Commerce Department Issues Affirmative Final Results of Expedited Sunset Reviews

Today, notice of the U.S. Department of Commerce’s final affirmative determinations in the agency’s expedited sunset reviews of the antidumping duty orders on frozen warmwater shrimp from China, India, Thailand, and Vietnam was published in the Federal Register.

In the notice, Commerce explained that both the Ad Hoc Shrimp Trade Action Committee (AHSTAC) and the American Shrimp Processors Association (ASPA) had submitted timely notices of intent to participate in the third sunset review of these antidumping duty orders. Further, Commerce observed that both AHSTAC and ASPA had each filed complete substantive responses to the agency’s announcement that it was initiating the sunset review, but that no substantive responses had been submitted by any foreign exporter or U.S. importer.

Based on the filings that Commerce had received, the agency determined that the revocation of the antidumping duty orders would likely lead to the continuation or recurrence of dumping and that the magnitude of the dumping margins likely to continue or recur would be weighted-average margins of up to 5.34 percent for shrimp from Thailand, up to 25.76 percent for shrimp from Vietnam, up to 110.90 percent for shrimp from India, and up to 112.81 percent for shrimp from China.

Similarly, on Friday, notice of the U.S. International Trade Commission’s determination to conduct full reviews of the four antidumping duty orders was published in the Federal Register. In that notice, the agency stated: “The Commission hereby gives notice that it will proceed with full reviews pursuant to the Tariff Act of 1930 to determine whether revocation of the antidumping duty orders on frozen warmwater shrimp from China, India, Thailand, and Vietnam would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.” The Commission further confirmed that it had found the substantive responses to that agency’s notice of institution of the reviews filed by the domestic interested parties – ASPA, AHSTAC, and the Ad Hoc Shrimp Industry Committee (AHSIC) – to have been adequate, as were the responses filed by representatives of the Indian, Thai, and Vietnamese industries.  

At the end of the full reviews, the Commission will determine whether the antidumping duties on shrimp will continue to be imposed. The Commission noted that “[a] schedule for the reviews will be established and announced at a later date.”

Why are there antidumping duties on shrimp and how do they work? 

In December 2003, formal petitions were filed by AHSTAC with the federal government requesting the imposition of antidumping duties on imports of frozen, non-breaded warmwater shrimp from Brazil, China, Ecuador, India, Thailand, and Vietnam. After a year of administrative litigation, AHSTAC established that imports from all six countries were being sold at less than fair value (dumped) and that the domestic shrimp industry, comprised of shrimp fishermen, shrimp farmers, and shrimp processors, was suffering material injury by reason of these unfairly-traded imports. In result, antidumping duty orders were formally imposed on shrimp imports from these six countries in February 2005.

Under the antidumping duty orders, importers are required to make a deposit of estimated antidumping duties at the time that imported shrimp is entered into the United States. Although the antidumping duty orders on shrimp from Brazil and Ecuador have been revoked and antidumping duties are no longer imposed on these shrimp imports, U.S. Customs and Border Protection reports that roughly $41.8 million in antidumping duties was deposited on shrimp imports from China, India, Thailand, and Vietnam in fiscal year 2020 after more than $37.2 million in antidumping duties was deposited on these shrimp imports in fiscal year 2019.

On an annual basis, foreign shrimp exporters and U.S. importers have the option of requesting that the U.S. Department of Commerce conduct an administrative review, which gives them the opportunity to demonstrate that they did not sell shrimp into the United States at below fair value or that, alternatively, their dumping rates were lower than the duty deposit rates applied at importation. If successful, U.S. importers receive refunds of the estimated antidumping duties initially deposited. At the same time, U.S. industry members may also request that Commerce conduct an administrative review, giving them the opportunity to establish that their foreign competition was selling at dumping rates that were higher than the amounts initially deposited. If the U.S. industry is successful, U.S. importers receive bills from U.S. Customs and Border Protection to pay additional antidumping duties on those imports.

Administrative reviews generally take more than a year to complete, with the parties participating in a review having the option of appealing Commerce’s final determinations to the U.S. Court of International Trade and the U.S. Court of Appeals for the Federal Circuit. Once litigation is fully completed, Commerce gives U.S. Customs and Border Protection liquidation instructions which, depending on the outcome of the administrative litigation, may order CBP to provide refunds of estimated antidumping duties to importers or to collect additional duties from those importers.

For the antidumping duty orders on shrimp, the amount of antidumping duties being collected is significant. U.S. Customs and Border Protection reports that in fiscal year 2020 the agency was ordered to liquidate (collect) over $39.0 million in antidumping duties on shrimp imports, with Commerce ordering CBP to liquidate (collect) roughly $141.0 million in antidumping duties on shrimp imports in fiscal year 2019. When CBP is ordered to collect additional antidumping duties because the domestic industry has successfully argued that dumping rates are higher than the deposit rates imposed at importation, the agency is sometimes unable to get importers to pay these additional funds. In fiscal years 2019 and 2020, U.S. Customs and Border Protection reports that roughly $17.9 million of the $180.0 million the agency was ordered to collect remains outstanding and has not been collected.

In addition to this administrative review process, the U.S. shrimp industry is required, on a five-year cycle, to demonstrate to Commerce and the U.S. International Trade Commission that the removal of antidumping duties would likely lead to the continuation or recurrence of unfair trade and that this would likely cause material injury to the domestic industry. These proceedings are also known as “sunset reviews.” The shrimp antidumping duty orders are currently undergoing their third sunset review.

What are the next steps?

Following Commerce’s issuance of final affirmative determinations in that agency’s sunset reviews of the antidumping duty orders, there is just one more step that must be met in order to maintain the antidumping duties on shrimp imports from China, India, Thailand, and Vietnam for another five years: the Commission’s full sunset review.

Once the full review begins, the Commission will issue questionnaires to U.S. shrimp fishermen, farmers, and processors in order to obtain information necessary to evaluate whether the domestic shrimp industry will be materially injured if the trade relief is removed. Generic examples of these questionnaires can be obtained at the ITC’s website at the following link:  https://usitc.gov/trade_remedy/question.htm.

As indicated in today’s Federal Register notice, the Commission has not yet determined a schedule for its full review. The agency is expected to formally announce a schedule for the final phase of its review sometime later this year.

The Federal Register notice of the final results of Commerce’s expedited sunset reviews on the antidumping duties imposed on frozen warmwater shrimp from China, India, Thailand, and Vietnam can be found here: https://www.shrimpalliance.com/wp-content/uploads/2022/09/Federal-Register-Notice-on-Commerce-Final-Results-3rd-Sunset.pdf

The Federal Register notice announcing the U.S. International Trade Commission’s to conduct full sunset reviews on the antidumping duty orders imposed on frozen warmwater shrimp from China, India, Thailand, and Vietnam can be found here: https://www.shrimpalliance.com/wp-content/uploads/2022/09/Federal-Register-Notice-on-ITC-Adequacy-Determination-3rd-Sunset.pdf

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