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Bonds still haunt shrimp importers, despite agreements

By Steven Hedlund
August 01, 2006

More than 100 foreign shrimp exporters inked agreements with the Southern Shrimp Alliance allowing them to bypass the burdensome administrative-review process, lock in antidumping tariffs at the rates the U.S. Department of Commerce set early last year and, theoretically, free up millions of dollars in continuous bonds. The deadline for settling was July 6.

However, the continuous bonds U.S. importers were required to post in early 2005 and 2006 won't be cleared and returned if they purchased shrimp from one of the dozens of foreign exporters who refused to settle with the SSA, says an international-trade lawyer involved in the antidumping case.

Theoretically, a U.S. importer who bought $10 million of shrimp from 10 foreign exporters who settled and $500,000 from one who didn't wouldn't recoup the continuous bond until the DOC finalized the one exporter's rate.

"How this all sorts out remains to be seen," says the attorney, who requested anonymity.

By settling, the exporters avoided the possibility that the DOC would raise the rates during an administrative review, a process that takes one to two years to complete.

In total, 104 exporters from Thailand, Vietnam, India, Ecuador and Brazil - five of the six countries named in the SSA's 2004 antidumping case - settled. Empacadora Gran Mar SA of Ecuador was the first company to settle on May 11.

Chinese exporters, who were hit with the highest tariffs, up to 113 percent, declined to settle.

In turn, the exporters who settled agreed to cooperate with the SSA's efforts to urge U.S. and foreign governments to step up testing of shrimp for banned substances and crack down on transshipping, mislabeling and other forms of tariff evasion.

Additionally, the exporters gave the SSA an undisclosed sum of money. The Mazzetta Co., a Highland Park, Ill., shrimp importer, suspects the amount is in the range of $50 million (see Newsline, p. 10).

What's more, domestic shrimpers and processors can apply for a share of the money afforded by the Byrd Amendment in fiscal 2007 because many exporters' rates were finalized by Sept. 30, the end of fiscal 2006; hundreds applied by the July 31 deadline.

Congress voted to revoke Byrd early this year, but it won't be phased out until Oct. 1, 2007.

In the meantime, foreign-shrimp interests are fighting the SSA's antidumping case on numerous fronts. In response to a complaint filed by Ecuadoran exporters, the World Trade Organization on July 19 established a panel to investigate whether "zeroing," a practice the U.S. government uses to calculate dumping margins, violates international trade law.

The Seafood Exporters Association of India and the National Fisheries Institute filed separate lawsuits late last year in the U.S. Court of International Trade in New York.

The cases, challenging the legality of U.S. Customs and Border Protection's new continuous-bond policy, have yet to move forward, says Stacey Viera, NFI's director of communications and coalitions.

According to testimony the CBP's Bruce Ingalls submitted to the court in defense of the policy in March, the agency collected $172 million in continuous bonds for shrimp in 2005.

He noted, "Without sufficient bonding, CBP would only be covered by rate fluctuations of 28 percent ($48 million)."

- Steven Hedlund

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