[Federal Register Volume 69, Number 149 (Wednesday, August 4, 2004)]
[Notices]
[Pages 47111-47120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17817]



[[Page 47111]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-840]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value, Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances: Certain Frozen and Canned 
Warmwater Shrimp from India

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

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

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SUMMARY: We preliminarily determine that certain frozen and canned 
warmwater shrimp from India are being, or are likely to be, sold in the 
United States at less than fair value, as provided in section 733(b) of 
the Tariff Act of 1930, as amended (the Act). In addition, we 
preliminarily determine that there is a reasonable basis to believe or 
suspect that critical circumstances exist with respect to the subject 
merchandise exported from India for Hindustan Lever Limited (HLL). We 
also preliminarily determine that there is no reasonable basis to 
believe or suspect that critical circumstances exist with respect to 
the subject merchandise exported from India for respondents Devi Sea 
Foods Ltd. (Devi) and Nekkanti Seafoods Limited (Nekkanti), or for 
companies subject to the ``all others'' rate.
    Interested parties are invited to comment on this preliminary 
determination. Because we are postponing the final determination, we 
will make our final determination not later than 135 days after the 
date of publication of this preliminary determination in the Federal 
Register.

DATES: Effective Date: August 4, 2004.

FOR FURTHER INFORMATION CONTACT: Elizabeth Eastwood or Jill Pollack, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3874 or (202) 482-4593, 
respectively.

Preliminary Determination

    We preliminarily determine that certain frozen and canned warmwater 
shrimp from India are being, or are likely to be sold, in the United 
States at less than fair value (LTFV), as provided in section 733 of 
the Act. The estimated margins of sales at LTFV are shown in the 
``Suspension of Liquidation'' section of this notice. In addition, we 
preliminarily determine that there is a reasonable basis to believe or 
suspect that critical circumstances exist with respect to the subject 
merchandise exported from India by HLL. The critical circumstances 
analysis for the preliminary determination is discussed below under the 
section ``Critical Circumstances.''

Background

    Since the initiation of this investigation (see 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, 69 FR 3876 (January 27, 
2004) (Initiation Notice)), the following events have occurred.
    On February 17, 2004, the United States International Trade 
Commission (ITC) preliminarily determined that there is a reasonable 
indication that imports of certain frozen and canned warmwater shrimp 
from India are materially injuring the United States industry. See ITC 
Investigation Nos. 731-TA-1063-1068 (Publication No. 3672).
    On February 20, 2004, we selected the three largest producers/
exporters of certain frozen and canned warmwater shrimp from India as 
the mandatory respondents in this proceeding. See Memorandum to Louis 
Apple, Director Office 2, from the Team entitled, ``Antidumping Duty 
Investigation of Certain Frozen and Canned Warmwater Shrimp from 
India--Selection of Respondents,'' dated February 20, 2004. We 
subsequently issued the antidumping questionnaire to Devi, HLL, and 
Nekkanti on February 20, 2004.
    During the period February through June 2004, various interested 
parties, including the petitioners,\1\ submitted comments on the scope 
of this and the concurrent investigations of certain frozen and canned 
warmwater shrimp concerning whether the following products are covered 
by the scope of the investigations: a certain seafood mix, dusted 
shrimp, battered shrimp, salad shrimp sold in counts of 250 pieces or 
higher, the species Macrobachium rosenbergii, organic shrimp, and 
peeled shrimp used in breading.\2\ In addition, the Louisiana Shrimp 
Alliance (LSA), an association of domestic shrimp harvesters and 
processors, requested that the Department expand the scope to include 
fresh (never frozen) shrimp. See ``Scope Comments'' section of this 
notice.
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    \1\ The petitioners in this investigation are the Ad Hoc Shrimp 
Trade Alliance (an ad hoc coalition representative of U.S. producers 
of frozen and canned warmwater shrimp and harvesters of wild-caught 
warmwater shrimp), Versaggi Shrimp Corporation, and Indian Ridge 
Shrimp Company.
    \2\ Specifically, Ocean Duke Corporation (Ocean Duke), an 
importer and wholesaler of the subject merchandise, requested that 
the following products be excluded from the scope of this and the 
concurrent investigations on certain frozen and canned warmwater 
shrimp: (1) ``Dusted shrimp,'' (2) ``battered shrimp,'' and (3) 
``seafood mix.'' Another importer, Rubicon Resources LLP, supported 
Ocean Duke's request regarding dusted and battered shrimp. Eastern 
Fish Company and Long John Silver's, Inc. also requested that dusted 
and battered shrimp be excluded from the scope of the 
investigations. Furthermore, the Seafood Exporters' Association of 
India requested that the Department find that warmwater salad shrimp 
in counts of 250 pieces or higher are not within the scope, and that 
the species Machrobachium rosenbergii is a separate class or kind of 
merchandise. Also, Exportadora de Alimentos S.A., one of the 
respondents in the Ecuador case, requested that the Department find 
that farm-raised organic shrimp is not covered by the scope of the 
investigations. Finally, the American Breaded Shrimp Processors 
Association, comprised of importers of peeled shrimp which they 
consume in the production of breaded shrimp products, requested that 
peeled shrimp imported for the sole purpose of breading be excluded 
from the scope of the investigations.
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    We received section A questionnaire responses from the three 
respondents in March 2004, and section B, C, and D questionnaire 
responses in April 2004.
    We issued and received responses to our supplemental questionnaires 
from May through July 2004.
    On May 3, 2004, the petitioners alleged that Devi and HLL made 
third country sales below the cost of production (COP) and, therefore, 
requested that the Department initiate a sales-below-cost investigation 
of these respondents.\3\ On May 28, 2004, the Department initiated a 
sales-below-cost investigation for Devi and HLL. See Memorandum to 
Louis Apple, Director Office 2, from the Team entitled: ``Petitioners'' 
Allegation of Sales Below the Cost of Production for Devi Sea Foods 
Limited,'' (Devi Cost Allegation Memo) dated May 28, 2004, and 
Memorandum to Louis Apple, Director Office 2, from the Team entitled: 
``Petitioners'' Allegation of Sales Below the Cost of Production for 
Hindustan Lever Limited,'' date May 28, 2004 (HLL Cost Allegation 
Memo).
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    \3\ Based on our analysis of an allegation contained in the 
petition, we found that there were reasonable grounds to believe or 
suspect that sales of foreign-like product in the relevant third 
country market for Nekkanti, i.e., Japan, were made at prices below 
their COP. Accordingly, pursuant to section 773(b) of the Act, we 
initiated a country-wide cost investigation relating to third-
country sales to Japan at the time of the initiation to determine 
whether sales were made at prices below their respective COPs. See 
Initiation Notice, 69 FR at 3880.
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    On May 18, 2004, pursuant to sections 733(c)(1)(B) and (c)(2) of 
the Act and 19

[[Page 47112]]

CFR 351.205(f), the Department determined that the case was 
extraordinarily complicated and postponed the preliminary determination 
until no later than July 28, 2004. See Notice of Postponement of 
Preliminary Determinations of Antidumping Duty Investigations: Certain 
Frozen and Canned Warmwater Shrimp from Brazil (A-351-838), Ecuador (A-
331-802), India (A-533-840), Thailand (A-549-822), the People's 
Republic of China (A-570-893), and the Socialist Republic of Vietnam 
(A-503-822), 69 FR 29509 (May 24, 2004).
    On May 21, 2004, the Department denied LSA's request to amend the 
scope to include fresh (never frozen) shrimp. See Memorandum from 
Jeffrey A. May, Deputy Assistant Secretary, AD/CVD Enforcement Group I, 
and Joseph A. Spetrini, Deputy Assistant Secretary AD/CVD Enforcement 
Group III, to James J. Jochum, Assistant Secretary for Import 
Administration entitled: ``Antidumping Investigations on Certain Frozen 
and Canned Warmwater Shrimp from Brazil, Ecuador, India, the People's 
Republic of China, Thailand and the Socialist Republic of Vietnam: 
Scope Determination Regarding Fresh (Never Frozen) Shrimp,'' dated May 
21, 2004 (Scope Decision Memorandum I).
    On May 26, 2004, HLL provided a third country sales listing for its 
second largest third country market, Italy, in response to the 
Department's concerns that certain of its sales to Spain were not 
destined for that country.
    Pursuant to the Department's solicitation, on June 7, 2004, various 
interested parties, including the petitioners, submitted comments on 
the issue of whether product comparisons and margin calculations in 
this and the concurrent investigations of certain frozen and canned 
warmwater shrimp should be based on data provided on an ``as sold'' 
basis or data converted to a headless, shell-on (HLSO) basis.\4\ 
Additional comments were subsequently submitted on June 15 and 25, 
2004. See ``Product Comparison Comments'' section, below.
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    \4\ Specifically, the Department received comments from the 
following interested parties, in addition to the petitioners, on 
June 7: the Brazilian Shrimp Farmers' Association and Central de 
Industrializacao e Distribuicao de Alimentos Ltda.; Empresa De 
Armazenagem Frigorifica Ltda.; Camara Nacional de Acuacultura 
(National Chamber of Aquaculture) of Ecuador; the Rubicon Group 
(comprised of Andaman Seafood Co., Ltd. Chanthaburi Seafoods Co., 
Ltd. And Thailand Fishery Cold Storage Public Co., Ltd.); Thai I-Mei 
Frozen Foods Co., Ltd. and its affiliated reseller Ocean Duke; the 
Seafood Exporters of India and its members Devi, HLL, and Nekkanti; 
the VASEP Shrimp Committee and its members; and Shantou Red Garden 
Foodstuff Co., Ltd. In addition to addressing the ``as sold'/HLSO 
issue, some of these parties also commented on the significance of 
species and container weight in the Department's product 
characteristic hierarchy.
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    On June 8, 2004, the petitioners alleged that HLL made below-cost 
sales to Italy and, therefore, requested that the Department initiate a 
sales-below-cost investigation. However, because we have not selected 
Italy as HLL's comparison market in this case, we have not considered 
this allegation. See Memorandum to Louis Apple, Director Office 2, from 
the Team entitled: ``Antidumping Duty Investigation of Certain Frozen 
and Canned Warmwater Shrimp from India--Third-Country Market Selection 
for Hindustan Lever, Limited,'' dated July 28, 2004 (HLL Third Country 
Comparison Market Selection Memorandum), for further discussion.
    On June 15, 2004, the petitioners objected to Devi's use of Canada 
as its third country comparison market, and they requested that the 
Department obtain sales data for the company's second largest third 
country market, Japan. In July 2004, the Department determined that it 
is appropriate to use the third country market initially reported by 
Devi (i.e., Canada). See Memorandum to Louis Apple, Director Office 2, 
from the Team entitled: ``Antidumping Duty Investigation of Certain 
Frozen and Canned Warmwater Shrimp from India--Third-Country Market 
Selection for Devi Sea Foods Limited,'' dated July 28, 2004 (Devi Third 
Country Comparison Market Selection Memorandum), for further 
discussion.
    On July 2, 2004, the Department made preliminary scope 
determinations with respect to the following shrimp products: Ocean 
Duke's seafood mix, salad shrimp sold in counts of 250 pieces or 
higher, Macrobrachium rosenbergii, organic shrimp, peeled shrimp used 
in breading, dusted shrimp, and battered shrimp. See Memorandum from 
Edward C. Yang, Vietnam/NME Unit Coordinator, Import Administration to 
Jeffrey A. May, Deputy Assistant Secretary for Import Administration 
entitled: ``Antidumping Investigation on Certain Frozen and Canned 
Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the People's 
Republic of China and the Socialist Republic of Vietnam: Scope 
Clarifications: (1) Ocean Duke's Seafood Mix; (2) Salad Shrimp Sold in 
Counts of 250 Pieces or Higher; (3) Macrobrachium rosenbergii; (4) 
Organic Shrimp; and (5) Peeled Shrimp Used in Breading,'' dated July 2, 
2004 (Scope Decision Memorandum II); and Memorandum from Edward C. 
Yang, Vietnam/NME Unit Coordinator, Import Administration to Jeffrey A. 
May, Deputy Assistant Secretary for Import Administration entitled: 
``Antidumping Investigation on Certain Frozen and Canned Warmwater 
Shrimp from Brazil, Ecuador, India, Thailand, the People's Republic of 
China and the Socialist Republic of Vietnam: Scope Clarification: 
Dusted Shrimp and Battered Shrimp,'' dated July 2, 2004 (Scope Decision 
Memorandum III). See also ``Scope Comments'' section below.
    On July 12, 2004, HLL requested that the Department find that one 
of its third country sales was made outside the ordinary course of 
trade. While we were unable to consider this request for the 
preliminary determination, we will consider it for purposes of the 
final determination.

Postponement of Final Determination

    Section 735(a)(2) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise, or in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioner. The Department's regulations, at 19 CFR 351.210(e)(2), 
require that requests by respondents for postponement of a final 
determination be accompanied by a request for extension of provisional 
measures from a four-month period to not more than six months.
    Pursuant to section 735(a)(2) of the Act, on June 22, 2004, Seafood 
Exporters Association of India (SEAI) and the individual respondents in 
this investigation, Devi, HLL and Nekkanti, requested that, in the 
event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination until 
not later than 135 days after the date of the publication of the 
preliminary determination in the Federal Register, and extend the 
provisional measures to not more than six months. In accordance with 19 
CFR 351.210(b), because (1) our preliminary determination is 
affirmative, (2) the respondents account for a significant proportion 
of exports of the subject merchandise, and (3) no compelling reasons 
for denial exist, we are granting the respondents' request and are 
postponing the final determination until no later than 135 days after 
the publication of this notice in the Federal

[[Page 47113]]

Register. Suspension of liquidation will be extended accordingly.

Period of Investigation

    The period of investigation (POI) is October 1, 2002, through 
September 30, 2003. This period corresponds to the four most recent 
fiscal quarters prior to the month of the filing of the petition (i.e., 
December 2003).

Scope of Investigation

    The scope of this investigation includes 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,\5\ deveined or not deveined, cooked or 
raw, or otherwise processed in frozen or canned form.
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    \5\ ``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 investigation, 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 investigation. 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 investigation.
    Excluded from the scope are (1) breaded shrimp \6\ 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.
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    \6\ Pursuant to our scope determination on battered shrimp, we 
find that breaded shrimp includes battered shrimp as discussed in 
the ``Scope Comments'' section below. See Scope Memorandum III.
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    The products covered by this scope are currently classifiable 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 customs purposes only and 
are not dispositive, but rather the written description of the scope of 
this investigation is dispositive.

Scope Comments

    In accordance with the preamble to our regulations, we set aside a 
period of time for parties to raise issues regarding product coverage 
and encouraged all parties to submit comments within 20 calendar days 
of publication of the Initiation Notice. See Antidumping Duties; 
Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997) 
and Initiation Notice at 69 FR 3877. Throughout the 20 days and beyond, 
the Department received many comments and submissions regarding a 
multitude of scope issues, including: (1) Fresh (never frozen) shrimp, 
(2) Ocean Duke's seafood mix, (3) salad shrimp sold in counts of 250 
pieces or higher, (4) Macrobrachium rosenbergii, (5) organic shrimp, 
(6) peeled shrimp used in breading, (7) dusted shrimp and (8) battered 
shrimp. On May 21, 2004, the Department determined that the scope of 
this and the concurrent investigations remains unchanged, as certain 
frozen and canned warmwater shrimp, without the addition of fresh 
(never frozen) shrimp. See Scope Decision Memorandum I.
    On July 2, 2004, the Department made scope determinations with 
respect to Ocean Duke's seafood mix, salad shrimp sold in counts of 250 
pieces or higher, Macrobrachium rosenbergii, organic shrimp and peeled 
shrimp used in breading. See Scope Decision Memorandum II. Based on the 
information presented by interested parties, the Department determined 
that Ocean Duke's seafood mix is excluded from the scope of this and 
the concurrent investigations; however, salad shrimp sold in counts of 
250 pieces or higher, Macrobrachium rosenbergii, organic shrimp and 
peeled shrimp used in breading are included within the scope of these 
investigations. See Scope Decision Memorandum II at 33.
    Additionally, on July 2, 2004, the Department made a scope 
determination with respect to dusted shrimp and battered shrimp. See 
Scope Decision Memorandum III. Based on the information presented by 
interested parties, the Department preliminarily finds that, while 
substantial evidence exists to consider battered shrimp to fall within 
the meaning of the breaded shrimp exclusion identified in the scope of 
these proceedings, there is insufficient evidence to consider that 
shrimp which has been dusted falls within the meaning of ``breaded'' 
shrimp. However, there is sufficient evidence for the Department to 
consider excluding this merchandise from the scope of these proceedings 
provided an appropriate description can be developed. See Scope 
Decision Memorandum III at 18. To that end, along with the previously 
solicited comments regarding breaded and battered shrimp, the 
Department solicits comments from interested parties which enumerate 
and describe a clear, administrable definition of dusted shrimp. See 
Scope Decision Memorandum III at 23.

Fair Value Comparisons

    To determine whether sales of certain frozen and canned warmwater 
shrimp from India to the United States were made at LTFV, we compared 
the export price (EP) to the normal value (NV), as described in the 
``Export Price'' and ``Normal Value'' sections of this notice, below. 
In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI 
weighted-average EPs to NVs.
    For this preliminary determination, we have determined that Devi, 
HLL, and Nekkanti did not have viable home market sales during the POI. 
Therefore, as the basis for NV, we used third country sales to Canada 
(Devi), Spain (HLL), and Japan (Nekkanti) when making comparisons in 
accordance with section 773(a)(1)(C) of the Act. See Devi Third Country 
Comparison Market Selection Memorandum and HLL Third Country Comparison 
Market Selection Memorandum for further discussion.

[[Page 47114]]

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by Devi in Canada, HLL in Spain, and 
Nekkanti in Japan, as appropriate, during the POI that fit the 
description in the ``Scope of Investigation'' section of this notice to 
be foreign like products for purposes of determining appropriate 
product comparisons to U.S. sales. We compared U.S. sales to sales made 
in the third country, where appropriate. Where there were no sales of 
identical merchandise in the third country made in the ordinary course 
of trade to compare to U.S. sales, we compared U.S. sales to sales of 
the most similar foreign like product made in the ordinary course of 
trade. Where there were no sales of identical or similar merchandise 
made in the ordinary course of trade, we made product comparisons using 
constructed value (CV).
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by the respondents in 
the following order of importance: Processed form, cooked form, head 
status, count size (on an ``as sold'' basis), shell status, vein 
status, tail status, other shrimp preparation, frozen form, flavoring, 
container weight, presentation, species, and preservative.

Product Comparison Comments

As Sold v. HLSO Methodology

    We received comments from various interested parties concerning 
whether to perform product comparisons and margin calculations using 
data provided on an ``as sold'' basis or on data converted to an HLSO 
basis.\7\
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    \7\ In this notice, we address only those comments pertaining to 
market-economy dumping calculation methodology. Any comments 
pertaining to non-market-economy dumping calculation methodology are 
separately addressed in the July 2, 2004, preliminary determinations 
in the antidumping duty investigations of certain frozen and canned 
warmwater shrimp from the People's Republic of China and the 
Socialist Republic of Vietnam (see 69 FR 42654 (July 16, 2004) and 
69 FR 42672 (July 16, 2004), respectively).
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    The petitioners argue that using a consistent HLSO equivalent 
measure permits accurate product comparisons and margin calculations 
whereas the ``as sold'' measures do not. In particular, the petitioners 
emphasize that it is necessary to translate the actual sold volumes 
(weights) and count sizes to a uniform unit of measure that takes into 
account the various levels of processing of the different shrimp 
products sold and the allegedly large difference in value between the 
shrimp tail meat and other parts of the shrimp that may constitute ``as 
sold'' weight or count size, such as the head or shell. The 
petitioners' contention is premised upon their belief that the shrimp 
tail meat is the value-driving component of the shrimp. The respondents 
disagree, maintaining generally that using HLSO-equivalent data 
violates the antidumping duty law and significantly distorts product 
comparisons and margin calculations. In particular, they argue that: 
(1) Shrimp is sold based on its actual size and form, not on an HLSO 
basis, and it is the Department's practice to use actual sales/cost 
data in its margin analysis; (2) the rates used to convert price, 
quantity and expense data to an HLSO basis are uncertain as they are 
not maintained by the respondents in the ordinary course of business, 
and are generally based on each individual company's experience rather 
than any accepted industry-wide standard; and (3) the HLSO methodology 
introduces a significant distortion through the incorrect assumption 
that the value of the product varies solely in direct proportion to the 
change in weight resulting from production yields, when in fact the 
value of the product depends also on other factors such as quality and 
form.
    Our analysis of the company responses shows that: (1) No respondent 
uses HLSO equivalents in the normal course of business, for either 
sales or cost purposes; and (2) there is no reliable or consistent HLSO 
conversion formula for all forms of processed shrimp across all 
companies, as each company defined its conversion factors differently 
and derived these factors based on its own production experience. 
Therefore, we preliminarily determine it is appropriate to perform 
product comparisons and margin calculations using data ``as sold.'' 
This approach is in accordance with our normal practice and precludes 
the use of conversion rates, the accuracy of which is uncertain. Given 
the variety and overlap of the ``as sold'' count size ranges reported 
by the respondents, we also preliminarily determine that it is 
appropriate to standardize product comparisons across respondents by 
fitting the ``as sold'' count sizes into the count size ranges 
specified in the questionnaire.

Product Characteristics Hierarchy

    We also received comments from various interested parties regarding 
the significance of the species and container weight criteria in the 
Department's product comparison hierarchy.
    Various parties requested that the species criterion be ranked 
higher in the Department's product characteristic hierarchy--as high as 
the second most important characteristic, rather than the thirteenth--
based on their belief that species is an important factor in 
determining price. One party provided industry publications indicating 
price variations according to species type. Another party requested 
further that the Department revise the species categories specified in 
the Department's questionnaire to reflect characteristics beyond color 
(i.e., whether the shrimp was farm-raised or wild-caught). In addition, 
several parties requested that container weight, the eleventh 
characteristic in the Department's product characteristic hierarchy, be 
eliminated altogether as a product matching criterion, as they believe 
it is commercially insignificant and relates to packing size or form, 
rather than the physical attributes of the product.
    With respect to the arguments regarding the species criterion, the 
petitioners disagree, maintaining that there is no credible evidence 
that species drives pricing to such a significant extent that buyers 
consider it more important than product characteristics such as head 
and cooked status. Rather, the petitioners contend that once shrimp is 
processed (e.g., cooked, peeled, etc.), the species classification 
becomes essentially irrelevant. Therefore, the petitioners assert that 
while species type has some, not entirely insignificant effect on 
shrimp prices, it is appropriately captured in the Department's product 
matching hierarchy. Furthermore, with respect to the container weight 
criterion, the petitioners assert that, while the shrimp inside the 
container may be identical, in many cases the size of the container is 
an integral part of the product and an important determinant of the 
markets and channels through which shrimp can be sold. For this reason, 
the petitioners maintain that the Department should continue to include 
container weight as a product matching characteristic.
    Regarding the species criterion, we have not changed the position 
of this criterion in the product characteristic hierarchy for the 
preliminary determination. We agree that the physical characteristic of 
species type may impact the price or cost of processed shrimp. For that 
reason, we included species type as one of the product matching 
criteria. However, based on our review of the record evidence, we find 
that other physical characteristics of the subject merchandise, such as 
head status, count size, shell status, and frozen form, appear to be 
more significant in setting

[[Page 47115]]

price or determining cost. The information provided by the parties, 
which suggests that price may be affected in some cases by species 
type, does not provide sufficient evidence that species type is more 
significant than the remaining physical characteristics of the 
processed shrimp. Therefore, we find an insufficient basis to revise 
the ranking of the physical characteristics established in the 
Department's questionnaire for the purpose of product matching.
    With respect to differentiating between species types beyond the 
color classifications identified in the questionnaire, we do not find 
that such differentiations reflect meaningful differences in the 
physical characteristics of the merchandise. In particular, we note 
that whether shrimp is farm-raised or wild-caught is not a physical 
characteristic of the shrimp, but rather a method of harvesting. 
Therefore, we have not accepted the additional species classifications 
proposed by the respondents. Accordingly, in those cases where the 
respondents reported additional species classifications for their 
processed shrimp products, we reclassified the products into one of the 
questionnaire color classifications. We made an exception for the 
shrimp identified as ``scampi'' (or Macrobrachium rosenbergii) and 
``red ring'' (or Aristeus alcocki), where appropriate, because they 
represent species distinct from those associated by color in the 
Department's questionnaire. Regarding this exception, we note that 
while scampi and red ring are sufficiently distinct for product 
matching purposes, they are not so distinct as to constitute a separate 
class or kind of merchandise (see Scope Memorandum II). We also made an 
exception for the shrimp identified as ``mixed'' (e.g., ``salad'' 
shrimp), where appropriate, because there is insufficient information 
on the record to classify these products according to the questionnaire 
color classifications.
    Regarding the container weight criterion, we have included it as 
the eleventh criterion in the product characteristic hierarchy because 
we view the size or weight of the packed unit as an integral part of 
the final product sold to the customer, rather than a packing size or 
form associated with the shipment of the product to the customer. 
Moreover, we find it appropriate, where possible (other factors being 
equal), to compare products of equivalent container weight (e.g., a 
one-pound bag of frozen shrimp with another one-pound bag of frozen 
shrimp, rather than a five-pound bag), as the container weight may 
impact the per-unit selling price of the product.

Broken Shrimp

    Two of the respondents in this case, HLL and Nekkanti, reported 
sales of broken shrimp in their third country markets, while the third 
respondent, Devi, reported such sales in its U.S. market. Because: (1) 
The matching criteria for this investigation do not currently account 
for broken shrimp; (2) no interested parties have provided comments on 
the appropriate methodology to match these sales; and (3) the quantity 
of such sales does not constitute a significant percentage of the 
respondents' databases, we have excluded these sales from our analysis 
for purposes of the preliminary determination. Nonetheless, we are 
seeking comments from interested parties regarding our treatment of 
these sales for consideration in the final determination.

Glazing

    One of the respondents in this investigation, HLL, reported sales 
in the comparison market on a glazed-weight basis (i.e., including the 
weight of frozen water). However, HLL reported sales to the United 
States on a net-weight basis (i.e., without glazing). Therefore, in 
order to make comparisons for HLL on the same basis in both markets, we 
converted the data in the comparison market to a net-weight equivalent 
basis.

Export Price

Devi

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on the packed price to 
unaffiliated purchasers in the United States. Where appropriate, we 
made adjustments for billing adjustments. We made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight expenses, 
foreign brokerage and handling expenses, and international freight 
expenses. We also made deductions for export taxes, in accordance with 
section 772(c)(2)(B) of the Act. See Notice of Preliminary 
Determination of Less Than Fair Value and Postponement of Final 
Determination: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67 
FR 18165, 18169 (April 15, 2002) (Steel Wire Rod from Brazil).

HLL

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on the packed price to 
unaffiliated purchasers in the United States. We made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight expenses, 
foreign brokerage and handling expenses, international freight 
expenses, marine insurance, and port dues, and other miscellaneous 
shipment charges, including loading charges. Regarding these loading 
charges, HLL classified these expenses as direct selling expenses; 
however, we treated them as movement because they relate to the 
shipment of the merchandise. We also made deductions for export taxes, 
in accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod 
from Brazil, 67 FR at 18169.

Nekkanti

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on the packed price to 
unaffiliated purchasers in the United States. We also made deductions 
for movement expenses in accordance with section 772(c)(2)(A) of the 
Act; these included, where appropriate, foreign inland freight 
expenses, foreign brokerage and handling expenses, loading charges, 
container terminal handling charges, other miscellaneous movement 
expenses, and international freight expenses. We also made deductions 
for export taxes, in accordance with section 772(c)(2)(B) of the Act. 
See Steel Wire Rod from Brazil, 67 FR at 18169.
    Nekkanti reported in its U.S. sales listing additional revenue 
received from one customer. However, we did not make adjustments for 
this revenue because Nekkanti failed to provide sufficient explanation 
of the circumstances under which it received it, and it provided 
inadequate supporting documentation in its supplemental questionnaire 
responses. We have issued an additional supplemental questionnaire 
related to this revenue, and we will examine this information at 
verification.

[[Page 47116]]

Duty Drawback

    Devi, HLL, and Nekkanti claimed a price adjustment based on their 
participation in the Indian government's Duty Entitlement Passbook 
(DEPB) Program. The Department's practice is to consider the Indian 
DEPB program under section 772(c)(1)(B) of the Act (i.e., the duty 
drawback provision). See Notice of Preliminary Results of Antidumping 
Duty Administrative Review: Stainless Steel Bar From India, 68 FR 
11058, 11062 (March 7, 2003), unchanged in the final results.\8\ The 
respondents disagree that this adjustment is like duty drawback, given 
that Indian exporters simply receive DEPB revenue after making an 
export sale. Further, they stated that the DEPB program differs from a 
duty drawback program in that, in order to be eligible to receive DEPB 
payments, Indian exporters need not: (1) Import product; or (2) pay 
import duties. However, because there is no provision in the Act for 
general export subsidies, we have continued to analyze this claim under 
the duty drawback provision.
---------------------------------------------------------------------------

    \8\ See Stainless Steel Bar From India; Final Results of 
Antidumping Duty Administrative Review, 68 FR 47543 (August 11, 
2003).
---------------------------------------------------------------------------

    The Department will grant a respondent's claim for a duty drawback 
adjustment where the respondent has demonstrated that there is (1) a 
sufficient link between the import duty and the rebate, and (2) a 
sufficient amount of raw materials imported and used in the production 
of the final exported product. See Rajinder Pipe Ltd. v. United States 
(Rajinder Pipes), 70 F. Supp. 2d 1350, 1358 (CIT 1999). In Rajinder 
Pipes, the Court of International Trade upheld the Department's 
decision to deny a respondent's claim for duty drawback adjustments 
because there was not substantial evidence on the record to establish 
that part one of the Department's test had been met. See also Viraj 
Group, Ltd. v. United States, Slip Op. 01-104 (CIT August 15, 2001).
    In this investigation, Devi, HLL, and Nekkanti have failed to 
demonstrate that there is a link between the import duty paid and the 
rebate received, and that imported raw materials are used in the 
production of the final exported product. Therefore, because they have 
failed to meet the Department's requirements, we are denying the 
respondents' requests for an adjustment for DEPB revenue.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared each respondent's volume of home market sales 
of the foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    In this investigation, we determined that each respondent's 
aggregate volume of home market sales of the foreign like product was 
insufficient to permit a proper comparison with U.S. sales of the 
subject merchandise. Therefore, we used sales to the respondent's 
largest third country market as the basis for comparison-market sales 
in accordance with section 773(a)(1)(C) of the Act and 19 CFR 351.404. 
As discussed above, we used Canada for Devi, Spain for HLL, and Japan 
for Nekkanti.

B. 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 level of trade (LOT) as the EP. 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 selling, general and 
administrative expenses (SG&A) and profit. For EP, the U.S. LOT is also 
the level of the starting-price sale, which is usually from exporter to 
importer.
    To determine whether NV sales are at a different LOT than EP sales, 
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 level of trade of the export 
transaction, we make an LOT adjustment under section 773(a)(7)(A) of 
the Act.
    In this investigation, we obtained information from each respondent 
regarding the marketing stages involved in making the reported third 
country and U.S. sales, including a description of the selling 
activities performed by each respondent for each channel of 
distribution. We analyzed this data and found that each respondent made 
direct sales to distributors and/or trading companies in both the U.S. 
and comparison markets. In addition, Devi made direct sales to 
retailers in both markets. According to the information in their 
questionnaire responses, these respondents perform essentially the same 
selling functions in the United States and the relevant third country 
market (i.e., inventory maintenance, packing, and freight and delivery 
arrangements (Devi); sales and marketing support, payment of 
commissions, packing, and freight and delivery arrangements (HLL); and 
sales and marketing support, payment of commissions, packing, and 
freight and delivery arrangements (Nekkanti)). Therefore, we find that, 
for each respondent, the sales channels in each market are at the same 
LOT. Accordingly, all comparisons are at the same LOT for Devi, HLL, 
and Nekkanti and an adjustment pursuant to section 773(a)(7)(A) of the 
Act is not warranted.

C. Cost of Production Analysis

    Based on our analysis of the petitioners' allegations, we found 
that there were reasonable grounds to believe or suspect that Devi's, 
HLL's, and Nekkanti's sales of frozen and canned warmwater shrimp in 
their third country markets were made at prices below their COP. 
Accordingly, pursuant to section 773(b) of the Act, we initiated sales-
below-cost investigations to determine whether the respondents' sales 
were made at prices below their respective COPs. See the Devi Cost 
Allegation Memo, the HLL Cost Allegation Memo, and the Initiation 
Notice, 69 FR at 3879-3880, for further discussion.
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus an amount for general and administrative 
expenses (G&A), interest expenses, and third country packing costs. See 
``Test of Third Country Sales Prices'' section below for treatment of 
third country selling expenses. We relied on the COP data submitted by 
the respondents except in the following instances:
A. Devi
    1. We adjusted the reported G&A expense ratio by including in the 
calculation ``Loss on sale of assets'' which was recorded as an 
``Administrative expense'' in the company's audited financial 
statements; and

[[Page 47117]]

    2. We adjusted the reported financial expense ratio by including in 
the calculation the ``export packing credit'' and ``interest on packing 
credit in foreign currency,'' which were recorded as interest expense 
in the company's audited financial statements.
    See Memorandum from Ernest Z. Gziryan to Neal M. Halper, Director 
Office of Accounting entitled: ``Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Determination--Devi 
Sea Foods Limited,'' dated July 28, 2004, for further discussion.
B. HLL
    1. We recalculated HLL's financial expense ratio based on the 
December 31, 2003, audited consolidated financial statements of HLL's 
parent company Unilever PLC. We excluded Unilever PLC's profit from the 
sale of bonds and derivatives, as well as the claimed offset for credit 
expense and inventory carrying costs, from the financial expense 
calculation.
    See Memorandum from Laurens Van Houten to Neal Halper, Director 
Office of Accounting, entitled: ``Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Determination--
Hindustan Lever Ltd.,'' dated July 28, 2004, for further discussion.
C. Nekkanti
    1. We adjusted the G&A expense ratio to reflect the use of cost 
goods sold as a denominator rather than cost of production; and
    2. We adjusted the financial expense ratio to use the cost of goods 
sold, rather than cost of production, as the denominator. We excluded 
from the financial expense calculation the claimed offset for credit 
expenses and inventory carrying cost.
    See Memorandum from Christopher J. Zimpo to Neal Halper, Director 
Office of Accounting, entitled: ``Cost of Production and Constructed 
Value Calculation Adjustments for the Preliminary Determination--
Nekkanti Sea Foods Ltd.,'' dated July 28, 2004, for further discussion.
2. Test of Third Country Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the third country sales of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
the sale prices were below the COP. The prices were exclusive of any 
applicable billing adjustments, movement charges, and direct and 
indirect selling expenses. In determining whether to disregard third 
country market sales made at prices less than their COP, we examined, 
in accordance with sections 773(b)(1)(A) and (B) of the Act, whether 
such sales were made (1) within an extended period of time in 
substantial quantities, and (2) at prices which permitted the recovery 
of all costs within a reasonable period of time.
3. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the respondent's sales of a given product during the POI are 
at prices less than the COP, we do not disregard any below-cost sales 
of that product, because we determine that in such instances the below-
cost sales were not made in substantial quantities. Where 20 percent or 
more of the respondent's sales of a given product during the POI are at 
prices less than the COP, we determine that the below-cost sales 
represent substantial quantities within an extended period of time, in 
accordance with section 773(b)(1)(A) of the Act. In such cases, we also 
determine whether such sales were made at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(1)(B) of the Act.
    We found that, for certain specific products, more than 20 percent 
of Devi's, HLL's, and Nekkanti's third country sales during the POI 
were at prices less than the COP and, in addition, the below-cost sales 
did not provide for the recovery of costs within a reasonable period of 
time. We therefore excluded these sales and used the remaining sales, 
if any, as the basis for determining NV, in accordance with section 
773(b)(1) of the Act. Where there were no sales of any comparable 
product at prices above the COP, we used CV as the basis for 
determining NV.
D. Calculation of Normal Value Based on Comparison Market Prices
1. Devi
    For Devi, we calculated NV based on delivered prices to 
unaffiliated customers. We made deductions for export taxes, in 
accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod 
from Brazil, 67 FR at 18169. We also made deductions for movement 
expenses, including foreign inland freight expenses, foreign brokerage 
and handling expenses, and international freight expenses. In addition, 
we made adjustments under section 773(a)(6)(C)(iii) of the Act and 19 
CFR 351.410 for differences in circumstances of sale for credit 
expenses, direct selling expenses (including survey charges, Export 
Inspection Agency fees, and microbiological examination fees), bank 
charges, and commissions. In its calculation of inventory carrying 
costs, Devi included an amount for export credit guarantee fees. 
Because these fees had not been accounted for in the U.S. and Canadian 
sales listings, we made an additional adjustment for differences in 
circumstances of sale for these expenses. See Memorandum from Elizabeth 
Eastwood to the file entitled: ``Calculations performed for Devi Sea 
Foods Limited (Devi) in the Investigation of Certain Frozen and Canned 
Warmwater Shrimp from India,'' dated July 28, 2004, for further 
discussion.
    Furthermore, in accordance with 19 CFR 351.410(e), we offset U.S. 
commissions by the lesser of the commission amount or the amount of 
third country indirect selling expenses because Devi incurred 
commissions only in the U.S. market. We made adjustments for 
differences in costs attributable to differences in the physical 
characteristics of the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. We also deducted third 
country packing costs and added U.S. packing costs in accordance with 
sections 773(a)(6)(A) and (B) of the Act.
2. HLL
    For HLL, we calculated NV based on delivered prices to unaffiliated 
customers. We made deductions for export taxes, in accordance with 
section 772(c)(2)(B) of the Act. See Steel Wire Rod from Brazil, 67 FR 
at 18169. We made deductions for movement expenses in accordance with 
section 772(c)(2)(A) of the Act; these included, where appropriate, 
foreign inland freight expenses, foreign brokerage and handling 
expenses, international freight expenses, marine insurance, port dues, 
and other miscellaneous shipment charges, including loading charges. 
Regarding these miscellaneous charges, HLL classified these expenses as 
direct selling expenses; however, we treated them as movement expenses 
because they relate to the shipment of the merchandise.
    In addition, we made adjustments under section 773(a)(6)(C)(iii) of 
the Act and 19 CFR 351.410 for differences in circumstances of sale for 
credit expenses and commissions.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also

[[Page 47118]]

deducted third country packing costs and added U.S. packing costs in 
accordance with sections 773(a)(6)(A) and (B) of the Act.
3. Nekkanti
    For Nekkanti, we calculated NV based on delivered prices to 
unaffiliated customers. We made deductions for export taxes, in 
accordance with section 772(c)(2)(B) of the Act. See Steel Wire Rod 
from Brazil, 67 FR at 18169. We made further deductions for movement 
expenses, including foreign inland freight expenses, foreign brokerage 
and handling expenses, loading charges, container terminal handling 
charges, other miscellaneous movement expenses, and international 
freight expenses. In addition, we made adjustments under section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in 
circumstances of sale for credit expenses, bank charges, Export 
Inspection Agency fees, and commissions.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also deducted third country packing costs and added 
U.S. packing costs in accordance with sections 773(a)(6)(A) and (B) of 
the Act.

Currency Conversion

    Devi, HLL, and Nekkanti reported that they purchased forward 
exchange contracts which were used to convert certain sales 
transactions into home market currency. Under 19 CFR 351.415(b), if a 
currency transaction on forward markets is directly linked to an export 
sale under consideration, the Department is directed to use the 
exchange rate specified with respect to such foreign currency in the 
forward sale agreement to convert the foreign currency. In this case, 
however, the respondents failed to adequately link the contracts to 
specific sales, and they also failed to identify the relevant sales in 
the U.S. and third country sales listings. Therefore, we made currency 
conversions into U.S. dollars in accordance with section 773A(a) of the 
Act based on the exchange rates in effect on the dates of the U.S. 
sales as certified by the Federal Reserve Bank. Nonetheless, we have 
requested that the respondents remedy the deficiencies in their sales 
reporting. We will examine this issue at verification and consider any 
additional data submitted by these parties for the final determination.

Critical Circumstances

    On May 19, 2004, the petitioners alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigation of certain frozen and canned warmwater 
shrimp from India. In accordance with 19 CFR 351.206(c)(2)(i), because 
the petitioners submitted a critical circumstances allegation more than 
20 days before the scheduled date of the preliminary determination, the 
Department must issue its preliminary critical circumstances 
determination not later than the date of the preliminary determination.
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A)(i) There is a history 
of dumping and material injury by reason of dumped imports in the 
United States or elsewhere of the subject merchandise, or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and there was likely to be 
material injury by reason of such sales, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period.
    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) The volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, section 
351.206(h)(2) of the Department's regulations provides that ``unless 
the imports during a ``relatively short period'' have increased by at 
least 15 percent over the imports during an immediately preceding 
period of comparable duration, the Secretary will not consider the 
imports massive.'' Section 351.206(i) of the Department's regulations 
defines ``relatively short period'' as normally being the period 
beginning on the date the proceeding begins (i.e., the date the 
petition is filed) and ending at least three months later. The 
regulations also provide, however, that if the Department finds that 
importers, exporters, or producers had reason to believe, at some time 
prior to the beginning of the proceeding, that a proceeding was likely, 
the Department may consider a period of not less than three months from 
that earlier time.
    In determining whether the above statutory criteria have been 
satisfied, we examined: (i) Exporter-specific shipment data requested 
by the Department; (ii) information presented by the respondents in 
their June 28, 2004, submission, and (iii) the ITC preliminary injury 
determination.
    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i) of the Act, the Department normally considers evidence 
of an existing antidumping duty order on the subject merchandise in the 
United States or elsewhere to be sufficient. See Preliminary 
Determination of Critical Circumstances: Steel Concrete Reinforcing 
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With 
regard to imports of certain frozen and canned warmwater shrimp from 
India, the petitioners make no statement concerning a history of 
dumping. We are not aware of any antidumping order in the United States 
or in any country on certain frozen and canned warmwater shrimp from 
India. For this reason, the Department does not find a history of 
injurious dumping of the subject merchandise from India pursuant to 
section 733(e)(1)(A)(i) of the Act.
    To determine whether the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value and 
that there was likely to be material injury by reason of such sales in 
accordance with section 733(e)(1)(A)(ii) of the Act, the Department 
normally considers margins of 25 percent or more for export price sales 
or 15 percent or more for constructed export price transactions 
sufficient to impute knowledge of dumping. See Preliminary 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from the People's Republic of China, 62 FR 31972, 
31978 (October 19, 2001). Each respondent reported only EP sales. The 
preliminary dumping margin calculated for HLL is greater than 25 
percent and less than 25 percent for the remaining respondents. Based 
on the ITC's preliminary determination of injury, and the preliminary 
dumping margin for HLL, we find there is a reasonable basis to impute 
to importers knowledge of dumping and likely injury only for HLL. See 
Critical Circumstances Memo at Attachment II.
    In determining whether there are ``massive imports'' over a 
``relatively short period,'' pursuant to section

[[Page 47119]]

733(e)(1)(B) of the Act, the Department normally compares the import 
volumes of the subject merchandise for at least three months 
immediately preceding the filing of the petition (i.e., the ``base 
period'') to a comparable period of at least three months following the 
filing of the petition (i.e., the ``comparison period''). However, as 
stated in section 351.206(i) of the Department's regulations, if the 
Secretary finds importers, exporters, or producers had reason to 
believe at some time prior to the beginning of the proceeding that a 
proceeding was likely, then the Secretary may consider a time period of 
not less than three months from that earlier time. Imports normally 
will be considered massive when imports during the comparison period 
have increased by 15 percent or more compared to imports during the 
base period.
    For the reasons set forth in the Critical Circumstances Memo, we 
find sufficient bases exist for finding importers, or exporters, or 
producers knew or should have known an antidumping case was pending on 
certain frozen and canned shrimp imports from India by August 2003, at 
the latest. In addition, in accordance with section 341.206(i) of the 
Department's regulations, we determined December 2002 through August 
2003 should serve as the ``base period,'' while September 2003 through 
May 2004 should serve as the ``comparison period'' in determining 
whether or not imports have been massive in the comparison period, as 
these periods represent the most recently available data for analysis.
    For HLL, we preliminarily determine, as noted above, that importers 
knew or should have known that this respondent was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales in accordance with section 
733(e)(1)(A)(ii) of the Act. For HLL, we also found massive imports 
over a relatively short period. See Critical Circumstances Memo at 
Attachment I.
    In examining seasonal trends, under 19 CFR 351.206(h)(1)(ii), we 
compared the time series data for the two years prior to August 2003 
(i.e., 2001 and 2002) and found that there have not been significant 
surges in imports from India between comparable base and comparison 
periods in prior years. Therefore, based on the time series data, we 
conclude that imports of certain frozen and canned warmwater shrimp 
from India are not subject to seasonal trends. Consequently, we find 
imports of certain frozen and canned warmwater shrimp from India for 
HLL were massive pursuant to section 733(e)(1)(B) of the Act. Because 
HLL satisfies the imputed knowledge of injurious dumping criterion 
under section 733(e)(1)(A)(ii) of the Act and the massive imports in 
accordance with section 733(e)(1)(B) of the Act, we preliminarily find 
that critical circumstances exist for HLL. Because Devi and Nekkanti do 
not satisfy the imputed knowledge of injurious dumping criterion under 
section 733(e)(1)(A)(ii) of the Act, we preliminarily find that 
critical circumstances do not exist for Devi and Nekkanti.
    Regarding the companies subject to the ``all others'' rate, it is 
the Department's normal practice to conduct its critical circumstances 
analysis for these companies based on the experience of investigated 
companies. See Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Steel Concrete Reinforcing Bars From Turkey, 62 FR 9737, 
9741 (March 4, 1997). However, the Department does not automatically 
extend an affirmative critical circumstances determination to companies 
covered by the ``all others'' rate. See Notice of Final Determination 
of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in 
Coils from Japan, 64 FR 30574 (June 8, 1999) (Stainless Steel from 
Japan). Instead, the Department considers the traditional critical 
circumstances criteria with respect to the companies covered by the 
``all others'' rate. Consistent with Stainless Steel from Japan, the 
Department has, in this case, applied the traditional critical 
circumstances criteria to the ``all others'' category for the 
antidumping investigation of frozen and canned warmwater shrimp from 
India.
    The dumping margin for the ``all others'' category in the instant 
case, 14.20 percent, does not exceed the 25 percent threshold necessary 
to impute knowledge of dumping. Therefore we do not find that importers 
knew or should have known that there would be material injury from the 
dumped merchandise.
    In summary, we find that there is a reasonable basis to believe or 
suspect importers had knowledge of dumping and the likelihood of 
material injury with respect to certain frozen and canned warmwater 
shrimp from India for HLL. We also find that there have been massive 
imports of certain frozen and canned warmwater shrimp over a relatively 
short period from respondent HLL. However, for Devi, Nekkanti, and the 
companies subject to the ``all others'' rate, we find that there is no 
reasonable basis to believe or suspect importers had knowledge of 
dumping and the likelihood of material injury with respect to certain 
frozen and canned warmwater shrimp from India. Given the analysis 
summarized above, and described in more detail in the Critical 
Circumstances Memo, we preliminarily determine that critical 
circumstances exist with regard to imports of certain frozen and canned 
warmwater shrimp from India only for respondent HLL.
    We will make a final determination concerning critical 
circumstances for all producers/exporters of subject merchandise from 
India when we make our final dumping determinations in this 
investigation, which will be 135 days after publication of the 
preliminary dumping determination.

Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
U.S. Customs and Border Protection (CBP) to suspend liquidation of all 
imports of subject merchandise that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of this 
notice in the Federal Register, except for imports by HLL. For HLL, in 
accordance with section 733(e)(2) of the Act, we are directing CBP to 
suspend liquidation of imports of subject merchandise that are entered, 
or withdrawn from warehouse, for consumption on or after 90 days prior 
to the date of publication of this notice in the Federal Register.
    We will instruct CBP to require a cash deposit or the posting of a 
bond equal to the weighted-average amount by which the NV exceeds EP, 
as indicated in the chart below. These suspension-of-liquidation 
instructions will remain in effect until further notice. The weighted-
average dumping margins are as follows:

------------------------------------------------------------------------
                                     Weighted-average       Critical
       Exporter/Manufacturer        Margin percentage    circumstances
------------------------------------------------------------------------
Devi Sea Foods Ltd................               3.56                 No

[[Page 47120]]

 
Hindustan Lever Limited...........              27.49                Yes
Nekkanti Seafoods Limited.........               9.16                 No
All others........................              14.20                 No
------------------------------------------------------------------------

ITC Notification

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

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted to the 
Department no later than seven days after the date of the final 
verification report issued in this proceeding. Rebuttal briefs must be 
filed five days from the deadline date for case briefs. A list of 
authorities used, a table of contents, and an executive summary of 
issues should accompany any briefs submitted to the Department. 
Executive summaries should be limited to five pages total, including 
footnotes. Section 774 of the Act provides that the Department will 
hold a public hearing to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs, provided that 
such a hearing is requested by an interested party. If a request for a 
hearing is made in this investigation, the hearing will tentatively be 
held two days after the rebuttal brief deadline date at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230. Parties should confirm by telephone the time, 
date, and place of the hearing 48 hours before the scheduled time.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination no later than 135 days after 
the publication of this notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: July 28, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-17817 Filed 8-3-04; 8:45 am]
BILLING CODE 3510-DS-P