[Federal Register Volume 61, Number 171 (Tuesday, September 3, 1996)]
[Notices]
[Pages 46438-46440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22412]


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DEPARTMENT OF COMMERCE
[A-614-801]


Fresh Kiwifruit From New Zealand; Final Results of Antidumping 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative 
Review.

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SUMMARY: On April 10, 1996, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on fresh kiwifruit from New Zealand. The review 
cover one exporter, the New Zealand Kiwifruit Marketing Board (NZKMB), 
and the period from June 1, 1994, through May 31, 1995. Based on our 
analysis of the comments received, we have revised the dumping margin 
for NZKMB.

EFFECTIVE DATES: September 3, 1996.

FOR FURTHER INFORMATION CONTACT: Paul M. Stolz or Thomas F. Futtner, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone (202) 482-4474 or 482-3814, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On April 10, 1996, the Department published the preliminary results 
(61 FR 15924) of its administrative review of the antidumping duty 
order on fresh kiwifruit from New Zealand (57 FR 23203 (June 2, 1992)). 
The Department has now completed this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended (the 
Act). Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act), by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Departments regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Scope of the Review

    The product covered by the order under 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 the order. 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 review is dispositive.

Analysis of Comments Received

    We invited interested parties to comment on the preliminary 
results. We received timely comments from respondent, the New Zealand 
Kiwifruit Marketing Board (NZKMB), and petitioner, the California 
Kiwifruit Commission.

Comment 1

    The petitioner alleged a number of specific ministerial errors 
pertaining to the application of the computer program used by the 
Department and submitted specific suggested program edits.
    Respondents also alleged ministerial errors pertaining to the 
computer program. In one instance, respondent alleged a ministerial 
error with regard to transportation insurance, and petitioner argued 
that this was not an error. This issue is considered in comment 2. In 
all other instances there was no disagreement between the petitioner 
and respondent concerning the alleged

[[Page 46439]]

ministerial errors made by the Department.
    The errors alleged by the petitioner and respondent related to the 
following: 1) exchange rates were incorrectly applied; 2) certain 
indirect selling expenses were erroneously labeled as direct expenses 
while certain direct expenses were labeled as indirect; 3) delivery 
premiums were not added to the starting price for both U.S. and New 
Zealand sales; 4) inventory carrying costs were not included in home 
market indirect selling expenses; 5) imputed credit expenses were 
deducted from the price in performing the cost test; 6) General and 
Administrative (G&A) expenses were double counted.

DOC Position

    With respect to the ministerial error allegations other than that 
which is considered in comment 2, the Department has incorporated the 
suggested edits into the computer program. (See memorandum to the file 
dated July 22, 1996, for a detailed description of all adjustments 
made.)

Comment 2

    Respondent claims that transportation insurance expenses to U.S. 
sales should not be deducted from the constructed export price (CEP) 
starting price as this is an indirect selling expense. Respondent 
states that these expenses are incurred in New Zealand and are 
therefore not direct U.S. expenses. Furthermore, respondent states that 
in the Department's analysis memorandum for the preliminary 
determination in this proceeding, the Department stated that it 
intended to treat transportation insurance as an indirect selling 
expense.
    Petitioner states that transportation insurance should be deducted 
from the CEP starting price because it is an expense identifiable with 
U.S. sales regardless of whether respondent considers it to be a direct 
or indirect selling expense.

DOC Position

    Although the Department did indicate in its analysis memorandum for 
the preliminary results that it was treating transportation insurance 
as an indirect selling expense, upon reassessment of this point, we 
agree with petitioner that transportation insurance should be deducted 
from CEP as it should similarly be deducted from New Zealand normal 
value (NV). Transportation insurance is a movement expense and can be 
linked to specific shipments to different markets. We have made the 
appropriate adjustments to the computer program to deduct the amount of 
transportation insurance allocated to U.S. sales for the CEP starting 
price and New Zealand NV.

Comment 3

    Petitioner argues that although New Zealand home market sales 
exceeded five percent of U.S. sales during the period of review (POR), 
particular market conditions in New Zealand during the POR were such 
that the Department should not consider that market to be viable. 
Petitioner claims that particular market conditions in New Zealand did 
not permit proper comparisons between New Zealand sales and U.S. sales. 
Petitioner relies on an exception outlined in the URAA Statement of 
Administrative Action (SAA) at 151-152: ``The Administration intends 
that Commerce will normally use the five percent threshold except where 
some unusual situation renders its application inappropriate. * * * In 
unusual situations * * * home market sales constituting more than five 
percent of sales to the United States could be considered not viable.'' 
Petitioner states that the New Zealand market was distorted because New 
Zealand law and respondent's own regulations establish respondent as 
the exclusive exporter of export quality kiwifruit from New Zealand. 
Petitioner claims that New Zealand has been a ``dumping ground'' for 
production that cannot be sold in export markets, thus driving down 
domestic prices. Finally, petitioner claims that all home market sales 
are below cost, and that this should be a factor in evaluating the 
viability of the market. Petitioner requested that the Department 
require respondent to submit Japanese sales and that the Department use 
this information to establish NV.
    The respondent asserts that the URAA explicitly and clearly 
establishes that a home market is considered viable if home market 
sales equal or exceed five percent of U.S. sales. Respondent notes that 
the SAA at 151, establishes an exception to this rule for ``particular 
market situations.'' Respondent notes that such circumstances only 
exist where ``* * * a single sale in the home market constitutes five 
percent of sales to the United States or there is government control 
over pricing to such an extent that home market prices cannot be 
considered to be competitively set. It may also be the case that a 
particular market situation could arise from differing patterns of 
demand in the United States and in the foreign market. For example, if 
significant price changes are closely correlated with holidays which 
occur at different times of the year in the two markets, the prices in 
the foreign market may not be suitable for comparison to prices in the 
United States.'' Respondent asserts that none of these situations 
prevailed in the New Zealand home market during the POR.

DOC Position

    We disagree with petitioner. The home market clearly meets the 
quantitative standard set forth in 19 U.S.C. 1677b(a)(1)(C). We note 
that, in past reviews of kiwifruit from New Zealand, where the 
quantitative test was based on third country markets rather than the 
U.S. market, the New Zealand home market was not viable. Under the new 
law, viability is determined on the basis of the relationship between 
home market sales and U.S. sales. Since sales of subject merchandise in 
New Zealand substantially exceeded five percent of those in the U.S. 
market, the quantitative test of the home market under current law is 
satisfied.
    Petitioner alleges that the New Zealand market is an inappropriate 
basis for normal value because the ``particular market situation in the 
exporting country does not permit a proper comparison with the export 
price or constructed export price,'' as these terms are used in 19 
U.S.C. 1677b(a)(1)(C)(iii). The SAA that accompanied the URAA, at 822, 
establishes that a ``particular market situation'' might exist where a 
single sale in the home market exceeds the quantitative viability 
threshold or where there is government control over pricing to such an 
extent that home market prices cannot be considered to be competitively 
set. The SAA also mentions situations in which demand patterns are 
different in the foreign market and the United States.
    As the language of the SAA makes clear, we are not limited by the 
examples of ``particular market situations'' described in that 
document. However, based on the evidence on the record, we find that 
there is no ``particular market situation,'' within the meaning of 19 
U.S.C. 1677b(a)(1)(c)(iii) which warrants a departure from the normal 
five percent test. We are not persuaded by petitioner's assertion that, 
during the POR, New Zealand was used as a ``dumping ground'' for 
production that could not be sold in export markets. The record does 
not demonstrate that kiwifruit sold in export markets by the NZKMB is 
of higher quality than kiwifruit sold in the home market by the NZKMB. 
Nor does NZKMB's dominance in the exportation of kiwifruit from New 
Zealand establish that there were price controls in the New Zealand 
kiwifruit market. Indeed, evidence on the record

[[Page 46440]]

demonstrates that the NZKMB is not strictly the exclusive exporter of 
kiwifruit from New Zealand. Sales of kiwifruit by any grower, reseller 
or other party, to the Australian market is permissible under New 
Zealand law. Also, New Zealand resellers of kiwifruit are permitted to 
export to other markets if they are licensed by the NZKMB. Thus export 
markets and export pricing are not subject to absolute control and 
manipulation by the NZKMB. Even if the NZKMB were in a position to 
manipulate export prices, there is no evidence on the record that the 
NZKMB acts on behalf of the New Zealand government to control prices in 
the home market. As a result, we find that petitioners have not 
presented evidence of ``price control'' sufficient to satisfy the 
``particular market situation'' standard under the new law.
    A finding of sales below cost of production does not, in and of 
itself, establish that a ``particular market situation'' exists. It is 
the Department's longstanding practice to first determine whether the 
home market is viable and then to determine whether sales are made 
below cost of production. In this review, we applied the below-cost 
test, as described in the preliminary results of review, and found that 
within an extended period of time, substantially more than 80 percent 
of the home market sales were sold at prices below the COP, which would 
not permit the recovery of all costs within a reasonable period of 
time. Since a substantial number of sales were made below cost we 
relied on constructed value (CV). Since the remaining above-cost 
sale(s) in this review segment had no corresponding model matches, we 
also relied on CV where sale(s) were above-cost.
    For these reasons, based on the evidence on the record, we find 
that the New Zealand market does not represent a ``particular market 
situation'' within the meaning of 19 U.S.C. 1677b(a)(1)(C)(iii). As a 
result, we reaffirm our preliminary determination on this issue.

Final Results of Review

    As a result of comments received and programming errors corrected, 
we have revised our preliminary results.

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (Percent) 
------------------------------------------------------------------------
New Zealand Kiwifruit Marketing Board......................         2.81
------------------------------------------------------------------------

    The Customs Service shall assess antidumping duties on all 
appropriate entries. Individual differences between U.S. price and NV 
may vary from the percentage stated above. 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 
these final results of administrative review, as provided for by 
section 751(a)(1) of the Act: (1) the cash deposit rate for the review 
firm will be 2.81 percent; and (2) the cash deposit rate for 
merchandise exported by all other manufacturers and exporters will be 
the ``all others'' rate of 98.60 percent established in the less-than-
fair-value investigation; in accordance with the Department practice. 
See Floral Trade Council v. United States, 822 F. Supp. 766 (1993), and 
Federal Mogul Corporation, 822 F. Supp. 782 (1993).
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review. This notice 
serves as the final 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 notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d). Timely written notification or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of the APO is a sanctionable 
violation.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

    Dated: August 22, 1996.
Robert S. La Russa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 96-22412 Filed 8-30-96; 8:45 am]
BILLING CODE 3510-DS-M