[Federal Register Volume 68, Number 89 (Thursday, May 8, 2003)]
[Notices]
[Pages 24707-24716]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-11486]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-122-845, A-122-847]


Notice of Preliminary Determinations of Sales at Less Than Fair 
Value: Certain Durum Wheat and Hard Red Spring Wheat From Canada

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

ACTION: Notice of preliminary determinations of sales at less than fair 
value.

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SUMMARY: We preliminarily determine that durum wheat and hard red 
spring wheat from Canada are being, or are likely to be, sold in the 
United States at less than fair value, as provided in section 733(b) of 
the Tariff Act of 1930, as amended.
    Interested parties are invited to comment on these preliminary 
determinations. If these investigations proceed normally, we will make 
our

[[Page 24708]]

final determinations within 75 days of these preliminary 
determinations.

EFFECTIVE DATE: May 8, 2003.

FOR FURTHER INFORMATION CONTACT: Jarrod Goldfeder, Julie Santoboni, or 
Cole Kyle, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0189, (202) 482-4194, or 
(202) 482-1503, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Since the initiation of these investigations (Notice of Initiation 
of Antidumping Duty Investigations: Certain Durum Wheat and Hard Red 
Spring Wheat from Canada, 67 FR 65947 (October 29, 2002) (``Initiation 
Notice''), the following events have occurred:
    On November 1, 2002, we solicited comments from interested parties 
regarding the criteria to be used for model-matching purposes. We 
received numerous comments on our proposed matching criteria in 
November and December 2002. Furthermore, we held discussions on the 
issue of model matching with officials from the North American Millers 
Association and the U.S. Department of Agriculture on November 15 and 
20, 2002, respectively. On December 6, 2002, the Department adopted the 
model match criteria and hierarchy for these proceedings. See 
Memorandum to John Brinkmann, ``Selection of Model Matching Criteria 
for Purposes of the Antidumping Duty Questionnaire,'' dated December 6, 
2002, which is on file in the Central Records Unit (``CRU'') in room B-
099 of the main Department building.
    On November 25, 2002, the United States International Trade 
Commission (``ITC'') preliminarily determined that there is a 
reasonable indication that imports of durum wheat and hard red spring 
(``HRS'') wheat from Canada are materially injuring the United States 
durum wheat and HRS wheat industries (see ITC Investigation Nos. 731-
TA-1019A and 1019B (Publication No. 3563)).
    On December 4, 2002, we selected the Canadian Wheat Board (``CWB'') 
as the mandatory respondent in these proceedings. For further 
discussion, see Memorandum to John Brinkmann, ``Respondent Selection'' 
dated December 4, 2002 (``Respondent Selection Memorandum''), which is 
on file in the CRU. We subsequently issued the antidumping 
questionnaires to the CWB on December 9, 2002.
    On November 18, 2002, the Government of Canada (``GOC'') submitted 
two scope exclusion requests. See ``Scope Comments'' section, below. On 
December 12, 2002, the petitioners \1\ submitted their rebuttal 
comments. The GOC and the petitioners submitted additional comments on 
February 4 and 11, 2003, respectively.
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    \1\ The petitioners are the North Dakota Wheat Commission 
(``NDWC'') (hard red spring wheat), the Durum Growers Trade Action 
Committee (durum wheat), and the U.S. Durum Growers Association 
(durum wheat).
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    On December 23, 2002, the petitioners submitted comments in support 
of their allegation that a particular market situation, within the 
meaning of section 773(a)(1)(C)(iii) of the Tariff Act of 1930, as 
amended (``the Act''), exists with regard to sales of durum wheat and 
HRS wheat in Canada. Further information and comments were received 
from the CWB, the petitioners, and the GOC throughout January 2003. On 
February 4, 2003, the Department informed interested parties that, 
based on evidence on the records of these investigations as of that 
date, we determined that it is appropriate for the Department to 
collect Canadian home market sales data for use as the basis for normal 
value. See ``Selection of Comparison Market,'' below.
    In January and February 2003, the Department received responses to 
sections A, B, and C of the Department's original questionnaire from 
the CWB. The Department issued supplemental questionnaires for sections 
A, B, and C in February and March 2003, and received responses from the 
CWB from February through April 2003.
    On January 24, 2003, pursuant to section 733(c)(1)(B) of the Act, 
we determined that these proceedings are extraordinarily complicated 
and that additional time was necessary to make our preliminary 
determinations. Therefore, we postponed the preliminary determinations 
until no later than May 1, 2003. See Notice of Postponement of 
Preliminary Antidumping Duty Determinations: Certain Durum Wheat and 
Hard Red Spring Wheat from Canada, 67 FR 24114 (January 31, 2003).
    On January 29, 2003, the petitioners made an allegation of sales 
below the cost of production (``COP'') against sales of HRS wheat from 
Canada. On February 19, 2003, the petitioners revised their sales-
below-COP allegation on HRS wheat and also alleged that sales of durum 
wheat in Canada were made at prices below COP. The petitioners 
supplemented their cost allegation on February 24, 2003. The CWB 
submitted comments on these cost allegations on February 7, 24, and 27, 
2003. On February 25, 2003, the Department initiated a cost 
investigation on Canadian sales of HRS wheat. See Memorandum to Neal 
Halper, ``Certain Hard Red Spring Wheat from Canada: Petitioner's 
Allegation of Sales Below the Cost of Production by the Canadian Wheat 
Board,'' dated February 25, 2003, which is on file in the CRU.
    Also, on February 25, 2003, we solicited comments from interested 
parties regarding the selection of cost respondents in the sales-below-
cost investigation of HRS wheat. We received comments from the 
petitioners and the CWB on February 28, March 3, and March 7, 2003. On 
March 10, 2003, we solicited additional comments from interested 
parties on our proposed cost respondent selection methodology. On March 
12, 2003, we received comments on the proposed cost respondent 
selection methodology from the petitioners and the CWB. Thereafter, on 
March 14, 2003, the Department issued a section D questionnaire to 
selected cost respondents. The Department received responses to section 
D of the Department's questionnaire on April 21, 2003. Supplemental 
questionnaires for section D will be issued subsequent to the 
preliminary determination on HRS wheat.
    On February 28, 2003, the Department determined not to initiate a 
cost investigation on Canadian sales of durum wheat. See Memorandum to 
Neal Halper, ``Certain Durum Wheat from Canada: Petitioner's Allegation 
of Sales Below the Cost of Production by the Canadian Wheat Board,'' 
dated February 28, 2003, which is on file in the CRU. On March 10, 
2003, the petitioners requested that the Department reconsider its 
decision to not initiate an investigation of sales below COP by the 
CWB. The petitioners submitted further information and comments on 
March 14, 21, 27, and 31, 2003. On March 12, 25, and 28, 2003, the CWB 
filed comments opposing the petitioners' request for reconsideration. 
On April 8, 2003, the Department reaffirmed its decision not to 
initiate a cost investigation on Canadian sales of durum wheat. See 
Memorandum to Susan Kuhbach, Acting Deputy Assistant Secretary, 
``Antidumping Duty Investigation of Certain Durum Wheat from Canada; 
Request for the Department to Reconsider its Decision to Not Initiate 
an Investigation of Sales Below the Cost of production by the Canadian 
Wheat Board,'' dated April 8, 2003, which is on file in the CRU.
    On April 23 and 25, 2003, the petitioners submitted comments with

[[Page 24709]]

respect to the upcoming preliminary determinations.

Scope of Investigations

    For purposes of these investigations, the products covered are (1) 
durum wheat and (2) hard red spring wheat.

A. Durum Wheat

    Imports covered by this investigation are all varieties of durum 
wheat from Canada. This includes, but is not limited to, a variety 
commonly referred to as Canada Western Amber Durum. The merchandise 
subject to this investigation is currently classifiable under the 
following Harmonized Tariff Schedule of the United States (``HTSUS'') 
subheadings: 1001.10.00.10, 1001.10.00.91, 1001.10.00.92, 
1001.10.00.95, 1001.10.00.96, and 1001.10.00.99. Although the HTSUS 
subheadings are provided for convenience and customs purposes, our 
written description of the scope of these proceedings is dispositive.

B. Hard Red Spring Wheat

    Imports covered by this investigation are all varieties of hard red 
spring wheat from Canada. This includes, but is not limited to, 
varieties commonly referred to as Canada Western Red Spring, Canada 
Western Extra Strong, and Canada Prairie Spring Red. The merchandise 
subject to this investigation is currently classifiable under the 
following HTSUS subheadings: 1001.90.10.00, 1001.90.20.05, 
1001.90.20.11, 1001.90.20.12, 1001.90.20.13, 1001.90.20.14, 
1001.90.20.16, 1001.90.20.19, 1001.90.20.21, 1001.90.20.22, 
1001.90.20.23, 1001.90.20.24, 1001.90.20.26, 1001.90.20.29, 
1001.90.20.35, and 1001.90.20.96. Although the HTSUS subheadings are 
provided for convenience and customs purposes, our written description 
of the scope of these proceedings is dispositive.

Scope Comments

    In accordance with our regulations, we set aside a period of time 
for parties to raise issues regarding product coverage and encouraged 
all parties to submit comments within 20 calendar days of publication 
of the Initiation Notice (see 67 FR 65948).
    On November 18, 2002, we received a request from the GOC to amend 
the scope of these investigations and the companion countervailing duty 
(``CVD'') investigations of hard red spring wheat and durum wheat. 
Specifically, the GOC requested that the scope be amended to exclude 
those areas of Canada where the CWB does not have jurisdiction, and to 
remove Harmonized Tariff Schedule number 1001.90.20.96 from the scope 
of the antidumping and CVD investigations of certain hard red spring 
wheat.
    On December 12, 2002, the petitioners submitted rebuttal comments. 
On February 4, 2003, the GOC responded to those comments, and on 
February 11, 2003, the petitioners commented on the GOC's February 4, 
2003 comments.
    In the concurrent CVD investigations of durum wheat and HRS wheat 
from Canada, the Department preliminarily determined that these scope 
exclusions were not warranted. For further discussion, see the March 3, 
2003 memorandum to Acting Deputy Assistant Secretary Susan H. Kuhbach, 
``Scope Exclusion Requests: Non-Canadian Wheat Board Areas and HTSUS 
1001.90.20.96,'' on file in the CRU for the instant proceedings; and 
Preliminary Affirmative Countervailing Duty Determinations and 
Alignment of Final Countervailing Duty Determinations With Final 
Antidumping Duty Determinations: Certain Durum Wheat and Hard Red 
Spring Wheat from Canada, 68 FR 11374, 11375 (March 10, 2003).

Period of Investigation

    The period of investigation (``POI'') is July 1, 2001, through June 
30, 2002. This period corresponds to the four most recent fiscal 
quarters prior to the filing of the petition (i.e., September 13, 
2002).

Fair Value Comparisons

    To determine whether sales of durum wheat and hard red spring wheat 
from Canada to the United States were made at less than fair value 
(``LTFV''), we compared the export price (``EP'') to the normal value 
(``NV''), as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice, below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI weighted-average EPs to 
NVs. Any specific changes to the EP and NV calculations are discussed 
in the May 1, 2003, calculation memoranda, which are on file in the CRU 
(``Calculation Memoranda'').

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the CWB in the home market during the POI 
that fit the description in the ``Scope of Investigations'' section of 
this notice to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales of identical merchandise made in the home market, where 
possible. 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.
    To identify identical and similar merchandise for purposes of 
comparing U.S. and home market sales, we developed several product 
characteristics. Specifically, for durum wheat, we asked the CWB to 
report information on the type, grade, protein content, vitreous kernel 
content, test weight, and moisture content, for each sale during the 
POI. For HRS wheat, we asked the CWB to report information on the type, 
grade, protein content, class, vitreous kernel content, test weight, 
and moisture content, for each sale during the POI.
    In its submissions concerning model matching, as well as in its 
initial questionnaire responses, the CWB consistently asserted that it 
would be unable to provide complete data on vitreous kernel content, 
test weight, and moisture content, because such data are not normally 
maintained in the CWB's books and records--in either electronic or hard 
copy form--in the ordinary course of business. Because the Department 
found that these product characteristics are appropriate for model 
matching purposes in these proceedings, we reiterated our request that 
the CWB supply all available data to the Department. In its April 23, 
2003, supplemental questionnaire response, the CWB stated that it had 
reported all of the product characteristic data available to it. For 
durum wheat, the CWB reported complete product characteristics for 
virtually all U.S. sales and reported complete data for approximately 
half of the home market sales. For HRS wheat, however, the CWB reported 
complete product characteristic data for only a small number of U.S. 
and home market sales. The CWB reiterated that, because data on these 
product characteristics are not maintained in the CWB's normal course 
of business for a majority of transactions, the sales databases were 
``necessarily incomplete.'' See CWB's April 23, 2003, submission, at 2.
    For purposes of these preliminary determinations, we have accepted 
the CWB's statement that it has reported all the product characteristic 
information available to it. However, given the magnitude of the 
missing data, we intend to verify very carefully the CWB's claim that 
all data were reported and that it does not consistently collect or 
maintain data on vitreous kernel

[[Page 24710]]

content, test weight, and moisture content. Moreover, we continue to 
take the position that all the product characteristics selected by the 
Department are important for making proper comparisons in these 
proceedings. Therefore, for durum wheat, we have matched U.S. sales for 
which complete product characteristic data was reported to those home 
market sales also containing complete product characteristic data, 
given the fact that we have almost complete U.S. data and complete data 
on a sufficient number of home market sales. For HRS wheat, however, we 
would not be able to make meaningful comparisons if we were to rely on 
all seven product characteristics because of the incompleteness of the 
U.S. and home market sales databases. Accordingly, we have matched U.S. 
sales of HRS wheat to home market sales using only the first four 
product characteristics (i.e., type, grade, protein content, and 
class). However, we note that, consistent with the methodology outlined 
in the Memorandum from Theresa L. Caherty and Michael P. Martin to Neal 
M. Halper, ``Identification of Cost of Production Respondents,'' dated 
April 22, 2003 (``Cost Respondent Selection Memorandum''), which is on 
file in the CRU, we have excluded Canadian western extra strong wheat, 
Canadian prairie spring wheat, and feed wheat from the HRS wheat 
antidumping duty analysis due to the relatively small quantity of sales 
of these products to the United States during the POI.

Date of Sale

    In its original questionnaire responses, the CWB reported home 
market and U.S. sales using invoice date as the date of sale. Based on 
the description of the sales process provided by the CWB, we note that, 
in the CWB's normal commercial practice, the sales invoice is normally 
issued after the date of shipment. Because the date of shipment almost 
always precedes the reported date of sale, we preliminarily determine 
that the date of shipment better reflects the date on which the CWB 
established the material terms of sale, in accordance with 19 CFR 
351.401(i). Accordingly, we have relied on the date of shipment as the 
date of sale.

Export Price

    For both durum wheat and HRS wheat, we calculated EP, in accordance 
with section 772(a) of the Act, because the merchandise was sold prior 
to importation by the exporter or producer outside the United States to 
the first unaffiliated purchaser in the United States, or to an 
unaffiliated purchaser for exportation to the United States, and 
because constructed export price methodology was not otherwise 
warranted. We based EP on the in-store or C&F price to unaffiliated 
purchasers in the United States. We identified the starting price, 
where appropriate, by accounting for interest charges/allowances, 
cleaning allowances, cost of moving charges, late shipment storage 
charges, rail freight allowances, and billing adjustments, where 
applicable. The CWB reported agent's commissions as an adjustment to 
the starting price. We treated these expenses as commission expenses. 
See Calculation Memoranda. We also made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Act. These 
included, where appropriate, foreign inland freight (country elevator 
to terminal, or Thunder Bay to St. Lawrence freight charges), rail 
carrier charges, hopper car charges, terminal expenses, fobbing costs 
(charges associated with loading the wheat onto the vessel), demurrage/
despatch costs, country elevator storage expenses, freight revenue, and 
certain other freight charges, which, because of their proprietary 
nature, cannot be summarized in this notice. See Calculation Memoranda. 
As noted in the Calculation Memoranda, we reclassified certain expenses 
reported by the CWB as movement expenses as direct selling expenses.

Normal Value

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 value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP. In order to 
determine whether there is a sufficient volume of sales in the home 
market to serve as a viable basis for calculating NV (i.e., whether the 
aggregate volume of home market sales of the foreign like product is 
equal to or greater than five percent of the aggregate volume of U.S. 
sales), we compared the CWB's 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. 
Because the CWB'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 for the subject merchandise, we determined that the home 
market was viable for both durum wheat and HRS wheat.
    In the Initiation Notice, we determined that information reasonably 
available to the petitioners indicated the existence of a particular 
market situation--pursuant to section 773(a)(1)(C)(iii) of the Act--
which rendered price comparisons between home market and U.S. prices 
inappropriate for purposes of determining whether to initiate these 
investigations. See Initiation Notice, 67 FR at 65949. We noted, 
however, that during the course of these investigations we would 
examine further the issue of particular market situation and, if 
necessary, the proper comparison markets to be used in each 
investigation. Id.
    In a letter to interested parties dated February 4, 2003, we 
acknowledged that ``[t]he existence of a government entity, the CWB, as 
a monopoly buyer and seller of wheat in the Canadian domestic market 
raised legitimate concerns that a particular market situation might 
exist with respect to the Canadian home market in these 
investigations.'' However, based on evidence on the records of these 
investigations as of that date, we did not find that the Canadian 
government controls prices to such an extent that they are non-
competitive and inappropriate for use in our dumping analyses. Also, in 
past cases the Department has recognized a strong preference for using 
the home market in the Department's dumping calculations and, 
therefore, has established a high threshold for rejecting home market 
sales based upon a particular market situation.\2\ In the case of durum 
wheat and HRS wheat, we determined that it is appropriate to collect 
Canadian home market sales data for use as the basis for normal value. 
However, we also acknowledged that a number of questions needed to be 
addressed before a final decision on this issue could be rendered and 
that any decision made on this issue was subject to change based on 
evidence collected in supplemental

[[Page 24711]]

questionnaires or our findings at verification.
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    \2\ See Fresh Kiwifruit from New Zealand: Final Results of 
Antidumping Administrative Review, 61 FR 46438 (September 3, 1996); 
Certain Cold-Rolled and Corrosion-Resistant Carbon Steel Flat 
Products from Korea: Final Results of Antidumping Duty 
Administrative Review, 62 FR 18404 (April 15, 1997); Notice of Final 
Results of Antidumping Duty Administrative Review: Furfuryl Alcohol 
from South Africa, 62 FR 61804 (November 14, 1997); Notice of Final 
Determination of Sales at Less than Fair Value: Fresh Atlantic 
Salmon from Chile, 63 FR 31411 (June 8, 1998); Final Results of 
Antidumping Duty Administrative Review: Electrolytic Manganese 
Dioxide from Greece, 65 FR 68978 (November 15, 2000).
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    Accordingly, in the February 4, 2003, supplemental section A 
questionnaire (which was modified slightly on February 20, 2003), we 
asked the CWB to provide further information regarding the alleged 
particular market situation. Specifically, we asked questions designed 
to establish whether the CWB's prices in the home market are based upon 
competitively set prices and whether the CWB consistently bases its 
prices on a published U.S. price (e.g., daily prices reported by the 
Minneapolis Grain Exchange or other sources). On February 21 and March 
4, 2003, the CWB submitted responses to the supplemental section A 
questionnaire. On April 23, 2003, the petitioners submitted additional 
comments on this issue.
    No new information provided by interested parties since our 
February 4, 2003, letter suggests that the Canadian government controls 
prices to such an extent that they are non-competitive and 
inappropriate for use in our dumping analyses. See Memorandum to 
Jeffrey A. May, Deputy Assistant Secretary, ``Particular Market 
Situation,'' dated May 1, 2003, which is on file in the CRU. 
Accordingly, we continue to find that it is appropriate to use home 
market sales for purposes of determining normal value in these 
investigations. Because this finding is based, in part, on 
representations by the CWB about how it sets prices in the home market, 
our decision regarding the appropriateness of Canadian home market 
prices may be subject to change based upon the results of verification.

B. Affiliated-Party Transactions and Arm's Length Test

    In its questionnaire responses, the CWB noted that it is treating 
grain producers that supply grain to the CWB as affiliated parties, 
given the various aspects of the relationship between the western 
Canadian grain producers and the CWB. Specifically, western Canadian 
grain producers supply the CWB, are members of the CWB, and elect two-
thirds of the CWB Board; therefore, according to the CWB, the western 
Canadian farmers control the CWB Board. See the CWB's January 10, 2003, 
section A questionnaire response, at A-16 to A-17. However, the CWB 
further noted that, under its ``Producer Direct Sales'' (``PDS'') 
program, the CWB makes sales to grain producers, and it has treated 
sales to these producers as unaffiliated party transactions. In other 
words, the CWB appears to have considered grain producers to be 
affiliated parties when they supply grain to the CWB, but considered 
the same entities to be unaffiliated when they act as customers under 
the PDS program. For purposes of these preliminary determinations, we 
are treating sales to producers under the PDS program as affiliated 
party transactions because these entities are affiliated with the CWB 
pursuant to section 771(33)(G) of the Act.
    The Department's standard practice with respect to the use of home 
market sales to affiliated parties for NV is to determine whether such 
sales are at arm's length prices. Therefore, in accordance with that 
practice, we performed an arm's length test on the CWB's sales to 
affiliates as follows.
    Sales to affiliated customers in the home market not made at arm's 
length prices (if any) were excluded from our analysis because we 
considered them to be outside the ordinary course of trade. See 19 CFR 
351.102. 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 movement charges and 
direct selling expenses. 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 (May 19, 1997). In instances where no price 
ratio could be constructed for an affiliated customer because identical 
merchandise was not sold to unaffiliated customers, we were unable to 
determine that these sales were made at arm's-length prices and, 
therefore, excluded them from our LTFV analysis. See, e.g., Final 
Determinations of Sales at Less Than Fair Value: Certain Cold-Rolled 
Carbon Steel Flat Products from Argentina, 58 FR 37062, 37077 (July 9, 
1993). Where the exclusion of such sales eliminated all sales of the 
most appropriate comparison product, we made a comparison to the next 
most similar model.

C. Cost of Production Analysis

    As noted above, based on our analysis of an allegation made by the 
petitioners after initiation of these investigations, we found that 
there were reasonable grounds to believe or suspect that sales of HRS 
wheat in the home market were made at prices below their COP. 
Accordingly, pursuant to section 773(b) of the Act, we initiated a 
company-specific sales-below-cost investigation to determine whether 
sales of HRS wheat were made at prices below their COP.
    As noted above in the case history, the Department selected the 
CWB, the largest exporter of the subject merchandise to the United 
States during the POI, as the sole respondent in the HRS wheat 
investigation. The CWB's February 5, 2003, section A questionnaire 
response stated that it was an exporter of the subject merchandise, not 
the producer of subject merchandise, and included a list of wheat 
suppliers. Because there are more than 56,000 HRS wheat producers in 
Canada, the Department developed a methodology to calculate a 
representative COP and constructed value (``CV'') for the merchandise 
under consideration. The Department's cost respondent methodology 
resulted in stratifying producers of HRS wheat by all relevant soil 
types within each major producing province in Canada and selecting a 
sample size that ensured a minimum of two producers within each 
stratum.\3\ The resulting final sample size was twenty-seven producers. 
A simple average of the costs of production within a stratum was 
calculated and then the amounts per stratum were weight averaged based 
on each stratum's delivered tons.
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    \3\ See Cost Respondent Selection Memorandum.
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    Of the twenty-seven producers selected, one producer (i.e., cost 
respondent 2) \4\ chose not to respond to the Department's 
questionnaire, two other producers (i.e., cost respondents 10 and 27) 
did not respond based on extenuating circumstances discussed below, and 
one other producer (i.e., cost respondent 19) had significant issues 
with respect to the reporting of its COP. Therefore, as described in 
detail below, because these producers have not provided the necessary 
information on the record to calculate the simple-average COP within 
their respective stratum, the use of facts otherwise available is 
warranted.
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    \4\ Due to the proprietary nature of the name of each producer, 
we have assigned a number to each farmer (``cost respondent'') that 
will be used throughout this notice when referring to that specific 
farmer. A list or code key identifying the name associated with each 
cost respondent number can be found in attachment 1 of the 
Memorandum from Theresa L. Caherty and Michael P. Martin to Neal M. 
Halper, ``Cost of Production and Constructed Value Adjustments for 
the Preliminary Determination,'' dated May 1, 2003 (``COP/CV 
Adjustments Memorandum''), which is on file in the CRU.
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    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

[[Page 24712]]

submission of the information or in the form and manner requested, 
subject to subsections (c)(1) and (e) of section 782 of the Act; (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) of the Act, the Department shall, subject to section 
782(d) of the Act, use the facts otherwise available in reaching the 
applicable determination under this title.\5\ Section 776(b) of the Act 
further provides that adverse inferences may be used when a party has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information.
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    \5\ Where the Department determines that a response to a request 
for information does not comply with the request, section 782(d) of 
the Act provides that the Department will so inform the party 
submitting the response and will, to the extent practicable, provide 
that party the opportunity to remedy or explain the deficiency. If 
the party fails to remedy the deficiency within the applicable time 
limits, the Department may, subject to section 782(e) of the Act, 
disregard all or part of the original and subsequent responses, as 
appropriate. Section 782(e) of the Act provides that the Department 
``shall not decline to consider information that is submitted by an 
interested party and is necessary to the determination but does not 
meet all the applicable requirements established by the 
administering authority'' if the information is timely, can be 
verified, and is not so incomplete that it cannot be used, and if 
the interested party acted to the best of its ability in providing 
the information. Where all of these conditions are met, the statute 
requires the Department to use the information, if it can do so 
without undue difficulties.
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    With respect to cost respondent 2, this producer chose not to 
respond to the Department's questionnaire. As a result, use of facts 
available is appropriate pursuant to section 776(a)(2)(A) of the Act. 
In accordance with section 776(b) of the Act, if the Department finds 
that ``an interested party failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' an 
adverse inference may be used in determining the facts otherwise 
available. In the instant case, cost respondent 2 did not cooperate to 
the best of its ability by failing to provide any of the information 
requested in the section D cost questionnaire with no rationale for why 
it could not provide such information when other producers could. 
Therefore, as adverse facts available for the preliminary determination 
on HRS wheat for this cost respondent, we used the higher of the COP 
from the petition for the same province and soil type or the highest 
reported cost for other cost respondents within the same stratum. Based 
on our comparison of the two amounts we found that the reported cost 
for the other cost respondents within the same stratum was higher. As a 
result, we used the other respondent's COP within the same stratum as 
the surrogate cost for cost respondent 2.
    Both cost respondents 10 and 27 did not respond to the Department's 
cost questionnaire based on extenuating circumstances. With respect to 
cost respondent 10, the CWB explained that this farmer had deliveries 
of HRS wheat to the CWB during the POI, but did not produce HRS wheat 
during the 2001 growing season. However, cost respondent 10 did have 
affiliated parties that produced HRS wheat during the cost reporting 
period. Therefore, as a surrogate, cost respondent 10 reported its 
affiliate's COP for the cost reporting period. We note that this 
affiliate was not considered a cost respondent in the sample selection 
and, as such, we determined it would not be appropriate to include the 
affiliate's COP in our overall calculation of COP.
    Similar to cost respondent 10, cost respondent 27 did not provide 
cost data for the 2001 growing season because the information was not 
available. Specifically, cost respondent 27 sold its farming operations 
and ceased farming. Because neither cost respondent 10 nor 27 had 
information available that would enable them to respond to the 
Department's cost questionnaire and--in the case of cost respondent 
10--they attempted to provide some cost information, we applied neutral 
facts available for the HRS wheat preliminary determination pursuant to 
sections 776(a)(2)(A) and (B) of the Act. As neutral facts available, 
we have relied on the cost data submitted by the other cost respondents 
within the same stratum. Therefore, we have not included an amount for 
these cost respondents in the simple average calculation within their 
respective stratums.
    With respect to cost respondent 19, we note that, unlike the 
farmers discussed above, it submitted COP information for the cost 
reporting period. However, due to extenuating circumstances during the 
2001 cost reporting period, this cost respondent received insurance 
proceeds that exceeded its total cost incurred. In addition, due to the 
extenuating circumstances, the yield per acre of wheat was aberrant 
compared to the other cost respondents. As a result, we determined that 
neutral facts available was warranted pursuant to section 776(a)(2)(B) 
of the Act. As neutral facts available we have relied on the cost data 
submitted by the other cost respondents within the same stratum. 
Therefore, we have not included an amount for this cost respondent in 
the simple average calculation within its stratum.
1. Calculation of COP
    As noted above, the sole respondent, the CWB, was an exporter of 
the subject merchandise, not the producer of subject merchandise. 
Therefore, consistent with our practice regarding the cost of resales 
of subject merchandise, we requested COP data from a sample of the 
CWB's wheat suppliers. See Cost Respondent Selection Memorandum. In 
accordance with section 773(b)(3) of the Act, we calculated a single 
weighted-average COP based on the sum of the cost of materials and 
fabrication for the foreign like product, plus amounts for general and 
administrative (G&A) expenses, interest expenses, and home market 
packing costs for all wheat producers selected. See the ``Test of 
Comparison Market Sales Prices'' section below for treatment of home 
market selling expenses. To calculate the weighted average COP, we 
first simple averaged the COPs within each stratum, then weight 
averaged the results based on each stratum's delivered tons.
2. Common and Individual Cost Respondent Adjustments
    We relied on the COP data submitted by each cost respondent in its 
cost questionnaire response, except in specific instances where the 
submitted costs were not appropriately quantified or valued, or where 
the costs otherwise required adjustment, as discussed below:
(A) Common Cost Respondent Adjustments
    1. We adjusted the reported labor costs for cost respondents 1, 3-
9, 11-16, 18, 20-22, and 24-26. Virtually all of the labor provided on 
these farms was performed by the owners. For reporting purposes, the 
cost respondents relied on labor hours and rates from a study performed 
by Professor Schoney of the University of Saskatchewan. However, 
because this data was self-selected by the cost respondents and only 
represented data collected from a single province (Saskatchewan), we 
relied instead on the per acre labor rates published in the provincial 
crop guides.
    2. We disallowed a reported offset to the COP for insurance 
proceeds received during the year by cost respondents 7, 8, 11, 15, 17, 
22, 23, 25, and 26. These cost respondents failed to provide any 
explanation describing the facts surrounding these insurance payments. 
For example, it is unclear to which year's harvest the payments relate, 
what crops are affected, or whether the

[[Page 24713]]

proceeds are based on market value for the damaged crops or to recover 
lost costs.
    3. We adjusted the direct cost pool used to allocate variable and 
fixed overhead costs for cost respondents 1, 3, 4, 6, 8, 9, 11, 12, 14-
16, 20, 21, and 22-26. Specifically, we excluded the cost of purchased 
livestock (whether expensed or amortized) and imputed labor from the 
direct cost pool.
    4. We deducted imputed labor costs from the denominator used in the 
calculation of the G&A and financial expenses ratios. We then 
recalculated the ratio and applied the result to the per-unit cost of 
manufacture (``COM''), exclusive of imputed labor. This adjustment was 
made for cost respondents 1, 3-9, 11-18, and 20-26.
    For detailed calculations of these adjustments for each cost 
respondent, see the COP/CV Adjustments Memorandum.
(B) Individual Cost Respondent Adjustments

Cost Respondent 1

    We reduced cost respondent 1's reported production volume by the 
amount of seed consumed in 2002.

Cost Respondent 3

    We revised cost respondent 3's allocation of land use cost to 
apportion an amount to pasture land used for grazing livestock.

Cost Respondent 5

    We revised cost respondent 5's reported per-unit COM by calculating 
the per-unit amount using the actual quantity of HRS wheat produced, 
instead of the quantity of HRS wheat delivered.

Cost Respondent 6

    We revised cost respondent 6's per-unit COM by calculating the per-
unit amount using the actual quantity of HRS wheat produced. It appears 
that the cost respondent inadvertently used the incorrect production 
quantity.

Cost Respondent 7

    We revised cost respondent 7's reported cost of production to 
include the total amount expensed for corporate and partnership start-
up costs, in accordance with the cost respondent's normal books and 
records.
    We also increased cost respondent 7's reported cost of production 
to include labor costs related to bookkeeping services performed by an 
affiliate.

Cost Respondent 9

    We adjusted cost respondent 9's reported insurance costs to reflect 
the accrued expense. Specifically, we included the total commodity 
insurance premiums, not only the actual insurance payments.

Cost Respondent 14

    For cost respondent 14, we revised the direct cost pool used to 
allocate variable and fixed overhead costs as noted in the common cost 
respondent adjustment 3 above. In addition, we included certain 
expenses (i.e., repairs and maintenance, fuel, etc.) in the direct cost 
pool that were excluded by the cost respondent.
    We increased the numerator used to calculate the G&A expense ratio 
to include an amount for GST taxes that were deducted twice.
    We also increased the numerator for the financial expense ratio by 
disallowing an offset for short-term interest income. Specifically, we 
found no evidence on the record in the cost respondent's normal books 
and records where this income was actually earned and recorded.

Cost Respondent 16

    We adjusted cost respondent 16's allocation of custom work 
expenses.

Cost Respondent 17

    We adjusted cost respondent 17's labor to reflect the actual labor 
expense reported in the cost respondent's normal books and records.

Cost Respondent 21

    We disallowed the change in accounting method related to repairs 
and maintenance expenses. Specifically, for reporting purposes cost 
respondent 21 capitalized and amortized certain repairs and maintenance 
expenses. However, these amounts were expensed in the cost respondent's 
normal books and records. Therefore, for the HRS wheat preliminary 
determination, we included the total amount expensed in the COP.

Cost Respondent 22

    We reduced cost respondent 22's reported production volume by the 
amount of seed consumed in 2002.

Cost Respondent 23

    We revised cost respondent 23's labor to reflect actual labor costs 
reported in the cost respondent's normal books and records.
    We disallowed cost respondent 23's treatment of a secondary wheat 
product as a by-product offset. For the preliminary determination, we 
calculated one average cost of HRS wheat for the 2001 growing season. 
Thus, while we disallowed the offset to HRS wheat costs, we did include 
the quantity of feed HRS wheat in the denominator of the calculation of 
the growing season's average HRS wheat cost per ton.

Cost Respondent 25

    We adjusted the reported land use cost for cost respondent 25 to 
include the amount of rent paid to the shareholders for land and to 
exclude the property taxes personally paid by the shareholders.
3. Test of Home Market Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales of HRS wheat, as required under 
section 773(b) of the Act, in order to determine whether the sale 
prices were below the COP. The prices were adjusted for any applicable 
freight revenue, interest charges/allowances, cleaning allowances, cost 
of moving charges, late shipment storage charges, rail freight 
allowances, movement charges, billing adjustments, and direct and 
indirect selling expenses. In determining whether to disregard home 
market sales made at prices less than their COP, we examined whether 
such sales were made (1) within an extended period of time in 
substantial quantities, and (2) at prices which did not permit the 
recovery of all costs within a reasonable period of time.
4. Results of the COP Test
    Pursuant to section 773(b)(1), where less than 20 percent of the 
respondent's sales of a given product are at prices less than the COP, 
we do not disregard any below-cost sales of that product, because we 
determine that in such instances the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product are at prices less than the COP, we determine 
that the below-cost sales represent ``substantial quantities'' within 
an extended period of time, in accordance with section 773(b)(1)(A) of 
the Act. In such cases, we also determine whether such sales were made 
at prices which would not permit recovery of all costs within a 
reasonable period of time, in accordance with section 773(b)(1)(B) of 
the Act. If so, we disregard the below-cost sales.
    We found that, for certain specific HRS products, more than 20 
percent of the CWB's home market sales within an extended period of 
time were at prices less than the COP and, in addition, such sales did 
not provide for the recovery of costs within a reasonable period of 
time. We therefore excluded these sales and used the remaining sales, 
if any, as the

[[Page 24714]]

basis for determining NV, in accordance with section 773(b)(1) of the 
Act.

D. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP. Sales are made at different 
LOTs if they are made at different marketing stages (or their 
equivalent) according to 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''),\6\ including selling 
functions,\7\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
---------------------------------------------------------------------------

    \6\ The marketing process in the United States and comparison 
markets begins with the producer and extends to the sale to the 
final user or consumer. The chain of distribution between the two 
may have many or few links, and the respondent's sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of the respondent to determine 
properly where in the chain of distribution the sales occurred.
    \7\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of these preliminary determinations, 
we have organized the common durum wheat and hard red spring wheat 
selling functions into four major categories: Sales process and 
marketing support, freight and delivery, inventory and warehousing, 
and quality assurance/warranty services. Other selling functions 
unique to the respondent were considered, as appropriate.
---------------------------------------------------------------------------

    Pursuant to section 773(a)(7)(A) of the Act and 19 CFR 351.412(c), 
in identifying levels of trade for EP and comparison market sales 
(i.e., NV based on either home market or third country prices), we 
consider the starting prices before any adjustments.
    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the 
EP, the Department may compare the U.S. sale to sales at a different 
LOT in the comparison market. 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 sales 
at different LOTs in the country in which NV is determined, we make a 
level of trade adjustment under section 773(a)(7)(A) of the Act.
    We obtained information from the CWB regarding the marketing stages 
involved in making the reported home market and U.S. sales, including a 
description of the selling activities performed by the CWB for each 
channel of distribution. Our level of trade findings are summarized 
below. Our LOT analyses for durum wheat and HRS wheat, which contain 
business proprietary information, are incorporated in the Calculation 
Memoranda.
1. Durum Wheat
    The CWB reported seven channels of distribution in the home market, 
with three customer categories. The first channel of distribution, 
coded in its submissions as channel 1, included Eastern Water In-store 
Thunder Bay sales made to unaffiliated resellers and end-users. The 
second channel of distribution, coded in its submissions as channel 2, 
were Eastern Water FOB In-store St. Lawrence sales made to unaffiliated 
resellers. The third channel of distribution, coded in its submissions 
as channel 3, were Rail to East (not through Thunder Bay) sales made to 
unaffiliated resellers and end users. The fourth channel of 
distribution, coded in its submissions as channel 4, were Western 
Elevator to Mills (acting as a process elevator) sales made to end 
users. The fifth channel of distribution, coded in its submissions as 
channel 5, were Western Elevator to Mill (not acting as a process 
elevator) and Producer Direct sales made to unaffiliated resellers, end 
users, and producers. Sales to these customer categories in each of 
these channels were similar with respect to sales process, freight 
services, warehouse/inventory maintenance, and warranty service. 
Accordingly, we preliminarily determine that these channels of 
distribution constitute a distinct LOT (``LOTH1'').
    The sixth channel of distribution, coded in its submissions as 
channel 6, were Western Mill Producer Direct sales made to end users 
and producers. The seventh channel of distribution, coded in its 
submissions as channel 10, were Producer Direct Sales, Domestic Feed 
Sales, or Truck Sales to the United States made to unaffiliated 
resellers and producers. Sales to these customer categories in both of 
these channels were similar with respect to sales process, freight 
services, warehouse/inventory maintenance, and warranty service, but 
differed from sales to LOTH1 substantially with respect to freight 
services and warehouse/inventory maintenance. Accordingly, we 
preliminarily determine that these channels of distribution constitute 
a distinct LOT (``LOTH2'').
    In the U.S. market, the CWB had only EP sales. The CWB reported EP 
sales to two channels of distribution and three customer categories. 
The first channel of distribution, coded in its submissions as channel 
7, were Rail Minneapolis/Chicago sales made to unaffiliated resellers 
and end users. Sales to both customer categories in this channel were 
similar with respect to sales process, freight services, warehouse/
inventory maintenance, and warranty service. Accordingly, we 
preliminarily determine that this channel of distribution constitutes a 
distinct LOT (``LOTU1'').
    The second channel of distribution, coded in its submissions as 
channel 10, were Producer Direct Sales, Domestic Feed Sales, or Truck 
Sales to the United States made only to producers. We found that sales 
in this channel (``LOTU2'') differed substantially from LOTU1 with 
respect to the sales process, freight service, and warehouse/inventory 
maintenance, and that sales in each LOT were made at different points 
in the chain of distribution. Based upon our overall analysis in the 
U.S. market, we found that LOTU1 and LOTU2 constitute two distinct 
levels of trade.
    The EP level of trade LOTU1 was similar to the home market level of 
trade LOTH1 with respect to sales process, freight services, 
warehousing/inventory maintenance, and warranty service, but differed 
considerably from home market level of trade LOTH2 with respect to 
freight services and warehousing/inventory maintenance. Consequently, 
we matched U.S. sales at EP level of trade LOTU1 to sales at the same 
level of trade in the home market (i.e., LOTH1). Where we did not match 
products at the same level of trade, and there was a pattern of 
consistent price differences between different levels of trade, we made 
a level of trade adjustment. See section 773(a)(7)(A) of the Act.
    The EP level of trade LOTU2 was similar to the home market level of 
trade LOTH2 with respect to sales process, freight services, 
warehousing/inventory maintenance, and warranty service, but differed 
considerably from home market level of trade LOTH1 with respect to 
freight services and warehousing/inventory maintenance. Consequently, 
we matched U.S. sales at EP level of trade LOTU2 to sales at the same 
level of trade in the home market (i.e., LOTH2). Where we did not match 
products at the same level of trade, and there was a pattern of 
consistent price differences between different levels of trade, we made 
a level of trade

[[Page 24715]]

adjustment. See section 773(a)(7)(A) of the Act.
2. Hard Red Spring Wheat
    The CWB reported seven channels of distribution in the home market, 
with three customer categories. The first channel of distribution, 
coded in its submissions as channel 1, included Eastern Water In-store 
Thunder Bay sales made to unaffiliated resellers and end-users. The 
second channel of distribution, coded in its submissions as channel 2, 
were Eastern Water FOB In-store St. Lawrence sales made to end users. 
The third channel of distribution, coded in its submissions as channel 
3, were Rail to East (not through Thunder Bay) sales made to 
unaffiliated resellers and end users. The fourth channel of 
distribution, coded in its submissions as channel 4, were Western 
Elevator to Mills (acting as a process elevator) sales made to 
unaffiliated resellers and end users. The fifth channel of 
distribution, coded in its submissions as channel 5, were Western 
Elevator to Mill (not acting as a process elevator) and Producer Direct 
sales made to unaffiliated resellers, end users, and producers. Sales 
to these customer categories in each of these channels were similar 
with respect to sales process, freight services, warehouse/inventory 
maintenance, and warranty service. Accordingly, we preliminarily 
determine that these channels of distribution constitute a distinct LOT 
(``LOTH1'').
    The sixth channel of distribution, coded in its submissions as 
channel 6, were Western Mill Producer Direct sales made to end users. 
The seventh channel of distribution, coded in its submissions as 
channel 10, were Producer Direct Sales, Domestic Feed Sales, or Truck 
Sales to the United States made to unaffiliated resellers, end users, 
and producers. Sales to these customer categories in these channels 
were similar with respect to sales process, freight services, 
warehouse/inventory maintenance, and warranty service, but differed 
from sales to LOTH1 substantially with respect to freight services. 
Accordingly, we preliminarily determine that these channels of 
distribution constitute a distinct LOT (``LOTH2'').
    In the U.S. market, the CWB had only EP sales. The CWB reported EP 
sales to four channels of distribution and three customer categories. 
The first channel of distribution, coded in its submissions as channel 
7, were Rail Minneapolis/Chicago sales made to unaffiliated resellers 
and end users. The second channel of distribution, coded in its 
submissions as channel 8, were Vessel Thunder Bay to Buffalo/Puerto 
Rico sales made to unaffiliated resellers. The third channel of 
distribution, coded in its submissions as channel 9, were Vancouver to 
United States sales made to unaffiliated resellers and end users. Sales 
to both customer categories in these channels were similar with respect 
to sales process, freight services, warehouse/inventory maintenance, 
and warranty service. Accordingly, we preliminarily determine that 
these channels of distribution constitute a distinct LOT (``LOTU1'').
    The fourth channel of distribution, coded in its submissions as 
channel 10, were Producer Direct Sales, Domestic Feed Sales, or Truck 
Sales to the United States made to unaffiliated resellers and 
producers. Sales to both customer categories in this channel were 
similar with respect to sales process, freight services, warehouse/
inventory maintenance, and warranty service. We further found that 
sales in this channel (``LOTU2'') differed substantially from LOTU1 
with respect to freight services and warehouse/inventory maintenance, 
and that sales in each LOT were made at different points in the chain 
of distribution. Based upon our overall analysis in the U.S. market, we 
found that LOTU1 and LOTU2 constitute two distinct levels of trade.
    The EP level of trade LOTU1 was similar to the home market level of 
trade LOTH1 with respect to sales process, freight services, 
warehousing/inventory maintenance, and warranty service, but differed 
considerably from home market level of trade LOTH2 with respect to 
freight services. Consequently, we matched U.S. sales at EP level of 
trade LOTU1 to sales at the same level of trade in the home market 
(i.e., LOTH1). Where we did not match products at the same level of 
trade, and there was a pattern of consistent price differences between 
different levels of trade, we made a level of trade adjustment. See 
section 773(a)(7)(A) of the Act.
    The EP level of trade LOTU2 was similar to the home market level of 
trade LOTH2 with respect to sales process, freight services, 
warehousing/inventory maintenance, and warranty service, but differed 
considerably from home market level of trade LOTH1 with respect to 
freight services and warehousing/inventory maintenance. Consequently, 
we matched U.S. sales at EP level of trade LOTU2 to sales at the same 
level of trade in the home market (i.e., LOTH2). Where we did not match 
products at the same level of trade, and there was a pattern of 
consistent price differences between different levels of trade, we made 
a level of trade adjustment. See section 773(a)(7)(A) of the Act.

E. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on in-store or C&F prices to unaffiliated 
customers or prices to affiliated customers that we determined to be at 
arm's length. We identified the correct starting price, where 
appropriate, by accounting for interest charges/allowances, cleaning 
allowances, cost of moving charges, late shipment storage charges, rail 
freight allowances, and billing adjustments. We also made adjustments 
for the following movement expenses, where appropriate, in accordance 
with section 773(a)(6)(B)(iii) of the Act: Foreign inland freight (from 
country elevator to terminal or Eastern Canadian Mills, or from Thunder 
Bay to St. Lawrence), hopper car charges, terminal expenses, fobbing 
costs, handling and elevation expenses, and country elevator storage 
expenses. As noted in the Calculation Memoranda, we reclassified 
certain expenses reported by the CWB as movement expenses as direct 
selling expenses. Because there are no cost differences attributable to 
differences in the physical characteristics of the merchandise in these 
cases, we were not able to make a difference in merchandise 
adjustment--pursuant to section 773(a)(6)(C)(ii) of the Act and 19 CFR 
351.411--based on costs. In addition, where appropriate, we made 
adjustments under section 773(a)(6)(C)(iii) of the Act for differences 
in circumstances of sale for imputed credit expenses, tender premiums, 
car awards performance measures, cleaning costs, weighing/inspection 
costs, protein premiums, producer revenues, and certain other 
proprietary adjustments. We also made adjustments, in accordance with 
19 CFR 351.410(e), for indirect selling expenses incurred in the 
comparison market or on U.S. sales where commissions were granted on 
sales in one market but not in the other (the commission offset). 
Finally, where appropriate, we made an adjustment for differences in 
LOT under section 773(a)(7)(A) of the Act and 19 CFR 351.412(b)-(e).

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information to be

[[Page 24716]]

used in making our final determinations.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
the U.S. Bureau of Customs and Border Protection (``BCBP'') to suspend 
liquidation of all imports of subject merchandise from Canada that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We will 
instruct the BCBP to require a cash deposit or the posting of a bond 
equal to the weighted-average amount by which the NV exceeds the EP, as 
indicated in the chart below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

                               Durum Wheat
------------------------------------------------------------------------
                                                        Weighted-average
                Exporter/manufacturer                  margin percentage
------------------------------------------------------------------------
Canadian Wheat Board.................................               8.15
All Others...........................................               8.15
------------------------------------------------------------------------


                          Hard Red Spring Wheat
------------------------------------------------------------------------
                                                        Weighted-average
                Exporter/manufacturer                  margin percentage
------------------------------------------------------------------------
Canadian Wheat Board.................................               6.12
All Others...........................................               6.12
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determinations. If our final determinations are affirmative, 
the ITC will determine before the later of 120 days after the date of 
these preliminary determinations or 45 days after our final 
determinations whether these imports are materially injuring, or 
threaten material injury to, the U.S. industries.

Disclosure

    We will disclose the calculations used in our analyses to parties 
in these proceedings in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for these investigations must be submitted to the 
Department no later than 50 days after the date of publication of these 
preliminary determinations or one week after the issuance of the last 
verification report, whichever is later. Rebuttal briefs must be filed 
five 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.
    Section 774 of the Act provides that the Department will hold a 
public 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 an interested party. If a request for a hearing 
is made in these investigations, the hearing will tentatively be held 
two days after submission of the rebuttal briefs at the U.S. Department 
of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230. 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 to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the 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 the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    If these investigations proceed normally, we will make our final 
determinations within 75 days of these preliminary determinations.
    These determinations are published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: May 1, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-11486 Filed 5-7-03; 8:45 am]
BILLING CODE 3510-DS-P