[Federal Register: August 4, 2004 (Volume 69, Number 149)]
[Notices]
[Page 47111-47120]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr04au04-43]
[[Page 47111]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-840]
Notice of Preliminary Determination of Sales at Less Than Fair
Value, Postponement of Final Determination, and Affirmative Preliminary
Determination of Critical Circumstances: Certain Frozen and Canned
Warmwater Shrimp from India
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 India are being, 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). In addition, we
preliminarily determine that there is a reasonable basis to believe or
suspect that critical circumstances exist with respect to the subject
merchandise exported from India for Hindustan Lever Limited (HLL). We
also preliminarily determine that there is no reasonable basis to
believe or suspect that critical circumstances exist with respect to
the subject merchandise exported from India for respondents Devi Sea
Foods Ltd. (Devi) and Nekkanti Seafoods Limited (Nekkanti), or for
companies subject to the ``all others'' rate.
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.
DATES: Effective Date: August 4, 2004.
FOR FURTHER INFORMATION CONTACT: Elizabeth Eastwood or Jill Pollack,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-3874 or (202) 482-4593,
respectively.
Preliminary Determination
We preliminarily determine that certain frozen and canned warmwater
shrimp from India are being, 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. In addition, we
preliminarily determine that there is a reasonable basis to believe or
suspect that critical circumstances exist with respect to the subject
merchandise exported from India by HLL. The critical circumstances
analysis for the preliminary determination is discussed below under the
section ``Critical Circumstances.''
Background
Since the initiation of this investigation (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)), the following events have occurred.
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 India 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 India as
the mandatory respondents in this proceeding. See Memorandum to Louis
Apple, Director Office 2, from the Team entitled, ``Antidumping Duty
Investigation of Certain Frozen and Canned Warmwater Shrimp from
India--Selection of Respondents,'' dated February 20, 2004. We
subsequently issued the antidumping questionnaire to Devi, HLL, and
Nekkanti on February 20, 2004.
During the period February through June 2004, various interested
parties, including the petitioners,\1\ 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, 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.\2\ 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\ 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.
\2\ 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, C, and D questionnaire
responses in April 2004.
We issued and received responses to our supplemental questionnaires
from May through July 2004.
On May 3, 2004, the petitioners alleged that Devi and HLL made
third country sales below the cost of production (COP) and, therefore,
requested that the Department initiate a sales-below-cost investigation
of these respondents.\3\ On May 28, 2004, the Department initiated a
sales-below-cost investigation for Devi and HLL. See Memorandum to
Louis Apple, Director Office 2, from the Team entitled: ``Petitioners''
Allegation of Sales Below the Cost of Production for Devi Sea Foods
Limited,'' (Devi Cost Allegation Memo) 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 for
Hindustan Lever Limited,'' date May 28, 2004 (HLL Cost Allegation
Memo).
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\3\ Based on our analysis of an allegation contained in the
petition, we found that there were reasonable grounds to believe or
suspect that sales of foreign-like product in the relevant third
country market for Nekkanti, i.e., Japan, were made at prices below
their COP. Accordingly, pursuant to section 773(b) of the Act, we
initiated a country-wide cost investigation relating to third-
country sales to Japan at the time of the initiation to determine
whether sales were made at prices below their respective COPs. See
Initiation Notice, 69 FR at 3880.
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On May 18, 2004, pursuant to sections 733(c)(1)(B) and (c)(2) of
the Act and 19
[[Page 47112]]
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 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 entitled: ``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 May 26, 2004, HLL provided a third country sales listing for its
second largest third country market, Italy, in response to the
Department's concerns that certain of its sales to Spain were not
destined for that country.
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.\4\
Additional comments were subsequently submitted on June 15 and 25,
2004. See ``Product Comparison Comments'' section, below.
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\4\ 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, HLL, and Nekkanti;
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 June 8, 2004, the petitioners alleged that HLL made below-cost
sales to Italy and, therefore, requested that the Department initiate a
sales-below-cost investigation. However, because we have not selected
Italy as HLL's comparison market in this case, we have not considered
this allegation. See Memorandum to Louis Apple, Director Office 2, from
the Team entitled: ``Antidumping Duty Investigation of Certain Frozen
and Canned Warmwater Shrimp from India--Third-Country Market Selection
for Hindustan Lever, Limited,'' dated July 28, 2004 (HLL Third Country
Comparison Market Selection Memorandum), for further discussion.
On June 15, 2004, the petitioners objected to Devi's use of Canada
as its third country comparison market, and they requested that the
Department obtain sales data for the company's second largest third
country market, Japan. In July 2004, the Department determined that it
is appropriate to use the third country market initially reported by
Devi (i.e., Canada). See Memorandum to Louis Apple, Director Office 2,
from the Team entitled: ``Antidumping Duty Investigation of Certain
Frozen and Canned Warmwater Shrimp from India--Third-Country Market
Selection for Devi Sea Foods Limited,'' dated July 28, 2004 (Devi Third
Country Comparison Market Selection Memorandum), for further
discussion.
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 Administration
entitled: ``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 entitled:
``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.
On July 12, 2004, HLL requested that the Department find that one
of its third country sales was made outside the ordinary course of
trade. While we were unable to consider this request for the
preliminary determination, we will consider it for purposes of the
final 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, Seafood
Exporters Association of India (SEAI) and the individual respondents in
this investigation, Devi, HLL and Nekkanti, 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 respondents account 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
[[Page 47113]]
Register. Suspension of liquidation will be extended accordingly.
Period of Investigation
The period of investigation (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,\5\ deveined or not deveined, cooked or
raw, or otherwise processed in frozen or canned form.
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\5\ ``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 \6\ 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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\6\ 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 classifiable 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 customs 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 at 69 FR 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 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 India to the United States were made at LTFV, we compared
the export price (EP) to the normal value (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.
For this preliminary determination, we have determined that Devi,
HLL, and Nekkanti did not have viable home market sales during the POI.
Therefore, as the basis for NV, we used third country sales to Canada
(Devi), Spain (HLL), and Japan (Nekkanti) when making comparisons in
accordance with section 773(a)(1)(C) of the Act. See Devi Third Country
Comparison Market Selection Memorandum and HLL Third Country Comparison
Market Selection Memorandum for further discussion.
[[Page 47114]]
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced and sold by Devi in Canada, HLL in Spain, and
Nekkanti in Japan, as appropriate, 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 country, where appropriate. Where there were no sales of
identical merchandise in the third country 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
constructed value (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.\7\
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\7\ 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 69 FR 42654 (July 16, 2004) and
69 FR 42672 (July 16, 2004), respectively).
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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 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.
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
[[Page 47115]]
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.
Broken Shrimp
Two of the respondents in this case, HLL and Nekkanti, reported
sales of broken shrimp in their third country markets, while the third
respondent, Devi, reported such sales in its U.S. market. Because: (1)
The matching criteria for this investigation do not currently account
for broken 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' databases, we have excluded these sales from our analysis
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.
Glazing
One of the respondents in this investigation, HLL, reported sales
in the comparison market on a glazed-weight basis (i.e., including the
weight of frozen water). However, HLL reported sales to the United
States on a net-weight basis (i.e., without glazing). Therefore, in
order to make comparisons for HLL on the same basis in both markets, we
converted the data in the comparison market to a net-weight equivalent
basis.
Export Price
Devi
In accordance with section 772(a) of the Act, we calculated EP for
those sales where 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 based EP on the packed price to
unaffiliated purchasers in the United States. Where appropriate, we
made adjustments for billing adjustments. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these included, where appropriate, foreign inland freight expenses,
foreign brokerage and handling expenses, and international freight
expenses. We also made deductions for export taxes, in accordance with
section 772(c)(2)(B) of the Act. See Notice of Preliminary
Determination of Less Than Fair Value and Postponement of Final
Determination: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67
FR 18165, 18169 (April 15, 2002) (Steel Wire Rod from Brazil).
HLL
In accordance with section 772(a) of the Act, we calculated EP for
those sales where 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 based EP on the packed price to
unaffiliated purchasers in the United States. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these included, where appropriate, foreign inland freight expenses,
foreign brokerage and handling expenses, international freight
expenses, marine insurance, and port dues, and other miscellaneous
shipment charges, including loading charges. Regarding these loading
charges, HLL classified these expenses as direct selling expenses;
however, we treated them as movement because they relate to the
shipment of the merchandise. We also made deductions for export taxes,
in accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod
from Brazil, 67 FR at 18169.
Nekkanti
In accordance with section 772(a) of the Act, we calculated EP for
those sales where 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 based EP on the packed price to
unaffiliated purchasers in the United States. We also made deductions
for movement expenses in accordance with section 772(c)(2)(A) of the
Act; these included, where appropriate, foreign inland freight
expenses, foreign brokerage and handling expenses, loading charges,
container terminal handling charges, other miscellaneous movement
expenses, and international freight expenses. We also made deductions
for export taxes, in accordance with section 772(c)(2)(B) of the Act.
See Steel Wire Rod from Brazil, 67 FR at 18169.
Nekkanti reported in its U.S. sales listing additional revenue
received from one customer. However, we did not make adjustments for
this revenue because Nekkanti failed to provide sufficient explanation
of the circumstances under which it received it, and it provided
inadequate supporting documentation in its supplemental questionnaire
responses. We have issued an additional supplemental questionnaire
related to this revenue, and we will examine this information at
verification.
[[Page 47116]]
Duty Drawback
Devi, HLL, and Nekkanti claimed a price adjustment based on their
participation in the Indian government's Duty Entitlement Passbook
(DEPB) Program. The Department's practice is to consider the Indian
DEPB program under section 772(c)(1)(B) of the Act (i.e., the duty
drawback provision). See Notice of Preliminary Results of Antidumping
Duty Administrative Review: Stainless Steel Bar From India, 68 FR
11058, 11062 (March 7, 2003), unchanged in the final results.\8\ The
respondents disagree that this adjustment is like duty drawback, given
that Indian exporters simply receive DEPB revenue after making an
export sale. Further, they stated that the DEPB program differs from a
duty drawback program in that, in order to be eligible to receive DEPB
payments, Indian exporters need not: (1) Import product; or (2) pay
import duties. However, because there is no provision in the Act for
general export subsidies, we have continued to analyze this claim under
the duty drawback provision.
---------------------------------------------------------------------------
\8\ See Stainless Steel Bar From India; Final Results of
Antidumping Duty Administrative Review, 68 FR 47543 (August 11,
2003).
---------------------------------------------------------------------------
The Department will grant a respondent's claim for a duty drawback
adjustment where the respondent has demonstrated that there is (1) a
sufficient link between the import duty and the rebate, and (2) a
sufficient amount of raw materials imported and used in the production
of the final exported product. See Rajinder Pipe Ltd. v. United States
(Rajinder Pipes), 70 F. Supp. 2d 1350, 1358 (CIT 1999). In Rajinder
Pipes, the Court of International Trade upheld the Department's
decision to deny a respondent's claim for duty drawback adjustments
because there was not substantial evidence on the record to establish
that part one of the Department's test had been met. See also Viraj
Group, Ltd. v. United States, Slip Op. 01-104 (CIT August 15, 2001).
In this investigation, Devi, HLL, and Nekkanti have failed to
demonstrate that there is a link between the import duty paid and the
rebate received, and that imported raw materials are used in the
production of the final exported product. Therefore, because they have
failed to meet the Department's requirements, we are denying the
respondents' requests for an adjustment for DEPB revenue.
Normal Value
A. Home Market Viability
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.
In this investigation, we determined that each respondent's
aggregate volume of home market sales of the foreign like product was
insufficient to permit a proper comparison with U.S. sales of the
subject merchandise. Therefore, we used sales to the respondent's
largest 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, we used Canada for Devi, Spain for HLL, and Japan
for Nekkanti.
B. Level of Trade
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. 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.
To determine whether NV sales are at a different LOT than EP 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.
In this investigation, we obtained information from each respondent
regarding the marketing stages involved in making the reported third
country and U.S. sales, including a description of the selling
activities performed by each respondent for each channel of
distribution. We analyzed this data and found that each respondent made
direct sales to distributors and/or trading companies in both the U.S.
and comparison markets. In addition, Devi made direct sales to
retailers in both markets. According to the information in their
questionnaire responses, these respondents perform essentially the same
selling functions in the United States and the relevant third country
market (i.e., inventory maintenance, packing, and freight and delivery
arrangements (Devi); sales and marketing support, payment of
commissions, packing, and freight and delivery arrangements (HLL); and
sales and marketing support, payment of commissions, packing, and
freight and delivery arrangements (Nekkanti)). Therefore, we find that,
for each respondent, the sales channels in each market are at the same
LOT. Accordingly, all comparisons are at the same LOT for Devi, HLL,
and Nekkanti and an adjustment pursuant to section 773(a)(7)(A) of the
Act 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 Devi's,
HLL's, and Nekkanti's sales of frozen and canned warmwater shrimp in
their third country markets were made at prices below their COP.
Accordingly, pursuant to section 773(b) of the Act, we initiated sales-
below-cost investigations to determine whether the respondents' sales
were made at prices below their respective COPs. See the Devi Cost
Allegation Memo, the HLL Cost Allegation Memo, and the Initiation
Notice, 69 FR at 3879-3880, for further discussion.
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
the respondents except in the following instances:
A. Devi
1. We adjusted the reported G&A expense ratio by including in the
calculation ``Loss on sale of assets'' which was recorded as an
``Administrative expense'' in the company's audited financial
statements; and
[[Page 47117]]
2. We adjusted the reported financial expense ratio by including in
the calculation the ``export packing credit'' and ``interest on packing
credit in foreign currency,'' which were recorded as interest expense
in the company's audited financial statements.
See Memorandum from Ernest Z. Gziryan to Neal M. Halper, Director
Office of Accounting entitled: ``Cost of Production and Constructed
Value Calculation Adjustments for the Preliminary Determination--Devi
Sea Foods Limited,'' dated July 28, 2004, for further discussion.
B. HLL
1. We recalculated HLL's financial expense ratio based on the
December 31, 2003, audited consolidated financial statements of HLL's
parent company Unilever PLC. We excluded Unilever PLC's profit from the
sale of bonds and derivatives, as well as the claimed offset for credit
expense and inventory carrying costs, from the financial expense
calculation.
See Memorandum from Laurens Van Houten to Neal Halper, Director
Office of Accounting, entitled: ``Cost of Production and Constructed
Value Calculation Adjustments for the Preliminary Determination--
Hindustan Lever Ltd.,'' dated July 28, 2004, for further discussion.
C. Nekkanti
1. We adjusted the G&A expense ratio to reflect the use of cost
goods sold as a denominator rather than cost of production; and
2. We adjusted the financial expense ratio to use the cost of goods
sold, rather than cost of production, as the denominator. We excluded
from the financial expense calculation the claimed offset for credit
expenses and inventory carrying cost.
See Memorandum from Christopher J. Zimpo to Neal Halper, Director
Office of Accounting, entitled: ``Cost of Production and Constructed
Value Calculation Adjustments for the Preliminary Determination--
Nekkanti Sea Foods Ltd.,'' dated July 28, 2004, for further discussion.
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, 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 do not disregard any below-cost sales
of that product, because we determine 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 are at
prices less than the COP, we determine that the below-cost sales
represent substantial quantities within an extended period of time, in
accordance with section 773(b)(1)(A) of the Act. In such cases, we also
determine 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 Devi's, HLL's, and Nekkanti's 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. Where there were no sales of any comparable
product at prices above the COP, we used CV as the basis for
determining NV.
D. Calculation of Normal Value Based on Comparison Market Prices
1. Devi
For Devi, we calculated NV based on delivered prices to
unaffiliated customers. We made deductions for export taxes, in
accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod
from Brazil, 67 FR at 18169. We also made deductions for movement
expenses, including foreign inland freight expenses, foreign brokerage
and handling expenses, and international freight expenses. 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 credit
expenses, direct selling expenses (including survey charges, Export
Inspection Agency fees, and microbiological examination fees), bank
charges, and commissions. In its calculation of inventory carrying
costs, Devi included an amount for export credit guarantee fees.
Because these fees had not been accounted for in the U.S. and Canadian
sales listings, we made an additional adjustment for differences in
circumstances of sale for these expenses. See Memorandum from Elizabeth
Eastwood to the file entitled: ``Calculations performed for Devi Sea
Foods Limited (Devi) in the Investigation of Certain Frozen and Canned
Warmwater Shrimp from India,'' dated July 28, 2004, for further
discussion.
Furthermore, in accordance with 19 CFR 351.410(e), we offset U.S.
commissions by the lesser of the commission amount or the amount of
third country indirect selling expenses because Devi incurred
commissions only in the U.S. market. 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
sections 773(a)(6)(A) and (B) of the Act.
2. HLL
For HLL, we calculated NV based on delivered prices to unaffiliated
customers. We made deductions for export taxes, in accordance with
section 772(c)(2)(B) of the Act. See Steel Wire Rod from Brazil, 67 FR
at 18169. We made deductions for movement expenses in accordance with
section 772(c)(2)(A) of the Act; these included, where appropriate,
foreign inland freight expenses, foreign brokerage and handling
expenses, international freight expenses, marine insurance, port dues,
and other miscellaneous shipment charges, including loading charges.
Regarding these miscellaneous charges, HLL classified these expenses as
direct selling expenses; however, we treated them as movement expenses
because they relate to the shipment of the merchandise.
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
credit expenses 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
[[Page 47118]]
deducted third country packing costs and added U.S. packing costs in
accordance with sections 773(a)(6)(A) and (B) of the Act.
3. Nekkanti
For Nekkanti, we calculated NV based on delivered prices to
unaffiliated customers. We made deductions for export taxes, in
accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod
from Brazil, 67 FR at 18169. We made further deductions for movement
expenses, including foreign inland freight expenses, foreign brokerage
and handling expenses, loading charges, container terminal handling
charges, other miscellaneous movement expenses, and international
freight expenses. 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 credit expenses, bank charges, Export
Inspection Agency 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 sections 773(a)(6)(A) and (B) of
the Act.
Currency Conversion
Devi, HLL, and Nekkanti reported that they purchased forward
exchange contracts which were used to convert certain sales
transactions into home market currency. Under 19 CFR 351.415(b), if a
currency transaction on forward markets is directly linked to an export
sale under consideration, the Department is directed to use the
exchange rate specified with respect to such foreign currency in the
forward sale agreement to convert the foreign currency. In this case,
however, the respondents failed to adequately link the contracts to
specific sales, and they also failed to identify the relevant sales in
the U.S. and third country sales listings. Therefore, we made currency
conversions into U.S. dollars in accordance with section 773A(a) of the
Act based on the exchange rates in effect on the dates of the U.S.
sales as certified by the Federal Reserve Bank. Nonetheless, we have
requested that the respondents remedy the deficiencies in their sales
reporting. We will examine this issue at verification and consider any
additional data submitted by these parties for the final determination.
Critical Circumstances
On May 19, 2004, the petitioners alleged that there is a reasonable
basis to believe or suspect critical circumstances exist with respect
to the antidumping investigation of certain frozen and canned warmwater
shrimp from India. In accordance with 19 CFR 351.206(c)(2)(i), because
the petitioners submitted a critical circumstances allegation more than
20 days before the scheduled date of the preliminary determination, the
Department must issue its preliminary critical circumstances
determination not later than the date of the preliminary determination.
Section 733(e)(1) of the Act provides that the Department will
preliminarily determine that critical circumstances exist if there is a
reasonable basis to believe or suspect that: (A)(i) There is a history
of dumping and material injury by reason of dumped imports in the
United States or elsewhere of the subject merchandise, or (ii) the
person by whom, or for whose account, the merchandise was imported knew
or should have known that the exporter was selling the subject
merchandise at less than its fair value and there was likely to be
material injury by reason of such sales, and (B) there have been
massive imports of the subject merchandise over a relatively short
period.
Section 351.206(h)(1) of the Department's regulations provides
that, in determining whether imports of the subject merchandise have
been ``massive,'' the Department normally will examine: (i) The volume
and value of the imports; (ii) seasonal trends; and (iii) the share of
domestic consumption accounted for by the imports. In addition, section
351.206(h)(2) of the Department's regulations provides that ``unless
the imports during a ``relatively short period'' have increased by at
least 15 percent over the imports during an immediately preceding
period of comparable duration, the Secretary will not consider the
imports massive.'' Section 351.206(i) of the Department's regulations
defines ``relatively short period'' as normally being the period
beginning on the date the proceeding begins (i.e., the date the
petition is filed) and ending at least three months later. The
regulations also provide, however, that if the Department finds that
importers, exporters, or producers had reason to believe, at some time
prior to the beginning of the proceeding, that a proceeding was likely,
the Department may consider a period of not less than three months from
that earlier time.
In determining whether the above statutory criteria have been
satisfied, we examined: (i) Exporter-specific shipment data requested
by the Department; (ii) information presented by the respondents in
their June 28, 2004, submission, and (iii) the ITC preliminary injury
determination.
To determine whether there is a history of injurious dumping of the
merchandise under investigation, in accordance with section
733(e)(1)(A)(i) of the Act, the Department normally considers evidence
of an existing antidumping duty order on the subject merchandise in the
United States or elsewhere to be sufficient. See Preliminary
Determination of Critical Circumstances: Steel Concrete Reinforcing
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With
regard to imports of certain frozen and canned warmwater shrimp from
India, the petitioners make no statement concerning a history of
dumping. We are not aware of any antidumping order in the United States
or in any country on certain frozen and canned warmwater shrimp from
India. For this reason, the Department does not find a history of
injurious dumping of the subject merchandise from India pursuant to
section 733(e)(1)(A)(i) of the Act.
To determine whether the person by whom, or for whose account, the
merchandise was imported knew or should have known that the exporter
was selling the subject merchandise at less than its fair value and
that there was likely to be material injury by reason of such sales in
accordance with section 733(e)(1)(A)(ii) of the Act, the Department
normally considers margins of 25 percent or more for export price sales
or 15 percent or more for constructed export price transactions
sufficient to impute knowledge of dumping. See Preliminary
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate from the People's Republic of China, 62 FR 31972,
31978 (October 19, 2001). Each respondent reported only EP sales. The
preliminary dumping margin calculated for HLL is greater than 25
percent and less than 25 percent for the remaining respondents. Based
on the ITC's preliminary determination of injury, and the preliminary
dumping margin for HLL, we find there is a reasonable basis to impute
to importers knowledge of dumping and likely injury only for HLL. See
Critical Circumstances Memo at Attachment II.
In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section
[[Page 47119]]
733(e)(1)(B) of the Act, the Department normally compares the import
volumes of the subject merchandise for at least three months
immediately preceding the filing of the petition (i.e., the ``base
period'') to a comparable period of at least three months following the
filing of the petition (i.e., the ``comparison period''). However, as
stated in section 351.206(i) of the Department's regulations, if the
Secretary finds importers, exporters, or producers had reason to
believe at some time prior to the beginning of the proceeding that a
proceeding was likely, then the Secretary may consider a time period of
not less than three months from that earlier time. Imports normally
will be considered massive when imports during the comparison period
have increased by 15 percent or more compared to imports during the
base period.
For the reasons set forth in the Critical Circumstances Memo, we
find sufficient bases exist for finding importers, or exporters, or
producers knew or should have known an antidumping case was pending on
certain frozen and canned shrimp imports from India by August 2003, at
the latest. In addition, in accordance with section 341.206(i) of the
Department's regulations, we determined December 2002 through August
2003 should serve as the ``base period,'' while September 2003 through
May 2004 should serve as the ``comparison period'' in determining
whether or not imports have been massive in the comparison period, as
these periods represent the most recently available data for analysis.
For HLL, we preliminarily determine, as noted above, that importers
knew or should have known that this respondent was selling the subject
merchandise at less than its fair value and that there was likely to be
material injury by reason of such sales in accordance with section
733(e)(1)(A)(ii) of the Act. For HLL, we also found massive imports
over a relatively short period. See Critical Circumstances Memo at
Attachment I.
In examining seasonal trends, under 19 CFR 351.206(h)(1)(ii), we
compared the time series data for the two years prior to August 2003
(i.e., 2001 and 2002) and found that there have not been significant
surges in imports from India between comparable base and comparison
periods in prior years. Therefore, based on the time series data, we
conclude that imports of certain frozen and canned warmwater shrimp
from India are not subject to seasonal trends. Consequently, we find
imports of certain frozen and canned warmwater shrimp from India for
HLL were massive pursuant to section 733(e)(1)(B) of the Act. Because
HLL satisfies the imputed knowledge of injurious dumping criterion
under section 733(e)(1)(A)(ii) of the Act and the massive imports in
accordance with section 733(e)(1)(B) of the Act, we preliminarily find
that critical circumstances exist for HLL. Because Devi and Nekkanti do
not satisfy the imputed knowledge of injurious dumping criterion under
section 733(e)(1)(A)(ii) of the Act, we preliminarily find that
critical circumstances do not exist for Devi and Nekkanti.
Regarding the companies subject to the ``all others'' rate, it is
the Department's normal practice to conduct its critical circumstances
analysis for these companies based on the experience of investigated
companies. See Notice of Final Determination of Sales at Less Than Fair
Value: Certain Steel Concrete Reinforcing Bars From Turkey, 62 FR 9737,
9741 (March 4, 1997). However, the Department does not automatically
extend an affirmative critical circumstances determination to companies
covered by the ``all others'' rate. See Notice of Final Determination
of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in
Coils from Japan, 64 FR 30574 (June 8, 1999) (Stainless Steel from
Japan). Instead, the Department considers the traditional critical
circumstances criteria with respect to the companies covered by the
``all others'' rate. Consistent with Stainless Steel from Japan, the
Department has, in this case, applied the traditional critical
circumstances criteria to the ``all others'' category for the
antidumping investigation of frozen and canned warmwater shrimp from
India.
The dumping margin for the ``all others'' category in the instant
case, 14.20 percent, does not exceed the 25 percent threshold necessary
to impute knowledge of dumping. Therefore we do not find that importers
knew or should have known that there would be material injury from the
dumped merchandise.
In summary, we find that there is a reasonable basis to believe or
suspect importers had knowledge of dumping and the likelihood of
material injury with respect to certain frozen and canned warmwater
shrimp from India for HLL. We also find that there have been massive
imports of certain frozen and canned warmwater shrimp over a relatively
short period from respondent HLL. However, for Devi, Nekkanti, and the
companies subject to the ``all others'' rate, we find that there is no
reasonable basis to believe or suspect importers had knowledge of
dumping and the likelihood of material injury with respect to certain
frozen and canned warmwater shrimp from India. Given the analysis
summarized above, and described in more detail in the Critical
Circumstances Memo, we preliminarily determine that critical
circumstances exist with regard to imports of certain frozen and canned
warmwater shrimp from India only for respondent HLL.
We will make a final determination concerning critical
circumstances for all producers/exporters of subject merchandise from
India when we make our final dumping determinations in this
investigation, which will be 135 days after publication of the
preliminary dumping determination.
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
U.S. Customs and Border Protection (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, except for imports by HLL. For HLL, in
accordance with section 733(e)(2) of the Act, we are directing CBP to
suspend liquidation of imports of subject merchandise that are entered,
or withdrawn from warehouse, for consumption on or after 90 days prior
to 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 Critical
Exporter/Manufacturer Margin percentage circumstances
------------------------------------------------------------------------
Devi Sea Foods Ltd................ 3.56 No
[[Page 47120]]
Hindustan Lever Limited........... 27.49 Yes
Nekkanti Seafoods Limited......... 9.16 No
All others........................ 14.20 No
------------------------------------------------------------------------
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 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. 04-17817 Filed 8-3-04; 8:45 am]
BILLING CODE 3510-DS-P