[Federal Register Volume 60, Number 204 (Monday, October 23, 1995)]
[Notices]
[Pages 54333-54335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-26209]



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DEPARTMENT OF COMMERCE

International Trade Administration
[A-614-801]


Fresh Kiwifruit From New Zealand; Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: In response to a request by the New Zealand Kiwifruit 
Marketing Board (NZKMB), the respondent in this case, the Department of 
Commerce (the Department) is conducting an administrative review of the 
antidumping duty order on fresh kiwifruit from New Zealand. The review 
covers one exporter of the subject merchandise to the United States for 
the period June 1, 1993, through May 31, 1994.
    We preliminarily determine that sales have been made below the 
foreign market value (FMV). If these preliminary results are adopted in 
our final results of administrative review, we will instruct the U.S. 
Customs Service to assess antidumping duties equal to the difference 
between the United States price (USP) and the FMV. Interested parties 
are invited to comment on these preliminary results. Parties who submit 
argument in this proceeding are requested to submit with the argument 
(1) a statement of the issue, and (2) a brief summary of the argument.

EFFECTIVE DATE: October 23, 1995.

FOR FURTHER INFORMATION CONTACT: Paul Stolz or Thomas F. Futtner, 
Office of Antidumping Compliance, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, D.C. 20230; telephone (202) 482-
4195 or 482-3814, respectively.

Applicable Statute

    The Department is conducting this review in accordance with section 
751(a) of the Tariff Act of 1930, as amended (Act). Unless otherwise 
indicated, all citations to the statute and to the Department's 
regulations are in reference to the provisions as they existed on 
December 31, 1994.

SUPPLEMENTARY INFORMATION:

Background

    On June 2, 1992, the Department published the antidumping duty 
order on fresh kiwifruit from New Zealand (57 FR 23203). On June 7, 
1994, the Department published a notice of ``Opportunity to Request 
Administrative Review'' of this antidumping duty order for the period 
June 1, 1993, through May 31, 1994 (59 FR 29411). We received a timely 
request for review by the respondent, NZKMB. On July 15, 1994, the 
Department initiated a review of NZKMB (59 FR 36160). The period of 
review (POR) is June 1, 1993 through May 31, 1994.

Scope of the Review

    The product covered by this review is fresh kiwifruit. Processed 
kiwifruit, including fruit jams, jellies, pastes, purees, mineral 
waters, or juices made from or containing kiwifruit, are not covered 
under the scope of this review. The subject merchandise is currently 
classifiable under subheading 0810.90.20.60 of the Harmonized Tariff 
Schedule (HTS). Although the HTS number is provided for convenience and 
customs purposes, our written description of the scope of this order is 
dispositive.

Verification

    As provided in section 776(b) of the Tariff Act, we verified 
information provided by the respondent by using standard verification 
procedures, including onsite inspection of the grower's/seller's 
facilities, the examination of relevant sales and financial records, 
and selection of original documentation containing relevant 
information. Our verification results are outlined in the public 
versions of the verification reports.

United States Price

    In calculating USP, the Department treated certain sales by the 
respondent as exporter's sales price (ESP) sales, as provided in 
section 772(c) of the Tariff Act. These sales to the United States by 
NZKMB were made to the first unrelated party in the United States after 
importation, and hence warranted ESP methodology.
    We calculated ESP based on packed F.O.B. (ex-New Zealand 
coolstore), and packed F.O.B., freight-prepaid prices. We made 
deductions, where appropriate, for New Zealand inland freight 
(coolstore to port), loading charges in New Zealand, ocean freight, 
basic marine insurance, charter insurance, U.S. import duties, U.S. 
brokerage and handling, U.S. inland freight (decreased to account for 
prepaid freight where applicable), and price discounts (i.e., 
advertising allowances, special advertising allowances, market 
adjustment discounts, advertising rebates which actually constituted 
discounts, and discounts for quality problems). In accordance with 
sections 772(e)(1) and (2) of the Tariff Act, we made additional 
deductions, where appropriate, for agent commissions, broker 
commissions, credit, direct advertising, and indirect selling expenses. 
Indirect selling expenses included inventory carrying costs, repacking, 
U.S. primary and U.S. satellite coolstore charges, New Zealand and U.S. 
instore insurance, fire insurance, product liability and tamper 
insurance, earthquake insurance, indirect advertising, quality control 
expenses, miscellaneous selling-agent-related charges, other U.S.-
incurred indirect expenses, and other New Zealand-incurred indirect 
selling expenses associated with selling in the United States. We 
increased the U.S. price to account for post sale price adjustments not 
reflected in the gross price.
    As provided in section 772(b) of the Tariff Act, we used purchase 
price as the U.S. price for sales made directly by the NZKMB to 
unrelated customers in the United States prior to importation. 
Deductions were made, where appropriate, for ocean freight, foreign 
inland freight, and inland/marine insurance in accordance with section 
772(d)(2) of the Tariff Act.

Foreign Market Value

    In order to determine whether there were sufficient sales of 
kiwifruit in the home market to serve as a viable basis for calculating 
FMV, we compared the volume of home market sales of kiwifruit by NZKMB 
to its volume of 

[[Page 54334]]
kiwifruit sales to third countries, in accordance with section 
773(a)(1)(B) of the Act. We determined that home market sales did not 
constitute a viable basis for calculating FMV. Therefore, in accordance 
with 19 CFR sections 353.48 and 353.49(b), the Department chose sales 
to Japan as the basis of FMV. Japan is the largest third-country market 
based on information submitted by the NZKMB. Neither the petitioner nor 
the respondent in this review raised any other factor relevant to third 
country selection, hence we did not consider any other factor in 
determining the third-country market. The Department relied on monthly 
weighted-average third country prices in the calculation of FMV.
    Because many of the NZKMB's third country sales were found to have 
been made at prices below the cost of production and were therefore 
disregarded in the most recent review, the Department initiated a COP 
investigation for the purposes of this administrative review. Just as 
the Department found in the original investigation and the first 
administrative review, we find that in comparing third-country sales to 
COP, the reseller/exporter's acquisition prices are irrelevant because 
section 773(b) of the Tariff Act requires that the Department look at 
the actual COP of the subject merchandise. Thus, we used the cost 
incurred by kiwifruit farmers, the actual producers of the subject 
merchandise, to calculate the COP benchmark.
    Due to the large number of growers from which the NZKMB purchased 
kiwifruit during the POR, the Department determined that sampling was 
both administratively necessary and methodologically appropriate to 
calculate a representative cost of producing the subject merchandise 
for purposes of this administrative review (see section 777A of the 
Tariff Act). Based on comments submitted by the petitioner and the 
respondent, we decided to select kiwifruit growers as follows: Farms 
were segregated by geographic regions into either the Bay of Plenty 
region or non-Bay of Plenty regions. In selecting our sample of 25 
growers, we determined that we would select 18 growers representing the 
Bay of Plenty region and seven from the non-Bay of Plenty regions, in 
order to reflect the relative proportion of kiwi production from each 
of the two regions. Because the Department's purpose is to estimate the 
average unit cost per tray of exported kiwifruit, as a second step we 
have assigned selection probabilities to the growers on the basis of 
the volume of kiwifruit each grower submitted to the NZKMB for export. 
(See public document Proposed Sampling Methodology, August 26, 1994.)
    We sent COP questionnaires through the NZKMB to 25 kiwifruit 
growers, all but one of which responded to the Department's 
questionnaire. The 24 responses submitted, along with supplemental 
responses and verification results, were analyzed and relied upon, 
where appropriate, in reaching the preliminary results of the review.
    We calculated the cost of cultivation for each grower by summing 
all costs for the 1993-1994 kiwifruit season. These costs included the 
cost of materials, farm labor, farm overhead, and packing. We allocated 
the cost on a per-tray equivalent basis over the total number of tray 
equivalents submitted by each grower to the NZKMB. (A tray equivalent 
is a standard unit of measurement for kiwifruit. It is representative 
of the kiwifruit which can fit into a standard packing tray.) We then 
adjusted those costs to reflect the fruit loss of 8.8 percent, which 
was disclosed by the NZKMB in its financial statement. We added the 
NZKMB's general and administrative expenses to the farm's average cost 
per tray.
    The orchard set-up costs for all growers were amortized over 20 
years. Where growers purchased an established orchard, the acquisition 
price of the farm was treated as the start up cost.
    For growers that allocated costs over the productive area, that is, 
canopy area, we made adjustments to include the headlands and sidelands 
in the productive area of the kiwifruit orchard for the purpose of 
allocating costs.
    We made adjustments to growers' cost for depreciation, interest, 
labor, repairs, management, vehicles, fertilizer, spraying, rates 
(property tax), electricity, shelter, water, general and 
administrative, pruning, and mowing on a farm-specific basis where 
appropriate.
    For the grower that did not submit a response, we used best 
information available (BIA) to determine its COP, pursuant to 19 CFR 
353.37(a). This BIA was based on the highest COP we calculated for all 
responding growers.
    We calculated a simple average COP from the sampled growers' 
individual COPs. The total COP was calculated on a New Zealand dollar 
per single-layer tray equivalent basis (NZ$/SLT). In accordance with 
section 773(b) of the Tariff Act, in determining whether to disregard 
home market sales made at prices below COP, we examined whether such 
sales were made in substantial quantities over an extended period of 
time, and whether such sales were made at prices which would permit 
recovery of all costs within a reasonable period of time in the normal 
course of trade.
    When less than 10 percent of the third-country market sales of a 
model in a POR were at prices below COP, we did not disregard any sales 
of that model for that POR. When 10 percent or more, but not more than 
90 percent, of the third-country market sales of a particular model in 
a POR were determined to be below cost, we excluded the below-cost 
third country market sales from our calculation of FMV for that POR, 
provided that these below-cost market sales were made over an extended 
period of time. When more than 90 percent of the third-country market 
sales of a particular model were made below cost over an extended 
period of time during a POR, we disregarded all third-country market 
sales of that model in our calculation of FMV for that POR, in 
accordance with section 773(a)(2) of the Tariff Act.
    To determine whether sales below cost had been made over an 
extended period of time, we compared the number of months in which 
below-cost sales occurred for a particular model to the number of 
months during a POR in which that model was sold. If the model was sold 
in fewer than three months during a POR, we did not disregard below-
cost sales unless there were below-cost sales of that model in each 
month sold. If a model was sold in three or more months in a POR, we 
did not disregard below-cost sales unless there were sales below cost 
in at least three of the months in which the model was sold during each 
POR. We used CV as the basis for FMV when an insufficient number of 
third-country market sales were made at prices above COP (see 
Preliminary Results and Partial Termination of Antidumping Duty 
Administrative Review: Tapered Roller Bearings, Four Inches or Less in 
Outside Diameter, and Components Thereof, From Japan (58 FR 69336, 
69338, December 10, 1993)).
    There is no information on the record demonstrating that prices of 
below cost sales would recover all costs within a reasonable period of 
time.
    To calculate CV, the statutory minimum profit of eight percent was 
added because the NZKMB's actual profit was less than the statutory 
minimum (see section 773(e) of the Act). We added actual selling, 
general and administrative expenses for the NZKMB to the farm's average 
cost per tray because the actual expenses were higher than the 
statutory minimum of 10 percent. 

[[Page 54335]]

    We adjusted third-country prices, where appropriate, to reflect 
deductions for rebates, New Zealand inland freight, New Zealand inland 
freight insurance, New Zealand port loading expenses, ocean freight and 
charter insurance. Direct advertising, imputed credit, and letter of 
credit charges were also deducted. We also deducted indirect selling 
expenses including inventory carrying costs, New Zealand instore and 
fire insurance, product liability and tamper insurance, indirect 
advertising, and other indirect selling expenses when calculating FMV 
for comparison to ESP transactions. This deduction for third country 
indirect selling expenses was capped by the amount of U.S. indirect 
selling expenses plus U.S. commissions, in accordance with 19 CFR 
353.56(b).

Preliminary Results of Review

    We preliminarily determine that the following margin exists for the 
period June 1, 1993, through May 31, 1994:

------------------------------------------------------------------------
                                                                 Percent
                     Manufacturer/exporter                       margin 
------------------------------------------------------------------------
New Zealand Kiwifruit Marketing Board.........................     10.97
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between U.S. price and FMV may vary from the percentage 
stated above. Upon completion of this review, the Department will issue 
appraisement instructions concerning the respondent directly to the 
U.S. Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise, entered, or withdrawn 
from warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided for by section 
751(a)(1) of the Act: (1) The cash deposit rate for the reviewed firm 
will be that firm's rate established in the final results of this 
administrative review; (2) For previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) If 
the exporter is not a firm covered in this review, a prior review, or 
in the original less-than-fair-value (LTFV) investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; (4) If 
neither the manufacturer nor the exporter is a firm covered in this or 
any previous review conducted by the Department, the cash deposit rate 
will be 98.60 percent, the ``all others'' rate established in the LTFV 
investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    Interested parties may request disclosure within five days of the 
date of publication of this notice, and may request a hearing within 
ten days of the date of publication. Any hearing, if requested, will be 
held as early as convenient for the parties but not later than 44 days 
after the date of publication or the first work day thereafter. Case 
briefs or other written comments from interested parties may be 
submitted not later than 30 days after the date of publication of this 
notice. Rebuttal briefs and rebuttal comments, limited to issues raised 
in the case briefs, may be filed not later than 37 days after the date 
of publication. The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 353.26 to file a certificate regarding the 
reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22.

    Dated: October 5, 1995.
Paul L. Joffe,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 95-26209 Filed 10-20-95; 8:45 am]
BILLING CODE 3510-DS-P