[Federal Register Volume 69, Number 17 (Tuesday, January 27, 2004)]
[Notices]
[Pages 3876-3883]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1698]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-838, A-331-802, A-533-840, A-549-822, A-570-893, A-552-802]


Notice of Initiation of Antidumping Duty Investigations: Certain 
Frozen and Canned Warmwater Shrimp From Brazil, Ecuador, India, 
Thailand, the People's Republic of China and the Socialist Republic of 
Vietnam

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

ACTION: Initiation of Antidumping Duty Investigations.

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EFFECTIVE DATE: January 27, 2004.

FOR FURTHER INFORMATION CONTACT: David Goldberger at (202) 482-4136

[[Page 3877]]

(Brazil and Ecuador), Michael Strollo at 202-482-0629 (India and 
Thailand); Alex Villanueva at (202) 482-3208 (People's Republic of 
China and Socialist Republic of Vietnam); Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Initiation of Investigations

The Petitions

    On December 31, 2003, the Department of Commerce ``the Department'' 
received petitions filed in proper form by the Ad Hoc Shrimp Trade 
Action Committee, an ad hoc coalition representative of U.S. producers 
of frozen and canned warmwater shrimp and harvesters of wild-caught 
warmwater shrimp ``the petitioner''. The petitioner filed amendments to 
the petitions on January 12, 2004.
    In accordance with section 732(b)(1) of the Tariff Act of 1930 
(``the Act''), the petitioner alleges that imports of certain frozen 
and canned warmwater shrimp from Brazil, Ecuador, India, Thailand, the 
People's Republic of China (``the PRC'') and the Socialist Republic of 
Vietnam (``Vietnam''), are, or are likely to be, sold in the United 
States at less than fair value within the meaning of section 731 of the 
Act, and that imports from Brazil, Ecuador, India, Thailand, the PRC 
and Vietnam, are materially injuring, or are threatening to materially 
injure, an industry in the United States.
    The Department finds that the petitioner filed these petitions on 
behalf of the domestic industry because it is an interested party as 
defined in section 771(9)(G) of the Act and it has demonstrated 
sufficient industry support with respect to each of the antidumping 
investigations that it is requesting the Department to initiate. See 
infra, ``Determination of Industry Support for the Petitions.''

Scope of Investigations

    The scope of these investigations include certain warmwater shrimp 
and prawns, whether frozen or canned, wild-caught (ocean harvested) or 
farm-raised (produced by aquaculture), head-on or head-off, shell-on or 
peeled, tail-on or tail-off,\1\ deveined or not deveined, cooked or 
raw, or otherwise processed in frozen or canned form.
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    \1\ ``Tails'' in this context means the tail fan, which includes 
the telson and the uropods.
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    The frozen or canned warmwater shrimp and prawn products included 
in the scope of the investigations, regardless of definitions in the 
Harmonized Tariff Schedule of the United States (``HTSUS''), are 
products which are processed from warmwater shrimp and prawns through 
either freezing or canning and which are sold in any count size.
    The products described above may be processed from any species of 
warmwater shrimp and prawns. Warmwater shrimp and prawns are generally 
classified in, but are not limited to, the Penaeidae family. Some 
examples of the farmed and wild-caught warmwater species include, but 
are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn 
(Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river 
prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), 
redspotted shrimp (Penaeus brasiliensis), southern brown shrimp 
(Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern 
rough shrimp (Trachypenaeus curvirostris), southern white shrimp 
(Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white 
shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus 
indicus).
    Frozen shrimp and prawns that are packed with marinade, spices or 
sauce are included in the scope of the investigations. In addition, 
food preparations, which are not ``prepared meals,'' that contain more 
than 20 percent by weight of shrimp or prawn are also included in the 
scope of the investigations.
    Excluded from the scope are (1) breaded shrimp and prawns 
(1605.20.10.20); (2) shrimp and prawns generally classified in the 
Pandalidae family and commonly referred to as coldwater shrimp, in any 
state of processing; (3) fresh shrimp and prawns whether shell-on or 
peeled (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in 
prepared meals (1605.20.05.10); and (5) dried shrimp and prawns.
    The products covered by this scope are currently classified under 
the following HTSUS subheadings; 0306.13.00.03, 0306.13.00.06, 
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 
1605.20.10.10, 1605.20.10.30, and 1605.20.10.40. These HTSUS 
subheadings are provided for convenience and for Customs and Border 
Protection (``CBP'') purposes only and are not dispositive, but rather 
the written descriptions of the scope of these investigations is 
dispositive.
    As discussed in the preamble to the Department's regulations 
(Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27323 (May 19, 1997)), we are setting aside a period for parties to 
raise issues regarding product coverage. The Department encourages all 
parties to submit such comments within 20 calendar days of publication 
of this notice. Comments should be addressed to Import Administration's 
Central Records Unit, Room 1870, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230. The period of 
scope consultations is intended to provide the Department with ample 
opportunity to consider all comments and consult with parties prior to 
the issuance of the preliminary determinations.

Determination of Industry Support for the Petitions

    Section 732(b)(1) of the Act requires that a petition be filed on 
behalf of the domestic industry. Section 732(c)(4)(A) of the Act 
provides that the Department's industry support determination, which is 
to be made before the initiation of the investigation, be based on 
whether a minimum percentage of the relevant industry supports the 
petition. A petition meets this requirement if the domestic producers 
or workers who support the petition account for: (1) at least 25 
percent of the total production of the domestic like product; and (2) 
more than 50 percent of the production of the domestic like product 
produced by that portion of the industry expressing support for, or 
opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act 
provides that, if the petition does not establish support of domestic 
producers or workers accounting for more than 50 percent of the total 
production of the domestic like product, the Department shall: i) poll 
the industry or rely on other information in order to determine if 
there is support for the petition, as required by subparagraph (A), or 
ii) determine industry support using a statistically valid sampling 
method.
    Section 771(4)(A) of the Act defines the ``industry'' as the 
producers of a domestic like product. In investigations involving some 
processed agricultural products, the statue allows the Department also 
to include producers of the raw agricultural product with the 
definition of the industry. See 771(4)(E) of the Act. For a full 
discussion, see the January 20, 2004, Memorandum to Joseph Spetrini and 
Jeffrey May from James Doyle, Norbert Gannon, Alex Villanueva, and 
Christopher Riker entitled ``Antidumping Duty Petitions on Certain 
Frozen and Canned

[[Page 3878]]

Warmwater Shrimp from Brazil, Ecuador, India, the People's Republic of 
China, Thailand, and the Socialist Republic of Vietnam: Domestic Like 
Product Analysis and Calculation of Industry Support'' (``DLP and 
Industry Support Memo''). The International Trade Commission (``ITC''), 
which is responsible for determining whether the domestic 
industry has been injured, must also determine what 
constitutes a domestic like product in order to define the industry. 
While both the Department and the ITC must apply the same statutory 
definition regarding the domestic like product (section 771(10) of the 
Act), they do so for different purposes and pursuant to a separate and 
distinct authority. In addition, the Department's determination is 
subject to limitations of time and information. Although this may 
result in different definitions of the like product, such differences 
do not render the decision of either agency contrary to the law.\2\
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    \2\ See Algoma Steel Corp. Ltd. v. United States, 688 F. Supp. 
639, 642-44 (Ct. Int'l Trade 1988) (``the ITC does not look behind 
ITA's determination, but accepts ITA's determination as to which 
merchandise is in the class of merchandise sold at LTFV'').
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    Section 771(10) of the Act defines the domestic like product as ``a 
product which is like, or in the absence of like, most similar in 
characteristics and uses with, the article subject to an investigation 
under this title.'' Thus, the reference point from which the domestic 
like product analysis begins is ``the article subject to an 
investigation,'' i.e., the class or kind of merchandise to be 
investigated, which normally will be the scope as defined in the 
petition.
    In this case, the domestic like product referred to in the petition 
is the single domestic like product defined in the ``Scope of 
Investigations'' section, above. At this time, the Department has no 
basis on the record to find the petition's definition of the domestic 
like product to be inaccurate. The Department, therefore, has adopted 
the domestic like product definition set forth in the petition. For a 
discussion of the domestic like product analysis in this case, see the 
DLP and Industry Support Memo.
    Moreover, the Department has determined that the petition contains 
adequate evidence of industry support; therefore, polling was 
unnecessary (see DLP and Industry Support Memo). Specifically, based on 
the analysis contained in the DLP and Industry Support Memo, the 
Department finds that producers supporting the petition represent over 
50 percent of total production of the domestic like product.
    Accordingly, the Department determines that this petition is filed 
on behalf of the domestic industry within the meaning of section 
732(b)(1) of the Act.

Export Price and Normal Value

    The following are descriptions of the allegations of sales at less 
than fair value upon which the Department based its decision to 
initiate these investigations. The sources of data for the deductions 
and adjustments relating to U.S. and foreign market prices, constructed 
value (``CV''), and factors of production are discussed in greater 
detail in the country-specific Initiation Checklists, as appropriate. 
Should the need arise to use any of this information as facts available 
under section 776 of the Act in our preliminary or final 
determinations, we will re-examine the information and revise the 
margin calculations.
    Regarding an investigation involving a non-market economy (``NME'') 
country, the Department presumes, based on the extent of central 
government control in an NME, that a single dumping margin, should 
there be one, is appropriate for all NME exporters in the given 
country. In the course of these investigations, all parties will have 
the opportunity to provide relevant information related to the issues 
of a country's NME status and the granting of separate rates to 
individual exporters. See, e.g., Notice of Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide from the People's Republic of 
China, 59 FR 22585, 22586-87 (May 2, 1994).

Brazil

Export Price

    The anticipated period of investigation ``POI'' for Brazil is 
October 1, 2002, through September 30, 2003.
    The petitioner based export price (``EP'') on average unit values 
(``AUVs'') of headless, shell-on, frozen warmwater shrimp for the POI 
from official U.S. import statistics. As the AUVs used were net of 
international freight, insurance and import charges, no further 
deductions were made to derive U.S. prices. See the Initiation 
Checklist.

Normal Value

    The petitioner based normal value (``NV'') on home market ex-
factory price quotes from Brazilian producers of head-on, shell-on 
frozen warmwater shrimp which it obtained from market research. See the 
January 16, 2004, Memorandum to the File from David Goldberger and Jim 
Nunno entitled ``Telephone Conversation with Foreign Market 
Researcher.'' These prices were adjusted to reflect headless, shell-on 
frozen warmwater shrimp, comparable to that which is imported into the 
United States. The petitioner made currency conversions based on the 
average of the daily real/U.S. dollar exchange rates as posted on the 
Department's Web site. See the Initiation Checklist.
    The estimated dumping margins in the petition, based on comparisons 
of EP to NV, ranged from 32 percent to 349 percent.

Ecuador

Export Price

    The anticipated POI for Ecuador is October 1, 2002, through 
September 30, 2003.
    The petitioner based EP on AUVs of headless, shell-on, frozen 
warmwater shrimp for the POI from official U.S. import statistics. As 
the AUVs used were net of international freight, insurance and import 
charges, no further deductions were made to derive U.S. prices. See the 
Initiation Checklist.

Normal Value

    During the course of the initiation, the petitioner placed on the 
record information which indicated that there is no viable home market 
for certain frozen and canned warmwater shrimp from Ecuador because 
nearly all shrimp produced in Ecuador is produced for the export 
market. We confirmed this information based on our conversation with 
the market researcher. See the January 16, 2004, Memorandum to the File 
from David Goldberger and Jim Nunno entitled ``Telephone Conversation 
with Foreign Market Researcher.''
    In selecting the third-country market, the petitioner chose Italy 
because: 1) it is the largest third-country market for scope 
merchandise outside of the United States during the POI; 2) the 
aggregate quantity of scope merchandise sold by Ecuadorian exporters to 
Italy accounted for more than five percent of the aggregate quantity of 
the scope merchandise sold in the United States; and 3) the product 
sold to the Italian market is comparable to the product which served as 
the basis for EP. After examining this evidence, we found the 
petitioner's selection of Italy as the comparison market to be 
reasonable.
    The petitioner based NV on prices published by the Torino, Italy 
Chamber of Commerce for the same count sizes upon which it based EP. 
These prices were adjusted to reflect headless, shell-on shrimp, 
comparable to that which is imported into the United States. The 
petitioner further adjusted these prices

[[Page 3879]]

by deducting importer and wholesaler mark-ups, import charges and 
international freight. Finally, the petitioner made currency 
conversions based on the average of the daily euro/U.S. dollar exchange 
rates as posted on the Department's Web site. See the Initiation 
Checklist.
    The estimated dumping margins in the petition, based on comparisons 
of EP to NV, ranged from 85 percent to 166 percent.

India

Export Price

    The anticipated POI for India is October 1, 2002, through September 
30, 2003.
    The petitioner based EP on AUVs of headless, shell-on, frozen 
warmwater shrimp for the POI from official U.S. import statistics. 
Although the AUVs used were net of international freight, insurance and 
import charges, the petitioner made a deduction for import charges, as 
well as foreign inland freight, to derive U.S. prices. We adjusted the 
petitioner's EP calculation by not deducting an amount for foreign 
inland freight and U.S. import expenses because the petitioner either 
provided inadequate support to deduct these expenses from EP in the 
petition, or the starting price did not include them. See the 
Initiation Checklist.

Normal Value

    The petitioner claims that the home market is not viable for 
purposes of calculating normal value. Section 773(a)(1)(C)(iii) of the 
Act provides that the Department 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. In 
the petition, the petitioner placed on the record information which 
indicated that virtually all of the frozen and canned warmwater shrimp 
sold in the home market is of non-export quality. We confirmed this 
information based on our conversations with the market researcher. See 
the January 16, 2004, Memorandum to the File from Alice Gibbons and Jim 
Nunno entitled ``Telephone Conversations with Foreign Market 
Researcher.'' Because the home market does not constitute a valid basis 
for calculating normal value, the petitioner provided sales of 
warmwater shrimp to India's largest export market, Japan. According to 
the petitioner, this is consistent with the Department's prior 
practice. See Notice of Final Determination of Sales at Less Than Fair 
Value: Fresh Atlantic Salmon From Chile, 63 FR 31411, 31418 (June 9, 
1998). Although we have accepted the petitioner's claim for purposes of 
initiating this case, we will continue to examine the issue of home 
market viability as this case progresses.
    In selecting the third-country market, the petitioner chose Japan 
because: 1) it is the largest third-country market for scope 
merchandise outside of the United States during the POI; 2) the 
aggregate quantity of scope merchandise sold by Indian exporters to 
Japan accounted for more than five percent of the aggregate quantity of 
the scope merchandise sold in the United States; and 3) the product 
sold to the Japanese market is comparable to the product which served 
as the basis for EP. After examining this evidence, we found the 
petitioner's selection of Japan as the comparison market to be 
reasonable.
    The petitioner based NV on publicly listed price quotations from 
the Tokyo Central Wholesale Market for the same count sizes upon which 
it based EP. These prices were adjusted to reflect headless, shell-on 
and frozen warmwater shrimp, comparable to that which is imported into 
the United States. The petitioner further adjusted NV by deducting 
import charges. We revised the petitioner's calculation of the average 
yen/U.S. dollar exchange rate by calculating a simple average of the 
daily rates as posted on the Department's Web site rather than monthly 
averages as posted on the Federal Reserve's Web site. In addition, as 
noted in the EP section above, we adjusted the petitioner's calculation 
by not deducting an amount for foreign inland freight expenses. Because 
the proposed foreign inland freight adjustment to NV is based on the 
identical information as the proposed adjustment to EP, we similarly 
find that the petitioner provided inadequate support to substantiate 
this adjustment. Therefore, we have also not deducted foreign inland 
freight expenses from NV. See the Initiation Checklist.
    Pursuant to section 773(b) of the Act, the petitioner provided 
information demonstrating reasonable grounds to believe or suspect that 
sales by Indian producers in the relevant foreign market were made at 
prices below the cost of production (``COP'') and, accordingly, 
requested that the Department conduct a country-wide sales-below-COP 
investigation in connection with this investigation. The Statement of 
Administrative Action (``SAA''), submitted to the Congress in 
connection with the interpretation and application of the URAA, states 
that an allegation of sales below COP need not be specific to 
individual exporters or producers. SAA, H.R. Doc. No. 103-316 at 833 
(1994). The SAA, at 833, states that ``Commerce will consider 
allegations of below-cost sales in the aggregate for a foreign country, 
just as Commerce currently considers allegations of sales at less than 
fair value on a country-wide basis for purposes of initiating an 
antidumping investigation.''
    Further, the SAA provides that section 773(b)(2)(A) of the Act 
retains the requirement that the Department have ``reasonable grounds 
to believe or suspect'' that below-cost sales have occurred before 
initiating such an investigation. Reasonable grounds exist when an 
interested party provides specific factual information on costs and 
prices, observed or constructed, indicating that sales in the foreign 
market in question are at below-cost prices. Id.
    Pursuant to section 773(b)(3) of the Act, COP consists of the cost 
of manufacturing (``COM''); selling, general, and administrative 
expenses (``SG&A''); financial expenses; and packing expenses. Here, 
the petitioner calculated the COM based on its own production 
experience, adjusted for known differences between costs to produce 
frozen and canned warmwater shrimp in the United States and in India 
using publically available information. Specifically, for fresh shrimp, 
the petitioner used consumption rates published by the National Marine 
Fisheries Service. The petitioner used the U.S. producers' own 
consumption rates for other raw materials, direct labor and energy. To 
adjust the U.S. producers' costs associated with fresh shrimp, the 
petitioner relied upon market research. To adjust the U.S. producers' 
costs associated with sodium tripolyphosphate and packing materials, 
the petitioner relied upon Indian import statistics as published by the 
Government of India Ministry of Commerce and Industry. To adjust the 
U.S. producers' costs associated with labor, the petitioner relied upon 
Government of India Labor Bureau statistics. To adjust the U.S. 
producers' costs associated with utilities, the petitioner relied upon 
Organization for Economic Cooperation and Development's (``OECD'') 
statistics. The petitioner relied upon its own overhead costs, except 
for depreciation, which was based on the 2002 financial statements of 
two Indian seafood processors. To calculate SG&A and financial expense, 
the petitioner relied upon the 2002 financial statements of two Indian 
seafood processors.
    Based on a comparison of the Japanese market prices for frozen and 
canned warmwater shrimp to the COP calculated in the petition, we find

[[Page 3880]]

reasonable grounds to believe or suspect that sales of the foreign like 
product were made at prices below the COP within the meaning of section 
773(b)(2)(A)(i) of the Act. Accordingly, the Department is initiating a 
country-wide cost investigation relating to third-country sales to 
Japan.
    Pursuant to sections 773(a)(4), 773(b) and 773(e) of the Act, the 
petitioner also based NV for sales in the United States on CV. The 
petitioner calculated CV using the same COM, SG&A, and financial 
expense figures used to compute the Japanese third-country market 
costs. The petitioner did not include any amount for profit. Therefore, 
CV is equivalent to COP.
    Based on the changes noted above, the recalculated dumping margins 
for certain frozen and canned warmwater shrimp from India range from 
82.30 percent to 110.90 percent.

People's Republic of China

Export Price

    The anticipated POI for the PRC is April 1, 2003, through September 
30, 2003.
    The petitioner based EP on AUVs of headless, shell-on, frozen 
warmwater shrimp for the POI from official U.S. import statistics. As 
the AUVs used were net of international freight, insurance and import 
charges, no further deductions for these expenses were made to derive 
U.S. prices. See the Initiation Checklist.

Normal Value

    The PRC is an NME country and no determination to the contrary has 
yet been made by the Department. See the Initiation Checklist. In 
accordance with section 771(18)(c)(i) of the Act, any determination 
that a foreign country has at one time been considered an NME shall 
remain in effect until revoked. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Saccharin from the 
People's Republic of China, 68 FR 27530, 27531 (May 20, 2003) 
(``Saccharin'').\3\ Accordingly, the petitioner provided a dumping 
margin calculation using the Department's NME methodology as required 
by 19 CFR 351.202(b)(7)(i)(C).
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    \3\ The presumption of NME status for the PRC has not been 
revoked by the Department and remains in effect for purposes of the 
initiation and this investigation. Therefore, the NV of the product 
is appropriately based on factors of production valued in a 
surrogate market economy country in accordance with 773(c) of the 
Act.
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    The petitioner based NV on factors of production. The petitioner 
asserted that it did not have specific, reliable information on the 
factors of production incurred for subject merchandise in the PRC. 
Therefore, the petitioner relied upon an average of factors of 
production ratios used in the United States for the NV calculation. 
Specifically, the petition used production factors provided by several 
U.S. warmwater shrimp processors. See the petitioner's January 12 
submission at Attachment A. The petitioner argues that because these 
companies are significant producers of the domestic like product, their 
experience is an appropriate model for estimating the costs of PRC 
manufacturers. The model accounts for the amount of each manufacturing 
input required to produce one pound of frozen warmwater shrimp. The 
main factor is raw warmwater shrimp; however, other factors of 
production included in the NV calculation are: tripolyphosphate, labor, 
electricity, water, overhead and packing materials. See the Initiation 
Checklist.
    The petitioner selected India as the surrogate country. The 
petitioner argued that, pursuant to section 773(c)(4) of the Act, India 
is an appropriate surrogate because it is a market-economy country that 
is at a comparable level of economic development to the PRC and is a 
significant producer of comparable merchandise.\4\ Based on the 
information provided by the petitioner, we believe that its use of 
India as a surrogate country is appropriate for purposes of initiating 
this investigation. See the Initiation Checklist.
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    \4\ As noted in the India section of this notice, the Indian 
home market for warmwater shrimp is not viable. However, this 
situation does not lessen India's ability to be properly designated 
as the appropriate primary surrogate country for the PRC and 
Vietnam. Pursuant to section 773(c) of the Act, an appropriate 
surrogate country is a market economy country that is (A) at a level 
of comparable economic development to the NME country, and (B) a 
significant producer of comparable merchandise. India is 
economically comparable to both the PRC and Vietnam, and India is 
the second largest producer of shrimp in the world after the PRC. 
See Petition at Volume I, page 8. It follows that India is an 
appropriate surrogate for purposes of this initiation and these 
investigations.
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    In accordance with section 773(c)(4) of the Act, the petitioner 
valued factors of production, where possible, on reasonably available, 
public surrogate country data. To value certain raw materials, the 
petitioner used official Indian government import statistics, excluding 
those values from countries previously determined by the Department to 
be NME countries and excluding imports into India from Indonesia, Korea 
and Thailand, in light of the prevalence of export subsidies in those 
countries. See Notice of Final Determination of Sales at Less Than Fair 
Value: Ferrovanadium from the People's Republic of China, 67 FR 71137, 
71139 (Nov. 29, 2002). For inputs valued in Indian rupees and not 
contemporaneous with the POI (i.e., April 2003 - September 2003), the 
petitioner used information from the wholesale price indices (``WPI'') 
in India as published in the International Financial Statistics by the 
International Monetary Fund to determine the appropriate adjustments 
for inflation. In addition, the petitioner made currency conversions, 
where necessary, based on the average rupee/U.S. dollar exchange rate 
for the POI.
    To value raw warmwater shrimp, the major input, the petitioner used 
a market researcher to determined the cost of shrimp in India. See the 
January 16, 2004, Memorandum to the File from John LaRose and Jim Nunno 
entitled ``Telephone Conversation with Foreign Market Researcher.'' The 
research was conducted in Mumbai, India and completed in December 2003. 
Sodium tripolyphosphate and packing materials were valued by the 
petitioner using Indian import statistics, as reported in the Monthly 
Statistics of Foreign Trade of India. The price information from the 
Monthly Statistics of Foreign Trade of India represents cumulative 
import values for the period April 2002 to March 2003. To value water, 
the petitioner calculated a surrogate value based on price data in 
India as reported by the Second Water Utilities Data Book, Asian and 
Pacific Region, published by the Asian Development Bank. Electricity in 
India was valued by the petitioner using the OECD Energy Prices and 
Taxes data. In accordance with 19 CFR 351.408(c)(3), the Department 
calculates and publishes the surrogate values for labor to be used in 
NME cases. Therefore, to value labor, the petitioner relied on 
published wage rates and a labor rate of $0.83 per hour.
    The petitioner calculated surrogate financial ratios (depreciation, 
SG&A and profit) using the 2001 financial statements of two Indian 
seafood processors that process marine products. To calculate a single 
surrogate ratio for overhead, depreciation, SG&A, and profit, the 
petitioner calculated a simple average for the two Indian seafood 
processors.
    In its calculation of the surrogate profit and financial expenses, 
the petitioner included a zero value expense when averaging the 
experiences of the two Indian seafood processors.
    However, it is the Department's practice not to average a zero 
expense into the calculation of the surrogate financial ratios. See 
Notice of Initiation of Antidumping Duty Investigations: Electrolytic 
Manganese Dioxide From Australia, Greece, Ireland, Japan, South Africa 
and the People's Republic of

[[Page 3881]]

China, 68 FR 51551 (Aug. 27, 2003) (``EMD''). Therefore, the Department 
has recalculated the surrogate financial ratios. See the Initiation 
Checklist at Attachment II. In addition, the petitioner included U.S. 
producer costs in the normal value calculation of non-depreciation 
overhead because they were unable to identify those unique costs in the 
Indian surrogate company financial statements. However, section 
773(c)(4) of the Act states that ``{t{time} he administering authority, 
in valuing factors of production under paragraph (1), shall utilize, to 
the extent possible, the prices or costs of factors of production in 
one or more market economies that are (A) at a level of economic 
development comparable to that of the non market economy, and (B) 
significant producers of comparable merchandise.'' Therefore, U.S. 
prices or costs are not appropriate for use as surrogate values. See, 
e.g., Notice of Initiation of Antidumping Duty Investigations: 
Polyvinyl Alcohol from Germany, Japan, the Peoples Republic of China, 
the Republic of Korea, and Singapore, 67 FR 61591 (Oct. 1, 2002) and 
accompanying Initiation Checklist at page 19 (``PVA''). The ultimate 
goal of the Department's margin calculations is to achieve the greatest 
accuracy possible. The Department has found no evidence on the record 
showing that non-depreciation overhead is not included in the overhead 
figures of the Indian surrogate company financial statements. 
Therefore, to be conservative, the Department has determined that the 
U.S. producer costs for non-depreciation overhead should not be 
included in the normal value calculation. See the Initiation Checklist.
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(c) of the Act, the estimated recalculated dumping margins 
for certain frozen and canned warmwater shrimp from the PRC range from 
112.81 percent to 263.68 percent.

Thailand

Export Price

    The anticipated POI for Thailand is October 1, 2002, through 
September 30, 2003.
    The petitioner based EP on AUVs of frozen, cooked and peeled shrimp 
for the POI from official U.S. import statistics. Although the AUVs 
used were net of international freight, insurance and import charges, 
the petitioner made a deduction for import charges, as well as foreign 
inland freight, to derive U.S. prices. We adjusted the petitioner's EP 
calculation by not deducting amounts for foreign inland freight and 
U.S. import expenses because the petitioner either provided inadequate 
support for these expenses in the petition, or the starting price did 
not include them. See the Initiation Checklist.

Normal Value

    In the petition, the petitioner placed on the record information 
which indicated that there is no viable home market for certain frozen 
and canned warmwater shrimp from Thailand because the Thai market 
purchases only fresh (i.e., live, unchilled or else chilled, 
unprocessed) or traditional household industry-produced dried shrimp. 
We confirmed this information based on our conversation with the market 
researcher. See the January 16, 2004, Memorandum to the File from 
Elizabeth Eastwood and Jim Nunno entitled ``Telephone Conversation with 
Foreign Market Researcher.''
    In selecting the third-country market, the petitioner chose Japan 
because: 1) it is the largest third-country market for scope 
merchandise outside of the United States during the POI; 2) the 
aggregate quantity of scope merchandise sold by Thai exporters to Japan 
accounted for more than five percent of the aggregate quantity of the 
scope merchandise sold in the United States; and 3) the product sold to 
the Japanese market is comparable to the product which served as the 
basis for EP. After examining this evidence, we found the petitioner's 
selection of Japan as the comparison market to be reasonable.
    The petitioner based NV on AUVs of Thai exports of frozen, cooked 
shrimp to Japan during the POI. We revised the petitioner's calculation 
of the average yen/U.S. dollar exchange rate by calculating a simple 
average of the daily rates as posted on the Department's Web site 
rather than monthly averages as posted on the Federal Reserve's Web 
site. In addition, as noted in the EP section above, we adjusted the 
petitioner's calculation by not deducting an amount for foreign inland 
freight expenses. Because the proposed foreign inland freight 
adjustment to NV is based on the identical information as the proposed 
adjustment to EP, we similarly find that the petitioner provided 
inadequate support to substantiate this adjustment. Therefore, we have 
also not deducted foreign inland freight expenses from NV. See the 
Initiation Checklist.
    Based on the changes noted above, the recalculated dumping margin 
for certain frozen and canned warmwater shrimp from Thailand is 57.64 
percent.

Vietnam

Export Price

    The anticipated POI for the PRC is April 1, 2003, through September 
30, 2003.
    The petitioner based EP on AUVs of headless, shell-on, frozen 
warmwater shrimp for the POI from official U.S. import statistics. As 
the AUVs used were net of international freight, insurance and import 
charges, no further deductions for these expenses were made to derive 
U.S. prices. See the Initiation Checklist.

Normal Value

    Vietnam is an NME country and no determination to the contrary has 
yet been made by the Department. In accordance with section 771(18) of 
the Act, any determination that a foreign country has at one time been 
considered an NME shall remain in effect until revoked. See the 
Initiation Checklist. See, e.g., Saccharin, 68 FR at 27531.\5\ 
Accordingly, the petitioner provided a dumping margin calculation using 
the Department's NME methodology as required by 19 CFR 
351.202(b)(7)(i)(C).
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    \5\ The presumption of NME status for the PRC has not been 
revoked by the Department and remains in effect for purposes of the 
initiation and this investigation. Therefore, the NV of the product 
is appropriately based on factors of production valued in a 
surrogate market economy country in accordance with 773(c) of the 
Act.
---------------------------------------------------------------------------

    The petitioner based NV on factors of production. The petitioner 
asserted that it did not have specific, reliable information on the 
factors of production incurred for subject merchandise in Vietnam. 
Therefore, the petitioner relied upon an average of factors of 
production ratios used in the United States for the NV calculation. 
Specifically, the petition used production factors provided by several 
U.S. warmwater shrimp processors. The petitioner argues that, because 
these companies are significant producers of the domestic like product, 
their experience is an appropriate model for estimating the costs of 
Vietnamese manufacturers. The model accounts for the amount of each 
manufacturing input required to produce one pound of frozen warmwater 
shrimp. The main factor is raw warmwater shrimp, however, other factors 
of production included in the NV calculation are: tripolyphosphate, 
labor, electricity, water, overhead and packing materials. See the 
Initiation Checklist.
    The petitioner selected India as the surrogate country. The 
petitioner argued that, pursuant to section 773(c)(4) of the Act, India 
is an appropriate surrogate because it is a market-economy country

[[Page 3882]]

that is at a comparable level of economic development to Vietnam and is 
a significant producer of comparable merchandise.\6\ Based on the 
information provided by the petitioner, we believe that the 
petitioner's use of India as a surrogate country is appropriate for 
purposes of initiating this investigation. See the Initiation 
Checklist.
---------------------------------------------------------------------------

    \6\ As noted in the India section of this notice, the Indian 
home market for warmwater shrimp is not viable. However, this 
situation does not lessen India's ability to be properly designated 
as the appropriate primary surrogate country for the PRC and 
Vietnam. Pursuant to section 773(c) of the Act, an appropriate 
surrogate country is a market economy country that is (A) at a level 
of comparable economic development to the NME country, and (B) a 
significant producer of comparable merchandise. India is 
economically comparable to both the PRC and Vietnam, and India is 
the second largest producer of shrimp in the world after the PRC. 
See Petition at Volume I, page 8. It follows that India is an 
appropriate surrogate for purposes of this initiation and these 
investigations.
---------------------------------------------------------------------------

    In accordance with section 773(c)(4) of the Act, the petitioner 
valued factors of production, where possible, on reasonably available, 
public surrogate country data. To value certain raw materials, the 
petitioner used official Indian government import statistics, excluding 
those values from countries previously determined by the Department to 
be NME countries and excluding imports into India from Indonesia, Korea 
and Thailand, in light of the prevalence of export subsidies in those 
countries. See Notice of Final Determination of Sales at Less Than Fair 
Value: Ferrovanadium from the People's Republic of China, 67 FR 71137, 
71139 (Nov. 29, 2002). For inputs valued in Indian rupees and not 
contemporaneous with the POI (i.e., April 2003 - September 2003), the 
petitioner used information from the WPI in India as published in the 
International Financial Statistics by the International Monetary Fund 
to determine the appropriate adjustments for inflation. In addition, 
the petitioner made currency conversions, where necessary, based on the 
average rupee/U.S. dollar exchange rate for the POI.
    To value raw warmwater shrimp, the major input, the petitioner used 
a market researcher to determine the cost of shrimp in India. The 
research was conducted in Mumbai, India and completed in December 2003. 
See the January 16, 2004, Memorandum to the File from Paul Walker and 
Jim Nunno entitled ``Telephone Conversation with Foreign Market 
Researcher.'' Sodium tripolyphosphate and packing materials were valued 
by the petitioner using Indian import statistics, as reported in the 
Monthly Statistics of Foreign Trade of India. The price information 
from the Monthly Statistics of Foreign Trade of India represents 
cumulative import values for the period April 2002 to March 2003. To 
value water, the petitioner calculated a surrogate value based on price 
data in India as reported by the Second Water Utilities Data Book, 
Asian and Pacific Region, published by the Asian Development Bank. 
Electricity in India was valued by the petitioner using the OECD Energy 
Prices and Taxes data. In accordance with 19 CFR 351.408(c)(3), the 
Department calculates and publishes the surrogate values for labor to 
be used in NME cases. Therefore, to value labor, the petitioner relied 
on published wage rates and a labor rate of $0.63 per hour.
    The petitioner calculated surrogate financial ratios (depreciation, 
SG&A and profit) using the 2001 financial statements of two Indian 
seafood processors that process marine products. To calculate a single 
surrogate ratio for overhead, depreciation, SG&A, and profit, the 
petitioner calculated a simple average for the two Indian seafood 
processors. In its calculation of the surrogate profit and financial 
expenses, the petitioner included a zero value expense when averaging 
the experiences of the two Indian seafood processors.
    However, it is the Department's practice not to average a zero 
expense into the calculation of the surrogate financial ratios. See 
EMD. Therefore, the Department has recalculated the surrogate financial 
ratios. See the Initiation Checklist at Attachment II. In addition, the 
petitioner included U.S. producer costs in the normal value calculation 
of non-depreciation overhead because they were unable to identify those 
unique costs in the Indian surrogate company financial statements. 
However, section 773(c)(4) of the Act states that ``{t{time} he 
administering authority, in valuing factors of production under 
paragraph (1), shall utilize, to the extent possible, the prices or 
costs of factors of production in one or more market economies that are 
(A) at a level of economic development comparable to that of the non 
market economy, and (B) significant producers of comparable 
merchandise.'' Therefore, U.S. prices or costs are not appropriate for 
use as surrogate values. See, e.g., PVA. The ultimate goal of the 
Department's margin calculations is to achieve the greatest accuracy 
possible. The Department has found no evidence on the record showing 
that non-depreciation overhead is not included in the overhead figures 
of the Indian surrogate company financial statements. Therefore, to be 
conservative, the Department has determined that the U.S. producer 
costs for non-depreciation overhead should not be included in the 
normal value calculation. See the Initiation Checklist.
    Based on comparisons of EP to NV, calculated in accordance with 
section 773(c) of the Act, the estimated recalculated dumping margins 
for certain frozen and canned warmwater shrimp from Vietnam range from 
25.76 percent to 93.13 percent.

Fair Value Comparisons

    Based on the data provided by the petitioner, there is reason to 
believe that imports of certain frozen and canned warmwater shrimp from 
Brazil, Ecuador, India, Thailand, the PRC and Vietnam are being, or are 
likely to be, sold at less than fair value.

Allegations and Evidence of Material Injury and Causation

    With regard to Brazil, Ecuador, India, Thailand, the PRC, and 
Vietnam, the petitioner alleges that the U.S. industry producing the 
domestic like product is being materially injured, or is threatened 
with material injury, by reason of the individual and cumulated imports 
of the subject merchandise sold at less than NV.
    The petitioner contends that the industry's injured condition is 
evident in the declining trends in market share, net operating profits, 
net sales volumes and revenues, and production employment. These 
factors apply to both the firms that produce frozen and canned 
warmwater shrimp, and the harvesters and growers of the raw 
agricultural product, wild-caught and farm-raised warmwater shrimp. The 
allegations of injury and causation are supported by relevant evidence 
including information from U.S. import statistics, the National Marine 
Fisheries Service, a commodity news reporting agency, industry surveys, 
and press reports from a variety of sources. We have assessed the 
allegations and supporting evidence regarding material injury and 
causation, and we have determined that these allegations are properly 
supported by adequate evidence and meet the statutory requirements for 
initiation. See the Initiation Checklists.

Initiation of Antidumping Investigations

    Based upon our examination of the petitions on certain frozen and 
canned warmwater shrimp, we have found that they meet the requirements 
of section 732 of the Act. Therefore, we are initiating antidumping 
duty investigations to determine whether imports of certain frozen and 
canned warmwater shrimp from Brazil,

[[Page 3883]]

Ecuador, India, Thailand, the PRC, and Vietnam are being, or are likely 
to be, sold in the United States at less than fair value. Unless this 
deadline is extended pursuant to section 733(b)(1)(A) of the Act, we 
will make our preliminary determinations no later than 140 days after 
the date of this initiation.

Distribution of Copies of the Petitions

    In accordance with section 732(b)(3)(A) of the Act, a copy of the 
public version of each petition has been provided to the 
representatives of the governments of Brazil, Ecuador, India, Thailand, 
the PRC, and Vietnam. We will attempt to provide a copy of the public 
version of each petition to each exporter named in the petitions, as 
provided for under 19 CFR 351.203(c)(2).

ITC Notification

    We have notified the ITC of our initiations as required by section 
732(d) of the Act.

Preliminary Determinations by the ITC

    The ITC will preliminarily determine no later than February 17, 
2004, whether there is a reasonable indication that imports of certain 
frozen and canned warmwater shrimp from Brazil, Ecuador, India, 
Thailand, the PRC and Vietnam are causing material injury, or 
threatening to cause material injury, to a U.S. industry. A negative 
ITC determination for any country will result in the investigation 
being terminated with respect to that country; otherwise, these 
investigations will proceed according to statutory and regulatory time 
limits.
    This notice is issued and published pursuant to section 777(i) of 
the Act.

    Dated: January 20, 2004.
James Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1698 Filed 1-26-04; 8:45 am]
BILLING CODE 3510-DS-S