[Federal Register Volume 66, Number 202 (Thursday, October 18, 2001)]
[Notices]
[Pages 52888-52893]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26290]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-836]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Live Processed Blue 
Mussels From Canada

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

EFFECTIVE DATE: October 18, 2001.

FOR FURTHER INFORMATION CONTACT: Zev Primor at (202) 482-4114, Maisha 
Cryor at (202) 482-5831 or Paige Rivas at (202) 482-0651, AD/CVD 
Enforcement Office IV, Group II, Import Administration, Room 1870, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230.

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 (URAA). In addition, unless otherwise 
indicated, all citations to Department of Commerce (Department) 
regulations refer to the regulations codified at 19 CFR part 351 (April 
2001).

Preliminary Determination

    We preliminarily determine that live processed blue mussels from 
Canada are being sold, or are likely to be sold, in the United States 
at less than fair value (LTFV), as provided in section 733 of the Act. 
The estimated margins of sales at LTFV are shown in the Suspension of 
Liquidation section of this notice.

Case History

    This investigation was initiated on April 6, 2001.\1\ See Notice of 
Initiation of Antidumping Investigation: Live Processed Blue Mussels 
From Canada, 66 FR 18227 (April 6, 2001) (Initiation Notice). Since the 
initiation of the investigation, the following events have occurred.
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    \1\ The petitioner in this investigation is Great Eastern Mussel 
Farms, Inc.
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    On April 25, 2001, the United States International Trade Commission 
(ITC) preliminarily determined that there is a reasonable indication 
that an industry in the United States is materially injured or 
threatened with material injury by reason of imports from Canada of 
mussels. See Mussels From Canada, 66 FR 85 (May 2, 2001).
    On May 8, 2001, in response to comments from interested parties 
pertaining the scope of the investigation, the Department issued a 
memorandum outlining the modifications to the scope language. See 
Memorandum to Tom Futtner ``Live Processed Blue Mussels from Canada: 
Modification to the Scope of the Subject Merchandise Following Comments 
from Interested Parties'' (May 8, 2001) on file in the Central Records 
Unit (CRU), room B-099 of the main Department of Commerce Building.
    Also on May 8, 2001, the Department issued Section A of the 
antidumping questionnaire to Confederation Cove Mussel Co., Ltd. 
(Confederation Cove), PEI Mussel King, Inc. (Mussel King), Prince 
Edward Aqua Farms, Inc., (Prince Edward), and Atlantic Aqua Farms, 
Inc., (Atlantic Aqua). On May 18, 2001, the Department issued Sections 
B and C of the antidumping questionnaire to the four respondents.
    On June 29, 2001, the petitioner requested a postponement of the 
preliminary determination in this investigation. On July 30, 2001, the 
Department published a Federal Register notice postponing the deadline 
for the preliminary determination until October 9, 2001. See Live 
Processed Blue Mussels From Canada: Extension of Time Limit for 
Preliminary Determination of Antidumping Duty Investigation, 66 FR 146 
(July 30, 2001). Although the deadline for this preliminary 
determination was originally October 9, 2001, in light of the events of 
September 11, 2001 and the subsequent closure of the Federal Government 
for reasons of security, the time frame for issuing this preliminary 
determination has been extended by two days.

[[Page 52889]]

Period of Investigation (POI)

    The POI is April 1, 2000, through March 31, 2001. This period 
corresponds to the four most recent fiscal quarters prior to the month 
of the filing of the petition (i.e., March 2000).

Postponement of the Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    On October 9, 2001, Confederation Cove and Atlantic Aqua requested 
that, in the event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination until 
135 days after the publication of the preliminary determination. 
Confederation Cove and Atlantic Aqua also included a request to extend 
the provisional measures to not more than 135 days after the 
publication of the preliminary determination. Accordingly, since we 
have made an affirmative preliminary determination, and the requesting 
parties account for a significant proportion of exports of the subject 
merchandise, we have postponed the final determination until not later 
than 135 days after the date of the publication of the preliminary 
determination.

Scope of Investigation

    Imports covered by the investigation are shipments of live 
processed blue mussels from Canada. Included in the scope are fresh, 
live, processed blue mussels (mytilus edulis). Processing may include, 
but is not limited to, purging, grading, debearding, picking, 
inspecting and packing. Processed mussels are mussels that are: (1) 
Free of sand or grit, broken product, defective product and beards 
(byssus threads); (2) uniform in size; and (3) packed or ready for 
packing. Mussels that meet the aforementioned characteristics, 
regardless of the methods used to achieve these characteristics, are 
covered by this investigation. The live processed blue mussels subject 
to this investigation are currently classifiable under subheading 
0307.31.00 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheading is provided for convenience and 
Customs purposes, the Department's written description of the scope of 
this investigation remains dispositive.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Where it is not practicable to examine all known 
producers/exporters of subject merchandise, section 777A(c)(2) of the 
Act permits the Department to investigate either (1) a sample of 
exporters, producers, or types of products that is statistically valid 
based on the information available at the time of selection, or (2) 
exporters and producers accounting for the largest volume of the 
subject merchandise that can reasonably be examined. Using company-
specific export data for the POI, which we obtained from queries of 
U.S. Customs data under the HTS number that corresponds to the subject 
merchandise, we found that sixty producers/exporters may have exported 
mussels to the United States during the POI. Due to limited resources 
we determined that we could investigate only the four largest 
producers/exporters, accounting for more than 50 percent of total 
exports to the United States. See memorandum regarding Selection of 
Respondents for the Antidumping Investigation of Live Processed Blue 
Mussels from Canada (May 1, 2001) on file in the CRU. Therefore, we 
designated Atlantic Aqua, Prince Edward, Confederation Cove, and Mussel 
King as mandatory respondents and sent them the antidumping 
questionnaire.

Product Comparisons

    In accordance with section 771(16) of the Act, all products 
produced by the respondents covered by the description in the Scope of 
Investigation section, above, and sold in Canada during the POI are 
considered to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We have relied upon 
package type and, in the case of one respondent also size, to match 
U.S. sales of subject merchandise to comparison-market sales of the 
foreign like product or constructed value (CV). Where there were no 
sales of identical merchandise in the home market to compare to U.S. 
sales, we compared U.S. sales to the next most similar foreign like 
product on the basis of the characteristics listed above.

Fair Value Comparisons

    During the POI, U.S. sales by the Canadian respondents were both 
export price (EP) and constructed export price (CEP) sales. To 
determine whether sales of mussels from Canada were made in the United 
States at LTFV, we compared EP and CEP to the normal value (NV), as 
described in the EP, CEP, and NV sections of this notice. In accordance 
with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-
average EPs and CEPs and compared these to weighted-average home market 
prices during the POI.

Date of Sale

    For home market and U.S. sales, the four respondents reported the 
date of invoice as the most appropriate date of sale. These respondents 
stated that the invoice date best reflects the date on which the 
material terms of sale are established and that price and/or quantity 
can and do change between order confirmation date and invoice/shipment 
date. The Department is preliminarily using the dates of sale reported 
by each respondent (i.e., date of invoice), as this is our preferred 
methodology. The Department uses invoice date under 19 CFR 351.401(i) 
unless there is sufficient evidence that material terms of sale 
initially set at some earlier date were not subject to change. However, 
we intend to fully examine establishment of material terms of sale at 
verification, and we will incorporate our findings, as appropriate, in 
our analysis for the final determination.

Export Price

    For Mussel King, Atlantic Aqua, Prince Edward and a portion of 
Confederation Cove's sales, we used EP for the price to the United 
States, in accordance with section 772(a) of the Act, because the four 
respondents reported that they sold the merchandise directly to 
unaffiliated U.S. customers or sold the merchandise to unaffiliated 
trading companies, with knowledge that these companies in turn sold the 
merchandise to U.S. customers, and constructed export price was not 
otherwise warranted for these transactions. For Mussel King, Atlantic 
Aqua, Prince Edward and Confederation Cove, we calculated EP using the 
packed prices charged to the first unaffiliated customer in the United 
States (the starting price). We deducted

[[Page 52890]]

from the starting price, where applicable, amounts for discounts, 
rebates, billing adjustments (Mussel King reported warranty expense 
which we are treating as a billing adjustment, see Calculation 
Memorandum of the Preliminary Results for the Less-Than Fair-Value 
Investigation of PEI Mussel King Inc., (Mussel King) (October 11, 2001) 
in file in the CRU), and movement expenses in accordance with section 
772(c)(2)(A) of the Act. In this case, movement expenses include 
foreign inland freight, international freight, foreign and U.S. 
brokerage and handling charges, insurance, U.S. duties, U.S. inland 
freight and U.S. warehousing. In the instant investigation, no 
additions to EP were warranted under section 772(c)(1) of the Act.

CEP

    In accordance with section 772(b) of the Act, CEP is the price at 
which the subject merchandise is first sold (or agreed to be sold) in 
the United States before or after the date of importation by or for the 
account of the producer or exporter of such merchandise or by a seller 
affiliated with the producer or exporter, to a purchaser not affiliated 
with the producer or exporter, as adjusted under subsections (c) and 
(d). For purposes of this investigation, Confederation Cove has 
classified a portion of its sales as CEP sales. For Confederation Cove, 
we calculated CEP based on packed prices to unaffiliated purchasers in 
the United States. We made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these included, where 
appropriate, brokerage and handling, international freight, and U.S. 
warehousing. In accordance with section 772(d)(1) of the Act, we 
deducted those selling expenses associated with economic activities 
occurring in the United States, including direct selling expenses 
(imputed credit expenses, repacking) and indirect selling expenses. For 
CEP sales, we also made an adjustment for profit in accordance with 
section 772(d)(3) of the Act. We recalculated Confederation Cove's 
reported U.S. freight expense by reallocating the freight expense over 
the quantity of subject merchandise sold during the POI. See 
Calculation Memorandum of the Preliminary Results for the Less-Than-
Fair Value Investigation of Confederation Cove Mussel Co. Ltd., 
(October 11, 2001) on file in the CRU. In the instant investigation, no 
additions to CEP were warranted under section 772(c)(1) of the Act.

NV

A. Selection of Comparison Market
    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or has 
sufficient aggregate value, if quantity is inappropriate) and that 
there is no particular market situation in the home market that 
prevents a proper comparison with the EP transaction. The statute 
contemplates that quantities (or value) will normally be considered 
insufficient if they are less than five percent of the aggregate 
quantity (or value) of sales of the subject merchandise to the United 
States. For this investigation, we found that all four respondents each 
had a viable home market for mussels. Thus, the home market is the 
appropriate comparison market in this investigation, and we used the 
respondents' submitted home market sales data for purposes of 
calculating NV. In deriving NV, we made adjustments as detailed in the 
``Calculation of NV Based on Home Market Prices'' and ``Calculation of 
NV Based on CV,'' sections below.
B. Affiliated-Party Transactions and Arm's-Length Test
    If an exporter or producer sells the subject merchandise to an 
affiliated party, the Department may calculate normal value based on 
that sale only if satisfied that the price is comparable to the price 
at which the exporter or producer sold the subject merchandise to a 
person who is not affiliated with the seller (i.e., arm's length 
price). See section 773(a)(1)(B)(i) of the Act and 19 CFR 351.403(c).
    Mussel King, Prince Edward, and Atlantic Aqua reported that they 
only sold mussels in the home market to unaffiliated customers. 
Therefore, the Department's arm's-length test is inapplicable with 
regard to their home market sales. Confederation Cove reported that it 
sold mussels in the home market to affiliated customers. We applied the 
arm's-length test to Confederation Cove's affiliated party sales by 
comparing these sales to sales of identical merchandise by 
Confederation Cove to unaffiliated home market customers. If the 
affiliated party sales satisfied the arm's-length test, we used the 
sales in our analysis. Sales to affiliated customers in the home market 
which were not made at arm's-length prices were excluded from our 
analysis because we consider such sales to be outside the ordinary 
course of trade. See section 773(a)(1)(B)(i) of the Act. To test 
whether these sales were made at arm's-length prices, we compared on a 
model-specific basis the starting prices of sales to affiliated and 
unaffiliated customers net of all discounts and rebates, movement 
charges, direct selling expenses, and home market packing. Where, for 
the tested models of subject merchandise, prices to the affiliated 
party were on average 99.5 percent or more of the price to the 
unaffiliated parties, we determined that sales made to the affiliated 
party were at arm's-length. See 19 CFR 351.403(c) and Antidumping 
Duties; Countervailing Duties; Final Rule 62 FR 27296, 27355 (The 
Preamble) (May 19, 1997).
C. Cost of Production (COP) Analysis
    On July 6 and July 12, 2001, the petitioner alleged that sales of 
mussels in the home market were made at prices below the fully absorbed 
COP with regard to Prince Edward and Atlantic Aqua, respectively. On 
July 19, 2001, the petitioner alleged that sales of mussels in the home 
market were made at prices below the fully absorbed COP with regard to 
both Mussel King and Confederation Cove. Accordingly, the petitioner 
requested that the Department conduct company-specific sales-below-COP 
investigations. Based upon the comparison of adjusted prices for the 
foreign like product to COP, and in accordance with section 
773(b)(2)(A)(i) of the Act, we found reasonable grounds to believe or 
suspect that sales of mussels produced in Canada were made at prices 
below the COP with regard to all four respondents. As a result, the 
Department has conducted an investigation to determine whether the four 
respondents made sales in the home market at prices below their 
respective COPs during the POI within the meaning of section 773(b) of 
the Act. We conducted the COP analysis described below. See Memorandum 
to Holly A. Kuga ``Petitioner's Allegation of Sales Below the Cost of 
Production for Atlantic Aqua Farms, Inc., (Aug. 15, 2001); Memorandum 
to Holly A. Kuga ``Petitioner's Allegation of Sales Below the Cost of 
Production for Prince Edward Aqua Farms (Aug. 15, 2001); Memorandum to 
Holly A. Kuga ``Petitioner's Allegation of Sales Below the Cost of 
Production for Confederation Cove Mussel Co., Ltd., (Aug. 15, 2001); 
Memorandum to Holly A. Kuga ``Petitioner's Allegation of Sales Below 
the Cost of Production for PEI Mussel King (Aug. 15, 2001), all on file 
in the CRU.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated a 
weighted-average COP for each respondent based

[[Page 52891]]

on the sum of the cost of materials and fabrication for the foreign 
like product, plus amounts for the home market general and 
administrative (G&A) expenses, including interest expenses. We relied 
on the COP data submitted by Confederation Cove, Mussel King, Prince 
Edward, and Atlantic Aqua in their cost questionnaire responses.
2. Test of Home Market Sales Prices
    On a model-specific basis, we compared the reported COP to the home 
market prices, less any applicable discounts and rebates, movement 
charges, selling expenses, commissions, and packing. We then compared 
the adjusted weighted-average COP to the home market sales of the 
foreign like product, as required under section 773(b) of the Act, in 
order to determine whether these sales had been made at prices below 
the COP within an extended period of time (i.e., a period of one year) 
in substantial quantities and whether such prices were sufficient to 
permit the recovery of all costs within a reasonable period of time.
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 during the POI were 
at prices less than the COP, we do not disregard any below-cost sales 
of that product because we determined that the below-cost sales were 
not made in ``substantial quantities'' within an extended period of 
time. Where 20 percent or more of a respondent's sales of a given 
product during the POI were at prices less than the COP, we determine 
such sales to have been made in ``substantial quantities'' within an 
extended period of time in accordance with sections 773(b)(2)(B) and 
773(b)(2)(C) of the Act. In such cases, because we compared prices to 
POI average costs, we also determine that such sales were not made at 
prices that would permit recovery of all costs within a reasonable 
period of time, in accordance with section 773(b)(2)(D) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Mussel King's and Confederation Cove's home market sales, within an 
extended period of time, were at prices less than the COP, in 
accordance with section 773(b)(1)(A) of the Act. We, therefore, 
excluded these sales and used the remaining above-cost sales as the 
basis for determining NV, in accordance with section 773(b)(1) of the 
Act. With respect to Atlantic Aqua's and Prince Edward's home market 
sales, we determined that less than 20 percent of their sales within an 
extended period of time were made at prices less than the COP. We, 
therefore, retained all home market sales for these two respondents and 
used them as the basis for determining NV, in accordance with section 
773(b)(1) of the Act.
D. Calculation of NV Based on Home Market Prices
    We based home market prices on the packed prices to unaffiliated 
purchasers in Canada. We adjusted, where applicable, the starting price 
for discounts and rebates. We made adjustments for any 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 pursuant to section 
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made 
adjustments for differences in circumstances of sale (COS) pursuant to 
section 773(a)(6)(C)(iii) of the Act by deducting direct selling 
expenses incurred for home market sales (credit expense), and adding 
U.S. direct selling expenses. We also made adjustments, pursuant to 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). Finally, we made a 
CEP offset adjustment to the NV for indirect selling expenses pursuant 
to section 773 (a)(7)(B) of the Act as discussed in the Level of Trade/
CEP Offset section below. No other adjustments to NV were claimed or 
allowed.
E. Calculation of NV Based on CV
    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. In the instant case, 
because NV can be based on home market sales, NV has not been 
calculated based on CV.
F. Level of Trade (LOT)/CEP Offset
    In accordance with section 773(a)(1)(B)(i) 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 transactions as appropriate. 
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 
selling, general, and administrative (SG&A) expenses and profit. For EP 
sales, the U.S. LOT is also the level of the starting-price sale, which 
is usually from exporter to importer. 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 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 LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, 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 Industrial Nitrocellulose From the United 
Kingdom; Notice of Final Results of Antidumping Duty Administrative 
Review, 65 FR 6148, 6151 (February 8, 2000).
    We obtained information from the respondents about the marketing 
stages involved in the reported U.S. and home market sales, including a 
description of the selling activities performed by the respondents for 
each channel of distribution. In identifying LOTs for EP and home 
market sales, we considered the selling functions reflected in the 
starting price before any adjustments. In identifying LOTs for CEP, we 
considered the selling functions reflected in the CEP, after the 
deduction of expenses and profit under section 772(d) of the Act. We 
expect that, if claimed levels of trade are the same, the functions and 
activities of the seller should be similar. Conversely, if a party 
claims that LOTs are different for different groups of sales, the 
functions and activities of the seller should be dissimilar. In this 
investigation, none of the respondents requested a LOT adjustment. 
However, Confederation Cove requested a CEP offset.
    With regard to home market sales, Confederation Cove reported that 
its sales were made to four categories of home market customers 
(distributors, retailers, processors and end users) through two 
channels of distribution. For both channels, Confederation Cove 
performed similar selling functions for all its home market customers 
(packaging, negotiating terms of sale, issuing invoices, preparing 
product for shipment, and processing orders). Because channels of 
distribution do not qualify as separate LOTs when the

[[Page 52892]]

selling functions performed for each customer class are sufficiently 
similar, we determined that there is a single LOT for home market 
sales. See the memorandum entitled Live Processed Blue Mussels from 
Canada: Level-of-Trade Analysis, dated October 11, 2001, (LOT 
Memorandum). For its U.S. market sales, Confederation Cove reported 
that it made EP and CEP sales of subject merchandise to three types of 
customers (distributors, retailers and restaurants) through two 
channels of distribution. The two channels are as follows: (1) Sales 
from Confederation Cove directly to unaffiliated U.S. distributors 
(i.e. Confederation Cove's EP sales); and (2) sales from Confederation 
Coves to its U.S. affiliate, who then resold the merchandise to 
unaffiliated distributors, retailers and restaurants (i.e. 
Confederation Cove's CEP sales). Further, it indicated that for both EP 
and CEP sales, it performed certain types of selling functions 
(packaging, negotiation of sales terms, preparing product for shipment, 
issuing invoices and processing orders) to varying degrees for each 
channel of distribution. We examined the types of selling functions 
provided in each of the two U.S. market channels of distribution, and 
determined, based upon the selling functions performed, that EP sales 
and CEP sales are made at two different LOTs, specifically, LOT1 (the 
LOT for EP sales) for EP sales, and at a less remote stage of 
distribution, LOT2 (the LOT for CEP sales), for CEP sales. See LOT 
Memorandum. We then compared LOT1 to the home market LOT and found that 
EP sales are provided at the same LOT as home market sales. Thus, no 
LOT adjustment is warranted for EP sales. We also compared LOT2 to the 
home market and found that CEP sales are provided at a different LOT 
than home market transactions. Specifically, we examined the selling 
functions performed by Confederation Cove for its U.S. CEP sales (as 
adjusted under section 772(d) of the Act)) and determined that they are 
at a different LOT than its home market sales because the company's CEP 
transactions were at a less advanced stage of distribution. Therefore, 
we have preliminarily found that Confederation Cove's home-market sales 
occurred at a different and more advanced LOT than its CEP sales to the 
United States. Because we compared CEP sales to home market sales which 
were at a more advanced LOT, we examined whether a LOT adjustment may 
be appropriate. In this case, Confederation Cove only sold at one LOT 
in the home market. Therefore, there is no basis upon which to 
demonstrate a pattern of consistent price differences between LOTs 
based on sales of subject merchandise. Further, we do not have 
information which would allow us to examine pricing patterns based on 
Confederation Cove's sales of other products and there is no other 
record information on which such a LOT analysis could be based. Because 
the data available do not provide an appropriate basis for making a LOT 
adjustment and the LOT in the home market is at a more advanced stage 
of distribution than the LOT of the CEP sales, a CEP offset is 
appropriate. Thus, we made a CEP-offset adjustment to HM sales in 
accordance with section 773(a)(7)(B) of the Act for comparison to 
Confederation Cove's CEP sales. In accordance with section 773(a)(7)(B) 
of the Act, we calculated the CEP offset as the lesser of the 
following: (1) the indirect selling expenses incurred for the home-
market sales, or (2) the indirect selling expenses deducted from the 
starting price in calculating CEP. See LOT Memorandum.
    Mussel King reported that it made EP sales of subject merchandise 
to a single type of customer through a single channel of distribution 
in the U.S. market. Further, Mussel King indicated that it performed 
certain types of selling functions (freight and delivery arrangements, 
promotional services, and customer claim/returned product support) for 
the U.S. customers. Because there is only one type of customer, a 
single channel of distribution, and the same selling functions are 
performed for every customer, we preliminarily determine that there is 
a single level of trade with respect to Mussel King's EP sales. Because 
we found that home market sales of subject merchandise are made to a 
single type of customer through a single channel of distribution with 
identical selling functions and intensity as those provided in the U.S. 
market, we preliminarily determined that Mussel King's EP sales are 
provided at the same LOT as its home market sales. Thus, no LOT 
adjustment is warranted, and we have not made a LOT adjustment for 
Mussel King's sales.
    Atlantic Aqua and Prince Edward reported that they sold subject 
merchandise to three different types of customers (distributor, retail 
and end user) in the home market. Further, they indicated that, for 
each of the reported channels of distribution, they provided the same 
types of selling functions (price negotiation, sales calls, 
interactions with customers, inventory maintenance, freight, and 
delivery) at the same levels of intensity. Since all types of customers 
received the same selling functions, at the same levels of intensity, 
we determine, preliminarily, that there is a single LOT in the home 
market with respect to Atlantic Aqua and Prince Edward. With regard to 
U.S. EP sales, both Atlantic Aqua and Prince Edward reported that their 
sales were made to the same type of customers and through the same 
channels of distribution as sales made in the home market (e.g., 
distributor, retail and end user). Further, both companies indicated 
that the selling functions for the U.S. customers are very similar to 
those provided for the home market customers (e.g., price negotiation, 
sales calls, interactions with customers, inventory maintenance, 
freight, and delivery). As a result, we preliminarily determine that 
there is a single level of trade for both companies for U.S. EP sales. 
Further, because the selling functions, offered by both companies, are 
very similar in nature and intensity in both the U.S. and the home 
markets, we have, preliminarily, found that both Atlantic Aqua's and 
Prince Edward's EP sales are provided at the same LOT as their home 
market sales. Thus, no LOT adjustment is warranted, and we have not 
made a LOT adjustment for Atlantic Aqua's and Prince Edward's sales.

Currency Conversions

    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 obtained from the Federal Reserve Bank (the 
Department's preferred source for exchange rates).

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determination.

All Others Rate

    Section 735(c)(5)(A) of the Act provides for the use of an ``all 
others'' rate, which is applied to non-investigated firms. See SAA at 
873. This section states that the all others rate shall generally be an 
amount equal to the weighted average of the weighted-average dumping 
margins established for exporters and producers individually 
investigated, excluding any zero and de minimis margins, and any 
margins based entirely upon the facts available. Therefore, we have 
preliminarily assigned to all other exporters of Canadian mussels, a 
margin that is the weighted average of the margins calculated for the 
respondents, excluding the zero margins.

[[Page 52893]]

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all entries of mussels 
from Canada, except for exports by Atlantic Aqua and Mussel King, that 
are entered, or withdrawn from warehouse, for consumption on or after 
the date of publication of this notice in the Federal Register. Because 
the estimated weighted-average dumping margins for Atlantic Aqua and 
Mussel King are zeros, we are not directing the Customs Service to 
suspend liquidation of entries of these companies from Canada. We are 
also instructing the Customs Service to require a cash deposit or the 
posting of a bond equal to the dumping margin, as indicated in the 
chart below.
    These instructions suspending liquidation will remain in effect 
until further notice.

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Atlantic Aqua Farms, Inc...................................         0.00
Confederation Cove, Inc....................................         4.70
Prince Edward Aqua Farms, Inc..............................         3.48
PEI Mussel King, Inc.......................................         0.00
All Others.................................................         4.33
------------------------------------------------------------------------

Disclosure

    The Department will disclose calculations performed within five 
days of the date of publication of this notice to the parties of the 
proceedings in this investigation in accordance with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determination is 
affirmative, the ITC will determine whether these imports are 
materially injuring, or threaten material injury to, the U.S. industry. 
The deadline for that ITC determination would be the later of 120 days 
after the date of this preliminary determination or 45 days after the 
date of our final determination.

Public Comment

    For the investigation of live processed mussels from Canada, case 
briefs for this investigation must be submitted no later than one week 
after the issuance of the last verification reports. The Department 
will notify the parties accordingly. Rebuttal briefs must be filed 
within five business days after the deadline for submission of case 
briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. Public versions of all comments and 
rebuttals should be provided to the Department and made available on 
diskette. Section 774 of the Act provides that the Department will hold 
a hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW., Washington, DC 20230. In the event that the Department 
receives requests for hearings from parties to several companies, the 
Department may schedule a single hearing to encompass all those 
companies. Parties should confirm by telephone the time, date, and 
place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request within 30 days of 
the publication of this notice. Requests should specify the number of 
participants and provide a list of the issues to be discussed. Oral 
presentations will be limited to issues raised in the briefs. If this 
investigation proceeds normally, we will make our final determination 
in the investigation of live processed mussels from Canada no later 
than 135 days after the date of this preliminary determination.
    This determination is issued and published pursuant to sections 
733(d) and 777(i)(1) of the Act.

    Dated: October 11, 2001.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 01-26290 Filed 10-17-01; 8:45 am]
BILLING CODE 3510-DS-P