March 26, 2014
 

US proposes increase in duties on Asian shrimp exporters
 

 

The United States Department of Commerce (DOC) plans to increase preliminary duty of up to 10% above previous final rates on major shrimp exporters to the United States, including Thailand, Vietnam and India.

 

This results primarily from the DOC's use of a new calculation methodology called "differential pricing." Differential pricing allows the DOC to measure differences in prices among various consumers, regions and time periods, which in many cases, results in higher duties.

 

For example, Vietnamese exporters - who will be the hardest hit if the preliminary determination holds - were levied rates between 5 and 10%, a significant increase from the DOC's 2013 final determination in the prior review that awarded zero percent rates across the board. This figure comes from the preliminary determination for the period of February 1, 2012 to January 31, 2013.

 

Where needed, the DOC can construct export prices on the basis of their own analysis, and then mark transactions to these constructed prices. The result is that they abandon their previous method of simply taking the average export price and the average cost.

 

The preliminary determination shows exporters Minh Phu Seafood and Stapimex duty margins rising from zero to 4.98% and 9.75%, respectively.

 

In India, rates were also increased across the board. Most notably, Devi Fisheries went from a de minimis rate of 0.23% to 1.97%. Falcon Marine Exports, meanwhile, went from a zero percent rate to 3.01%.

 

Similarly, Thai exporters saw their shrimp antidumping duties tick up from 0% in 2013 to 1.1% industry-wide, including Pakfood. Marine Gold was left out of the 2014 preliminary review because it was excluded from the antidumping order as of February 1, 2012.

 

Since these rates are preliminary, neither will they apply retroactively, nor will they affect the cash deposit rate on current shipments. All cash deposit rates will continue in effect according to the final results of the most recent administrative review. However, if the preliminary rates are finalised with no change, then importers in the current review period will owe duties at the increased rates at the conclusion of the reviews.

 

In its most basic description, the DOC's differential pricing formula measures differences in prices among consumers, time periods and regions. It substitutes for the "Targeted Dumping" methodology that the DOC used only when an allegation of targeting was first filed by a member of the domestic industry. No allegation is now required.

 

However, both of the DOC's antidumping methodologies are considered controversial, and both the Court of International Trade and the World Trade Organisation are now considering challenges to the methods in cases other than the shrimp cases. It is much too early to know how these will be resolved.

 

Should the DOC uphold these higher preliminary rates in its final determination, cash deposits with the new duties would take effect on the publication date of the final results, which will occur later from May to September.

 

This article was based on a commentary from Warren Connelly and Jarrod Goldfeder from the law firm of Akin Gump Strauss Hauer & Feld LLP.