[Federal Register Volume 64, Number 24 (Friday, February 5, 1999)]
[Notices]
[Pages 5767-5770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-2823]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-351-605]


Frozen Concentrated Orange Juice From Brazil; Preliminary Results 
and Partial Rescission of Antidumping Duty Administrative Review

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

SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on frozen concentrated orange 
juice from Brazil in response to a timely request from the petitioners 
to review six manufacturers/exporters of the subject merchandise. This 
review covers the U.S. sales and/or entries of only four manufacturers/
exporters because we are rescinding this review with respect to two 
companies. This is the eleventh period of review, covering May 1, 1997, 
through April 30, 1998.
    We have preliminarily determined that sales have been made below 
normal value by each of the companies subject to this review. If these 
preliminary results are adopted in the final results of this 
administrative review, we will instruct the Customs Service to assess 
antidumping duties on all appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument: (1) A statement of the issue; and (2) a 
brief summary of the argument.

EFFECTIVE DATE: February 5, 1999.

FOR FURTHER INFORMATION CONTACT: Sergio Gonzalez or Shawn Thompson, 
Office of AD/CVD Enforcement, Office 5, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone 
(202) 482-1779 or (202) 482-1776, respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to 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 at 19 CFR part 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

    On May 12, 1998, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
an Administrative Review'' of the antidumping duty order on frozen 
concentrated orange juice (FCOJ) from Brazil (63 FR 26143).
    In accordance with 19 CFR 351.213(b)(1), on May 29, 1998, Florida 
Citrus Mutual, Caulkins Indiantown Citrus Co., Citrus Belle, Citrus 
World, Inc., Orange-Co of Florida, Inc., Peace River Citrus Products, 
Inc., and Southern Gardens Citrus Processors Corp. (collectively ``the 
petitioners'') requested an administrative review of the antidumping 
order covering the period May 1, 1997, through April 30, 1998, for the 
following producers and exporters of FCOJ: Branco Peres Citrus, S.A. 
(Branco Peres), Cambuhy Citrus Comercial e Exportadora Ltd. (Cambuhy), 
Citrovita Agro Industrial S.A. (Citrovita), CTM Citrus S.A. (CTM), 
Frutax Industria e Comercio Ltda. (Frutax), and Sucorrico S.A. 
(Sucorrico). On June 12, 1998, the Department issued questionnaires to 
each of these companies. On June 29, 1998, the Department published in 
the Federal Register a notice of initiation of administrative review 
for Branco Peres, Cambuhy, Citrovita, CTM, Frutax, and Sucorrico (63 FR 
35188).
    In July 1998, Cambuhy, CTM, and Sucorrico informed the Department 
that they had no shipments of subject merchandise to the United States 
during the period of review (POR). We have confirmed this with 
information from the Customs Service with regard to CTM and Sucorrico. 
Therefore, in accordance with Sec. 351.213(d)(3) of the Department's 
regulations and consistent with the Department's practice, we are 
rescinding our review for CTM and Sucorrico. For further discussion, 
see the ``Partial Rescission of Review'' section of this notice, below.
    Regarding Cambuhy, we were informed by the Customs Service that 
this company exported FCOJ to Puerto Rico during the POR. Consequently, 
on August 17, 1998, we issued a supplemental questionnaire to Cambuhy 
in which we again requested that it provide sales information. On 
September 2, 1998, Cambuhy acknowledged that it had exported to Puerto 
Rico, but declined to participate further in the administrative review. 
Because Cambuhy did not respond to the questionnaire, we have 
preliminarily assigned it a margin based on adverse facts available. 
For further discussion, see the ``Facts Available'' section of this 
notice, below.
    In August 1998, we received responses from Branco Peres and 
Citrovita. We received no response from Frutax. Because Frutax did not 
respond to the questionnaire, we have also preliminarily assigned a 
margin to this company based on adverse facts available. For further 
discussion, see the ``Facts Available'' section, below.
    Also in August 1998, we issued a supplemental questionnaire to 
Branco Peres. We received a response to this questionnaire in September 
1998.
    In August and September 1998, the petitioners alleged that Branco 
Peres and Citrovita were selling at prices below the cost of production 
(COP) in their third country and home markets, respectively. Based on 
information submitted by the petitioners, the Department found 
reasonable grounds to believe or suspect that sales in the foreign 
markets were made at prices below the cost of producing the 
merchandise, in accordance with section 773(b)(1) of the Act. As a 
result, the Department initiated investigations to determine whether 
Branco Peres and Citrovita made foreign market sales during the POR at 
prices below their respective COPs within the meaning of section 773(b) 
of the Act. For further discussion, see the memorandum to Louis Apple 
from the team entitled

[[Page 5768]]

``Initiation of Sales Below the Cost of Production Investigations in 
the Antidumping Duty Administrative Review of Frozen Concentrated 
Orange Juice from Brazil,'' dated October 14, 1998.
    In October 1998, we issued a supplemental sales questionnaire to 
Citrovita.
    In November 1998, both Branco Peres and Citrovita informed the 
Department that they did not intend to submit additional sales or cost 
information. Consequently, because these companies did not respond to 
the COP questionnaires, and in the case of Citrovita the supplemental 
sales questionnaire, we have also assigned them a margin based on 
adverse facts available. For further discussion, see the ``Facts 
Available'' section, below.

Scope of the Review

    The merchandise covered by this review is FCOJ from Brazil. The 
merchandise is currently classifiable under item 2009.11.00 of the 
Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS item 
number is provided for convenience and for U.S. Customs purposes. The 
Department's written description remains dispositive.

Partial Rescission of Review

    As noted above, in July 1998, CTM and Sucorrico informed the 
Department that they had no shipments of subject merchandise to the 
United States during the POR. We have confirmed this with information 
received from the Customs Service. Therefore, in accordance with 19 CFR 
351.213(d)(3) and consistent with the Department's practice, we are 
rescinding our review with respect to CTM and Sucorrico (see, e.g., 
Certain Welded Carbon Steel Pipe and Tube from Turkey; Final Results 
and Partial Rescission of Antidumping Administrative Review, 63 FR 
35190, 35191 (June 29, 1998); and Certain Fresh Cut Flowers From 
Colombia; Final Results and Partial Rescission of Antidumping Duty 
Administrative Review, 62 FR 53287, 53288 (Oct. 14, 1997)).

Facts Available

A. Use of Facts Available for Branco Peres, Cambuhy, Citrovita, and 
Frutax

    In accordance with section 776(a)(2)(A) of the Act, we 
preliminarily determine that the use of facts available is appropriate 
as the basis for the dumping margin for Branco Peres, Cambuhy, 
Citrovita, and Frutax. Section 776(a)(2) of the Act provides that if an 
interested party: (1) Withholds information that has been requested by 
the Department; (2) fails to provide such information in a timely 
manner or in the form or manner requested, subject to subsections 
782(c)(1) and (e) of the Act; (3) significantly impedes a determination 
under the antidumping statute; or (4) provides such information but the 
information cannot be verified, the Department shall, subject to 
subsection 782(d) of the Act, use facts otherwise available in reaching 
the applicable determination. Specifically, both Cambuhy and Frutax 
failed to respond to the Department's questionnaire, issued in June 
1998, while Branco Peres and Citrovita failed to respond to the COP 
questionnaire. Moreover, Citrovita also failed to respond to a 
supplemental questionnaire regarding sales information.
    Because all four respondents have failed to respond to certain 
questionnaires and have refused to participate fully in this 
administrative review, we preliminarily determine that, in accordance 
with sections 776(a) and 782(e) of the Act, the use of total facts 
available is appropriate. See, e.g., Certain Grain-Oriented Electrical 
Steel From Italy: Final Results of Antidumping Duty Administrative 
Review, 62 FR 2655 (Jan. 17, 1997).
    Section 776(b) of the Act provides that adverse inferences may be 
used with respect to a party that has failed to cooperate by not acting 
to the best of its ability to comply with requests for information. See 
Statement of Administrative Action accompanying the URAA, H.R. Rep. No. 
316, 103rd Cong., 2d Sess. at 870. The failure of each of the four 
respondents to participate in the review and to respond to the 
Department's questionnaires demonstrates that each has failed to act to 
the best of its ability in this review and, therefore, an adverse 
inference is warranted. See, e.g., Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Steel Concrete Reinforcing Bars 
From Turkey, 62 FR 9737 (Mar. 4, 1997); and Extruded Rubber Thread From 
Malaysia; Final Results of Antidumping Duty Administrative Review, 63 
FR 12752 (Mar. 16, 1998).
    In situations involving non-cooperating respondents of this type, 
it is the Department's normal practice to select as adverse facts 
available the highest margin from the current or any prior segment of 
the same proceeding. (See, e.g., Certain Corrosion-Resistant Carbon 
Steel Flat Products and Certain Cut-to-Length Carbon Steel Plate from 
Canada; Final Results of Antidumping Duty Administrative Review and 
Determination to Revoke in Part, 64 FR 2173, 2175 (Jan. 13, 1999); and 
Brass Sheet and Strip from Germany; Final Results of Antidumping Duty 
Administrative Review, 63 FR 42823 (Aug. 11, 1998).) In this case, 
however, use of this margin, 2.52 percent, would not be appropriate 
because it is apparent that the respondents would benefit from their 
lack of cooperation, given that 2.52 percent is much lower than the 
margins actually calculated based on information submitted by 
respondents in this segment of the proceeding (see below). Therefore, 
we do not believe this rate is high enough to encourage participation 
in future segments of this proceeding.
    Consequently, in accordance with section 776(b)(4) of the Act, we 
have used the data on the record of this proceeding as adverse facts 
available. Specifically, we used the data supplied by the petitioners 
in the cost allegation, as well as the sales data provided by the two 
respondents that submitted partial questionnaire responses (i.e., 
Branco Peres and Citrovita), to calculate sales-specific dumping 
margins. We then selected as the facts available rate for each of the 
four non-cooperating respondents the highest transaction-specific 
margin calculated in this manner. This rate is 65.20 percent. For the 
procedures used to determine this rate, see the ``Calculation of the 
Facts Available Rate'' section, below.
    We find that the methodology described above is appropriate given 
the particular facts of this case. Specifically, we note that, unlike 
in many cases, the publicly available cost data submitted by the 
petitioners in the cost allegation was complete. The petitioners 
provided cost data for 100 percent of the products sold by Branco Peres 
and Citrovita. Moreover, this data was contemporaneous with the POR and 
specific to Brazil. Finally, this methodology results in a facts 
available rate that is sufficiently high to effectuate the purpose of 
the facts available rule--which is to encourage the participation of 
these companies in future segments of this proceeding.

B. Calculation of the Facts Available Rate

    As noted above, we used the data in the cost allegation to perform 
the cost test for Branco Peres and Citrovita. The COP information in 
the cost allegation was obtained from two sources: (1) A U.S. 
Department of Agriculture Attache Report, dated November 1997, which 
showed the price and quantity of oranges needed to produce one metric 
ton of FCOJ; and (2) a study by a University of Florida professor

[[Page 5769]]

published in Citrus & Vegetable Magazine in December 1997, which showed 
FCOJ processing and general and administrative costs.
    We compared the COP figures derived from the cost allegation to 
home market/third country prices of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
these sales had been made at prices below the COP. We compared product-
specific COPs to product-specific foreign market prices, less any 
applicable movement charges.
    In determining whether to disregard foreign market sales made at 
prices below the COP, we examined whether such sales were made: (1) In 
substantial quantities within an extended period of time; and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time in the normal course of trade. See section 773(b)(1) of 
the Act.
    Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than 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 at prices below the COP, we found that 
sales of that product were made in ``substantial quantities'' within an 
extended period of time (as defined in section 773(b)(2)(B) of the 
Act), in accordance with section 773(b)(2)(C)(i) of the Act. In such 
cases, we also determined that such sales were not made at prices which 
would permit recovery of all costs within a reasonable period of time, 
in accordance with section 773(b)(2)(D) of the Act. Therefore, we 
disregarded the below-cost sales.
    We found that more than 20 percent of Branco Peres' and Citrovita's 
foreign market sales within an extended period of time were at prices 
less than COP. Further, the prices did not provide for the recovery of 
costs within a reasonable period of time. We therefore disregarded the 
below-cost sales and, where available, used the remaining above-cost 
sales as the basis for determining NV, in accordance with section 
773(b)(1) of the Act. For those U.S. sales of FCOJ for which there were 
no comparable foreign market sales in the ordinary course of trade, we 
compared export price (EP) and constructed export price (CEP) to CV, in 
accordance with section 773(a)(4) of the Act.
    In accordance with section 773(e) of the Act, we calculated CV 
using the COP data referenced above. In accordance with section 
773(e)(2)(A) of the Act, we based profit for Branco Peres on the 
amounts incurred and realized by this company in connection with the 
production and sale of the foreign like product in the ordinary course 
of trade, for consumption in the foreign country. Regarding Citrovita, 
because: (1) This company made no sales at prices above the COP; and 
(2) there was no publicly available profit rate on the record of this 
proceeding, we used a profit rate which was derived from the public 
financial statements of the sole respondent who participated in the 
most recent prior administrative review. For further discussion, see 
the memorandum to the file from Sergio Gonzalez entitled ``Calculations 
Performed for Citrovita for the Preliminary Results,'' dated February 
1, 1999 (the Citrovita Calculation Memorandum).
    In accordance with the results of the cost test, we disregarded all 
foreign market sales made at prices below the COP.
    We made currency conversions into U.S. dollars, in accordance with 
section 773A of the Act, based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank. 
Company-specific calculations are discussed below.
1. Branco Peres
    We calculated EP using the data submitted by Branco Peres in its 
September 18, 1998, supplemental questionnaire response. We based EP on 
the gross unit price to the first unaffiliated purchaser in the United 
States. We made deductions from gross unit price, where appropriate, 
for foreign inland freight, foreign inland insurance, warehousing 
costs, and port charges, in accordance with section 772(c)(2)(A) of the 
Act.
    We also calculated NV using the data submitted on September 18, 
1998. Based on the results of the cost test described above, we found 
that Branco Peres made certain third country sales during the POR at 
prices above the COP. Consequently, where a contemporaneous comparison 
existed, we based NV on these above-cost sales. Where no 
contemporaneous comparison existed, we based NV on CV.
    Where NV was based on third country sales, we based NV on the gross 
unit price to unaffiliated customers. We made deductions, where 
appropriate, for foreign inland freight, foreign inland insurance, 
warehousing costs, and port charges, in accordance with section 
773(a)(6)(B) of the Act. Pursuant to section 773(a)(6)(C)(iii) of the 
Act, we made circumstance-of-sale adjustments, where appropriate, for 
differences in commissions and credit expenses.
    Where NV was based on CV, we made circumstance-of-sale adjustments, 
where appropriate, for commissions and credit expenses, in accordance 
with section 773(a)(6)(C)(iii) and (a)(8) of the Act.
2. Citrovita
    We calculated CEP using the data submitted by Citrovita on August 
17, 1998. We calculated CEP based on the gross unit price to the first 
unaffiliated customer in the United States. We made deductions from 
gross unit price, where appropriate, for foreign inland freight, ocean 
freight, marine insurance, U.S. brokerage and handling expenses, U.S. 
customs duties, U.S. inland freight, and U.S. warehousing expenses, in 
accordance with section 772(c)(2)(A) of the Act. We made additional 
deductions, where appropriate, for commissions, credit, U.S. indirect 
selling expenses, and U.S. inventory carrying costs, in accordance with 
section 772(d)(1) of the Act.
    Because Citrovita did not respond to the supplemental sales 
questionnaire, we adjusted its U.S. sales data to account for certain 
discrepancies in its response. Specifically, where the data shown on 
Citrovita's calculation worksheets differed from the data contained in 
the U.S. sales listing, we used the highest figure reported as facts 
available. See the Citrovita Calculation Memorandum.
    Pursuant to section 772(d)(3) of the Act, we further reduced gross 
unit price by an amount for profit, to arrive at CEP. Because there was 
no publicly available profit rate on the record of this proceeding, we 
used a profit rate which was derived from the public financial 
statements of the sole respondent who participated in the most recent 
prior administrative review. See the Citrovita Calculation Memorandum.
    Based on the results of the cost test described above, we found 
that Citrovita made no home market sales during the POR at prices above 
the COP. Consequently, we based NV on CV.
    For CEP-to-CV comparisons, we made circumstance-of-sale 
adjustments, where appropriate, for commissions and credit expenses 
(offset by interest revenue received by Citrovita), in accordance with 
section 773(a)(6)(C)(iii) and (a)(8) of the Act. We computed the CV 
profit rate using the same financial statements referenced above. 
Furthermore, we recalculated home market credit expenses on the basis 
of home market price net of Brazilian taxes, in accordance with our 
practice. See, e.g., Ferrosilicon from Brazil; Final Results of 
Antidumping Duty Administrative

[[Page 5770]]

Review, 61 FR 59407 (Nov. 22, 1996). For further discussion, see the 
Citrovita Calculation Memorandum.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margins exist for the period May 1, 1997, through April 30, 
1998:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                       percent
------------------------------------------------------------------------
Branco Peres Citrus, S.A...................................        65.20
Cambuhy Citrus Comercial e Exportadora Ltda................        65.20
Citrovita Agro Industrial S.A..............................        65.20
Frutax Industria e Comercio Ltda...........................        65.20
------------------------------------------------------------------------

    Interested parties may request a hearing within 30 days of the 
publication of this notice. Any hearing, if requested, will be held 37 
days after the date of publication, or the first workday thereafter. 
Interested parties may submit case briefs within 30 days of 
publication. Rebuttal briefs, limited to issues raised in the case 
briefs, may be filed not later than 35 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 case briefs, within 120 days from 
the date of publication of this notice.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The duty 
assessment rates for importers of subject merchandise will be those 
rates listed above. These rates will be assessed uniformly on all 
entries of FCOJ made during the POR. The Department will issue 
appraisement instructions directly to the Customs Service.
    Further, the following deposit requirements will be effective for 
all shipments of FCOJ from Brazil entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results 
of this administrative review, as provided for by section 751(a)(1) of 
the Act: (1) The cash deposit rates for Branco Peres, Cambuhy, 
Citrovita, and Frutax will be the rates established in the final 
results of this review; (2) for any previously reviewed or investigated 
company 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 
less-than-fair-value (LTFV) investigation, but the manufacturer is, the 
cash deposit rate will be the rate established for the most recent 
period for the manufacturer of the merchandise; and 4) the cash deposit 
rate for all other manufacturers or exporters will continue to be 1.96 
percent, the all others rate established in the LTFV investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213.

    Dated: February 1, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-2823 Filed 2-4-99; 8:45 am]
BILLING CODE 3510-DS-P