CIT Complaint Contests Long-Term Interest Offsets in Shrimp Exporter's Costs of Production
The Commerce Department unlawfully failed to offset interest expenses with interest income in calculating the costs of production for shrimp exporter Megaa Moda, the company said in a Sept. 29 complaint filed at the Court of International Trade (Megaa Moda Private Limited v. U.S., CIT # 23-00205).
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The filing contests Commerce's final determination in the 2021-2022 administrative review of the antidumping duty order on frozen warmwater shrimp from India, in which it assigned a 7.92% dumping margin to Megaa Moda. Megaa Moda, along with NK Marine Exports, was selected as a mandatory respondent.
In both its initial and final determinations, Commerce did not allow Megaa Moda to offset certain interest income to financial expenses. Commerce claimed that the interest earned didn't relate to short-term investment of working capital and that Megaa Moda didn't demonstrate the short-term nature of the interest income offset.
The exporter said it provided the department with a list of all interest expense and income items used to compute net financial expenses, as well as "substantial supporting documentation confirming its interest income as short term in nature." It is Commerce’s standard practice to exclude from its financial expense calculations any income from long-term financial assets because such income is generally not associated with a company's general operations, Megaa Moda said.
"For more than 30 years, Commerce has allowed an offset for short-term interest income when respondents demonstrate that the short-term assets were purchased or funded with cash generated from their manufacturing and selling operations," Megaa Moda said.