[Federal Register Volume 71, Number 35 (Wednesday, February 22, 2006)]
[Notices]
[Pages 9091-9094]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-2511]



[[Page 9091]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[C-507-501]


Certain In-shell Pistachios from the Islamic Republic of Iran: 
Preliminary Results of Countervailing Duty Administrative Review

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

SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty (CVD) order on certain 
in-shell (raw) pistachios from the Islamic Republic of Iran (Iran) for 
the period January 1, 2004, through December 31, 2004. For information 
on the net subsidy rate for the reviewed company, please see the 
``Preliminary Results of Review'' section of this notice. Interested 
parties are invited to comment on these preliminary results. (See the 
``Public Comment'' section of this notice.)

EFFECTIVE DATE: February 22, 2006.

FOR FURTHER INFORMATION CONTACT: Darla Brown, AD/CVD Operations, Office 
3, Import Administration, U.S. Department of Commerce, Room 4014, 14th 
Street and Constitution Avenue NW., Washington DC 20230; telephone 
(202) 482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On March 11, 1986, the Department published in the Federal Register 
the countervailing duty order on certain in-shell (raw) pistachios from 
Iran. See Final Affirmative Countervailing Duty Determination and 
Countervailing Duty Order: In-shell Pistachios from Iran, 51 FR 8344 
(March 11, 1986) (In-shell Pistachios). On March 1, 2005, the 
Department published a notice of opportunity to request an 
administrative review of this CVD order. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 70 FR 9918 (March 1, 
2005). On March 31, 2005, we received timely requests for 
administrative review from the California Pistachio Commission (CPC) 
and Cal Pure Pistachios, Inc. (Cal Pure). The CPC and Cal Pure 
requested that the Department conduct a review with respect to Tehran 
Negah Nima Trading Company, Inc., trading as Nima Trading Company 
(Nima), the respondent company in this proceeding. On April 22, 2005, 
we initiated an administrative review of the CVD order on in-shell 
(raw) pistachios from Iran covering the period of review (POR) January 
1, 2004, through December 31, 2004. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 70 FR 20862 (April 22, 
2005).
    On June 8, 2005, we issued our initial questionnaire to the 
Government of Iran (GOI) and Nima. Neither the GOI nor Nima submitted 
questionnaire responses. Therefore, as discussed below in the ``Use of 
Facts Available'' section of this notice, we have resorted to the facts 
otherwise available, employing an adverse inference. See Section 776 of 
the Tariff Act of 1930, as amended (the Act).
    On December 5, 2005, we extended the period for the completion of 
the Preliminary Results pursuant to Section 751(a)(3)(A) of the Act. 
See Certain In-shell (Raw) Pistachios from the Islamic Republic of 
Iran: Extension of Time Limit for Preliminary Results of Countervailing 
Duty Administrative Review, 70 FR 72426 (December 5, 2005).
    In accordance with 19 CFR 351.213(b), this administrative review 
covers only those producers or exporters for which a review was 
specifically requested. Accordingly, this administrative review covers 
Nima and ten programs.

Scope of Order

    The product covered by this order is in-shell (raw) pistachio nuts 
from which the hulls have been removed, leaving the inner hard shells 
and edible meat, as currently classifiable in the Harmonized Tariff 
Schedules of the United States (HTSUS) under item number 0802.50.20.00. 
The HTSUS subheading is provided for convenience and customs purposes. 
The written description of the scope of this proceeding is dispositive.

Use of Facts Available

    During the course of this proceeding, we have sought information 
from the company subject to this review, Nima, and from the GOI 
pertaining to countervailable subsidy programs in Iran and their use by 
Nima and Nima's growers and producers. Specifically, we have asked for 
information concerning Nima's and its growers' usage of the following 
programs: Provision of Credit, Provision of Fertilizer and Machinery, 
Tax Exemptions, Provision of Water and Irrigation Equipment, Technical 
Support, Duty Refunds on Imported Raw or Intermediate Materials Used in 
the Production of Export Goods, Program to Improve Quality of Exports 
of Dried Fruit, Iranian Export Guarantee Fund, GOI Grants and Loans to 
Pistachio Farmers, and Crop Insurance for Pistachios. See pages II-3 
through II-8 and pages III-6 through III-11 of the Department's June 8, 
2005, questionnaire. In addition, we have requested information 
concerning the total sales and sales of subject merchandise made by 
Nima during the POR. See pages III-3 through III-6 of the Department's 
June 8, 2005, questionnaire.
    Section 776(a) of the Act requires the use of facts available when 
an interested party withholds information that has been requested by 
the Department, or when an interested party fails to provide the 
information requested in a timely manner and in the form required. As 
described above, by failing to respond to our questionnaire, Nima and 
the GOI have failed to provide information regarding these programs, as 
well as Nima's sales, in the manner explicitly requested by the 
Department; therefore, we must resort to the facts otherwise available.
    Furthermore, Section 776(b) of the Act provides that in selecting 
from among the facts available, the Department may use an inference 
that is adverse to the interests of a party if it determines that a 
party has failed to cooperate to the best of its ability. The 
Department finds that by not providing necessary information 
specifically requested by the Department, the GOI and Nima have failed 
to cooperate to the best of their ability. Therefore, in selecting from 
among the facts available, the Department determines that an adverse 
inference is warranted.
    When employing an adverse inference in an administrative review, 
the statute indicates that the Department may rely upon information 
derived from (1) the petition, a final determination in a 
countervailing duty or an antidumping investigation, any previous 
administrative review, new shipper review, expedited antidumping 
review, section 753 review, or section 762 review; or (2) any other 
information placed on the record. See Section 776(b) of the Act and 19 
CFR 351.308(c). Thus, in applying adverse facts available, we have used 
information from the final determination of In-shell Pistachios; 
Certain In-Shell Pistachios and Certain Roasted In-Shell Pistachios 
from the Islamic Republic of Iran: Final Results of New Shipper 
Countervailing Duty Reviews, 68 FR 4997 (January 31, 2003) (New Shipper 
Reviews); and Certain In-shell Pistachios from the Islamic Republic of 
Iran: Final Results of Countervailing Duty Administrative Review, 70 FR 
54027 (September 13, 2005) (2003 In-shell Pistachios).

[[Page 9092]]

    If the Department relies on secondary information (e.g., data from 
a petition) as facts available, Section 776(c) of the Act provides that 
the Department shall, ``to the extent practicable,'' corroborate such 
information using independent sources reasonably at its disposal.\1\ 
The SAA further provides that to corroborate secondary information 
means that the Department will satisfy itself that the secondary 
information to be used has probative value. See also 19 CFR 351.308(d) 
(describing the corroboration of secondary information).
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    \1\ The Statement of Administrative Action accompanying the URAA 
clarifies that information from the petition is ``secondary 
information.'' See Statement of Administrative Action, URAA, H. Doc. 
No. 316, Vol. 1, 103d Cong. (1994) (SAA) at 870.
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    Thus, in those instances in which it determines to apply adverse 
facts available, the Department, in order to satisfy itself that such 
information has probative value, will examine, to the extent 
practicable, the reliability and relevance of the information used. 
However, unlike other types of information, such as publicly available 
data on the national inflation rate of a given country or national 
average interest rates, there typically are no independent sources for 
data on company-specific benefits resulting from countervailable 
subsidy programs. The only source for such information normally is 
administrative determinations. In the instant case, no evidence has 
been presented or obtained which contradicts the reliability of the 
evidence relied upon in previous segments of this proceeding.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render benefit data not 
relevant. See Cotton Shop Towels from Pakistan: Final Results of 
Countervailing Duty Administrative Review, 66 FR 42514 (August 13, 
2001). Where circumstances indicate that the information is not 
appropriate as adverse facts available, the Department will not use it. 
See Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812 (February 22, 1996). In the instant 
case, no evidence has been presented or obtained which contradicts the 
relevance of the benefit data relied upon in previous segments of this 
proceeding. Thus, in the instant case, the Department finds that the 
information used has been corroborated to the extent practicable.

Analysis of Programs

Programs Preliminarily Determined to Be Countervailable
    Because the GOI and Nima did not provide the information necessary 
to conduct an analysis of these programs, we are making an adverse 
inference that each of these programs continues to exist, is 
countervailable, and that a benefit was conferred upon Nima during the 
POR.

A. Provision of Fertilizer and Machinery

    In In-shell Pistachios, 51 FR at 8345-6, the Department found that 
growers, processors or exporters of pistachios in Iran can obtain 
fertilizer and machinery from the GOI at preferential prices.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in In-shell Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 7.11 percent ad valorem.

B. Provision of Credit

    In In-shell Pistachios, the Department found that bounties or 
grants were provided to growers, processors, or exporters in Iran of 
pistachios under this program. Specifically, the Department found that 
agricultural cooperatives in Iran make credit available on terms 
inconsistent with commercial considerations from funds provided by the 
GOI to their members. See 51 FR at 8346.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in In-shell Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 7.11 percent ad valorem.

C. Tax Exemptions

    In In-shell Pistachios, the Department found that bounties or 
grants were provided to growers, processors, or exporters in Iran of 
pistachios under this program. Specifically, the Department determined 
that farmers benefit from legislation that exempts farmers and 
livestock breeders from paying taxes, provided they follow government 
agricultural guidelines. See 51 FR at 8346.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in In-shell Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 7.11 percent ad valorem.

D. Provision of Water and Irrigation Equipment

    In In-shell Pistachios, the Department found that bounties or 
grants were provided to growers, processors, or exporters in Iran of 
pistachios under this program. Specifically, the Department determined 
that pistachio growers in Iran may benefit from the construction of 
soil dams, flood barriers, canals, and other irrigation projects 
undertaken by the government to increase agricultural production. See 
51 FR at 8346.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in In-shell Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 7.11 percent ad valorem.

E. Technical Support

    In In-shell Pistachios, the Department found that bounties or 
grants were provided to growers, processors, or exporters in Iran of 
pistachios under this program. Specifically, the

[[Page 9093]]

Department determined that pistachio growers in Iran receive technical 
support as part of the GOI's program to support agricultural 
development, and that this technical support included research projects 
to improve cultivation techniques, as well as assistance in harvesting, 
marketing, and the use of fertilizer. See 51 FR at 8346.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in In-shell Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 7.11 percent ad valorem.

F. Duty Refunds on Imported Raw or Intermediate Materials Used in the 
Production of Export Goods

    In the New Shipper Reviews, we found that there was sufficient 
information on the record to suggest that duties and levies paid in 
connection with the importation of intermediate materials used in the 
production of the exported commodities and goods are refunded to 
exporters, pursuant to the Third Five Year Development Plan (TFYDP) 
enacted by the GOI. See the May 8, 2002, Memorandum to Melissa G. 
Skinner from the Team, re: New Subsidy Allegations, contained in the 
February 2, 2006, Memorandum to the File from the Team, re: Placing 
Memos on the Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in the New Shipper 
Reviews, and thus was not among the programs addressed in In-shell 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
7.11, the highest rate established for individual programs in In-shell 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 7.11 
percent ad valorem.

G. Program to Improve Quality of Exports of Dried Fruit

    In the New Shipper Reviews, we found that there was sufficient 
information on the record to suggest that pursuant to the Budget Act of 
2001 - 2002, the GOI provides financial assistance to exporters of 
dried fruit and pistachios to assist them in the production of export 
quality goods. See the May 8, 2002, Memorandum to Melissa G. Skinner 
from the Team, re: New Subsidy Allegations, contained in the February 
2, 2006, Memorandum to the File from the Team, re: Placing Memos on the 
Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in the New Shipper 
Reviews, and thus was not among the programs addressed in In-shell 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
7.11, the highest rate established for individual programs in In-shell 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 7.11 
percent ad valorem.

H. Iranian Export Guarantee Fund

    In the 2003 administrative review of raw in-shell pistachios, we 
found that petitioners had provided sufficient evidence to support 
their allegation that the GOI pays a ``prize'' in the form of an export 
subsidy to exporters; these prizes are payable commensurate with the 
added value of export goods and services. See the October 27, 2004, 
Memorandum to Melissa G. Skinner from the Team, re: New Subsidy 
Allegations, contained in the February 2, 2006, Memorandum to the File 
from the Team, re: Placing Memos on the Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in In-shell 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
7.11, the highest rate established for individual programs in In-shell 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 7.11 
percent ad valorem.

I. GOI Grants and Loans to Pistachio Farmers

    In 2003 In-shell Pistachios, we found that petitioners had provided 
sufficient evidence to support their allegation that the GOI's Foreign 
Exchange Reserve Account Board of Trustees agreed to provide both a 
grant of $100,000,000 and a $50,000,000 buyer's credit to Iranian 
pistachio cooperatives and pistachio farmers. See the May 8, 2002, 
Memorandum to Melissa G. Skinner from the Team, re: New Subsidy 
Allegations, contained in the February 2, 2006 Memorandum to the File 
from the Team, re: Placing Memos on the Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in In-shell 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
7.11, the highest rate established for individual programs in In-shell 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results.

[[Page 9094]]

Accordingly, we preliminarily find that the net subsidy rate for this 
program is 7.11 percent ad valorem.

J. Crop Insurance for Pistachios

    In 2003 In-shell Pistachios, we found that petitioners had provided 
sufficient evidence to support their allegation that the GOI 
established the Iranian Agricultural Product Insurance Act (IAPIA), 
whereby the Agricultural Bank will insure agricultural produce as a 
means of achieving the goals and policies of the agricultural sector 
and that the GOI aids farmers in securing insurance premiums at less 
than market value. See the May 8, 2002, Memorandum to Melissa G. 
Skinner from the Team, re: New Subsidy Allegations, contained in the 
February 2, 2006 Memorandum to the File from the Team, re: Placing 
Memos on the Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in In-shell 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
7.11, the highest rate established for individual programs in In-shell 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 7.11 
percent ad valorem.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we have calculated an 
individual subsidy rate for Nima, the only producer/exporter subject to 
this administrative review, for the POR, i.e., calendar year 2004. We 
preliminarily determine that the total estimated net countervailable 
subsidy rate is 71.10 percent ad valorem.
    As Nima is the exporter but not the producer of subject 
merchandise, should the final results of this review remain the same as 
these preliminary results, the Department's final results of review 
will apply to subject merchandise exported by Nima and produced by any 
grower. See 19 CFR 351.107(b).
    The Department intends to instruct U.S. Customs and Border 
Protection (CBP), within 15 days of publication of the final results of 
this review, to liquidate all shipments of subject merchandise exported 
by Nima, entered, or withdrawn from warehouse, for consumption during 
the POR at the rate established in this administrative review.
    We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide 
rate applicable to the company. Accordingly, the cash deposit rates 
that will be applied to non-reviewed companies covered by this order 
will be the rate for that company established in the most recently 
completed administrative proceeding. See Certain In-Shell Pistachios 
from the Islamic Republic of Iran: Final Results of Countervailing Duty 
Administrative Review, 68 FR 41310 (July 11, 2003). These cash deposit 
rates shall apply to all non-reviewed companies until a review of a 
company assigned these rates is requested.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the publication of these preliminary 
results. Rebuttal briefs, which are limited to arguments raised in case 
briefs, must be submitted no later than five days after the time limit 
for filing case briefs, unless otherwise specified by the Department. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) a statement of the issue, and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of this administrative review, including 
the results of its analysis of issues raised in any case or rebuttal 
brief or at a hearing.
    This administrative review and notice are issued and published in 
accordance with Sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 14, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-2511 Filed 2-21-06; 8:45 am]
BILLING CODE 3510-DS-S