[Federal Register Volume 68, Number 43 (Wednesday, March 5, 2003)]
[Notices]
[Pages 10440-10444]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5185]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-552-801]


Notice of Amended Preliminary Antidumping Duty Determination of 
Sales at Less Than Fair Value: Certain Frozen Fish Fillets From the 
Socialist Republic of Vietnam

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

ACTION: Amended preliminary antidumping duty determination of sales at 
less than fair value.

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EFFECTIVE DATE: March 5, 2003.

FOR FURTHER INFORMATION CONTACT: Alex Villanueva or James C. Doyle, AD/
CVD Enforcement Group III, Office 9, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-3208, or (202) 482-0159, respectively.

Scope of the Investigation

    For purposes of this investigation, the product covered is frozen 
fish fillets, including regular, shank, and strip fillets, whether or 
not breaded or marinated, of the species Pangasius Bocourti, Pangasius 
Hypophthalmus (also known as Pangasius Pangasius), and Pangasius 
Micronemus. The subject merchandise will be hereinafter referred to as 
frozen ``basa'' and ``tra'' fillets, which are the Vietnamese common 
names for these species of fish. These products are classifiable under 
tariff article codes 0304.20.60.30 (Frozen Catfish Fillets), 
0304.20.60.96 (Frozen Fish Fillets, NESOI), 0304.20.60.43 (Frozen 
Freshwater Fish Fillets) and 0304.20.60.57 \1\ (Frozen Sole Fillets) of 
the Harmonized Tariff Schedule of the United States (``HTSUS''). This 
investigation covers all frozen fish fillets meeting the above 
specification, regardless of tariff classification. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope of this proceeding is dispositive.
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    \1\ The petitioners have included this tariff classification 
code because they believe that the merchandise under investigation 
is entering the United States under this classification based on 
previous uses of the term `sole' to describe Vietnamese basa and 
tra.
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Background

    On January 29, 2003, An Giang Fisheries Import and Export Joint 
Stock Company (``Agifish''), Vinh Hoan Company Limited (``Vinh Hoan''), 
Nam Viet Company Limited (``Nam Viet'') and Can Tho Agricultural and 
Animal Products Import Export Company (``CATACO''), hereinafter 
collectively referred to as ``Mandatory Respondents,'' timely filed 
allegations that the Department made ministerial errors in the 
preliminary determination.
    On February 3, 2003, Catfish Farmers of America (``CFA'') and the 
individual U.S. catfish processors America's Catch Inc.; Consolidated 
Catfish Co., L.L.C.; Delta Pride Catfish, Inc.; Harvest Select Catfish, 
Inc.; Heartland Catfish Company; Pride of the Pond; Simmons Farm Raised 
Catfish, Inc.; and Southern Pride Catfish Co., Inc., hereinafter 
referred to collectively as ``Petitioners,'' timely filed allegations 
that the Department made ministerial errors in the preliminary 
determination.

Amendment of Preliminary Determination

    On January 24, 2003, the Department of Commerce (``the 
Department'') preliminarily determined that certain frozen fish fillets 
from the Socialist Republic of Vietnam (``Vietnam'') are being, or are 
likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733(a) of the Tariff Act. See Notice 
of Preliminary Determination of Sales at Less Than Fair Value, 
Affirmative Preliminary Determination of Critical Circumstances and 
Postponement of Final Determination: Certain Frozen Fish Fillets from 
the Socialist Republic of Vietnam (``Preliminary Determination'') 68 FR 
4986 (January 31, 2003).
    The Department is amending the Preliminary Determination in the 
antidumping investigation of certain frozen fish fillets from the 
Socialist Republic of Vietnam.

Significant Ministerial Error

    A significant ministerial error is defined as an error, the 
correction of which, singly or in combination with other errors, would 
result in (1) a change of at least five absolute percentage points in, 
but not less than 25 percent of, the weighted-average dumping margin 
calculated in the original (erroneous) preliminary determination; or 
(2) a difference between a weighted-average dumping margin of zero or 
de minimis and a

[[Page 10441]]

weighted-average dumping margin of greater than de minimis or vice 
versa. See 19 CFR 351.224(g).

Ministerial Error Allegations from the Mandatory Respondents

Comment 1: U.S. Price to Normal Value Comparison

    The Mandatory Respondents argue that in calculating the company-
specific dumping margins for the Preliminary Determination, the 
Department applied an incorrect U.S. price for Mandatory Respondents' 
sales of glazed frozen fish fillets (coated with water, then frozen). 
The Mandatory Respondents claim that for sales involving glazed 
fillets, Mandatory Respondents reported in the field ``NETPRIU,'' the 
per-unit price for glazed fillets based on the actual sales quantity 
(minus the weight of the glaze). In addition, the Mandatory Respondents 
also reported the corresponding net sales quantity (minus the weight of 
the glaze) in the filed labeled ``QTYNETU.''
    The Mandatory Respondents argue that the Department inadvertently 
relied upon a price for glazed sales reported in the field ``GRSUPRU.'' 
However, the Mandatory Respondents argue, the prices reported in this 
field for glazed fillets do not reflect the actual per-unit prices of 
glazed products. The Mandatory Respondents note that the per-unit 
prices reported in ``GRSUPRU'' field are based on gross sales 
quantities, including the weight of the glaze. The Mandatory 
Respondents claim that the Department did not intend to use the gross-
weight prices for glazed sales reported in this field in the margin 
calculations. Therefore, the Mandatory Respondents argue, the 
Department must rely upon the per-unit price for glazed products 
reported in the field ``NETPRIU.''

Department's Position

    We agree with the Mandatory Respondents. In our Preliminary 
Determination, we overlooked that the Mandatory Respondents' factor 
utilization rates, and hence normal values, were calculated based on 
weights net of glazing water. Therefore, when calculating the dumping 
margin, we compared each Mandatory Respondent's normal value based on 
net weight to U.S. prices based on gross weight. This resulted in a 
distortion which we are correcting.
    During the course of the investigation, each Respondent explained 
that some customers purchased subject merchandise that was water 
glazed. In addition, the Mandatory Respondents stated that the water 
and other inputs used to produce glazed products were reported in the 
factors of production data. Therefore, in the numerator, the Mandatory 
Respondents included those factors of production used to produce 
subject merchandise inclusive of water glazing. However, the 
denominator used by the Mandatory Respondents represents the weight of 
the frozen fish products without the excess water weight associated 
with glazing. Consequently, the consumption ratio of each factor of 
production reported by the Mandatory Respondents was calculated by 
using the factors of production (including glazing) as the numerator 
and the weight of the frozen fish products without the excess water 
weight associated with glazing as the denominator. As a result, the 
consumption ratios used to calculate the normal value are based on a 
weight net of water.
    For every U.S. sale, the Mandatory Respondents reported a gross and 
net price (adjusted for net weight) and a gross and net weight (net of 
water content associated with glazing). In our Preliminary 
Determination, we based our U.S. starting prices on gross price and 
weighted the average price per control number (CONNUM) by the gross 
weight.
    To calculate the dumping margins, in the Preliminary Determination, 
we compared the U.S. starting gross price to the normal value 
calculated on a net basis, inadvertently creating a distorted 
comparison. For this amended preliminary determination, we have 
corrected the U.S. sales starting price by replacing the gross price 
with the net price and have averaged the dumping margins by the net 
weight in order to achieve a net normal value for a comparison to the 
net U.S. price. We note that the Department will revisit all aspects of 
this issue in the final determination.
    The correction of this error in combination with the correction of 
the other errors would result in a margin of 38.09% for Nam Viet and 
31.45% for Agifish, while the margins of the remaining Mandatory 
Respondents do not change significantly as noted below. This is more 
than five percentage points different from and more than 25 percent of 
the weighted-average dumping margin calculated in the Preliminary 
Determination. Accordingly, the error regarding the use of net weight 
and net price alleged by the Mandatory Respondents is a significant 
ministerial error within the meaning of 19 CFR 351.224(g) with regard 
to Nam Viet and Agifish.
    However, we note that the correction of this error in combination 
with the correction of the others does not fulfill the requirement of a 
significant ministerial error within the meaning of 19 CFR 351.224(g) 
for CATACO and Vinh Hoan. Therefore, we are not amending our 
Preliminary Determination with regard to CATACO's and Vinh Hoan's U.S. 
price to normal value comparisons. For a more detailed analysis, please 
see the company-specific analysis memorandums.

Comment 2: ByProduct Offset

    Citing the factors valuation memorandum that accompanied the 
Preliminary Determination, the Mandatory Respondents argue that the 
Department clearly stated that ``for each of the companies in this 
investigation, the Department has offset the cost of manufacturing by 
the value of the reported by-products.'' See Memorandum to the File 
from Alex Villanueva, Lisa Shishido, Joseph Welton, and Paul Walker, 
through Edward C. Yang and James C. Doyle: Factors Valuations for 
Agifish, Vinh Hoan, Nam Viet and CATACO (``Factor Memo''), dated 
January 24, 2003 at 7. However, the Mandatory Respondents argue, in the 
company-specific margin calculations, the Department did not follow its 
stated methodology and, instead, applied each company's byproduct 
credit as an offset to the final normal value, rather than as a 
deduction to the cost of manufacturing. According to the Mandatory 
Respondents, the Department's Factor Memo indicates that the Department 
fully intended to deduct each company's byproduct offset from the cost 
of manufacturing. The Mandatory Respondents assert that it is the 
Department's normal practice to treat income generated from the sale of 
byproducts as an offset to production costs and that the cost 
associated with the production of byproducts are reflected in the costs 
of the primary products generated in the production process. Thus, the 
Mandatory Respondents argue, the Department erred in deducting each 
company's by-product credits from normal value and must reconfigure the 
preliminary dumping margin calculations to ensure that the company-
specific byproduct offsets are correctly deducted from the cost of 
manufacturing.

Department's Position

    We agree with the Mandatory Respondents that the Department 
incorrectly deducted the byproduct credit from normal value. The Factor 
Memo clearly stated that for each of the companies in this 
investigation, the Department would offset the cost of manufacturing by 
the value of the reported byproducts. We note, however,

[[Page 10442]]

that the company-specific analysis memorandums provided the programming 
language demonstrating the byproduct offset was being deducted from the 
total normal value. In addition, our Preliminary Determination clearly 
stated that the by-product offset would be taken from normal value. 
``Where applicable, we deducted from each respondent's normal value the 
value of byproducts sold during the POI.''\2\ See Preliminary 
Determination, 68 FR at 4994. However, given the conflicting statements 
on the record, the fact that this is our normal practice, and that 
there was no explanation in the Preliminary Determination regarding the 
change, we agree that deducting the by-products from the total normal 
value represents an error. Therefore, for this amended preliminary 
determination, we are deducting each Mandatory Respondent's byproduct 
offset from the cost of manufacturing and not from normal value. We 
note that the Department will carefully revisit all aspects of this 
issue in the final determination.
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    \2\ Period of Investigation.
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    The correction of this error in combination with the correction of 
the other errors would result in a margin of for 38.09% for Nam Viet 
and 31.45% for Agifish, while the margins of the remaining Mandatory 
Respondents do not change significantly, as noted below. This is more 
than five percentage points different from and more than 25 percent of 
the weighted-average dumping margin calculated in the Preliminary 
Determination. Accordingly, the error regarding the correction of the 
byproduct offset alleged by the Mandatory Respondents is a significant 
ministerial error within the meaning of 19 CFR 351.224(g) for Nam Viet 
and Agifish.
    We note that the correction of this error does not fulfill the 
requirement of a significant ministerial error within the meaning of 19 
CFR 351.224(g) for CATACO and Vinh Hoan. Therefore, we are not amending 
our Preliminary Determination with regard to CATACO's and Vinh Hoan's 
byproduct offset. For a more detailed analysis, please see the company-
specific analysis memorandums.

Comment 3: Agifish's Fish Waste Offset

    Agifish argues that the Department incorrectly calculated Agifish's 
factor input for fish waste re-introduced in the production of the 
subject merchandise. Agifish asserts that rather than using the total 
amount of fish waste re-introduced in the company's first two 
production stages, the Department used only the amount of fish waste 
re-introduced at one of the production stages. According to Agifish, 
the Department's error drastically reduced the fish waste to subject 
merchandise ratio. Agifish argues that this is an apparent inadvertent 
ministerial error because the Department, in calculating dumping 
margins for the other three mandatory Mandatory Respondents, used the 
amount of fish waste reported for all production stages.

Department's Position

    We agree with Agifish that the Department incorrectly calculated 
Agifish's factor input for fish waste re-introduced in the production 
of the subject merchandise. Specifically, on January 17, 2003, Agifish 
submitted supplementary information indicating the amount of fish waste 
generated and sent to make fish feed which is re-introduced into the 
production process. Based on the factors of production data, we noted 
that the amount of fish waste generated and sent to make fish feed that 
Agifish indicated in its January 17, 2003 response was significantly 
lower than the actual amount used to make fish feed during the POI. 
Therefore, for the Preliminary Determination, we capped the amount of 
the fish waste offset at the actual amount of fish waste re-introduced 
as fish feed during the POI.
    We note, however, that in capping the offset as described above, 
the Department neglected to give Agifish credit for a byproduct 
described in the calculation database as ``fish flour.'' As the claim 
for this byproduct exists in the database and as there was no 
information on the record at the time of the preliminary determination 
casting doubt on the appropriateness of this claim, the Department will 
grant this claim. In order to value the fish flour byproduct, the 
Department is applying the surrogate value for fish flour. We note that 
the Department will revisit all aspects of this issue in the final 
determination.
    The correction of this error in combination with the correction of 
the other errors would result in a margin of 31.45% for Agifish. This 
is more than five percentage points different from and more than 25 
percent of the weighted-average dumping margin calculated in the 
Preliminary Determination. Accordingly, the error regarding the 
correction of the fish waste offset alleged by Agifish is a significant 
ministerial error within the meaning of 19 CFR 351.224(g).
    Therefore, we are amending our Preliminary Determination with 
regard to Agifish's fish waste offset. For a more detailed analysis, 
please see the company-specific analysis memorandums.

Comment 4: CATACO's Coal Consumption Ratio

    CATACO argues that the Department incorrectly calculated CATACO's 
coal consumption ratio in the Preliminary Determination. According to 
CATACO, the coal consumption ratio used by the Department includes coal 
used in both the farming and processing stages. CATACO argues that the 
Department should apply CATACO's coal consumption ratio specific to 
only the processing stage of the production process.

Department's Position

    We agree with CATACO. In our Preliminary Determination, we used a 
coal consumption ratio that was slightly higher than the coal 
consumption ratio that CATACO reported for the processing stage. 
Specifically, the coal consumption ratio we used in the Preliminary 
Determination included the amount of coal used in a stage preceding the 
processing stage. Consequently, the coal consumption used by the 
Department in the Preliminary Determination was overstated. Therefore, 
we have replaced the coal consumption ratio used in the Preliminary 
Determination with the correct coal consumption ratio reported by 
CATACO that is specific to only the processing stage of the production 
process. We note that the Department will revisit all aspects of this 
issue in the final determination.
    However, we note that the correction of this error in combination 
with the other alleged errors does not change the margin by a 
significant amount as required by 19 CFR 351.224(g). Therefore, we are 
not amending our Preliminary Determination with regard to CATACO's coal 
consumption ratio.

Ministerial Error Allegations from the Petitioners

Comment 1: Agifish's and Vinh Hoan's Fish Oil Offset

    The Petitioners argue that the Department erred in calculating 
Agifish's and Vinh Hoan's fish oil by-product offset. The Petitioners 
note that the Department stated that, in accordance with its policy, it 
would only grant byproducts credits for the amount of fish oil 
generated and sold by the Mandatory Respondents. See Memorandum from 
Alex Villanueva to the File regarding the Analysis of the Preliminary 
Determination of Certain Frozen Fish Fillets from the Socialist

[[Page 10443]]

Republic of Vietnam: Agifish, dated January 24, 2003 at 3, and 
Memorandum from Lisa Shishido to the File regarding the Analysis of the 
Preliminary Determination of Certain Frozen Fish Fillets from the 
Socialist Republic of Vietnam: Vinh Hoan, dated January 24, 2003 at 3. 
According to the Petitioners, both Agifish and Vinh Hoan sold more fish 
oil during the POI than they actually generated during the POI. 
Therefore, the Petitioners argue, based on the Department's stated 
policy, the Department should only have granted byproduct credits for 
the amount of fish oil both generated and sold during the POI, which 
was smaller than the amount of fish oil sold.

Department's Position

    We agree with the Petitioners that the Department erred in 
calculating Agifish's and Vinh Hoan's fish oil byproduct offset. The 
Petitioners correctly note that the Department stated that, in 
accordance with our practice, we would only grant byproducts credits 
for the amount of fish oil generated and sold by the Respondent 
companies. Both Agifish's and Vinh Hoan's January 17, 2003 supplemental 
responses revealed that the amount of fish oil sold during the POI was 
significantly more than the total amount of fish oil generated during 
the same period. In our Preliminary Determination, we did not cap the 
amount of the fish oil byproduct offset at the amount of fish oil 
generated and sold during the POI. Therefore, we have recalculated the 
amount of fish oil byproduct offset used in the Preliminary 
Determination and capped that offset at the amount of fish oil 
generated and sold during the POI. For a more detailed explanation, 
please see Agifish's and Vinh Hoan's analysis memorandums. We note that 
the Department will revisit all aspects of this issue in the final 
determination.
    The correction of this error in combination with the correction of 
the other errors would result in a margin of 31.45% for Agifish. This 
is more than five percentage points different from and more than 25 
percent of the weighted-average dumping margin calculated in the 
Preliminary Determination. Accordingly, the error regarding the 
correction of the fish oil offset alleged by Agifish is a significant 
ministerial error within the meaning of 19 CFR 351.224(g).
    However, the correction of this error in combination with the 
correction of the other errors would not result in a significant 
ministerial error within the meaning of 19 CFR 351.224(g) for Vinh 
Hoan. Accordingly, we are not amending our Preliminary Determination 
with regard to Vinh Hoan's fish oil offset.

Comment 2: Nam Viet's International Freight Expense

    The Petitioners argue that to value freight costs incurred by Nam 
Viet, on sales shipped by non-market economy carriers, the Department 
calculated the average rate incurred on shipments made by the market 
economy carriers. However, the Petitioners argue, in making the 
calculation, the Department incorrectly included sales values which did 
not incur freight costs in the denominator of its average. According to 
the Petitioners, by including these sales, the Department understated 
the ocean freight costs to be applied to those sales which were shipped 
on non-market economy carriers.

Department's Position:

    We agree with the Petitioners that, when valuing freight costs 
incurred by Nam Viet on sales shipped by non-market economy carriers, 
the Department incorrectly included sales which did not incur freight 
costs in calculating the average rate incurred on shipments made by the 
market economy carriers. Consequently, the average freight rate used by 
the Department in the Preliminary Determination was understated. 
Therefore, we have recalculated the average freight costs used in the 
Preliminary Determination, excluding those sales made by Nam Viet that 
were identified as FOB sales. We note that the Department will revisit 
all aspects of this issue in the final determination.
    The correction of this error in combination with the other errors 
would result in a margin of 38.09% for Nam Viet. This is more than five 
percentage points different from and more than 25 percent of the 
weighted-average dumping margin calculated in the Preliminary 
Determination. Accordingly, the error regarding the correction of 
freight costs alleged by the Petitioners is a significant ministerial 
error within the meaning of 19 CFR 351.224(g). Therefore, we are 
amending our Preliminary Determination with regard to Nam Viet's 
average freight costs. For a more detailed analysis, please see the 
company-specific analysis memorandums.
    As a result, we are amending the Preliminary Determination of the 
antidumping duty investigation of certain frozen fish fillets from the 
Socialist Republic of Vietnam to reflect the correction of the above-
cited ministerial errors. The revised final weighted-average dumping 
margins are as follows:
    The weighted-average dumping margins are as follows:

                Certain Frozen Fish Fillets From Vietnam
------------------------------------------------------------------------
                                                          Amended prelim
     Producer/manufacturer/exporter        Prelim margin      margin
------------------------------------------------------------------------
Agifish.................................           61.88           31.45
Vinh Hoan...............................           37.94           37.94
Nam Viet................................           53.96           38.09
CATACO..................................           41.06           41.06
Afiex...................................           49.16           36.76
CAFATEX.................................           49.16           36.76
Da Nang.................................           49.16           36.76
Mekonimex...............................           49.16           36.76
QVD.....................................           49.16           36.76
Viet Hai................................           49.16           36.76
Vietnam-Wide Rate.......................           63.88           63.88
------------------------------------------------------------------------

Suspension of Liquidation

    We will instruct U.S. Customs Service to continue to require a cash 
deposit or the posting of a bond equal to the weighted-average amount 
by which the NV exceeds EP, as indicated above. With respect to Nam 
Viet and the parties receiving the Vietnam-wide rate, the Department 
will direct the U.S.

[[Page 10444]]

Customs Service to continue to suspend liquidation of all entries of 
certain frozen fish fillets from Vietnam that are entered, or withdrawn 
from warehouse, for consumption on or after November 2, 2002, the date 
which is 90 days prior to the date of publication in the Federal 
Register of our original preliminary determination in this 
investigation in accordance with section 733(d) of the Act . With 
respect to Agifish, Vinh Hoan and CATACO, the Department will direct 
the U.S. Customs Service to continue to suspend liquidation of all 
entries of certain frozen fish fillets from Vietnam that are entered, 
or withdrawn from warehouse, for consumption on or after the date of 
publication in the Federal Register of our original preliminary 
determination in this investigation (i.e., January 31, 2003) in 
accordance with section 733(d) of the Act.
    We note that the effective date of the suspension of liquidation 
for Afiex, CAFAEX, Da Nang, Mekonimex, QVD and Viet Hai continues to be 
January 31, 2003, because we have not determined whether critical 
circumstances exists for these companies. As noted in our preliminary 
determination, we will publish our preliminary critical circumstances 
decision with respect to Afiex, CAFATEX, Da Nang, Mekonimex, QVD and 
Viet Hai at a later date. Therefore, with respect to Afiex, CAFATEX, Da 
Nang, Mekonimex, QVD and Viet Hai, the Department will direct the U.S. 
Customs Service to continue to suspend liquidation of all entries of 
certain frozen fish fillets from Vietnam that are entered, or withdrawn 
from warehouse, for consumption on or after the date of publication in 
the Federal Register of our original preliminary determinations in 
these investigations (i.e., January 31, 2003) in accordance with 
section 733(d) of the Act. These instructions to be issued to the U.S. 
Customs Service following publication of this amended preliminary 
determination will remain in effect until further notice.

International Trade Commission Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (``ITC'') of our amended preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: February 26, 2003.
Susan Kuhbach,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-5185 Filed 3-4-03; 8:45 am]
BILLING CODE 3510-DS-P