[Federal Register Volume 69, Number 68 (Thursday, April 8, 2004)]
[Notices]
[Pages 18524-18531]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8014]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-813]


Notice of Preliminary Results and Preliminary Determination To 
Revoke Order in Part: Canned Pineapple Fruit From Thailand

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

SUMMARY: In response to requests by producers/exporters of subject 
merchandise and by the petitioners \1\, the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on canned pineapple fruit (CPF) from Thailand. This review 
covers four producers/exporters of the subject merchandise.
---------------------------------------------------------------------------

    \1\ The petitioners are Maui Pineapple Company and the 
International Longshoremen's and Warehousemen's Union.
---------------------------------------------------------------------------

    We preliminarily determine that for one producer/exporter, Vita 
Food Factory (1989) Co., Ltd., sales have been made below normal value 
(NV). If these preliminary results are adopted in our final results, we 
will instruct Customs and Border Protection (CBP) to assess antidumping 
duties based on the difference between the export price (EP) or the 
constructed export price (CEP), as applicable, and the NV.

EFFECTIVE DATE: April 8, 2004.

FOR FURTHER INFORMATION CONTACT: Marin Weaver or Charles Riggle, at 
(202) 482-2336 or (202) 482-0650, respectively; AD/CVD Enforcement 
Office 5, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Case History

    On July 18, 1995, the Department issued an antidumping duty order 
on CPF from Thailand. See Notice of Antidumping Duty Order and Amended 
Final Determination: Canned Pineapple Fruit From Thailand, 60 FR 36775 
(July 18, 1995). On July 2, 2003, we published in the Federal Register 
the notice of opportunity to request the eighth administrative review 
of this order. See Antidumping or Countervailing Duty Order, Finding, 
or Suspended Investigation; Opportunity To Request Administrative 
Review, 68 FR 39511 (July 2, 2003).
    In accordance with Sec.  351.213(b)(2) of the Department's 
regulations, the following producers/exporters made

[[Page 18525]]

timely requests that the Department conduct an administrative review 
for the period from July 1, 2002, through June 30, 2003: Dole Food 
Company, Inc., Dole Packaged Foods Company, and Dole Thailand, Ltd. 
(collectively, Dole); Kuiburi Fruit Canning Co., Ltd. (Kuiburi); the 
Thai Pineapple Public Co., Ltd. (TIPCO); Vita Food Factory (1989) Co. 
Ltd. (Vita).
    In addition, on July 30, 2003, the petitioners, in accordance with 
Sec.  351.213(b)(1) of the Department's regulations, submitted a timely 
request that the Department conduct a review of Malee Sampran Public 
Co., Ltd. (Malee), Prachuab Fruit Canning Co. (Praft), Siam Fruit 
Canning (1988) Co., Ltd. (SIFCO), and the Thai Pineapple Canning 
Industry Corp., Ltd. (TPC), as well as for Dole, Kuiburi, TIPCO, and 
Vita. On August 27, 2003, the petitioners withdrew their review 
requests for TPC, Praft, SIFCO, and Malee.
    On August 22, 2003, we published the notice of initiation of this 
antidumping duty administrative review, covering the period July 1, 
2002, through June 30, 2003. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Requests for Revocation 
in Part, 68 FR 50750 (August 22, 2003).

Scope of the Review

    The product covered by this order is CPF, defined as pineapple 
processed and/or prepared into various product forms, including rings, 
pieces, chunks, tidbits, and crushed pineapple, that is packed and 
cooked in metal cans with either pineapple juice or sugar syrup added. 
CPF is currently classifiable under subheadings 2008.20.0010 and 
2008.20.0090 of the Harmonized Tariff Schedule of the United States 
(HTSUS). HTSUS 2008.20.0010 covers CPF packed in a sugar-based syrup; 
HTSUS 2008.20.0090 covers CPF packed without added sugar (i.e., juice-
packed). Although these HTSUS subheadings are provided for convenience 
and for customs purposes, the written description of the scope is 
dispositive.

Verification

    As provided in sections 782(i)(2) of the Act, in February and March 
2004 we verified information provided by Dole, Kuiburi, and TIPCO. We 
used standard verification procedures, including on-site inspection of 
the respondent producers' facilities and examination of relevant sales 
and financial records.

Product Comparisons

    We compared the EP or the CEP, as applicable, to the NV, as 
described in the Export Price and Constructed Export Price and Normal 
Value sections of this notice. We first attempted to compare 
contemporaneous sales in the U.S. and comparison markets of products 
that were identical with respect to the following characteristics: 
Weight, form, variety, and grade. Where we were unable to compare sales 
of identical merchandise, we compared products sold in the United 
States with the most similar merchandise sold in the comparison markets 
based on the characteristics listed above, in that order of priority. 
Where there were no appropriate comparison market sales of comparable 
merchandise, we compared the merchandise sold in the United States to 
constructed value (CV), in accordance with section 773(a)(4) of the 
Act. For all respondents, we based the date of sale on the date of the 
invoice.

Export Price and Constructed Export Price

    For the price to the United States, we used, as appropriate, EP or 
CEP as defined in sections 772(a) and 772(b) of the Act, respectively. 
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 the subject merchandise 
outside the United States to an unaffiliated purchaser in the United 
States, or to an unaffiliated purchaser for exportation to the United 
States. Section 772(b) of the Act defines CEP as the price at which the 
subject merchandise is first sold (or agreed to be sold) inside the 
United States before or after the date of importation, by or for the 
account of the producer or exporter of the merchandise, or by a seller 
affiliated with the producer or exporter, to an unaffiliated purchaser, 
as adjusted under subsections 772(c) and (d) of the Act.
    For all respondents, we calculated EP and CEP, as appropriate, 
using as a starting price the packed prices charged to the first 
unaffiliated customer in the United States.
    In accordance with section 772(c)(2) of the Act, we calculated the 
EP and CEP by deducting movement expenses and export taxes and duties 
from the starting price, where appropriate. Section 772(d)(1) of the 
Act provides for additional adjustments to CEP. Accordingly, for CEP 
sales we also reduced the starting price by direct and indirect selling 
expenses incurred in the United States and an amount for profit.
    We determined the EP or CEP for each company as follows:

TIPCO

    For TIPCO's U.S. sales, the merchandise was sold either directly by 
TIPCO or indirectly through its U.S. affiliate, TIPCO Marketing Co. 
(TMC), to the first unaffiliated purchaser in the United States prior 
to importation. We calculated an EP for all of TIPCO's sales because 
CEP was not otherwise warranted based on the facts of record. Although 
TMC is a company legally incorporated in the United States, the company 
does not have either business premises or employees in the United 
States. TIPCO employees based in Bangkok conduct all of TMC's 
activities out of TIPCO's Bangkok headquarters, including invoicing, 
paperwork processing, receipt of payment, and arranging for customs and 
brokerage. Accordingly, as the merchandise was sold before importation 
by TMC outside the United States, we have determined these sales to be 
EP transactions. See Canned Pineapple Fruit from Thailand: Final 
Results of Antidumpting Duty Administrative Review, 66 FR 52744 
(October 17, 2001) and accompanying Decision Memo at TIPCO Comment 16. 
See also Circular Welded Non-Alloy Steel Pipe from Mexico: Final 
Results of Antidumping Duty Administrative Review, 65 FR 37518 (June 
15, 2000) and accompanying Decision Memo at Hylsa Comment 3.
    We calculated EP based on the packed free on board (FOB) or cost 
and freight (C&F) price to unaffiliated purchasers in the United 
States. In accordance with section 772(c)(2)(A) of the Act, we made 
deductions from the starting price for foreign movement expenses 
(including brokerage and handling, port charges, stuffing expenses, and 
inland freight), international freight, U.S. customs duties, and U.S. 
brokerage and handling. See Analysis Memorandum for the Thai Pineapple 
Public Co. Ltd., dated April 1, 2004 (TIPCO Analysis Memorandum).

Vita

    We calculated an EP for all of Vita's sales because the merchandise 
was sold directly by Vita outside the United States to the first 
unaffiliated purchaser in the United States prior to importation, and 
CEP was not otherwise indicated. We calculated EP based on the packed 
FOB, cost, insurance, and freight (CIF), or C&F prices to unaffiliated 
purchasers in the United States. In accordance with section 
772(c)(2)(A) of the Act, we made deductions from the starting price for 
international freight, marine insurance, and foreign movement expenses 
(including terminal handling charge,

[[Page 18526]]

bill of lading free, customs clearance (shipping) charge, port charges, 
document legalization fee, stuffing expenses, inland freight and other 
miscellaneous charges). See Analysis Memorandum for Vita Food Factory 
(1989) Co., Ltd., dated April 1, 2004 (Vita Analysis Memorandum).

Kuiburi

    We calculated an EP for all of Kuiburi's sales because the 
merchandise was sold directly by Kuiburi outside the United States to 
the first unaffiliated purchaser in the United States prior to 
importation, and CEP was not otherwise indicated. We calculated EP 
based on the packed FOB or C&F price to unaffiliated purchasers in the 
United States. In accordance with section 772(c)(2)(A) of the Act, we 
made deductions from the starting price for foreign movement expenses 
and international freight. See Analysis Memorandum for Kuiburi Fruit 
Canning Company Limited, dated April 1, 2004 (Kuiburi Analysis 
Memorandum).

Dole

    For this period of review (POR), Dole had both EP and CEP 
transactions. The CEP transactions were made in the United States by 
Dole Packaged Foods (DPF), a division of Dole. The EP transactions were 
made directly from Dole Thailand, Ltd. (DTL) to the United States.
    CEP was based on DPF's price to unaffiliated purchasers in the 
United States. We made deductions from the starting price for discounts 
in accordance with Sec.  351.401(c) of the Department's regulations. We 
also made deductions for foreign inland movement expenses, insurance 
and international freight in accordance with section 772(c)(2)(A) of 
the Act. For Dole's CEP sales, in accordance with section 772(d)(1) of 
the Act, we deducted from the starting price those selling expenses 
associated with selling the subject merchandise in the United States, 
including direct and indirect selling expenses incurred by DPF in the 
United States. We also deducted from the starting price an amount for 
profit in accordance with section 772(d)(3) of the Act. See Analysis 
Memorandum for Dole, dated April 1, 2004 (Dole Analysis Memorandum). We 
calculated EP based on the packed FOB price to unaffiliated purchasers 
in the United States. In accordance with section 772(c)(2)(A) of the 
Act, we made deductions from the starting price for foreign movement 
expenses. See Dole Analysis Memorandum.

Normal Value

A. Selection of Comparison Markets

    Based on a comparison of the aggregate quantity of home market 
sales and U.S. sales, we determined that the quantity of foreign like 
product each respondent sold in Thailand did not permit a proper 
comparison with the sales of the subject merchandise to the United 
States because the quantity of each company's sales in its home market 
was less than 5 percent of the quantity of its sales to the U.S. 
market. See section 773(a)(1) of the Act. Therefore, for all 
respondents, in accordance with section 773(a)(1)(B)(ii) of the Act, we 
based NV on the price at which the foreign like product was first sold 
for consumption in each respondent's largest viable third-country 
market, i.e., Germany for both Vita and TIPCO, Canada for Dole, and 
Spain for Kuiburi.

B. Cost of Production Analysis

    Pursuant to section 773(b)(1) of the Act, we initiated a COP 
investigation of comparison markets for each respondent. Because we 
disregarded sales that failed the cost test in the last completed 
review for Dole, Kuiburi, TIPCO, and Vita, we had reasonable grounds to 
believe or suspect that sales by these companies of the foreign like 
product under consideration for the determination of NV in this review 
were made at prices below the COP, as provided by section 
773(b)(2)(A)(ii) of the Act.\2\ As a result, we initiated an 
investigation of sales below cost for each of these companies. We 
conducted the COP analysis as described below.
---------------------------------------------------------------------------

    \2\ The 2001/2002 review was not completed until five months 
after the current review was initiated. Therefore, at the time the 
questionnaires were issued, we initiated the COP investigations 
based on the results of the completed 2000/2001 review. See Notice 
of Final Results of Antidumping Duty Administrative Review, 
Rescission of Administrative Review in Part, and Final Determination 
to Revoke Order in Part: Canned Pineapple Fruit from Thailand, 67 FR 
76718 (December 13, 2002).
---------------------------------------------------------------------------

1. Calculation of COP/Fruit Cost Allocation
    In accordance with section 773(b)(3) of the Act, for each 
respondent, we calculated the weighted-average COP, by model, based on 
the sum of the costs of materials, fabrication, selling, general and 
administrative (SG&A) expenses, interest expense, and packing costs. We 
relied on the submitted COPs except in the specific instances noted 
below, where the submitted costs were not appropriately quantified or 
valued. In addition, we have implemented a change in practice regarding 
the treatment of foreign exchange gains and losses. For all four 
respondents, we adjusted the reported financial expense ratios to 
include all foreign exchange gains and losses in each company's 
interest expenses. See Stainless Steel Bar From India: Final Results of 
Antidumping Duty Administrative Review, 68 FR 47543, 47544 (August 11, 
2003).
    The Department's long-standing practice, now codified at section 
773(f)(1)(A) of the Act, is to rely on a company's normal books and 
records if such records are in accordance with home country generally 
accepted accounting principles (GAAP) and reasonably reflect the costs 
associated with production of the merchandise. In addition, as the 
statute indicates, the Department considers whether an accounting 
methodology, particulary an allocation methodology, has been 
historically used by the company. See section 773(f)(1)(A) of the Act. 
In previous segments of this proceeding, the Department has determined 
that joint production costs (i.e., pineapple and pineapple processing 
costs) cannot be reasonably allocated to canned pineapple on the basis 
of weight. See Final Determination of Sales at Less Than Fair Value: 
Canned Pineapple Fruit From Thailand, 60 FR 29553, 29561 (June 5, 
1995), \3\ and Notice of Final Results of Antidumping Duty 
Administrative Review: Canned Pineapple Fruit From Thailand, 63 FR 
7392, 7398 (February 13, 1998). For instance, cores and shells are used 
in juice production and the production of dehydrated products, while 
trimmed and cored pineapple cylinders are used in CPF production. 
Because these various parts of a pineapple are not interchangeable when 
it comes to CPF versus juice production, it would be unreasonable to 
value all parts of the pineapple equally by using a weight-based 
allocation methodology.
---------------------------------------------------------------------------

    \3\ This determination was upheld by the Court of Appeals for 
the Federal Circuit. The Thai Pineapple Public Co. v. United States, 
187 F.3d 1362 (Fed. Cir. 1999) (finding that the Department's cost 
allocation methodology in the original investigation was reasonable 
and supported by substantial evidence).
---------------------------------------------------------------------------

    Several respondents that revised their fruit cost allocation 
methodologies during the 1995/1996 POR changed from their historical 
net realizable value (NRV) methodology to weight-based methodologies 
and did not incorporate any measure of the qualitative factor of the 
different parts of the pineapple. As a result, such methodologies, 
although in conformity with Thai GAAP, do not reasonably reflect the 
costs associated with production of CPF. Therefore, for companies whose 
fruit cost allocation

[[Page 18527]]

methodology is weight-based, we requested that they recalculate fruit 
costs allocated to CPF based on NV methodology.
    Consistent with prior segments of this proceeding, the NRV 
methodology that we requested respondents to use was based on company-
specific historical amounts for sales and separable costs during the 
five-year period of 1990 through 1994. We made the following company-
specific adjustments to the cost data submitted in this review.
    TIPCO. We adjusted TIPCO's cost calculation for the second half of 
the POR to revise the solid pineapple ratio used to allocate costs 
between the solid pineapple used for CPF products and the solid 
pineapple used for tropical fruit salad products. This adjustment 
reflects a correction of the reported relative weight of these products 
based on the Department's findings at verification. See TIPCO's 
Analysis Memorandum for further information.
    Kuiburi. As discussed above, since the first administrative review 
of CPF from Thailand the Department has utilized a NRV methodology to 
allocate pineapple fruit costs among joint products. Under this 
methodology, the separable costs for each joint product (e.g., solid 
pineapple products produced primarily from pineapple cylinders and 
juice and dehydrated core products made primarily from pineapple cores 
and shells) are subtracted from the gross revenue for each joint 
product. The ratio of the net realizable value of each joint product to 
the total net realizable value of all products is then used as the 
allocation base.
    In the most recently completed review, we rejected Kuiburi's 
reported allocation methodologies from the historic period (1990 
through 1994),\4\ and 1997 through 2001, because they were based on 
relative revenues alone and failed to consider the impact of separable 
costs.\5\ Instead, the Department calculated a facts available (FA) NRV 
ratio for Kuiburi by averaging the historical NRVs of Dole, TIPCO, 
SIFCO, and Vita, respondents in that review whose methodologies 
reflected the Department's preferred methodology. At that time, the 
Department used this FA NRV surrogate methodology because none of the 
NRV ratio calculations offered by Kuiburi was deemed appropriate.\6\ In 
the instant review, Kuiburi based its allocation of joint products on 
the surrogate NRV allocation ratio methodology that the Department 
developed as FA for Kuiburi in the previous review.\7\
---------------------------------------------------------------------------

    \4\ Kuiburi began operations in 1992, so its reported historical 
period costs were actually from 1992 through 1994.
    \5\ Final Results POR 7 and accompanying Issues and Decision 
Memorandum at Comment 13.
    \6\ Id.
    \7\ See Notice of Final Results, Partial Rescission of 
Antidumping Duty Administrative Review, and Final Determination to 
Not Revoke Order in Part: Canned Pineapple Fruit From Thailand, 68 
FR 65247 (November 19, 2003) (Final Results POR 7).
---------------------------------------------------------------------------

    However, Kuiburi also provided an alternative NRV ratio 
calculation, based on solid and juice revenues without separable costs 
deducted during the partial historical period (1992-1994). 
Subsequently, Kuiburi provided two other ratios based on solid and 
juice revenues during the five-year periods of 1997 through 2001, and 
1998 through 2002, but again without separable costs deducted. The 
Department requested that Kuiburi report the first five-year period for 
which it could provide both revenues and separable costs. In response, 
Kuiburi provided a ratio based on the five-year period of 1998-2002, 
which contains separable costs and revenue. For these preliminary 
results, we have applied as FA the 1998-2002 ratio with separable costs 
deducted, and have revised relevant costs accordingly. See Kuiburi 
Analysis Memorandum.
    We have concluded that the 1998-2002 ratio is preferable to the 
averaged NRV because it is calculated from Kuiburi's own books and 
records and is based on both revenue and separable costs, and therefore 
satisfies more of the Department's requirements. In previous segments 
of this proceeding, the Department has excluded NRV ratios based on 
data from time periods when the Department had determined that CPF was 
sold at less than fair value. However, in this case, the Department has 
determined to use Kuiburi's NRV ratio from the 1998-2002 period as FA, 
because, among the alternatives available on the record, it most 
clearly approximates the Department's specified methodology used to 
calculate the historic NRV, by utilizing five years of data, 
incorporating separable costs and relying on the company's own data. As 
noted in the most recent previous review, Kuiburi did not exist until 
1992, and did not maintain any records of separable costs in its early 
years.\8\ Therefore, Kuriburi does not have the data to provide a full 
NRV calculation based on the historic period of 1990 through 1994.
---------------------------------------------------------------------------

    \8\ Id.
---------------------------------------------------------------------------

    In addition to selecting an alternative FA ratio for allocation of 
Kuiburi's joint costs, we have recalculated the total pineapple fruit 
usage to which this NRV ratio is applied. In its reported cost 
calculation, Kuiburi correctly offset pineapple cost with scrap scales 
of pineapple cores and shells to outside buyers. However, after 
deducting the offset for scrap sales, Kuiburi further reduced total 
pineapple usage by deducting the calculated values of cores and shell 
byproducts consumed internally by Kuiburi in the production of 
dehydrated pineapple cores (cores) and milled juice (shells). We have 
disallowed these additional offsets for cores and shells consumed to 
produce Kuiburi dehydrated cores and milled juice because we regard 
both products as joint products subject to the NRV-based fruit cost 
allocation, and have revised relevant cost accordingly. See Kuiburi 
Analysis Memorandum.
    Kuburi produces dehydrated cores from both fresh pineapple cores it 
purchases from other producers and from cores Kuiburi obtains as 
byproducts from its processing of whole pineapple. Kuiburi can track 
the cost of the purchased fresh cores separately and has properly not 
included the cost of the purchased cores in its joint production costs 
because they represent a distinct part of the pineapple dedicated to 
the production of a specific product, dehydrated cores. The Department 
disagrees specifically with Kuiburi's deduction of the calculated cost 
of Kuiburi's own byproduct cores that it uses in its own dehydrated 
core production. On the same basis, the Department disagrees with 
Kuiburi's deduction of the calculated cost of pineapple shell used to 
produce milled juice. In this case, Kuiburi argued that milled juice is 
itself a byproduct and therefore the cost of the shell input should be 
deducted. However, we regard milled juice as well as dehydrated cores 
as joint products.
    Under our NRV methodology, to the extent the dehydrated cores and 
milled juice are produced from cores and shells obtained as byproducts 
from Kuiburi's whole fruit purchases, milled juice and dehydrated cores 
are part of the joint production process and must be included in the 
NRV allocation. Both dehydrated cores and milled juice are accounted 
for on the ``juice'' side of the NRV allocation. As discussed above, 
the goal of the NRV methodology is to rationalize cost allocation of 
pineapple purchased whole, but for which the cylinder portions are 
normally used for CPF and other higher revenue products while the cores 
and shell are normally devoted to juice products. With the introduction 
of new products such as the dehydrated cores, it is important to 
reemphasize that the purpose of the NRV joint product methodology in 
this case is to distinguish between products that are primarily made 
from the cylinder portion of the pineapple and

[[Page 18528]]

other products that are primarily made from the shells and cores.
    We also adjusted the general and administrative expenses based on 
findings at verification. See Kuiburi's Analysis Memorandum.
    Dole. Based on verification findings we adjusted the values of 
sugar and citric acid as used in Dole's cost calculation. We increased 
the total value of the sugar used in Dole's cost calculation because we 
found that Dole had underreported its sugar costs, and we decreased 
citric acid costs because Dole had overstated them. Additionally, we 
recalculated Dole's can and labor costs to subtract the costs and labor 
associated with 6-ounce lithograph cans. See Dole Analysis Memorandum 
for further information.
2. Test of Comparison Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
adjusted weighted-average COP for each respondent to the comparison 
market sales of the foreign like product to determine whether these 
sales had been made at prices below the COP within an extended period 
of time in substantial quantities, and whether such prices were 
sufficient to permit the recovery of all costs within a reasonable 
period of time. On a product-specific basis, we compared the revised 
COP to the comparison market prices, less any applicable movement 
charges, taxes, rebates, commissions and other direct and indirect 
selling expenses.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were made at prices 
below the COP, we do not disregard any below-cost sales of that product 
because the below-cost sales were not made in ``substantial 
quantities.'' Where (1) 20 percent or more of a respondent's sales of a 
given product during the POR were made at prices below the COP and thus 
such sales 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 comparisons of price to weighted-average COPs for the 
POR, we determine that the below-cost sales of the product were at 
prices which would not permit recovery of all costs within a reasonable 
time period, in accordance with section 773(b)(2)(D) of the Act, we 
disregard the below-cost sales.
    We found that for certain CPF products, Dole, Kuiburi, TIPCO, and 
Vita made comparison-market sales at prices below the COP within an 
extended period of time in substantial quantities. Further, we found 
that these sales prices did not permit the recovery of costs within a 
reasonable period of time. We therefore excluded these sales from our 
analysis in accordance with section 773(b)(1) of the Act.

C. Calculation of Normal Value Based on Comparison Market Prices

    We determined price-based NVs for each company as follows. For all 
respondents, we made adjustments for differences in packing in 
accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act, 
and we deducted movement expenses consistent with section 
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made 
adjustments for differences in cost attributable to differences in 
physical characteristics of the merchandise pursuant to section 
773(a)(6)(C)(ii) of the Act, as well as for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Act and Sec.  351.410 of the Department's 
regulations. We also made adjustments, in accordance with Sec.  
351.410(e) of the Department's regulations, for indirect selling 
expenses incurred on comparison market or U.S. sales where commissions 
were granted on sales in one market but not in the other (the 
``commission offset''). Specifically, where commissions were granted in 
the U.S. market but not in the comparison market, we made a downward 
adjustment to NV for the lesser of (1) the amount of the commission 
paid in the U.S. market, or (2) the amount of indirect selling expenses 
incurred in the comparison market. If commissions were granted in the 
comparison market but not in the U.S. market, we made an upward 
adjustment to NV following the same methodology. Company-specific 
adjustments are described below.
    TIPCO. We based third-country market prices on the packed, FOB or 
C&F prices to unaffiliated purchasers in Germany. We adjusted for the 
following movement expenses: brokerage and handling, port charges, 
stuffing expenses, inland freight, and international freight. We made 
COS adjustments by deducting direct selling expenses incurred for 
third-country market sales (commissions, credit expenses, and bank 
charges) and adding U.S. direct selling expenses (commissions, credit 
expenses, and bank charges).
    Vita. We based third-country market prices on the packed FOB, C&F, 
or free alongside ship (FAS) prices to unaffiliated purchasers in 
Germany. We adjusted for the following movement expenses: international 
freight, inland freight, terminal handling charges, container stuffing 
charges, bill of lading fees, customs clearance charges, port charges, 
document legalization fees and other miscellaneous charges. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses, commissions, bank charges, 
warranty expenses, and packing costs) and adding U.S. direct selling 
expenses (credit expenses, commissions, and bank charges).
    Kuiburi. We based third-country market prices on the packed, FOB or 
C&F prices to an unaffiliated purchaser in Spain. We adjusted for 
foreign movement and international freight expenses. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses and bank charges) and adding U.S. 
direct selling expenses (credit expenses, bank charges, and 
commissions).
    Dole. We based third-country market prices on Dole Foods of Canada 
Ltd.'s (DFC) prices to unaffiliated purchasers in Canada. We adjusted 
for foreign movement expenses and international freight. We made COS 
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses, warranty, advertising, 
royalties, and commissions) and adding U.S. direct selling expenses 
(credit expenses, advertising, warranty, and commissions). We adjusted 
Dole's Canadian interest rate so that it reflects the one month prime 
commercial paper rate published by the Bank of Canada instead of the 
prime business rate which Dole had used to calculate credit expenses. 
In addition, because the NV LOT is more remote from the factory than 
the CEP LOT (see the Level of Trade section, below), and available data 
provide no appropriate basis to determine a LOT adjustment between NV 
and CEP, we made CEP offset pursuant to section 773(a)(7)(B) of the 
Act.

D. Calculation of Normal Value Based on Constructed Value

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the COM of the product sold in the United States, 
plus amounts for SG&A expenses, interest expenses, comparison market 
profit, and U.S. packing costs. We calculated each respondent's CV 
based on the methodology described in the Calculation of COP section of 
this notice, above. In accordance with section 773(e)(2)A) of the Act, 
we used the actual amounts incurred and

[[Page 18529]]

realized by each respondent in connection with the production and sale 
of the foreign like product, in the ordinary course of trade, for 
consumption in the comparison market to calculate SG&A expenses and 
comparison market profit.
    Where we compared U.S. price to CV, we made adjustments to CV for 
COS differences, in accordance with section 773(a)(8) of the Act and 
Sec.  351.410 of the Department's regulations, and as described under 
the Calculation of Normal Value section above. We made COS adjustments 
by deducting direct selling expenses incurred on comparison market 
sales and adding U.S. direct selling expenses for comparison to EP 
transactions in the United States. We did not compare U.S. price to CV 
for Dole, Kuiburi, or TIPCO because all U.S. sales were compared to 
contemporaneous sales of identical or similar merchandise in the 
ordinary course of trade. For Vita we compared U.S. price to CV when 
there were no contemporaneous sales of identical or similar merchandise 
in the ordinary course of trade.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same LOT as the EP or CEP transaction. The NV LOT is that of the 
starting price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive SG&A expenses and profit. 
For EP sales, the U.S. LOT is also the level of the starting price 
sale, which is usually from exporter to importer. For CEP sales, it is 
the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or CEP 
transactions, 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 LOT, 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 LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV LOT is more 
remote from the factory than the CEP LOT and there is no basis for 
determining whether the difference in the LOTs 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: Greenhouse Tomatoes From Canada, 67 FR 8781 
(February 26, 2002).
    In implementing these principles in this review, we obtained 
information from each respondent about the marketing stage involved in 
the reported U.S. and comparison market sales, including a description 
of the selling activities performed by the respondents for each channel 
of distribution. In identifying levels of trade for EP and comparison 
market sales, we considered the selling functions reflected in the 
starting price before any adjustments. For CEP sales, we considered 
only the selling activities reflected in the price after the deduction 
of expenses and profit under section 772(d) of the Act. We expect that, 
if claimed LOTs are the same, the functions and activities of the 
seller should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the functions and activities 
of the seller should be dissimilar.
    In this review, all respondents except Dole, claimed that all of 
their sales involved identical selling function, irrespective of 
channel of distribution or market. We examined these selling functions 
for Vita, TIPCO, and Kuiburi and found that sales activities were 
limited to negotiating sales prices, processing of purchase orders/
contracts, invoicing, and collecting payment. There was little or no 
strategic and economic planning, advertising or sales promotion, 
technical services, technical assistance, or after-sale service 
performed in either market by the respondents. Therefore, for all 
respondents except Dole, we have preliminarily found that there is an 
identical LOT in the U.S. and relevant comparison market, and no LOT 
adjustment is required for comparison of U.S. sales to comparison 
market sales.

Dole

    Dole reported six specific customer categories and one channel of 
distribution (sales through an affiliated reseller) for its comparison 
market, and eight specific customer categories and two channels of 
distribution for the U.S. market. The primary channel of distribution 
reported is sales through an affiliated reseller for its U.S. sales. 
The second channel of distribution in the United States is direct 
sales. In its response, Dole claims, and the Department concurs, that 
all of its sales to unaffiliated comparison market customers (i.e., the 
six customer categories) are at the same LOT because these sales are 
made through the same channel of distribution and involve the same 
selling functions.
    Dole had both CEP and EP sales in the U.S. market. Dole reported 
that its CEP sales were made through a single channel of distribution 
(i.e., sales through its U.S. affiliate, Dole Packaged Foods (DPF)). 
After making the appropriate deductions under section 772(d) of the Act 
for these CEP sales, we found that the remaining expenses associated 
with selling activities performed by Dole are limited to expenses 
related to the arrangement of freight and delivery to the port of 
export, which are incurred for all such sales. Consequently, we find 
that all CEP sales occurred at the same LOT. In contrast, the NV prices 
include a number of selling expenses attributable to selling activities 
performed by DFC in the comparison market, such as inventory 
maintenance, warehousing, delivery, order processing, advertising, 
rebate and promotional programs, warranties, and market research. 
Accordingly, we concluded that CEP is at a different LOT from the NV 
LOT, (i.e., the CEP sales are less remote from the factory than are the 
NV sales).
    For CEP sales, having determined that the comparison market sales 
were made at a level more remote from the factory than the CEP 
transactions, we then examined whether a LOT adjustment or CEP offset 
may be appropriate. In this case, Dole only sold at one LOT in the 
comparison market; therefore, there is no information available to 
determine a pattern of consistent price differences between the sales 
on which NV is based and the comparison market sales at the LOT of the 
export transaction, in accordance with the Department's normal 
methodology as described above. See Porcelain-on-Steel Cookware from 
Mexico Final Results of Administrative Review, 65 FR 30068 (May 10, 
2000). Further, we do not have information which would allow us to 
examine pricing patterns based on respondent's sales of other products, 
and there are no other respondents or other record information on which 
such an analysis could be biased. Accordingly, because the data 
available do not provide an appropriate basis for making a LOT 
adjustment, but the LOT in the comparison market is at a more advanced 
stage of distribution than the LOT of the CEP transactions, we made a 
CEP offset adjustment in accordance with section 773(a)(7)(B) of the 
Act. This offset is equal to the amount of indirect selling expenses 
incurred in the comparison market not exceeding the amount of indirect 
selling expenses deducted from the U.S. price in accordance with 
772(d)(1)(D) of the Act.

[[Page 18530]]

    Additionally, it appears that Dole's Canadian sales involve 
significantly more selling functions than Dole's U.S. EP sales. 
Therefore, we conclude that Dole's NV sales are made at a different, 
and more remote, level of trade than its EP sales. Nonetheless, we are 
unable to make a LOT adjustment for EP sales because there is no data 
on the record that would allow the Department to establish whether 
there is a pattern of consistent price differences between sales at 
different levels of trade in the comparison market. Therefore, a LOT 
adjustment is not possible for comparisons of EP sales to comparison 
market sales.

Intent To Revoke in Part

    On July 28, 2003, both Kuiburi and TIPCO requests that, pursuant to 
19 CFR 351.222(b)(2), the Department revoke the antidumping duty order 
in part based on their three consecutive years of sales at not less 
than normal value. On July 31, 2003, Dole made the same request. Dole, 
Kuiburi and TIPCO submitted, along with their revocation requests, a 
certification stating that: (1) Each company sold subject merchandise 
at not less than normal value during the POR, and that in the future 
each company would not sell such merchandise at less than normal value 
(see 19 CFR 351.222(e)(1)(i); (2) each company has sold the subject 
merchandise to the United States in commercial quantities during each 
of the past three years (see 19 CFR 351.222(e)(1)(ii); and (3) each 
company agreed to its immediate reinstatement in the order, as long as 
any exporter or producer is subject to the order, if the Department 
concludes that the company, subsequent to the revocation, sold the 
subject merchandise at less than NV. See 19 CFR 351.222(b)(2)(iii), and 
as referenced at 19 CFR 351.222(e)(1)(iii).
    Based on the preliminary results in this review and the final 
results of the two preceding reviews (see Notice of Final Results of 
Antidumping Duty Administrative Review, Rescission of Administrative 
Review in Part, and Final Determination to Revoke Order in Part: Canned 
Pineapple Fruit from Thailand, 67 FR 76718 (December 13, 2002) and 
Notice of Final Results of Antidumping Duty Administrative Review, 
Rescission of Administrative Review in Part, and Final Determination to 
Not Revoke Order in Part: Canned Pineapple Fruit from Thailand, 68 FR 
65247 (November 19, 2003)), Dole, Kuiburi, and TIPCO have preliminarily 
demonstrated three consecutive years of sales at not less than normal 
value. Furthermore, Dole's, Kuiburi's, and TIPCO's aggregate sales to 
the United States have been made in commercial quantities during the 
last three segments of this proceeding. See the April 1, 2004, 
Memorandum to Holly Kuga: Preliminary Determination to Revoke in Part 
the Antidumping Duty Order on Canned Pineapple Fruit from Thailand. 
Interested parties are invited to comment in their case briefs on all 
of the requirements that must be met by Dole, Kuiburi, and TIPCO under 
Sec.  351.222 of the Department's regulations to qualify for revocation 
from the antidumping duty order. Based on the above facts and absent 
any evidence to the contrary, the Department preliminarily determines 
that the continued application of the order to Dole, Kuiburi, and TIPCO 
is not otherwise necessary to offset dumping. Therefore, if these 
preliminary findings are affirmed in our final results, we intend to 
revoke the order with respect to merchandise produced and exported by 
Dole, Kuiburi, and TIPCO. In accordance with 19 CFR 351.222(f)(3), we 
will terminate the suspension of liquidation for any such merchandise 
entered, or withdrawn from warehouse, for consumption on or after July 
1, 2003, and will instruct Customs to refund any cash deposit.

Currency Conversion

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

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average margins exist for the period July 1, 2002, 
through June 30, 2003:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Dole Thailand, Ltd. (Dole).................................         0.18
Thai Pineapple Public Co., Ltd. (TIPCO)....................         0.12
Kuiburi Fruit Canning Co., Ltd. (Kuiburi)..................         0.30
Vita Food Factory (1989) Co., Ltd. (Vita)..................         0.96
------------------------------------------------------------------------

    Within five days of the publication of this notice we will disclose 
to parties to this proceeding the calculations used in our analyses. 
See section 351.224(b) of the Department's regulations. Interested 
parties are invited to comment on the preliminary results. Interested 
parties may submit case briefs within 30 days of the date of 
publication of this notice. Rebuttal briefs, limited to issues raised 
in the case briefs, may be filed not later than 37 days after the date 
of publication. Parties who submit arguments are requested to submit 
with each 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 written comments would provide the 
Department with an additional copy of the public version of any such 
comments on a diskette. Any interested party may request a hearing 
within 30 days of publication of this notice. See section 351.310(c) of 
the Department's regulations. If requested, a hearing will be held 44 
days after the publication of this notice, or the first workday 
thereafter. The Department will publish a notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any written comments or hearing, within 
120 days from publication of this notice.

Assessment

    Pursuant to Sec.  351.212(b) of the Department's regulations, the 
Department calculated an assessment rate for each importer of subject 
merchandise. Upon completion of this review, the Department will 
instruct CBP to assess antidumping duties on all entries of subject 
merchandise by those importers. We have calculated each importer's duty 
assessment rate based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total calculated 
entered value of examined sales. Where the assessment rate is above de 
minimis, the importer-specific rate will be assessed uniformly on all 
entries made during the POR.

Cash Deposit Requirements

    The following deposit rates will be effective upon publication of 
the final results of this administrative review for all shipments of 
CPF from Thailand entered, or withdrawn from warehouse, for consumption 
on or after the publication date, as provided by section 751(a)(1) of 
the Act: (1) The cash deposit rate for companies listed above will be 
the rate established in the final results of this review, except if the 
rate is less than 0.5 percent and, therefore, de minimis, the cash 
deposit will be zero; (2) for previously reviewed or investigated 
companies not listed above, the cash deposit rate will continue to be 
the company-specific rate published for the most recent period; (3) if 
the exporter is not a firm covered in this review, a prior review, or 
the LTFV investigation, but the manufacturer is,

[[Page 18531]]

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 or the LTFV investigation conducted by the Department, the cash 
deposit rate will be 26.64 percent, the ``All Others'' rate established 
in the LTFV investigation.
    These cash deposit requirements, when imposed, shall remain in 
effect until publication of the final results of the next 
administrative review.
    This notice serves as a preliminary reminder to importers of their 
responsibility under Sec.  351.402(f)(2) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
this review period. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 1, 2004.
Jeffrey A. May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8014 Filed 4-7-04; 8:45 am]
BILLING CODE 3510-DS-M