Requiring Commerce to Produce Estimates Without Anomalies Is Impossible Standard, US Says

“Companies are not required to keep their books and records in a certain way in the anticipation of a future Commerce antidumping investigation,” it noted.

Mattress petitioner Brooklyn Bedding, leading a group of domestic producers, argued in July that Commerce should have included importer Zinus U.S.’s in-transit mattresses in the department’s quarterly calculation of Zinus’ available inventory and, thus, sales -- as the importer didn’t track how many of the mattresses it sold from Indonesia compared with from other countries (see 2407170057).

Commerce chose to calculate Zinus U.S.’s Indonesian mattress inventory by looking to the proportion of mattresses purchased from the exporter during the period of review and including opening inventory, the U.S. said. It did so because purchases alone indicated that Zinus U.S. had somehow sold more mattresses than it possessed each quarter.

Brooklyn Bedding argued that, first, this yielded inaccurate data because, digging into the specific mattress model numbers, Zinus U.S. still seemed to be selling more of some models than it had.

But “when estimating, there will be anomalies such as too few or too many for a particular model, and the estimated data will likely fall short in a comparison with actual data because it is an estimate and cannot be held to an exactly matching requirement,” the U.S. said.

Remanding because an estimate had anomalies would require Commerce to meet an “impossible standard,” it said.

The U.S. did acknowledge several small errors in the department’s results upon remand. It said that Commerce accidentally indicated that its expenses analysis for Zinus Indonesia and its affiliate, Zinus Korea, included in-company transfers in its numerator but not in its denominator. However, this was simply inaccurate phrasing, as those transfers had appeared in both, it said. The government also said it may have “used incorrect language when referring to a production relationship requirement” when not including the same affiliate’s general and administrative expenses in Zinus Indonesia’s own.

This error “does not change the outcome of the analysis,” it said. It said that Commerce’s usual practice is to allocate a parent company’s G&A expenses to an affiliate when the parent company is providing the affiliate a specific service. But Brooklyn Bedding has not raised any evidence of G&A allocations from Zinus Korea serving a particular purpose for Zinus Indonesia, it claimed.

And the petitioner’s claim that Zinus Korea provided a loan guarantee to Zinus Indonesia was a result of a “misunderstanding,” the government said.

“The $60 million U.S. dollar loan guarantee is not for Zinus Indonesia but is for Zinus U.S.,” it said. “Zinus, Inc. (with a comma after Zinus) is the name of the Zinus affiliate located in the United States (Zinus U.S.). ... Whereas Zinus Inc. with no comma after Zinus is the name of the parent company located in Korea (Zinus Korea). ... The financial statement uses Zinus, Inc. (with a comma) for the $60 million U.S. dollar loan guarantee. ... These are different companies.”

Defendant-intervenors agreed in their own brief.

"Zinus does not read Mattress Petitioners’ comments to take issue with the overall model and methodology that the Department adopted in accounting for beginning inventory and period imports to calculate quarterly ratios (again, the idea of using a quarterly ratio was first proposed by Mattress Petitioners)," they said. "Rather, the only issue Mattress Petitioners identify in their comments is with respect to a mere [ ] models, accounting for a total of [ ] mattresses."