[Federal Register Volume 62, Number 7 (Friday, January 10, 1997)]
[Notices]
[Pages 1430-1433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-634]


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DEPARTMENT OF COMMERCE
[A-403-801]


Fresh and Chilled Atlantic Salmon From Norway; Final Results of 
New Shipper Antidumping Duty Administrative Review

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

ACTION: Notice of final results of new shipper antidumping duty 
administrative review.

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SUMMARY: On October 4, 1996, the Department of Commerce (the 
Department) issued preliminary results in the 1995 new shipper 
administrative review of the antidumping duty order on fresh and 
chilled Atlantic salmon from Norway (61 FR 51910). The review covers 
one manufacturer/exporter Nordic Group A/L (Nordic) of the subject 
merchandise to the United States. The period of review (POR) is May 1, 
1995, through October 31, 1995.
    We gave interested parties an opportunity to comment on our 
preliminary results and received a case brief from petitioner and a 
rebuttal brief from respondent. The final results remain unchanged from 
the preliminary results. The final dumping margin for the reviewed firm 
is listed below in the section entitled ``Final Results of Review''.

EFFECTIVE DATE: January 10, 1997.

FOR FURTHER INFORMATION CONTACT: Todd Peterson or Thomas Futtner, AD/
CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
4195 or (202) 482-3814, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    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 Department's regulations are to the 
current regulations, as amended by the interim regulations published in 
the Federal Register on May 11, 1995 (60 FR 25130).

Background

    On October 4, 1996, the Department issued preliminary results (61 
FR 51910) of its new shipper review of the antidumping duty order on 
fresh and chilled Atlantic salmon from Norway. The preliminary results 
indicated that Nordic sold subject merchandise at not less than normal 
value during the POR. We invited parties to comment on the preliminary 
results.
    The Department has now conducted this review in accordance with 
section 751 of the Act and section 353.22 of its regulations (19 CFR 
353.22).

Scope of the Review

    The merchandise covered by this review is fresh and chilled 
Atlantic salmon (salmon). It encompasses the species of Atlantic salmon 
(Salmo salar) marketed as specified herein; the subject merchandise 
excludes all other species of salmon: Danube salmon; Chinook (also 
called ``king'' or ``quinnat''); Coho (``silver''); Sockeye 
(``redfish'' or ``blueback''); Humpback (``pink''); and Chum (``dog''). 
Atlantic salmon is whole or nearly whole fish, typically (but not 
necessarily) marketed gutted, bled, and cleaned, with the head on. The 
subject merchandise is typically packed in fresh water ice (chilled). 
Excluded from the subject merchandise are fillets, steaks, and other 
cuts of Atlantic salmon. Also excluded are frozen, canned, smoked or 
otherwise processed Atlantic salmon. Fresh and chilled Atlantic salmon 
is currently provided for under Harmonized Tariff Schedule (HTS) 
subheading 0302.12.00.02.09. The HTS item number is provided for 
convenience and Customs purposes. The written description remains 
dispositive.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on our 
preliminary results. We received a case brief from petitioner and a 
rebuttal brief from respondent.

Comment 1:

    Petitioner contends that Nordic's one sale was made prior to the 
POR on April 28, 1995, and not on June 30, 1995, as claimed by 
respondent. Petitioner argues that the essential terms (i.e. price and 
quantity) of Nordic's sale to its U.S. customer were set in a letter 
dated April 28, 1995, and not changed substantially before completion 
of the transaction two months later. Based on this argument, petitioner 
maintains that the respondent entered into a binding agreement on April 
28, 1995, and that this constitutes the correct date of sale.
    Respondent contends that the reported sale date of June 23, 1995, 
(i.e. date of shipment) is correct. Respondent argues that it is the 
Department's established practice to rely on date of shipment as the 
date of sale when the quantity of the sale is not fixed until date of 
shipment. See Cold-Rolled Steel Flat Products from Korea, (60 FR 65284) 
December 19, 1995.
    Respondent points to the Department's termination of the first new-
shipper review of Nordic where the petitioner successfully argued that 
April 28, 1995, was not the date of sale for the same transaction 
reported in this review because the price and quantity differed 
materially between April 28, 1995, and the date of shipment. See Fresh 
and Chilled Atlantic Salmon from Norway: Termination In-Part of New 
Shipper Antidumping Duty Review, 60 FR 53162, (October 12, 1995).

Department's Position

    We agree with respondent. The Department terminated Nordic's first 
new shipper review, at the request of the petitioner, because the 
Department determined that Nordic made the U.S. sale to the first 
unrelated customer based on the invoice date of June 30, 1995, which 
was outside the POR of November 1, 1994, through April 30,

[[Page 1431]]

1995. In making this determination, we concluded that April 28, 1995, 
was not the correct date of sale because Nordic's April 28, 1995, 
letter did not identify the unrelated customer in the U.S. We also 
concluded that there were differences in the price and quantity 
specified in Nordic's April 28, 1995, letter and the June 30, 1995, 
invoice date. Accordingly, the Department determined the June 30, 1995, 
date of invoice to be the correct date of sale. See Memorandum from 
Joseph Spetrini to Susan Esserman, September 20, 1995.

Comment 2

    Petitioner argues that Nordic's sole U.S. sale cannot be the basis 
for Nordic's dumping margin because it is not a bona fide sale. 
Petitioner states that in such situations, the U.S. Court of 
International Trade (CIT) has recognized that the Department has the 
authority to disregard U.S. sales that are not the result of a bona 
fide transaction to ``prevent fraud upon its proceedings.'' See Chang 
Tieh Industry Company, Ltd. v. United States, 840 F. Supp. 141-46 (CIT 
1993). In addition, petitioner points to Sulfanilic Acid from Hungary, 
(58 FR 8257) to demonstrate that the Department has a history of 
disregarding U.S. sales where it is established that such sales are not 
bona fide transactions.
    Petitioner argues that there is abundant evidence to demonstrate 
that Nordic's single sale under review is not a bona fide transaction 
but rather is a transaction that was contrived for the purpose of 
escaping dumping liability. As support for this allegation, petitioner 
offers several arguments. Petitioner asserts that Nordic did not follow 
its own sales procedure in making this sale. According to petitioner, 
it is highly unusual for the U.S. customer to have traveled to Norway 
to arrange this transaction. In addition, there is no evidence of a 
written order confirmation produced by the U.S. customer that is 
typically the first document produced in the sales process.
    Petitioner contends that Nordic should not qualify as a new entrant 
into the fresh Atlantic salmon market based on making only one U.S. 
sale of the subject merchandise during the period November 1994 through 
October 1995. During this period, petitioner claims that there were no 
other sales of the subject merchandise to other markets. Rather, 
petitioner charges that respondent will enter the U.S. market after 
obtaining a zero dumping margin for its contrived sale.
    Petitioner contends that Nordic's U.S. customer, a smoker, paid an 
above market price for the sale under review. In support of this 
allegation, petitioner submitted an affidavit from a large U.S. salmon 
smoker that states that smokers can use frozen salmon at a price far 
less than the price incurred to Nordic for fresh salmon. The U.S. 
smoker also states that his company has not had an order for the 
covered merchandise because it is too expensive as a result of the 
antidumping duties and high movement charges. Petitioner points to U.S. 
import statistics which show that Nordic's U.S. smoker could have 
purchased frozen salmon at a price far below the price commanded by the 
fresh salmon it purchased from Nordic.
    Petitioner insists that the sale in question was not based on 
commercial considerations, but rather, Nordic's illegitimate purpose of 
achieving a zero rate. Petitioner supports this by pointing to the fact 
that less that one-half of one percent of Nordic's total sales to the 
U.S. customer were fresh salmon; the rest were frozen salmon. 
Petitioner further points out that Nordic has never sold fresh salmon 
to any another U.S. smoker. Petitioner argues that there is nothing on 
record to support why the U.S. customer would purchase such a small 
amount of fresh salmon.
    Petitioner provides documentation to demonstrate that Nordic's U.S. 
customer could have purchased fresh salmon from alternative sources 
such as Canada, Maine and Chile at significantly lower prices. 
Petitioner insists that not only was the sale in question priced higher 
than other comparable U.S. sales, but it was also priced higher than 
other world sales of fresh Norwegian salmon. Petitioner provides 
documentation to support his assertion that the European price is 
higher than the price paid in the sale under review.
    Petitioner insists that in order for the Department to accept the 
bona fide nature of this sale, the Department must investigate Nordic's 
U.S. customer. Petitioner points to PQ Corporation v. United States, 
652 F. Supp. 724 (CIT 1987) (PQ Corporation), to demonstrate that when 
there is a question pertaining to the bona fide nature of U.S. sales, 
the Department vigorously investigates to determine whether the U.S. 
sales are indeed bona fide sales. Thus, petitioner advocates a thorough 
investigation of the U.S. customer.
    Respondent contends that there is nothing on record to support the 
argument that the sale in question is not a bona fide transaction. The 
respondent points to Chang Tieh Industry Co., Ltd. v. United States, 
840 F. Supp. 141, 145 (CIT 1993) to show that the CIT has noted that 
antidumping laws do not contain provisions to disregard U.S. sales in 
the same manner that the statute directs the Department to disregard 
home market sales intended to establish a fictitious market. Therefore, 
respondent states arguendo, even had this one U.S. sale been considered 
outside the ordinary course of trade, the Department is not required by 
statute to disregard that sale. However, respondent concedes that the 
Department has the discretion, citing to Ipsco, Inc. v. United States, 
714 F. Supp. 1211 (CIT 1989), to disregard U.S. sales that are 
considered to be atypical and not representative of a respondent's U.S. 
sales. Because there was only one sale, this standard cannot be relied 
on as the one sale is entirely representative of all U.S. sales. 
Respondent refutes the applicability of Sulfanilic Acid from Hungary, 
58 FR 8256 February 12, 1993, where U.S. sales were disregarded because 
of fabricated verification documents. Similarly, respondent refutes the 
applicability of Manganese Metal From the People's Republic of China, 
60 FR 56045 November 6, 1995 (Manganese). Unlike this review, in the 
Manganese investigation, the Department disregarded sales based on the 
suspicious timing of the petition filing relative to the sales being 
made and the ``significantly higher prices reported for this fungible 
commodity.''
    Respondent argues the fact that there was one sale cannot form the 
basis for a determination that the sale is not a bona fide transaction. 
In PQ Corporation, the CIT found it proper for the Department to review 
the respondent's one sale to the United States with the intention of 
eliminating a dumping margin. Respondent points to the Memorandum from 
Holly Kuga to the File of July 26, 1995, stating that ``a new shipper 
review for salmon based on one sale would be consistent with prior 
practice.''
    Respondent further substantiates the bona fide nature of the 
transaction under review, contending that the record evidence 
demonstrates that its U.S. sale was made in the ordinary course of 
trade. Respondent argues that it followed customary sales procedures 
for this sale. Part of the customary procedure is for the President of 
Nordic Group, Inc. (the U.S. subsidiary) to travel back to Norway, 
often with U.S. customers as a means to educate the U.S. customer. See 
Sales Verification report.
    Respondent argues that petitioner is wrong in its claim that Nordic 
is not a new entrant to the U.S. fresh Atlantic salmon market because 
Nordic has made only one sale during the POR. Respondent states that by 
definition, to qualify for a new shipper review, Nordic did not sell 
any salmon prior to the

[[Page 1432]]

POR. Since Nordic is currently assessed an ``all-others'' rate of 23.80 
percent, U.S. customers are difficult to attract. Thus Nordic's one 
sale is justifiable and does not disqualify Nordic as a new shipper in 
the U.S. market.
    Respondent argues that Nordic's price for fresh Norwegian salmon is 
within the price range charged by others for fresh Norwegian salmon 
sold to the United States. Nordic claims that it was aware of the 
antidumping duty order and did its best to negotiate a price that would 
not violate U.S. antidumping laws. Respondent argues that in alleging 
Nordic's U.S. customer paid an above market price for the sale under 
review, the petitioner incorrectly compared the price of frozen salmon 
from other countries to that of fresh salmon from Norway. Frozen salmon 
is outside the scope of the order. The International Trade Commission 
found that fresh salmon is more expensive than frozen and that 
Norwegian Atlantic salmon is also considered by purchasers to be a 
higher priced product and is typically more expensive than U.S. 
produced salmon. Thus, the price of Norwegian Atlantic salmon cannot be 
compared to world market prices. Respondent dismisses the U.S. smoker's 
claim that the U.S. smoker cannot profitably purchase premium Norwegian 
Atlantic salmon because he either sells ``low end'' salmon or he runs 
an inefficient, high cost operation.
    Respondent states that to the extent price is relevant to determine 
the bona fide nature of the U.S. transaction, the comparison should be 
limited to the prices of subject merchandise sold in the United States 
in June 1995. According to the June 1995 Report IM 145, Department of 
Commerce, Bureau of the Census, Foreign Trade Division, Trade Data 
Services, Washington, D.C. (IM 145 Report), the price of Nordic's sale 
is consistent with other contemporaneous sales of fresh Norwegian 
salmon sold in the United States.
    Respondent argues that PQ Corporation does not compel the 
Department to investigate the U.S. customer to verify the bona fide 
nature of a transaction simply because a petitioner thinks the U.S. 
price is too high. Rather the result of PQ Corporation is that an 
administrative review could be based on one sale even though the 
importation was made for the purpose of adjusting the antidumping cash 
deposit rate.

Department's Position

    We disagree with petitioner. While there is no specific statutory 
or regulatory provision for the exclusion of U.S. sales as ``outside 
the ordinary course of trade,'' the Department's authority to prevent 
fraud upon its proceedings has been recognized. See Chang Tieh, 840 F. 
Supp. at 146. The Department may disregard a U.S. sale if it is 
determined that the sale is not the result of a bona fide arm's length 
transaction. PQ Corp., 652 F. Supp. at 729. We are very mindful of this 
issue, especially in the context of new shipper reviews, and take 
appropriate steps to investigate credible allegations. Based on our 
review of this here, we conclude that there is no evidence on the 
record to indicate that the single U.S. sale under review was not a 
bona fide transaction or that the transaction was in any way 
fraudulent. Further, insofar as there was no written order confirmation 
for the transaction under review, we relied on Nordic's June 30, 1995, 
invoice to determine the date of sale. See Department's position on 
Comment 1.
    At the outset, we note that the fact that there is only one U.S. 
sales transaction does not suggest that the transaction is not bona 
fide. As reflected in the Department's practice, the dumping analysis 
may be based upon a single sale even where the sale is designed for the 
express purpose of reducing the cash deposit rate. See P.Q. Corp., 652 
F. Supp. at 729. This may be even more true in the context of a new 
shipper review, where new entrants into the market are likely to assess 
(based on the Department's antidumping analysis) whether they can sell 
on a sustained basis. In this case, the Department advised that such a 
review could be based on one sale provided that the transaction be 
completed and all relevant data available prior to verification. See 
July 26, 1995 Memorandum from Holly Kuga to File. Moreover, the fact 
that the quantity involved in this transaction represents a small 
fraction of Nordic's total sales is not a determining factor in our 
analysis of the bona fide nature of the sale of subject merchandise. 
Thus, the fact that Nordic engaged in only one transaction cannot 
detract from the bona fide nature of the transaction.
    We also disagree with petitioner's assertion that Nordic employed 
an unusual sales procedure with respect to this transaction. At 
verification, we confirmed that the President of Nordic Inc. (the U.S. 
subsidiary) often traveled to Norway with U.S. customers. See Nordic 
Sales Verification Report at 3. Nordic officials indicated that they 
were expanding their relationship with the U.S. customer which had 
previously focused on frozen salmon. Id. There is no evidence on the 
record to contradict this statement. Moreover, we are not persuaded by 
the statement submitted by a U.S. salmon smoking operation that it 
would not use fresh salmon as an input. As Nordic explained in its 
October 7, 1996, supplemental questionnaire response, the U.S. customer 
could be expected to keep both fresh and frozen salmon on hand in order 
to serve a range of customers.
    With regard to petitioner's comments on the price of the sale, 
according to the IM 145 Report, the price Nordic charged was within the 
range of prices of other sales of the subject merchandise from Norway 
during the relevant June 1995 time period. Petitioner incorrectly 
compared prices of the subject merchandise to that of non-subject 
merchandise (frozen salmon) or salmon from other countries. Given 
evidence that Norwegian salmon is typically a higher priced product due 
to it being considered a premium product, we determine that the use of 
fresh salmon prices from other producing countries is an inaccurate 
basis for comparison.
    Finally, we disagree with petitioner's suggestion that the 
Department has not sufficiently investigated this transaction. Based on 
the Department's review of Nordic's initial and supplemental 
questionnaire responses, its on-site verification of Nordic's records, 
and other information of record, we conclude that there is no evidence 
on record to indicate that the single U.S. sale under review was not a 
bona fide transaction or that the transaction was in anyway fraudulent.

Comment 3

    Petitioner contends that the Department's constructed value 
methodology is improper given the facts of this review. In past reviews 
of this proceeding, petitioner contended that the third-country export 
prices used as foreign market value were made at prices below the cost 
of production. Thus, petitioner argued for use of the salmon farmers' 
actual cost of production as opposed to the acquisition prices paid by 
the exporters to the farmers. In this review, however, there are no 
home market or third country sales. Therefore, the petitioner argues 
that these different circumstances require foreign market value to be 
based on constructed value using the price Nordic actually paid for the 
merchandise. Petitioner argues that by using the actual price paid, the 
Department would fulfill the original concern of petitioner.
    Respondent contends that the Department correctly determined 
constructed value on the basis of cost of cultivation. Respondent 
argues that

[[Page 1433]]

petitioner's argument is essentially a middleman dumping argument and 
should be rejected. The Department is not free to choose the higher of 
fish farmer cost or exporter acquisition price. The Department's policy 
for using the fish farmers' cost of production rather than the 
exporter's acquisition price was established in the Memorandum from 
David Mueller, dated December 18, 1990, and has been used as the basis 
for determining cost of production in all salmon reviews.

Department's Position

    We agree with respondent. We consider the live salmon produced by 
the fish farmers and sold to the exporters to be the same merchandise 
covered by the antidumping duty order, but at an earlier stage of 
production. Accordingly, we consider the live salmon produced by the 
fish farmers to be the identical merchandise and not an input of the 
subject merchandise. As we found in all prior administrative reviews of 
this proceeding, the responding exporter is not transforming the 
merchandise. To determine the cost of producing salmon, the Department 
properly reviewed respondent's costs as well as the fish farm cost of 
cultivation.
    Insofar as the Department used the same methodology described in 
the preliminary results, the final results remain unchanged from the 
preliminary results. As a result of our comparison of constructed 
export price (CEP) and normal value (NV), we determine that the 
following weighted-average dumping margin exists:

------------------------------------------------------------------------
       Manufacturer/exporter                   Period             Margin
------------------------------------------------------------------------
Nordic Group A/L..................  5/1/95-10/31/95............     0.00
------------------------------------------------------------------------

    The results of this review shall be the basis for the assessment of 
antidumping duties on entries of merchandise covered by the 
determination and for future deposits of estimated duties. The posting 
of a bond or security in lieu of a cash deposit, pursuant to section 
751(a)(2)(B)(iii) of the Act and section 353.22(h)(4) of the 
Department's regulations, will no longer be permitted for this firm. 
The Department will issue appraisement instructions directly to the 
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 this administrative review, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for the reviewed 
company will be zero percent; (2) for exporters not covered in this 
review, but covered in previous reviews or the original less-than-fair-
value (LTFV) investigation, 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, previous reviews, or 
the original 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; and (4) the cash deposit rate 
for all other manufacturers or exporters will continue to be 23.80 
percent. This rate is the ``All Others'' rate from the LTFV 
investigation.
    These deposit requirements shall remain in effect until publication 
of the final results of the next administrative review.
    This notice also serves as a 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 orders (APOs) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 353.34(d)(1). Timely written notification 
of the return/destruction of APO materials or conversion to judicial 
protective order is hereby requested. Failure to comply with the 
regulations and the terms of an APO is a sanctionable violation.
    This new shipper administrative review and notice are in accordance 
with section 751(a)(2)(B) of the Act (19 U.S.C. 1675(a)(2)(B)) and 19 
CFR 353.22(h).

    Dated: December 30, 1996.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 97-634 Filed 1-9-97; 8:45 am]
BILLING CODE 3510-DS-P