[Federal Register Volume 65, Number 167 (Monday, August 28, 2000)]
[Notices]
[Pages 52065-52066]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-21929]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-337-803]


Notice of Initiation and Preliminary Results of Changed 
Circumstances Antidumping Duty Review: Fresh Atlantic Salmon from Chile

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

SUMMARY: Based on comments submitted by the petitioners with respect to 
the recent merger of Chilean salmon producers Marine Harvest Chile, 
S.A. (Marine Harvest) and Pesquera Mares Australes, Ltda. (Mares 
Australes), as well as information recently obtained by the Department 
of Commerce (the Department), we are initiating a changed circumstances 
review. Pursuant to this review, the Department preliminarily 
determines that the post-merger Marine Harvest is not the successor-in-
interest to either of the pre-merger companies, and is covered by the 
antidumping duty order on fresh Atlantic salmon from Chile. The 
Department is directing that liquidation of entries of subject 
merchandise under the name of Marine Harvest be suspended effective 
retroactively to July 1, 2000, the date of the merger of Mares 
Australes and Marine Harvest.

EFFECTIVE DATE: August 28, 2000.

FOR FURTHER INFORMATION CONTACT: Edward Easton or Gabriel Adler, at 
(202) 482-3003 or (202) 482-3813, respectively; AD/CVD Enforcement 
Office V, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street & Constitution 
Avenue, NW, Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

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 19 CFR Part 351 (1999).

Background

    On July 30, 1998, the Department issued an antidumping duty order 
on fresh Atlantic salmon from Chile. See Notice of Amended Final 
Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order: Fresh Atlantic Salmon from Chile, 63 FR 40699 (July 30, 1998). 
The order covered merchandise produced by a number of companies, 
including Mares Australes. The order excluded merchandise produced by a 
number of other companies, including Marine Harvest, which had been 
found to be dumping at a de minimis level in the less-than-fair-value 
(LTFV) investigation.
    On July 15, 1999, the parent company of Mares Australes purchased 
Marine Harvest. One week after the acquisition, the managing director 
of Mares Australes formed several task forces of Mares Australes and 
Marine Harvest officials to discuss how to harmonize and integrate the 
management of the two companies. By the end of 1999, the companies had 
laid off redundant management, and had created a single management 
structure.
    Mares Australes and Marine Harvest continued to distinguish salmon 
produced at their respective facilities, and to export their salmon to 
the United States under the respective names, until the end of June 
2000. On July 1, 2000, the parent company of Mares Australes directed, 
through a shareholder's meeting, that Mares Australes be formally 
merged with Marine Harvest, and that the merged entity do business 
under the name of Marine Harvest. A detailed explanation of these 
developments can be found in the memorandum from the team to Gary 
Taverman, dated August 21, 2000 (Mares Australes sales verification 
report), from the record of the first administrative review of the 
antidumping duty order on fresh Atlantic salmon from Chile.
    On July 25, 2000, the petitioners filed a letter with the 
Department expressing concern over the merger of Marine Harvest and 
Mares Australes, and requesting the immediate suspension of liquidation 
of subject merchandise exported under the name of Marine Harvest.

Scope of the Review

    The product covered by this review is fresh, farmed Atlantic 
salmon, whether imported ``dressed'' or cut. Atlantic salmon is the 
species Salmo salar, in the genus Salmo of the family salmoninae. 
``Dressed'' Atlantic salmon refers to salmon that has been bled, 
gutted, and cleaned. Dressed Atlantic salmon may be imported with the 
head on or off; with the tail on or off; and with the gills in or out. 
All cuts of fresh Atlantic salmon are included in the scope of the 
review. Examples of cuts include, but are not limited to: crosswise 
cuts (steaks), lengthwise cuts (fillets), lengthwise cuts attached by 
skin (butterfly cuts), combinations of crosswise and lengthwise cuts 
(combination packages), and Atlantic salmon that is minced, shredded, 
or ground. Cuts may be subjected to various degrees of trimming, and 
imported with the skin on or off and with the ``pin bones'' in or out.
    Excluded from the scope are (1) fresh Atlantic salmon that is ``not 
farmed'' (i.e., wild Atlantic salmon); (2) live Atlantic salmon; and 
(3) Atlantic salmon that has been subject to further processing, such 
as frozen, canned, dried, and smoked Atlantic salmon, or processed into 
forms such as sausages, hot dogs, and burgers.
    The merchandise subject to this investigation is classifiable as 
item numbers 0302.12.0003 and 0304.10.4093 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS statistical 
reporting numbers are provided for convenience and customs purposes, 
the written description of the merchandise is dispositive.

Initiation of Changed Circumstances Antidumping Review

    Based on the information discussed above, and in accordance with 
section 751(b)(1) of the Act and section 351.216 of the Department's 
regulations, the Department is initiating a changed circumstances 
review to determine whether salmon produced by the entity

[[Page 52066]]

known as Marine Harvest, comprised of the recently-merged operations of 
the former Marine Harvest and Mares Australes, is covered by the 
antidumping duty order on fresh Atlantic salmon from Chile.

Preliminary Results of Changed Circumstances Antidumping Review

    Section 351.221(c)(3)(ii) of the Department's regulations provides 
that the preliminary results of a changed circumstances review may be 
issued concurrently with the initiation of the review if the Department 
determines that expedited action is warranted. As explained below, the 
Department preliminarily finds that Marine Harvest, after being 
purchased and subsequently merged with Mares Australes, is no longer 
the entity that was excluded from the antidumping order. As such, the 
Department is directing the suspension of liquidation of entries of 
subject merchandise by Marine Harvest. The Department finds that 
expedited action is warranted, particularly in light of the fact that 
the Department recently collected substantial evidence regarding the 
purchase and merger of Marine Harvest with Mares Australes.
    In determining successor-in-interest questions in past cases, the 
Department typically has examined several factors including, but not 
limited to, changes in: (1) management; (2) production facilities; (3) 
supplier relationships; and (4) customer base. See, e.g., Brass Sheet 
and Strip from Canada: Final Results of Antidumping Duty Administrative 
Review, 57 FR 20460 (May 13, 1992). Such determinations are made based 
on consideration of the totality of the circumstances. If the evidence 
demonstrates that, with respect to the production and sale of the 
subject merchandise, the new company operates as the same business 
entity as the former company, the Department will accord the new 
company the same antidumping and countervailing duty treatment as its 
predecessor.
    In this case, the evidence on the record establishes that Marine 
Harvest, after being purchased and merged with Mares Australes, is 
substantially different from the pre-merger Marine Harvest. The 
management of Marine Harvest is now answerable to the parent company of 
the former Mares Australes, and consists of a number of former Mares 
Australes officials, including the operations manager. The production 
facilities of Marine Harvest have changed substantially, by the 
addition of the large number of hatcheries, freshwater sites, and ocean 
sites previously owned by Mares Australes (until the merger, the 
largest exporter of subject merchandise to the United States). Supplier 
relationships have changed, in that Marine Harvest now purchases 
virtually all of its feed from an affiliate of Mares Australes (whereas 
previously it purchased virtually all feed from unaffiliated parties). 
The customer base of the company has also changed, in that it now 
includes the distributor clients of Mares Australes, which are 
fundamentally different from the retail chain clients of the pre-merger 
Marine Harvest.\1\ See Mares Australes sales verification report.
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    \1\ According to the managing director of Mares Australes, the 
parent company of Mares Australes determined that the merged entity 
should retain the name of Marine Harvest principally because it had 
better name recognitiion in the U.S. market, and a more developed 
U.S. distribution system, than Mares Australes.
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    The post-merger Marine Harvest is also substantially different from 
the pre-merger Mares Australes. Though they are now answerable to the 
parent company of the pre-merger Mares Australes, the current president 
of the merged company worked for the pre-merger Marine Harvest, as did 
the manager now in charge of the finance and accounting staff. With the 
addition of Marine Harvest's large number of freshwater and saltwater 
salmon growing sites, the operations of the merged company are 
substantially greater than those of Mares Australes prior to the 
merger. Moreover, Mares Australes lacked a processing plant, and 
subcontracted processing services; the merged company now has a large 
processing plant, and all processing is now done in-house. Finally, 
Mares Australes' customers were distributors; the customers of the 
merged company include the retail chain customers of the pre-merger 
Marine Harvest.
    In sum, the merged company now doing business as Marine Harvest is 
substantially different from both pre-merger Marine Harvest and Mares 
Australes, and is therefore not the successor-in-interest to either. 
Given this, the Department preliminarily finds that the entity 
currently doing business as Marine Harvest is covered by the 
antidumping order on fresh Atlantic salmon. Accordingly, the Department 
will instruct the Customs Service to immediately suspend liquidation of 
all entries of fresh Atlantic salmon from Chile produced and exported 
under the name of Marine Harvest, that are entered, or withdrawn from 
warehouse, for consumption, effective retroactively to July 1, 2000, 
the date of the merger of Mares Australes and Marine Harvest.
    In determining what cash deposit rate to assign to Marine Harvest 
for this purpose, we believe it is more appropriate to assign the rate 
currently applicable to the pre-merger Mares Australes rather than the 
currently applicable all others rate. While Marine Harvest is not the 
successor in interest to Mares Australes, the currently applicable all 
others rate is higher than any antidumping margin ever assigned to 
either Marine Harvest or Mares Australes. Given this, we will instruct 
the Customs Service to require a cash deposit based on the cash deposit 
rate assigned to Mares Australes in the LTFV investigation, which was 
2.23 percent. This requirement for a cash deposit of estimated 
antidumping duties on Marine Harvest merchandise will continue unless 
and until it is modified pursuant to the final results of this changed 
circumstances review.

Public Comment

    Interested parties may submit case briefs and/or written comments 
no later than 14 days after the date of publication of these 
preliminary results of review. Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in such briefs or comments, may be 
filed no later than 21 days after the date of publication. Parties who 
submit arguments are requested to submit with the 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 diskette. 
Consistent with 19 CFR 351.216(e), the Department will issue the final 
results of this administrative review, which will include the results 
of its analysis of issues raised in any such comments, no later than 
270 days after the date on which this review was initiated, or within 
45 days if all parties agree to our preliminary determination.
    This notice is in accordance with section 751(b) of the Act.

    Dated: August 22, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-21929 Filed 8-25-00; 8:45 am]
BILLING CODE 3510-DS-P