Recently, the United States Department of Commerce issued an official notice regarding the acceptance of a request to investigate countervailing measures on frozen and fresh shrimp products from Vietnam. The products under investigation include frozen warmwater shrimp falling under HS codes 0306.17, 1605.21, and 1605.29. The countries under investigation include Ecuador, India, Indonesia, and Vietnam. Vietnam is specifically being investigated for countervailing, as its shrimp products fall under the countervailing investigation subjects have been subject to anti-dumping duties imposed by the U.S. since 2004.
The alleged countervailing scope includes frozen and fresh shrimp from Vietnam. The complainant explains that fresh shrimp raw material constitutes up to 95% of the value of frozen warmwater shrimp. Therefore, countervailing given to Vietnamese fresh shrimp suppliers are considered countervailing for Vietnamese producers and exporters of frozen shrimp to the United States.
The countervailing investigation period is in 2022, and the injury investigation period ranges from 2020 to the first half of 2023.
The goods under investigation are produced or manufactured in Vietnam and are alleged to receive countervailing from the Vietnamese government as well as other Vietnamese governments and public entities.
Request for Investigation of Countervailing Measures on Vietnamese Frozen and Fresh Shrimp
The request for investigation provides reasonable information for the U.S. Shrimp Processors Association (“Petitioner”) to demonstrate that the production and export of frozen warmwater shrimp from the Socialist Republic of Vietnam benefit from government subsidy.
Based on Sections 701(a)(1) and (2) of the Tariff Act of 1930, the U.S. Department of Commerce will impose countervailing duties on imports from a country that participates in a “countervailing duty agreement” where the imported goods:
(1) are produced or exported by companies benefiting from countervailing activities;
(2) cause serious injury or threaten to cause significant injury to domestic production.
Both these requirements are met in this case. This forms the basis for the Petitioner’s request for an investigation and imposition of countervailing duties in the complaint and any other countervailing found during the requested countervailing investigation.
The Petitioner has identified certain producers or exporters of frozen warm water shrimp in Vietnam that are alleged to have benefited from countervailing, and their products are alleged to have been exported to the United States. The names and addresses of these companies can be found in Exhibit I-16 of the complaint.
The Petitioner accuses Vietnamese companies of benefiting from a total of 40 programs categorized into groups such as loans and guarantees, corporate income tax incentives, exemptions from various fees (import taxes, irrigation fees, etc.), land rent reductions/exemptions, export promotion, investment support programs, agricultural insurance fee support, funding for research and development, and new seed cultivation.
According to information from the Vietnam Competition Authority, under U.S. regulations, the process for investigating countervailing proceeds as follows after receiving the investigation request from representatives of domestic production companies:
Step 1: The investigated country’s government (Vietnam) consults with the DOC regarding the investigation request.
Step 2: The DOC has 20 days to review the investigation request and issue a decision to initiate or not initiate the investigation, expected by November 14, 2023. In special cases, the DOC may extend this period to a total of 40 days.
Step 3: The ITC has 45 days from the receipt of the investigation request to issue a preliminary injury determination. If the ITC’s preliminary determination indicates no injury, the case will be terminated entirely (though this outcome is rare).
Step 4: The DOC has 65 days from initiation to issue a preliminary countervailing duty determination.
Step 5: The DOC has 75 days from the date of the preliminary determination to issue a final countervailing duty determination.
Step 6: The ITC has 45 days from the date the DOC issues the final countervailing duty determination to make a final injury determination.
Step 7: The DOC has 7 days to issue the countervailing duty order (in case both countervailing and injury determinations are affirmative).
The above timeframes are subject to extensions based on real-time conditions, potentially prolonging the investigation process significantly beyond the specified durations.
The Notice of DOC can be downloaded here.