A Chinese shrimp supplier to the Red Chamber Group is on the hook to pay millions of dollars in duties after a recent ruling from the US Department of Commerce (DOC).
That's because, according to the DOC's International Trade Administration (ITA), an exemption granted from shrimp anti-dumping duties to Red Garden Food Processing Co., Ltd. in 2013 should no longer apply to a successor company, Shantou Red Garden Food Processing Co (SRGFP)., Ltd. The two entities, the DOC argued, are distinct because in the past 17 years, Red Garden has seen significant changes, including changing its name twice.
"We base this recommendation on the fact that Red Garden’s ownership, management, production, suppliers, and customers changed significantly since the time of its revocation, making its operations materially dissimilar to those of Shantou RGFP," the DOC wrote in a preliminary ruling on the matter filed earlier this year.
Lawyers for the Chinese firm have argued in contrast that Red Garden Food Processing and Shantou Red Garden Food Processing are in fact the same company, attributing the DOC preliminary ruling to a misunderstanding resulting from a 2013 typographical error.
"There s no evidence on the record even remotely suggesting that Commerce intended to modify the dumping order by deleting a company which had been verified and substituting for it a fictitious company for which there is not even a scintilla of evidence on the record," lawyers for SRGFP wrote in an Oct. 19, 2019, response to the DOC's investigation.
On Dec. 17, the DPC finalized its ruling, which followed an October hearing on the matter.
John Williams, the executive director of the Southern Shrimp Alliance (SSA), applauded the ruling.
"We are grateful to the U.S. Department of Commerce for conducting a thorough investigation of Shantou Red Garden. We think this is the correct result and shows, once again, the Trump Administration’s commitment to the effective enforcement of our trade laws," he said.
The stakes for Red Chamber, which buys Red Garden's shrimp, are high. In March, congressman Kevin McCarthy, a Republican who represents the 23rd congressional district and is the House minority leader, spoke on the phone with DOC officials and commerce secretary Wilbur Ross regarding the matter.
He was concerned that, as the US importer, Red Chamber could be on the hook for up to $7m, the SSA said in a press release. But the DOC later said the estimated $7m figure was "overstated".
"Using the estimated figure publicly given to Commerce, the final antidumping rate of 58.96% implies potential liability of $3.6m for the importer," the SSA said of Red Chamber's liability.
December 24, 2020 at 02:02AM
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Red Chamber affiliate loses shrimp duty exemption, generating multimillion dollar bill - Undercurrent News
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