[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Notices]
[Pages 13896-13903]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5620]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-813]


Certain Preserved Mushrooms from India: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to timely requests by three manufacturer/exporters 
and petitioners,\1\ on March 30, 2000, the Department of Commerce 
published a notice of initiation of an administrative review of the 
antidumping duty order on certain preserved mushrooms from India with 
respect to twelve companies: Agro Dutch Foods Ltd., Alpine Biotech 
Ltd., Dinesh Agro Products Ltd., Flex Foods Ltd., Himalya International 
Ltd., Hindustan Lever Ltd. (formerly Ponds India Ltd.), Mandeep 
Mushrooms Ltd., Premier Mushroom Farms, Saptarishi Agro Industries 
Ltd., Techtran Agro Industries Limited, Transchem Ltd., and Weikfield 
Agro Products Ltd.
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    \1\ The petitioners are the Coalition for Fair Preserved 
Mushroom Trade which includes the American Mushroom Institute and 
the following domestic companies: L.K. Bowman, Inc., Modern Mushroom 
Farms, Inc., Monterey Mushrooms, Inc., Mount Laurel Canning Corp., 
Mushrooms Canning Company, Southwood Farms, Sunny Dell Foods, Inc., 
and United Canning Corp.
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    On June 22, 2000, we received a timely submission from the 
petitioners to withdraw their request for administrative review for 
Alpine Biotech, Ltd., Dinesh Agro Products Ltd., Flex Foods Ltd., 
Mandeep Mushrooms Ltd., Premier Mushroom Farms, Saptarishi Agro 
Industries Ltd., and Transchem Ltd. On July 18, 2000, the Department 
published a notice of partial recission of the antidumping duty 
administrative review with respect to the above-mentioned companies (65 
FR 44522). The period of review is August 5, 1998, through January 31, 
2000.
    We preliminarily determine that sales have been made below normal 
value. Interested parties are invited to comment on these preliminary 
results. If these preliminary results are adopted in

[[Page 13897]]

our final results of administrative review, we will instruct the 
Customs Service to assess antidumping duties on all appropriate 
entries.

EFFECTIVE DATE: March 8, 2001.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger, Katherine 
Johnson, or Dinah McDougall, Office 2, AD/CVD Enforcement Group I, 
Import Administration-Room B099, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-4136, (202) 482-4929, or 
(202) 482-3773, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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 (April 1999).

Background

    On December 31, 1998, the Department published in the Federal 
Register (63 FR 72246) the final affirmative antidumping duty 
determination on certain preserved mushrooms from India. On February 
19, 1999, the Department published an amended final determination and 
antidumping duty order (64 FR 8311) .
    On February 14, 2000, the Department published a notice advising of 
the opportunity to request an administrative review of the antidumping 
duty order on certain preserved mushrooms from India (65 FR 7348). In 
response to timely requests by three manufacturer/exporters, Agro Dutch 
Foods Ltd. (Agro Dutch), Himalya International Ltd. (Himalya), and 
Hindustan Lever Ltd. (formerly Ponds India Ltd.) (HLL), and the 
petitioners, the Department published a notice of initiation of an 
administrative review with respect to twelve companies: Agro Dutch, 
Alpine Biotech Ltd. (Alpine Biotech), Dinesh Agro Products Ltd. (Dinesh 
Agro), Flex Foods Ltd. (Flex Foods), Himalya, HLL, Mandeep Mushrooms 
Ltd. (Mandeep), Premier Mushroom Farms (Premier), Saptarishi Agro 
Industries Ltd. (Saptarishi), Techtran Agro Industries Limited 
(Techtran), Transchem Ltd. (Transchem), Weikfield Agro Products Ltd. 
(Weikfield) (65 FR 16875, March 30, 2000). The period of review (POR) 
is August 5, 1998, through January 31, 2000.
    On March 29, 2000, the Department issued antidumping duty 
questionnaires to the above-mentioned twelve companies. We received 
responses to the original questionnaire during the period March 2000 
through May 2000. We issued supplemental questionnaires to the five 
respondents for which the reviews were not rescinded (see below) and 
received responses for them during the period August 2000 through 
February 2001.
    On June 16, 2000, the Department received allegations from the 
petitioners that Techtran and Weikfield sold certain preserved 
mushrooms in India at prices below the cost of production (COP). On 
July 18, 2000, the Department initiated cost investigations of 
Techtran's and Weikfield's home-market sales of this merchandise.
    On June 22, 2000, we received a timely submission from the 
petitioners withdrawing their request for administrative review for 
Alpine Biotech, Dinesh Agro, Flex Foods, Mandeep, Premier, Saptarishi, 
and Transchem. On July 18, 2000, the Department published a notice of 
partial recission of the antidumping duty administrative review with 
respect to the above-mentioned companies (65 FR 44522).
    On July 28, 2000, the Department extended the time limit for the 
preliminary results in this review until February 28, 2001. See Certain 
Preserved Mushrooms from India and Indonesia: Notice of Extension of 
Time Limit for Preliminary Results of Antidumping Duty Administrative 
Review, 65 FR 46426.
    We conducted verification of Weikfield's, Techtran's, and Himalya's 
questionnaire responses during the period November 2000 through January 
2001. The verification reports are on file in Room B-099 of the 
Commerce Department. The Department is conducting this review in 
accordance with section 751(a) of the Act.

Scope of the Review

    The products covered by this review are certain preserved mushrooms 
whether imported whole, sliced, diced, or as stems and pieces. The 
preserved mushrooms covered under this review are the species Agaricus 
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to 
mushrooms that have been prepared or preserved by cleaning, blanching, 
and sometimes slicing or cutting. These mushrooms are then packed and 
heated in containers including but not limited to cans or glass jars in 
a suitable liquid medium, including but not limited to water, brine, 
butter, or butter sauce. Preserved mushrooms may be imported whole, 
sliced, diced, or as stems and pieces. Included within the scope of 
this review are ``brined'' mushrooms, which are presalted and packed in 
a heavy salt solution to provisionally preserve them for further 
processing.
    Excluded from the scope of this review are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.
    The merchandise subject to this review is classifiable under 
subheadings 2003.10.00.27, 2003.10.0031, 2003.10.0037, 2003.10.0043, 
2003.10.0047, 2003.10.0053, and 0711.90.4000 of the Harmonized Tariff 
Schedule of the United States (HTS). Although the HTS subheadings are 
provided for convenience and Customs purposes, our written description 
of the scope of this review is dispositive.

Verification

    As provided in section 782(i) of the Act, we conducted 
verifications of Himalya, Techtran, and Weikfield from November 2000 
through January 2001. We conducted the verifications using standard 
verification procedures including on-site inspection of the 
manufacturers' facilities, the examination of relevant accounting, 
sales, and other financial records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public versions of the verification reports which 
are on file in the Central Records Unit (CRU) in room B-099 of the Main 
Commerce Building.
    Based on verification, we made certain changes to data in the sales 
listings submitted by Himalya, Techtran, and Weikfield used to 
calculate the preliminary margins (see below and the company-specific 
calculation memoranda dated February 28, 2001).

Fair Value Comparisons

    To determine whether sales of certain preserved mushrooms by the 
respondents to the United States were made at less than normal value, 
we compared constructed export price (CEP) or export price, as 
appropriate, to the normal value, as described in the ``Export Price/
Constructed Export Price'' and ``Normal Value'' sections of this 
notice.

[[Page 13898]]

    Pursuant to section 777A(d)(2) of the Act, we compared the export 
prices of individual U.S. transactions to the weighted-average normal 
value of the foreign like product where there were sales made in the 
ordinary course of trade, as discussed in the ``Cost of Production 
Analysis'' section below.
    In this proceeding, neither HLL nor Himalya had a viable home or 
third country market. Therefore, as the basis for normal value, we used 
constructed value when making comparisons in accordance with section 
773(a)(4) of the Act.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents covered by the description in the 
``Scope of the Review'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
With respect to Agro Dutch, Techtran, and Weikfield, we compared U.S. 
sales to sales made in the home or third country market within the 
contemporaneous window period, which extends from three months prior to 
the U.S. sale until two months after the sale. Where there were no 
sales of identical merchandise in the home or third country market made 
in the ordinary course of trade to compare to U.S. sales, we compared 
U.S. sales to sales of the most similar foreign like product made in 
the ordinary course of trade. For those U.S. sales of mushrooms for 
which there were no comparable home or third country market sales in 
the ordinary course of trade (i.e., above cost), we compared U.S. sales 
to constructed value.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order: Preservation method, container type, mushroom 
style, weight, grade, container solution, and label type.
    For HLL and Himalya, we compared U.S. sales to constructed value 
because these respondents had insufficient home market and/or third 
country sales during the POR. See ``Normal Value'' section below for 
further discussion.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine normal value based on sales in the comparison 
market at the same level of trade (LOT) as the export price or CEP 
transaction. The normal value LOT is that of the starting-price sales 
in the comparison market or, when normal value is based on constructed 
value, that of the sales from which we derive selling, general and 
administrative (SG&A) expenses and profit. For export price, the U.S. 
LOT is also the level of the starting-price sale, which is usually from 
the exporter to an unaffiliated U.S. customer. For CEP, it is the level 
of the constructed sale from the exporter to an affiliated importer, 
after the deductions required under section 772(d) of the Act. To 
determine whether normal value sales are at a LOT different from export 
price 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 LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which normal value is based and comparison-market sales at the 
LOT of the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. For CEP sales, if the normal value 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 normal 
value and CEP affects price comparability, we adjust normal value 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).
    We note that the U.S. Court of International Trade (CIT) has held 
that the Department's practice of determining LOTs for CEP transactions 
after CEP deductions is an impermissible interpretation of section 
772(d) of the Act. See Borden, Inc. v. United States, 4 F. Supp. 2d 
1221, 1241-42 (CIT 1998) (Borden). 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 on the LOT issue. See 
Borden Inc. v. United States, Court No. 96-08-01970, Slip Op. 99-50 
(CIT June 4, 1999). The government has filed an appeal of Borden which 
is pending before the U.S. Court of Appeals for the Federal Circuit. 
Consequently, the Department has continued to follow its normal 
practice of adjusting CEP under section 772(d) prior to starting a LOT 
analysis, as articulated by the Department's regulations at 
Sec. 351.412.
    Both Techtran and Weikfield claimed that they were unable to 
calculate a LOT adjustment and, instead, reported home market indirect 
selling expenses as a surrogate LOT adjustment. We have undertaken an 
evaluation to determine whether such an adjustment is necessary. In so 
doing, we examined both respondents' distribution systems, including 
selling functions, classes of customers, and selling expenses. Techtran 
sold to distributors in both markets. Weikfield provided no basis in 
its questionnaire responses to establish that it had multiple levels of 
trade in either market for purposes of this adjustment. With regard to 
Agro Dutch, all sales in both markets are made through one channel of 
distribution. Accordingly, all comparisons are at the same level of 
trade for Agro Dutch, Techtran and Weikfield and an adjustment pursuant 
to section 773(a)(7)(A) is not warranted.
    With regard to HLL and Himalya, we compared all U.S. sales to 
constructed value, as noted above. As we could not determine the LOT of 
the sales from which we derived the profit for constructed value, we 
could not determine whether there is a difference in LOT between any 
U.S. sales and constructed value. Therefore, we made no LOT adjustment 
nor a CEP offset (in the case of Himalya) to normal value.

Export Price/Constructed Export Price

    For Agro Dutch, HLL, Techtran and Weikfield, we used export price 
methodology, in accordance with section 772(a) of the Act, because the 
subject merchandise was sold directly to the first unaffiliated 
purchaser in the United States prior to importation and CEP methodology 
was not otherwise indicated. With respect to Himalya, we calculated CEP 
in accordance with section 772(b) of the Act, because the subject 
merchandise was first sold by Trans Atlantic or Global Reliance after 
importation into the United States. We based export price and CEP on 
packed prices to unaffiliated purchasers in the United States. For all 
respondents, for those sales for which the payment date was not 
reported, we calculated credit based on the higher of either the 
average number of days between shipment and payment using the sales for 
which payment information was reported, or the most recent 
questionnaire response date.

Agro Dutch

    We were unable to determine the appropriate date of sale for 
certain U.S. sales because Agro Dutch failed to provide the requested 
sales documentation for these sales. Section 776(a)(2)(B) of the Act 
provides that the Department will, subject to section 782(d), use the 
facts otherwise available in reaching a determination if a respondent 
fails to provide necessary information ``by the deadlines for

[[Page 13899]]

submission of the information or in the form and manner requested, 
subject to subsections (c)(1) and (e) of section 782'' (of the Act). In 
accordance with section 776(a)(2)(B) of the Act, in these preliminary 
results we find it necessary to use partial facts available where Agro 
Dutch did not provide us with information necessary to conduct our date 
of sale analysis. Section 782(c)(1) does not apply because Agro Dutch 
did not provide a full explanation of why it was not able to submit 
this information on time. Moreover, pursuant to section 782(d), Agro 
Dutch was specifically informed that it was required to submit this 
information, yet it failed to do so and failed to provide any 
explanation for this deficiency. Finally, under section 782(e), the 
Department concludes that Agro Dutch did not act to the best of its 
ability in responding to requests for this information (see discussion 
below).
    The date of sale affects the contemporaneous pool of home market 
sales to which the U.S. sale is to be compared, and the exchange rate 
for converting costs and expenses in foreign currencies. Because we 
cannot identify the appropriate date of sale for the transactions in 
question, we are unable to determine the appropriate contemporaneous 
home market comparison sales. Therefore, as facts available, we have 
compared these U.S. sales to a normal value based on constructed value. 
As we cannot identify the date of sale for purposes of currency 
conversions, we have applied the highest exchange rate during the POR 
for all currency conversions involving these sales, as facts available.
    The Department is authorized, under section 776(b) of the Act, to 
use an inference that is adverse to the interest of a party if the 
Department finds that the party has failed to cooperate by not acting 
to the best of its ability to comply with the Department's request for 
information. In both the March 29, 2000, questionnaire and the July 18, 
2000, supplemental questionnaire, we specifically requested copies of 
any sales contracts or agreements with its U.S. customers. At page 1 of 
the business proprietary version of the August 15, 2000, supplemental 
questionnaire response, Agro Dutch indicates that a relevant sales 
document exists with respect to these sales, but did not include it in 
its response. Accordingly, we find that Agro Dutch has not cooperated 
with respect to providing this information and an adverse inference is 
warranted in applying facts available for the dates of sale for these 
transactions.
    Agro Dutch reported the per-unit expense incurred for the Indian 
Customs fee ``CESS,'' which is incurred as a percentage of sales value, 
on a weight-basis. We recalculated this expense on a value basis using 
the 0.5% rate reported in the response.
    Agro Dutch reported its U.S. sales as sold on an FOB, C&F, or CIF 
basis, indicating that, at a minimum, it was responsible for all 
movement expenses necessary to transport the goods to the Indian port 
and load them onto a vessel. However, Agro Dutch did not report foreign 
inland freight, foreign inland insurance, and foreign brokerage and 
handling on its FOB sales. As a result, pursuant to section 
776(a)(2)(B) of the Act, it was necessary to use partial facts 
available to conduct our analysis. Since this information was missing 
for only a few sales, and we did not determine that the company did not 
act to the best of its ability, we applied the average expense incurred 
on the U.S. sales for which these expenses were reported as non-adverse 
facts available.
    We made deductions from the starting price, where appropriate, for 
foreign inland freight, insurance and brokerage, export duty (CESS), 
and international freight in accordance with section 772(c)(1) of the 
Act and 19 CFR 351.402(a).

Himalya

    We made deductions from the starting price, where appropriate, for 
foreign inland freight, brokerage and handling expenses, international 
freight, U.S. duty, U.S. inland freight, and U.S. warehousing expenses 
in accordance with section 772(c)(1) of the Act and 19 CFR 351.402(a). 
We also deducted indirect selling expense, credit expense, and 
inventory carrying costs pursuant to section 772(d)(1) of the Act and 
19 CFR 351.402(b). We made an adjustment for profit in accordance with 
section 773(d)(3) of the Act.
    At the beginning of the sales verification, Himalya provided new 
information on U.S. brokerage and handling expenses, which were 
previously unreported in the response. As explained above, section 
776(a)(2)(B) of the Act provides that the Department will, subject to 
section 782(d), use the facts otherwise available in reaching a 
determination if a respondent fails to provide necessary information 
``by the deadlines for submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 
782'' of the Act. Himalya neglected to submit this information in a 
timely manner. Section 782(c)(1) does not apply because Himalya did not 
provide a full explanation of why it was not able to submit this 
information on time. Moreover, pursuant to section 782(d), Himalya was 
specifically informed that it was required to submit this information, 
yet it failed to do so and failed to provide any explanation for this 
deficiency. Finally, under section 782(e), the Department concludes 
that Himalya did not act to the best of its ability in responding to 
requests for this information. Where a party has not acted to the best 
of its ability to comply with the Department's requests for 
information, the Department is authorized to use an inference that is 
adverse to the interest of that party, pursuant to section 776(b). 
Accordingly, as partial adverse facts available, we applied the highest 
brokerage and handling expense for any entry of subject merchandise 
made by Himalya during the POR. We recalculated imputed credit expenses 
using a single interest rate for all sales, as Himalya had calculated 
this expense using various interest rates. We also recalculated 
Himalya's home market and U.S. inventory carrying costs to reflect the 
Department's standard methodology. Finally, we recalculated the 
reported indirect selling expenses incurred in the United States by 
collapsing the revenues and expenses of Himalya's two affiliated U.S. 
importers, rather than using an average of the two companies' 
individual rates, as reported by Himalya. (See the Himalya Preliminary 
Results Calculation Memorandum dated February 28, 2001, for further 
detail).

HLL

    We made deductions from the starting price, where appropriate, for 
foreign inland freight, foreign brokerage and handling, export duty, 
and international freight in accordance with section 772(c)(1) of the 
Act and 19 CFR 351.402(a). We recalculated export duty using the 0.5% 
rate reported in the response.

Techtran

    We made deductions from the starting price, where appropriate, for 
foreign inland freight (includes brokerage and handling), export duty, 
international freight, and marine insurance in accordance with section 
772(c)(1) of the Act and 19 CFR 351.402(a). We revised international 
freight expenses incurred on certain sales, based on our verification 
findings. (See the Techtran Preliminary Results Calculation Memorandum 
dated February 28, 2001, for further detail.)

[[Page 13900]]

Weikfield

    We made deductions from the starting price, where appropriate, for 
foreign inland freight, foreign brokerage and handling, international 
freight, CESS, U.S. duty, and other U.S. transportation expenses in 
accordance with section 772(c)(1) of the Act and 19 CFR 351.402(a). 
Weikfield reported the per-unit expense incurred for CESS, which is 
incurred as a percentage of sales value, on a weight-basis. We 
recalculated this expense on a value basis using the 0.5% rate reported 
in the response. We also revised the U.S. duty and transportation 
expenses incurred on certain sales, based on our verification findings.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating 
normal value, we compared the respondents' volume of home market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    Techtran's and Weikfield's aggregate volume of home market sales of 
the foreign like product was greater than five percent of their 
aggregate volume of U.S. sales of the subject merchandise. Therefore, 
we determined that the home market provides a viable basis for 
calculating normal value for both Techtran and Weikfield.
    With regard to Agro Dutch, we determined that the home market was 
not viable because Agro Dutch's aggregate volume of home market sales 
of the foreign like product was less than five percent of its aggregate 
volume of U.S. sales of the subject merchandise. However, we determined 
that the third country market of the Netherlands was viable, in 
accordance with section 773(a)(1)(B)(ii) of the Act. Therefore, 
pursuant to section 773(a)(1)(C) of the Act, we have used third country 
sales as a basis for normal value for Agro Dutch.
    Both Himalya and HLL reported that during the POR they made no home 
market sales. Himalya did not make third country sales during the POR, 
while HLL's sales to third countries constituted less than five percent 
of its U.S. sales. Therefore, we determined that neither the home 
market nor any third country market was a viable basis for calculating 
normal value for HLL and Himalya. As a result, we used constructed 
value as the basis for calculating normal value for these two 
respondents, in accordance with section 773(a)(4) of the Act.

Cost of Production Analysis

    The Department disregarded certain sales made by Agro Dutch and HLL 
in the less-than-fair-value (LTFV) investigation pursuant to a finding 
in that review that sales failed the cost test (see Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Preserved Mushrooms from 
India, 63 FR 41789 (August 5, 1998)). Thus, in accordance with section 
773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or 
suspect that respondents Agro Dutch and HLL made sales in the home 
market or third country at prices below the cost of producing the 
merchandise in the current review period. However, in the instant 
review, HLL's third country market was not viable. See ``Normal Value'' 
section, above. Accordingly, we cannot perform a cost test with regard 
to HLL. In addition, as stated in the ``Background'' section of this 
notice, based on a timely allegation filed by the petitioners, the 
Department initiated an investigation to determine whether Techtran's 
and Weikfield's home market sales were made at prices less than the 
cost of production. As a result, the Department initiated 
investigations to determine whether the respondents made home market or 
third country sales during the POR at prices below their COP within the 
meaning of section 773(b) of the Act.

A. Calculation of COP

    We calculated the COP on a product-specific basis, based on the sum 
of the respondents' cost of materials and fabrication for the foreign 
like product, plus amounts for SG&A, interest expense, and the cost of 
all expenses incidental to placing the foreign like product in a 
condition packed ready for shipment in accordance with section 
773(b)(3) of the Act.
    We relied on COP information submitted by the respondents, except 
for the following adjustments:

Agro Dutch

    We revised the general and administrative (G&A) expense rate 
calculation to include certain expenses that were written off. We 
adjusted the cost incurred used as the denominator in the calculation 
to exclude those expenses written off and to account for the change in 
work-in-process inventory.
    We revised the interest expense rate to include interest expenses 
on working capital. We increased the denominator used in this 
calculation based on the same adjustments made in calculating the G&A 
expense rate. (See February 28, 2001, Calculation Memorandum to Neal 
Halper for a discussion of the above-referenced adjustments).

Techtran

    We disallowed Techtran's capitalization of all its costs incurred 
from the beginning of the POR through October 13, 1999, and the claimed 
start-up adjustment that was calculated based on the same period. We 
revised Techtran's reported costs by allowing Techtran a start-up 
adjustment only for the period August 1998 through October 1998.
    We adjusted Techtran's reported cost of manufacturing (COM) to 
reflect differences in its allocation methodologies from one period 
versus the other and to include costs related to the auditor's 
adjustments.
    We revised the G&A expense rate calculation to include the 
auditor's adjustments and capitalized G&A expenses. We adjusted the 
cost incurred used as the denominator in the calculation to (1) include 
depreciation expenses; (2) include capitalized COM; (3) exclude packing 
costs; and (4) account for work-in-process inventory.
    We revised the financial expense rate calculation to include 
capitalized interest expense. We increased the denominator used in this 
calculation based on the same adjustments made in calculating the G&A 
expense rate. (See February 28, 2001, Calculation Memorandum to Neal 
Halper for a discussion of the above-referenced adjustments).

Weikfield

    We disallowed Weikfield's capitalization of production costs 
incurred during the POR by including the total capitalized amount net 
of related depreciation in the reported costs.
    We adjusted Weikfield's reported COM to account for the change in 
the work-in-process inventory.
    We revised the G&A expense rate calculation to include capitalized 
G&A expenses and exclude certain selling expenses. We adjusted the cost 
incurred used as the denominator in the calculation to include 
depreciation expense and exclude antidumping expenses and the change in 
work-in-process inventory.
    We revised the financial expense rate calculation to include 
capitalized interest expenses, interest on affiliated party loans and 
exchange rate differences. We made the same adjustments to the 
denominator of this calculation that were made in calculating the G&A 
expense rate. (See

[[Page 13901]]

February 28, 2001, Calculation Memorandum to Neal Halper for a 
discussion of the above-referenced adjustments).

B. Test of Home Market Prices

    For all respondents except Himalya and HLL, we compared the 
weighted-average, per-unit COP figures for the POR to home market or 
third country sales of the foreign like product, as required by section 
773(b) of the Act, in order to determine whether these sales were made 
at prices below the COP. In determining whether to disregard home 
market or third country sales made at prices below the COP, we examined 
whether: (1) Within an extended period of time, such sales were made in 
substantial quantities; and (2) such sales were made at prices which 
permitted the recovery of all costs within a reasonable period of time. 
On a product-specific basis, we compared the COP, consisting of the 
COM, G&A and interest expenses, to the net home market or third country 
prices, less any applicable movement charges, rebates, discounts, and 
direct and indirect selling expenses.

C. Results of COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of the 
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 twenty percent or more of the respondent's sales of 
a given product during the POR were at prices less than the COP, we 
disregarded the below-cost sales where such sales were found to be made 
at prices which would not permit the recovery of all costs within a 
reasonable period of time (in accordance with section 773(b)(2)(D) of 
the Act).
    The results of our cost tests for all three of these companies 
indicated for certain home market products, less than twenty percent of 
the sales of the model were at prices below COP. We therefore retained 
all sales of these models in our analysis and used them as the basis 
for determining normal value.
    Our cost tests also indicated that for certain other home market 
products more than twenty percent of home market sales within an 
extended period of time were at prices below COP and would not permit 
the full recovery of all costs within a reasonable period of time. In 
accordance with section 773(b)(1) of the Act, we excluded these below-
cost sales of these models from our analysis and used the remaining 
sales as the basis for determining normal value.

Price-to-Price Comparisons

    For Agro Dutch, Techtran, and Weikfield, we based normal value on 
the price at which the foreign like product is first sold for 
consumption in the home market or third country, in the usual 
commercial quantities and in the ordinary course of trade, and at the 
same LOT as the export price or CEP, as defined by section 
773(a)(1)(B)(i) of the Act.
    We reduced normal value for inland freight, insurance and 
brokerage, and early payment and quantity discounts, where appropriate, 
in accordance with section 773(a)(6) of the Act and 19 CFR 351.401.
    Agro Dutch reported the per-unit expense incurred for CESS on its 
Dutch sales, which is incurred as a percentage of sales value, on a 
weight-basis. We recalculated this expense on a value basis using the 
0.5% rate reported in the response.
    For comparisons to Agro Dutch's, Techtran's, and Weikfield's export 
price sales, we made a circumstance-of-sale adjustment, where 
appropriate, for differences in credit and commission expenses pursuant 
to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410.
    Techtran and Weikfield reported an imputed credit expense on U.S. 
sales based on the letter of credit settlement date. At verification, 
we found that these respondents incur actual bank financing expenses 
and fees for discounting the letters of credit issued on U.S. sales. 
Accordingly, we have recalculated the imputed credit expense and added 
the bank's letter of credit fee based on our verification findings, as 
detailed in the February 28, 2001, Memorandum entitled Weikfield 
Preliminary Results Margin Calculation (Weikfield Margin Memo) and the 
February 28, 2001, Techtran Preliminary Results Calculation Memorandum 
(Techtran Calculation Memo).
    For these same respondents, the reported imputed credit expenses on 
home market sales were based on specific periods from shipment to 
payment. At verification, we were unable to support this reporting as 
Techtran's and Weikfield's customers generally pay on a line of credit 
system, which was not previously described to the Department (see 
January 16, 2001, Weikfield Sales Verification Report at page 5 and 
February 2, 2001, Techtran Sales Verification Report at page 6). 
Because we were unable to tie Techtran's and Weikfield's home market 
payment methodology to any information submitted in the questionnaire 
responses, we have disallowed a circumstance-of-sale adjustment for 
home market imputed credit expenses.
    Weikfield reported commissions paid to both affiliated and 
unaffiliated parties in the home market. The Department's practice is 
to treat payments to affiliated parties providing services that relate 
to the sale of merchandise as commissions if they are actual 
expenditures resulting from specific sales and are not intra-company 
transfers. The Department allows these expenses as direct deductions to 
price if they are at arm's length and tie directly to sales. See Final 
Results of Administrative Review: Large Newspaper Printing Presses from 
Germany, 66 FR 11557 (February 26, 2001), and accompanying Decision 
Memorandum at Comment 5. To establish whether commissions are made at 
arm's-length, the Department normally compares the commissions paid to 
affiliated selling agents to those paid by the respondent to any 
unaffiliated selling agents in the same market (exporting or U.S.) or 
in any third-country market (see Final Determination of Sales at Less 
Than Fair Value: Coated Groundwood Paper from Finland, France, Germany 
and the United Kingdom, 56 FR 56359, 56363 (November 4, 1991)).
    In this case, we have no evidence suggesting that the affiliated 
party payments at issue are intra-company transfers, as they are actual 
expenditures tied to specific sales. Therefore, we are accepting them 
as commissions and must determine their arm's-length nature in 
accordance with our normal practice. As there are no commissions paid 
in the U.S. market, and we have no information on any commissions paid 
in third country markets, the only comparison we can make is between 
the two sets of commissions paid in the home market. The unaffiliated 
commissions are paid at a significantly different rate than the 
affiliated commissions, but the responsibilities of each type of 
commissionaire are different, which may account for the difference in 
the commission rates (see sample commission agreements at Exhibit 5 of 
Weikfield's August 9, 2000, response). Since we have no other basis to 
determine the arm's-length nature of the affiliated commissions, for 
purposes of the preliminary results, we have accepted the affiliated 
commissions to the extent that the amount paid does not exceed the rate 
paid to unaffiliated commissions.
    Weikfield did not report its indirect selling expenses separately 
from the G&A expenses reported with the COP and constructed value data.

[[Page 13902]]

Accordingly, we recalculated the G&A expenses and calculated an 
indirect selling expense for this purpose (see February 28, 2001, 
Calculation Memorandum to Neal Halper and Weikfield Margin Memo).
    We also reduced normal value for packing costs incurred in the home 
or third country market, in accordance with section 773(a)(6)(B)(i), 
and increased normal value to account for U.S. packing expenses in 
accordance with section 773(a)(6)(A). With regard to Techtran, we 
revised U.S. and home market packing costs in accordance with 
verification findings. See Techtran Calculation Memo.
    Finally, we made adjustments to normal value, where appropriate, 
for differences in costs attributable to differences in the physical 
characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.

Calculation of Constructed Value

    We calculated constructed value in accordance with section 773(e) 
of the Act, which indicates that constructed value shall be based on 
the sum of each respondent's cost of materials and fabrication for the 
foreign like product, plus amounts for SG&A expenses, profit and U.S. 
packing costs. We made the same adjustments to constructed value that 
were made to COP as described above for Agro Dutch, Techtran, and 
Weikfield.
    Because Himalya and HLL had no viable home or third country market, 
we derived SG&A and profit for Himalya and HLL in accordance with 
section 773(e)(2)(B)(ii) of the Act and the Statement of Administrative 
Action accompanying the URAA, H.R. Doc. No. 103-316, Vol. 1 at 169-171 
(SAA). See 19 CFR 351.405(b)(2) (clarifying that under section 
773(e)(2)(B) of the Act, ``foreign country'' means the country in which 
the merchandise is produced). Under this provision, we may use an 
amount which reflects SG&A and profit based on actual amounts incurred 
or realized by other investigated companies on home market sales in the 
ordinary course of trade of the foreign like product. See section 
773(e)(2)(B)(ii) of the Act. As a result, we calculated Himalya's and 
HLL's SG&A and profit as a weighted average of the SG&A and profit 
amounts incurred on home market sales by Techtran and Weikfield during 
the cost reporting period. For further details see Memorandum to Neal 
Halper, dated February 28, 2001, for Himalya and HLL.

Himalya

    We relied on the constructed value data submitted by Himalya, 
except for the following adjustments:
    We revised the production quantities for the different can types to 
correct for reporting errors made by Himalya.
    We revised the direct material cost to reflect the cost of 
materials consumed during the entire POR.
    We revised Himalya's allocation of variable and fixed costs to 
products by revising the fixed asset base used in the allocation 
formula.
    We adjusted Himalya's reported COM to account for the change in 
work-in-process inventory.
    We disallowed the start-up adjustment claimed by Himalya. (See the 
February 28, 2001, Calculation Memorandum from Laurens Van Houten to 
Neal Halper for a discussion of the above-referenced adjustments.)

HLL

    For HLL we have requested, but will not receive in time for the 
preliminary results, the reconciliation of the submitted costs to the 
audited financial statements costs. As stated by the Department in 
Certain Cut-to-Length Carbon Steel Plate From Mexico: Final Results of 
Antidumping Duty Administrative Review, 64 FR 76, 78, (January 4, 1999) 
``{a}lthough the format of the reconciliation of submitted costs to 
actual financial statement costs depends greatly on the nature of the 
accounting records maintained by the respondent, the reconciliation 
represents the starting point of a cost response because it assures the 
Department that the respondent has accounted for all costs before 
allocating those costs to individual products.'' Therefore, due to the 
critical nature of this reconciliation, it is imperative that HLL 
provide the requested information. In order to minimize the burden 
placed on the respondent, in a supplemental questionnaire we agreed to 
allow HLL to provide the cost reconciliation for one fiscal year rather 
than for two fiscal years. In accordance with section 776 and 782 of 
the Act, failure to provide this information timely may result in the 
use of facts available for the final results.

Price-to-Constructed Value Comparisons

    For Himalya and HLL, we based normal value on constructed value, in 
accordance with section 773(a)(4) of the Act. For comparisons to HLL's 
export price sales, and in those instances where we compared Agro 
Dutch's, Techtran's and Weikfield's export prices to constructed value, 
we made circumstance-of-sale (COS) adjustments by deducting from 
constructed value the weighted-average home market direct selling 
expenses and adding the U.S. direct selling expenses, in accordance 
with section 773(a)(8) of the Act and section 19 CFR 351.410. For 
comparisons to Himalya's CEP sales, we also deducted credit expenses 
from normal value.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act using the rates posted at www.ita.doc.gov. With respect to Agro 
Dutch, we have applied the highest exchange rate during the POR for all 
currency conversions involving certain U.S. sales, as facts available. 
See ``Export Price/Constructed Export Price'' section, above.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
weighted-average dumping margins for the period August 5, 1998, through 
January 31, 2000, are as follows:

------------------------------------------------------------------------
                                                                 Percent
                     Manufacturer/Exporter                       margin
------------------------------------------------------------------------
Agro Dutch Foods, Ltd.........................................  \1\ 0.03
Himalya International, Ltd....................................     26.34
Hindustan Lever, Ltd..........................................     42.08
Techtran Agro Industries Limited..............................     66.24
Weikfield Agro Products, Ltd..................................    26.44
------------------------------------------------------------------------
\1\ De minimus.

    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.
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs. Case briefs from interested parties and 
rebuttal briefs, limited to the issues raised in the respective case 
briefs, may be submitted not later than 30 days and 37 days, 
respectively, from the date of publication of these preliminary 
results. See 19 CFR 351.309(c) and (d). Parties who submit case briefs 
or rebuttal briefs in this proceeding are requested to submit with each 
argument (1) a statement of the issue and (2) a brief summary of the 
argument. Parties are also encouraged to provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited.

[[Page 13903]]

    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c).

Assessment Rates

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appropriate appraisement instructions directly to the 
Customs Service upon completion of this review. The final results of 
this review shall be the basis for the assessment of antidumping duties 
on entries of merchandise covered by the final results of this review 
and for future deposits of estimated duties. We will instruct the 
Customs Service to assess antidumping duties on all appropriate entries 
covered by this review if any importer-specific assessment rate 
calculated in the final results of this review is above de minimis 
(i.e., 19 CFR 351.106(c)(1)). For assessment purposes, we intend to 
calculate importer-specific assessment rates for the subject 
merchandise by aggregating the dumping margins calculated for all U.S. 
sales examined and dividing this amount by the total entered value of 
the sales examined.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) The cash deposit rates for the reviewed 
companies will be those established in the final results of this 
review, except if the rate is less than 0.50 percent, and therefore, de 
minimis within the meaning of 19 CFR 351.106(C)(1), in which case the 
cash deposit rate 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 original LTFV investigation, but the manufacturer 
is, the cash deposit rate will be the rate established for the most 
recent period for the manufacturer of the merchandise; and (4) the cash 
deposit rate for all other manufacturers or exporters will continue to 
be 11.30 percent, the ``All Others'' rate made effective by the LTFV 
investigation. These requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Importers

    This notice also 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 published in accordance 
with sections 751(a)(1) of the Act and 19 CFR 351.221. Effective 
January 20, 2001, Bernard T. Carreau is fulfilling the duties of the 
Assistant Secretary for Import Administration.

    Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5620 Filed 3-7-01; 8:45 am]
BILLING CODE 3510-DS-P