[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