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Commerce Improperly Rejected FIFO Method for Determining Origin in AD Investigation, Exporter Says

The Commerce Department improperly rejected a first-in-first-out (FIFO) methodology used by an Indonesian mattress exporter to determine which of the exporter’s U.S. inventory to examine in an antidumping duty investigation on mattresses from Indonesia, the exporter said in a brief filed with the Court of International Trade Nov. 9.

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Unable to identify country of origin for its prior sales made out of U.S. inventory during the investigation because of commingling and a lack of information kept on the mattresses, Zinus Global had employed a FIFO method on a model and warehouse-specific basis for constructed export price (CEP) sales, and used that method to separately report its Indonesian-origin sales and its sales originating from other countries.

“Rather than accept this reporting, Commerce instead adopted a back-of-the-envelope allocation methodology, suggested by Petitioners, whereby Commerce calculated an overall ratio, by calendar quarter, to approximate the share of U.S. inventory sales which were of product produced in Indonesia,” Zinus said. The method used by Commerce was less accurate, and there was no evidence that supported a move away from Zinus’ FIFO method, the brief said.

And during the investigation, Commerce did not seek any additional documentation or ask more questions beyond an initial request, and in its preliminary determination, Commerce only said that “questions remain” about the method used to determine origin for the CEP sales. “Absent further questions from Commerce, Zinus was unable to ascertain which questions, if any, may have been at issue at the time of the Preliminary Determination, nor could Zinus submit unsolicited factual information under Commerce’s procedures.

CIT “should remand this decision to Commerce with instructions to utilize Zinus’ FIFO methodology or else seek additional explanation and/or information from the company to verify the accuracy of Zinus’ FIFO methodology,” Zinus said. CIT recently upheld the application of AFA for an exporter that used a FIFO method to determine origin, finding that despite the exporter’s cooperation with the review at issue, the exporter had the duty to maintain records to more accurately assign origin (see 2110270027).