Commerce Nearly Halves AD Rate for Japanese Exporter After Excluding Expense From G&A Ratio
The Commerce Department dropped the antidumping duty rate for exporter Nagase & Co. from 27.21% to 15.93% after excluding the "compensation for payment" amount originally listed in the company's general and administrative expense ratio. Submitting its remand results Aug. 9 to the Court of International Trade, Commerce said it reviewed the evidence, including an additional questionnaire submitted by Nagase, and found the compensation for payment represents the reimbursement of a consignee's expenses incurred for making non-subject merchandise (Nagase & Co. v. U.S., CIT # 21-00574).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
In the 2018-20 administrative review of the antidumping duty order on glycine from Japan, Commerce originally said the expense was a general and administrative expense for the exporter, relying on a Nagase news release as evidence. In April, the trade court said that this finding was conclusory and contradicted by record evidence and that the news release was cited "without any analysis" (see 2304110063).
On remand, Commerce reviewed the evidence and reached a different conclusion. Nagase told the agency that the compensation for payment "was incurred to compensate a customer that had consigned production of a pharmaceutical product to" the exporter for "losses due to a delay in the approval of the pharmaceutical by the relevant government authority." The agency said this showed that Nagase made the non-glycine product for a non-affiliated customer and that the goods in question were not suitable for sale to other parties.
Upon reexamination, Commerce said it finds that "the amount represents the reimbursement of certain of the consginee's expenses incurred for the production of non-subject merchandise." The expense is not related to the company's general operations and was excluded from the G&A expense ratio, the agency said, lowering the exporter's duty rate.
During the remand proceeding, Nagase also argued for Commerce to recalculate its assessment rate even though the court did not remand this issue. The exporter said in the review it incorrectly submitted information, leading to an errant figure for the entered value of the constructed export price sales. The agency rejected the bid to correct the error since the request for review was untimely filed. Commerce refused to revisit the error on remand, telling the exporter the remand order told it to reconsider one unrelated issue, and the agency is "not persuaded" to "disturb the finality of the issue of the entered value at this time."