus provide the GOV, acting through Mr. X and the other members of the Board of Directors, with corporate authority to make decisions related to the company’s overall general operations.131  In sum, Mr. X’s government position alone is an indicia of de facto government control. “{W}hether any managers hold government positions at the national or sub-national government levels are relevant to its evaluation as to whether a respondent has demonstrated a lack of de facto government control with regard to its export activities.”132 Unlike the minority government shareholder in Caseamex I and II, Mr. X was a manager of Company Y and a member of the board for IDI and Company Y.  The CAFC has held that in making de facto control determinations, Commerce may make reasonable inferences from the record evidence.133 Here, the record shows that Mr. X held a position with the Vietnamese government during the POR and through his position as a member of IDI’s board, and in other roles in IDI and parent company, he had actual control over the several aspects of IDI’s business operations, including export activities, during the POR.134 Because there is evidence of actual control, IDI is wrong to claim that Commerce must search for “other indicia of control.”135  Moreover, IDI relies heavily on the Court’s decision in Caseamex I, although Commerce disagreed with the Court’s holding in that case, and it remains subject to CAFC appeal.136 More importantly, the record in this case demonstrates more extensive control of the subject company’s day-to-day operations. As shown above, the minority shareholder in Caseamex I and Caseamex II did not have the authority of Mr. X. Notably, the Court in Caseamex I and Caseamex II found that the government minority shareholder could be outvoted by the remaining majority shareholders.137 Given the composition of the board of IDI and Company Y, it is unlikely that Mr. X would be outvoted here.  As in Caseamex I and Caseamex II, given the party associations of Mr. X and other members of the board, “the government {can} control the company through traditional corporate control.”138 Therefore, when taken together, the facts demonstrate that IDI

130 Id. at 10 (citing Silicon Carbide, 59 FR at 22586-89 and Carbon and Certain Alloy Steel Wire Rod From the People’s Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Preliminary Affirmative Determination of Critical Circumstances, in Part, 79 FR 53169 (September 8, 2014), and accompanying PDM at “Separate Rates” section, unchanged in Carbon and Certain Alloy Steel Wire Rod From the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Final Affirmative Determination of Critical Circumstances, in Part, 79 FR 68860 (November 19, 2014)). 131 Id. at 14. 132 Id. at 15 (citing De Facto Criteria for Establishing a Separate Rate in Antidumping Proceedings Involving Non- Market Economy Countries, 78 FR 40430, 40432 (July 5, 2013) (De facto Notice)). 133 Id. (citing Daewoo, 6 F.3d at 1520 (explaining that substantial evidence may include “reasonable inferences from the record”) (quotation marks and citation omitted))). 134 Id. 135 Id. (citing IDI Case Brief at 2, 8, 14, and 19). 136 See id. (citing Caseamex II, at 2, 6 (noting that Commerce disagreed with the court’s holding in Caseamex I)). 137 Id. at 16. 138 Id. (internal citations omitted).

failed to demonstrate “an absence of central government control . . . with respect to exports.”139  IDI argues that Commerce, in effect, applied AFA pursuant to section 776(b) of the Act.140 Commerce did not; it based its preliminary separate rate determination on the record evidence and simply found that IDI is part of the Vietnam-wide entity.141 However, it would have been entirely consistent with the facts to apply that provision despite IDI’s arguments to the contrary.

Commerce Position: For the reasons stated below, we find that IDI has not demonstrated independence from the GOV. Accordingly, we continue to find that IDI is not entitled to a separate rate.

As an initial matter, contrary to IDI’s assertions, we have not made an adverse finding here, as defined under section 776(b) of the Act. The act of applying for a separate rate is a voluntary process undertaken by exporter-respondents and is not directly solicited by Commerce. Thus, IDI’s arguments regarding our alleged adverse finding are misplaced. IDI voluntarily submitted a separate rate application, and multiple supplemental questionnaire responses, which contained information that did not demonstrate that IDI is de facto independent from government ownership and control.

Commerce considers Vietnam to be an NME country under section 771(18) of the Act. In AD proceedings involving NME countries, such as Vietnam, Commerce applies a rebuttable presumption that the export activities of all firms within the country are subject to government control and influence.142 Commerce analyzes whether each entity exporting the merchandise under consideration is sufficiently independent under a test established in Sparklers143 and further developed in Silicon Carbide.144 According to this separate rate test, Commerce will assign a separate rate in NME proceedings if a respondent can demonstrate the absence of both de jure and de facto government control over its export activities. In determining de facto government control of an enterprise’s export functions, Commerce examines: (1) whether the export prices are set by, or are subject to the approval of, a government agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding the disposition of profits or financing of losses.145 Companies which do not demonstrate an absence of both de jure and de facto government control are

139 Id. (citing Shandong Huanri (Gr.) Gen. Co. v. United States, 493 F. Supp. 2d 1353, 1357 (CIT 2007) and Since Hardware (Guangzhou) Co. v. United States, 34 C.I.T. 1262, 1264 (2010)). 140 Id. (citing IDI Case Brief at 20-25). 141 Id. (citing Preliminary Results PDM at 7-8). 142 See, e.g., Certain New Pneumatic Off-the-Road Tires from the People’s Republic of China: Final Results of Antidumping Duty Administrative Review; 2012-2013, 80 FR 20197 (April 15, 2015), and accompanying IDM at Comment 1. 143 See Sparklers, 56 FR at 20589. 144 See Silicon Carbide, 59 FR at 22586. 145 See Silicon Carbide, 59 FR at 22586-89.

assigned the rate established for the Vietnam-wide entity, which applies to all imports from any exporter that has not established its eligibility for a separate rate.

The separate-rate test, where the respondent must demonstrate the absence of both de jure and de facto government control over its export activities, has been subject to litigation in the courts. In Sigma, the CAFC affirmed that it was within Commerce’s authority to employ a presumption for state control in an NME country and place the burden on the exporters to demonstrate an absence of central government control.146 The CAFC found that sections 771(18)(B)(iv)-(v) of the Act recognized a close correlation between an NME economy and government control of prices, output decisions, and allocation of resources and, therefore, Commerce’s presumption of government control was reasonable.147 In Jiangsu Jiasheng, the CIT ruled that Commerce could “make reasonable inferences from the record evidence” when examining the totality of the circumstances in determining whether a respondent had demonstrated de jure and de facto control of its export activities.148

Commerce’s application of the separate-rate test in NME cases has developed to address circumstances where the government entity holds either majority ownership (such that the potential for control exists based on ownership alone), or where the government does not hold a majority ownership interest but might nonetheless be able to exercise, or have the potential to exercise, control of a company’s general operations under certain factual scenarios.149 The CIT has explained that, pursuant to Commerce’s practice, a separate rate applicant “must show that the government neither actually selects management nor directly or indirectly involves itself in the day-to-day management of the company” to demonstrate independence from the government.150 IDI is unable to meet these conditions here.

146 See Sigma, 117 F. 3d at 1405-06 (“We agree with the government that it was within Commerce’s authority to employ a presumption of state control for exporters in a non-market economy, and to place the burden on the exporters to demonstrate an absence of central government control. The antidumping statute recognizes a close correlation between a non-market economy and government control of prices, output decisions, and the allocation of resources. Moreover, because exporters have the best access to information pertinent to the ‘state control’ issue, Commerce is justified in placing on them the burden of showing a lack of state control.”) (internal citations omitted). 147 Id.; see also Coalition for Preservation of Am. Brake Drum & Rotor Mfrs v. United States, 44 F. Supp. 2d 229, 243 (CIT 1999) (quoting Sigma, 117 F. 3d at 1405 (“Under the broad authority delegated to it from Congress, Commerce has employed ‘a presumption of state control for exporters in a non-market economy’… Under this presumption, all exporters receive one non-market economy country (NME) rate, or country-wide rate, unless an exporter can ‘affirmatively demonstrate’ its entitlement to a separate, company-specific margin by showing ‘an absence of central government control, both in law and in fact, with respect to exports’”)). 148 See Jiangsu Jiasheng Photovoltaic Tech. Co. v. United States, 121 F. Supp. 3d 1263, 1266 (CIT 2015) (Jiangsu Jiasheng 2015) (citing Jiangsu Jiasheng 2014, 28 F. Supp. 3d 1317, 1339 (quoting Certain Cut-to-Length Carbon Steel Plate from Ukraine, 62 FR 61754, 61759 (November 19, 1997) and Sigma, 117 F. 3d at 1405 (citation omitted), respectively; and citing Daewoo Elecs. Co. v. United States, 6 F. 3d 1511, 1520 (Fed. Cir. 1993) (explaining that substantial evidence may include “reasonable inferences from the record”) (citation omitted))). 149 There is no evidence that the GOV exerted de jure control over the operations of IDI. No party contends otherwise. Commerce’s statement that IDI failed to demonstrate de jure control in the Preliminary Determination was an error. Therefore, our separate rate analysis for IDI centers on whether the GOV exercises de facto control over the company. 150 See An Giang, 203 F.Supp.3d at 1289-90 (CIT 2017).

First, we find that the GOV is directly involved in the oversight of IDI’s business through its representation, via Mr. X, on the board of IDI and its parent company, Company Y. During the POR, a company official, Mr. X, held a position with a local provincial government (i.e., “deputy of the People’s Council of An Giang Province”) as a member of the Communist Party of Vietnam.151 Mr. X sat on the boards of both IDI and Company Y; this is significant, as the boards of directors are charged with making “important decisions of the company” as required by law.152 Importantly, the boards select the company management, who in turn handle the day- to-day operations of the company, including setting export prices.153

In addition to his position as a GOV official and member of IDI’s and its parent’s boards, Mr. X serves as a manager (specifically, “Deputy General Director”) in Company Y.154 In this position he was “in charge of external affairs … and thus responsible for arranging and attending meetings with the company’s investors, customers, partners and visitors from other companies.”155 As a result, Mr. X is also involved in the day-to-day management of Company Y and, in turn, IDI.156 Mr. X’s presence on the board of IDI and Company Y, along with his role in Company Y’s management, indicates that the GOV is involved in company-level decision making.

Second, Mr. X’s influence on the board is heightened and expanded by virtue of the fact that numerous other members of the IDI and Company Y boards are associated with the Communist Party of Vietnam. We recognize that there is a distinction between an individual who has a position of authority in the Vietnamese government, and an individual who has membership in the Communist Party of Vietnam. IDI contends that “{w}hile Mr. X and several members of the board of Company Y are involved with the party, none of these associations render IDI or Company Y under the control of the Vietnamese Government,” because “mere membership or association with the communist party does not mean an entity is subject to government 157 control.” Although we do not disagree with IDI that there are differences between government positions and Communist Party of Vietnam membership, we do not agree that “mere” membership in the Communist Party of Vietnam is meaningless for purposes of an analysis of government control.

Vietnam has a one-party system, and when an individual is a member of that party, the Communist Party of Vietnam, membership signifies that an individual is not just sympathetic to the ruling Vietnamese government’s goals, but is an active participant in furthering those goals. Accordingly, when a government official, such as Mr. X, is in a position of authority and power

151 See IDI’s Letter, “Certain Frozen Fish Fillets From The Socialist Republic of Vietnam: Supplemental Separate Rate Application - I.D.I. International Development and Investment Corporation,” dated February 19, 2019, at 4. 152 See IDI Case Brief at 18. 153 See IDI SRA at 17 (noting that the board is involved in the “selection of management,” and citing a specific “decision of the Board of Directors appointing the General Director of the company.”). 154 See IDI’s Letter, “Certain Frozen Fish Fillets From The Socialist Republic of Vietnam: Second Supplemental Separate Rate Application - I.D.I. International Development and Investment Corporation: dated April 2, 2019, at 2. 155 Id. at 2-3. 156 As his role involved meeting with customers and external parties, we find it likely that Mr. X played a role in price negotiations and export practices. 157 See IDI Case Brief at 15.

in companies such as IDI and Company Y, absent record information to the contrary, it is reasonable to presume that members of the Communist Party of Vietnam also in power in those companies will support and affirm the votes and influence of that government official to further the goals of the Vietnamese government.158

There is no evidence on the record suggesting that any of the multiple Communist Party of Vietnam members/associates on the boards of both IDI and Company Y have ever voted or acted in a manner at odds with Mr. X, or acted in a way that undermined his, and thereby the GOV’s, authority. IDI essentially argues that Communist Party of Vietnam membership is irrelevant, but we disagree with that overly general and broad assessment of the political dynamics of Communist Party membership in Vietnam.

Given the record evidence, we determine that it is reasonable to presume that Mr. X’s authority and control over IDI and Company Y is emboldened and furthered by the Communist Party of Vietnam members and associates on the boards of both companies. Accordingly, we find that the GOV’s interests are represented in IDI (and Company Y) by the presence of the government official, and furthered and expanded by the additional key Communist Party of Vietnam associates/members on the decision-making boards of those companies.

The particular powers vested in the board of each company, such as selection of management,159 as well as particular decisions of the board, further demonstrate the actual impact of Mr. X and the members and associates of the Communist Party of Vietnam in IDI’s operations. Moreover, other information on the record demonstrates that informal arrangements influence decisions of the board. As much of this information is proprietary in nature, we have included additional discussion in the accompanying BPI Addendum.

To summarize, there are several avenues through which the GOV can and does impact the operation of IDI. A manager of IDI’s parent company, i.e., Company Y, is a government official. That same government official plays a role in the boards of directors, which perform oversight of IDI and its parent and are involved in the selection of management. On both boards, members and associates of the Communist Party of Vietnam who are loyal to the ruling politicians in the GOV hold powerful positions. Taken together, these factors indicate that the government can control the company through traditional corporate control. Accordingly, we continue to find that IDI is de facto controlled by the GOV and is not entitled to a separate rate.

158 In our De facto Notice, we stated that we would consider whether any managers hold government positions at the national or sub-national government levels, among the various considerations used to determine whether a company is entitled to a separate rate, and that has subsequently been our practice. See 78 FR at 40433. With respect to membership in the Communist Party of Vietnam, one commenter suggested that we deny a separate rate where “two or more company managers or members of the board of directors are members of the Communist Party.” Id. Although at the time we determined not to consider two or more Communist Party members, alone, as part of our separate rate analysis, we also indicated that we might consider such factors, as well as others, on a case by case basis in the future, should the facts in a given case suggest such consideration is warranted. We have determined that in the facts of this case, the presence of a government official on the board of IDI/Company Y, in addition to the existence of multiple associates or members of the Communist Part of Vietnam, taken together, for the reasons explained above, supports a finding of de facto control. 159 See IDI SRA at 17 (noting that the board is involved in the “selection of management” and citing a specific “decision of the Board of Directors appointing the General Director of the company.”).

VII. RECOMMENDATION

Based on our analysis of the comments received, we recommend adopting all of the above positions and adjusting the margin calculation program for NTSF accordingly. If accepted, we will publish the final results of review and the final dumping margins in the Federal Register.

☒ ☐

______Agree Disagree

4/20/2020

Signed by: JEFFREY KESSLER Jeffrey I. Kessler Assistant Secretary for Enforcement and Compliance