Yesterday, the Department of Commerce published notice in the Federal Register that the antidumping duty orders on frozen warmwater shrimp from Brazil, China, India, Thailand, and Vietnam to include dusted shrimp in the scope of the trade remedy. The decision to make dusted shrimp subject to antidumping duties results from over six years of litigation by the Southern Shrimp Alliance.
In February 2005, Commerce implemented antidumping duty orders on frozen warmwater shrimp. Over the strenuous objections of the Southern Shrimp Alliance, through the Ad Hoc Shrimp Trade Action Committee, Commerce excluded “dusted” shrimp from the antidumping duty orders. In granting the exclusion, Commerce dismissed grave concerns expressed by the domestic industry that the decision would lead to widespread circumvention of the trade relief.
Once the orders were implemented, unprecedented volumes of “dusted” shrimp began to enter the United States market from China. A significant portion of these shrimp imports were intentionally mischaracterized as “dusted” shrimp to avoid the payment of antidumping duties. The Southern Shrimp Alliance conducted extensive investigations of the nature of the flood of “dusted” shrimp imports and with the assistance of many members of the domestic industry identified and developed evidence of abuse of the exemption.
Based on the concerns raised by the Southern Shrimp Alliance, U.S. Customs and Border Protection conducted a sampling operation of “dusted” shrimp imported into the United States. Over a 90-day period, CBP found that 64% of the 81 “dusted” shrimp entries sampled were incorrectly or inaccurately labeled dusted shrimp. Based on these findings, CBP estimated that importers caught importing fraudulent dusted shrimp had potentially evaded paying $132 million in antidumping duties.
At the same time as the organization worked with CBP to address abuse of the “dusted” shrimp exclusion, the Southern Shrimp Alliance challenged Commerce’s exclusion in federal court. These appeals ultimately resulted in rulings that found Commerce’s exclusion of dusted shrimp unlawful.
In the recently completed sunset review of the five antidumping duty orders on frozen warmwater shrimp, the U.S. International Trade Commission found that the domestic like product competing with imported shrimp included dusted shrimp. Based on this finding and the federal court rulings striking down the dusted shrimp exclusion, Commerce amended the scope of the orders to now include dusted shrimp.
UPDATE (April 28, 2011)
The following link is an explanation of the most recent CDSOA distribution and future distributions with respect to the “withheld” funds: http://www.cbp.gov/xp/cgov/trade/priority_trade/add_cvd/cont_dump/withheld_funds.xml