[Federal Register Volume 66, Number 69 (Tuesday, April 10, 2001)]
[Notices]
[Pages 18596-18604]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-8820]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-813]


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

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

SUMMARY: In response to requests by producers/exporters of subject 
merchandise and by the petitioners, 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 ten producers/exporters of the subject merchandise. The period 
of review (POR) is July 1, 1999, through June 30, 2000.
    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.
    Interested parties are invited to comment on the preliminary 
results. Parties who submit arguments are requested to submit with each 
argument: (1) a statement of the issue and (2) a brief summary of the 
argument. Further, we would appreciate parties submitting written 
comments to provide the Department with an additional copy of the 
public version of any such comments on diskette.

EFFECTIVE DATE: April 10, 2001.

FOR FURTHER INFORMATION CONTACT: Constance Handley or Charles Riggle, 
at (202) 482-0631 or (202) 482-0650, respectively; AD/CVD Enforcement 
OfficeV, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are to 19 CFR 
Part 351 (April 2000).

Case History

    On July 18, 1995, the Department issued an antidumping duty order 
on CPF from Thailand. See Notice of Antidumping Duty Order and Amended 
Final Determination: Canned Pineapple Fruit From Thailand, 60 FR 36775 
(July 18, 1995). On July 20, 2000, we published in the Federal Register 
the notice of opportunity to request the fifth administrative review of 
this order. See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative Review, 
65 FR 45037 (July 20, 2000).
    On July 20, 2000, July 24, 2000, and August 3, 2000, the following 
companies requested that the Department conduct an administrative 
review for the period from July 1, 1999, through June 30, 2000 
respectively: Vita Food Factory (1989) Co., Ltd. (Vita), Kuiburi Fruit 
Canning Company Limited (KFC) and Malee Sampran Public Co., Ltd. 
(Malee); The remaining companies requested reviews for the same period 
on July 31, 2000: Siam Food Products Public Co. Ltd. (SFP), The Thai 
Pineapple Public Co., Ltd. (TIPCO), Thai Pineapple Canning Industry 
(TPC), and Dole Food Company, Inc., Dole Packaged Foods Company, and 
Dole Thailand, Ltd. (collectively, ``Dole'');
    In addition, on July 28, 2000, the petitioners, Maui Pineapple 
Company

[[Page 18597]]

and the International Longshoremen's and Warehousemen's Union, in 
accordance with 19 CFR 351.213(b)(1), requested a review of KFC, Malee, 
Prachuab Fruit Canning Company (Praft), Siam Fruit Canning (1988) Co., 
Ltd. (SIFCO), SFP, TIPCO, TPC, Vita, Dole, and Siam Agro Industry 
Pineapple and Others Co., Ltd. (SAICO).
    On August 3, 2000, Malee withdrew its own request for an 
administrative review and requested that the Department reject the 
petitioners' request for an administrative review of Malee. Malee 
argued that the petitioners' request does not comply with 19 CFR 
351.213(b)(1) governing review requests by domestic interested parties 
because the petitioners did not explain sufficiently why they had 
``reason to believe'' that the current antidumping duty rates do not 
reflect the true margin of less-than-normal-value sales. However, based 
on the Department's precedent for granting requests for administrative 
reviews, the Department deemed the petitioners' request to be adequate 
and decided to initiate an administrative review of Malee along with 
other companies for which reviews had been requested.
    On September 6, 2000, we published the notice of initiation of this 
antidumping duty administrative review, covering the period July 1, 
1999, through June 30, 2000. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 65 FR 53980 (September 6, 2000).
    On September 12, 2000 and September 15, 2000 respectively, in 
response to the Department's questionnaire, Praft and SAICO stated that 
they made no shipments to the United States of the subject merchandise 
during the POR. On September 26, 2000, the Department issued a letter 
to SAICO requesting confirmation that SAICO had made no sales through 
other pineapple companies or trading companies. On October 3, 2000, 
SAICO confirmed that it had no shipments to the United States through 
any channel. The Department independently confirmed with the U.S. 
Customs Service that there were no shipments from Praft or SAICO during 
the POR. Therefore, in accordance with section 351.213(d)(3) of the 
Department's regulations, and consistent with our practice, we are 
treating these firms as non-shippers for purposes of this review and 
are preliminarily rescinding this review with respect to Praft and 
SAICO.

Scope of the Review

    The product covered by this review is CPF, 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, the written description of the scope is 
dispositive.

Verification

    As provided in section 782(i)(3) of the Act, we verified 
information provided by Dole and TPC. 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 
are in the case file in Room B-099 of the Main Department of Commerce 
Building. Additionally, since the petitioners have submitted a written 
request for verification of the factual information submitted by SIFCO, 
and since SIFCO has not been verified in the last three reviews in 
which it participated, verification is mandatory in accordance with 19 
CFR 531.307(b)(1)(v). For this review, due to limited staffing 
resourses, SIFCO will be verified after the preliminary determination.

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, there were no changes to the material terms of sale 
after the original contract was signed, and these terms did not change 
once the contract was issued. Therefore, because the material terms of 
sale were set on this date, we relied on contract date as the date of 
sale, as we had in the 1998/1999 review involving SIFCO.

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, export taxes and U.S. import duties, 
where appropriate. Section 772(d)(1) of the Act provides for additional 
adjustments to CEP. Accordingly, for all relevant sales we deducted 
direct and indirect selling expenses incurred in the United States and 
an amount for profit.
    We determined the EP or CEP for each company as follows:

TIPCO

    For TIPCO's U.S. sales, 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. We calculated an EP for all of TIPCO's sales because 
CEP was not otherwise warranted based on the facts of record. Although 
TMC is a company legally incorporated in the United States, the

[[Page 18598]]

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 Hylsa 
Comment 3.
    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. In addition, we revised the stuffing cost to 
reflect an arms-length price. See Analysis Memorandum for the Thai 
Pineapple Public Co., Ltd., dated April 2, 2001 (TIPCO Analysis Memo).

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. See Analysis 
Memorandum for Siam Food Products Public Co. Ltd., dated April 2, 2001 
(SFP Analysis Memo).

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 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, terminal handling charge, bill of 
lading fee, customs clearance (shipping) charge, port charges, document 
fee, stuffing expenses, inland freight and other miscellaneous 
charges), U.S. customs duties, and U.S. brokerage and handling. See 
Analysis Memorandum for Vita Food Factory (1989) Co., Ltd., dated April 
2, 2001 (Vita Analysis Memo).

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. See Analysis Memorandum for Kuiburi Fruit 
Canning Company Limited, dated April 2, 2001 (KFC Analysis Memorandum).

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 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 including inland freight (which consisted of brokerage and 
handling, port/ gate charges, staffing charges, document charges, and 
truck costs), international freight, and U.S. brokerage and handling. 
See Analysis Memorandum for Siam Fruit Canning (1988) Co., Ltd., dated 
April 2, 2001 (SIFCO Analysis Memo).

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. See Analysis Memorandum for the Thai 
Pineapple Canning Industry, dated April 2, 2001 (TPC Analysis Memo).

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 the 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

[[Page 18599]]

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. See Analysis Memorandum 
for Malee Sampran Public Co., Ltd., dated April 2, 2001 (Malee Analysis 
Memo).

Dole

    For this POR, the Department found that all of Dole's U.S. sales 
were properly classified as CEP transactions because these sales were 
made in the United States by Dole Packaged Foods (DPF), a division of 
Dole.
    CEP was based on DPF's 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 
Dole'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 and indirect selling expenses incurred by DPF in the United 
States. We also deducted from CEP an amount for profit in accordance 
with section 772(d)(3) of the Act.
    In addition, based on verification findings we made changes to 
Dole's control numbers, marine insurance, advertising expense, indirect 
selling expenses, early payment discounts, the shipment ratio between 
Dole Thailand and Dole Philippines, inventory carrying cost, packing 
materials and the standard case factor for one product. We also added 
certain sales reported by Dole at verification and made an adjustment 
to the vendor allowance reported for these sales. See Memorandum to 
Gary Taverman from Constance Handley and Christopher Riker, 
Verification of the U.S. and Comparison Market Sales Information and 
the Cost Information in the Response of The Thai Pineapple Public 
Company Ltd. in the 1999-2000 Administrative Review of Canned Pineapple 
Fruit from Thailand, dated April 2, 2001, (Dole Verification Report) 
(at X); see also Analysis Memorandum for Dole Food Company, Dole 
Packaged Foods and Dole Thailand, dated April 2, 2001 (Dole Analysis 
Memo).

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 five 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, France for SIFCO, Netherlands for TPC, the United Kingdom for 
SFP, Finland for TIPCO, and Canada for Dole and 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-markets for each 
respondent. Because we disregarded sales that failed the cost test in 
the last completed review of TIPCO, SFP, TPC, Malee, KFC, SIFCO, and 
Vita, and in the investigation (i.e., the last segment in which Dole 
participated) for Dole, 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.\1\ We conducted the COP analysis as described below.
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    \1\ The 1998/1999 review was not completed until three months 
after the current review was initiated. Therefor, at the time the 
questionnaires were issued, we initiated the COP investigations 
based on the results of the completed 1997/1998 review for all 
companies except KFC and SIFCO. With regard to KFC and SIFCO, we 
initiated a COP investigation on March 21, 2001, based on the 
results of the 1998/1999 review. See. Memorandum from Christopher 
Riker to Gary Taverman, Re: Initiation of COP Investigations, (March 
21, 2001).
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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).\2\ 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.
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    \2\ 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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    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

[[Page 18600]]

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 Malee. Because Malee already 
allocates fruit costs on a basis that reasonably takes into account 
qualitative differences between pineapple parts used in CPF versus 
juice products in its normal accounting records, we have not required 
it to recalculate its reported costs using the NRV methodology.
    We made the following company-specific adjustments to the cost data 
submitted in this review.
     Dole. We revised the NRV ratio reported by Dole. In the 
questionnaire, we requested that Dole report the NRV by deducting the 
separable cost of processing, which was defined as ``post-split off 
costs,''\3\ from the revenues earned on the sale of all joint products 
(i.e. solid products and pineapple juice). Dole provided a chart 
purporting to show that it had done so, and therefore we had no reason 
to believe that the submission was deficient.\4\ At verification, we 
discovered that Dole had in fact deducted all costs except pineapple, 
including processing costs incurred before the split off-point. See 
Dole Verification Report (at 12).
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    \3\ In pineapple processing the split-off point occurs after the 
fruit is cored and peeled by the Ginaca machine.
    \4\ On September 15, 1999, Dole submitted a letter requesting 
that it be permitted to submit NRV data for 1990-1993 rather than 
through 1994, as requested by the Department. Dole did not mention 
in this request that it was having trouble determining the non-
separable costs of production.
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    As noted in past reviews, to capture the actual cost of the 
pineapple, it is necessary to deduct processing costs after the split-
off point from the revenue earned. See Notice of Final Results of 
Antidumping Duty Administrative Review and Final Determination Not to 
Revoke Order in Part: Canned Pineapple Fruit from Thailand, 65 FR 77851 
(December 13, 2000) and accompanying Decision Memo at Comment 4. By 
also deducting non-separable costs, Dole failed to arrive at the 
correct NRV. Pursuant to section 782(d) the Department is required to 
provide the respondent an opportunity to remedy its deficient 
submission, to the extent practicable and provided that such remedy can 
be made within the applicable deadlines. Because verification has 
already taken place and the deadline for submitting factual information 
has passed, we have determined that it is not practicable to provide 
Dole with an opportunity to correct its deficient submission. Because 
Dole failed to follow the explicit directions provided by the 
Department and did not provide the requested information, we have 
determined that it failed to act to the best of its ability. Therefore, 
pursuant to section 776(b) of the Act, we are making an adverse 
inference and assigning Dole, as adverse facts available, the highest 
NRV ratio from among the other companies in this segment of the 
proceeding.\5\
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    \5\ Corroboration of this figure is not necessary because it is 
not secondary information.
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    We also revised Dole's fruit cost to assign the same per-standard-
case fruit cost to all solid products. See Dole Verification Report, 
(at 10) and the Dole Analysis Memo, (at 3).
     Malee. We revised Malee's fruit cost allocation to reflect 
its historic fruit cost allocation for the entire POR. As noted above, 
we did not require Malee to recalculate its reported costs using the 
Department's prescribed NRV methodology because, in its normal 
accounting records, Malee had consistently allocated fruit costs on a 
basis that reasonably takes into account qualitative differences 
between pineapple parts used in CPF versus juice products. However, in 
Malee's February 6, 2001 response to the Department's supplemental 
questionnaire, Malee stated that, effective January 2000, it revised 
its cost allocation methodology used in the ordinary course of 
business, and calculated fruit costs for the last six months of the POR 
based on a revised fruit cost allocation methodology.
    In its February 6, 2001 supplemental questionnaire response, Malee 
explained that it allocated fruit costs to each particular product, 
based on the ``expected'' net realizable value of the finished good. In 
a second supplemental questionnaire issued on March 2, 2001, the 
Department asked Malee to explain further its revised methodology and 
to provide details on how selling expenses and other separable costs 
were deducted from the overall revenue in order to calculate the NRV. 
On March 14, 2001, Malee provided information on how fruit costs are 
calculated after the ``expected sales value'' factors are established. 
However, it is not clear from Malee's response how selling expenses and 
other separable costs were deducted from overall revenue to obtain the 
NRV.
    Since Malee did not provide sufficient information to support its 
claim that the new fruit cost allocation methodology is based on NRV, 
we are using Malee's historic fruit cost allocation as used in prior 
reviews to calculate fruit costs for this POR. We have adjusted the 
overall model-specific fruit costs accordingly using information 
already on the record for this review. For further discussion of this 
adjustment, see the Malee Analysis Memo.
     TPC. Based on cost verification findings, we made changes 
to TPC's reported juice costs. See Verification Exhibit C-18, and TPC 
Analysis Memo, for a further discussion of these changes.
2. Test of Comparison Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
adjusted weighted-average COP for each respondent to the comparison 
market sales of the foreign like product, in order to determine whether 
these sales had been made at prices below the COP within an extended 
period of time in substantial quantities, and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. On a product-specific basis, we compared the revised 
COP to the comparison market prices, less any applicable movement 
charges, taxes, rebates, commissions and other direct and indirect 
selling expenses.
    Consistent with the third and fourth reviews, we have not deducted 
from the COP the value of certain tax certificate revenues. In the 
third review, we determined that 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.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were made at prices 
below the COP, we did not disregard any below-cost sales of that 
product because 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

[[Page 18601]]

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, Dole, TIPCO, SFP, SIFCO, 
Malee, TPC 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 NV 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). See TIPCO Analysis Memorandum, dated April 2, 2001 
(at 2).
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, warranty expenses, commissions, and bank 
charges) and adding U.S. direct selling expenses (credit expenses, 
commissions and bank charges).
SIFCO
    We based third-country market prices on the packed, FOB or C&F 
prices to unaffiliated purchasers in France. 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).
TPC
    We based third-country market prices on the packed, FOB or C&F 
prices to unaffiliated purchasers in the Netherlands. 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).
    In addition, because we verified that TPC's affiliate, Princes, 
could in fact report billing adjustments on an invoice-specific basis, 
we are, where possible, relying on the verification exhibits to correct 
the sales database to reflect actual adjustments on an invoice-specific 
basis. Where we do not have verified, invoice-specific information on 
billing adjustments, we are disallowing the allocated adjustment on 
sales made through Princes for purposes of the preliminary 
determination in accordance with 19 CFR 351.401(g)(2). In addition, we 
have disallowed royalties paid by Princes to Princes Ltd. See TPC 
Analysis Memorandum, dated April 2, 2001.
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).
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). We also made 
a level of trade (LOT) adjustment where appropriate.
Dole
    We based third-country market prices on Dole Foods of Canada Ltd.'s 
(DFC) prices to unaffiliated purchasers in Canada. We adjusted for 
foreign movement expenses and international freight. We made COS 
adjustments by deducting direct selling expenses incurred on third-
country market sales. In addition, because the NV level LOT is more 
remote from the factory than the

[[Page 18602]]

CEP LOT (see the LOT section below), and there is no basis for 
determining whether the difference in the levels of trade between NV 
and CEP affects price comparability, we made a CEP offset pursuant to 
section 773(a)(7)(B) of the Act.
    In addition, based on verification findings we made changes to 
Dole's control numbers and the shipment ratio between Dole Thailand and 
Dole Philippines. See Dole Verification Report.

D. Calculation of Normal Value Based on Constructed Value

    For those CPF products for which we could not determine the NV 
based on comparison market sales because there were no contemporaneous 
sales of a comparable product in the ordinary course of trade, we 
compared the EP or CEP to CV. In accordance with section 773(e) 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 
comparison market 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 LOT as the EP or CEP transaction. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive SG&A expenses and profit. 
For EP sales, the U.S. level of trade is also the level of the 
starting-price sale, which is usually from exporter to importer. For 
CEP sales, it is the level of the constructed sale from the exporter to 
the importer.
    To determine whether NV sales are at a different LOT 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 LOT, 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 LOT 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 LOTs are the same, the functions and activities of the 
seller should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar.
    We note that the U.S. Court of International Trade (``CIT'') has 
held that the Department's practice of determining levels of trade 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 (1998); and Micron Technology, Inc. v. United 
States, 40 F.Supp.2d 481 (1999). The U.S. Court of Appeals for the 
Federal Circuit, however, has reversed the Court of International 
Trade's holdings in both Micron and Borden on the level of trade issue. 
The Federal Circuit held that the statute unambiguously requires 
Commerce to deduct the selling expenses set forth in section 772(d) 
from the CEP starting price prior to performing its LOT analysis. See 
Micron Technology, Inc. v. United States, Court Nos. 00-1058,-1060 
(Fed. Cir. March 7, 2001); see also Borden, Inc. v. United States, 
Court Nos. 99-1575,-1576 (Fed. Cir. March 12, 2001)(unpublished 
opinion). Consequently, the Department will continue to adjust the CEP, 
pursuant to section 772(d), prior to performing the LOT analysis, as 
articulated by the Department's regulations at Sec. 351.412.
    In this review, all respondents except Malee and Dole 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, TPC, 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 by the respondents. Therefore, for 
all respondents except Malee and Dole, we have preliminarily found that 
there is an identical LOT 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

    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 reported two different channels of distribution 
for its sales in the home market: (1) sales through Malee Supply (1994) 
Co. Ltd. (Malee Supply), an affiliated reseller which are made at a 
more advanced marketing stage than the factory-direct sales, and (2) 
factory-direct sales involving minimal selling functions and which are 
at a marketing stage identical to that of the CEP transactions after 
deductions.
    In the home market, Malee reported numerous selling functions 
undertaken by Malee Supply for its resales to small wholesalers, 
retailers and end-users. In addition to maintaining inventory, Malee 
Supply also handled all advertising during the POR. The advertising was 
directed at the ultimate consumer. Malee also reported that Malee 
Supply replaces damaged or defective merchandise and, as necessary, 
breaks down packed cases into smaller lot sizes for many sales. 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.

[[Page 18603]]

    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. Where 
possible, we compared sales at Malee's U.S. LOT to sales at the 
identical home market LOT. If no match was available at the same LOT, 
we compared sales at Malee's U.S. LOT to Malee's sales through Malee 
Supply at the more advanced LOT.
    To determine whether a LOT adjustment was warranted, we examined 
the prices of comparable product categories, net of all adjustments, 
between sales at the two home market LOTs we had designated. We found a 
pattern of consistent price differences between sales at these LOTs.
    In making the LOT adjustment, we calculated the difference in 
weighted-average prices between the two different home market LOTs. 
Where U.S. sales were compared to home market sales at a different LOT, 
we reduced the home market price by the amount of this calculated LOT 
difference.

Dole

    Dole reported six specific customer categories and one channel of 
distribution (sales through an affiliated reseller) for both its home 
market and U.S. sales. In its response, Dole claims that all of its 
sales to unaffiliated comparison market customers (i.e., the six 
customer categories) are at the same LOT because these sales are made 
through the same channel of distribution and involve the same selling 
functions.
    Dole had only CEP sales in the U.S. market. Dole reported that its 
CEP sales were made through a single channel of distribution (i.e., 
sales through its U.S. affiliate, Dole Packaged Foods (DPF)), which we 
have treated as one LOT because there is no apparent difference in the 
selling functions performed by DPF for the different customers. After 
making the appropriate deductions under section 772(d) of the Act for 
these CEP sales, we found that the remaining expenses associated with 
selling activities performed by Dole are limited to expenses related to 
the arrangement of freight and delivery to the port of export that are 
reflected in the CEP price. In contrast, the normal value prices 
include a number of selling expenses attributable to selling activities 
performed by DFC in the comparison market, such as inventory 
maintenance, warehousing, delivery, order processing, advertising, 
rebate and promotional programs, warranties, and market research. 
Accordingly, we concluded that CEP is at a different LOT from the 
normal value LOT.
    Having determined that the comparison market sales were made at a 
level more remote from the cannery than the CEP transactions, we then 
examined whether a LOT adjustment or CEP offset may be appropriate. In 
this case, Dole only sold at one LOT in the comparison market; 
therefore, there is no information available to determine a pattern of 
consistent price differences between the sales on which normal value is 
based and the comparison market sales at the LOT of the export 
transaction, in accordance with the Department's normal methodology as 
described above. See Porcelain-on-Steel Cookware from Mexico Final 
Results of Administrative Review, 65 FR 30068 (May 10, 2000). Further, 
we do not have information which would allow us to examine pricing 
patterns based on respondent's sales of other products, and there are 
no other respondents or other record information on which such an 
analysis could be based. Accordingly, because the data available do not 
provide an appropriate basis for making a LOT adjustment, but the LOT 
in the comparison market is at a more advanced stage of distribution 
than the LOT of the CEP transactions, we made a CEP offset adjustment 
in accordance with section 773(a)(7)(B) of the Act. This offset is 
equal to the amount of indirect expenses incurred in the comparison 
market not exceeding the amount of indirect selling expenses deducted 
from the U.S. price in accordance with 772(d)(1)(D) of the Act.

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, 1999, 
through June 30, 2000:

------------------------------------------------------------------------
                                                                Margin
                    Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Siam Food Products Company Ltd. (SFP).......................        0.18
Dole Food Company, Inc. (Dole)..............................        1.02
The Thai Pineapple Public Company, Ltd. (TIPCO).............        4.73
Kuiburi Fruit Canning Co. Ltd. (KFC)........................        1.66
Thai Pineapple Canning Industry (TPC).......................        2.33
Siam Fruit Canning (1988) Co. Ltd. (SIFCO)..................        1.41
Vita Food Factory (1989) Co. Ltd. (Vita)....................        4.57
Malee Sampran Public Co., Ltd. (Malee)......................       10.45
------------------------------------------------------------------------

    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 all entries of subject 
merchandise by that importer. 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. Where the assessment rate is above de minimis, the 
importer-specific rate will be assessed uniformly on all entries made 
during the POR.

Cash Deposit Requirements

    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

[[Page 18604]]

751(a)(1) of the Act: (1) The cash deposit rate for companies listed 
above will be the rate established in the final results of this review, 
except if the rate is less than 0.5 percent and, therefore, de minimis, 
the cash deposit will be zero; (2) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the 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. Effective January 20, 
2001, Bernard T. Carreau is fulfilling the duties of the Assistant 
Secretary for Import Administration.

    Dated: April 2, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-8820 Filed 4-9-01; 8:45 am]
BILLING CODE 3510-DS-P