[Federal Register Volume 65, Number 153 (Tuesday, August 8, 2000)]
[Notices]
[Pages 48450-48457]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20031]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-813]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review and Preliminary Determination Not To Revoke Order in Part: 
Canned Pineapple Fruit From Thailand

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

SUMMARY: In response to requests by producers/exporters of subject 
merchandise and by the petitioner, the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on canned pineapple fruit (CPF) from Thailand. This review 
covers nine producers/exporters of the subject merchandise. The period 
of review (POR) is July 1, 1998, through June 30, 1999.
    We preliminarily determine that sales have been made below normal 
value (NV). 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 
(EP) or the constructed export price (CEP), as applicable, and the NV.
    Furthermore, if these preliminary results are adopted in our final 
results of this administrative review, we do not intend to revoke the 
antidumping duty order with respect to Malee Sampran Public Co., Ltd., 
based on the fact that the company has not made sales at not less than 
normal value during each of the last three review periods. See 
Preliminary Determination Not To Revoke section of this notice.
    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, (2) a brief summary of the 
argument and (3) a table of authorities. Further, we would appreciate 
it if parties submitting

[[Page 48451]]

written comments would provide the Department with an additional copy 
of the public version of any such comments on a diskette.

EFFECTIVE DATE: August 8, 2000.

FOR FURTHER INFORMATION CONTACT: Constance Handley or Charles Riggle, 
AD/CVD Enforcement Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
0631 or (202) 482-0650, 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 Department regulations refer to the 
regulations codified at 19 CFR Part 351 (April 1999).

Background

    On July 18, 1995, we published in the Federal Register the 
antidumping duty order on CPF from Thailand (60 FR 36775). On July 15, 
1999, we published in the Federal Register the notice of ``Opportunity 
to Request an Administrative Review'' of this order, covering the 
period July 1, 1998, through June 30, 1999 (64 FR 38181).
    The following producers/exporters of CPF requested a review in 
accordance with 19 CFR 351.213(b)(2): Vita Food Factory (1989) Co., 
Ltd. (Vita); Siam Fruit Canning (1988) Co., Ltd. (SIFCO); Siam Food 
Products Public Co. Ltd. (SFP); The Thai Pineapple Public Co., Ltd. 
(TIPCO); Malee Sampran Public Co., Ltd. (Malee); The Prachuab Fruit 
Canning Company Ltd. (PRAFT); Thai Pineapple Canning Industry (TPC); 
and Tropical Food Industries Co., Ltd. (TROFCO).
    In addition, on July 30, 1999, the petitioner, Maui Pineapple 
Company, in accordance with 19 CFR 351.213(b)(1), requested a review of 
Kuiburi Fruit Canning Co. Ltd. (KFC), Malee, PRAFT, SIFCO, SFP, TIPCO, 
TPC and Vita.
    On August 30, 1999, we published the notice of initiation of this 
antidumping duty administrative review covering the period July 1, 
1998, through June 30, 1999 (64 FR 47167).

Scope of the Review

    The product covered by this review is canned pineapple fruit (CPF). 
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 HTSUS subheadings are provided for convenience 
and for customs purposes, our written description of the scope is 
dispositive.

Verification

    As provided in section 782(i)(3) of the Act, we verified 
information provided by Malee, PRAFT, SFP and TIPCO. We used standard 
verification procedures, including on-site inspection of the respondent 
producers' facilities and examination of relevant sales and financial 
records. Our verification findings are outlined in the verification 
reports, which will be placed in the case file in Room B-099 of the 
Main Department of Commerce Building.

Fair Value Comparisons

    We compared the EP or the CEP, as applicable, to the 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 in the U.S. and comparison markets of products 
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 merchandise sold in the United States to constructed 
value (CV), in accordance with section 773(a)(4) of the Act. For all 
respondents except SIFCO, we based the date of sale on the date of the 
invoice. For SIFCO, we based the date of sale on the contract date. 
According to SIFCO, any changes to the material terms of sale occur 
before the original contract is signed, and these terms do not change 
once the contract is issued. Therefore, because the material terms of 
sale were firmly set on this date, we relied on contract date as the 
date of sale.

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. 
Section 772(a) of the Act defines EP as the price at which the subject 
merchandise is first sold by the exporter or producer outside the 
United States to an unaffiliated purchaser for exportation to the 
United States, before the date of importation, or to an unaffiliated 
purchaser for exportation to the United States.
    Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold inside the United States before or 
after the date of importation, by or for the account of the producer or 
exporter of the merchandise, or by a seller affiliated with the 
producer or exporter, to an unaffiliated purchaser, as adjusted under 
subsections 772(c) and (d) of the Act.
    For all respondents, we calculated EP and CEP, as appropriate, 
based on the packed prices charged to the first unaffiliated customer 
in the United States.
    In accordance with section 772(c)(2) of the Act, we reduced the EP 
and CEP by movement expenses and export taxes and U.S. import duties, 
where appropriate. Section 772(d)(1) of the Act provides for additional 
adjustments to CEP.
    We determined the EP or CEP for each company as follows:

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. Although TMC is a 
company legally incorporated in the United States, the company has 
neither business premises nor personnel in the United States. All 
activities transacted on behalf of TMC, including invoicing, paperwork 
processing, receipt of payment, and arranging for customs and 
brokerage, are conducted in Thailand where all TMC employees are 
located. Accordingly, as the merchandise was sold before importation by 
TMC outside the United States, we have determined these sales to be EP 
transactions. See Circular Welded Non-Alloy Steel Pipe from Mexico: 
Final Results of Antidumping Duty Administrative Review, 65 FR 37518 
(June 15, 2000) and accompanying Decision Memo at Comment 3.

[[Page 48452]]

    We calculated EP based on the packed FOB or CIF price to 
unaffiliated purchasers for exportation to the United States. In 
accordance with section 772(c)(2)(A) of the Act, we made deductions 
from the starting price for foreign movement expenses (including 
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 outside the United States to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise indicated. SFP has one employee in the United 
States; however, this employee does not: (1) Take title to the subject 
merchandise; (2) issue invoices or receive payments; or (3) arrange for 
other aspects of the transaction. The merchandise was shipped directly 
by SFP in Bangkok to the unaffiliated customer in the United States. 
The information on the record indicates that SFP's Bangkok office is 
responsible for confirming orders and for issuing the invoice directly 
to the customer. Payment also is sent directly from the unaffiliated 
U.S. customer to SFP in Bangkok. Therefore, the Department has 
determined that these sales were made in Bangkok prior to importation 
and, thus, are properly classified as EP transactions.
    We calculated EP based on the packed FOB or C&F price to 
unaffiliated purchasers for exportation to the United States. We made 
deductions for foreign movement expenses and international freight in 
accordance with section 772(c)(2)(A) of the Act.

Vita

    We calculated an EP for all of Vita's sales because the merchandise 
was sold directly by Vita outside the United States to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise indicated. We calculated EP based on the packed 
FOB or C&F price to unaffiliated purchasers for exportation to the 
United States. In accordance with section 772(c)(2)(A) of the Act, we 
made deductions from the starting price for foreign movement expenses 
and international freight.

KFC

    We calculated an EP for all of KFC's sales because the merchandise 
was sold directly by KFC outside the United States to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise indicated. We calculated EP based on the packed, 
FOB or C&F price to unaffiliated purchasers for exportation to the 
United States. In accordance with section 772(c)(2)(A) of the Act, we 
made deductions from the starting price for foreign movement expenses 
and international freight.

SIFCO

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

TPC

    During the POR, TPC had both EP and CEP transactions. We calculated 
an EP for sales where the merchandise was sold directly by TPC outside 
the United States 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, ex-warehouse, 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.

Malee

    For this POR, the Department found that all of Malee's U.S. sales 
were properly classified as CEP transactions because these sales were 
made in the United States by Malee's affiliated trading company Icon 
Foods.
    CEP was based on packed ex-dock U.S. port price to unaffiliated 
purchasers in the United States. We made deductions from the starting 
price for discounts in accordance with 19 CFR 351.401(c). We also made 
deductions for foreign inland movement expenses, insurance and 
international freight in accordance with section 772(c)(2)(A) of the 
Act. Because all of Malee's sales were CEP, in accordance with section 
772(d)(1) of the Act, we deducted from the starting price those selling 
expenses associated with selling the subject merchandise in the United 
States, including direct selling expenses and indirect selling expenses 
incurred by Icon Foods in the United States. We also deducted from CEP 
an amount for profit in accordance with section 772(d)(3) of the Act.

PRAFT

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

TROFCO

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

[[Page 48453]]

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 Thailand 
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 5 percent of the quantity of its 
sales to the U.S. market. See section 773(a)(1) of the Act. Therefore, 
for all respondents except Malee, in accordance with section 
773(a)(1)(B)(ii) of the Act, we based NV on the price at which the 
foreign like product was first sold for consumption in each 
respondent's largest viable third-country market, i.e., Germany for 
Vita, TPC and PRAFT, France for SIFCO, the United Kingdom for SFP, 
Finland for TIPCO, Japan for TROFCO, and Canada for KFC. With respect 
to Malee, we based NV on the price at which the foreign like product 
was first sold for consumption in the home market.

B. Cost of Production Analysis

    Pursuant to section 773(b)(1) of the Act, we initiated a cost of 
production (COP) investigation of comparison-market sales for each 
respondent. Based on timely allegations filed by the petitioners, we 
initiated COP investigations of KFC, TROFCO and SIFCO, to determine 
whether sales were made at prices below the COP. See Memoranda from 
Case Analysts to Holly Kuga, dated January 12, 2000. In addition, 
because we disregarded sales that failed the cost test in the last 
completed review of TIPCO, SFP, TPC, Malee, PRAFT and Vita, 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 were made at prices below the COP, as provided by 
section 773(b)(2)(A)(ii) of the Act.
    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, for each 
respondent, we calculated the weighted-average COP, by model, based on 
the sum of the costs of materials, fabrication, selling, general and 
administrative expenses (SG&A), 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 Notice of Final Results of Antidumping Duty Administrative 
Review: Canned Pineapple Fruit From Thailand, 63 FR 7392, 7398 
(February 13, 1998).\1\ 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 from their historical net realizable value (NRV) methodology 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 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 KFC, Praft 
and Malee. Because KFC, Praft and Malee already allocate fruit costs on 
a basis that reasonably takes into account qualitative differences 
between pineapple parts used in CPF versus juice products in their 
normal accounting records, we have not required KFC, Praft or Malee to 
recalculate their reported costs using the NRV methodology.
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    \1\ This determination was upheld by the Court of Appeals for 
the Federal Circuit. The Thai Pineapple Public Co. v. United States, 
187 F. 3d 1362 (Fed. Cir. 1999).
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    We made the following company-specific adjustments to the cost data 
submitted in this review.

SIFCO

    In allocating fruit costs between solid products and juice, SIFCO 
used a ratio different from the historical NRV ratio relied upon in the 
second review. Because we rely upon historical values for the 
allocation of fruit costs, and in order to be consistent with past 
reviews, we recalculated SIFCO's fruit costs, allocating them based on 
the verified figures from the second review. Further, we recalculated 
G&A to exclude foreign exchange losses incurred on accounts receivable 
and applied the recalculated G&A to a COM inclusive of packing. For a 
further discussion of these adjustments to SIFCO's calculations, see 
SIFCO Calculation Memorandum, dated July 31, 2000.

SFP

    SFP's reported fruit costs are based on NRV data for the 1990-1994 
period used in previous reviews. Based on verification findings, we 
made changes to SFP's reported can costs, overhead, and SG&A. See 
Verification Report, dated July 14, 2000, for a more detailed 
discussion of these changes.
1. 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.
    Consistent with the third review, we have not deducted from the COP 
the value of certain tax certificate revenues. In the third review, we 
determined that

[[Page 48454]]

the certificate is not tied to any duty drawback scheme, but rather, 
represents revenue paid to companies upon the export of domestically-
produced merchandise. See Notice of Final Results of Antidumping Duty 
Administrative Review: Canned Pineapple Fruit From Thailand, 64 FR 
69481, 69485 (December 13, 1999). Therefore, no adjustment was made to 
our dumping calculation for this payment.
2. 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 the below-cost sales were not made in ``substantial 
quantities.'' Where (1) 20 percent or more of a respondent's sales of a 
given product were made at prices below the COP and thus such sales 
were 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 time 
period, in accordance with section 773(b)(2)(D) of the Act, we 
disregarded the below-cost sales.
    We found that for certain CPF products, KFC, TIPCO, SFP, SIFCO, 
Malee and Vita 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 NV 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.

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, stuffing 
expenses, liner expenses and foreign inland freight. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (commissions, credit expenses and bank charges) 
and adding U.S. direct selling expenses (commissions, credit expenses 
and bank charges).

PRAFT

    We based third-country market prices on the packed FOB price to 
unaffiliated purchasers in Germany. We adjusted for foreign movement 
expenses. We made COS adjustments by deducting direct selling expenses 
incurred for third-country market sales including credit expenses and 
commissions and adding U.S. direct selling expenses including credit 
expenses and commissions.

SFP

    We based third-country market prices on the packed, FOB or C&F 
prices to unaffiliated purchasers in the United Kingdom. We adjusted 
for foreign movement expenses and international freight. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses, bank charges, warranties and 
commissions) and adding U.S. direct selling expenses (credit expenses 
and bank charges). We applied the commission offset in the manner 
described above.

Vita

    We based third-country market prices on the packed, FOB or C&F 
prices to unaffiliated purchasers in Germany. We adjusted for foreign 
movement expenses 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).

SIFCO

    We based third-country market prices on the packed, FOB prices to 
unaffiliated purchasers in France. We adjusted for foreign movement 
expenses. 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).

TPC

    We based third-country market prices on the packed, FOB or CNF 
prices to unaffiliated purchasers in Germany. We adjusted for foreign 
movement expenses 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, 
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). Where we compared U.S. sales that had no commission to 
comparison market sales with commissions, we applied the commission 
offset in the manner described above.

KFC

    We based third-country market prices on the packed, FOB prices to 
unaffiliated purchasers in Canada. We adjusted for foreign movement 
expenses. 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).

[[Page 48455]]

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).

TROFCO

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

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) of the 
Act, we calculated CV based on the sum of the COM of the product sold 
in the United States, plus amounts for SG&A 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 SG&A 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. We made COS adjustments by deducting direct selling expenses 
incurred on comparison market sales and adding U.S. direct selling 
expenses.

Level of Trade

    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.
    The U.S. Court of International Trade (CIT) has held that the 
Department's practice of determining level of trade for CEP 
transactions after CEP deductions is an impermissible interpretation of 
section 722(d) of the Act. See Borden, Inc. v. United States, 4 F. 
Supp. 2d 1221, 1241-42 (CIT March 26, 1998) (Borden II). The Department 
believes, however, that its practice is in full compliance with the 
statute. On June 4, 1999, the CIT entered final judgement in Borden II 
on the level-of-trade issue. See Borden, Inc. v. United States, Court 
No. 96-08-01970, Slip Op. 99-50 (CIT, June 4, 1999). The government has 
appealed Borden II to the Court of Appeals for the Federal Circuit. 
Consequently, the Department has continued to follow its normal 
practice of adjusting CEP under section 772(d) of the Act prior to 
starting a level-of-trade analysis, as articulated in the Department's 
regulations at section 351.412.
    To determine whether NV sales are at a different level of trade 
than EP or CEP transactions, 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 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.
    In this review, all respondents except Malee claimed that all of 
their sales involved identical selling functions, irrespective of 
channel of distribution or market. We examined these selling functions 
for Vita, SIFCO, SFP, TIPCO, PRAFT, TPC, TROFCO, and KFC, and found 
that sales activities were limited to negotiating sales prices, 
processing of purchase orders/contracts, invoicing, and collecting 
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 all respondents except Malee, we have preliminarily 
found that there is an identical level of trade in the U.S. and 
relevant comparison market, and no level-of-trade adjustment is 
required for comparison of U.S. sales to third-country sales.
    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

[[Page 48456]]

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.

Preliminary Determination Not To Revoke Order

    The Department may revoke an antidumping order in part if the 
Department concludes that: (1) One or more exporters or producers 
covered by the order have sold the merchandise at not less than NV for 
a period of at least three consecutive years, (2) it is unlikely that 
those persons will sell the subject merchandise at less than NV in the 
future; and (3) for any exporter or producer that the Secretary 
previously has determined to have sold the subject merchandise at less 
than NV, the exporter or producer agrees in writing to its immediate 
reinstatement in the order, as long as any exporter or producer is 
subject to the order, if the Secretary concludes that the exporter or 
producer, subsequent to the revocation, sold the subject merchandise at 
less than NV. See 19 CFR 351.222(b)(2).
    The Department ``may revoke, in whole or in part'' an antidumping 
duty order upon completion of a review under section 751 of the Act. 
While Congress has not specified the procedures that the Department 
must follow in revoking an order, the Department has developed a 
procedure for revocation that is described in 19 CFR 351.222. This 
regulation requires, inter alia, that a company requesting revocation 
submit the following: (1) A certification that the company has sold the 
subject merchandise at not less than NV in the current review period 
and that the company will not sell at less than NV in the future; (2) a 
certification that the company sold the subject merchandise in 
commercial quantities in each of the three years forming the basis of 
the receipt of such a request; and (3) an agreement that the order will 
be reinstated if the company is subsequently found to be selling the 
subject merchandise at less than fair value. Id. at 351.222(e)(i) See, 
e.g., Notice of Final Results of Antidumping Duty Administrative Review 
and Determination Not to Revoke the Antidumping Duty Order: Brass Sheet 
and Strip From the Netherlands, 65 FR 742, 743 (January 6, 2000). On 
August 6, 1999, Malee provided the required certifications.
    We have preliminarily determined a weighted-average margin of 1.72 
percent for Malee in the current review period. Consequently, we 
preliminarily find that Malee does not qualify for revocation of the 
order under section 351.222(b) of the Department's regulations. 
Therefore, we have not addressed the issues of whether Malee shipped in 
commercial quantities or whether the continued application of the 
antidumping duty order is necessary to offset dumping with regard to 
Malee. However, should Malee's final weighted-average margin for this 
review be less than 0.50 percent, we will address those issues at that 
time. We note that information on the record indicates that Malee's 
aggregate sales to the United States were not made in commercial 
quantities during each of the three review periods that formed the 
basis of Malee's revocation request. See the July 31, 2000 memorandum 
to Holly Kuga: Determination Not to Revoke in Part the Antidumping Duty 
Order on Canned Pineapple Fruit from Thailand. Interested parties are 
invited to comment in their case briefs on all of the requirements that 
must be met by Malee under section 351.222 of the Department's 
regulations in order to qualify for revocation from the antidumping 
duty order.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act, based on exchange rates in effect on the dates 
of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margins exist for the period July 1, 1998, 
through June 30, 1999:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Siam Food Products Company Ltd.............................         0.38
The Thai Pineapple Public Company, Ltd.....................         1.95
Kuiburi Fruit Canning Co. Ltd..............................         1.63
Thai Pineapple Canning Industry............................         4.69
Siam Fruit Canning (1988) Co. Ltd..........................         3.01
Vita Food Factory (1989) Co. Ltd...........................         5.19
The Prachuab Fruit Canning Company Ltd.....................         2.16
Tropical Food Industries Co., Ltd..........................         4.02
Malee Sampran Public Co., Ltd..............................         2.52
------------------------------------------------------------------------

    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 30 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. 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, (2) a brief summary of the argument and (3) a 
table of authorities. Further, we would appreciate it if parties 
submitting written comments would provide the Department with an 
additional copy of the public version of any such comments on a 
diskette. 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 or hearing, 
within 120 days from publication of this notice.
    Pursuant to 19 CFR 351.212(b), the Department calculated an 
assessment rate for each importer of subject merchandise. Upon 
completion of this review, the Department will instruct the U.S. 
Customs Service to assess antidumping duties on appropriate entries. We 
have calculated each importers' duty assessment rate based on the ratio 
of the total amount of antidumping duties calculated for the examined 
sales to the total entered value of examined sales. The importer-
specific rate will be assessed uniformly on all entries made during the 
POR.
    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

[[Page 48457]]

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 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) if neither the exporter nor 
the manufacturer is a firm covered in this or any previous review or 
the LTFV investigation 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(f)(2) 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: July 31, 2000.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-20031 Filed 8-7-00; 8:45 am]
BILLING CODE 3510-DS-P