[Federal Register: August 4, 2004 (Volume 69, Number 149)]
[Notices]
[Page 47091-47100]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au04-41]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-331-802]
Notice of Preliminary Determination of Sales at Less Than Fair
Value and Postponement of Final Determination: Certain Frozen and
Canned Warmwater Shrimp From Ecuador
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary determination of sales at less than fair
value.
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SUMMARY: We preliminarily determine that certain frozen and canned
warmwater shrimp from Ecuador are being sold, or are likely to be sold,
in the United States at less than fair value, as provided in section
733(b) of the Tariff Act of 1930, as amended (the Act). Interested
parties are invited to comment on this preliminary determination.
Because we are postponing the final determination, we will make our
final determination not later than 135 days after the date of
publication of this preliminary determination in the Federal Register.
EFFECTIVE DATE: August 4, 2004.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Terre Keaton,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-4136, or (202) 482-1280,
respectively.
Preliminary Determination
We preliminarily determine that certain frozen and canned warmwater
shrimp from Ecuador are being sold, or are likely to be sold, in the
United States at less than fair value (LTFV), as provided in section
733 of the Act. The estimated margins of sales at LTFV are shown in the
``Suspension of Liquidation'' section of this notice.
Background
Since the initiation of this investigation the following events
have occurred. See Initiation of Antidumping Duty Investigations:
Certain Frozen and Canned Warmwater Shrimp from Brazil, Ecuador, India,
Thailand, the People's Republic of China and the Socialist Republic of
Vietnam, 69 FR 3876 (January 27, 2004) (Initiation Notice).
On February 17, 2004, the United States International Trade
Commission (ITC) preliminarily determined that there is a reasonable
indication that imports of certain frozen and canned warmwater shrimp
from Ecuador are materially injuring the United States industry. See
ITC Investigation Nos. 731-TA-1063-1068 (Publication No. 3672).
On February 20, 2004, we selected the three largest producers/
exporters of certain frozen and canned warmwater shrimp from Ecuador as
the mandatory respondents in this proceeding. See Memorandum to Louis
Apple, Director Office 2, from The Team dated February 20, 2004. We
subsequently issued the antidumping questionnaire to Exporklore S.A.
(Exporklore), Exportadora De Alimentos S.A. (Expalsa), and Promarisco
S.A. (Promarisco) on February 20, 2004.
During the period February through June 2004, various interested
parties, including the petitioners, submitted comments on the scope of
this and the concurrent investigations of certain frozen and canned
warmwater shrimp concerning whether the following products are covered
by the scope of the investigations: a certain seafood mix,
[[Page 47092]]
dusted shrimp, battered shrimp, salad shrimp sold in counts of 250
pieces or higher, the species Macrobachium Rosenbergii, organic shrimp,
and peeled shrimp used in breading.\1\ In addition, the Louisiana
Shrimp Alliance (LSA), an association of domestic shrimp harvesters and
processors, requested that the Department expand the scope to include
fresh (never frozen) shrimp. See ``Scope Comments'' section of this
notice.
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\1\ Specifically, Ocean Duke Corporation (Ocean Duke), an
importer and wholesaler of the subject merchandise, requested that
the following products be excluded from the scope of this and the
concurrent investigations on certain frozen and canned warmwater
shrimp: (1) ``dusted shrimp,'' (2) ``battered shrimp,'' and (3)
``seafood mix.'' Another importer, Rubicon Resources LLP, supported
Ocean Duke's request regarding dusted and battered shrimp. Eastern
Fish Company and Long John Silver's, Inc. also requested that dusted
and battered shrimp be excluded from the scope of the
investigations. Furthermore, the Seafood Exporters' Association of
India requested that the Department find that warmwater salad shrimp
in counts of 250 pieces or higher are not within the scope, and that
the species Machrobachium Rosenbergii is a separate class or kind of
merchandise. Also, Exportadora de Alimentos S.A., one of the
respondents in the Ecuador case, requested that the Department find
that farm-raised organic shrimp is not covered by the scope of the
investigations. Finally, the American Breaded Shrimp Processors
Association, comprised of importers of peeled shrimp which they
consume in the production of breaded shrimp products, requested that
peeled shrimp imported for the sole purpose of breading be excluded
from the scope of the investigations.
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We received section A questionnaire responses from the three
respondents in March 2004, and section B and C questionnaire responses
in April 2004. We issued and received responses to our supplemental
questionnaires from April through June 2004.
On April 29, 2004, the petitioners \2\ alleged that Exporklore,
Expalsa and Promarisco made third country sales below the cost of
production (COP) and, therefore, requested that the Department initiate
a sales-below-cost investigation of each of the three respondents. On
May 28, 2004, the Department initiated a sales-below-cost investigation
of each of the three respondents, and required them to respond to
section D of the Department's questionnaire. See Memoranda to Louis
Apple, Director Office 2, from The Team Re: Petitioners' Allegation of
Sales Below the Cost of Production by Explorkore S.A., Exportadora de
Alimentos S.A., and Promarisco S.A. Ltd., dated May 28, 2004. With
respect to Exporklore, Expalsa and Promarisco, we received original
section D responses and revised sales databases in June 2004, and
supplemental section D responses in July 2004.
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\2\ The petitioners in this investigation are the Ad Hoc Shrimp
Trade Alliance (an ad hoc coalition representative of U.S. producers
of frozen and canned warmwater shrimp and harvesters of wild-caught
warmwater shrimp), Versaggi Shrimp Corporation and Indian Ridge
Shrimp Company.
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On May 18, 2004, pursuant to sections 733(c)(1)(B) and (c)(2) of
the Act and 19 CFR 351.205(f), the Department determined that the case
was extraordinarily complicated and postponed the preliminary
determination until no later than July 28, 2004. See Notice of
Postponement of Preliminary Determinations of Antidumping Duty
Investigations: Certain Frozen and Canned Warmwater Shrimp from Brazil
(A-351-838), Ecuador (A-331-802), India (A-533-840), Thailand (A-549-
822), the People's Republic of China (A-570-893), and the Socialist
Republic of Vietnam (A-503-822), 69 FR 29509 (May 24, 2004).
On May 21, 2004, the Department denied the LSA's request to amend
the scope to include fresh (never frozen) shrimp. See Memorandum from
Jeffrey A. May, Deputy Assistant Secretary, AD/CVD Enforcement Group I,
and Joseph A. Spetrini, Deputy Assistant Secretary AD/CVD Enforcement
Group III, to James J. Jochum, Assistant Secretary for Import
Administration Re: Antidumping Investigations on Certain Frozen and
Canned Warmwater Shrimp from Brazil, Ecuador, India, the People's
Republic of China, Thailand and the Socialist Republic of Vietnam:
Scope Determination Regarding Fresh (Never Frozen) Shrimp, dated May
21, 2004 (Scope Decision Memorandum I).
On June 7, 2004, the Department determined that a particular market
situation existed in Ecuador that rendered the home market
inappropriate for use as the comparison market for normal value (NV)
purposes. Therefore, the Department determined it appropriate to use
third country sales as the basis for NV. See June 7, 2004 Memorandum to
Louis Apple, Director Office 2, from The Team Re: Home Market as
Appropriate Comparison Market. Also, on June 7, 2004, after taking into
account Promarisco's and the petitioners' claims, the Department found
it appropriate to select Spain as the third country comparison market
for Promarisco. See June 7, 2004 Memorandum to Louis Apple, Director
Office 2, from The Team Re: Selection of Third Country Market for
Promarisco (Third Country Comparison Market Selection Memorandum). The
petitioners objected to the Department's third country comparison
market selection decision for Promarisco on June 10, 2004, and filed
additional comments on this topic in June and July 2004. Promarisco
responded to these comments in submissions filed in June and July 2004.
On June 4, 2004, Expalsa and Promarisco requested that the
Department allow them to report their costs of production based on
their fiscal year rather than the period of investigation (POI) because
their fiscal years ended within three months of the POI. On June 9,
2004, they each provided information that the Department requested in a
June 4, 2004, letter addressing the impact of such a period shift on
their cost reporting. On June 14, 2004, the Department denied the
respondents' requests because it appeared, based on the information
they provided, that shifting the cost reporting period would materially
impact the antidumping duty analysis. See June 14, 2004, Letter to
Warren Connelly, Counsel for Respondents, from Neal Halper, Director,
Office of Accounting.
Pursuant to the Department's solicitation, on June 7, 2004, various
interested parties, including the petitioners, submitted comments on
the issue of whether product comparisons and margin calculations in
this and the concurrent investigations of certain frozen and canned
warmwater shrimp should be based on data provided on an ``as sold''
basis or data converted to a headless, shell-on (HLSO) basis.\3\
Additional comments were subsequently submitted on June 15 and 25,
2004. See ``Product Comparison Comments'' section below.
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\3\ Specifically, the Department received comments from the
following interested parties, in addition to the petitioners, on
June 7: the Brazilian Shrimp Farmers' Association and Central de
Industrializacao e Distribuicao de Alimentos Ltda.; Empresa De
Armazenagem Frigorifica Ltda.; Camara Nacional de Acuacultura
(National Chamber of Aquaculture) of Ecuador; the Rubicon Group
(comprised of Andaman Seafood Co., Ltd. Chanthaburi Seafoods Co.,
Ltd. And Thailand Fishery Cold Storage Public Co., Ltd.), Thai I-Mei
Frozen Foods Co., Ltd. and its affiliated reseller Ocean Duke; the
Seafood Exporters of India and its members Devi Sea Foods Ltd.,
Hindustan Lever Limited, and Nekkanti Seafoods Limited ; the VASEP
Shrimp Committee and its members; and Shantou Red Garden Foodstuff
Co., Ltd. In addition to addressing the ``as sold'/HLSO issue, some
of these parties also commented on the significance of species and
container weight in the Department's product characteristic
hierarchy.
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On July 2, 2004, the Department made preliminary scope
determinations with respect to the following shrimp products: Ocean
Duke's seafood mix, salad shrimp sold in counts of 250 pieces or
higher, Macrobrachium rosenbergii, organic shrimp, peeled shrimp used
in breading, dusted shrimp and battered shrimp. See Memorandum from
Edward C. Yang, Vietnam/NME Unit Coordinator, Import Administration to
Jeffrey A. May, Deputy Assistant Secretary for Import
[[Page 47093]]
Administration Re: Antidumping Investigation on Certain Frozen and
Canned Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the
People's Republic of China and the Socialist Republic of Vietnam: Scope
Clarifications: (1) Ocean Duke's Seafood Mix; (2) Salad Shrimp Sold in
Counts of 250 Pieces or Higher; (3) Macrobrachium rosenbergii; (4)
Organic Shrimp; and (5) Peeled Shrimp Used in Breading, dated July 2,
2004 (Scope Decision Memorandum II); and Memorandum from Edward C.
Yang, Vietnam/NME Unit Coordinator, Import Administration to Jeffrey A.
May, Deputy Assistant Secretary for Import Administration Re:
Antidumping Investigation on Certain Frozen and Canned Warmwater Shrimp
from Brazil, Ecuador, India, Thailand, the People's Republic of China
and the Socialist Republic of Vietnam: Scope Clarification: Dusted
Shrimp and Battered Shrimp, dated July 2, 2004 (Scope Decision
Memorandum III). See also ``Scope Comments'' section below.
The petitioners and respondents each submitted comments in July
2004 on various company-specific issues for consideration in the
preliminary determination. In addition, Expalsa and Exporklore
submitted new information on July 16, July 21, and July 23, 2004,
respectively, including revised sales and COP data bases for
Exporklore. Except for minor, readily-identifiable data corrections, we
have not relied on this information for the preliminary determination
because there was insufficient time to analyze it prior to the
preliminary determination.
Postponement of Final Determination
Section 735(a)(2) of the Act provides that a final determination
may be postponed until not later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise, or in the event of a negative
preliminary determination, a request for such postponement is made by
the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2),
require that requests by respondents for postponement of a final
determination be accompanied by a request for extension of provisional
measures from a four-month period to not more than six months.
Pursuant to section 735(a)(2) of the Act, on June 22, 2004, the
respondents requested that, in the event of an affirmative preliminary
determination in this investigation, the Department postpone its final
determination until not later than 135 days after the date of the
publication of the preliminary determination in the Federal Register,
and extend the provisional measures to not more than six months. In
accordance with 19 CFR 351.210(b), because (1) our preliminary
determination is affirmative, (2) the respondent(s) account(s) for a
significant proportion of exports of the subject merchandise, and (3)
no compelling reasons for denial exist, we are granting the
respondents' request and are postponing the final determination until
no later than 135 days after the publication of this notice in the
Federal Register. Suspension of liquidation will be extended
accordingly.
Period of Investigation
The POI is October 1, 2002, through September 30, 2003. This period
corresponds to the four most recent fiscal quarters prior to the month
of the filing of the petition (i.e., December 2003).
Scope of Investigation
The scope of this investigation includes certain warmwater shrimp
and prawns, whether frozen or canned, wild-caught (ocean harvested) or
farm-raised (produced by aquaculture), head-on or head-off, shell-on or
peeled, tail-on or tail-off,\4\ deveined or not deveined, cooked or
raw, or otherwise processed in frozen or canned form.
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\4\ ``Tails'' in this context means the tail fan, which includes
the telson and the uropods.
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The frozen or canned warmwater shrimp and prawn products included
in the scope of the investigation, regardless of definitions in the
Harmonized Tariff Schedule of the United States (HTSUS), are products
which are processed from warmwater shrimp and prawns through either
freezing or canning 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 of the investigation. 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
of the investigation.
Excluded from the scope are (1) breaded shrimp \5\ and prawns
(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 (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in
prepared meals (1605.20.05.10); and (5) dried shrimp and prawns.
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\5\ Pursuant to our scope determination on battered shrimp, we
find that breaded shrimp includes battered shrimp as discussed in
the ``Scope Comments'' section below. See Scope Memorandum III.
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The products covered by this scope are currently classified under
the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06,
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18,
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40,
1605.20.10.10, 1605.20.10.30, and 1605.20.10.40. These HTSUS
subheadings are provided for convenience and for U.S. Customs and
Border Protection (CBP) purposes only and are not dispositive, but
rather the written description of the scope of this investigation is
dispositive.
Scope Comments
In accordance with the preamble to our regulations, we set aside a
period of time for parties to raise issues regarding product coverage
and encouraged all parties to submit comments within 20 calendar days
of publication of the Initiation Notice. (See Antidumping Duties;
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)
and Initiation Notice, 69 FR at 3877.) Throughout the 20 days and
beyond, the Department received many comments and submissions regarding
a multitude of scope issues, including: (1) Fresh (never frozen)
shrimp, (2) Ocean Duke's seafood mix, (3) salad shrimp sold in counts
of 250 pieces or higher, (4) Macrobrachium rosenbergii, (5) organic
shrimp, (6) peeled shrimp used
[[Page 47094]]
in breading, (7) dusted shrimp and (8) battered shrimp.
On May 21, 2004, the Department determined that the scope of this
and the concurrent investigations remains unchanged, as certain frozen
and canned warmwater shrimp, without the addition of fresh (never
frozen) shrimp. See Scope Decision Memorandum I. On July 2, 2004, the
Department made scope determinations with respect to Ocean Duke's
seafood mix, salad shrimp sold in counts of 250 pieces or higher,
Macrobrachium rosenbergii, organic shrimp and peeled shrimp used in
breading. See Scope Decision Memorandum II. Based on the information
presented by interested parties, the Department determined that Ocean
Duke's seafood mix is excluded from the scope of this and the
concurrent investigations; however, salad shrimp sold in counts of 250
pieces or higher, Macrobrachium rosenbergii, organic shrimp and peeled
shrimp used in breading are included within the scope of these
investigations. See Scope Decision Memorandum II at 33.
Additionally, on July 2, 2004, the Department made a scope
determination with respect to dusted shrimp and battered shrimp. See
Scope Decision Memorandum III. Based on the information presented by
interested parties, the Department preliminarily finds that while
substantial evidence exists to consider battered shrimp to fall within
the meaning of the breaded shrimp exclusion identified in the scope of
these proceedings, there is insufficient evidence to consider that
shrimp which has been dusted falls within the meaning of ``breaded''
shrimp. However, there is sufficient evidence for the Department to
consider excluding this merchandise from the scope of these proceedings
provided an appropriate description can be developed. See Scope
Decision Memorandum III at 18. To that end, along with the previously
solicited comments regarding breaded and battered shrimp, the
Department solicits comments from interested parties which enumerate
and describe a clear, administrable definition of dusted shrimp. See
Scope Decision Memorandum III at 23.
Fair Value Comparisons
To determine whether sales of certain frozen and canned warmwater
shrimp from Ecuador to the United States were made at LTFV, we compared
the export price (EP) to the NV, as described in the ``Export Price''
and ``Normal Value'' sections of this notice, below. In accordance with
section 777A(d)(1)(A)(I) of the Act, we compared POI weighted-average
EPs to NVs.
As discussed below under the ``Home Market Viability and Comparison
Market Selection'' section, we have determined that a particular market
situation existed in Ecuador that rendered the home market
inappropriate for use as the comparison market for NV purposes.
Therefore, as the basis for NV, we used third country sales to Italy
(Exporklore and Expalsa) and Spain (Promarisco) when making comparisons
in accordance with section 773(a)(1)(C) of the Act.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by the respondents in the third countries
during the POI that fit the description in the ``Scope of
Investigation'' section of this notice to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
We compared U.S. sales to sales made in the third countries, where
appropriate. Where there were no sales of identical merchandise in the
third countries made in the ordinary course of trade to compare to U.S.
sales, we compared U.S. sales to sales of the most similar foreign like
product made in the ordinary course of trade. Where there were no sales
of identical or similar merchandise made in the ordinary course of
trade, we made product comparisons using CV.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by the respondents in
the following order of importance: processed form, cooked form, head
status, count size (on an ``as sold'' basis), shell status, vein
status, tail status, other shrimp preparation, frozen form, flavoring,
container weight, presentation, species, and preservative.
Product Comparison Comments
As Sold v. HLSO Methodology
We received comments from various interested parties concerning
whether to perform product comparisons and margin calculations using
data provided on an ``as sold'' basis or on data converted to an HLSO
basis.\6\
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\6\ In this notice, we address only those comments pertaining to
market-economy dumping calculation methodology. Any comments
pertaining to non-market-economy dumping calculation methodology are
separately addressed in the July 2, 2004, preliminary determinations
in the antidumping duty investigations of certain frozen and canned
warmwater shrimp from the People's Republic of China and the
Socialist Republic of Vietnam. See Notice of Preliminary
Determination of Sales at Less Than Fair Value, Partial Affirmative
Preliminary Determination of Critical Circumstances and Postponement
of Final Determination: Certain Frozen and Canned Warmwater Shrimp
From the People's Republic of China, 69 FR 42654 (July 16, 2004),
and Notice of Preliminary Determination of Sales at Less Than Fair
Value, Negative Preliminary Determination of Critical Circumstances
and Postponement of Final Determination: Certain Frozen and Canned
Warmwater Shrimp From the Socialist Republic of Vietnam, 69 FR 42672
(July 16, 2004).
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The petitioners argue that using a consistent HLSO equivalent
measure permits accurate product comparisons and margin calculations
whereas the ``as sold'' measures do not. In particular, the petitioners
emphasize that it is necessary to translate the actual sold volumes
(weights) and count sizes to a uniform unit of measure that takes into
account the various levels of processing of the different shrimp
products sold and the allegedly large difference in value between the
shrimp tail meat and other parts of the shrimp that may constitute ``as
sold'' weight or count size, such as the head or shell. The
petitioners' contention is premised upon their belief that the shrimp
tail meat is the value-driving component of the shrimp.
The respondents disagree, maintaining generally that using HLSO-
equivalent data violates the antidumping duty law and significantly
distorts product comparisons and margin calculations. In particular,
they argue that: (1) Shrimp is sold based on its actual size and form,
not on an HLSO basis, and it is the Department's practice to use actual
sales/cost data in its margin analysis; (2) the rates used to convert
price, quantity and expense data to an HLSO basis are uncertain as they
are not maintained by the respondents in the ordinary course of
business, and are generally based on each individual company's
experience rather than any accepted industry-wide standard; and (3) the
HLSO methodology introduces a significant distortion through the
incorrect assumption that the value of the product varies solely in
direct proportion to the change in weight resulting from production
yields, when in fact the value of the product depends also on other
factors such as quality and form.
Our analysis of the company responses shows that: (1) no respondent
uses HLSO equivalents in the normal course of business, for either
sales or cost purposes; and (2) there is no reliable or consistent HLSO
conversion formula for all forms of processed shrimp across all
companies, as each company defined its conversion factors differently
and derived these factors
[[Page 47095]]
based on its own production experience. Therefore, we preliminarily
determine it is appropriate to perform product comparisons and margin
calculations using data ``as sold.'' This approach is in accordance
with our normal practice and precludes the use of conversion rates, the
accuracy of which is uncertain. Given the variety and overlap of the
``as sold'' count size ranges reported by the respondents, we also
preliminarily determine that it is appropriate to standardize product
comparisons across respondents by fitting the ``as sold'' count sizes
into the count size ranges specified in the questionnaire. See
Memorandum to the File entitled ``Exportadora de Alimentos S.A.
Preliminary Determination Notes and Margin Calculation'' dated July 28,
2004 (Expalsa Memo); Memorandum to the File entitled ``Exporklore S.A.,
Preliminary Determination Notes and Margin Calculation'' dated July 28,
2004; and ``Promarisco, S.A. Preliminary Determination Notes and Margin
Calculation'' dated July 28, 2004 for a further discussion of our
reclassification of count sizes.
Product Characteristics Hierarchy
We also received comments from various interested parties regarding
the significance of the species and container weight criteria in the
Department's product comparison hierarchy.
Various parties requested that the species criterion be ranked
higher in the Department's product characteristic hierarchy--as high as
the second most important characteristic, rather than the thirteenth--
based on their belief that species is an important factor in
determining price. One party provided industry publications indicating
price variations according to species type. Another party requested
further that the Department revise the species categories specified in
the Department's questionnaire to reflect characteristics beyond color
(i.e., whether the shrimp was farm-raised or wild-caught). In addition,
several parties requested that container weight, the eleventh
characteristic in the Department's product characteristic hierarchy, be
eliminated altogether as a product matching criterion, as they believe
it is commercially insignificant and relates to packing size or form,
rather than the physical attributes of the product.
With respect to the arguments regarding the species criterion, the
petitioners disagree, maintaining that there is no credible evidence
that species drives pricing to such a significant extent that buyers
consider it more important than product characteristics such as head
and cooked status. Rather, the petitioners contend that once shrimp is
processed (e.g., cooked, peeled, etc.), the species classification
becomes essentially irrelevant. Therefore, the petitioners assert that
while species type has some, not entirely insignificant effect on
shrimp prices, it is appropriately captured in the Department's product
matching hierarchy. Furthermore, with respect to the container weight
criterion, the petitioners assert that, while the shrimp inside the
container may be identical, in many cases the size of the container is
an integral part of the product and an important determinant of the
markets and channels through which shrimp can be sold. For this reason,
the petitioners maintain that the Department should continue to include
container weight as a product matching characteristic.
Regarding the species criterion, we have not changed the position
of this criterion in the product characteristic hierarchy for the
preliminary determination. We agree that the physical characteristic of
species type may impact the price or cost of processed shrimp. For that
reason, we included species type as one of the product matching
criteria. However, based on our review of the record evidence, we find
that other physical characteristics of the subject merchandise, such as
head status, count size, shell status, and frozen form, appear to be
more significant in setting price or determining cost. The information
provided by the parties, which suggests that price may be affected in
some cases by species type, does not provide sufficient evidence that
species type is more significant than the remaining physical
characteristics of the processed shrimp. Therefore, we find an
insufficient basis to revise the ranking of the physical
characteristics established in the Department's questionnaire for the
purpose of product matching.
With respect to differentiating between species types beyond the
color classifications identified in the questionnaire, we do not find
that such differentiations reflect meaningful differences in the
physical characteristics of the merchandise. In particular, we note
that whether shrimp is farm-raised or wild-caught is not a physical
characteristic of the shrimp, but rather a method of harvesting.
Therefore, we have not accepted the additional species classifications
proposed by the respondents. Accordingly, in those cases where the
respondents reported additional species classifications for their
processed shrimp products, we reclassified the products into one of the
questionnaire color classifications. We made an exception for the
shrimp identified as ``scampi'' (or Macrobrachium rosenbergii) and
``red ring'' (or Aristeus alcocki), where appropriate, because they
represent species distinct from those associated by color in the
Department's questionnaire. Regarding this exception, we note that
while scampi and red ring are sufficiently distinct for product
matching purposes, they are not so distinct as to constitute a separate
class or kind of merchandise (see Scope Memorandum II). We also made an
exception for the shrimp identified as ``mixed'' (e.g., ``salad''
shrimp), where appropriate, because there is insufficient information
on the record to classify these products according to the questionnaire
color classifications.
Regarding the container weight criterion, we have included it as
the eleventh criterion in the product characteristic hierarchy because
we view the size or weight of the packed unit as an integral part of
the final product sold to the customer, rather than a packing size or
form associated with the shipment of the product to the customer.
Moreover, we find it appropriate, where possible (other factors being
equal), to compare products of equivalent container weight (e.g., a
one-pound bag of frozen shrimp with another one-pound bag of frozen
shrimp, rather than a five-pound bag), as the container weight may
impact the per-unit selling price of the product.
Grade and ``Input Materials''
Expalsa contends that the Department should include grade and input
material as product matching characteristics for its sales because it
states that these factors have a significant effect on both prices and
costs in its normal course of business. We have not incorporated these
characteristics in our matching criteria because no party in this or
any of the concurrent investigations has provided evidence of
consistent industry-wide standards for reporting shrimp grade. Each
company or customer appears to have its own grade specifications.
Accordingly, we have no basis to establish a consistent method of
classifying shrimp by grade. Further, we are not convinced that input
material, a characteristic which Expalsa uses to distinguish processed
shrimp products consisting of ``non-standard mixes'' of shrimp (i.e.,
shrimp of mixed grades and mixed sizes), is a proper physical
characteristic to be considered as a product matching criterion.
Instead, the input material appears to be a factor related to
calculating the direct material
[[Page 47096]]
costs for each product. Moreover, because we are not considering grade
to be a matching criterion for the preliminary determination, the input
material issue is moot with respect to grade. With respect to the mixed
size aspect of this issue, we have reclassified the count size ranges
reported by the respondents into the count size ranges specified in the
questionnaire, as noted above in the ``Product Comparison Comments''
section of the notice. However, we may examine Expalsa's claims further
at verification for consideration in our final determination.
Substandard Quality Shrimp
Each of the respondents in this investigation reported sales of
substandard quality shrimp, such as ``broken shrimp'' or ``shrimp
meat'', in their sales to the U.S. market, but none to their respective
third country markets. Because: (1) the matching criteria for this
investigation do not currently account for substandard quality shrimp;
(2) no interested parties have provided comments on the appropriate
methodology to match these sales; and (3) the quantity of such sales
does not constitute a significant percentage of the respondents'
respective databases, we have excluded these sales from our analysis,
where possible, for purposes of the preliminary determination.
Nonetheless, we are seeking comments from interested parties regarding
our treatment of these sales for consideration in the final
determination.
Export Price
In accordance with section 772(a) of the Act, for all three
respondents, we used EP methodology for sales in which the merchandise
was sold to the first unaffiliated purchaser in the United States prior
to importation by the exporter or producer outside the United States.
We made company-specific adjustments as follows.
Exporklore
In accordance with section 772(a) of the Act, we based EP on the
packed FOB or C&F price to unaffiliated purchasers in the United
States. We adjusted the starting price for billing adjustments
associated with the sale, where appropriate. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these expenses included, where appropriate, international freight,
foreign inland freight, foreign inland insurance, and foreign brokerage
and handling expenses.
Some of Exporklore's U.S. sales were sold on a glazed-weight basis
(i.e., the reported sales quantity included the weight of frozen
water). Where appropriate, we converted the data in the U.S. market to
a net-weight equivalent basis.
Expalsa
In accordance with section 772(a) of the Act, we based EP on the
packed FOB or C&F price to unaffiliated purchasers in the United
States. We adjusted the starting price, where appropriate, for certain
billing adjustments and freight revenue associated with the sale. We
made deductions for movement expenses in accordance with section
772(c)(2)(A) of the Act; these expenses included, where appropriate,
foreign inland freight, brokerage and handling fees and international
freight.
The reported expense amount identified as ``total export charge''
in the U.S. sales listing that includes brokerage and handling fees
also includes inspection fees and other expenses which may be
considered selling expenses rather than movement expenses. However, as
Expalsa did not separate the brokerage and handling charges from the
other expenses included in the reported amount, we have treated the
entire amount as movement expenses for purposes of the preliminary
determination.
Expalsa reported three types of billing adjustments for certain
U.S. sales, each of which was paid or credited in 2004, after the
filing of the petition, although Expalsa claimed that the basis for the
adjustment was established during the POI. As stated in Final
Determination of Sales at Less Than Fair Value: Large Newspaper
Printing Presses from Germany, 61 FR 38166, 38181 (July 23, 1996) (LNPP
from Germany), the Department is cautious in accepting price
adjustments which occur after receipt of a petition so as to discourage
potential manipulation of potential dumping margins. Based on our
analysis of the information on the record at this time, we find that
Expalsa has demonstrated that the basis for a price adjustment was
established prior to the filing of the petition for only one of the
three reported types of billing adjustments. Accordingly, we have
disallowed two of the billing adjustments for purposes of the
preliminary determination, but we will examine all three billing
adjustments further at verification for consideration in the final
determination. See Expalsa Memo for additional information as Expalsa
has claimed proprietary treatment for the factual details surrounding
these adjustments.
Promarisco
In accordance with section 772(a) of the Act, we based EP on the
packed FOB, C&F, or CIF prices to unaffiliated purchasers in the United
States. We made deductions from the starting price for movement
expenses in accordance with section 772(c)(2)(A) of the Act; these
expenses included, where appropriate, foreign inland freight, foreign
inland insurance, international freight, and marine insurance.
Promarisco reported as billing adjustments two sets of price
revisions made after the petition in this investigation was filed. As
discussed above, and consistent with LNPP from Germany, we have
disallowed those post-petition price adjustments because the
information on the record at this time fails to demonstrate that the
basis for these adjustments was established prior to the filing of the
petition. However, we will examine them further at verification for
consideration in the final determination. See Promarisco Memo for
additional information as Promaricso has claimed proprietary treatment
for the factual details surrounding these adjustments.
Normal Value
A. Home Market Viability and Comparison Market Selection
In order to determine whether there is a sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
the aggregate volume of home market sales of the foreign like product
is equal to or greater than five percent of the aggregate volume of
U.S. sales), we compared each respondent's volume of home market sales
of the foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(C) of the Act.
As noted above, the Department determined that a particular market
situation existed in Ecuador that rendered the home market
inappropriate for use as the comparison market for NV purposes.
Therefore, the Department determined it appropriate to use third
country sales as the basis for NV for all three respondents. For a
detailed discussion of this issue, see June 7, 2004, Memorandum to
Louis Apple, Director Office 2, from The Team Re: Home Market as
Appropriate Comparison Market. Therefore, we used sales to the
respondent's most appropriate third country market as the basis for
comparison-market sales in accordance with section 773(a)(1)(C) of the
Act and 19 CFR 351.404. As discussed above and in the Third Country
Comparison Market Selection
[[Page 47097]]
Memorandum, we used Italy for Expalsa and Exporklore, and Spain for
Promarisco.
With respect to the selection of Spain as the comparison market for
Promarisco, the petitioners filed additional comments in June 2004,
objecting to the Department's decision to select Spain, rather than
Japan, as the most appropriate third country comparison market.
Specifically, the petitioners claimed that the Department erred in
concluding that Promarisco's sales to Spain were more similar to its
U.S. sales than its Japanese sales. According to the petitioners, the
Department did not accurately account for the petitioners' product
comparison analysis in determining the ``most similar'' comparison
market. In response, Promarisco filed additional comments supporting
the Department's decision.
The petitioners' subsequent comments offer no basis to compel us to
alter our decision. The Department considered the petitioners' product
comparison analysis along with its own product comparison analysis in
selecting Promarisco's third country comparison market. However, as we
emphasized in the Third Country Comparison Market Selection Memorandum,
we considered all of the criteria under 19 CFR 351.404(e) in
determining the appropriate third country comparison market. That is,
we considered: (1) Whether the foreign like product exported to a
particular third country is more similar to the subject merchandise
exported to the United States than is the foreign like product exported
to other third countries; (2) whether the volume of sales to a
particular third country is larger than the volume of sales to other
third countries; and (3) other factors as the Secretary considers
appropriate. After analyzing the available information in terms of all
three criteria, we determined that Spain is the appropriate comparison
market. Based on the preliminary determination results, and after
review of the additional comments submitted by the petitioners and
Promarisco, we continue to hold that Spain is the appropriate
comparison market.
The petitioners argue that, based on the product matching
characteristics, the Japanese market offers the ``most similar''
comparisons to U.S. sales compared to the Spanish market. As we
indicated in the Third Country Comparison Market Selection Memorandum,
we agree with the petitioners that there is a high proportion of
identical or similar product matches when comparing Japanese sales to
U.S. sales. We also noted that the Spanish market also offered a high
proportion of matches to U.S. sales. Our analysis at that time showed
identical or similar product matches of Spanish sales to U.S. sales of
at least ninety-eight percent of U.S. sales; this preliminary
determination results in one-hundred percent identical or similar
product matches of Spanish sales to U.S. sales.
We have no basis to dispute the petitioners' contention that we
would also find a significant proportion of product matches from
Japanese sales. However, similarity of foreign like product is only one
of the three criteria for determining the appropriate third country
market under 19 CFR 351.404(e). The petitioners' June 2004 comments do
not address the criterion of sales volume. In the Third Country
Comparison Market Selection Memorandum, we did not specifically address
which of the two markets was the larger in terms of sales volume. We
stated that both the Spanish and Japanese markets is sufficiently large
for purposes of serving as the comparison market. Subsequent to this
Memorandum, as discussed above, the Department has determined to
perform product comparisons and margin calculations using data on an
``as sold'' basis. We note that the volume of Promarisco's sales to
Spain is greater, on an ``as sold'' basis, than Promarisco's sales to
Japan during the POI.
Finally, we note that the petitioners did not address the
Department's analysis of the third criterion under 19 CFR
351.404(e)(3), the ``other factors the Secretary considers
appropriate.'' As we explained in the Third Country Comparison Market
Selection Memorandum, Promarisco reported that its Japanese customers
require a higher level of quality and freshness than do its U.S.
customers and its Spanish customers. Promarisco also reported that the
harvesting, transportation, handling and processing procedures
associated with the sale of subject merchandise in Japan are more
stringent than are the same processes associated with the sale of this
merchandise in the United States.
Based on a consideration of all three criteria under 19 CFR
351.404(e), we continue to find that Spain is the more appropriate
third-country market for Promarisco. Nevertheless, we intend to verify
all factual representations made by Promarisco on this topic; any
misrepresentations may result in the use of adverse facts available
under section 776(b) of the Act.
B. Level of Trade Analysis
In accordance with section 773(a)(1)(B) of the Act, to the extent
practicable, we determine NV based on sales in the comparison market at
the same level of trade (LOT) as the EP or CEP. The NV LOT is that of
the starting-price sales in the comparison market or, when NV is based
on CV, that of the sales from which we derive selling, general and
administrative expenses (SG&A) and profit. For EP, the U.S. LOT is also
the level of the starting-price sale, which is usually from exporter to
importer. For CEP, it is the level of the constructed sale from the
exporter to the importer.
To determine whether NV sales are at a different LOT than EP or CEP
sales, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different LOT, and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison market sales at the level of
trade of the export transaction, we make an LOT adjustment under
section 773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV
level is more remote from the factory than the CEP level and there is
no basis for determining whether the difference in levels between NV
and CEP affects price comparability, we adjust NV under section
773(a)(7)(B) of the Act (the CEP offset provision). See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
In this investigation, we obtained information from each respondent
regarding the marketing stages involved in making the reported third
country (Italy or Spain) and U.S. sales, including a description of the
selling activities performed by each respondent for each channel of
distribution. Company-specific LOT findings are summarized below.
Exporklore
Exporklore made sales to wholesalers/distributors through the same
channel of distribution in both the United States and Italy. As
described in its questionnaire response, Exporklore performs identical
selling functions in the United States and Italy. Therefore, these
sales channels are at the same LOT. Accordingly, all comparisons are at
the same LOT for Exporklore and an adjustment pursuant to section
773(a)(7)(A) is not warranted.
[[Page 47098]]
Expalsa
Expalsa made sales to distributors through the same channel of
distribution in both the U.S. and Italy. As described in its
questionnaire response, Expalsa performs identical selling functions in
the United States and Italy. Therefore, these sales channels are at the
same LOT. Accordingly, all comparisons are at the same LOT for Expalsa
and an adjustment pursuant to section 773(a)(7)(A) is not warranted.
Promarisco
Promarisco made sales to food processors and distributors through
the same channel of distribution in both the United States and Spain.
As described in its questionnaire response, Promarisco performs the
identical selling functions in the United States and Spain. Therefore,
these sales channels are at the same LOT. Accordingly, all comparisons
are at the same LOT for Promarisco and an adjustment pursuant to
section 773(a)(7)(A) is not warranted.
C. Cost of Production Analysis
Based on our analysis of the petitioners' allegations, we found
that there were reasonable grounds to believe or suspect that the
respondents' sales of frozen and canned warmwater shrimp in the third
countries were made at prices below their respective COPs. Accordingly,
pursuant to section 773(b) of the Act, we initiated sales-below-cost
investigations to determine whether sales by Expalsa, Exporklore, and
Promarisco were made at prices below their respective COPs. See
Memorandum to Louis Apple, Director Office 2, from The Team entitled
``Petitioners'' Allegation of Sales Below the Cost of Production by
Expalsa'' dated May 28, 2004; Memorandum to Louis Apple, Director
Office 2, from The Team entitled ``Petitioners'' Allegation of Sales
Below the Cost of Production by Exporklore'' dated May 28, 2004; and
Memorandum to Louis Apple, Director Office 2, from The Team entitled
``Petitioners'' Allegation of Sales Below the Cost of Production by
Promarisco'' dated May 28, 2004.
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated COP
based on the sum of the cost of materials and fabrication for the
foreign like product, plus an amount for general and administrative
expenses (G&A), interest expenses, and third country packing costs. See
``Test of Third Country Sales Prices'' section below for treatment of
third country selling expenses. We relied on the COP data submitted by
Exporklore, Expalsa and Promarisco except in the following instances:
Exporklore
1. We adjusted Exporklore's reported direct labor costs to disallow
the offset taken for co-packing revenues.
2. We adjusted Exporklore's reported costs for shrimp harvested
from affiliated farms to reflect the higher of transfer price, market
price or the affiliate's COP in accordance with section 773(f)(3) of
the Act.
3. We revised Exporklore's reported COP by re-allocating the raw
shrimp costs among products sold in the U.S., third country and
domestic markets.
4. We adjusted Exporklore's reported costs for affiliated payroll
service commissions to reflect the higher of market or transfer price
in accordance with section 773(f)(2) of the Act.
5. We revised Exporklore's G&A expense rate to exclude offshore
expenses from the cost of sales denominator used to calculate the rate.
6. We revised Exporklore's financial expense rate to include the
change in currency adjustment from the financial statements and to
exclude offshore expenses from the cost of sales denominator used to
calculate the rate.
See Memorandum to Neal Halper from Heidi Schriefer entitled ``Cost
of Production and Constructed Value Calculation Adjustments for the
Preliminary Determination--Exporklore, S.A.'' dated July 28, 2004.
Expalsa
1. We adjusted the reported costs for shrimp harvested from
affiliated farms to reflect the higher of transfer price, market price,
or the affiliate's COP in accordance with section 773(f)(3) of the Act.
2. We adjusted the fixed overhead expenses to reflect the costs for
the POI rather than the calendar year 2003.
See Memorandum to Neal Halper from Nancy Decker entitled ``Cost of
Production and Constructed Value Calculation Adjustments for the
Preliminary Determination--Exportadora de Alimentos, S.A.'' dated July
28, 2004 (Expalsa Cost Memo).
Promarisco
1. We adjusted Promarisco's reported costs for affiliated shrimp
purchases to reflect the higher of market or transfer price in
accordance with section 773(f)(2) of the Act. See Memorandum to Neal
Halper from Taija A. Slaughter entitled ``Cost of Production and
Constructed Value Calculation Adjustments for the Preliminary
Determination--Promarisco S.A.'' dated July 28, 2004.
2. Test of Third Country Sales Prices
On a product-specific basis, we compared the adjusted weighted-
average COP to the third country sales of the foreign like product, as
required under section 773(b) of the Act, in order to determine whether
the sale prices were below the COP. The prices were exclusive of any
applicable billing adjustments, movement charges, discounts, and direct
and indirect selling expenses. In determining whether to disregard
third country market sales made at prices less than their COP, we
examined, in accordance with sections 773(b)(1)(A) and (B) of the Act,
whether such sales were made (1) within an extended period of time in
substantial quantities, and (2) at prices which permitted the recovery
of all costs within a reasonable period of time.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of the respondent's sales of a given product during the POI are
at prices less than the COP, we did not disregard any below-cost sales
of that product, because we determined that in such instances the
below-cost sales were not made in substantial quantities. Where 20
percent or more of the respondent's sales of a given product during the
POI were at prices less than the COP, we determined that the below-cost
sales represented substantial quantities within an extended period of
time, in accordance with section 773(b)(1)(A) of the Act. In such
cases, we also determined whether such sales were made at prices which
would not permit recovery of all costs within a reasonable period of
time, in accordance with section 773(b)(1)(B) of the Act.
We found that, for certain specific products, more than 20 percent
of the respondents' respective third country sales during the POI were
at prices less than the COP and, in addition, the below-cost sales did
not provide for the recovery of costs within a reasonable period of
time. We therefore excluded these sales and used the remaining sales,
if any, as the basis for determining NV, in accordance with section
773(b)(1) of the Act as the basis for determining NV. Where there were
no sales of any comparable product at prices above the COP, we used CV
as the basis for determining NV.
[[Page 47099]]
D. Calculation of Normal Value Based on Comparison Market Prices
Exporklore
We calculated NV based on FOB or C&F prices to unaffiliated
customers. We made deductions, where appropriate, from the starting
price for rebates. We also made deductions for movement expenses,
including foreign inland freight, foreign inland insurance, brokerage
and handling, and international freight, under section 773(a)(6)(B)(ii)
of the Act. In addition, we made adjustments under section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in
circumstances of sale for imputed credit and inspection fees.
Furthermore, we made adjustments for differences in costs attributable
to differences in the physical characteristics of the merchandise in
accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
We also deducted third country packing costs and added U.S. packing
costs in accordance with section 773(a)(6)(A) and (B) of the Act.
Some of Exporklore's Italian sales were sold on a glazed-weight
basis (i.e., the reported sales quantity included the weight of frozen
water). Where appropriate, we converted the data in the Italian market
to a net-weight equivalent basis.
Expalsa
We calculated NV based on FOB or C&F prices to unaffiliated
customers. We made deductions, where appropriate, from the starting
price for rebates and billing adjustments. We also made deductions for
movement expenses, including inland freight and international freight,
under section 773(a)(6)(B)(ii) of the Act. In addition, we made
adjustments under section 773(a)(6)(C)(iii) of the Act and 19 CFR
351.410 for differences in circumstances of sale for imputed credit,
testing and inspection expenses, bank fees, and other direct selling
expenses. Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411. We also deducted third country packing costs and added
U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of
the Act.
Expalsa reported freight expenses associated with the shipment and
return of cancelled sales to Italy as a direct selling expense. Expalsa
is unable to determine with certainty the ultimate destination of this
merchandise (see June 2, 2004, submission at page SB-14). When expenses
cannot be associated with a sale to the first unaffiliated customer,
the Department will normally treat them as indirect selling expenses to
the selling market and entity of the originating sale (i.e., the market
for which the expenses were incurred, and the corporate entity which
incurred the expenses). See Notice of Final Determination of Sales at
Not Less Than Fair Value: Certain Color Television Receivers From
Malaysia, 69 FR 20592 (April 16, 2004), Issues and Decision Memorandum
at Comment 2. Accordingly, we have reclassified the freight expenses at
issue as indirect selling expenses in the Italian market, the market of
the originating sales. In addition, we recalculated these expenses by
allocating them over all Italian sales made during the POI because
Expalsa had incorrectly allocated them over calendar year 2003 sales.
See Expalsa Memo.
Promarisco
We calculated NV based on CIF, C&F or FOB prices to unaffiliated
customers. We made deductions from the starting price for movement
expenses, including inland freight, inland insurance, marine insurance,
and international freight under section 773(a)(6)(B)(ii) of the Act. In
addition, we made adjustments under section 773(a)(6)(C)(iii) of the
Act and 19 CFR 351.410 for differences in circumstances of sale for
imputed credit expenses, testing expenses, inspection fees, and
commissions. Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411. We also deducted third country packing costs and added
U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of
the Act.
Promarisco reported a bonus paid to its unaffiliated agent in the
Spanish market several months after the filing of the petition in the
instant investigation. Although Promarisco claims that the bonus
applied to sales made during the POI, the information on the record at
this time does not adequately demonstrate that the basis for this claim
was established prior to the filing of the petition. As discussed above
for similar claimed adjustments, we are disallowing the bonus as an
adjustment to price for the preliminary determination but will examine
it further at verification.
E. Calculation of Normal Value Based on Constructed Value
In accordance with section 773(a)(4) of the Act, for Expalsa, we
based NV on CV in those instances where there were no comparable sales
in the Italian third country market made in the ordinary course of
trade.
In accordance with section 773(e) of the Act, we calculated CV
based on the sum of the respondent's cost of materials and fabrication
for the foreign like product, plus amounts for SG&A, profit, and U.S.
packing costs. We calculated the cost of materials and fabrication, G&A
and interest based on the methodology described in the ``Calculation of
COP'' section of this notice. For further details, see Expalsa Cost
Memo.
For comparisons to EP, we made circumstances-of-sale adjustments by
deducting third country direct selling expenses and adding U.S. direct
selling expenses.
Currency Conversion
As all three respondents reported their prices, expenses, and costs
in U.S. dollars, no currency conversions were required in our margin
calculations.
Verification
As provided in section 782(I) of the Act, we will verify all
information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
CBP to suspend liquidation of all imports of subject merchandise that
are entered, or withdrawn from warehouse, for consumption on or after
the date of publication of this notice in the Federal Register.
We will instruct CBP to require a cash deposit or the posting of a
bond equal to the weighted-average amount by which the NV exceeds EP,
as indicated in the chart below. These suspension-of-liquidation
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter/Manufacturer margin
percentage
------------------------------------------------------------------------
Exporklore S.A............................................. 9.35
Exportadora De Alimentos S.A............................... 6.08
Promarisco S.A............................................. 6.77
All Others................................................. 7.30
------------------------------------------------------------------------
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final
[[Page 47100]]
determination whether these imports are materially injuring, or
threaten material injury to, the U.S. industry.
Disclosure
We will disclose the calculations used in our analysis to parties
in this proceeding in accordance with 19 CFR 351.224(b).
Public Comment
Case briefs for this investigation must be submitted to the
Department no later than seven days after the date of the final
verification report issued in this proceeding. Rebuttal briefs must be
filed five days from the deadline date for case briefs. A list of
authorities used, a table of contents, and an executive summary of
issues should accompany any briefs submitted to the Department.
Executive summaries should be limited to five pages total, including
footnotes. Section 774 of the Act provides that the Department will
hold a public hearing to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs, provided that
such a hearing is requested by an interested party. If a request for a
hearing is made in this investigation, the hearing will tentatively be
held two days after the rebuttal brief deadline date at the U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230. Parties should confirm by telephone the time,
date, and place of the hearing 48 hours before the scheduled time.
Interested parties who wish to request a hearing, or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, within 30 days of the publication of this notice. Requests should
contain: (1) The party's name, address, and telephone number; (2) the
number of participants; and (3) a list of the issues to be discussed.
Oral presentations will be limited to issues raised in the briefs.
We will make our final determination no later than 135 days after
the publication of this notice in the Federal Register.
This determination is published pursuant to sections 733(f) and
777(I) of the Act.
Dated: July 28, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-17815 Filed 8-3-04; 8:45 am]
BILLING CODE 3510-DS-P