CIT Says Commerce Erred in Analysis of Whether Shopping Bag Exporter Knew Sale Was for Export to US
The Court of International Trade on Oct. 1 sent back the Commerce Department's finding that antidumping duty respondent Ditar correctly reported an individual transaction, dubbed "Transaction X," as a home market sale in the AD investigation on shopping bags from Colombia. Judge M. Miller Baker said on remand the agency must address whether Ditar had "actual" knowledge of whether Transaction X was destined for export "without importing evidence relevant only to" whether Ditar had "constructive" knowledge that the sale was for export.
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If Commerce then finds Ditar's statements alone aren't admissions of actual knowledge, the agency "must then examine whether the company had constructive knowledge based on the other evidence in the record," the judge said.
During the investigation, Ditar said Transaction X was “unique in that it was the only home-market sale made to an unaffiliated party during the [period of investigation] for which it had knowledge that the merchandise would subsequently be exported to the United States.”
The respondent said it had "two clues" that indicated the bags in question were for the U.S. market, though it didn't know whether the sale would be exported to the U.S. during the investigation period. Those clues were that "plate charges" linked to the transaction were only associated with U.S. sales and the bags' design reflected "ultimate use in the U.S. market."
Commerce said the transaction was properly reported as a home-market sale, since the record lacked any evidence that Ditar "signed or prepared documentation stating that the merchandise was intended to be exported to this country" or that any labeling or packing indicated the goods were meant for export. The company also charged Colombia's value-added tax to the buyer, which it wouldn't have done if the goods had been sold to the U.S., the agency noted.
Baker found two problems with Commerce's analysis.
First, the agency failed to address the "verification report’s multiple references to Ditar personnel’s statements that they ‘had knowledge’ of the merchandise’s destination." While the U.S. says Commerce gives greater weight to physical evidence prepared at the time of a transaction than to unsubstantiated statements made by company officials, the judge said that claim "wrongly conflates the two prongs of the knowledge test." A respondent's admission it knew "of the U.S. destination" is enough to establish actual knowledge "if it shows what the company knew at the time of the sale," the judge said.
The physical evidence and document cited by the government, which is evidence of constructive knowledge, is only relevant in the absence of actual knowledge, the court said.
The second problem with the agency's analysis is that, despite the examination of constructive knowledge, "Commerce never discussed whether the company 'should have known' the sale was destined for the U.S.," Baker said. The evidence considered by Commerce, including the inclusion of the value-added tax, can't be used to establish actual knowledge, and, was improperly considered by the agency, since Commerce didn't discuss whether the company "should have known of the bags' ultimate destination," the court said.
(Coalition for Fair Trade in Shopping Bags v. United States, Slip Op. 25-129, CIT # 24-00157, dated 10/01/25; Judge: M. Miller Baker; Attorneys: J. Michael Taylor of King & Spalding for plaintiff Coalition for Fair Trade in Shopping Bags; Yaakov Roth for defendant U.S. government; Robert Gosselink of Trade Pacific for defendant-intervenor Ditar)