[Federal Register Volume 69, Number 3 (Tuesday, January 6, 2004)]
[Notices]
[Pages 621-627]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-236]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-812]


Honey From Argentina: Preliminary Results of Antidumping Duty 
Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: On January 22, 2003, the Department of Commerce (the 
Department) published in the Federal Register (68 FR 3009) a notice 
announcing the initiation of the administrative review of the 
antidumping duty order on honey from Argentina. The period of review 
(POR) is May 11, 2001, to November 30, 2002.
    We preliminarily determine that sales of honey from Argentina have 
been made below the normal value (NV) in the cases of Nexco S.A. and 
Seylinco S.A. If these preliminary results are adopted in our final 
results of administrative review, we will instruct Customs and Border 
Protection (CBP) to assess antidumping duties based on the difference 
between the export price (EP) or constructed export price (CEP) and NV. 
Interested parties are invited to comment on these preliminary results. 
Parties who submit argument in these proceedings are requested to 
submit with the argument: (1) A statement of the issues, (2) a brief 
summary of the argument, and (3) a table of authorities.

EFFECTIVE DATE: January 6, 2004.

FOR FURTHER INFORMATION CONTACT: Phyllis Hall for Nexco S.A. (Nexco), 
David Cordell for TransHoney S.A. (TransHoney), Brian Sheba for 
(HoneyMax S.A. (HoneyMax) and Seylinco S.A. (Seylinco)), Angela Strom 
for (Asociacion de Cooperativas Argentinas (ACA)) or Donna Kinsella, 
Enforcement Group III, Office 8, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Room 7866, Washington, DC 20230; telephone 
(202) 482-1398, (202) 482-0408, (202) 482-0145, (202) 482-2704, (202) 
482-0194, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 31, 2002, the American Honey Producers Association and 
the Sioux Honey Association (collectively ``petitioners'') requested an 
administrative review of the antidumping duty order (see Notice of 
Antidumping Duty Order: Honey from Argentina, 66 FR 63672 (December 10, 
2001)) on honey from Argentina in response to the Department's notice 
of opportunity to request a review published in the Federal Register. 
Petitioners requested the Department conduct an administrative review 
of entries of subject merchandise made by 21 Argentine producers/
exporters. In addition, the Department received requests for review 
from 9 Argentine exporters. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 68 FR 3009 (January 22, 2003). The Department initiated the 
review for all companies.
    On January 17, 2003, petitioners withdrew their requests for review 
of 14 of the 21 companies. The Department subsequently rescinded the 
review with respect to these 14 companies. See Honey from Argentina: 
Notice of Partial Rescission of Antidumping Duty Administrative Review, 
68 FR 13895 (March 21, 2003).
    On February 19, 2003, the Department issued sections A, B and C of 
the antidumping questionnaire to all exporters subject to review. We 
received responses on May 12 and May 15, 2003 (ACA); March 14 and April 
21, 2003 (HoneyMax); March 14 and April 21, 2003 (Nexco); March 21 and 
April 21, 2003 (Seylinco); April 3, April 21 and May 15, 2003 (CEASA 
and TransHoney); April 21 and May 15, 2003, (Radix). We received 
comments from petitioners on April 2 and May 21, 2003 (ACA); May 9, 
2003 (Nexco); April 3 and May 12, 2003 (HoneyMax and Seylinco); April 
15 and May 12, 2003 (TransHoney); April 14 and May 14, 2003 (CEASA); 
and April 10 and May 2, 2003 (Radix). The Department issued 
supplemental questionnaires on June 3, 2003 (ACA); and on May 23, 2003 
(HoneyMax, Nexco, Seylinco CEASA, Radix and TransHoney). We received 
responses on July 1 (ACA); June 12 (HoneyMax); June 18 (Nexco); June 16 
(Seylinco); and June 23, 2003 (TransHoney, CEASA and Radix). 
Petitioners commented on these responses on July 23 (ACA); July 16 
(HoneyMax); July 22 (Nexco); July 1 (Seylinco); July 9 (Radix); and 
July 10, 2003 (TransHoney and CEASA). The Department issued additional 
supplemental questionnaires on July 29 (TransHoney, CEASA and Radix); 
July 30 (ACA, HoneyMax and Seylinco); and August 1, 2003 (Nexco). We 
received responses to these additional supplemental questionnaires on 
August 19 (ACA); August 11 (HoneyMax); August 20 (Nexco); August 11 
(Seylinco); and August 18 (TransHoney).
    On July 23, 2003, the Department extended the time limit for 
issuance of the preliminary results of the administrative review to 
December 8, 2003. See Honey from Argentina; Extension of Time Limit for 
Preliminary Results of Administrative Review, 68 FR 43491 (July 23, 
2003).
    On May 12, 2003, the petitioners alleged that CEASA, TransHoney, 
HoneyMax, Nexco, and Seylinco made sales in the comparison market 
during the POR at less than the cost of production and requested that 
the

[[Page 622]]

Department initiate a sales below cost investigation with respect to 
these companies. On May 21, 2003, Nexco, Seylinco, HoneyMax, CEASA and 
TransHoney filed comments regarding petitioners' cost allegations. On 
June 5, 2003, petitioners submitted rebuttal comments. On July 2, 2003, 
the Department initiated a sales below cost investigation for CEASA and 
TransHoney. See Decision Memorandum of Petitioner's Allegation of Sales 
Below the Cost of Production by Cia Europeo Americana, S.A., HoneyMax, 
S.A., Nexco, S.A., Seylinco, S.A. and TransHoney, S.A. from The Team to 
Barbara Tillman, dated July 2, 2003, and the Decision Memorandum of 
Selection of Cost Respondents from The Team to Neal Halper, dated July 
14, 2003. On July 24, 2003, the Department issued Section D 
questionnaires to suppliers of ACA, TransHoney, CEASA, and Radix.
    On August 13, 2003, Radix and CEASA, submitted letters withdrawing 
their requests for review. On the same date, petitioners also submitted 
a letter withdrawing their request for review with respect to Radix and 
CEASA. The Department granted this request and subsequently rescinded 
the review with respect to these two companies. See Honey from 
Argentina: Notice of Partial Rescission of Antidumping Duty 
Administrative Review, 68 FR 52386 (September 3, 2003).
    The Department received responses to Section D of the antidumping 
questionnaire on September 12, 17, 23, and 29 (suppliers of ACA), and 
on September 26, 2003 (suppliers of TransHoney). We received comments 
from petitioners on the Cost Responses of ACA and TransHoney beekeepers 
and middlemen on October 3, 2003. We issued supplemental questionnaires 
to ACA and TransHoney (suppliers and middlemen) on October 6, 2003. We 
received responses to these supplemental questionnaires on November 3 
(TransHoney) and November 4, 6 and 7, 2003 (ACA). We received comments 
from petitioners on the supplemental cost responses of ACA and 
TransHoney beekeepers and middlemen on November 17, 2003.
    On August 28, 2003, the Department requested constructed value (CV) 
information from Seylinco and HoneyMax. Requests for reconsideration 
were filed by HoneyMax and Seylinco on September 4, 2003. The 
Department received comments from petitioners on September 16, 2003. On 
September 29, 2003, the Department initiated a cost investigation for 
HoneyMax. See Decision Memorandum of Initiation of a Cost Investigation 
for HoneyMax S.A. (``HoneyMax'') and Rescission of Request for 
Constructed Value Pursuant to an August 28, 2003, Request from the 
Department, from the Team to Joseph Spetrini, dated September 29, 2003. 
On September 30, 2003, the Department issued section D questionnaires 
to HoneyMax suppliers.
    On November 26, 2003, the Department extended the time limit for 
preliminary results of the administrative review to December 31, 2003. 
See Honey from Argentina; Extension of Time Limit for Preliminary 
Results of Administrative Review, 68 FR (66399) (November 26, 2003).

Scope of the Review

    The merchandise under review is honey from Argentina. For purposes 
of this review, the products covered are natural honey, artificial 
honey containing more than 50 percent natural honey by weight, 
preparations of natural honey containing more than 50 percent natural 
honey by weight, and flavored honey. The subject merchandise includes 
all grades and colors of honey whether in liquid, creamed, comb, cut 
comb, or chunk form, and whether packaged for retail or in bulk form.
    The merchandise under review is currently classifiable under 
subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized 
Tariff Schedule of the United States (HTSUS). Although the HTSUS 
subheadings are provided for convenience and CBP purposes, the 
Department's written description of the merchandise under this order is 
dispositive.

Verification

    As provided in section 782(i) of the Tariff Act (Act), we verified 
sales and cost information provided by the companies using standard 
verification procedures such as the examination of relevant sales and 
financial records. Our sales verification results are outlined in the 
public and proprietary versions of sales verification reports, which 
are on file in the Central Records Unit (CRU) of the Department in room 
B-099 of the main Commerce building. See Transhoney's Sales 
Verification Report dated October 22, 2003; Nexco's Sales Verification 
Report dated October 30, 2003; ACA's Sales Verification Report dated 
November 12, 2003; HoneyMax's and Seylinco's Sales Verification Reports 
dated November 7, 2003. The cost verification reports will be available 
on file in the CRU.

Product Comparison

    In accordance with section 771(16) of the Act, we considered all 
sales of honey covered by the description in the ``Scope of Review'' 
section of this notice, supra, which were sold in the third country 
market during the POR, to be the foreign like product for the purpose 
of determining appropriate product comparisons to honey sold in the 
United States. In making the product comparisons, we matched products 
based on the physical characteristics reported by ACA, HoneyMax, Nexco, 
Seylinco and TransHoney. Where there were no sales of identical 
merchandise in the third country market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics and reporting instructions listed in 
the antidumping duty questionnaire and instructions, or to constructed 
value (CV), as appropriate.

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Act, to the 
extent practicable, we determine NV based on sales in the home market 
at the same level of trade (LOT) as EP or the CEP. The NV level of 
trade is that of the starting-price sales in the home market or, when 
NV is based on CV, that of sales from which we derive selling, general 
and administrative (SG&A) expenses and profit. For CEP, it is the level 
of the constructed sale from the exporter to an affiliated importer 
after the deductions required under section 772(d) of the Act.
    To determine whether NV sales are at a different level of trade 
than CEP, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different level of trade and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act. 
Finally, for CEP sales, if the NV level is more remote from the factory 
than the CEP level and there is no basis for determining whether the 
difference in the levels between NV and CEP affects price 
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the 
CEP-offset provision). See Final Determination of Sales at Less Than 
Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 
62 FR 61731, 61732-33 (November 19, 1997).
    ACA reported two levels of trade in the U.S. and third country 
markets

[[Page 623]]

corresponding to differing channels of distribution: (1) Sales to 
packers and (2) sales to importers. The Department has determined that 
differing channels of distribution, alone, do not qualify as separate 
levels of trade (LOTs) when selling functions performed for each 
customer class are sufficiently similar. We found that the selling 
functions ACA provided to its reported channels of distribution in the 
third country and U.S. markets were virtually the same, varying only by 
the degree to which warranty services were provided. We do not find the 
varying degree of warranty services sufficient to determine the 
existence of different marketing stages. Thus, we have determined there 
is only one level of trade for ACA's sales to all markets. See ACA's 
Analysis Memorandum dated December 30, 2003.
    HoneyMax, Nexco, Seylinco and TransHoney reported a single level of 
trade for all U.S. and third country sales. Each company claimed that 
its selling activities in both markets are identical. At verification, 
we found essentially the same services offered in both markets. 
Therefore for HoneyMax, Nexco, Seylinco, and TransHoney, we determine 
that all reported sales are made at the same level of trade, and we 
have no need to make a level of trade adjustment. See Analysis 
Memoranda for HoneyMax, Nexco, Seylinco and TransHoney dated December 
30, 2003.

Fair Value Comparisons

    To determine whether sales of subject merchandise made by ACA, 
HoneyMax, Nexco, Seylinco, and TransHoney to the United States were 
made at less than fair value, we compared the EP or CEP, to the NV, as 
described below. Pursuant to section 777A(d)(2) of the Act, we compared 
the EP or CEP of individual U.S. transactions to the monthly weight-
averaged NV of the foreign like product where there were sales at 
prices above the cost of production (COP), as discussed in the ``Cost 
of Production Analysis'' section below.

Transactions Investigated

    Section 351.401(i) of the Department's regulations states that the 
Department will normally will use date of invoice, as recorded in the 
exporter's or producer's records kept in the ordinary course of 
business, as the date of sale, but may use a date other than the date 
of invoice if it better reflects the date on which material terms of 
sale are established. For ACA and HoneyMax (U.S. sales), the Department 
used the reported shipment date as shipment occurred prior to invoice 
date. TransHoney reported either shipment date or invoice date, 
whichever occurred first. Nexco, Seylinco, and HoneyMax (third country 
sales) reported the invoice date as date of sale. However, for Nexco 
the Department used shipment date as date of sale where shipment date 
occurred prior to invoice date as it is the Department's practice to 
use the date of shipment as the date of sale where date of shipment 
precedes invoice date. See Notice of Final Determinations of Sales at 
Less than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat 
from Canada, 68 FR 52741, (September 5, 2003) and accompanying Decision 
Memo at Comment 3.\1\
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    \1\ See page 16 of the Decision Memorandum, which is available 
on the Web at http://ia.ita.doc.gov/frn/summary/canada/03-22661-1.pdf or in the Import Administration's Central Records Unit located 
at Room B-099, U.S. Department of Commerce, Pennsylvania Avenue and 
14th Street, NW., Washington, DC 20230.
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Export Price and Constructed Export Price

    Section 772(a) of the Act defines EP as ``the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter of subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States or to an unaffiliated purchaser for exportation to the United 
States. * * *,'' as adjusted under subsection (c). Section 772(b) of 
the Act defines CEP as ``the price at which the subject merchandise is 
first sold (or agreed to be sold) in the United States before or after 
the date of importation by or for the account of the producer or 
exporter of such merchandise or by a seller affiliated with the 
producer or exporter, to a purchaser not affiliated with the producer 
or exporter. * * *,'' as adjusted under subsections (c) and (d). For 
purposes of this administrative review, HoneyMax classified all of its 
U.S. sales as CEP because all of its U.S. sales were made through its 
wholly-owned U.S. affiliate to non-affiliated purchasers in the United 
States. ACA, Nexco, Seylinco and TransHoney have classified their U.S. 
sales as EP because all sales were made to unaffiliated purchasers in 
the U.S. market. For purposes of these preliminary results, we have 
accepted these classifications.

Normal Value

1. Home Market Viability

    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was a sufficient volume of sales in the home market to 
serve as a viable basis for calculating NV (i.e., the aggregate volume 
of home market sales of the foreign like product is greater than or 
equal to five percent of the aggregate volume of U.S. sales), we 
compare each company's aggregate volume of home market sales of the 
foreign like product to its aggregate volume of U.S. sales of subject 
merchandise. For HoneyMax, Nexco, Seylinco, and TransHoney, the 
aggregate volume of sales in the home market of the foreign like 
product was less than five percent of the aggregate volume of U.S. 
sales of the subject merchandise. Therefore, we determined for these 
companies that sales in the home market did not provide a viable basis 
for calculating NV.
    Section 773(a)(1)(C)(iii) provides that Commerce may determine that 
home market sales are inappropriate as a basis for determining normal 
value if the particular market situation would not permit a proper 
comparison. On March 4, 2003, ACA alleged that during the POR a 
particular market situation existed with respect to sales of honey in 
Argentina which renders these sales inappropriate for purposes of 
calculating NV. Petitioners responded on March 26, 2003, alleging that 
ACA failed to explain why their home market is not appropriate for 
determining normal value. On April 10, ACA responded deeming the 
following factors relevant in finding a particular market situation 
with respect to honey sold in the Argentine market: (1) The industry is 
export oriented; (2) home market sales are incidental and of inferior 
quality; (3) sales were at reduced prices; and (4) the marketing and 
distribution of domestic sales were perfunctory. On April 25, 2003, the 
Department determined that a particular market situation exists with 
respect to ACA's sales of honey in Argentina which renders the 
Argentine market inappropriate for purposes of determining normal 
value. See Decision Memorandum of Analysis of Particular Market Place 
Situation from Angela Strom Through Donna Kinsella and Richard Weible 
to Barbara Tillman, dated April 25, 2003.
    When sales in the home market are not viable, section 
773(a)(1)(B)(ii) of the Act provides that sales to a particular third-
country market may be utilized if (I) the prices in such market are 
representative; (II) the aggregate quantity of the foreign like product 
sold by the producer or exporter in the third-country market is five 
percent or more of the aggregate quantity of the subject merchandise 
sold in or to the United States; and (III) the Department does not 
determine that a particular market situation in the third-country 
market prevents a proper comparison with the U.S. price. HoneyMax, 
Nexco,

[[Page 624]]

TransHoney and Seylinco reported Germany as their largest third country 
market during the POR in terms of volume of sales (and with five 
percent or more of sales to the United States). ACA reported the United 
Kingdom as its largest third country market during the POR in terms of 
volume of sales (and with five percent or more of sales to the United 
States). See Notice of Preliminary Results of Antidumping Duty 
Administrative Review, Preliminary Determination To Revoke the Order in 
Part, and Partial Rescission of Antidumping Duty Administrative Review: 
Fresh Atlantic Salmon From Chile, 67 FR 51186 (August 7, 2002), 
(selecting the largest third country market as the basis for normal 
value). The Department preliminarily determines that the prices in 
Germany and the United Kingdom are representative and no particular 
market situation exists that would prevent a proper comparison. As a 
result, for HoneyMax, Nexco, TransHoney, and Seylinco, normal value is 
based on sales to Germany. For ACA, normal value is based on sales to 
the United Kingdom.
    For all companies under review, therefore, NV is based on third 
country market sales to unaffiliated purchasers made in the usual 
commercial quantities and in the ordinary course of trade. For NV, we 
used the prices at which the foreign like product was first sold for 
consumption in the usual commercial quantities, in the ordinary course 
of trade, and, to the extent possible, at the same LOT as the EP or CEP 
as appropriate. We calculated NV as noted in the ``Price-to-CV 
Comparisons'' and ``Price-to-Price Comparisons'' sections of this 
notice.

2. Cost of Production

Background
    Based on the information contained in a timely cost allegation 
filed by petitioners on May 12, 2003, the Department found reasonable 
grounds to believe or suspect that sales of the foreign like product by 
HoneyMax and TransHoney, in their respective comparison markets, were 
made at prices below the cost of production, pursuant to section 
773(b)(1) of the Act. See Petitioners' Allegation of Sales Below Cost 
dated May 12, 2003. As a result, the Department initiated a sales 
below-cost investigation for TransHoney and Honeymax. See Decision 
Memorandum of Petitioner's Allegation of Sales Below the Cost of 
Production by Cia Europeo Americana, S.A., HoneyMax, S.A., Nexco, S.A., 
Seylinco, S.A. and TransHoney, S.A. from the Team to Barbara Tillman, 
dated July 2, 2003; and Decision Memorandum of Initiation of a Cost 
Investigation for HoneyMax, S.A. (``HoneyMax''); and Rescission of 
Request for Constructed Value, Pursuant to an August 28, 2003, Request 
from the Department; from the Team to Joseph Spetrini, dated September 
29, 2003.
    With respect to ACA, because the Department found in the 
investigation certain sales made to the comparison market at prices 
below the cost of producing the subject merchandise and excluded such 
sales from normal value, the Department determined that there are 
reasonable grounds to believe or suspect that ACA made sales in the 
comparison market at prices below the cost of producing the merchandise 
in this review. See Notice of Final Determination of Sales at Less Than 
Fair Value; Honey from Argentina, 66 FR 50611 (October 4, 2001); and 
section 773(b)(2)(A)(i) of the Act. As a result, the Department 
initiated a sales below cost investigation with respect to ACA to 
determine whether ACA made sales to the comparison market during the 
POR at prices below the respective COP within the meaning of section 
773(b) of the Act.
A. Cost of Production Analysis
    As noted above, because the Department disregarded sales below cost 
in the investigation for ACA, which was the most recently completed 
segment of the proceeding, we automatically initiated a cost of 
production (COP) inquiry for this respondent. For both HoneyMax and 
TransHoney S.A., based on our analysis of allegations made by the 
petitioners after the initiation of the administrative review, we found 
that there were reasonable grounds to believe or suspect that sales of 
honey in the comparison market were made at prices below their COP. 
Accordingly, pursuant to section 773(b) of the Act, we initiated 
company-specific sales-below-cost investigations to determine whether 
sales of honey were made at prices below their COP. Further, as noted 
above in the case history, on March 14, 18, and 28, 2003, the 
aforementioned respondents stated in the section A questionnaire 
responses that they were exporters of the subject merchandise, not 
producers of subject merchandise, and included a list of their honey 
suppliers. Because each exporter reported that it had approximately 20 
to 300 beekeeper suppliers and 8 to 20 intermediary suppliers, the 
Department developed a methodology to calculate a representative COP 
and CV for the merchandise under consideration. The Department's cost 
respondent methodology resulted in selecting five beekeepers that 
supplied the largest quantity of honey to each exporter as reported in 
the exporters' list of beekeeper suppliers.\2\ In addition, the 
Department selected one intermediary supplier that supplied that 
largest quantity of honey to each exporter. A simple average of the 
costs of production for each exporter was then calculated.
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    \2\ See Selection of Cost of Production Respondents Memorandum 
to Neal M. Halper from The Team dated July 14, 2003.
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B. Calculation of COP
    As noted above, respondents were exporters of the subject 
merchandise, not producers of subject merchandise. Therefore, 
consistent with our practice regarding the cost of resales of subject 
merchandise, we requested COP data from selected beekeeper suppliers 
for each exporter. See Selection of Cost of Production Respondents 
Memorandum, dated July 14, 2003. In accordance with section 773(b)(3) 
of the Act, we calculated a COP for each beekeeper supplier 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 comparison market packing costs for each 
exporter's selected beekeeper suppliers. We then added the associated 
selling expenses that each exporter incurred to calculate the final 
COP.
    As specified below, we determined that the Argentine economy 
experienced significant inflation during the POR. Therefore, in order 
to avoid the distortive effect of inflation in our comparison of costs 
and prices, we requested that the beekeeper suppliers submit the 
product-specific cost of production (COP) incurred during the cost 
reporting period which corresponded to a full honey growing and 
harvesting season. We then calculated an average COP for honey after 
indexing the reported monthly costs to an equivalent currency level as 
of November 2002 using the wholesale price index from the Argentine 
Instituto National de Estadistica y Censos to reflect the effects of 
inflation. After calculating the weighted average COP for each cost 
respondent, we calculated an average COP for each exporter based on 
that exporter's selected honey suppliers. We then restated the average 
COPs for each exporter in the currency value of each respective month.
Common and Individual Cost Respondent Adjustments
    We relied on the COP data submitted by each cost respondent in its 
cost

[[Page 625]]

questionnaire response, as discussed below:
(1) Common Cost Respondent Adjustment
    We adjusted the reported labor costs for all cost respondents. 
Virtually all of the labor provided on these farms was performed by the 
owners or a small number of hired laborers. For reporting purposes, a 
majority of the cost respondents relied on estimated labor hours and 
rates for the hired laborers and minimal or zero labor costs for the 
owners. However, nine of the beekeeper suppliers did not maintain any 
labor type records and could not provide supporting documentation for 
the labor costs reported for hired laborers. In addition, none of the 
beekeeper suppliers were able to provide support for the reported 
owner's labor costs. As a result, we relied instead on the per hive 
labor rate from the one beekeeper supplier that maintained and provided 
supporting documentation for the costs incurred for hired laborers to 
produce honey. For the owner's labor costs, we used the labor cost from 
the Argentine Government's Bulletin For Agricultural Workers.\3\
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    \3\ See RESOLUCION C.N.T.A. N[deg] 33/94 issued on December 29, 
1994, which is available on the Web at http://www.trabajo.gov.ar/legislacion/resolucion/files_rural/res0033-1994.dot.
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    We adjusted the denominator used in the calculation of the general 
and administrative expenses (G&A) and the financial expense ratios for 
all beekeepers. We excluded imputed labor from the total cost of 
manufacturing (COM) of all products in the calculation of the ratio 
denominator. We then applied the calculated G&A and financial expense 
ratios to the per-unit COM exclusive of imputed labor.
(2) Individual Cost Respondent Adjustments
    See Memoranda from The Team to Neal M. Halper, ``Cost of Production 
and Constructed Value Adjustments for the Preliminary Results,'' dated 
December 30, 2003, (COP/CV Adjustments Memoranda).
C. Test of Third Country Prices and Results of the COP Test
    In determining whether to disregard third country market sales made 
at prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Act: (1) Whether, within an extended period 
of time, such sales were made in substantial quantities; and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade. Where less than 20 percent of the respondent's home market sales 
of a given model (i.e., CONNUM) were at prices below the COP, we did 
not disregard any below-cost sales of that model because we determined 
that the below-cost sales were not made within an extended period of 
time and in ``substantial quantities.'' Where 20 percent or more of the 
respondent's home market sales of a given model were at prices less 
than COP, we disregarded the below-cost sales because: (1) They were 
made within an extended period of time in ``substantial quantities,'' 
in accordance with sections 773(b)(2)(B) and (C) of the Act, and (2) 
based on our comparison of prices to the weighted-average COPs for the 
POR, they were at prices which would not permit the recovery of all 
costs within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act. Therefore, for purposes of this administrative 
review, we disregarded below-cost sales made by TransHoney or ACA where 
20 percent or more of the respondent's home market sales of a given 
model were at prices less than COP, and used the remaining sales as the 
basis for determining NV, in accordance with section 773(b)(1) of the 
Act.
    With respect to HoneyMax, because the Department did not receive 
COP information from HoneyMax suppliers until very late in the 
proceeding, we were unable to incorporate sales below cost analysis in 
these preliminary results of the review. Subsequent to these 
preliminary results and prior to the date for comments with respect to 
HoneyMax, the Department intends to issue a preliminary analysis 
memorandum detailing the COP calculation for HoneyMax suppliers and the 
results of the cost test involving HoneyMax sales. These results, in 
consideration of all comments submitted, will be included in the 
Department's final results of the review.

Price-to-Price Comparisons

ACA

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on the third country market prices to 
unaffiliated purchasers. We made adjustments, where applicable, for 
movement expenses (i.e., inland freight) in accordance with section 
773(a)(6)(B) of the Act. We also made adjustments, where applicable, 
for direct selling expenses, in accordance with section 773(a)(6)(C) of 
the Act. See ACA's Analysis Memorandum dated December 30, 2003.

HoneyMax

    We based NV on the third country market prices to unaffiliated 
purchasers. We made adjustments, where applicable, for movement 
expenses in accordance with section 773(a)(6)(B) of the Act. We made 
circumstance-of-sale adjustments for credit, where appropriate, in 
accordance with section 773(a)(6)(C). We also made adjustments, where 
applicable, for other direct selling expenses in accordance with 
section 773(a)(6)(C) of the Act. See HoneyMax's Analysis Memorandum 
dated December 30, 2003.

Nexco

    We based NV on the third country prices to unaffiliated purchasers. 
We made adjustments, where applicable, for movement expenses in 
accordance with section 773(a)(6)(B) of the Act. We made circumstance-
of-sale adjustments for credit and other direct selling expenses where 
appropriate in accordance with section 773(a)(6)(C) of the Act. See 
Nexco's Analysis Memorandum dated December 30, 2003.

Seylinco

    We based NV on the third country prices to unaffiliated purchasers. 
We made adjustments, where applicable, for movement expenses in 
accordance with section 773(a)(6)(B) of the Act. We made circumstance-
of-sale adjustments for credit where appropriate in accordance with 
section 773(a)(6)(C) of the Act. We also made adjustments, where 
applicable, for other direct selling expenses in accordance with 
section 773(a)(6)(C) of the Act. See Seylinco's Analysis Memorandum 
dated December 30, 2003.

TransHoney

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on the third country market prices to 
unaffiliated purchasers. We made adjustments, where applicable, for 
movement expenses in accordance with section 773(a)(6)(B) of the Act. 
We made circumstance-of-sale adjustments for credit and direct selling 
expenses, where appropriate, in accordance with section 773(a)(6)C of 
the Act. See TransHoney's Analysis Memorandum dated December 30, 2003.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act. Section 773A(a) of the Act directs the 
Department to use a daily exchange rate in order to convert foreign 
currencies into U.S. dollars unless the daily rate involves a

[[Page 626]]

fluctuation. It is the Department's practice to find that a fluctuation 
exists when the daily exchange rate differs from the benchmark rate by 
2.25 percent. The benchmark is defined as the moving average of rates 
for the past 40 business days. When we determine a fluctuation to have 
existed, we substitute the benchmark rate for the daily rate, in 
accordance with established practice. See Policy Bulletin 96.1; see 
also Preliminary Results of Antidumping Duty Administrative Review; 
Aramid Fiber Formed of Poly Para-Phenylene Terephthalamide From the 
Netherlands, 64 FR 36841, 36843 (July 8, 1999); Notice of Preliminary 
Results and Partial Rescission of Antidumping Duty Administrative 
Review: Canned Pineapple Fruit From Thailand, 64 FR 30476, 30480 (June 
8, 1999).
    In adopting its currency conversion policy, the Department 
recognized that a sudden large decrease in the value of a currency 
without any significant rebound could meet the technical definition of 
a fluctuation. To avoid this unintended result, in Policy Bulletin 96.1 
the Department explained that we would apply the average benchmark rate 
in the case of an exchange rate ``fluctuation'' but also stated that we 
would use daily rates when ``the decline in the value of a foreign 
currency is so precipitous and large as to reasonably preclude the 
possibility that it is merely fluctuating.'' In Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Plate 
in Coils and Stainless Steel Sheet and Strip From Korea, 64 FR 30664 
(June 8, 1999) (SSSS from Korea), the Department found that a decline 
of more than 40 percent within a two-month period was sufficiently 
large and precipitous that use of daily rates was warranted during this 
two-month period. In contrast, in Notice of Final Determination of 
Sales at Less Than Fair Value: Extruded Rubber Thread from Indonesia, 
64 FR 14690, 14693 (March 26, 1999) (Extruded Rubber Thread from 
Indonesia), the Department found that a decline of some 50 percent 
spread over five months was not precipitous and large and continued to 
employ its normal exchange rate methodology. See 64 FR 14690, 14693 
(March 26, 1999). See Notice of Final Results of Antidumping Duty 
Administrative Review: Certain Welded Carbon Steel Pipes and Tubes from 
Thailand, 64 FR 56759, 56763 (October 21, 1999) (Pipe and Tube from 
Thailand). See also, DRAMS from Korea: Final Results of Antidumping 
Duty Administrative Review, 64 FR 69694, 69703-04 (December 14, 1999).
    Our preliminary analysis of dollar-peso exchange rates shows that 
the peso declined rapidly in early 2002, losing almost 70 percent of 
its value over a three month period. Prior to this, the Argentine peso 
was pegged to the U.S. dollar and it did not fluctuate. Starting in 
January 2002, however, the peso experienced a large decline against the 
dollar in short succession, and it did not rebound significantly in a 
short time. Indeed, the decline in value of the peso was as large and 
more rapid than the decline in the value of the Korean won in 1997, 
which we have found to be precipitous and large. See Notice of Final 
Determination of Sales at Less than Fair Value of Stainless Steel Sheet 
and Strip in Coils from the Republic of Korea, 64 FR 109, 30664, 30670 
(June 8, 1999). As such, we preliminary determine that the decline in 
the peso during January through March 2002 was of such magnitude that 
the dollar-peso exchange rate cannot reasonably be viewed as having 
simply fluctuated at that time, i.e., as having experienced only a 
momentary drop in value relative to the normal benchmark. We find that 
there was a large, precipitous drop in the value of the peso in 
relation to the U.S. dollar between January through March 2002, 
warranting application of daily exchange rates. We recognize that, 
following a large and precipitous decline in the value of a currency, a 
period may exist during which exchange rate expectations are revised 
and thus it is unclear whether further declines are a continuation of 
the large and precipitous decline or merely fluctuations. Thus, we 
devised a methodology for identifying the point following a precipitous 
drop at which it is reasonable to presume the rates were merely 
fluctuating. Beginning on January 7, 2002, we used only actual daily 
rates until the daily rates were not more than 2.25 percent below the 
average of the 20 previous daily rates for five consecutive days. At 
that point, we determined that the pattern of daily rates no longer 
reasonably precluded the possibility that they were merely 
``fluctuating.'' Using a 20-day average for this purpose provides a 
reasonable indication that it is no longer necessary to refrain from 
using the normal methodology, while avoiding the use of daily rates 
exclusively for an excessive period of time. Accordingly, from the 
first of these five days, we resumed classifying daily rates as 
``fluctuating'' or ``normal'' in accordance with our standard practice, 
except that we began with a 20-day benchmark and on each succeeding day 
added a daily rate to the average until the normal 40-day average was 
restored as the benchmark. See Pipe and Tube from Thailand. Applying 
this methodology in the instant case, we used daily rates from January 
7, 2002, through March 31, 2002. We then resumed the use of our normal 
methodology through the end of the period of review (November 30, 
2002), starting with a benchmark based on the average of the 20 
reported daily rates beginning on April 1, 2002.
    The Department's preferred source for daily exchange rates is the 
Federal Reserve Bank. See Preliminary Results of Antidumping Duty 
Administrative Review: Stainless Steel Sheet and Strip in Coins from 
France, 68 FR 47049 (August 7, 2003). However, the Federal Reserve Bank 
does not track or publish exchange rates for the Argentine Peso. 
Therefore, we made currency conversions based on the daily exchange 
rates from Factiva, a Dow Jones & Reuters Retrieval Service. The 
exchange rate is expressed as pesos per dollar. Factiva publishes 
exchange rates for Monday through Friday only. We used the rate of 
exchange on the most recent Friday for conversion dates involving 
Saturday through Sunday where necessary.

Preliminary Results of Review

    As a result of our review we preliminarily determine the following 
weighted-average dumping margins exist for the period May 11, 2001, 
through November 30, 2002:

------------------------------------------------------------------------
                                                            Weighted
                 Manufacturer/exporter                   average margin
                                                          (percentage)
------------------------------------------------------------------------
Asociacion de Cooperativas Argentinas.................              0
HoneyMax S.A..........................................              0
Nexco S.A.............................................              0.87
Seylinco S.A..........................................              0.59
TransHoney S.A........................................              0
------------------------------------------------------------------------

    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b). An interested party may request a hearing within thirty 
days of publication. See 19 CFR 351.310(c). Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date per 19 
CFR 351.310(d). Interested parties may submit case briefs or written 
comments no later than 30 days after the date of publication of these 
preliminary results of review. Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in the case briefs and comments,

[[Page 627]]

may be filed no later than 35 days after the date of publication of 
this notice. Parties who submit arguments in these proceedings are 
requested to submit with the argument: (1) A statement of the issue, 
(2) a brief summary of the argument and (3) a table of authorities. 
Further, we would appreciate it if parties submitting case briefs, 
rebuttal briefs, and written comments would provide the Department with 
an additional copy of the public version of any such argument on 
diskette. The Department will issue final results of this 
administrative review, including the results of our analysis of the 
issues in any such case briefs, rebuttal briefs, and written comments 
or at a hearing, within 120 days of publication of these preliminary 
results.
    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), we calculated importer-specific ad valorem assessment 
rates for the merchandise based on the ratio of the total amount of 
antidumping duties calculated for the examined sales made during the 
POR to the total customs value of the sales used to calculate those 
duties. This rate will be assessed uniformly on all entries of that 
particular importer made during the POR. The Department will issue 
appropriate appraisement instructions directly to CBP upon completion 
of the review.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of honey from Argentina entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act:
    (1) The cash deposit rates for all companies reviewed will be the 
rates established in the final results of review;
    (2) For any previously reviewed or investigated company not listed 
above, the cash deposit rate will continue to be the company-specific 
rate published in the most recent period;
    (3) If the exporter is not a firm covered in this review or the 
LTFV investigation, but the manufacturer is, the cash deposit rate will 
be the rate established for the most recent period for the manufacturer 
of the merchandise; and
    (4) If neither the exporter nor the manufacturer is a firm covered 
in this or any previous review conducted by the Department, the cash 
deposit rate will be the ``all others'' rate from the investigation 
(36.59 percent); See Notice of Final Determination of Sales at Less 
Than Fair Value; Honey From Argentina, 66FR 50611-50613, 40562 (October 
4, 2001).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: December 30, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-236 Filed 1-5-04; 8:45 am]
BILLING CODE 3510-DS-P