[Federal Register Volume 69, Number 152 (Monday, August 9, 2004)]
[Notices]
[Pages 48197-48201]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18151]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-507-502]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Certain In-Shell Raw Pistachios From Iran

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

ACTION: Notice of preliminary results of antidumping administrative 
review.

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SUMMARY: In response to a request from Tehran Negah Nima Trading 
Company, Inc., trading as Nima Trading Company, (collectively, Nima), 
the U.S. Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain in-shell 
raw pistachios from Iran. The period of review is July 1, 2002, through 
June 30, 2003. We have preliminarily determined that Nima has made 
sales at not less than normal value during the period covered by this 
review. The preliminary results are listed below in the section titled 
``Preliminary Results of Review.'' Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: August 9, 2004.

FOR FURTHER INFORMATION CONTACT: Angelica Mendoza at (202) 482-3019 or 
Abdelali Elouaradia at (202) 482-1374; AD/CVD Operations, Office Six, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register an antidumping 
duty order on certain in-shell raw pistachios (pistachios) from Iran on 
July 17, 1986. See Antidumping Duty Order: Certain In Shell Pistachios 
from Iran, 51 FR 25922 (July 17, 1986). On July 2, 2003, the Department 
published a notice of opportunity to request an administrative review 
of the antidumping duty order on pistachios from Iran, 68 FR 39511. On 
July 30, 2003, Nima, an exporter of subject merchandise during the 
period of review, requested that the Department conduct an 
administrative review of its sales to the United States covered by the 
antidumping duty order. On August 22, 2003, the Department initiated an 
administrative review of the antidumping duty order on pistachios from 
Iran for the period July 1, 2002, through June 30, 2003, in order to 
determine whether merchandise imported into the United States was sold 
at less than fair value by Nima. See Initiation of Antidumping and 
Countervailing Duty Administrative Review and Requests for Revocations 
in Part, 68 FR 50750 (Administrative Review Initiation).
    On August 29, 2003, the Department issued Nima an antidumping duty 
questionnaire. On September 19, 2003, Nima filed its response to 
Section A of the Department's questionnaire. We received Nima's 
response to Section C of the Department's questionnaire on October 14, 
2003.
    On October 24, 2003, petitioner, California Pistachio Commission, 
filed comments on Nima's Section A and C questionnaire responses and 
filed a request that the Department determine whether antidumping 
duties had been absorbed during the period of review by Nima. See 
``Duty Absorption'' section below. We received comments on Nima's 
Section A and C questionnaire responses from Cal Pure Pistachios, Inc. 
(Cal Pure), an interested party in this proceeding, on November 6, 
2003.

[[Page 48198]]

    On November 7, 2003, the Department issued a Section D antidumping 
duty questionnaire soliciting information from Nima's supplier of 
pistachios, Razi Domghan Agricultural and Animal Husbandry Company 
(Razi Farm). On November 20, 2003, we issued Nima a supplemental 
questionnaire covering its Section A and C responses. On November 25, 
2003, petitioner requested that the Department conduct a verification 
of Nima's questionnaire responses. We received Nima's first 
supplemental Section A and C questionnaire response on December 4, 
2003.
    On December 11, 2003, petitioner requested that the Department 
extend the deadline for new factual information until 30 days before 
issuance of the preliminary results. In response to petitioner's 
request, on December 16, 2003, the Department extended the deadline for 
submitting new factual information in this proceeding until 60 days 
prior to issuance of the preliminary results.
    On December 31, 2003, Razi Farm filed its Section D questionnaire 
response. Petitioner and Cal Pure filed comments on Nima's first 
supplemental questionnaire response on January 9, 2004. On January 16, 
2004, the Department issued Nima a second supplemental Section A and C 
questionnaire. We received comments on Razi Farm's Section D 
questionnaire response from petitioner and Cal Pure on January 20, 
2004. On January 27, 2004, Razi Farm filed original copies of 
certificates of representation and of facts. On January 28, 2004, 
petitioner submitted factual information regarding current conditions 
in Iran. On January 30, 2004, petitioner submitted factual information 
with respect to Nima's pistachio supplier in Iran.
    On February 2, 2004, we issued a supplemental Section D 
questionnaire to Razi Farm. On February 5, 2004, the Department fully 
extended its deadline for the preliminary results of this review. See 
Certain In-Shell Raw Pistachios from Iran; Extension of Time Limit for 
Preliminary Results of Administrative Review, 69 FR 5487.
    On February 6, 2004, we received Nima's second supplemental Section 
A and C questionnaire response. We received Razi Farm's first 
supplemental Section D questionnaire response on March 1, 2004. 
Petitioner filed comments on Nima's second supplemental Section A and C 
questionnaire response on March 1, 2004.
    On March 19, 2004, petitioner and interested parties (i.e., Cal 
Pure and Western Pistachios Association) filed comments on Razi Farm's 
first supplemental Section D questionnaire response. The Department 
issued a second supplemental Section D questionnaire to Razi Farm on 
March 23, 2004. On April 2, 2004, petitioner withdrew its January 30, 
2004, filing that included factual information with respect to Nima's 
pistachio supplier in Iran. We received Razi Farm's second supplemental 
Section D questionnaire response on April 19, 2004. On May 3, 2004, Cal 
Pure filed comments on Razi Farm's supplemental response. On May 12, 
2004, we issued Razi Farm a third supplemental Section D questionnaire 
response.
    On May 18, 2004, petitioner filed factual information regarding 
Razi Farm's knowledge that the pistachios it sold to Nima were destined 
for the United States. On May 21, 2004, we solicited information from 
Razi Farm as to the types of documents that would be available during 
our cost verification. On May 24, 2004, we received from petitioner a 
request to rescind the instant review in which petitioner alleged that 
Razi Farm knew or should have known that the goods it sold to Nima were 
for export to the United States.
    On May 25, 2004, Razi Farm filed its third supplemental Section D 
questionnaire response. On the same day, Nima also filed a copy of its 
2002 tax return. We issued our agendas for verification to Nima and 
Razi Farm on June 2, 2004. On June 3, 2004, and June 4, 2004, we 
received pre-verification comments from petitioner and Cal Pure. On 
June 4, 2004, Cal Pure requested that the Department cancel 
verification. On July 7, 2004, we received comments from petitioner for 
consideration in these preliminary results.

Period of Review

    The period of review (POR) is July 1, 2002 through June 30, 2003.

Scope of Antidumping Duty Order

    The product covered by the antidumping duty order is raw, in-shell 
pistachio nuts from which the hulls have been removed, leaving the 
inner hard shells, and edible meats from Iran. This merchandise is 
currently provided for in item 0802.50.20.00 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheading is 
provided for convenience and customs purposes, the Department's written 
description of the merchandise under order is dispositive.

Verification

    As provided in section 782(i)(3) of the Tariff Act of 1930, as 
amended (the Act) and section 351.307 of the Department's regulations, 
we conducted verification of U.S. sales and cost questionnaire 
responses submitted by Nima and Razi Farm from June 7, 2004, through 
June 9, 2004 in Yerevan, Armenia. Although the verification was 
conducted off-site, we used standard verification procedures, including 
the examination of relevant sales, cost, and financial records, and a 
selection of original documentation. Our verification results are 
outlined in the Memorandum to the File through Abdelali Elouaradia, 
Program Manager, Office 6, Administrative Review of the Antidumping 
Duty Order on Certain In-Shell Raw Pistachios from Iran: Verification 
of U.S. Sales Questionnaire Responses Submitted by Tehran Negah Nima 
Trading Company, Ltd. (Nima), dated June 29, 2004 (Sales Verification 
Report); and Memorandum to Neal Halper, Director, Office of Accounting, 
Antidumping Duty Administrative Review of Certain In-Shell Raw 
Pistachios from Iran: Verification Report on Cost of Production and 
Constructed Value Data Submitted by Razi Farm, dated June 29, 2004 
(Cost Verification Report).\1\
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    \1\ These are public documents. Copies of these reports are on 
file in the Central Records Unit (CRU) located in room B-099 of the 
Main Commerce Building.
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Duty Absorption

    As noted in the ``Background'' section above, on October 24, 2003, 
petitioner requested that the Department determine whether antidumping 
duties had been absorbed during the POR by Nima. Section 751(a)(4) of 
the Act provides that the Department, if requested, determine during an 
administrative review initiated two or four years after the publication 
of the order whether antidumping duties have been absorbed by a foreign 
producer or exporter, if the subject merchandise is sold in the United 
States through an affiliated importer.
    Because the antidumping duty order was published seventeen years 
prior to the initiation of this review, we determine that petitioner's 
request is unwarranted by section 751(a)(4) of the Act. Moreover, 
neither the foreign producer nor the exporter subject to the instant 
order is affiliated with the U.S. importer. Therefore, we find that 
section 751(a)(4) of the Act is not applicable to this review, and 
accordingly, we did not determine whether antidumping duties had been 
absorbed during the POR by Nima.

Bona Fides of Sale Under Review

    Based on questionnaire responses submitted by Nima, and our 
verification

[[Page 48199]]

thereof, we preliminarily determine that Nima's sale to the United 
States constitutes a bona fide commercial transaction. We note that in 
the recent new shipper review of Nima the Department faced similar 
facts and concluded that the sale of a relatively small quantity of 
pistachios shipped via air freight was a bona fide arm's-length 
transaction. See Final Results of Antidumping Duty New Shipper Review: 
Certain In-Shell Raw Pistachios from Iran, 68 FR 353 (January 3, 2003) 
and accompanying Issues and Decision Memorandum at Comment 2.

Application of Knowledge Test

    Based on our examination of the questionnaire responses and 
verification findings, we preliminarily determine, in accordance with 
the Department's established practice, that Razi Farm neither knew nor 
should have known that the merchandise under review was for export to 
the United States at the time of the sale.
    Under section 772(a) of the Act, the basis for export price is the 
price at which the first party in the chain of distribution who has 
knowledge of the U.S. destination of the merchandise sells the subject 
merchandise, either directly to a U.S. purchaser or to an intermediary 
such as a trading company. The party making such a sale, with knowledge 
of the destination, is the appropriate party to be reviewed. See 
Certain Pasta from Italy: Termination of New Shipper Antidumping Duty 
Administrative Review, 62 FR 66602 (December 19, 1997) (Pasta from 
Italy). The Department's test for determining knowledge is whether the 
relevant party knew or should have known that the merchandise was 
destined for the United States.
    In determining whether a party knew or should have known that its 
merchandise was destined for the United States, the Department's well-
established practice is to consider such factors as: (1) Whether that 
party prepared or signed any certificates, shipping documents, 
contracts or other papers stating that the destination of the 
merchandise was the United States; (2) whether that party used any 
packaging or labeling which stated that the merchandise was destined 
for the United States; (3) whether any unique features or 
specifications of the merchandise otherwise indicated that the 
destination was the United States; and (4) whether that party admitted 
to the Department that it knew that its sales were destined for the 
United States. See, e.g., Dynamic Random Access Memory Semiconductors 
of One Megabit or Above from the Republic of Korea: Final Results of 
Antidumping Duty Administrative Review and Determination Not To Revoke 
the Order in Part, 64 FR 69694 (December 14, 1999); Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Synthetic Indigo from the People's Republic of 
China, 64 FR 69723 (December 14, 1999) (unchanged in final 
determination); and Pasta from Italy, 62 FR 66602 (December 19, 1997). 
Because at the time of the sale none of the above factors appears to be 
present in the instant case, the Department preliminarily determines 
that Razi Farm neither knew nor should have known that the pistachios 
it sold to Nima were destined for the United States.
    Based upon the Department's analysis of record documentation, we 
conclude that there is no evidence that Razi Farm prepared or signed 
any documentation relevant to the shipping, handling, and packing of 
the merchandise for export during the POR. Instead, the record clearly 
indicates that Nima, not Razi Farm, prepared and signed all 
certificates, shipping documents, contracts or other papers identifying 
the destination of the merchandise as the United States. See Nima's 
September 19, 2003, Section A questionnaire response at Exhibit 6. 
Moreover, the record is void of evidence that Razi Farm used any 
packaging or labeling which stated that the merchandise was destined 
for the United States. Rather, the record indicates that Nima re-packed 
the merchandise for shipment to the United States. See Nima's December 
4, 2003, supplemental questionnaire response at 6. Further, there were 
no unique features or specifications of the merchandise that would 
otherwise indicate that it was destined for the United States.
    In addition, as noted above, the Department analyzed Nima's 
response recounting conversations that it had with Razi Farm around the 
time of the sale. In particular, Nima informed Razi Farm that it might 
receive a questionnaire from some foreign government, including the 
U.S. government (U.S. Department of Commerce). See Nima's December 4, 
2003 supplemental questionnaire response at 3 and 10. We find that 
while Nima's statements indicate that these pistachios would be used 
for an export sale, Nima did not clearly indicate to which market the 
pistachios would be shipped. The statements alone are inconclusive in 
determining whether Razi Farm knew or should have known at the time of 
sale that the pistachios it sold to Nima were destined for the United 
States.
    Furthermore, during verification, the general manager of Razi Farm 
stated that he first learned that the pistachios he sold to Nima were 
exported to the United States in May 2004, approximately a year after 
the date of the sale. See Sales Verification Report at 4. It is clear 
from the statements made by Razi Farm's general manager during 
verification that Razi Farm did not admit to the Department that it 
knew that its sales were destined for the United States at the time of 
its sale to Nima. Therefore, contrary to petitioner's and Cal Pure's 
claims, we do not find that Nima's account of conversations it had with 
Razi Farm during the POR compel the Department to find that Razi Farm 
had knowledge as defined in section 772(a) of the Act. Moreover, there 
is no evidence currently on the record that meets the factors, 
described above, considered by the Department in its knowledge test. We 
also note that unsubstantiated conversations and hearsay placed on the 
record by petitioners are not evidence sufficient for this analysis. In 
summary, in considering the totality of current record information, we 
preliminarily determine that Razi Farm neither knew nor should have 
known at the time of sale that the pistachios it sold to Nima were 
destined for the United States.
    In light of the significance of this issue, the Department will 
allow parties to submit written comments and any additional documentary 
evidence based on factual information that indicate that Razi Farm did 
or did not have knowledge that the goods in question were destined for 
the United States at the time of the sale, in accordance with the types 
of factors listed above. Comments and factual evidence with respect to 
this issue are due no later than 14 calendar days after the publication 
date of these preliminary results.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondent covered by the description in the 
``Scope of Antidumping Duty Order'' section above and sold in the 
comparison market during the POR, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
As there were no home market foreign like products to compare to a U.S. 
sale, we used constructed value (CV).

[[Page 48200]]

United States Price

    For Nima, we based the United States price on export price (EP), in 
accordance with section 772(a) of the Act, because the first sale to an 
unaffiliated purchaser was made prior to importation, and constructed 
export price was not otherwise warranted by the facts on the record. We 
calculated EP based on the packed price from the exporter to the first 
unaffiliated customer in the United States. We deducted inland freight 
expenses from the starting price (gross unit price), in accordance with 
section 772(c) of the Act.

Normal Value Based on CV

    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the cost of materials and fabrication of the 
subject merchandise, plus amounts for selling, general, and 
administrative (SG&A) expenses, interest, profit, and U.S. packing 
costs. In particular, we calculated CV based on the producer's (Razi 
Farm's) costs of materials and fabrication of the subject merchandise, 
G&A, and interest, plus the exporter's (Nima's) SG&A expenses and an 
amount for profit.
    The producer's costs were submitted in three supplemental section D 
responses as well as a copy of a production cost study compiled by the 
Iranian Ministry of Finance based on production of pistachio farms in 
Iran. The producer provided copies of company ledgers maintained for 
the farm and sales invoices. See Razi Farm's May 25, 2004, third 
supplemental questionnaire response. We verified the producer's data 
and information provided in Razi Farm's responses in June 2004. See 
Cost Verification Report.
    Because there were no viable home market sales or third country 
sales made by Nima during the POR, we cannot calculate CV profit under 
section 773(e)(2)(A) of the Act. Section 773(e)(2)(B)(iii) of the Act 
allows the Department to use amounts incurred and realized for profits 
based on any other reasonable method, as long as that profit does not 
exceed the amount normally realized by exporters or producers in 
connection with the sale for consumption in the foreign country of 
merchandise that is in the same general category of products as the 
subject merchandise. Using the methodology established in a prior 
segment of this proceeding, we based profit on a home market sale made 
by an Iranian pistachio farmer in Nima's new shipper review pursuant to 
section 773(e)(2)(B)(iii) of the Act. See Certain In-Shell Raw 
Pistachios from Iran: Preliminary Results of Antidumping Duty New 
Shipper Review, 67 FR 50863 (August 6, 2002) (unchanged in the final 
results). The profit rate is a profit realized in connection with a 
sale for consumption in the foreign country of subject merchandise. 
There is no evidence on the record that indicates this profit rate is 
aberrational or not representative of home market profit rates of 
subject merchandise. However, we may revisit this rate calculation in 
computing CV for our final results. See Memorandum from Gina K. Lee 
through Michael P. Martin to Neal M. Halper, Constructed Value 
Adjustments for Preliminary Results, dated July 30, 2004 (CV Prelim 
Memo).
    For these preliminary results, we have relied on the submitted CV, 
except where noted below:
    1. We recalculated depreciation expense to correct an error.
    2. We revised the reported pesticide expenses for a clerical error.
    3. We increased the electricity expenses to reflect the costs for 
an entire year.
    4. We calculated a profit rate based on publicly available 
information.

See CV Prelim Memo for details.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations at the rates certified by the Federal Reserve 
Bank or by Dow Jones Reuter Business Interactive, LLC (trading as 
Factiva).

Preliminary Results of Review

    We preliminarily determine that an antidumping duty margin does not 
exist for the following exporter:

------------------------------------------------------------------------
                                                                Margin
             Exporter                          POR             (percent)
------------------------------------------------------------------------
Tehran Negah Nima Trading Company,        07/01/02-06/30/03        0.00
 Inc..............................
------------------------------------------------------------------------

    In accordance with 19 CFR 351.224(b), the Department will disclose 
to all interested parties to this proceeding the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice.
    Pursuant to 19 CFR 351.309 of the Department's regulations, 
interested parties may submit written comments and/or case briefs on 
these preliminary results. Comments and case briefs must be submitted 
no later than thirty days after the date of publication of this notice. 
Rebuttal comments and briefs must be limited to issues raised in the 
case briefs and comments, and must be submitted no later than five days 
after the time limit for filing case briefs and comments. Parties 
submitting arguments in this proceeding are requested to submit with 
the argument: (1) A statement of the issue, and (2) a brief summary of 
the argument. Case and rebuttal briefs and comments must be served on 
interested parties in accordance with 19 CFR 351.303(f). Also, within 
thirty days of the date of publication of this notice, an interested 
party may request a public hearing on the arguments to be raised in the 
case and rebuttal briefs and comments. See 19 CFR 351.310(c). Unless 
otherwise specified, the hearing, if requested, will be held two days 
after the date for submission of rebuttal briefs, or the first working 
day thereafter. The Department will issue the final results of this 
administrative review, including the results of its analysis of issues 
raised in any case and rebuttal briefs and comments, within 120 days of 
publication of these preliminary results.

Assessment Rates

    Upon completion of this administrative review, the Department will 
determine, and U.S. Customs and Border Protection (CBP) shall assess, 
antidumping duties on all appropriate entries. In accordance with 19 
CFR 351.212(b)(1), we have calculated an importer-specific assessment 
rate for merchandise subject to this review. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of review. If these preliminary 
results are adopted in the final results of review, we will direct CBP 
to assess the resulting assessment rates against the entered customs 
values for the subject merchandise on each of the importer's entries 
during the review period.

Cash Deposit

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or

[[Page 48201]]

withdrawn from warehouse, for consumption on or after the publication 
date of the final results of this administrative review, as provided by 
section 751(a)(1) of the Act: (1) The cash deposit rate for Nima will 
be the rate established in the final results of this administrative 
review (except that no deposit will be required if the rate is zero or 
de minimis, i.e., less than 0.5 percent); (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 original less than fair value (LTFV) 
investigation, but the producer is, the cash deposit rate will be the 
rate established for the most recent period for the producer of the 
merchandise; and (4) if neither the exporter nor the producer is a firm 
covered in this review, a prior review, or the original LTFV 
investigation, the cash deposit rate will continue to be the ``all 
others'' rate of 184.28 percent established in the LTFV investigation. 
This rate reflects the amount of export subsidies found in the final 
countervailing duty determination in the investigation subtracted from 
the dumping margin found in the LTFV determination. See Final 
Affirmative Countervailing Duty Determination and Countervailing Duty 
Order; In-Shell Pistachios From Iran, 51 FR 8344 (March 11, 1986). 
These cash deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this administrative 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.
    These preliminary results are issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18151 Filed 8-6-04; 8:45 am]
BILLING CODE 3510-DS-P