[Federal Register Volume 66, Number 125 (Thursday, June 28, 2001)]
[Notices]
[Pages 34423-34425]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-16297]



[[Page 34423]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-337-807]


Initiation of Countervailing Duty Investigation: IQF Red 
Raspberries From Chile

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

ACTION: Initiation of countervailing duty investigation.

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EFFECTIVE DATE: June 28, 2001.

FOR FURTHER INFORMATION CONTACT: Craig W. Matney or Jennifer D. Jones 
at (202) 482-1778 and (202) 482-4194, respectively, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, Room 3099, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

Initiation of Investigation

The 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. In addition, unless otherwise indicated, 
all citations to the Department's regulations are references to the 
provisions codified at 19 CFR part 351 (April 2000).

The Petition

    On May 31, 2001, the Department received a petition filed in proper 
form by the IQF Red Raspberry Fair Trade Committee (hereinafter ``the 
petitioner''). The Department received information supplementing the 
petition throughout the initiation period.
    In accordance with section 702(b)(1) of the Act, the petitioner 
alleges that manufacturers, producers, or exporters of the subject 
merchandise from Chile receive countervailable subsidies within the 
meaning of section 701 of the Act, and that such imports are materially 
injuring, or threatening material injury to, an industry in the United 
States.
    The Department finds that the petitioner and its members filed this 
petition on behalf of the domestic industry because they are interested 
parties as defined in sections 771(9)(C) of the Act and they have 
demonstrated sufficient industry support. See infra, ``Determination of 
Industry Support for the Petition.''

Scope of Investigation

    The products covered by this petition are imports of individually 
quick frozen (IQF) whole or broken red raspberries from Chile, with or 
without the addition of sugar or syrup, regardless of variety, grade, 
size or horticulture method (e.g., organic or not), the size of the 
container in which packed, or the method of packing. The scope of the 
petition excludes fresh red raspberries and block frozen red 
raspberries (i.e., puree, straight pack, juice stock, and juice 
concentrate).
    The merchandise subject to this investigation is classifiable under 
0811.20.2020 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheading is provided for convenience and 
customs purposes, the written description of the merchandise under 
investigation is dispositive.
    During our review of the petition, we discussed the scope with the 
petitioner to ensure that it accurately reflects the product for which 
the domestic industry is seeking relief. Moreover, as discussed in the 
preamble to the Department's regulations (see Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27295, 27323 (May 19, 1997)), 
we are setting aside a period for parties to raise issues regarding 
product coverage. The Department encourages all parties to submit such 
comments within 20 calendar days of publication of this notice. 
Comments should be addressed to Import Administration's Central Records 
Unit at Room 1870, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230. The period of scope 
consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with parties prior to 
the issuance of the preliminary determination.

Consultations

    On June 13, 2001, the Department held consultations with 
representatives of the Government of Chile (GOC) pursuant to section 
702(b)(4)(ii) of the Act. During these consultations, the GOC submitted 
copies of public laws relating to certain programs alleged in the 
petition. The points raised in the consultations are described in the 
Memorandum to the File, ``CVD Consultations with Officials from the 
Government of Chile,'' dated June 13, 2001, and in the subsequent 
``Letter to Susan H. Kuhbach,'' dated June 14, 2001.

Determination of Industry Support for the Petition

    Section 702(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 702(c)(4)(A) of the Act 
provides that a petition meets this requirement if the domestic 
producers or workers who support the petition account for: (1) At least 
25 percent of the total production of the domestic like product, and 
(2) more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. Thus, to determine whether the 
petition has the requisite industry support, the statute directs the 
Department to look to producers and workers who produce the domestic 
like product. The International Trade Commission (ITC), which is 
responsible for determining whether ``the domestic industry'' has been 
injured, must also determine what constitutes a domestic like product 
in order to define the industry. While both the Department and the ITC 
must apply the same statutory definition regarding the domestic like 
product (section 771(10) of the Act), they do so for different purposes 
and pursuant to separate and distinct authority. In addition, the 
Department's determination is subject to limitations of time and 
information. Although this may result in different definitions of the 
domestic like product, such differences do not render the decision of 
either agency contrary to the law.\1\
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    \1\ See Algoma Steel Corp. Ltd. v. United States, 688 F. Supp. 
639, 642-44 (CIT 1988); High Information Content Flat Panel Displays 
and Display Glass from Japan: Final Determination; Rescission of 
Investigation and Partial Dismissal of Petition, 56 FR 32376, 32380-
81 (July 16, 1991).
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this subtitle.'' Thus, the reference point from which the 
domestic like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    The domestic like product referred to in the petition is the single 
domestic like product defined in the ``Scope of Investigation'' section 
above. No party has commented on the petition's definition of the 
domestic like product, and there is nothing on the record to indicate 
that this definition is inaccurate. The Department, therefore, has 
adopted the domestic like product definition set forth in the petition.
    Moreover, the Department has determined that the petition contains

[[Page 34424]]

adequate evidence of industry support; therefore, polling is 
unnecessary (see Initiation Checklist, dated June 20, 2001 (Initiation 
Checklist), at Industry Support). The petitioner indicated that there 
may be several additional small U.S. producers accounting for less than 
10 percent of U.S. production who are not petitioners. We have no 
knowledge of any other domestic producers. Accordingly, the Department 
determines that this petition is filed on behalf of the domestic 
industry within the meaning of section 732(b)(1) of the Act.

Injury Test

    Because Chile is a ``Subsidies Agreement Country'' within the 
meaning of section 701(b) of the Act, section 701(a)(2) applies to this 
investigation. Accordingly, the ITC must determine whether imports of 
the subject merchandise from Chile materially injure, or threaten 
material injury to, a U.S. industry.

Allegations and Evidence of Material Injury and Causation

    The petition alleges that the U.S. industry producing the domestic 
like product is being materially injured, or is threatened with 
material injury, by reason of the imports of the subject merchandise. 
The petitioner contends that the industry's injured condition is 
evident in the declining trends in net operating income, net sales 
volume and value, profit to sales ratios, and capacity utilization. The 
allegations of injury and causation are supported by relevant evidence 
including U.S. Customs import data, lost sales, and pricing 
information. We have assessed the allegations and supporting evidence 
regarding material injury and causation, and have determined that these 
allegations are properly supported by accurate and adequate evidence, 
and meet the statutory requirements for initiation (see Initiation 
Checklist).

Allegations of Subsidies

    Section 702(b) of the Act requires the Department to initiate a 
countervailing duty proceeding whenever an interested party files a 
petition on behalf of an industry, that (1) alleges the elements 
necessary for an imposition of a duty under section 701(a), and (2) is 
accompanied by information reasonably available to the petitioner 
supporting the allegations.

Initiation of Countervailing Duty Investigation

    The Department has examined the countervailing duty petition on IQF 
red raspberries from Chile and found that it complies with the 
requirements of section 702(b) of the Act. Therefore, in accordance 
with section 702(b) of the Act, we are initiating a countervailing duty 
investigation to determine whether manufacturers, producers, or 
exporters of IQF red raspberries from Chile receive countervailable 
subsidies.
    We are including in our investigation the following programs 
alleged in the petition to have provided countervailable subsidies to 
producers and exporters of the subject merchandise in Chile:

1. Suppliers Development Program
2. Export Promotion by ProChile
3. Corporacion de Fomento de la Produccion (CORFO) Export Subsidies
4. Law 18,576 Export Credit Limits
5. Law 18,634 Import Duties on Capital Goods
6. Law 18,480 Simplified Duty Drawback

    We are not including in our investigation the following programs 
alleged to benefit producers and exporters of the subject merchandise 
in Chile:
1. Law 18,645 Loan Guarantees
    The petition alleges that Law 18,645 provides to Chilean exporters 
of non-traditional goods loan guarantees of up to 50 percent of a 
loan's value, for loans which do not exceed U.S.$150,000. The petition 
further alleges that these guarantees are specific because they are 
limited to exporters. According to information provided by the 
petitioner, only products which qualify for simplified duty drawback 
under Law 18,480 are within the scope of Law 18,645.
    The GOC states that the regulations implementing Law 18,645 (which 
are reasonably available to the petitioner) set conditions for receipt 
of these loan guarantees. Either the product must be eligible for 
simplified duty drawback (see above) or the industry must have exported 
less than U.S.$16.7 million on average over the past two years. The IQF 
red raspberry industry does not meet either criterion. Moreover, the 
same allegation was made in Salmon, and was rejected by the Department 
because the petitioners failed to identify any preferential treatment 
or benefit from the program. (See Notice of Initiation of 
Countervailing Duty Investigation: Fresh Atlantic Salmon From Chile, 62 
FR 36772, 36775 (July 9, 1997). Therefore, the Department is not 
initiating an investigation of Law 18,645.
2. Start-up Assistance of Fundacion Chile
    The petition alleges that Fundacion Chile has participated in the 
development of the Chilean raspberry industry since 1980 when 
production, processing and marketing tests of raspberries began. The 
petition further alleges that in 1985, Fundacion Chile created two new 
producer/exporter berry companies in regions IX and X under its 
``Development of New Species for Export'' program. However, the 
petition does not allege any potential assistance subsequent to 1985. 
Under 19 CFR 351.524(b), non-recurring subsidies are allocated over a 
period corresponding to the average useful life (AUL) of the renewable 
physical assets used to produce the subject merchandise. 19 CFR 
351.524(d)(2) creates a rebuttable presumption that the AUL will be 
taken from the U.S. Internal Revenue Service's 1977 Class Life Asset 
Depreciation Range System (the ``IRS Tables''). For the asset class 
which includes IQF red raspberries, ``manufacture of other food 
products,'' the IRS Tables prescribe an AUL of 12 years. Therefore, the 
Department is not initiating an investigation of Fundacion Chile start-
up assistance because any potential benefit would have been received 
outside the applicable AUL.
    However, we will reexamine the allegation if the petitioner 
provides sufficient information that either extends the AUL to 
incorporate the period during which a benefit was received or if 
additional information is provided indicating that start-up assistance 
was provided to a producer or exporter during the appropriate period.

Distribution of Copies of the Petition

    In accordance with section 702(b)(4)(A)(i) of the Act, a copy of 
the public version of the petition has been provided to the GOC. We 
will attempt to provide a copy of the public version of the petition to 
each exporter named in the petition, as provided for under section 
351.203(c)(2) of the Department's regulations.

ITC Notification

    We have notified the ITC of our initiation, as required by section 
702(d) of the Act.

Preliminary Determination by the ITC

    The ITC will determine no later than July 16, 2001, whether there 
is a reasonable indication that imports of IQF red raspberries from 
Chile are causing material injury, or threatening to cause material 
injury to, a U.S. industry. A negative ITC determination

[[Page 34425]]

will result in the investigation being terminated; otherwise, the 
investigation will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: June 20, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-16297 Filed 6-27-01; 8:45 am]
BILLING CODE 3510-DS-P