Federal Circuit Affirms a 112.81% Antidumping Duty Rate Assigned to a Chinese Exporter that Provided False and Inaccurate Information to Commerce

News & Insights
Oct 5, 2015

The U.S. Court of Appeals for the Federal Circuit (“Federal Circuit”) today affirmed the U.S. Court of International Trade (“CIT”)’s decisions that the U.S. Department of Commerce (“Commerce”) had properly assigned a 112.81% antidumping duty rate to Hilltop International (“Hilltop”) in the 2008-2009 and 2009-2010 administrative reviews of the antidumping duty order on frozen warmwater shrimp from China.

Picard Kentz & Rowe (PKR) argued the case on behalf of the Ad Hoc Shrimp Trade Action Committee (AHSTAC), an association of domestic producers of frozen warmwater shrimp representing the U.S. shrimp industry in the administrative review proceedings.

Represented by PKR, in another administrative proceeding, AHSTAC submitted additional evidence to Commerce indicating that shrimp subject to antidumping duty orders had potentially been transshipped through Cambodia in order to evade duty payment. Commerce’s review of this evidence identified inconsistencies with Hilltop’s representations to the agency in the course of several administrative proceedings. Ultimately, Commerce’s investigation revealed that Hilltop had made false and inaccurate representations to the agency regarding the existence of a Cambodian affiliate.

Re-opening the records in both the 2008-2009 and the 2009-2010 administrative reviews, Commerce denied Hilltop separate rate status and assigned a 112.81% China-wide rate to it based on statutory “adverse facts available” (“AFA”) in remand proceedings for both reviews.

In response, Hilltop appealed Commerce’s AFA finding to the CIT, challenging Commerce’s authority to consider the evidence submitted by AHSTAC and the application of a 112.81% antidumping duty rate. The CIT rejected Hilltop’s appeal and found that Commerce had acted reasonably and within its legal authority in response to the exporter’s false and inaccurate statements.Hilltop thereafter appealed the CIT’s decision to the Federal Circuit. In the decision issued today, the Federal Circuit upheld the CIT’s prior ruling. The Federal Circuit found that, based on Hilltop’s non-cooperation and material misrepresentations, Commerce properly declined to find that Hilltop was entitled to an antidumping duty rate separate from the Chinese-government operated entity. Although Hilltop argued that its false claims were not material to Commerce’s calculation of a dumping margin, the Federal Circuit held that the exporter’s “failure to disclose its affiliates and its misrepresentations undermined all of Hilltop’s submissions . . . .”

The Federal Circuit also affirmed Commerce’s use of a 112.81% antidumping duty rate. The Court found that Commerce had appropriately taken steps to confirm the commercial reality of the dumping margin and that the agency had reasonably determined that “a non-cooperative respondent could have made sales at the same rate.” While Hilltop complained that the 112.81% dumping margin involved stale data derived from sales made significantly before those at issue in the administrative review proceedings, the Federal Circuit observed that “the age of information alone” does not undermine its relevance, particularly in light of Commerce’s detailed explanation of the relevancy of the sales data utilized.

Separate and apart from its holdings regarding Hilltop, the Federal Circuit also held that the recently-enacted Trade Preferences Extension Act of 2015 (the “Act”), which affects Commerce’s ability to select and utilize dumping margins as AFA, does not apply to the instant appeals. In particular, the Federal Circuit found that Congress intended the AFA section of the Act to apply only to Commerce determinations made on or after the date of enactment.