Commerce Failed to Investigate All of Shrimp Exporters' Cross-Owned Suppliers, Petitioner Says
The Commerce Department failed to investigate subsidies received by cross-owned suppliers of fresh shrimp in the countervailing duty investigation on frozen warmwater shrimp from Ecuador, petitioner American Shrimp Processors Association argued in a Feb. 21 complaint at the Court of International Trade. The association also contested Commerce's findings that the provision of fuel and brackish water for less than adequate remuneration were not countervailable (American Shrimp Processors Association v. United States, CIT # 25-00026).
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Commerce picked Industrial Pesquera Santa Priscila and Sociedad Nacional de Galapagos (SONGA) as the two mandatory respondents in the investigation. After the agency filed its preliminary determination, the association filed new subsidy allegations, claiming that the shrimp industry benefited from the provision of fuel and brackish water for LTAR.
During the investigation, Santa Priscila reported cross-ownership with 71 entities, while SONGA reported cross-ownership with 44 entities. The agency asked the respondents to respond to requests for information "on behalf of a limited number of cross-owned entities." Santa Priscila submitted data for itself and four cross-owned affiliates, while SONGA submitted information for itself and three cross-owned affiliates.
The agency didn't request that the respondents submit information on subsidies to non-cross-owned suppliers of fresh shrimp.
The association argued that Commerce's "decision to excuse the mandatory respondents from submitting complete questionnaire responses on behalf of all cross-owned suppliers of fresh shrimp" was not backed by substantial evidence or in accordance with law. The petitioners said they bought inputs from cross-owned companies then asked to be excused from submitting responses on behalf of these suppliers after the deadline to do so.
Nevertheless, the agency "granted the request," and only required the respondents to submit information for only one cross-owned supplier. The petitioner said the move violated the law.
During the investigation, Commerce also declined to countervail the provision of fuel, despite the fact that the fuel was provided by EP Petroecuador, a government-owned oil company. The agency noted the fact that the fuel was bought from private trading companies and distributors instead of directly from Petroecuador. Similarly, the agency refused to countervail the provision of brackish water, since "there is no fee for non-consumptive use of brackish water and the mandatory respondents were responsible for all infrastructure costs to transport brackish water to and from their facilities."
The association argued that it showed during the proceeding "that the mandatory respondents were indirect recipients of a countervailable financial contribution when they purchased government-produced fuel from private traders and distributors." The agency's finding to the contrary isn't supported by evidence or the law, the brief said.
Regarding the provision of brackish water, the petitioner argued that "the cost-free access to brackish water from public water sources constitutes a countervailable benefit." The association said Commerce found evidence at verification "relating to the provision of brackish water that was inconsistent with the questionnaire responses submitted by the government of Ecuador." The petitioner also faulted Commerce for not using AFA regarding this program in light of the evidence discovered at verification that the respondents didn't report.
The petitioner ultimately challenged the CVD rates of 3.57% for Santa Priscila and 4.41% for SONGA.