[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] ----------------------------------------------------------------------- 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. ----------------------------------------------------------------------- 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