[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Notices]
[Pages 12081-12088]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4392]



[[Page 12081]]

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DEPARTMENT OF COMMERCE

International Trade Administration

A-351-838


Certain Frozen Warmwater Shrimp from Brazil: Preliminary Results 
and Preliminary Partial Rescission of Antidumping 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 antidumping duty order on certain 
frozen warmwater shrimp from Brazil with respect to 15 companies.\1\ 
The respondents which the Department selected for individual review are 
Amazonas Industrias Alimenticias S.A. (``AMASA'') and Comercio de 
Pescado Aracatiense Ltda. (``Compescal''). Compescal did not respond to 
the Department's request for information in this review. For further 
discussion, see the ``Use of Facts Available'' section of this notice. 
The respondents which were not selected for individual review are 
listed in the ``Preliminary Results of Review'' section of this notice. 
This is the second administrative review of this order. The period of 
review (``POR'') is February 1, 2006, through January 31, 2007.
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    \1\ This figure does not include those companies for which the 
Department is preliminarily rescinding the administrative review. 
See ``Partial Rescission of Review'' section for further discussion.
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    We preliminarily determine that sales made by AMASA have been made 
below normal value (``NV''). In addition, we have preliminarily 
determined a weighted-average margin for those companies that were not 
selected for individual review, but were responsive to the Department's 
requests for information, based on the preliminary results for the 
respondents selected for individual review. To those companies which 
were not responsive to the Department's requests for information, we 
have preliminarily assigned a margin based on adverse facts available 
(``AFA'').
    If the preliminary results are adopted in our final results of 
administrative review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on all appropriate 
entries. Interested parties are invited to comment on the preliminary 
results.

EFFECTIVE DATE: March 6, 2008.).

FOR FURTHER INFORMATION CONTACT:  Kate Johnson or Rebecca Trainor, AD/
CVD Operations, Office 2, Import Administration-Room 1117, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-4929 or (202) 482-4007, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In February 2005, the Department published in the Federal Register 
an antidumping duty order on certain frozen warmwater shrimp from 
Brazil. See Notice of Amended Final Determination and Antidumping Duty 
Order: Certain Frozen Warmwater Shrimp from Brazil, 70 FR 5143 
(February 1, 2005) (``Shrimp Order''). On February 2, 2007, the 
Department published in the Federal Register a notice of opportunity to 
request an administrative review of the antidumping duty order of 
certain frozen warmwater shrimp from Brazil for the period February 1, 
2006, through January 31, 2007. See Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 72 FR 5007 (February 2, 2007). On February 28, 
2007, the petitioner\2\ and the Louisiana Shrimp Association (``LSA''), 
a domestic interested party, requested an administrative review for 
numerous Brazilian exporters of subject merchandise in accordance with 
section 751(a) of the Tariff Act of 1930, as amended (``the Act''), and 
19 CFR 351.213(b)(2)(1).
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    \2\ The petitioner is the Ad Hoc Shrimp Trade Action Committee.
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    On April 5, 2007, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
See ``Duty Absorption'' section below for further discussion.
    On April 6, 2007, the Department initiated an administrative review 
for 40 companies and requested that each company provide data on the 
quantity and value (``Q&V'') of its exports of subject merchandise to 
the United States during the POR for mandatory respondent selection 
purposes. These companies are listed in the Department's notice of 
initiation. See Notice of Initiation of Administrative Reviews of the 
Antidumping Duty Orders on Certain Frozen Warmwater Shrimp from Brazil, 
Ecuador, India and Thailand, 72 FR 17100 (April 6, 2007) (``Notice of 
Initiation'').
    In its April 18, 2007, entry of appearance, Empresa De Armazenagem 
Frigorifica Ltda., (``Empaf'') notified the Department that its name 
changed to Netuno Alimentos S.A., Maricultura Netuno S.A. and Netuno 
USA, Inc. (collectively ``Netuno''). As a result, on April 24, 2007, we 
solicited information on this name change from Netuno. Netuno supplied 
this information on May 9, 2007. After analyzing this information, we 
preliminarily find that Netuno is the successor-in-interest to Empaf. 
For further discussion, see the ``Successor-in-Interest'' section of 
this notice, below.
    During the period April through September 2007, we received 
responses to the Department's Q&V questionnaire from 26 potential 
respondents. Eighteen of these companies reported that they had no 
shipments/exports of subject merchandise to the United States during 
the POR. We also received timely requests for withdrawal of the review 
with respect to certain companies. Accordingly, of the 40 named firms 
for which the Department initiated an administrative review, eight 
entities had both an active request for review and an appropriately 
submitted Q&V questionnaire response which indicates exports to the 
United States during the POR.
    Based upon our consideration of the responses to the Q&V 
questionnaire and the resources available to the Department, we 
determined that it was not practicable to examine all exporters/
producers of subject merchandise for which a review request remained. 
As a result, on July 19, 2007, we selected the two largest remaining 
producers/exporters by export volume of certain frozen warmwater shrimp 
from Brazil during the POR, AMASA and Compescal, as the mandatory 
respondents in this review. See Memorandum to Stephen Claeys, Deputy 
Assistant Secretary for Import Administration, from James Maeder, 
Director, Office 2, AD/CVD Operations, entitled ``2006-2007 Antidumping 
Duty Administrative Review of Certain Frozen Warmwater Shrimp from 
Brazil: Selection of Respondents for Individual Review,'' dated July 
19, 2007. On July 20, 2007, we issued the antidumping questionnaire to 
AMASA and Compescal.
    On August 24, 2007, we published a notice rescinding the 
administrative review with respect to 22 companies in accordance with 
19 CFR 351.213(d)(1). For further discussion, see Certain Frozen 
Warmwater Shrimp from Brazil; Partial Rescission of Antidumping Duty 
Administrative Review; 72 FR 48616 (August 24, 2007).
    We received a response to section A of the questionnaire from AMASA 
on August 24, 2007. We received a

[[Page 12082]]

response to sections B and C of the questionnaire from AMASA on 
September 24, 2007.
    On October 9, 2007, the petitioner requested that the Department 
initiate a sales-below-cost investigation of AMASA. On October 26, 
2007, we initiated this investigation. See Memorandum to James Maeder, 
Director, Office 2, AD/CVD Operations, from The Team entitled 
``Petitioner's Allegation of Sales Below the Cost of Production for 
Amazonas Industrias Alimenticias S.A.,'' dated October 26, 2007.
    On October 26, 2007, the Department postponed the preliminary 
results in this review until no later than February 28, 2008. See 
Certain Frozen Warmwater Shrimp from Brazil, Ecuador, India, Thailand, 
and the Socialist Republic of Vietnam: Notice of Extension of Time 
Limits for the Preliminary Results of the Second Administrative 
Reviews, 72 FR 60800 (October 26, 2007).
    We issued a supplemental questionnaire to AMASA on October 25, 
2007, and received a response on November 20, 2007.
    AMASA submitted a response to section D of the questionnaire on 
December 4, 2007. We issued supplemental questionnaires to AMASA with 
respect to section D on December 14, 2007, January 9, 2008, and 
February 5, 2008, and received responses to these supplemental 
questionnaires on December 31, 2007, January 22, 2008, and February 12, 
2008.
    On January 14 and 18, 2008, the petitioner and LSA, respectively, 
withdrew their requests for administrative review of AMASA and 
requested that the Department rescind the current administrative review 
of that company. On January 18, 2008, we issued letters to the 
petitioner and LSA stating that we were unable to grant their requests 
because the requests were not timely and the Department had already 
expended significant resources in this administrative review.
    The sales verification was conducted during the period January 22-
24, 2008, and the report of the Department's findings was issued on 
February 11, 2008. The cost verification will take place following the 
preliminary results.
    At the request of the Department, AMASA submitted revised U.S. and 
home market sales databases on February 13, 2008.
    On February 22, 2008, AMASA submitted comments with respect to the 
calculation of AMASA's preliminary antidumping margin. These comments 
were received too late for consideration in the preliminary results. 
However, if these issues are raised in the context of parties' case 
briefs, we will address the issues in the final results.

Scope of the Order

    The scope of this order includes certain frozen warmwater shrimp 
and prawns, whether wild-caught (ocean harvested) or farm-raised 
(produced by aquaculture), head-on or head-off,\3\ shell-on or peeled, 
tail-on or tail-off, deveined or not deveined, cooked or raw, or 
otherwise processed in frozen form.
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    \3\ ``Tails'' in this context means the tail fan, which includes 
the telson and the uropods.
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    The frozen warmwater shrimp and prawn products included in the 
scope of this order, regardless of definitions in the Harmonized Tariff 
Schedule of the United States (``HTSUS''), are products which are 
processed from warmwater shrimp and prawns through freezing 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 this order. 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 this order.
    Excluded from the scope are: 1) breaded shrimp and prawns (HTSUS 
subheading 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 (HTSUS subheadings 0306.23.00.20 and 0306.23.00.40); 4) shrimp 
and prawns in prepared meals (HTSUS subheading 1605.20.05.10); 5) dried 
shrimp and prawns; 6) canned warmwater shrimp and prawns (HTSUS 
subheading 1605.20.10.40); 7) certain dusted shrimp; and 8) certain 
battered shrimp. Dusted shrimp is a shrimp-based product: 1) that is 
produced from fresh (or thawed-from-frozen) and peeled shrimp; 2) to 
which a ``dusting'' layer of rice or wheat flour of at least 95 percent 
purity has been applied; 3) with the entire surface of the shrimp flesh 
thoroughly and evenly coated with the flour; 4) with the non-shrimp 
content of the end product constituting between four and 10 percent of 
the product's total weight after being dusted, but prior to being 
frozen; and 5) that is subjected to IQF freezing immediately after 
application of the dusting layer. Battered shrimp is a shrimp-based 
product that, when dusted in accordance with the definition of dusting 
above, is coated with a wet viscous layer containing egg and/or milk, 
and par-fried.
    The products covered by this order are currently classified under 
the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 
1605.20.10.10, and 1605.20.10.30. These HTSUS subheadings are provided 
for convenience and for customs purposes only and are not dispositive, 
but rather the written description of the scope of this order is 
dispositive.

Partial Rescission of Review

    On September 13, 2007, Qualimar Comercio Imp. E Exp. Ltda. 
(``Qualimar'') submitted a Q&V response stating that it had no 
shipments/exports of subject merchandise to the United States during 
the POR. See Memorandum to The File from Rebecca Trainor, Senior 
Analyst, Office 2, entitled ``2006-2007 Administrative Review of 
Certain Frozen Warmwater Shrimp from Brazil: Qualimar Comercio 
Importacao e Exportacao Ltda.,'' dated August 17, 2007. Data from CBP 
show that Qualimar did not have shipments of subject merchandise during 
the POR. Therefore, we are preliminarily rescinding this review with 
respect to Qualimar.

Successor-in-Interest

    As noted above, on April 18, 2007, Empaf informed the Department 
that it is now doing business as Netuno. On April 24, 2007, we 
requested that Netuno address the following four factors with respect 
to this change in corporate structure in order to determine whether 
Netuno is the

[[Page 12083]]

successor-in-interest to Empaf: management, production facilities for 
the subject merchandise, supplier relationships, and customer base.
    On May 9, 2007, Netuno responded to the Department's request. In 
this submission, Netuno confirmed that it is the successor-in-interest 
to Empaf. Specifically, Netuno stated that there were no changes to 
Empaf's management, production facilities for the subject merchandise, 
supplier relationships, or customer base as a result of the change in 
corporate structure. Based on our analysis of Netuno's May 9, 2007, 
submission, we find that its organizational structure, management, 
production facilities, supplier relationships, and customers have 
remained essentially unchanged. Further, we find that Netuno operates 
as the same business entity as Empaf with respect to the production and 
sale of certain frozen warmwater shrimp. Thus, we preliminarily find 
that Netuno is the successor-in-interest to Empaf, and, as a 
consequence, its exports of certain frozen warmwater shrimp are subject 
to this proceeding.

Facts Available

    Section 776(a) of the Act provides that the Department will apply 
``facts otherwise available'' if, inter alia, necessary information is 
not available on the record or an interested party: 1) withholds 
information that has been requested by the Department; 2) fails to 
provide such information within the deadlines established, or in the 
form or manner requested by the Department, subject to subsections 
(c)(1) and (e) of section 782 of the Act; 3) significantly impedes a 
proceeding; or 4) provides such information, but the information cannot 
be verified.
    As discussed in the ``Background'' section, above, in April 2007, 
the Department requested that all companies subject to review respond 
to the Department's Q&V questionnaire for purposes of mandatory 
respondent selection. The original deadline to file a response was 
April 23, 2007. The following seven firms did not respond to the 
Department's request for information: 1) Acarau Pesca Distr. de Pescado 
Imp. E Exp. Ltda.; 2) Aquacultura Fortaleza Aquafort SA; 3) ITA Fish - 
S.W.F. Importacao e Exportacao Ltda.; 4) Orion Pesca Ltda.; 5) Santa 
Lavinia Comercio e Exportacao Ltda.; 6) Secom Aquicultura Comercio E 
Industria SA; and 7) Tecmares Maricultura Ltda. In May and June 2007, 
we issued letters to these companies affording them a second and third 
opportunity to respond to the Q&V questionnaire; however, none of the 
companies responded or submitted a Q&V questionnaire response. By 
failing to respond to the Department's Q&V questionnaire, these 
companies withheld requested information and significantly impeded the 
proceeding. Thus, pursuant to sections 776(a)(2)(A) and (C) of the Act, 
the Department preliminarily finds that the use of total facts 
available is appropriate for these firms.
    Compescal, one of the two mandatory respondents in this 
administrative review, also did not submit a response to the 
antidumping questionnaire. On August 29, 2007, we sent a letter to the 
company advising it that we had not received its questionnaire 
response. If it had indeed sent a response, we asked Compescal to 
provide the courier tracking number so we could locate the submission. 
We also reiterated the statement included in the cover letter to the 
questionnaire issued to Compescal that failure to respond to the 
Department's questionnaire may result in the use of AFA as required by 
section 776 of the Act for the determinations in this administrative 
review. We received no response to our letter. Therefore, pursuant to 
sections 776(a)(2)(A) and (C) of the Act, the Department preliminarily 
finds that the use of total facts available is appropriate for 
Compescal.

Application of Adverse Facts Available and Corroboration

    In selecting from among the facts otherwise available, section 
776(b) of the Act authorizes the Department to use an adverse inference 
if the Department finds that an interested party failed to cooperate by 
not acting to the best of its ability to comply with the request for 
information. See, e.g., Notice of Final Results of Antidumping Duty 
Administrative Review: Stainless Steel Bar from India, 70 FR 54023, 
54025-26 (Sept. 13, 2005); see also Notice of Final Determination of 
Sales at Less Than Fair Value and Final Negative Critical 
Circumstances: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67 
FR 55792, 55794-96 (Aug. 30, 2002). Adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See Statement 
of Administrative Action accompanying the Uruguay Round Agreements Act, 
H.R. Rep. No. 103-316, Vol. 1, at 870 (1994) (``SAA''). Furthermore, 
``affirmative evidence of bad faith on the part of a respondent is not 
required before the Department may make an adverse inference.'' See 
Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 
27340 (May 19, 1997), see also Nippon Steel Corp. v. United States, 337 
F.3d 1373, 1382 (Fed. Cir. 2003) (``Nippon''). We find that Acarau 
Pesca Distr. de Pescado Imp. E Exp. Ltda., Aquacultura Fortaleza 
Aquafort SA, Compescal, ITA Fish - S.W.F. Importacao e Exportacao 
Ltda., Orion Pesca Ltda., Santa Lavinia Comercio e Exportacao Ltda., 
Secom Aquicultura Comercio E Industria SA, and Tecmares Maricultura 
Ltda. did not act to the best of their abilities in this proceeding, 
within the meaning of section 776(b) of the Act, because they failed to 
respond to the Department's requests for information. Therefore, an 
adverse inference is warranted in selecting from among the facts 
otherwise available. See Nippon, 337 F. 3d at 1382-83.
    For purposes of the preliminary results, we have applied to the 
above-listed companies an AFA margin of 68.15 percent, which is the 
highest rate determined for any respondent in any segment of the 
proceeding (i.e., the less-than-fair-value (``LTFV'') investigation, 
the first administrative review, or the instant review). The Court of 
International Trade (``CIT'') and the Court of Appeals for the Federal 
Circuit have consistently upheld this approach. See NSK Ltd. v. United 
States, 346 F. Supp. 2d 1312, 1335 (CIT 2004) (upholding a 73.55 
percent total AFA rate, the highest available dumping margin from a 
different respondent in an LTFV investigation).
    Section 776(b) of the Act provides that the Department may use as 
AFA information derived from: 1) the petition; 2) the final 
determination in the investigation; 3) any previous review; or 4) any 
other information placed on the record. The Department's practice, when 
selecting an AFA rate from among the possible sources of information, 
has been to ensure that the margin is sufficiently adverse ``as to 
effectuate the statutory purposes of the AFA rule to induce respondents 
to provide the Department with complete and accurate information in a 
timely manner.'' See, e.g., Certain Steel Concrete Reinforcing Bars 
from Turkey; Final Results and Rescission of Antidumping Duty 
Administrative Review in Part, 71 FR 65082, 65084 (November 7, 2006).
    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, secondary information used as facts 
available from independent sources reasonably at its disposal. The 
Department's regulations provide that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See 19 CFR

[[Page 12084]]

351.308(d); see also SAA at 870. Information from prior segments of the 
proceeding constitutes secondary information and, to the extent 
practicable, the Department will examine the reliability and relevance 
of the information to be used.
    In selecting an appropriate AFA rate, the Department considered: 1) 
the rates alleged in the petition (see Notice of Initiation of 
Antidumping Duty Investigations: Certain Frozen and Canned Warmwater 
Shrimp From Brazil, Ecuador, India, Thailand, the People's Republic of 
China and the Socialist Republic of Vietnam, 69 FR 3876, 3879 (January 
27, 2004)); 2) the rates calculated in the final determination of the 
LTFV investigation, which ranged from 9.69 to 67.80\4\ percent (see 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Frozen and Canned Warmwater Shrimp from Brazil, 69 FR 76910 (December 
23, 2004; and Shrimp Order); 3) the rates calculated in the 2004-2006 
administrative review, which ranged from 4.62 to 15.41 percent (see 
Certain Frozen Warmwater Shrimp from Brazil: Final Results and Partial 
Rescission of Antidumping Duty Administrative Review, 72 FR 52061 
(September 12, 2007); and 4) the rate calculated for the sole 
participating respondent in the current administrative review (68.15 
percent).
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    \4\ This margin was based on the rate we calculated for 
respondent Norte Pesca S.A. in the preliminary determination of the 
LTFV investigation, based on information it submitted in its 
questionnaire responses. Although this company withdrew from the 
investigation after the preliminary determination, this rate was 
used as the AFA rate in the final determination.
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    For purposes of the preliminary results, we did not use either of 
the two highest of the three petition rates (i.e., 320 percent and 349 
percent) because we were unable to corroborate them with independent 
information reasonably at our disposal, i.e., the transaction-specific 
margins in the current administrative review. We did not use the 
remaining petition rate (i.e., 32 percent) because it was lower than 
the current AFA rate, and as such would not accomplish the objectives 
of AFA, stated above.
    In addition, we find that the rates calculated for the respondents 
in the LTFV investigation and the 2004-2006 review are not sufficiently 
high as to effectuate the purpose of the facts available rule (i.e., we 
do not find that these rates are high enough to encourage participation 
in future segments of this proceeding in accordance with section 776(b) 
of the Act). Therefore, we have assigned a rate of 68.15 percent as 
AFA, which is the highest margin determined for any respondent in any 
segment of the proceeding (i.e., the current administrative review). We 
consider the 68.15 percent rate to be sufficiently high so as to 
encourage participation in future segments of this proceeding. No 
corroboration of this rate under section 776(c) of the Act is necessary 
because we are relying on information obtained in the course of the 
current segment of the proceeding, rather than on secondary 
information.
    The Department will also consider information reasonably at its 
disposal as to whether there are circumstances that would render a 
margin inappropriate. Where circumstances indicate that the selected 
margin is not appropriate as AFA, the Department may disregard the 
margin and determine an appropriate margin. See, e.g., Fresh Cut 
Flowers from Mexico; Final Results of Antidumping Duty Administrative 
Review, 61 FR 6812, 6814 (February 22, 1996) (where the Department 
disregarded the highest calculated margin as AFA because the margin was 
based on a company's uncharacteristic business expense resulting in an 
unusually high margin). For the instant review, we examined whether any 
information on the record would discredit the selected rate as 
reasonable facts available and found none. Because we did not find 
evidence indicating that the margin selected as AFA in this review is 
not appropriate, we have determined that the highest margin calculated 
for any respondent in any segment of the proceeding (i.e., 68.15 
percent) is appropriate to use as AFA, and are assigning this rate to 
Acarau Pesca Distr. de Pescado Imp. E Exp. Ltda., Aquacultura Fortaleza 
Aquafort SA, Compescal, ITA Fish - S.W.F. Importacao e Exportacao 
Ltda., Orion Pesca Ltda., Santa Lavinia Comercio e Exportacao Ltda., 
Secom Aquicultura Comercio E Industria SA, and Tecmares Maricultura 
Ltda. in the preliminary results of this review.

Duty Absorption

    On April 5, 2007, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides for the Department, if requested, 
to 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. Although this review was initiated two years after the 
publication of the order, AMASA, the only cooperative mandatory 
respondent in this review, did not sell subject merchandise in the 
United States through an affiliated importer. Therefore, it is not 
appropriate to make a duty absorption determination in this segment of 
the proceeding within the meaning of section 751(a)(4) of the Act. See 
Agro Dutch Industries Ltd. v. United States, No. 2007-1011 (Fed. Cir. 
November 20, 2007).

Comparisons to Normal Value

    To determine whether sales of certain frozen warmwater shrimp by 
AMASA to the United States were made at less than NV, we compared 
export price (``EP'') to the NV, as described in the ``Export Price'' 
and ``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual U.S. transactions to the weighted-average NV of the foreign 
like product where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by AMASA covered by the description in the ``Scope of 
the Order'' section, above, to be foreign like products for purposes of 
determining appropriate product comparisons to U.S. sales. Pursuant to 
19 CFR 351.414(e)(2), we compared U.S. sales to sales made in the home 
market within the contemporaneous window period, which extends from 
three months prior to the month of the U.S. sale until two months after 
the sale. Where there were no sales of identical merchandise in the 
comparison market 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. In making the 
product comparisons, we matched foreign like products based on the 
physical characteristics reported by AMASA in the following order: 
cooked form, head status, count size, organic certification, shell 
status, vein status, tail status, other shrimp preparation, frozen 
form, flavoring, container weight, presentation, species, and 
preservative. In addition, we compared whole shrimp to whole shrimp and 
broken shrimp to broken shrimp, where possible.
    AMASA reported cost differences associated with two quality-related 
physical characteristics: 1) whole vs. broken shrimp; and 2) premium 
grade shrimp vs. shrimp that is part of an all

[[Page 12085]]

other' category of grades. We allowed the differentiation of costs by 
broken/non-broken shrimp because AMASA's records differentiate costs on 
this basis\5\ and such treatment is consistent with our normal practice 
in this proceeding to match whole shrimp with whole shrimp and broken 
shrimp with broken shrimp, where possible. See, Certain Frozen 
Warmwater Shrimp from Brazil: Preliminary Results and Partial 
Rescission of Antidumping Duty Administrative Review, 72 FR 10680 
(March 9, 2007) and Certain Frozen Warmwater Shrimp from Brazil: Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 72 FR 52061 (September 12, 2007) (unchanged in final). However, 
because we have never distinguished shrimp by grade in the context of 
this proceeding and AMASA has not provided sufficient evidence 
warranting a change to the Department's product comparison criteria in 
this review, we have disallowed product comparisons by grade as well as 
the differentiation of costs by grade.
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    \5\ During the POR, AMASA purchased all of the raw shrimp it 
used in the production of subject merchandise, and its purchase 
prices differed depending on whether the shrimp was whole or broken.
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Export Price

    For all U.S. sales made by AMASA, we applied the EP methodology, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold by the producer/exporter outside of the United 
States directly to the first unaffiliated purchaser in the United 
States prior to importation and constructed export price (``CEP'') 
methodology was not otherwise warranted based on the facts of record.
    We based EP on packed prices to the first unaffiliated purchaser in 
the United States. Where appropriate, we made adjustments to the 
starting price for billing adjustments. We made deductions from the 
starting price for foreign inland freight and foreign brokerage 
expenses, where appropriate, in accordance with section 772(c)(2)(A) of 
the Act.

Normal Value

A. Home Market Viability and Selection of Comparison Markets

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the 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.
    Because AMASA's aggregate volume of home market sales of the 
foreign like product was greater than five percent of its aggregate 
volume of U.S. sales for the subject merchandise, we determined that 
its home market was viable. Therefore, we used home market sales as the 
basis for NV in accordance with section 773(a)(1)(B) of the Act.

B. Affiliated-Party Transactions and Arm's-Length Test

    During the POR, AMASA sold the foreign like product to affiliated 
customers (employees). To test whether these sales were made at arm's-
length prices, we compared, on a product-specific basis, the starting 
prices of sales to affiliated and unaffiliated customers, net of all 
taxes, discounts and rebates, movement charges, direct selling 
expenses, and packing expenses, where applicable. Pursuant to 19 CFR 
351.403(c) and in accordance with the Department's practice, where the 
price to the affiliated party was, on average, within a range of 98 to 
102 percent of the price of the same or comparable merchandise sold to 
unaffiliated parties, we determined that sales made to the affiliated 
party were at arm's length. See Antidumping Proceedings: Affiliated 
Party Sales in the Ordinary Course of Trade, 67 FR 69186, 69187 (Nov. 
15, 2002) (establishing that the overall ratio calculated for an 
affiliate must be between 98 percent and 102 percent in order for sales 
to be considered in the ordinary course of trade and used in the NV 
calculation). Sales to affiliated customers in the comparison market 
that were not made at arm's-length prices were excluded from our 
analysis because we considered these sales to be outside the ordinary 
course of trade. See 19 CFR 351.102(b).

C. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP or CEP. Sales are made at 
different LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
See also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997) (``Plate from South Africa''). In 
order to determine whether the comparison sales were at different 
stages in the marketing process than the U.S. sales, we reviewed the 
distribution system in each market (i.e., the chain of distribution), 
including selling functions, class of customer (customer category), and 
the level of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices), we consider the starting prices before 
any adjustments. For CEP sales, we consider only the selling activities 
reflected in the price after the deduction of expenses and profit under 
section 772(d) of the Act. See Micron Technology, Inc. v. United 
States, 243 F. 3d 1301, 1314 (Fed. Cir. 2001).
    When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or CEP sales at a different LOT 
in the comparison market, where available data make it practicable, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa, 62 FR at 61732-33.
    In this administrative review, we obtained information from AMASA 
regarding the marketing stages involved in making the reported foreign 
market and U.S. sales, including a description of the selling 
activities it performed for each channel of distribution. AMASA 
reported that it made EP sales in the U.S. market through a single 
channel of distribution (i.e., direct sales to distributors). We 
examined the selling activities performed for this channel, and found 
that AMASA performed the following selling functions: sales forecasting 
and strategic/economic planning, sales promotion, packing, order input/
processing, direct sales personnel, sales/marketing support, freight 
services and provision of guarantees. These selling activities can be 
generally grouped into two core selling function categories for 
analysis: 1) sales and marketing; and 2) freight and delivery services. 
Because all sales in the United States are made through a single 
distribution channel, we

[[Page 12086]]

preliminarily determine that there is one LOT in the U.S. market.
    With respect to the home market, AMASA made sales to distributors 
(or customers of distributors). We examined the selling activities 
performed for this channel, and found that AMASA performed the 
following selling functions: sales forecasting and strategic/economic 
planning, sales promotion, packing, order input/processing, direct 
sales personnel, sales/marketing support, payment of commissions, and 
provision of guarantees. These selling activities can be generally 
grouped into one core selling function category for analysis: sales and 
marketing. Accordingly, based on the core selling functions, we find 
that AMASA performed sales and marketing for all home market sales. We 
do not find the fact that commissions are not provided for certain home 
market sales sufficient to establish a separate LOT. Accordingly, we 
preliminarily determine that there is one LOT in the home market.
    Finally, we compared the EP LOT to the home market LOT and found 
that the core selling functions performed for U.S. and home market 
customers are virtually identical, with the exception of freight/
delivery services and the payment of commissions. We do not find these 
differences sufficient to determine that the U.S. and home market sales 
are made at different LOTs. Therefore, we determined that sales to the 
U.S. and home markets during the POR were made at the same LOT, and as 
a result, no LOT adjustment is warranted.

D. Cost of Production Analysis

    Based on our analysis of the petitioner's allegation, we found that 
there were reasonable grounds to believe or suspect that AMASA's sales 
of frozen warmwater shrimp in the home market were made at prices below 
its cost of production (``COP''). Accordingly, pursuant to section 
773(b) of the Act, we initiated a sales-below-cost investigation to 
determine whether AMASA's sales were made at prices below its COP. See 
Memorandum to James Maeder, Director, Office 2, AD/CVD Operations, from 
The Team entitled ``Petitioner's Allegation of Sales Below the Cost of 
Production for Amazonas Industrias Alimenticias S.A.,'' dated October 
26, 2007.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated 
AMASA's COP based on the sum of its costs of materials and conversion 
for the foreign like product, plus amounts for general and 
administrative (``G&A'') expenses and interest expenses. See ``Test of 
Comparison Market Sales Prices'' section below for treatment of home 
market selling expenses.
    The Department relied on the COP data submitted by AMASA in its 
February 12, 2008, supplemental response to section D of the 
questionnaire for the COP calculation, except for the following 
instances where the information was not appropriately quantified or 
valued.
1. We disallowed the differentiation of costs for different grades of 
shrimp.
2. We increased AMASA's total reported cost of manufacturing (``COM'') 
by the unreconciled difference between AMASA's total COM for the POR 
based on its normal books and records and the total POR COM submitted 
to the Department.
3. We increased AMASA's reported G&A expenses to include other non-
operating costs.
4. We disallowed AMASA's claimed interest income offset to its reported 
financial expenses because AMASA failed to provide supporting evidence 
that the interest income was earned on short-term interest-bearing 
assets.
Our revisions to AMASA's COP data are discussed in the Memorandum from 
LaVonne Clark, Senior Accountant, to Neal Halper, Director, Office of 
Accounting, entitled ``Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results - Amazonas 
Industrias Alimenticias, S.A,'' dated February 28, 2008.

2. Test of Comparison Market Sales Prices

    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market 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. For purposes of this comparison, we 
used COP exclusive of selling and packing expenses. The prices were 
exclusive of any applicable taxes, movement charges, discounts, direct 
and indirect selling expenses, and packing expenses.

3. Results of the COP Test

    In determining whether to disregard home market or third country 
sales made at prices below the COP, we examined, in accordance with 
sections 773(b)(1)(A) and (B) of the Act: 1) whether, within an 
extended period of time, such sales were made in substantial 
quantities; and 2) whether such sales were made at prices which 
permitted the recovery of all costs within a reasonable period of time 
in the normal course of trade. Where less than 20 percent of the 
respondent's home market sales of a given product 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 within an extended period of time and in ``substantial 
quantities.'' Where 20 percent or more of a respondent's sales of a 
given product are at prices less than the COP, we disregard the below-
cost sales because: 1) they were made within an extended period of time 
in ``substantial quantities,'' in accordance with sections 773(b)(2)(B) 
and (C) of the Act, and 2) based on our comparison of prices to the 
weighted-average COPs for the POR, they were at prices which would not 
permit the recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act.
    We found that, for certain products, more than 20 percent of 
AMASA's home market sales were at prices less than the COP and, in 
addition, such 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 as the basis for determining NV, in accordance with 
section 773(b)(1) of the Act.

D. Calculation of Normal Value Based on Comparison Market Prices

    We based NV on FOB prices to unaffiliated customers in the home 
market. We made deductions, where appropriate, from the starting price 
for taxes, under section 773(a)(6)(B)(iii) of the Act.
    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. 
In addition, we made adjustments under section 773(a)(6)(C)(iii) of the 
Act and 19 CFR 351.410 for differences in circumstance-of-sale 
(``COS'') for imputed credit expenses and commissions. As commissions 
were granted in the home market but not in the U.S. market, we deducted 
commissions paid in the home market from the starting price, and made 
an upward adjustment to NV for the lesser of 1) the amount of 
commissions paid in the home market, or 2) the amount of indirect 
selling expenses incurred in the U.S. market. With regard to credit 
expenses, AMASA reported that it had not received payment for certain 
U.S. sales. Consequently, for these sales, we used

[[Page 12087]]

a payment date of February 28, 2008 (i.e., the date of the preliminary 
results), and recalculated imputed credit expenses accordingly.
    We also deducted home market packing costs and added U.S. packing 
costs, in accordance with section 773(a)(6)(A) and (B) of the Act.

E. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on constructed value 
(``CV''). Accordingly, for those frozen warmwater shrimp products for 
which we could not determine the NV based on comparison-market sales, 
either because there were no useable sales of a comparable product or 
all sales of the comparable products failed the COP test, we based NV 
on the CV.
    Section 773(e) of the Act provides that the CV shall be based on 
the sum of the cost of materials and fabrication for the imported 
merchandise, plus amounts for SG&A expenses, profit, and U.S. packing 
costs. We calculated the cost of materials and fabrication, SG&A, and 
interest based on the methodology described in the ``Cost of Production 
Analysis'' section, above.
    We based SG&A and profit on the actual amounts incurred and 
realized by AMASA in connection with the production and sale of the 
foreign like product in the ordinary course of trade for consumption in 
the comparison market, in accordance with section 773(e)(2)A) of the 
Act.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP, 
we made COS adjustments by deducting direct selling expenses incurred 
on home market sales from, and adding U.S. direct selling expenses to, 
CV.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A of the Act and 19 CFR 351.415 based on the exchange rates 
in effect on the dates of the U.S. sales as certified by the Federal 
Reserve Bank.

Preliminary Results of the Review

    We preliminarily determine that weighted-average dumping margins 
exist for the respondents for the period February 1, 2006, through 
January 31, 2007, as follows:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/Exporter                       Margin
------------------------------------------------------------------------
Amazonas Industrias Alimenticias S.A. (``AMASA'')...........       68.15
Comercio de Pescado Aracatiense Ltda. (``Compescal'').......       68.15
------------------------------------------------------------------------

Review-Specific Average Rate Applicable to the Following Companies:\6\
---------------------------------------------------------------------------

    \6\ This rate is normally based on the weighted average of the 
margins calculated for those companies selected for individual 
review, excluding de minimis margins or margins based entirely on 
AFA. However, in this review, the only calculated margin is the rate 
applicable to AMASA, which is also the rate used for AFA purposes in 
this review.

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/Exporter                       Margin
------------------------------------------------------------------------
Pesqueira Maguary Ltda......................................       68.15
Ipesca - Industria de Frio e Pesca S.A......................       68.15
Central de Industrializacao e Distribuicao de Alimentos            68.15
 Ltda. (``CIDA'') and Cia Exportadora de Produtos do Mar
 (``Produmar'').............................................
Intermarine Servicos Nauticos Ltda..........................       68.15
Aquatica Maricultura do Brasil Ltda./Aquafeed do Brasil            68.15
 Ltda.......................................................
JK Pesca Ltda...............................................       68.15
------------------------------------------------------------------------

AFA Rate Applicable to the Following Companies:

------------------------------------------------------------------------
                                                                Percent
                    Manufacturer/Exporter                       Margin
------------------------------------------------------------------------
Acarau Pesca Distr. de Pescado Imp. e Exp. Ltda.............       68.15
Aquacultura Fortaleza Aquafort SA...........................       68.15
ITA Fish - S.W.F. Importacao e Exportacao Ltda..............       68.15
Orion Pesca Ltda............................................       68.15
Santa Lavinia Comercio e Exportacao Ltda....................       68.15
Secom Aquicultura Comercio E Industria SA...................       68.15
Tecmares Maricultura Ltda...................................       68.15
------------------------------------------------------------------------

Disclosure and Public Hearing

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. See 19 CFR 351.224(b). Interested 
parties may submit cases briefs not later than 30 days after the date 
of issuance of the last verification report in this case. Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed not 
later than 35 days after the date of issuance of the last verification 
report in this case. Parties who submit case briefs or rebuttal briefs 
in this proceeding are requested to submit with each argument 1) a 
statement of the issue; 2) a brief summary of the argument; and 3) a 
table of authorities.
    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, Room 1117, within 30 days of the 
date of 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 issues to be discussed. See 19 CFR 
351.310(c). Issues raised in the hearing will be limited to those 
raised in the respective case briefs. The Department will issue the 
final results of this administrative review, including the results of 
its analysis of issues raised in any written briefs, not later than 120 
days after the date of publication of this notice, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department will issue 
appropriate appraisement instructions for the companies subject to this 
review directly to CBP 15 days after the date of publication of the 
final results of this review.
    Because AMASA reported the estimated entered value of its U.S. 
sales, we have calculated importer-specific per-unit duty assessment 
rates by aggregating the total amount of antidumping duties calculated 
for the examined sales and dividing this amount by the total quantity 
of those sales. To determine whether the duty assessment rates are de 
minimis, in accordance with the requirement set forth in 19 CFR 
351.106c)2), we will calculate importer-specific ad valorem ratios 
based on the estimated entered value. For the responsive companies 
which were not selected for individual review, we will calculate an 
assessment rate based on the weighted average of the cash deposit rates 
calculated for the companies selected for individual review excluding 
any which are de minimis or determined entirely on AFA (i.e., based on 
the cash deposit rate calculated for AMASA).
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR 
351.106(c)(2), we will instruct CBP to liquidate without regard to 
antidumping

[[Page 12088]]

duties any entries for which the assessment rate is de minimis (i.e., 
less than 0.50 percent). See 19 CFR 351.106(c)(1). The final results of 
this review shall be the basis for the assessment of antidumping duties 
on entries of merchandise covered by the final results of this review 
and for future deposits of estimated duties, where applicable.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment 
Policy Notice). This clarification will apply to entries of subject 
merchandise during the POR produced by companies included in these 
final results of review for which the reviewed companies did not know 
that the merchandise they sold to the intermediary (e.g., a reseller, 
trading company, or exporter) was destined for the United States. In 
such instances, we will instruct CBP to liquidate unreviewed entries at 
the all-others rate if there is no rate for the intermediary involved 
in the transaction. See Assessment Policy Notice for a full discussion 
of this clarification.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or 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)(2)(C) of the Act: 1) the cash deposit rate for each specific 
company listed above will be that established in the final results of 
this review, except if the rate is less than 0.50 percent, and 
therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in 
which case the cash deposit rate will be zero; 2) for previously 
reviewed or investigated companies not participating in this review, 
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, or the original LTFV investigation, but the 
manufacturer is, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and 4) 
the cash deposit rate for all other manufacturers or exporters will 
continue to be 7.05 percent, the all-others rate made effective by the 
LTFV investigation. See Shrimp Order. These requirements, when imposed, 
shall remain in effect until further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These preliminary results of administrative review and notice are 
published in accordance with sections 751(a)(1) and 777(i)(1) of the 
Act and 19 CFR 351.221.

    Dated: February 28, 2008.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E8-4392 Filed 3-5-08; 8:45 am]
BILLING CODE 3510-DS-S