Frozen Warmwater Shrimp From Ecuador: Final Affirmative Countervailing Duty Determination, 85506-85508 [2024-24957]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 89, Number 208 (Monday, October 28, 2024)]
[Notices]
[Pages 85506-85508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-24957]


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DEPARTMENT OF COMMERCE

International Trade Administration

[C-331-806]


Frozen Warmwater Shrimp From Ecuador: Final Affirmative 
Countervailing Duty Determination

AGENCY: Enforcement and Compliance, International Trade Administration, 
Department of Commerce.

SUMMARY: The U.S. Department of Commerce (Commerce) determines that 
countervailable subsidies are being provided to producers and exporters 
of frozen warmwater shrimp (shrimp) from Ecuador. The period of 
investigation (POI) is January 1, 2022, through December 31, 2022.

DATES: Applicable October 28, 2024.

FOR FURTHER INFORMATION CONTACT: Reginald Anadio or Zachary Shaykin, 
AD/CVD Operations, Office IV, Enforcement and Compliance, International 
Trade Administration, U.S. Department of Commerce, 1401 Constitution 
Avenue NW, Washington, DC 20230; telephone: (202) 482-3166 or (202) 
482-5377, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 1, 2024, Commerce published its Preliminary Determination 
in the Federal Register and invited interested parties to comment.\1\ 
In the Preliminary Determination, and in accordance with section 
705(a)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 
351.210(b)(4), Commerce aligned this final countervailing duty (CVD) 
determination with the final antidumping duty (AD) determination of 
frozen warmwater shrimp from Ecuador.\2\ On July 12 and September 26, 
2024, Commerce issued its post-preliminary determinations.\3\ On July 
22, 2024, Commerce tolled certain deadlines in this administrative 
proceeding by seven days.\4\ The deadline for the final determination 
is now October 21, 2024.
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    \1\ See Frozen Warmwater Shrimp from Ecuador: Preliminary 
Affirmative Countervailing Duty Determination, and Alignment of 
Final Determination with the Final Antidumping Duty Determination, 
89 FR 22379 (April 1, 2024) (Preliminary Determination), amended in 
Frozen Warmwater Shrimp from Ecuador: Amended Preliminary 
Determination of Countervailing Duty Investigation, 89 FR 31722 
(April 25, 2024) (Amended Preliminary Determination).
    \2\ Id., 89 FR at 22380.
    \3\ See Memoranda, ``Countervailing Duty Investigation of Frozen 
Warmwater Shrimp from Ecuador: Post-Preliminary Analysis,'' dated 
July 12, 2024 (First Post-Preliminary Determination); and 
``Countervailing Duty Investigation of Frozen Warmwater Shrimp from 
Ecuador: Second Post-Preliminary Determination Calculations for 
Sociedad Nacional de Galapagos C.A.,'' dated September 26, 2024 
(Second Post-Preliminary Determination).
    \4\ See Memorandum, ``Tolling of Deadlines for Antidumping and 
Countervailing Duty Proceedings,'' dated July 22, 2024.
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    For a complete description of the events that followed the 
Preliminary Determination, see the Issues and Decision Memorandum.\5\ 
The Issues and Decision Memorandum is a public document and is made 
available to the public via Enforcement and Compliance's Antidumping 
and Countervailing Duty Centralized Electronic Service System (ACCESS). 
ACCESS is available to registered users at https://access.trade.gov. In 
addition, a complete version of the Issues and Decision Memorandum can 
be accessed directly at https://access.trade.gov/public/FRNoticesListLayout.aspx.
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    \5\ See Memorandum, ``Issues and Decision Memorandum for the 
Final Affirmative Determination of the Countervailing Duty 
Investigation of Frozen Warmwater Shrimp from Ecuador,'' dated 
concurrently with, and hereby adopted by, this notice (Issues and 
Decision Memorandum).
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Scope of the Investigation

    The product covered by this investigation is frozen freshwater 
shrimp from Ecuador. For a complete description of this investigation, 
see Appendix I.

Scope Comments

    We received no comments from interested parties on the scope of the 
investigation as it appeared in the Preliminary Determination. 
Therefore, we made no changes to the scope of the investigation.

Verification

    As provided in section 782(i)(1) of the Act, in July 2024, Commerce 
conducted verification of the subsidy information reported by 
Industrial Pesquera Santa Priscila S.A. (Santa Priscila), Sociedad 
Nacional de Gal[aacute]pagos C.A. (SONGA), and the Government of 
Ecuador (GOE) for use in our final determination. We used standard 
verification procedures, including an examination of relevant 
accounting records and original source documents provided by Santa 
Priscila, SONGA, and the GOE.\6\
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    \6\ See Memoranda, ``Countervailing Duty Investigation of Frozen 
Warmwater Shrimp from Ecuador: Verification of the Questionnaire 
Responses of Sociedad Nacional de Gal[aacute]pagos C.A.,'' dated 
August 13, 2024; ``Countervailing Duty Investigation of Frozen 
Warmwater Shrimp from Ecuador: Verification of the Questionnaire 
Responses of Industrial Pesquera Santa Priscila S.A.,'' dated August 
22, 2024; and ``Countervailing Duty Investigation of Frozen 
Warmwater Shrimp from Ecuador: Verification of the Questionnaire 
Responses of the Government of Ecuador,'' dated September 3, 2024.
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Analysis of Subsidy Programs and Comments Received

    The subsidy programs under investigation, and the issues raised in 
the case and rebuttal briefs that were submitted by interested parties 
in this investigation are discussed in the Issues and Decision 
Memorandum. For a list of the issues raised by interested parties and 
addressed in the Issues and Decision Memorandum, see Appendix II.

Methodology

    Commerce conducted this investigation in accordance with section 
701 of the Act. For each of the subsidy programs found to be 
countervailable, Commerce determines that there is a subsidy, i.e., a 
financial contribution by an ``authority'' that gives rise to a benefit 
to the recipient, and that the subsidy is specific.\7\ For a full 
description of the methodology underlying our final determination, see 
the Issues and Decision Memorandum.
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    \7\ See sections 771(5)(B) and (D) of the Act regarding 
financial contribution; section 771(5)(E) of the Act regarding 
benefit; and section 771(5A) of the Act regarding specificity.
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    In making this final determination, Commerce relied, in part, on 
facts

[[Page 85507]]

otherwise available, including with an adverse inference, pursuant to 
sections 776(a) and (b) of the Act. For a full discussion of our 
application of adverse facts available (AFA), see the Preliminary 
Determination,\8\ First Post-Preliminary Determination and Second Post-
Preliminary Determination,\9\ and the Issues and Decision Memorandum 
section entitled ``Use of Facts Otherwise Available and Application of 
Adverse Inferences.''
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    \8\ See Preliminary Determination and Amended Preliminary 
Determination.
    \9\ See First Post-Preliminary Determination and Second Post-
Preliminary Determination.
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Changes Since the Preliminary Determination

    Based on our review and analysis of the information at verification 
and comments received from interested parties, we made certain changes 
to the subsidy rate calculations for both Santa Priscila and SONGA.\10\ 
For a discussion of these changes, see the Issues and Decision 
Memorandum.
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    \10\ See Memorandum, ``Final Determination Calculations for 
Santa Priscila,'' dated concurrently with this notice, and 
Memorandum, ``Final Determination Calculations for SONGA,'' dated 
concurrently with this notice.
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All-Others Rate

    In accordance with section 705(c)(1)(B)(i) of the Act, we 
calculated an individual estimated countervailable subsidy rates for 
the mandatory respondents, Santa Priscila and SONGA. Section 
705(c)(5)(A)(i) of the Act states that, for companies not individually 
investigated, Commerce will determine an all-others rate equal to the 
weighted-average countervailable subsidy rates established for 
exporters and/or producers individually investigated, excluding any 
subsidy rates that are zero, de minimis, or determined entirely under 
section 776 of the Act.
    In this investigation, we calculated individual total net 
countervailable subsidy rates for both Santa Priscila and SONGA that 
are not zero, de minimis, or based entirely on facts otherwise 
available. Therefore, we calculated the all-others rate using a 
weighted average of the individual estimated subsidy rates calculated 
for the examined respondents (Santa Priscila and SONGA) using each 
company's publicly-ranged sales value for their exports to the United 
States of subject merchandise,\11\ in accordance with section 
705(c)(5)(A)(i) of the Act.
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    \11\ With two respondents under examination, Commerce normally 
calculates: (A) a weighted-average of the estimated subsidy rates 
calculated for the examined respondents; (B) a simple average of the 
estimated subsidy rates calculated for the examined respondents; and 
(C) a weighted-average of the estimated subsidy rates calculated for 
the examined respondents using each company's publicly-ranged U.S. 
sale quantities for the merchandise under consideration. Commerce 
then compares (B) and (C) to (A) and selects the rate closest to (A) 
as the most appropriate rate for all other producers and exporters. 
See, e.g., Ball Bearings and Parts Thereof from France, Germany, 
Italy, Japan, and the United Kingdom: Final Results of Antidumping 
Administrative Reviews, Final Results of Changed-Circumstances 
Review, and Revocation of an Order in Part, 75 FR 53661, 53663 
(September 1, 2010); see also Forged Steel Fluid End Blocks from 
Italy: Preliminary Affirmative Countervailing Duty Determination, 
and Alignment of Final Determination with Final Antidumping Duty 
Determination, 85 FR 31460, 31461 (May 26, 2020), unchanged in 
Forged Steel Fluid End Blocks from Italy: Final Affirmative 
Countervailing Duty Determination, 85 80022, 80023 (December 11, 
2020).
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Final Determination

    Commerce determines that the following estimated countervailable 
subsidy rates exist:

------------------------------------------------------------------------
                                                         Subsidy rate
                       Company                           (percent  ad
                                                           valorem)
------------------------------------------------------------------------
Industrial Pesquera Santa Priscila S.A..............                3.57
Sociedad Nacional de Gal[aacute]pagos C.A...........                4.41
All Others..........................................                3.78
------------------------------------------------------------------------

Disclosure

    We intend to disclose to interested parties the calculations and 
analysis performed in this final determination within five days of any 
public announcement or, if there is no public announcement, within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b).

Continuation of Suspension of Liquidation

    As a result of our Preliminary Determination, and pursuant to 
sections 703(d)(1)(B) and (d)(2) of the Act, Commerce instructed U.S. 
Customs and Border Protection (CBP) to collect cash deposits and 
suspend liquidation of entries of subject merchandise from Ecuador that 
were entered, or withdrawn from warehouse, for consumption on April 1, 
2024, the date of publication of the Preliminary Determination in the 
Federal Register. In accordance with section 703(d) of the Act, we 
instructed CBP to discontinue the suspension of liquidation of all 
entries of subject merchandise entered or withdrawn from warehouse, on 
or after July 30, 2024, but to continue the suspension of liquidation 
of all entries of subject merchandise on or before July 29, 2024.
    If the U.S. International Trade Commission (ITC) issues a final 
affirmative injury determination, we will issue a countervailing duty 
order, reinstate the suspension of liquidation under section 706(a) of 
the Act, and require a cash deposit of estimated countervailing duties 
for entries of subject merchandise in the amounts indicated above. If 
the ITC determines that material injury, or threat of material injury, 
does not exist, this proceeding will be terminated, and all estimated 
duties deposited or securities posted as a result of the suspension of 
liquidation will be refunded or cancelled.

U.S. International Trade Commission Notification

    In accordance with section 705(d) of the Act, Commerce will notify 
the ITC of its final affirmative determination that countervailable 
subsidies are being provided to producers and exporters of shrimp from 
Ecuador. Because the final determination is affirmative, in accordance 
with section 705(b) of the Act, the ITC will make its final 
determination as to whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports of shrimp from Ecuador no later than 45 days after our final 
determination. In addition, we are making available to the ITC all non-
privileged and nonproprietary information related to this 
investigation. We will allow the ITC access to all privileged and 
business proprietary information in our files, provided the ITC 
confirms that it will not disclose such information, either publicly or 
under an administrative protective order (APO), without the written 
consent of the Assistant Secretary for Enforcement and Compliance. If 
the ITC determines that material injury or threat of material injury 
does not exist, this proceeding will be terminated and all cash 
deposits will be refunded. If the ITC determines

[[Page 85508]]

that such injury does exist, Commerce will issue a countervailing duty 
order directing CBP to assess, upon further instruction by Commerce, 
countervailing duties on all imports of the subject merchandise that 
are entered, or withdrawn, for consumption on or after the effective 
date of the suspension of liquidation, as discussed above in the 
``Continuation of Suspension of Liquidation'' section.

Administrative Protective Orders

    In the event that the ITC issues a final negative injury 
determination, this notice will serve as the only reminder to parties 
subject to an APO of their responsibility concerning the destruction of 
proprietary information disclosed under APO, in accordance with 19 CFR 
351.305(a)(3). Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and terms of an APO 
is a violation which is subject to sanction.

Notification to Interested Parties

    This determination is issued and published in accordance with 
sections 705(d) and 777(i) of the Act, and 19 CFR 351.210(c).

    Dated: October 21, 2024.
Ryan Majerus,
Deputy Assistant Secretary for Policy and Negotiations, performing the 
non-exclusive functions and duties of the Assistant Secretary for 
Enforcement and Compliance.

Appendix I

Scope of the Investigation

    The scope of this investigation includes certain frozen 
warmwater shrimp and prawns whether wild-caught (ocean harvested) or 
farm-raised (produced by aquaculture), head-on or head-off, shell-on 
or peeled, tail-on or tail-off, deveined or not deveined, cooked or 
raw, or otherwise processed in frozen form. ``Tails'' in this 
context means the tail fan, which includes the telson and the 
uropods.
    The frozen warmwater shrimp and prawn products included in the 
scope, regardless of definitions in the Harmonized Tariff Schedule 
of the United States (HTSUS), are products which are processed from 
warmwater shrimp and prawns through freezing and which are sold in 
any count size.
    The products described above may be processed from any species 
of warmwater shrimp and prawns. Warmwater shrimp and prawns are 
generally classified in, but are not limited to, the Penaeidae 
family. Some examples of the farmed and wild-caught warmwater 
species include, but are not limited to, whiteleg shrimp (Penaeus 
vannemei), banana prawn (Penaeus merguiensis), fleshy prawn (Penaeus 
chinensis), giant river prawn (Macrobrachium rosenbergii), giant 
tiger prawn (Penaeus monodon), redspotted shrimp (Penaeus 
brasiliensis), southern brown shrimp (Penaeus subtilis), southern 
pink shrimp (Penaeus notialis), southern rough shrimp (Trachypenaeus 
curvirostris), southern white shrimp (Penaeus schmitti), blue shrimp 
(Penaeus stylirostris), western white shrimp (Penaeus occidentalis), 
and Indian white prawn (Penaeus indicus).
    Frozen shrimp and prawns that are packed with marinade, spices 
or sauce are included in the scope. In addition, food preparations, 
which are not ``prepared meals,'' that contain more than 20 percent 
by weight of shrimp or prawn are also included in the scope.
    Excluded from the scope are: (1) breaded shrimp and prawns 
(HTSUS subheading 1605.20.10.20); (2) shrimp and prawns generally 
classified in the Pandalidae family and commonly referred to as 
coldwater shrimp, in any state of processing; (3) fresh shrimp and 
prawns whether shell-on or peeled (HTSUS subheadings 0306.36.0020 
and 0306.36.0040); (4) shrimp and prawns in prepared meals (HTSUS 
subheading 1605.20.05.10); (5) dried shrimp and prawns; (6) canned 
warmwater shrimp and prawns (HTSUS subheading 1605.20.10.40); (7) 
certain dusted shrimp; and (8) certain battered shrimp. Dusted 
shrimp is a shrimp-based product: (1) that is produced from fresh 
(or thawed-from-frozen) and peeled shrimp; (2) to which a 
``dusting'' layer of rice or wheat flour of at least 95 percent 
purity has been applied; (3) with the entire surface of the shrimp 
flesh thoroughly and evenly coated with the flour; (4) with the 
nonshrimp content of the end product constituting between four and 
10 percent of the product's total weight after being dusted, but 
prior to being frozen; and (5) that is subjected to IQF freezing 
immediately after application of the dusting layer. Battered shrimp 
is a shrimp-based product that, when dusted in accordance with the 
definition of dusting above, is coated with a wet viscous layer 
containing egg and/or milk, and par-fried.
    The products covered by the scope are currently classified under 
the following HTSUS subheadings: 0306.17.0004, 0306.17.0005, 
0306.17.0007, 0306.17.0008, 0306.17.0010, 0306.17.0011, 
0306.17.0013, 0306.17.0014, 0306.17.0016, 0306.17.0017, 
0306.17.0019, 0306.17.0020, 0306.17.0022, 0306.17.0023, 
0306.17.0025, 0306.17.0026, 0306.17.0028, 0306.17.0029, 
0306.17.0041, 0306.17.0042, 1605.21.1030, and 1605.29.1010. These 
HTSUS subheadings are provided for convenience and for customs 
purposes only and are not dispositive, but rather the written 
description of the scope is dispositive.

Appendix II

List of Topics Discussed in the Issues and Decision Memorandum

I. Summary
II. Background
III. Scope of the Investigation
IV. Diversification of Ecuador's Economy
V. Subsidies Valuation
VI. Use of Facts Otherwise Available and Application of Adverse 
Inferences
VII. Analysis of Programs
VIII. Discussion of the Issues
    Comment 1: Commerce Should Countervail the Provision of Brackish 
Water
    Comment 2: Commerce Should Countervail the Provision of Fuel
    Comment 3: Commerce Should Revise the Benchmark Used To Value 
the Provision of Electricity
    Comment 4: Commerce Should Correct the Multiplier Used for 
Programs Benefitting Respondents' Shrimp Suppliers
    Comment 5: Commerce Should Apply Adverse Facts Available (AFA) 
To Countervail Unverifiable and Omitted Income Tax Programs
    Comment 6: Commerce Should Revise the Denominator for the 
Investment Contract/Tax Incentives for Priority Sectors Under the 
2010 Organic Production Code for Santa Priscila
    Comment 7: Commerce Should Make Certain Revisions to SONGA's 
Subsidy Calculations
    Comment 8: Commerce Should Make Certain Revisions to Santa 
Priscila's Subsidy Calculations
    Comment 9: Commerce Should Revise Its Countervailable Subsidy 
Calculation Regarding Provision of Land Concessions
    Comment 10: Commerce Should Find That Certain Tax Programs are 
not Countervailable
    Comment 11: Commerce Should Revise its Attribution of Benefits 
Received by Cross-Owned Input Suppliers to Santa Priscila
    Comment 12: Commerce Should Recalculate Its Countervailable 
Subsidy Calculation for SONGA Under the Refund of Currency Outflow 
Tax (ISD) On Inputs Program
    Comment 13: Section 771B Is Not Supported by the Record
    Comment 14: Commerce Should Adjust the Cash Deposit (CD) Rates
    Comment 15: Commerce's Should Reverse Its Rejection of SONGA's 
Minor Correction
    Comment 16: Commerce Should Correct its Application of AFA to 
SONGA and Naturisa, and Santa Priscila and Produmar Under the Motor 
Vehicle Tax Reduction Program
IX. Recommendation

 [FR Doc. 2024-24957 Filed 10-25-24; 8:45 am]
 BILLING CODE 3510-DS-P