Background
Ditar, S.A., a Colombian producer of paper shopping bags, sought a level-of-trade adjustment in an antidumping-duty investigation. It contended that its Colombian sales to distributors and end users occurred at different levels of trade because it performed warehousing, repacking, and other selling activities more intensively for end-user customers.
The court previously remanded the matter to the Department of Commerce to reconsider whether Ditar’s indirect selling expenses supported its claimed differences in selling intensity and to justify Commerce’s conclusion that the pricing differential between distributor and end-user sales was not significant. On remand, Commerce again found that Ditar had not established different levels of trade and declined to reach the price-comparability question.
The Court’s Holding
The court sustained Commerce’s remand determination. Substantial evidence supported the agency’s finding that Ditar’s indirect selling-expense data did not substantiate that warehousing and repacking services applied only to end-user sales or were performed at the claimed intensity. The underlying accounting information lacked transaction-specific detail, and indirect expenses were allocated across sales channels. Because Ditar bore the burden of demonstrating entitlement to the adjustment, its unsupported assertions did not require Commerce to grant one.
The court also held that Commerce reasonably declined to decide whether the price differential between distributor and end-user sales was significant. A level-of-trade adjustment requires both different levels of trade and an effect on price comparability. Because Ditar failed to establish the first prerequisite, resolving the second would have been unnecessary and could not have changed the result.
Key Takeaways
- A party seeking a level-of-trade adjustment bears the burden of proving that the adjustment is appropriate.
- Indirect selling expenses may be insufficient to establish channel-specific differences when the record does not tie those expenses or activities to particular customers or transactions.
- Commerce need not decide whether a price difference affects comparability when the applicant fails to establish different levels of trade.
Why It Matters
The decision underscores that claimed differences in selling functions must be supported by record evidence showing how the activities apply to particular sales channels and differ in intensity. Properly reporting costs as indirect expenses does not, by itself, prove the factual predicates for a level-of-trade adjustment.
It also confirms that Commerce may stop its analysis after a claimant fails one independently necessary statutory requirement, rather than resolving an additional issue that cannot alter eligibility for the adjustment.