In-Transit Mattresses Were 'Inventory,' Antidumping Petitioner Argues

The in-transit mattresses were "undeniably purchased by Zinus US and part of Zinus US’ inventory under applicable accounting standards," Brooklyn Bedding said. Zinus acknowledged that it takes title from Zinus Korea at the time of shipment, "meaning that it owned the mattresses while in-transit and thus was fully capable of selling those mattresses to customers," Brooklyn Bedding said.

Just as Zinus’ own accounting practices required Zinus US to count the mattresses as part of its year-end inventory reporting, Commerce declined to allow Zinus to discount those mattresses for the purposes of calculating quarterly ratios, the petitioner said.

In its March remand order, the court found that Commerce failed to provide sufficient explanation to support its inclusion of mattresses in transit in its calculation of the constructed export price (see 2303210054). Zinus filed remand comments in August, arguing that Commerce failed to satisfy the remand order with respect to the inclusion of in-transit mattresses in its quarterly ratio calculation (see 2308090035).

Commerce didn't ignore evidence of existing inventory as Zinus claimed, Brooklyn Bedding said. Instead, Commerce "clearly explained" that Zinus' claims were misguided and based on inventory that was outside the scope of the AD order.

Contrary to Zinus' claims, Commerce relied on the mattressmaker's own reporting to reach its conclusions rather than resorting to available facts. "The Department’s conclusion was based on reasonable inferences it made based on the record facts it had before it," Brooklyn said.

In its own remand comments, Zinus Indonesia said that it supports Commerce's explanation regarding the company's reporting of its affiliate's selling expenses. Zinus also said that it is now OK with Commerce’s additional explanation regarding its use of Indonesian Global Trade Atlas (GTA) import data as a surrogate market price for its transactions.

Consistent with the remand order, Commerce offered additional explanation to support its finding that Zinus provided all requested information relating to Zinus Korea’s selling expenses, the company said. Commerce included in its margin calculation the expenses that Zinus Korea "actually incurred" in selling the merchandise at issue. Zinus Indonesia provided documentation showing that, during the period of investigation, Zinus Korea served solely as a manager of invoices and other documents, while Zinus Indonesia was the entity performing order input and processing.

Commerce also correctly addressed Brooklyn Bedding's allegation that Commerce had ignored evidence that Zinus Korea engaged in more significant selling activities. Commerce said that those arguments were speculation and unsupported by the record, thus complying with the order for further consideration, Zinus said.

On the GTA data issue, Zinus said that Commerce correctly provided additional explanation. Because transactions were between Zinus Indonesia and non-market economy-based suppliers, Commerce correctly found that it was unable to use the suppliers’ sales or costs of production as substitutes for market price. The agency then requested market-based surrogate price information that would allow it to conduct an arm’s-length analysis. The GTA data reflected market economy imports of relevant inputs into Indonesia that could "reasonably be expected to be available." Zinus argued that Commerce correctly explained in its remand results that, though the GTA data was "clearly less reflective," limitations required the use of less than ideal data.