Indonesian Mattress Maker Challenges Surrogate Data, Ministerial Error in AD Review at Trade Court
Indonesian mattress exporter PT Ecos Jaya Indonesia and its affiliate PT Grantec Jaya Indonesia launched a challenge at the Court of International Trade against the Commerce Department's calculation of the exporter's constructed value and constructed export profit and selling expense ratios. The company objected to Commerce's use of financial data from Malaysian mattress maker Masterfoam Industries and Indian mattress conglomerate Kurlon Enterprise as surrogate sources (PT Ecos Jaya Indonesia v. United States, CIT # 24-00001).
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Commerce used the surrogate data as part of the 2020-22 review of the antidumping duty order on mattresses from Indonesia. During the review, Ecos Jaya Indonesia said the agency should only use the Masterfoam data, though Commerce rejected this request and hit the company with a final 8.40% AD rate.
At the trade court, the company said Commerce "unreasonably and unlawfully introduced distortions and inaccuracies into" the AD calculation by using a second surrogate source "with dissimilar business operations and sales channels to that of Plaintiffs."
After the rate was published in the review, Ecos Jaya Indonesia filed a ministerial error allegation against the duty rate. The agency used Masterfoam's financial data but modified the data by reducing the surrogate company's profit by the dividend income from associates and subsidiaries, which was included in the general and administrative calculation as "Other Income," Ecos Jaya Indonesia said.
The ministerial error allegation said that Commerce "inadvertently failed to reduce the cost of goods sold" denominator, which includes both the general and administrative and "Other Income" marks, "by the same dividends in the denominator of the CV profit and selling expense ratios." Commerce said this does not rise to the level of a ministerial error under the AD statute. Ecos Jaya Indonesia disagreed, saying it "plainly met the definition" of a ministerial error in the agency's regulations.