Certain Frozen Fish Fillets Form the Socialist Republic of Vietnam
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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. 2 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. 3 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.