On March 25, 2024, the U.S. Department of Commerce (DOC) issued a preliminary determination in the countervailing duty (CVD) investigation on frozen warmwater shrimp (HS codes: 0306.17, 1605.21, and 1605.29) from Vietnam. The investigation was initiated on November 14, 2023, following a petition from the American Shrimp Processors Association, with the investigation period spanning from January 1, 2022, to December 31, 2022.
In this case, the DOC selected the two largest Vietnamese exporters of the subject merchandise to the United States as mandatory respondents. On January 4, 2024, one of the respondents submitted a request to the DOC to cease participation in the investigation. Consequently, only one company remained as the mandatory respondent.
Based on the information from various parties, including the Vietnamese government, Vietnamese exporters, and U.S. petitioners, the DOC preliminarily determined countervailing duty rates for Vietnamese companies as follows: 2.84% for the sole mandatory respondent and all other Vietnamese companies; and 196.41% for the one non-participating respondent. The 196.41% rate was determined based on adverse facts available, resulting in a significantly higher duty compared to other companies.
From the onset, the DOC investigated 40 programs/policies of the Vietnamese government, categorized into the following groups: (i) loan and guarantee programs; (ii) corporate income tax incentive programs; (iii) programs for waiving receivables; (iv) land use incentive programs; (v) funding programs. Notably, the DOC investigated a series of programs under the Fisheries Development Strategy to 2030, Vision to 2045, per Decision No. 339/QD-TTg dated March 11, 2021, and the Fisheries Sector Development Program for 2021-2030.
On February 5 and 23, 2024, the DOC further investigated additional programs, based on requests from the U.S. petitioners, relating to income tax, land rent exemptions, and provision of electricity, water, wastewater treatment, and telecommunications services below market value, as well as the supply of broodstock, shrimp seed, and shrimp feed below market value. This resulted in the investigation covering nearly 50 programs, the largest number ever investigated in a Vietnamese export CVD case.
In the preliminary determination, the DOC found 24 out of nearly 50 programs to be countervailable subsidies, 13 programs not to be countervailable subsidies, and temporarily deferred conclusions on 12 programs pending further information and assessment.
Following the issuance of the preliminary determination in the Federal Register, U.S. Customs and Border Protection (CBP) will require deposits for shipments of the subject merchandise to the U.S. at the preliminary CVD rates.
Next Steps:
The DOC will conduct verification to confirm the information provided by the Vietnamese government and companies. This verification will form the basis for the DOC’s final determination, setting the official duty rates for Vietnamese companies. Interested parties can submit comments on the preliminary determination or views on the case no later than 7 days after the final verification report is issued. Rebuttal comments are due no later than 5 days after the initial comment deadline.
Additionally, interested parties may request a hearing in writing to the DOC, limited to issues raised in the comments and rebuttals, within 30 days from the DOC’s preliminary determination notice (March 26, 2024).
The DOC is scheduled to issue its final subsidy determination by August 5, 2024 (unless extended). Subsequently, the U.S. International Trade Commission (USITC) will issue its final injury determination within 45 days of the DOC’s final determination.
The TRA advises Vietnamese companies to prepare and fully cooperate with the DOC during the upcoming verification and to raise any concerns or comments on the preliminary determination that may be unreasonable or non-compliant with WTO regulations. Active participation and thorough preparation in the verification process and commenting period can directly influence the DOC’s final determination.
