[Federal Register Volume 63, Number 68 (Thursday, April 9, 1998)]
[Notices]
[Pages 17357-17364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9435]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-489-501]


Notice of Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review: Canned Pineapple Fruit From 
Thailand

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

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SUMMARY: In response to requests by four producers/exporters of subject 
merchandise and by the petitioners,\1\ the Department of Commerce is 
conducting an administrative review of the antidumping duty order on 
canned pineapple fruit from Thailand. This review covers seven 
producers/exporters of the subject merchandise. The period of review is 
July 1, 1996, through June 30, 1997.
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    \1\ Maui Pineapple Co. Ltd. and the International Longshoremen's 
and Warehousemen's Union.
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    We preliminarily determine that sales have been made below normal 
value. If these preliminary results are adopted in our final results, 
we will instruct the U.S. Customs Service to assess antidumping duties 
based on the difference between the export price or constructed export 
price and the normal value.
    Interested parties are invited to comment on the preliminary 
results. Parties who submit arguments are requested to submit with each 
argument: (1) a statement of the issue; and (2) a brief summary of the 
argument.

EFFECTIVE DATE: April 9, 1998.

FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell, AD/
CVD Enforcement Group I, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-0650 or (202) 482-3813, 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 
regulations provided in 19 CFR Part 351, as published in the Federal 
Register on May 19, 1997 (62 FR 27296).

Background

    On July 18, 1995, we published in the Federal Register the 
antidumping duty order on canned pineapple fruit from Thailand (60 FR 
36775). On July 21, 1997, we published in the Federal Register the 
notice of Opportunity to Request an Administrative Review of this 
order, covering the period July 1, 1996, through June 30, 1997 (62 FR 
38973). On July 31, 1997, the petitioners requested a review of 26 
producers/exporters of canned pineapple fruit (CPF), in accordance with 
19 CFR 351.213(b)(1). On August 22, 1997, the petitioners withdrew 
their request for review for all companies except: (1) The Prachuab 
Fruit Canning Co. Ltd. (Prachuab); (2) Vita Food Factory (1989) Co. 
Ltd. (Vita); and (3) Siam Fruit Canning (1988) Co. Ltd. (SIFCO).
    On July 31, 1997, the following producers/exporters of canned 
pineapple fruit requested a review in accordance with 19 CFR 
351.213(b)(2): (1) Siam Food Products Public Co. Ltd. (SFP); (2) Thai 
Pineapple Canning Industry (TPC); (3) The Thai Pineapple Public Co. 
Ltd. (TIPCO); (4) Malee Sampran Factory Public Co. Ltd. (Malee); and 
(5) Dole Food Company Inc., Dole Packaged Foods Company and Dole 
Thailand Ltd. (collectively, Dole).
    On August 28, 1997, we published the notice of initiation of this 
antidumping duty administrative review covering the period July 1, 
1996, through June 30, 1997 (62 FR 45621).

Partial Rescission of Antidumping Duty Administrative Review

    On October 6, 1997, Dole withdrew its request for a review. Because 
there was no other request for a review of Dole, and because Dole's 
letter withdrawing its request for a review was timely filed, we are 
rescinding the review with respect to Dole in accordance with 19 CFR 
351.213(d)(1).

Scope of the Review

    The product covered by this review is canned pineapple fruit. For 
purposes of the review, CPF is defined as pineapple processed and/or 
prepared into various product forms, including rings, pieces, chunks, 
tidbits, and crushed pineapple, that is packed and cooked in metal cans 
with either pineapple juice or sugar syrup added. CPF is currently 
classifiable under subheadings 2008.20.0010 and 2008.20.0090 of the 
Harmonized Tariff Schedule of the United States (HTSUS). HTSUS 
2008.20.0010 covers CPF packed in a sugar-based syrup; HTSUS 
2008.20.0090 covers CPF packed without added sugar (i.e., juice-
packed). Although these

[[Page 17358]]

HTSUS subheadings are provided for convenience and for customs 
purposes, our written description of the scope is dispositive.

Duty Absorption

    On February 12, 1998, the petitioners requested that the Department 
investigate the extent to which duty absorption has occurred in this 
review. Section 351.213(j)(1) of our regulations provides that we will 
determine whether antidumping duties have been absorbed by an exporter 
or producer subject to the review if requested by a domestic interested 
party within 30 days of the date of publication of the notice of 
initiation. Because the petitioners' request was untimely filed, we 
have not investigated the occurrence of duty absorption in this review.

Use of Facts Available

    We have determined Vita's antidumping rate based on the facts 
available because this respondent failed to participate fully in, and 
has significantly impeded, this review. On January 8, 1998, counsel for 
Vita notified us that it had withdrawn its representation of, and entry 
of appearance on behalf of, this company. On January 9, 1998, we 
contacted Vita to determine whether the company planned to continue as 
a respondent in this review. Vita notified the Department on January 
12, 1998, that it planned to continue in this review.
    On January 20, 1998, we notified Vita that we had not received its 
response to our January 2, 1998, supplemental section A questionnaire. 
Vita notified the Department on January 22, 1998, that it had no 
knowledge of the supplemental section A questionnaire. Because we 
initially issued the supplemental section A questionnaire to counsel 
for Vita prior to its withdrawal as Vita's representative, we sent 
another copy of the questionnaire directly to Vita on January 27, 1998, 
and granted Vita additional time, until February 4, 1998, to respond. 
We also provided Vita with instructions on how to file submissions with 
the Department, instructions for serving such submissions to interested 
parties, and an interested parties list for this review. On the same 
date, we also sent a supplemental questionnaire for sections B and C 
directly to Vita by certified mail.
    The record shows that on February 5, 1998, we again informed Vita 
that we had not received its response to the supplemental questionnaire 
for section A. At the same time, we reminded Vita of the February 6, 
1998, deadline for its response to section D of the questionnaire 
(which we issued directly to the company on January 13, 1998), and its 
February 11, 1998, deadline for its response to the supplemental 
questionnaire for sections B and C. We have not received responses to 
any of these information requests.
    Because Vita did not respond to our requests for information, 
without which we are unable to perform an analysis of its pricing 
practices, we preliminarily determine that the use of facts available 
is appropriate, in accordance with section 776(a) of the Act. 
Specifically, by failing to respond to section D of the questionnaire, 
Vita has precluded the Department from conducting an analysis to 
determine whether its comparison-market (Germany) sales prices were 
below the cost of production (COP) in substantial quantities. In 
addition, by not responding to the supplemental questionnaires, Vita 
has failed to provide information regarding its selling practices in 
the United States and Germany. Accordingly, we determine that, pursuant 
to section 776(b) of the Act, it is appropriate to make inferences 
adverse to the interests of Vita because it failed to cooperate to the 
best of its ability.
    Where we must base the entire dumping margin for a respondent in an 
administrative review on facts available because that respondent failed 
to cooperate by not acting to the best of its ability to comply with a 
request for information, section 776(b) of the Act authorizes the use 
of inferences adverse to the interests of that respondent in choosing 
facts available. Section 776(b) of the Act also authorizes the 
Department to use as adverse facts available information derived from 
the petition, the final determination, a previous administrative 
review, or other information placed on the record. Due to Vita's 
failure to cooperate, we have preliminarily assigned to Vita as adverse 
facts available a rate of 55.77 percent, the highest rate calculated 
for any respondent during any segment of this proceeding. This rate was 
calculated for a respondent in the less-than-fair-value (LTFV) 
investigation.
    Because information from prior segments of the proceeding 
constitutes secondary information, section 776(c) of the Act provides 
that the Department shall, to the extent practicable, corroborate that 
secondary information from independent sources reasonably at its 
disposal. The Statement of Administrative Action (SAA) provides that 
corroborate means simply that the Department will satisfy itself that 
the secondary information to be used has probative value. See H.R. Doc. 
316, vol. 1, at 870 (1994).
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike other types of information, 
such as input costs or selling expenses, there are no independent 
sources for calculated dumping margins. Thus, in an administrative 
review, if the Department chooses as total adverse facts available a 
calculated dumping margin from a prior segment of the proceeding, it is 
not necessary to question the reliability of the margin for that time 
period. With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal as 
to whether there are circumstances that would render a margin 
inappropriate. Where circumstances indicate that the selected margin is 
not appropriate as adverse facts available, the Department will 
disregard the margin and determine an appropriate margin. See, e.g., 
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (where the 
Department disregarded the highest margin as adverse facts available 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin). In this 
review, we are not aware of any circumstances that would render the use 
of the margin selected for Vita as inappropriate.

Fair Value Comparisons

    We compared the export price (EP) or constructed export price (CEP) 
to the normal value (NV), as described in the Export Price and 
Constructed Export Price and Normal Value sections of this notice. We 
first attempted to compare contemporaneous sales 2 of 
products sold in the U.S. and comparison markets that were identical 
with respect to the following characteristics: weight, form, variety, 
and grade. Where we were unable to compare sales of identical 
merchandise, we compared U.S. products with the most similar 
merchandise sold in the comparison market based on the characteristics 
listed above, in that order of priority. Where there were no 
appropriate comparison market sales of comparable merchandise, we 
compared the

[[Page 17359]]

merchandise sold in the United States to constructed value (CV).
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    \2\  For all companies except Prachuab and TPC, we matched U.S. 
and comparison market sales using invoice date as the date of sale 
for both markets. Our use of other dates as the date of sale for 
Prachuab and TPC is discussed in the company-specific sections of 
this notice.
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    On January 8, 1998, the Court of Appeals for the Federal Circuit 
issued a decision in CEMEX v. United States, 133 F.3d 897 (Fed. Cir. 
1998) (CEMEX). In that case, based on the pre-URAA version of the Act, 
the Court ruled that the Department may not resort immediately to CV as 
the basis for foreign market value (now normal value) when we find home 
market sales of the identical or most similar merchandise to be outside 
the ordinary course of trade. This issue was not raised by any party in 
this proceeding. However, the URAA amended the definition of sales 
outside the ordinary course of trade to include sales disregarded 
pursuant to the cost test. See Section 771(15) of the Act. 
Consequently, pursuant to this court decision, we have reconsidered our 
practice and have determined that, where we find comparison market 
sales of merchandise identical or most similar to that sold in the 
United States to be outside the ordinary course of trade, it would be 
inappropriate to resort directly to CV as the basis for NV. Instead, we 
will compare other sales of similar merchandise to the U.S. sales, if 
such other sales exist and are otherwise appropriate. The Department 
will use CV as the basis for NV only when there are no above-cost sales 
that are otherwise suitable for comparison.
    Therefore, in this proceeding, when making comparisons in 
accordance with section 771(16) of the Act, we considered all 
comparison market sales of the foreign like product that were in the 
ordinary course of trade for purposes of determining appropriate 
product comparisons to U.S. sales. Where there were no comparison 
market sales of identical merchandise made in the ordinary course of 
trade, we compared U.S. sales to comparison market sales of the most 
similar foreign like product made in the ordinary course of trade, 
based on characteristics listed above. Thus, we have implemented the 
Court's decision in CEMEX.

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP as defined in sections 772(a) and 772(b) of the Act, respectively. 
We determined the EP or CEP for each company as follows.

TPC

    During the POR, TPC made both EP and CEP transactions. We 
calculated an EP for sales where the merchandise was sold directly by 
TPC to the first unaffiliated purchaser in the United States prior to 
importation and CEP was not otherwise warranted based on the facts of 
record. We calculated a CEP for sales made by TPC's affiliated U.S. 
reseller, Mitsubishi International Corporation (MIC), after importation 
of the subject merchandise into the United States. EP and CEP were 
based on the packed FOB, CIF, or delivered price to unaffiliated 
purchasers in, or for exportation to, the United States. We made 
deductions for discounts and rebates, including early payment 
discounts, promotional allowances, freight allowances, and billback 
discounts and rebates. We also made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act. These include inland 
freight from plant to port of exportation, foreign brokerage and 
handling, other miscellaneous foreign port charges, international 
freight, marine insurance, U.S. customs brokerage, U.S. customs duty, 
harbor maintenance fees, merchandise processing fee, and U.S. inland 
freight expenses (freight from port to warehouse and freight from 
warehouse to the customer).
    In accordance with section 772(d)(1) of the Act, for CEP sales we 
deducted from the starting price those selling expenses that were 
incurred in selling the subject merchandise in the United States, 
including commissions, direct selling expenses (credit costs, warranty 
expenses), and indirect selling expenses incurred by MIC in the United 
States. We also deducted from CEP an amount for profit in accordance 
with section 772(d)(3) of the Act.
    Consistent with our findings in the first period of 
review,3 we have based TPC's date of sale on the contract 
date for EP transactions and on the invoice date for CEP transactions. 
Although TPC suggested in its questionnaire response that invoice date 
was the appropriate date of sale for EP as well as CEP transactions, it 
did not provide evidence of any changes in the material terms of sale 
(price and quantity) between the contract date and invoice date for EP 
transactions.
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    \3\ See Notice of Final Results of Antidumping Duty 
Administrative Review: Canned Pineapple fruit From Thailand, 63 FR 
7392, 7394 (February 13, 1998) (Final Results).
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TIPCO

    We calculated an EP for all of TIPCO's sales because the 
merchandise was sold either directly by TIPCO or indirectly through its 
U.S. affiliate, TIPCO Marketing Co. (TMC), to the first unaffiliated 
purchaser in the United States prior to importation, and CEP was not 
otherwise warranted based on the facts of record. Sales through TMC 
involved direct shipment from TIPCO to the unaffiliated customer, 
without any merchandise entering TMC's physical inventory. Further, 
TMC's involvement in the sales process for indirect sales was limited 
to that of a processor of sales documentation. We calculated EP based 
on the packed FOB or CIF price to unaffiliated purchasers for 
exportation to the United States. We made deductions from the starting 
price for movement expenses in accordance with section 772(c)(2)(A) of 
the Act. These include foreign movement expenses (brokerage and 
handling, port charges, stuffing expenses, and inland freight), 
international freight, U.S. customs duties, and U.S. brokerage and 
handling.

SFP

    We calculated an EP for all of SFP's sales because the merchandise 
was sold directly by SFP to the first unaffiliated purchaser in the 
United States prior to importation, and CEP was not otherwise warranted 
based on the facts of record. SFP has one employee located in the 
United States who communicates with U.S. customers regarding SFP's U.S. 
sales. However, the information on record indicates that SFP's Bangkok 
office is responsible for confirming orders, issuing the invoice direct 
to the customer, and for arranging for shipment to the U.S. port. 
Accordingly, we have preliminarily determined that the activity 
performed by SFP's U.S. employee does not rise above the level of a 
processor of paperwork and communications link.
    We calculated EP based on the packed FOB or C&F price to 
unaffiliated purchasers for exportation to the United States. We made 
deductions from the starting price for discounts. We also made 
deductions for foreign inland movement expenses and for international 
freight in accordance with section 772(c)(2)(A) of the Act.

Malee

    We calculated an EP for all of Malee's sales because the 
merchandise was sold either directly by Malee or indirectly through its 
U.S. affiliate, Icon Foods LLC (Icon), to the first unaffiliated 
purchaser in the United States prior to importation, and CEP was not 
otherwise warranted based on the facts of record. Sales through Icon 
involved direct shipment from Malee to the unaffiliated customer, 
without any merchandise entering Icon's physical inventory. Further, 
Icon's involvement in the sales process for indirect sales was limited 
to

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that of a processor of sales documentation. We calculated EP based on 
the packed FOB or CIF price to unaffiliated purchasers for exportation 
to the United States. We made deductions from the starting price for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
These included foreign movement expenses (brokerage and handling and 
inland freight to the port of exportation), international freight, 
marine insurance and U.S. customs duties.

Prachuab

    We calculated an EP for all of Prachuab's sales because the 
merchandise was sold directly by Prachuab to the first unaffiliated 
purchaser in the United States prior to importation, and CEP was not 
otherwise warranted based on the facts of record. We calculated EP 
based on the packed, FOB or C&F price to unaffiliated purchasers for 
exportation to the United States. We made deductions from the starting 
price for foreign movement expenses (including inland freight and 
containerization charges) and international freight in accordance with 
section 772(c)(2)(A) of the Act. We based Prachuab's date of sale on 
shipment date because the information on the record indicates that: (1) 
Prachuab's date of shipment occurs within 3-5 days of its date of 
invoice and (2) Prachuab records its sales based on date of shipment.

SIFCO

    We calculated an EP for all of SIFCO's sales because the 
merchandise was sold directly by SIFCO to the first unaffiliated 
purchaser in the United States prior to importation, and CEP was not 
otherwise warranted based on the facts of record. We calculated EP 
based on the packed, FOB price to unaffiliated purchasers for 
exportation to the United States. We made deductions from the starting 
price for foreign inland movement expenses in accordance with section 
772(c)(2)(A) of the Act.

Normal Value

A. Selection of Comparison Markets

    Based on a comparison of the aggregate quantity of home market 
sales and U.S. sales, we determined that, with the exception of Malee, 
the quantity of foreign like product each respondent sold in the 
exporting country did not permit a proper comparison with the sales of 
the subject merchandise to the United States because the quantity of 
each company's sales in its home market was less than five percent of 
the quantity of its sales to the U.S. market. See section 773(a)(1) of 
the Act. For these respondents, in accordance with section 
773(a)(1)(B)(ii) of the Act, we have based NV on the price at which the 
foreign like product was first sold for consumption in each 
respondent's largest third-country market, i.e., Germany for TPC and 
SFP, Finland for TIPCO, and Japan for Prachuab and SIFCO.
    For Malee, the quantity of foreign like product sold in Thailand 
did permit a proper comparison with the sales of the subject 
merchandise to the United States pursuant to section 773(a)(1)(B) of 
the Act, because the quantity of Malee's sales in its home market was 
more than five percent of the quantity of its sales to the U.S. market. 
Accordingly, we have based NV on Malee's sales in Thailand.

B. Cost of Production Analysis

    Based on timely allegations filed by the petitioners, we initiated 
COP investigations of Vita, Prachuab and SIFCO, to determine whether 
sales were made at prices below the COP. See Memoranda from Case 
Analysts to Richard W. Moreland, dated January 12, 1998 (Vita), January 
27, 1998 (Prachuab) and February 27, 1998 (SIFCO). In addition, because 
we disregarded below-cost sales in the last completed review of TPC, 
TIPCO and SFP, 4 and in the last completed segment of the 
proceeding involving Malee (i.e., the less-than-fair-value 
investigation), we had reasonable grounds to believe or suspect that 
sales by these companies of the foreign like product under 
consideration for the determination of NV in this review may have been 
made at prices below the COP, as provided by section 773(b)(2)(A)(ii) 
of the Tariff Act. Therefore, pursuant to section 773(b)(1) of the Act, 
we initiated a COP investigation of sales by TPC, TIPCO, SFP, Malee, 
Vita, Prachuab and SIFCO in the comparison market.
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    \4\  See Final Results, 63 FR 7392 (February 13, 1998).
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    We conducted the COP analysis as described below.
1. Calculation of COP/Fruit Cost Allocation
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, based on the sum of the costs of 
materials, fabrication, general expenses, and packing costs. We relied 
on the submitted COPs except in the specific instances noted below, 
where the submitted costs were not appropriately quantified or valued.
    The Department's long-standing practice, now codified at section 
773(f)(1)(A) of the Act, is to rely on a company's normal books and 
records if such records are in accordance with home country generally 
accepted accounting principles (GAAP) and reasonably reflect the costs 
associated with production of the merchandise. In addition, as the 
statute indicates, the Department considers whether an accounting 
methodology, particularly an allocation methodology, has been 
historically used by the company. See section 773(f)(1)(A) of the Act. 
In previous segments of this proceeding, the Department has determined 
that joint production costs (i.e., pineapple and pineapple processing 
costs) cannot be reasonably allocated to canned pineapple on the basis 
of weight. See Final Determination of Sales at Less Than Fair Value: 
Canned Pineapple Fruit From Thailand, 60 FR 29553, 29561 (June 5, 
1995)), and Final Results, 63 FR 7392, 7398.5 For instance, 
cores and shells are used in juice production, while trimmed and cored 
pineapple cylinders are used in CPF production. Because these various 
parts of a pineapple are not interchangeable when it comes to CPF 
versus juice production, it would be unreasonable to value all parts of 
the pineapple equally by using a weight-based allocation methodology. 
Several respondents that revised their fruit cost allocation 
methodologies during the 1995-96 POR changed to weight-based 
methodologies and did not incorporate any measure of the qualitative 
factor of the different parts of the pineapple. As a result, such 
methodologies, although in conformity with Thai GAAP, do not reasonably 
reflect the costs associated with production of CPF. Therefore, for 
companies whose fruit cost allocation methodology is weight-based, we 
requested that they recalculate fruit costs allocated to CPF based on a 
net realizable value (NRV) methodology. Consistent with prior segments 
of this proceeding, the NRV methodology that we requested respondents 
to use was based on company-specific historical amounts for sales and 
separable costs during the five-year period of 1990 through 1994. We 
made this request of all companies in this review except for Malee. 
Because Malee already allocates

[[Page 17361]]

fruit costs on a basis that reasonably takes into account qualitative 
differences between pineapple parts used in CPF versus juice products 
in its normal accounting records, we have not required Malee to 
recalculate its reported costs using the NRV methodology.
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    \5\ The Court of International Trade (CIT) ruled in favor of the 
respondents who challenged the Department's position that joint 
production costs cannot be reasonably allocated to canned pineapple 
on the basis of weight. The Thai Pineapple Public Co. Ltd., et al. 
v. United States, Slip Op. 96-182 (CIT November 8, 1996). That 
decision is currently being reviewed by the Court of Appeals for the 
Federal Circuit.
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    We made the following company-specific adjustments to the cost data 
submitted in this review.

Prachuab

    While Prachuab provided its historical NRV data as requested, it 
calculated its variable fruit costs using POR-specific NRV data. 
Therefore, we have recalculated Prachuab's fruit costs using the 
historical five-year NRV data indicated above.

SIFCO

    SIFCO used a weight-based methodology to calculate its variable 
fruit costs. Therefore, we have recalculated SIFCO's fruit costs using 
the historical five-year NRV data from SIFCO's February 20, 1998 
submission.
    In addition, we noted that SIFCO's databases contained missing 
values for packing expenses. Therefore, for sales to the United States 
and for sales to Japan, we used per-unit packing expenses provided in 
SIFCO's February 12, 1998 submission. SIFCO used a weight-based 
methodology.

SFP

    SFP's reported fruit costs were based on NRV data for the 1992-95 
period. Further, the NRV ratio was based on a ratio of standard cases 
of solid products to standard cases of juice products, which is 
distortive because the weighting factors used to derive standard cases 
of solid and juice products are not equivalent. Therefore, we have 
recalculated SFP's fruit costs using the 1990-94 NRV ratio that was 
verified in the previous review.
2. Test of Comparison Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
adjusted weighted-average COP for each respondent to the comparison 
market sales of the foreign like product, in order to determine whether 
these sales had been made at prices below the COP within an extended 
period of time in substantial quantities, and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. On a product-specific basis, we compared the revised 
COP to the comparison market prices, less any applicable movement 
charges, taxes, rebates, commissions and other direct and indirect 
selling expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were made at prices 
below the COP, we did not disregard any below-cost sales of that 
product because we determined that the below-cost sales were not made 
in ``substantial quantities.'' Where 20 percent or more of a 
respondent's sales of a given product were made at prices below the 
COP, we disregarded the below-cost sales because: (1) such sales were 
found to be made within an extended period of time in substantial 
quantities in accordance with sections 773(b)(2) (B) and (C) of the 
Act; and (2) based on comparisons of price to weighted-average COPs for 
the POR, we determined that the below-cost sales of the product were at 
prices which would not permit recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    We found that, for certain CPF products, TIPCO, SFP, TPC, Malee, 
Prachuab, and SIFCO made comparison market sales at prices below the 
COP within an extended period of time in substantial quantities. 
Further, we found that these sales prices did not permit the recovery 
of costs within a reasonable period of time. We therefore excluded 
these sales from our analysis in accordance with section 773(b)(1) of 
the Act.

C. Calculation of Normal Value Based on Comparison Market Prices

    We determined price-based NVs for each company as follows. For all 
respondents, we made adjustments for differences in packing in 
accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, 
and we deducted movement expenses consistent with section 
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made 
adjustments for differences in cost attributable to differences in 
physical characteristics of the merchandise pursuant to section 
773(a)(6)(C)(ii) of the Act, as well as for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We also made 
adjustments, in accordance with 19 CFR 351.410(e), for indirect selling 
expenses incurred on comparison market or U.S. sales where commissions 
were granted on sales in one market but not in the other (the 
commission offset). Specifically, where commissions were granted in the 
U.S. market but not in the comparison market, we made a downward 
adjustment to normal value for the lesser of (1) the amount of the 
commission paid in the U.S. market, or (2) the amount of indirect 
selling expenses incurred in the comparison market. If commissions were 
granted in the comparison market but not in the U.S. market, we made an 
upward adjustment to normal value following the same methodology. 
Company-specific adjustments are described below.

TPC

    We based third-country market prices on the packed, ex-factory, or 
delivered prices to unaffiliated purchasers in Germany. We adjusted for 
the following movement expenses: inland freight from plant to port of 
exportation, foreign brokerage and handling, other miscellaneous 
foreign port charges, and international freight. For comparisons to EP, 
we made COS adjustments by deducting direct selling expenses incurred 
for third-country market sales (credit expenses, letter of credit 
charges, warranties and bank charges) and adding U.S. direct selling 
expenses (credit expenses, letter of credit charges, bank charges, and 
warranties). For comparisons to CEP, we made COS adjustments by 
deducting direct selling expenses incurred on third-country market 
sales and adding U.S. direct selling expenses other than those deducted 
from the starting price in calculating CEP pursuant to section 772(d) 
of the Act (i.e., we added expenses for letters of credit and bank 
charges incurred by TPC in Thailand). We offset commission expenses in 
the manner described above. We denied TPC's claimed CEP offset for the 
reasons stated in the Level of Trade section below.
    TPC claimed that because there were frequent changes in the 
material terms of sale between the contract date and the invoice date 
with respect to comparison market sales, the invoice date was the 
appropriate comparison market date of sale. We agree that TPC has 
demonstrated that invoice date is the appropriate date of sale in the 
comparison market, based on such changes to the material terms of sale. 
However, as noted in the Export Price and Constructed Export Price 
section above, contrary to our findings in the first review, TPC 
incorrectly claimed that invoice date was the appropriate date of sale 
for both EP and CEP transactions, and reported comparison market sales 
made 90 days before the earliest invoice date of U.S. sales. Because we 
have determined that contract date, not invoice date, is the

[[Page 17362]]

appropriate date of sale for EP transactions, we have matched such 
sales to comparison market sales based on U.S. contract date. Since the 
contract date precedes the invoice date, we do not have all comparison 
market sales made 90 days before the contract date of the first U.S. 
sale. Accordingly, we resorted to constructed value where we were 
unable to match EP sales to contemporaneous comparison market sales 
(i.e., those sales made during the same month, 90 days before, or 60 
days after, the contract date of the U.S. sale).

TIPCO

    We based third-country market prices on the packed, FOB prices to 
unaffiliated purchasers in Finland. We adjusted for the following 
movement expenses: brokerage and handling, port charges, liner 
expenses, stuffing expenses and foreign inland freight. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses and bank charges) and adding U.S. 
direct selling expenses (credit expenses and bank charges). We offset 
commission expenses in the manner described above.

SFP

    We based third-country market prices on the packed, FOB prices to 
unaffiliated purchasers in Germany. We adjusted for the following 
movement expenses: foreign inland freight and port charges. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses and bank charges) and adding U.S. 
direct selling expenses (credit expenses and bank charges).

Malee

    We based home market prices on the packed, delivered prices to 
unaffiliated purchasers in Thailand. We adjusted for foreign inland 
freight. We made COS adjustments by deducting direct selling expenses 
incurred for home market sales (credit expenses, warranty expenses, 
advertising expenses and commissions) and adding U.S. direct selling 
expenses (credit expenses, bank charges and commissions). No other 
adjustments to NV were claimed or allowed.

Prachuab

    We based third-country market prices on the packed, FOB or C&F 
prices to unaffiliated purchasers in Japan. We adjusted for the 
following movement expenses: foreign inland freight, containerization 
charges, and international freight. We made COS adjustments by 
deducting direct selling expenses incurred for third-country market 
sales (credit expenses, bank charges and commissions) and adding U.S. 
direct selling expenses (credit expenses, bank charges and 
commissions). As with Prachuab's U.S. sales, we based the date of sale 
of Prachuab's comparison market sales on shipment date.

SIFCO

    We based third-country market prices on the packed, C&F prices to 
unaffiliated purchasers in Japan. We adjusted for the following 
movement expenses: foreign inland freight and international freight. We 
made COS adjustments by deducting direct selling expenses incurred for 
third-country market sales (credit expenses, bank charges and 
commissions) and adding U.S. direct selling expenses (credit expenses, 
bank charges and commissions).

D. Calculation of Normal Value Based on Constructed Value

    For those CPF products for which we could not determine the NV 
based on comparison market sales because there were no contemporaneous 
sales of a comparable product in the ordinary course of trade, we 
compared the EP or CEP to CV. In accordance with section 773(e)(1) of 
the Act, we calculated CV based on the sum of the cost of manufacturing 
(COM) of the product sold in the United States, plus amounts for 
general expenses, comparison market profit, and U.S. packing costs. We 
calculated each respondent's CV based on the methodology described in 
the Calculation of COP section of this notice, above. In accordance 
with section 773(e)(2)(A) of the Act, we used the actual amounts 
incurred and realized by each respondent in connection with the 
production and sale of the foreign like product, in the ordinary course 
of trade, for consumption in the foreign country to calculate general 
expenses and comparison market profit.
    For price-to-CV comparisons, we made adjustments to CV for COS 
differences, in accordance with section 773(a)(8) of the Act and 19 CFR 
351.410. For comparisons to EP, we made COS adjustments by deducting 
direct selling expenses incurred on comparison market sales and adding 
U.S. direct selling expenses. For comparisons to CEP, we made COS 
adjustments by deducting direct selling expenses incurred on comparison 
market sales and adding U.S. direct selling expenses other than those 
deducted from the starting price in calculating CEP pursuant to section 
772(d) of the Act (i.e., we added letter of credit expenses and bank 
charges for TPC). We also made adjustments, where applicable, for the 
commission offset in the manner described above.

Level of Trade/CEP Offset

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade as the EP or CEP transaction. The NV level of 
trade is that of the starting-price sales in the comparison market or, 
when NV is based on CV, that of the sales from which we derive SG&A 
expenses and profit. For EP sales, the U.S. level of trade is also the 
level of the starting-price sale, which is usually from exporter to 
importer. For CEP sales, it is the level of the constructed sale from 
the exporter to the importer.
    To determine whether NV sales are at a different level of trade 
than EP or CEP, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different level of trade, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 
Finally, for CEP sales, if the NV level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP offset provision). See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from 
South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information from each respondent about the marketing stage involved in 
the reported U.S. and comparison market sales, including a description 
of the selling activities performed by the respondents for each channel 
of distribution. In identifying levels of trade for EP and third-
country market sales, we considered the selling functions reflected in 
the starting price before any adjustments. For CEP sales, we considered 
only the selling activities reflected in the price after the deduction 
of expenses and profit under section 772(d) of the Act. We expect that, 
if claimed levels of trade are the same, the

[[Page 17363]]

functions and activities of the seller should be similar. Conversely, 
if a party claims that levels of trade are different for different 
groups of sales, the functions and activities of the seller should be 
dissimilar.
    Our level-of-trade analysis for each respondent is described below.

TPC

    During the POR, TPC made sales through multiple channels of 
distribution in both the U.S. and German markets. In the United States, 
TPC made both direct sales to unaffiliated customers and sales through 
its affiliated U.S. reseller MIC. In Germany, TPC made both direct 
sales and indirect sales through an affiliated reseller in the 
Netherlands, Princes Foods B.V. (Princes). We compared the selling 
activities performed by TPC for EP sales to the activities performed by 
TPC and MIC for CEP sales (after excluding those selling activities 
related to the expenses deducted under section 772(d) of the Act), and 
found them to be both limited in scope and essentially identical. The 
functions that TPC performed on both direct and indirect sales were 
limited to negotiation of prices, processing of purchase orders, and 
invoicing. Therefore, we find that there is a single level of trade in 
the United States for both EP and CEP sales.
    Similarly, we compared the selling functions and activities 
performed by TPC for direct sales to Germany to the functions and 
activities performed by TPC and Princes for indirect sales to Germany. 
These activities were also limited to negotiating prices with German 
customers, invoicing those customers, and making limited sales calls. 
In essence, the only difference in selling activity between TPC's 
direct and indirect sales to Germany is that indirect sales involved 
the issuance of an additional invoice among affiliated parties, and 
this difference does not establish a significantly more advanced 
marketing stage. Therefore, we have considered TPC's direct and 
indirect sales to Germany as being at a single level of trade. Because 
the selling functions performed for TPC's sales in the two markets are 
essentially the same, irrespective of channel of distribution, we find 
that all of TPC's sales were made at a single level of trade. 
Therefore, no level of trade adjustment or CEP offset is warranted in 
the calculation of TPC's dumping margin.

Malee

    Malee reported that all of its sales made to the United States were 
to importer/distributors and involved minimal selling functions on the 
part of Malee. Malee claimed two different levels of trade for its 
sales in the home market: (1) factory-direct sales involving minimal 
selling functions, and which are at a level of trade identical to the 
EP level of trade; and (2) sales through Malee Supply (1994) Co. Ltd. 
(Malee Supply), an affiliated reseller.
    Malee made direct sales to hotels, restaurants and industrial 
users. Malee claimed that its only selling function on direct sales was 
delivery of the product to the customer. Malee reported numerous 
selling functions undertaken by Malee Supply for its resales to small 
wholesalers, retailers and end-users. In addition to maintaining 
inventory, Malee Supply also handled all advertising during the POR. 
The advertising was directed at the ultimate consumer. Malee also 
reported that Malee Supply replaces damaged or defective merchandise 
and, as necessary, breaks down packed cases into smaller lot sizes for 
many sales.
    Our examination of the selling activities, selling expenses, and 
customer categories involved in these two channels of distribution 
indicates that they constitute separate levels of trade, and that the 
direct sales are made at the same level as Malee's U.S. sales. 
Accordingly, we matched Malee's U.S. sales to direct sales made in the 
home market. Because we were able to match all U.S. sales in this 
manner to sales made at the same level of trade, without resorting to 
home market sales made through the other level of trade, we did not 
reach the issue of whether a level-of-trade adjustment was appropriate 
under the facts of this case.

SFP, TIPCO, Prachuab and SIFCO

    In this review, SFP, TIPCO, Prachuab and SIFCO claimed that all of 
their sales were made through a similar channel of distribution (direct 
sales to customers in export markets) and involved identical selling 
functions, irrespective of market. In examining these selling 
functions, we found that sales activities were limited to negotiation 
of prices, processing of purchase orders/contracts, invoicing, and 
collection of payment; there was little or no strategic and economic 
planning, advertising or sales promotion, technical services, technical 
assistance, or after-sale service performed in either market. 
Therefore, for these four respondents we have preliminarily found that 
there is a single (and identical) level of trade in each market, and no 
level-of-trade adjustment is required for comparison of U.S. sales to 
third-country sales.

Currency Conversion

    For purposes of the preliminary results, we made currency 
conversions in accordance with section 773A(a) of the Act, based on the 
official exchange rates published by the Federal Reserve. Section 
773A(a) of the Act directs the Department to use a daily exchange rate 
in order to convert foreign currencies into U.S. dollars, unless the 
daily rate involves a fluctuation. In accordance with the Department's 
practice, we have determined as a general matter that a fluctuation 
exists when the daily exchange rate differs from a benchmark by 2.25 
percent. The benchmark is defined as the rolling average of rates for 
the past 40 business days. When we determine that a fluctuation exists, 
we substitute the benchmark for the daily rate.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin exists for the period July 1, 1996, through June 30, 
1997:

------------------------------------------------------------------------
                                                                Margin  
                   Manufacturer/exporter                      (percent) 
------------------------------------------------------------------------
Siam Food Products Public Company Ltd......................         0.59
The Thai Pineapple Public Company, Ltd.....................         5.24
Thai Pineapple Canning Industry Corp., Ltd.................         4.78
Malee Sampran Factory Public Company Ltd...................         1.01
The Prachuab Fruit Canning Co. Ltd.........................        10.96
Siam Fruit Canning (1988) Co. Ltd..........................        14.19
Vita Food Factory (1989) Co. Ltd...........................        55.77
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Any interested party may request a 
hearing within thirty days of publication. See 19 CFR 351.310(c). If 
requested, a hearing will be held 44 days after the publication of this 
notice, or the first workday thereafter. Interested parties may submit 
case briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, 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 a notice of the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such written comments.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate

[[Page 17364]]

entries. Individual differences between EP/CEP and NV may vary from the 
percentages stated above. Upon completion of this review, the 
Department will issue appraisement instructions directly to the U.S. 
Customs Service.
    Furthermore, the following deposit rates will be effective upon 
publication of the final results of this administrative review for all 
shipments of CPF from Thailand entered, or withdrawn from warehouse, 
for consumption on or after the publication date, as provided by 
section 751(a)(1) of the Act: (1) the cash deposit rate for companies 
listed above will be the rate established in the final results of this 
review, except if the rate is less than 0.5 percent and, therefore, de 
minimis, the cash deposit will be zero; (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 the 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) if neither the 
exporter nor the manufacturer is a firm covered in this or any previous 
review conducted by the Department, the cash deposit rate will be 24.64 
percent, the All Others rate established in the LTFV investigation.
    These cash deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402 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 determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 2, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-9435 Filed 4-8-98; 8:45 am]
BILLING CODE 3510-DS-P