[Federal Register Volume 67, Number 45 (Thursday, March 7, 2002)]
[Notices]
[Pages 10371-10377]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-5475]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-813]
Certain Preserved Mushrooms from India: Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to timely requests by four manufacturer/exporters
and the petitioner,\1\ on March 22, 2001, the Department of Commerce
published a notice of initiation of an administrative review of the
antidumping duty order on certain preserved mushrooms from India with
respect to twelve companies. The period of review is February 1, 2000,
through January 31, 2001.
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\1\ The petitioner is the Coalition for Fair Preserved Mushroom
Trade which includes the American Mushroom Institute and the
following domestic companies: L.K. Bowman, Inc., Modern Mushroom
Farms, Inc., Monterey Mushrooms, Inc., Mount Laurel Canning Corp.,
Mushrooms Canning Company, Southwood Farms, Sunny Dell Foods, Inc.,
and United Canning Corp.
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We preliminarily determine that sales have been made below normal
value. Interested parties are invited to comment on these preliminary
results. If these preliminary results are adopted in our final results
of administrative review, we will instruct the Customs Service to
assess antidumping duties on all appropriate entries.
EFFECTIVE DATE: March 7, 2002.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger, Kate Johnson, or
Margarita Panayi, Office 2, AD/CVD Enforcement Group I, Import
Administration-Room B099, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-4136, (202) 482-4929, or
(202) 482-0049, respectively.
SUPPLEMENTARY INFORMATION:
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (the Act), are references to the provisions effective
January 1, 1995, the effective date of the amendments made to the Act
by the Uruguay Round Agreements Act (URAA). In addition, unless
otherwise indicated, all citations to the Department of Commerce's (the
Department's) regulations are to 19 CFR Part 351 (April 2001).
Background
On February 19, 1999, the Department published in the Federal
Register an amended final determination and antidumping duty order on
certain preserved mushrooms from India (64 FR 8311).
On February 14, 2001, the Department published a notice advising of
the opportunity to request an administrative review of the antidumping
duty order on certain preserved mushrooms from India (66 FR 10269). In
response to timely requests by four manufacturer/exporters, Agro Dutch
Foods Ltd. (Agro Dutch), Himalya International Ltd. (Himalya),
Hindustan Lever Ltd. (formerly Ponds India Ltd.) (HLL), and Weikfield
Agro Products, Ltd. (Weikfield), and the petitioner, the Department
published a notice of initiation of an administrative review with
respect to twelve companies: Agro Dutch, Alpine Biotech Ltd. (Alpine
Biotech), Dinesh Agro Products Ltd. (Dinesh Agro), Flex Foods Ltd.
(Flex Foods), Himalya, HLL, Mandeep Mushrooms Ltd. (Mandeep), Premier
Mushroom Farms (Premier), Saptarishi Agro Industries Ltd. (Saptarishi),
Techtran Agro Industries Limited (Techtran), Transchem Ltd.(Transchem),
and Weikfield (66 FR 16037, March 22, 2001). The period of review (POR)
is February 1, 2000, through January 31, 2001.
On March 30, 2001, the Department issued antidumping duty
questionnaires to the above-mentioned twelve companies. We received
responses to the original questionnaire during the period May through
July 2001. We issued supplemental questionnaires in August 2001 and
January 2002, and received responses during the period August through
September 2000 and February 2002.
On April 23, 2001, we received a timely submission from HLL to
withdraw its request for an administrative review. On April 24, 2001,
we received a timely submission from the petitioner to withdraw its
request for administrative reviews of HLL and Transchem.
In June 2001, counsel for Saptarishi informed the Department that
the company would no longer participate in the 2000-2001 administrative
review. On June 14, 2001, we received a timely submission from the
petitioner to withdraw its request for administrative review of Alpine
Biotech, Dinesh Agro, Flex Foods, Mandeep, Premier, and Techtran. On
July 13, 2001, the Department published a notice of partial recission
of the antidumping duty administrative review with respect to Alpine
Biotech, Dinesh Agro, Flex Foods, HLL, Mandeep, Premier, and Techtran,
and Transchem (66 FR 36753). Therefore, the Department is reviewing
only Agro Dutch, Himalya, Saptarishi and Weikfield in this
administrative review.
On July 11, 2001, the Department received an allegation from the
petitioner that Himalya sold certain preserved mushrooms in India at
prices below the cost of production (COP). On August 9, 2001, the
Department initiated a cost investigation of Himalya's home-market
sales of this merchandise. See August 9, 2001, Memorandum to Louis
Apple from The Team Regarding ``Allegation of Sales Below the Cost of
Production for Himalya International Limited (Himalya).'' On July 19,
2001, the Department extended the time limit for the preliminary
results in this review until February 28, 2002. See Certain Preserved
Mushrooms from India, Indonesia, and the People's Republic of China:
Notice of Extension of Time Limit for Preliminary Results in
Antidumping Duty Administrative Reviews, 66 FR 37640.
Scope of the Order
The products covered by this order are certain preserved mushrooms
whether imported whole, sliced, diced, or as stems and pieces. The
preserved mushrooms covered under this order are the species Agaricus
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to
mushrooms that have been prepared or preserved by cleaning, blanching,
and sometimes slicing or cutting. These mushrooms are then packed and
heated in containers including but not limited to cans or glass jars in
a suitable liquid medium, including but not limited to water, brine,
butter, or butter sauce. Preserved mushrooms may be imported whole,
sliced, diced, or as stems and pieces. Included within the scope of
this order are ``brined'' mushrooms, which are presalted and packed in
a heavy salt solution to provisionally preserve them for further
processing.
Excluded from the scope of this order are the following: (1) All
other species of mushroom, including straw mushrooms; (2) all fresh and
chilled mushrooms, including ``refrigerated'' or ``quick blanched
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5)
``marinated,'' ``acidified,'' or ``pickled'' mushrooms, which are
[[Page 10372]]
prepared or preserved by means of vinegar or acetic acid, but may
contain oil or other additives.
The merchandise subject to this order is classifiable under
subheadings 2003.10.0027, 2003.10.0031, 2003.10.0037, 2003.10.0043,
2003.10.0047, 2003.10.0053, and 0711.90.4000 of the Harmonized Tariff
Schedule of the United States (HTS)\2\. Although the HTS subheadings
are provided for convenience and customs purposes, our written
description of the scope of this order is dispositive.
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\2\ As of January 1, 2002, the HTS numbers are as follows:
2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143,
2003.10.0147, 2003.10.0153, and 0711.51.0000.
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Use of Facts Otherwise Available
As noted above in the ``Background'' section, Saptarishi informed
the Department in June 2001 that it would no longer participate in this
review. Because of Saptarishi's refusal to cooperate in this review, we
determine that the application of facts available is appropriate,
pursuant to section 776(a)(2) of the Act.
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person (A) withholds information that has been requested
by the administering authority; (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782; (C) significantly impedes a proceeding under this title; or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority shall, subject
to section 782(d), use the facts otherwise available in reaching the
applicable determination under this title.''
Because Saptarishi refused to participate in this administrative
review, we find that, in accordance with sections 776(a)(2)(A) and (C)
of the Act, the use of total facts available is appropriate (see, e.g.,
Final Results of Antidumping Duty Administrative Review for Two
Manufacturers/Exporters: Certain Preserved Mushrooms from the People's
Republic of China, 65 FR 50183, 50184 (August 17, 2000) (for a more
detailed discussion, see Preliminary Results of Antidumping Duty
Administrative Review for Two Manufacturers/Exporters: Certain
Preserved Mushrooms from the People's Republic of China, 65 FR 40609,
40610-40611 (June 30, 2000)); Notice of Final Determination of Sales at
Less Than Fair Value: Persulfates from the People's Republic of China,
62 FR 27222, 27224 (May 19, 1997); and Certain Grain-Oriented
Electrical Steel from Italy: Final Results of Antidumping Duty
Administrative Review, 62 FR 2655 (January 17, 1997) (for a more
detailed discussion, see Preliminary Results of Antidumping Duty
Administrative Review: Certain Grain-Oriented Electrical Steel from
Italy, 61 FR 36551, 36552 (July 4, 1996)).
Section 776(b) of the Act provides that, if the Department finds
that an interested party ``has failed to cooperate by not acting to the
best of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of the
party as facts otherwise available. Adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See Statement
of Administrative Action (SAA) accompanying the URAA, H.R. Doc. No.
103-316, at 870 (1994). Furthermore, ``an affirmative finding of bad
faith on the part of the respondent is not required before the
Department may make an adverse inference.'' See Antidumping Duties;
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997).
Section 776(b) of the Act authorizes the Department to use as
adverse facts available information derived from the petition, the
final determination from the LTFV investigation, a previous
administrative review, or any other information placed on the record.
Under section 782(c) of the Act, a respondent has a responsibility not
only to notify the Department if it is unable to provide requested
information, but also to provide a ``full explanation and suggested
alternative forms.'' Saptarishi informed the Department of its
unwillingness to participate in this review, thereby failing to comply
with this provision of the statute. Therefore, we determine that
Saptarishi failed to cooperate to the best of its ability, making the
use of an adverse inference appropriate.
In this proceeding, in accordance with Department practice (see,
e.g., Rescission of Second New Shipper Review and Final Results and
Partial Rescission of First Antidumping Duty Administrative Review
Brake Rotors From the People's Republic of China, 64 FR 61581, 61584
(November 12, 1999); and Fresh Garlic from the People's Republic of
China: Final Results of Antidumping Duty Administrative Review, 65 FR
33295 (May 23, 2000) (for a more detailed discussion, see Preliminary
Results of Antidumping Duty Administrative Review: Fresh Garlic From
the People's Republic of China, 64 FR 39115 (July 21, 1999)), as
adverse facts available, we have preliminarily assigned to exports of
the subject merchandise produced by Saptarishi the rate of 66.24
percent, the highest rate calculated for any cooperative respondent in
the original less-than-fair-value (LTFV) investigation or the 1998-2000
administrative review. The rates assigned to respondents in the
previous two segments of the proceeding range from single digits for
cooperative respondents to a petition rate of 243.87 for non-
cooperative respondents. The Department's practice when selecting an
adverse rate from among the possible sources of information is to
ensure that the margin is sufficiently adverse ``as to effectuate the
purpose of the facts available rule to induce respondents to provide
the Department with complete and accurate information in a timely
manner.'' See Final Determination of Sales at Less than Fair Value:
Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909,
8932 (February 23, 1998). We find the application of a rate of 66.24
percent to Saptarishi to be sufficiently adverse in this case.
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' the Department shall, to the extent
practicable, corroborate that information from independent sources
reasonably at the Department's disposal. Secondary information is
described in the SAA as ``{i}nformation derived from the petition that
gave rise to the investigation or review, the final determination
concerning the subject merchandise, or any previous review under
section 751 concerning the subject merchandise.'' See SAA at 870. The
SAA states that ``corroborate'' means to determine that the information
used has probative value (id.). To corroborate secondary information,
the Department will, to the extent practicable, examine the reliability
and relevance of the information to be used.
Unlike other types of information, such as input costs or selling
expenses, there are no independent sources from which the Department
can derive calculated dumping margins; the only source for margins is
administrative determinations. In an administrative review, if the
Department chooses as facts available a calculated dumping margin from
a prior segment of the proceeding, it is not necessary to question the
reliability of the margin for that time period, because it was
calculated in accordance with the statute.
[[Page 10373]]
With respect to the relevance aspect of corroboration, the
Department will consider information reasonably at its disposal as to
whether there are circumstances that would render a margin not
relevant. Where circumstances indicate that the selected margin may not
be relevant, the Department will attempt to find a more appropriate
basis for facts available. See, e.g., Final Results of Antidumping Duty
Administrative Review: Fresh Cut Flowers from Mexico, 61 FR 6812, 6814
(February 22, 1996) (where the Department disregarded the highest
margin as best information available because the margin was based on
another company's uncharacteristic business expense resulting in an
unusually high margin).
We preliminarily determine that the calculated margin selected, as
adverse facts available, is relevant, and has probative value because
it is based on verified data from a respondent in the immediately
preceding administrative review. Although this margin is the highest in
the range of calculated margins, there is no basis to conclude that it
is aberrational or is inappropriate as applied to Saptarishi.
Accordingly, we determine that this rate is an appropriate rate to be
applied in this review to exports of the subject merchandise produced
by Saptarishi as facts otherwise available.
Allegation of Duty Reimbursement
In its January 30, 2002, comments, the petitioner alleges that
because Agro Dutch and Weikfield are the importers of record for the
preserved mushrooms they produce and export to the United States, and,
therefore, pay all applicable antidumping cash deposits and duties on
this merchandise, they are paying duties on behalf of their respective
importers within the meaning of the Department's reimbursement
regulation. See 19 CFR 351.402(f). In numerous cases, the Department
has held that reimbursement within the meaning of the regulation does
not occur when the importer and exporter are the same legal entity.
Because Agro Dutch and Weikfield function both as the exporter and U.S.
importer of the preserved mushrooms they produce, there is no basis for
reducing U.S. price under the Department's reimbursement regulation.
See, e.g., Certain Welded Carbon Steel Pipes and Tubes from Thailand:
Final Results of Antidumping Duty Administrative Review, 66 FR 53388
(October 22, 2001), and accompanying Issues and Decision Memorandum at
Comment 1.
Fair Value Comparisons
To determine whether sales of certain preserved mushrooms by the
respondents to the United States were made at less than normal value,
we compared constructed export price (CEP) or export price, as
appropriate, to the normal value, as described in the ``Export Price/
Constructed Export Price'' and ``Normal Value'' sections of this
notice.
Pursuant to section 777A(d)(2) of the Act, we compared the export
prices of individual U.S. transactions to the weighted-average normal
value of the foreign like product where there were sales made in the
ordinary course of trade, as discussed in the ``Cost of Production
Analysis'' section below.
In this review, neither Agro Dutch nor Weikfield had a viable home
or third country market. Therefore, as the basis for normal value, we
used constructed value when making comparisons in accordance with
section 773(a)(4) of the Act.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondents covered by the description in the
``Scope of the Order'' section, above, to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
With respect to Himalya, we compared U.S. sales to sales made in the
home market within the contemporaneous window period, which extends
from three months prior to the U.S. sale until two months after the
sale. Where there were no sales of identical merchandise in the home
market made in the ordinary course of trade to compare to U.S. sales,
we compared U.S. sales to sales of the most similar foreign like
product made in the ordinary course of trade. Where there were no sales
of identical or similar merchandise made in the ordinary course of
trade in the home market to compare to U.S. sales, we compared U.S.
sales to constructed value. In making the product comparisons, we
matched foreign like products based on the physical characteristics
reported by the respondents in the following order: preservation
method, container type, mushroom style, weight, grade, container
solution, and label type.
For Agro Dutch and Weikfield, we compared U.S. sales to constructed
value because these respondents had insufficient home market and/or
third country sales during the POR. See ``Normal Value'' section below
for further discussion.
Export Price/Constructed Export Price
For Agro Dutch and Weikfield, we used export price methodology, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold first to an unaffiliated purchaser in the United
States prior to importation and CEP methodology was not otherwise
indicated. With respect to Himalya, we calculated CEP in accordance
with section 772(b) of the Act, because the subject merchandise was
first sold by Transatlantic or Global Reliance, Himalya's affiliated
importers in the United States, after importation into the United
States. We based export price and CEP on packed, FOB, C&F, CIF, ex
port/warehouse, and delivered prices, as appropriate, to unaffiliated
purchasers in the United States. For each respondent, for those U.S.
sales for which the payment was not received as of the date of the last
questionnaire response, we recalculated imputed credit for purposes of
a circumstance-of-sale (COS) adjustment using the date of the
preliminary results, February 28, 2002, as the date of the payment. We
will provide the respondents an opportunity to provide updated payment
data for use in the final results.
Agro Dutch
We made deductions from the starting price, where appropriate, for
foreign inland freight, freight document charges, insurance, foreign
brokerage, Indian export duty (CESS), and international freight in
accordance with section 772(c)(1) of the Act and 19 CFR 351.402(a).
In a February 11, 2002, submission, Agro Dutch stated that it made
data entry errors in reporting the per-unit expenses incurred on
certain U.S. sales for foreign inland freight, foreign brokerage, and
CESS. Agro Dutch provided a revised sales listing with that submission
in which it claimed to correct these errors. However, this unsolicited
sales data revision is incomplete, as the accompanying narrative lacks
details about the nature of the errors and corrections made by Agro
Dutch, and is untimely for analysis and use in the preliminary results.
Accordingly, we are using the information in the previously submitted
sales response for the preliminary results. However, we will provide
Agro Dutch with an opportunity to resubmit sales expense corrections,
along with detailed explanations, following the issuance of the
preliminary results for consideration in the final results.
Also, in the February 11, 2002, submission, Agro Dutch advised the
Department for the first time in this
[[Page 10374]]
segment of the proceeding that it received monetary advances from one
of its customers in anticipation of future shipments for which the
product and price were not determined at the time of the advance. This
statement suggests that Agro Dutch may have a long-term contract or
sales agreement with this customer, yet Agro Dutch claims that it had
no binding contracts or agreements with any U.S. customers during the
POR (see Agro Dutch's August 30, 2001, supplemental questionnaire
response at page 1). Further, Agro Dutch's reporting of pre-payments
appears inconsistent with its earlier statement that all of its U.S.
sales are sold with payment terms of 90 days after the bill of lading
date (see May 25, 2001, Section C questionnaire response at page C-12).
In the previous review, Agro Dutch reported that it had a sales
agreement of some sort with this customer, but failed to provide it for
the record despite specific requests from the Department. Because the
Department could not adequately determine whether Agro Dutch had
reported the correct date of sale without reviewing the sales
agreement, the Department made an adverse inference in applying facts
available to calculation factors affected by the date of sale. See
Certain Preserved Mushrooms from India: Preliminary Results of
Antidumping Duty Administrative Review, 66 FR 13896, 13899 (March 8,
2001) (1998-2000 Preliminary Results); and Certain Preserved Mushrooms
from India: Final Results of Antidumping Duty Administrative Review, 66
FR 42507 (August 13, 2001), and accompanying Issues and Decision
Memorandum at Comment 2.
Agro Dutch's February 11, 2002, description of its sales to this
customer requires further explanation as to the existence of any sales
agreement with this customer, the appropriate date of sale, and the
relevant payment terms. However, we had insufficient time prior to the
preliminary results to seek this clarification. Thus, for purposes of
the preliminary results, we are relying on the same reasoning as in the
1998-2000 Preliminary Results and applying partial facts available
under section 776(a) of the Act to the data affected by date of sale
and payment terms, namely the exchange rate for currency conversions
and imputed credit. Given the untimeliness and incompleteness of Agro
Dutch's explanation of the sale terms to this customer in this review,
we find that, for purposes of the preliminary results, Agro Dutch has
not cooperated to the best of its ability to comply with the
Department's requests in the questionnaire and supplemental
questionnaire to supply full information of its payment terms and
copies of any sales agreements. Thus, adverse inferences are warranted
in applying facts available for the affected data pursuant to section
776(b) of the Act. As adverse facts available for the exchange rate, we
are applying the highest exchange rate during the POR for all currency
conversions involving these sales. As facts available for imputed
credit, we are recalculating imputed credit for these sales by using
the date of the preliminary results, February 28, 2002, as the payment
date. We will provide Agro Dutch with the opportunity to provide
further information on this topic after the issuance of the preliminary
results for consideration in the final results.
Himalya
We made deductions from the CEP starting price, where appropriate,
for foreign inland freight, brokerage and handling expenses,
international freight, marine insurance, U.S. duty, U.S. inland
freight, and U.S. warehousing expenses in accordance with section
772(c)(1) of the Act and 19 CFR 351.402(a). We also deducted indirect
selling expenses, credit expenses, and inventory carrying costs
pursuant to section 772(d)(1) of the Act and 19 CFR 351.402(b). We
recalculated credit expenses and inventory carrying costs using a
public-source U.S. interest rate. See February 28, 2002 Memorandum to
the File Preliminary Results Calculation Memorandum for Himalya
International Ltd. (Himalya) (Himalya Calculation Memo) for specifics
as to why Himalya's reported U.S. interest rate data was insufficient.
We made an adjustment for CEP profit in accordance with section
773(d)(3) of the Act. Finally, since there was insufficient time prior
to the preliminary results to request additional information/
clarification regarding certain expenses/adjustments, we will issue a
supplemental questionnaire subsequent to the preliminary results. See
Himalya Calculation Memo.
Weikfield
We made deductions from the starting price, where appropriate, for
discounts, foreign inland freight, foreign inland and marine insurance,
foreign brokerage and handling, international freight, CESS, and U.S.
duty (including U.S. brokerage and handling expenses) in accordance
with section 772(c)(1) of the Act and 19 CFR 351.402(a).
We revised Weikfield's reported discount amount granted to one
customer based on information in the questionnaire responses to correct
an allocation error acknowledged by Weikfield.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
normal value, we compared the respondents' volume of home market sales
of the foreign like product to the volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(C) of the Act.
Himalya's aggregate volume of home market sales of the foreign like
product was greater than five percent of its aggregate volume of U.S.
sales of the subject merchandise. Therefore, we determined that the
home market provides a viable basis for calculating normal value for
Himalya.
With regard to Weikfield, we determined that its home market was
not viable because the aggregate volume of home market sales of the
foreign like product was less than five percent of the aggregate volume
of U.S. sales of the subject merchandise. Agro Dutch reported that
during the POR it made no home market sales. Neither Agro Dutch nor
Weikfield reported any third country sales during the POR. Therefore,
we determined that neither the home market nor any third country market
was a viable basis for calculating normal value for Agro Dutch and
Weikfield. As a result, we used constructed value as the basis for
calculating normal value for these two respondents, in accordance with
section 773(a)(4) of the Act.
Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate normal value based on sales
at the same level of trade (LOT) as the export price or CEP. Sales are
made at different LOTs if they are made at different marketing stages
(or their equivalent). See 19 CFR 351.412(c)(2). Substantial
differences in selling activities are a necessary, but not sufficient,
condition for determining that there is a difference in the stages of
marketing (id.); see also Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From
South Africa, 62 FR 61731, 61732 (November 19, 1997). In order to
determine whether the comparison sales were at different stages in the
marketing process than the U.S. sales, we reviewed the distribution
system in each market (i.e., the ``chain of distribution''), including
selling functions, class of customer (``customer category''), and the
level of selling expenses for each type of sale.
[[Page 10375]]
Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for export price and comparison market sales (i.e., NV
based on either home market or third country prices\3\), we consider
the starting prices before any adjustments. For CEP sales, we consider
only the selling activities reflected in the price after the deduction
of expenses and profit under section 772(d) of the Act. See Micron
Technology, Inc. v. United States, Court Nos. 00-1058-1060 (Fed. Cir.
March 7, 2001).
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\3\ Where normal value is based on constructed value, we
determine the normal value LOT based on the LOT of the sales from
which we derive selling expenses, general and administrative (G&A)
and profit for constructed value, where possible.
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When the Department is unable to find sales of the foreign like
product in the comparison market at the same LOT as the export price or
CEP, the Department may compare the U.S. sale to sales at a different
LOT in the comparison market. In comparing export price or CEP sales at
a different LOT in the comparison market, where available data make it
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the
Act. Finally, for CEP sales only, if a normal value LOT is more remote
from the factory than the CEP LOT and there is no basis for determining
whether the difference in LOTs between normal value and CEP affected
price comparability (i.e., no LOT adjustment is practicable), the
Department shall grant a CEP offset, as provided in section
773(a)(7)(B) of the Act. See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997).
We examined Himalya's home market and U.S. distribution systems,
including selling functions, classes of customers, and selling
expenses. Himalya sold to wholesalers, retailers, caterers, canteens,
and restaurants in the home market and through their affiliated
importers to distributors and wholesalers in the United States.
However, Himalya did not provide information on its selling activities
for its transactions with its affiliated importers. Therefore, we are
unable perform a LOT analysis comparing the selling functions provided
by Himalya on its home market sales and those provided by Himalya on
sales to its affiliated importers. Accordingly, an adjustment pursuant
to sections 773(a)(7)(A) or 773(a)(7)(B) is not warranted.
For Agro Dutch and Weikfield, because we based normal value on
constructed value, and are applying the profit rate and selling expense
rates calculated for these respondents from the most recently completed
segment of this proceeding, i.e., the 1998-2000 administrative review,
as both of these respondents had viable foreign markets in that review
(see ``Calculation of Constructed Value'' section below), we are also
using the information from the previous review for our LOT analysis. In
that review, we found a single LOT for both Agro Dutch and Weikfield.
See 1998 - 2000 Preliminary Results, 66 FR at 13898. Therefore, we made
neither a LOT adjustment nor a CEP offset (in the case of Himalya) to
normal value for any of the companies in this review.
Cost of Production Analysis
The Department disregarded certain sales made by Agro Dutch and
Weikfield in the 1998-2000 administrative review, pursuant to findings
in that review that sales failed the cost test (see Certain Preserved
Mushrooms from India: Preliminary Results of Antidumping Duty
Administrative Review, 66 FR 13896 (March 8, 2001)). Thus, in
accordance with section 773(b)(2)(A)(ii) of the Act, there are
reasonable grounds to believe or suspect that respondents Agro Dutch
and Weikfield made sales in the home market or third country at prices
below the cost of producing the merchandise in the current review
period. However, as discussed above in the ``Normal Value'' section of
this notice, neither Agro Dutch nor Weikfield had a viable home or
third country market during the POR. Accordingly, we cannot perform a
cost test with regard to Agro Dutch or Weikfield. In addition, as
stated in the ``Background'' section of this notice, based on a timely
allegation filed by the petitioner, the Department initiated an
investigation to determine whether Himalya's home market sales were
made at prices less than the cost of production within the meaning of
section 773(b) of the Act.
A. Calculation of COP
We calculated the COP on a product-specific basis, based on the sum
of Himalya's cost of materials and fabrication for the foreign like
product, plus amounts for selling, general and administrative (SG&A)
expenses, interest expense, and the cost of all expenses incidental to
placing the foreign like product in a condition packed ready for
shipment in accordance with section 773(b)(3) of the Act.
We relied on COP information submitted by Himalya, except for the
following adjustments: we recalculated G&A and interest expenses to
include certain expenses which were not included in the original
calculation. See Himalya Calculation Memo.
B. Test of Home Market Prices
For Himalya, we compared the weighted-average, per-unit COP figures
for the POR to home market sales of the foreign like product, as
required by section 773(b) of the Act, in order to determine whether
these sales were made at prices below the COP. In determining whether
to disregard home market sales made at prices below the COP, we
examined whether: (1) within an extended period of time, such sales
were made in substantial quantities; and (2) such sales were made at
prices which permitted the recovery of all costs within a reasonable
period of time. On a product-specific basis, we compared the COP,
consisting of the cost of manufacturing, G&A and interest expenses, to
the net home market prices, less any applicable movement charges,
rebates, discounts, and direct and indirect selling expenses. We
revised indirect selling expenses to allocate 12 months of expenses
over 12 months of sales because Himalya reported a ratio of 12 months
of expenses to ten months of sales (see Himalya Calculation Memo).
C. Results of COP Test
The results of our cost test for Himalya indicated all sales were
at prices above COP. We therefore retained all sales in our analysis
and used them as the basis for determining normal value.
Price-to-Price Comparisons
For Himalya, we based normal value on the price at which the
foreign like product is first sold for consumption in the home market,
in the usual commercial quantities and in the ordinary course of trade,
and at the same LOT as CEP, as defined by section 773(a)(1)(B)(i) of
the Act.
We reduced normal value for inland freight, insurance and
brokerage, and discounts and rebates, where appropriate, in accordance
with section 773(a)(6) of the Act and 19 CFR 351.401.
We also reduced normal value for packing costs incurred in the home
market, in accordance with section 773(a)(6)(B)(i), and increased
normal value to account for U.S. packing expenses in accordance with
section 773(a)(6)(A). We made a deduction for credit expenses, where
appropriate, pursuant to section 773(a)(6)(C)(iii) of the Act and 19
CFR 351.410. Finally, we made adjustments to normal value, where
appropriate, for differences in costs attributable to differences in
the physical characteristics of the
[[Page 10376]]
merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act and 19 CFR
351.411.
Calculation of Constructed Value
We calculated constructed value in accordance with section 773(e)
of the Act, which indicates that constructed value shall be based on
the sum of each respondent's cost of materials and fabrication for the
subject merchandise, plus amounts for SG&A expenses, profit and U.S.
packing costs. For Agro Dutch and Weikfield, we relied on the submitted
constructed value information except for the following adjustments:
Agro Dutch
Agro Dutch revised its G&A and interest expense rates in its
supplemental response but did not submit a revised constructed value
data base reflecting these revisions. We recalculated the G&A and
interest rates using this revised data.
Weikfield
We recalculated Weikfield's G&A rate using information based on its
2000-2001 audited financial statement. For an explanation of the
recalculation, see the February 28, 2002, Memorandum to the File
Weikfield Preliminary Results Calculation Notes.
Because Agro Dutch and Weikfield had no viable home or third
country market during the POR, we derived profit and selling expenses
for Agro Dutch and Weikfield in accordance with section
773(e)(2)(B)(iii) of the Act and the Statement of Administrative Action
accompanying the URAA, H.R. Doc. No. 103-316, Vol.1 at 839-841 (1994)
(SAA). Section 773(e)(2)(B)(iii) of the Act allows the Department to
calculate selling expenses and profit using any reasonable method,
provided that the amount for profit does not exceed the amount normally
realized by exporters or producers ``in connection with the sale, for
consumption in the foreign country, of merchandise that is in the same
general category of products as the subject merchandise,'' the so-
called ``profit cap.'' See 19 CFR 351.405(b)(2) (clarifying that under
section 773(e)(2)(B) of the Act, ``foreign country'' means the country
in which the merchandise is produced). However, when the Department is
unable to calculate a ``profit cap'' due to an absence of information
on the record, it may calculate profit based on the facts otherwise
available based on any reasonable method and without a profit cap. See
the SAA at 841.
For this review, we are unable to determine the amounts that
exporters and producers of merchandise that is in the same general
category of products as the subject merchandise in the foreign market
incurred and realized for selling expenses and profit (i.e., we are
unable to calculate a ``profit cap'') due to insufficient information
on the record. As facts available, we are applying the profit rates and
selling expenses calculated for Agro Dutch and Weikfield, respectively,
in the most recent segment of this proceeding. See February 28, 2002,
Memoranda to the File Agro Dutch 1998-2000 Profit and Selling Expense
Rate Calculations and Weikfield 1998-2000 Profit and Selling Expense
Rate Calculations. This approach is consistent with that applied in
Frozen Concentrated Orange Juice from Brazil: Final Results and Partial
Rescission of Antidumping Duty Administrative Review, 66 FR 51008,
(October 5, 2001), and accompanying Issues and Decision Memorandum at
Comment 3.
Agro Dutch provided profit rate information on certain Indian food
processors in its February 11, 2002, submission. This unsolicited new
factual information was received too late for any consideration in the
preliminary results. Further, it is incomplete as the information
consists solely of the profit rates and sales results of certain Indian
companies, without any supporting information such as complete annual
reports or financial statements for these companies. We will provide
Agro Dutch with an opportunity to supplement this information with
supporting details in time for consideration in the final results. We
will extend the same opportunity to the other parties in this segment
of the proceeding to submit additional factual information relevant to
the selection of the constructed value profit and selling rates for
consideration in the final results.
Price-to-Constructed Value Comparisons
For Agro Dutch and Weikfield, we based normal value on constructed
value, in accordance with section 773(a)(4) of the Act. For comparisons
to Agro Dutch's and Weikfield's export price sales, we made COS
adjustments by deducting from constructed value the weighted-average
home market direct selling expenses and adding the U.S. direct selling
expenses, in accordance with section 773(a)(8) of the Act and section
19 C.F.R. 351.410.
As noted above under the ``Export Price/Constructed Export Price''
section, for Agro Dutch and Weikfield, we recalculated imputed credit
expenses used for COS adjustment purposes on U.S. sales unpaid as of
the last questionnaire response. As discussed above, we also
recalculated imputed credit expenses on U.S. sales made by Agro Dutch
to a particular customer.
Currency Conversion
We made currency conversions in accordance with section 773A of the
Act based on the 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
weighted-average dumping margins for the period February 1, 2000,
through January 31, 2001, are as follows:
------------------------------------------------------------------------
Percent
Manufacturer/Exporter Margin
------------------------------------------------------------------------
Agro Dutch Foods, Ltd....................................... 1.54
Himalya International, Ltd.................................. 0.68
Saptarishi Agro Industries, Inc............................. 66.24
Weikfield Agro Products, Ltd................................ 0.00
------------------------------------------------------------------------
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 scheduled upon receipt of responses to
supplemental questionnaires and determination of briefing schedule.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within 30 days of the
date of publication of this notice. Requests should contain: (1) the
party's name, address and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed. See 19 CFR
351.310(c).
Issues raised in the hearing will be limited to those raised in the
respective case briefs. Case briefs from interested parties and
rebuttal briefs, limited to the issues raised in the respective case
briefs, may be submitted in accordance with a schedule to be determined
upon the receipt of responses to supplemental questionnaires, which the
Department will issue subsequent to the preliminary results. Parties
who submit case briefs or rebuttal briefs in this proceeding are
requested to submit with each argument (1) a statement of the issue and
(2) a brief summary of the argument. Parties are also encouraged to
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations, and cases cited.
[[Page 10377]]
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
written briefs, not later than 120 days after the date of publication
of this notice.
Assessment Rates
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. The Department
will issue appropriate appraisement instructions directly to the
Customs Service upon completion of this review. The final results of
this review shall be the basis for the assessment of antidumping duties
on entries of merchandise covered by the final results of this review
and for future deposits of estimated duties. We will instruct the
Customs Service to assess antidumping duties on all appropriate entries
covered by this review if any importer-specific assessment rate
calculated in the final results of this review is above de minimis
(i.e., less than 0.50 percent). See 19 CFR 351.106(c)(1). For
assessment purposes, we intend to calculate importer-specific
assessment rates for the subject merchandise by aggregating the dumping
margins calculated for all U.S. sales examined and dividing this amount
by the total entered value of the sales examined.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(1) of the Act: (1) The cash deposit rates for the reviewed
companies will be those established in the final results of this
review, except if the rate is less than 0.50 percent, and therefore, de
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the
cash deposit rate will be zero; (2) for previously reviewed or
investigated companies not listed above, the cash deposit rate will
continue to be the company-specific rate published for the most recent
period; (3) if the exporter is not a firm covered in this review, a
prior review, or the original LTFV investigation, but the manufacturer
is, the cash deposit rate will be the rate established for the most
recent period for the manufacturer of the merchandise; and (4) the cash
deposit rate for all other manufacturers or exporters will continue to
be 11.30 percent, the ``All Others'' rate made effective by the LTFV
investigation. These requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are published in accordance
with section 751(a)(1) of the Act and 19 CFR 351.221.
February 28, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-5475 Filed 3-6-02; 8:45 am]
BILLING CODE 3510-DS-S