[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Notices]
[Pages 12088-12102]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4418]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-549-822]
Certain Frozen Warmwater Shrimp From Thailand: 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 Thailand with respect to 42 \1\ companies. The
four respondents which the Department selected for individual review
are Andaman Seafood Co., Ltd., Chanthaburi Frozen Food Co., Ltd. (CFF),
Chanthaburi Seafoods Co., Ltd., Euro-Asian International Seafoods Co.,
Ltd., Intersia Foods Co., Ltd. (Intersia Foods) (formerly Y2K Frozen
Foods Co., Ltd. (Y2K Frozen Foods)), Phattana Seafood Co., Ltd.,
Phattana Frozen Food Co., Ltd., S.C.C. Frozen Seafood Co., Ltd.,
Seawealth Frozen Food Co., Ltd., Thailand Fishery Cold Storage Public
Co., Ltd., Thai International Seafoods Co., Ltd., and Wales & Co.
Universe Limited (collectively ``the Rubicon Group''); Pakfood Public
Company Limited and its affiliated subsidiaries, Asia Pacific
(Thailand) Company Limited, Chaophraya Cold Storage Company Limited,
Okeanos Company Limited, and Takzin Samut Company Limited (collectively
``Pakfood''); Thai I-Mei Frozen Foods Co., Ltd. (Thai I-Mei); and Thai
Union Frozen Products Public Co., Ltd. (Thai Union Frozen), Thai Union
Seafood Co., Ltd. (Thai Union Seafood) (collectively ``Thai Union'').
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 review
covers the period 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.
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We preliminarily determine that sales were made by Pakfood, the
Rubicon Group, Thai I-Mei, and Thai Union below normal value (NV). In
addition, based on the preliminary results for the respondents selected
for individual review, 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. For those companies which were not responsive to the
Department's requests for information, we have preliminarily assigned
to them 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: Irina Itkin, AD/CVD Operations, Office
2, Import Administration--Room 1870, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0656.
SUPPLEMENTARY INFORMATION:
Background
In February 2005, the Department published in the Federal Register
an antidumping duty order on certain frozen warmwater shrimp from
Thailand. See Notice of Amended Final Determination of Sales at Less
Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater
Shrimp from Thailand, 70 FR 5145 (Feb. 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
[[Page 12089]]
Thailand for the period February 1, 2006, through January 31, 2007. See
Antidumping and Countervailing Duty Order, Finding, or Suspended
Investigation; Opportunity to Request Administrative Review, 72 FR 5007
(Feb. 2, 2007). In response to timely requests from interested parties,
pursuant to 19 CFR 351.213(b)(1) and (2), to conduct an administrative
review of the sales of certain frozen warmwater shrimp made by numerous
companies during the period of review (POR), the Department initiated
an administrative review for 142 companies and requested that each
provide data on the quantity and value (Q&V) of its exports of subject
merchandise to the United States during the POR. 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, 17107-09 (Apr. 6, 2007).
On April 5, 2007, the petitioner \2\ requested that the Department
determine whether antidumping duties had been absorbed during the POR.
See the ``Duty Absorption'' section, below, for further discussion.
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\2\ The petitioner is the Ad Hoc Shrimp Trade Action Committee.
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During the period April through July 2007, we received responses to
the Department's Q&V questionnaire from 99 companies. We were unable to
locate three companies and we did not receive responses to this
questionnaire from 12 companies. For further discussion, see the
``Application of Facts Available'' section of this notice, below.
In its April 23, 2007, Q&V questionnaire response, the Rubicon
Group stated that one of its affiliates, Y2K Frozen Foods, changed its
corporate structure prior to the initiation of this review and is now
doing business under the name Intersia Foods. As a result, on May 7,
2007, we solicited information on this change from the Rubicon Group.
The Rubicon Group supplied this information on May 21, 2007. After
analyzing this information, we preliminarily find that Intersia Foods
is the successor-in-interest to Y2K Frozen Foods. For further
discussion, see the ``Successor-in-Interest'' section of this notice,
below.
On July 5, 2007, in accordance with 19 CFR 351.213(d)(1), the
Louisiana Shrimp Association (LSA) withdrew its request for review for
six companies (i.e., Anglo-Siam Seafoods Co., Ltd., Gallant Ocean
(Thailand) Co., Ltd., Li-Thai Frozen Foods Co., Ltd., Queen Marine Food
Co., Ltd., Smile Heart Foods Co., Ltd., and Thai World Imports and
Exports), with respect to which the petitioner also withdrew its
request on March 16, 2007.
On July 16, 2007, we requested information from I.T. Foods
Industries Co., Ltd. (I.T. Foods) regarding its April 24, 2007, Q&V
questionnaire response stating that it had no shipments or entries of
subject merchandise into the United States during the POR because,
based on information obtained from CBP, it appeared that I.T. Foods
did, in fact, have such shipments or entries. For further discussion,
see the ``Application of Weighted-Average Margin to I.T. Foods''
section of this notice, below.
Based upon our consideration of the responses to the Q&V
questionnaire received 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 was requested. As a
result, on July 19, 2007, we selected the four largest producers/
exporters of certain frozen warmwater shrimp from Thailand during the
POR, Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union, as the
mandatory respondents in this proceeding. See the Memorandum to Stephen
J. Claeys from James Maeder entitled, ``2006-2007 Antidumping Duty
Administrative Review on Certain Frozen Warmwater Shrimp from Thailand:
Selection of Respondents for Individual Review,'' dated July 17, 2007.
On this same date, we issued the antidumping duty questionnaire to
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union.
On August 16, 2007, I.T. Foods provided information to the
Department indicating that it did, in fact, have reportable
transactions during the POR. Therefore, we did not rescind the
administrative review with respect to this company and are
preliminarily assigning to it a weighted-average margin calculated for
the companies selected for individual review because, based on its
response: (1) The discrepancy between the Q&V questionnaire response
and the CBP data appeared to be an inadvertent oversight; (2) the
quantity of the exports in question was so small that it would not have
had an impact on our selection of respondents; and (3) the company has
been responsive to our requests for information. For further
discussion, see the ``Application of Weighted-Average Margin to I.T.
Foods'' section of this notice, below.
We received responses to sections A, B, C, and D of the
questionnaire from Pakfood, the Rubicon Group, Thai Union, and Thai I-
Mei in August, September, and October 2007.
On September 5, 2007, we published a notice rescinding the
administrative review with respect to 69 companies for the following
reasons: (1) The request for an administrative review for the company
was withdrawn in a timely manner; (2) the company had no shipments of
subject merchandise to the United States during the POR; (3) the Q&V
questionnaire sent to the company was returned to the Department
because of an ``undeliverable'' address; or (4) the company name was a
duplicate name. See Certain Frozen Warmwater Shrimp from Thailand;
Partial Rescission of Antidumping Duty Administrative Review, 72 FR
50931 (Sept. 5, 2007) (Partial Rescission Notice). See also, the
Memorandum to the File from Brianne Riker entitled, ``Intent to Rescind
in Part the Antidumping Duty Administrative Review on Frozen Warmwater
Shrimp from Thailand,'' dated August 8, 2007.
On September 28, 2007, the petitioner requested that the Department
initiate a sales-below-cost investigation for Pakfood and Thai Union.
We initiated sales-below-cost investigations for Pakfood and Thai Union
on October 5, 2007. See the October 5, 2007, Memoranda to James Maeder
from The Team entitled, ``The Petitioner's Allegation of Sales Below
the Cost of Production for Pakfood Company Limited'' (Pakfood Cost
Allegation) and ``The Petitioner's Allegation of Sales Below the Cost
of Production for Thai Union Frozen Products PCL and Thai Union Seafood
Company, Ltd.'' (Thai Union Cost Allegation).
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 (Oct. 26, 2007).
During the period October 2007 through February 2008, we issued to
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union supplemental
questionnaires regarding sections A, B, C, and D of the original
questionnaire. We received responses to these questionnaires during the
period November 2007 through February 2008.
We conducted sales and cost verifications at Thai Union and its
U.S. affiliate in January and February 2008.
On February 20, 2008, Thai Union submitted a revised sales database
which incorporated certain minor
[[Page 12090]]
corrections to its data discovered at verification.
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, shell-on or peeled,
tail-on or tail-off,\3\ 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.
Successor-in-Interest
In making a successor-in-interest determination, the Department
normally examines several factors including, but not limited to,
changes in: (1) Management; (2) production facilities; (3) supplier
relationships; and (4) customer base. See Notice of Final Results of
Changed Circumstances Antidumping Duty Administrative Review:
Polychloroprene Rubber From Japan, 67 FR 58 (Jan. 2, 2002), and Brass
Sheet and Strip from Canada; Final Results of Antidumping Duty
Administrative Review, 57 FR 20460 (May 13, 1992). While no one of
these factors is dispositive, the Department will generally consider
the new company to be the successor to the previous company if its
resulting operation is not materially dissimilar to that of its
predecessor. See Industrial Phosphoric Acid from Israel; Final Results
of Antidumping Duty Changed Circumstances Review, 59 FR 6944 (Feb. 14,
1994); and Notice of Final Determination of Sales at Less Than Fair
Value and Affirmative Final Determination of Critical Circumstances:
Certain Orange Juice from Brazil, 71 FR 2183 (Jan. 13, 2006).
As noted above, on April 23, 2007, the Rubicon Group informed the
Department that its affiliated producer Y2K Frozen Foods is now doing
business under the name Intersia Foods. As a result, on May 7, 2007, we
requested that the Rubicon Group address the four factors noted above
(i.e., management, production facilities for the subject merchandise,
supplier relationships, and customer base) with respect to this change
in corporate structure in order to determine whether Intersia Foods
Co., Ltd. is the successor-in-interest to Y2K Frozen Foods.
On May 21, 2007, the Rubicon Group responded to the Department's
request. In this submission, the Rubicon Group provided evidence to
demonstrate that Intersia Foods is the successor-in-interest to Y2K
Frozen Foods. Specifically, the Rubicon Group stated that there were no
changes to Y2K Frozen Foods' management, production facilities for the
subject merchandise, supplier relationships, or customer base as a
result of the change in corporate structure. According to the Rubicon
Group, Y2K Frozen Foods officially changed its name to Intersia Foods
on June 24, 2004, in order to more clearly identify the company as a
foods business. Based on our analysis of the Rubicon Group's May 21,
2007, submission, we find that Intersia Foods' organizational
structure, management, production facilities, supplier relationships,
and customers have remained essentially unchanged. Further, we find
that Intersia Foods operates as the same business entity as Y2K Frozen
Foods with respect to the production and sale of certain frozen
warmwater shrimp. Thus, we find that Intersia Foods is the successor-
in-interest to Y2K Frozen Foods, and, as a consequence, its exports of
certain frozen warmwater shrimp are subject to this proceeding.
Partial Rescission of Review
In February 2007, the Department received timely requests, in
accordance with 19 CFR 351.213(b)(1), from the petitioner and the LSA
to conduct a review of Lucky Union Foods Co., Ltd. (Lucky Union),
Songkla Canning PCL (Songkla), and Thai Union Manufacturing Co., Ltd.
(Thai Union Manufacturing), which are affiliated with Thai Union, a
respondent in this review. The Department initiated a review of these
three companies and requested that they supply data on the quantity and
value of their exports of shrimp during the POR. On April 23, 2007,
Thai Union submitted a response
[[Page 12091]]
to the Department's Q&V questionnaire, in which it indicated that only
two of its companies, Thai Union Frozen and Thai Union Seafood,
exported subject merchandise to the United States during the POR, while
Lucky Union, Songkla, and Thai Union Manufacturing did not produce or
export frozen shrimp the United States during the POR. We confirmed
this information at Thai Union's sales verification. See the February
13, 2008, memorandum to the file from Irina Itkin and Brianne Riker
entitled, ``Verification of the Sales Response of Thai Union Frozen
Products Public Co., Ltd./Thai Union Seafood Co., Ltd. in the
Antidumping Administrative Review of Certain Frozen Warmwater Shrimp
from Thailand'' (``Thai Union Verification Report'') at pages 3 and 10.
Therefore, because Lucky Union, Songkla, and Thai Union Manufacturing
had no shipments of subject merchandise to the United States during the
POR, in accordance with 19 CFR 351.213(d)(3), and consistent with the
Department's practice, we are preliminarily rescinding our review with
respect to them. See, e.g., Certain Frozen Warmwater Shrimp from
Thailand: Final Results and Final Partial Rescission of Antidumping
Duty Administrative Review, 72 FR 52065, 52067 (Sept. 12, 2007) (04-06
Thai Shrimp Final Results); Certain Steel Concrete Reinforcing Bars
From Turkey; Final Results, Rescission of Antidumping Duty
Administrative Review in Part, and Determination To Revoke in Part, 70
FR 67665, 67666 (Nov. 8, 2005).
Application of Weighted-Average Margin to I.T. Foods
In its April 24, 2007, response to the Q&V questionnaire, I.T.
Foods claimed that it had no shipments or entries of subject
merchandise into the United States during the POR. However, when we
attempted to confirm this claim with data obtained from CBP, we found
that there were entries of merchandise into the United States produced
and/or exported by I.T. Foods that appeared to be within the scope of
the antidumping duty order. See the Memorandum to the File from Brianne
Riker entitled, ``2006-2007 Administrative Review of Certain Frozen
Warmwater Shrimp from Thailand: Entry Documents from U.S. Customs and
Border Protection,'' dated June 12, 2007. Therefore, on July 16, 2007,
we requested information from I.T. Foods to explain this discrepancy.
On August 16, 2007, I.T. Foods provided information to the
Department indicating that it did, in fact, have reportable
transactions of subject merchandise during the POR of ``tiny shrimp.''
See the August 16, 2007, letter to the Department from I.T. Foods.
Therefore, we did not rescind the administrative review with respect to
this company and are preliminarily assigning to it the weighted-average
margin calculated for the companies selected for individual review
because, based on its response: (1) The discrepancy between the Q&V
questionnaire response and the CBP data appeared to be an inadvertent
oversight; (2) the quantity of the exports in question was so small
that it would not have had an impact our selection of respondents; and
(3) the company has been responsive to our requests for information.
Upon issuance of the final results of this administrative review, we
will instruct CBP to assess antidumping duties on I.T. Foods' entries
of subject merchandise at the weighted-average rate.
In addition, based on the information provided by I.T. Foods, we
also have preliminarily determined certain other merchandise produced/
exported by I.T. Foods (i.e., ``shrimp balls'') that entered the United
States during the POR is not subject to the scope of the order because
the shrimp content of this product is limited to shrimp flavoring. See
the August 16, 2007, letter to the Department from I.T. Foods.
Therefore, upon issuance of the final results of this administrative
review, we will instruct CBP to liquidate I.T. Foods' entries of non-
subject merchandise (i.e., ``shrimp balls'') without regard to
antidumping duty liability.
Period of Review
The POR is February 1, 2006, through January 31, 2007.
Application of Facts Available
Section 776(a) of the Tariff Act of 1930, as amended (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.
In this administrative review, 13 companies failed to respond
completely to the Department's requests for information. Therefore, we
preliminarily determine that it is appropriate to assign these
companies dumping margins, either in whole or in part, based on facts
available. These companies are discussed below.
A. Companies That Failed To Respond to the Q&V Questionnaire
As discussed in the ``Background'' section, above, in April 2007,
the Department requested that all companies subject to the 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. Of the 142 companies subject to this review, 60
companies did not respond to the Department's initial request for
information. Subsequently in May and June 2007, the Department issued
two letters to these companies affording them additional opportunities
to submit a response to the Department's Q&V questionnaire. However, 12
of these companies also failed to respond to the Department's
additional Q&V questionnaires.\4\ On July 19, 2007, the Department
placed documentation on the record confirming delivery of the
questionnaires to each company. See the Memorandum to the File from
Brianne Riker entitled, ``Placing Delivery Information on the Record of
the 2006-2007 Antidumping Duty Administrative Review on Certain Frozen
Warmwater Shrimp from Thailand,'' dated July 19, 2007. 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, because these
companies did not respond to the Department's questionnaire, the
Department preliminarily finds that the use of total facts available is
appropriate.
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\4\ These companies are: Applied DB; Chonburi LC; Haitai Seafood
Co., Ltd. (Haitai); High Way International Co., Ltd. (High Way
International); Merkur Co., Ltd. (Merkur); Ming Chao Ind Thailand
(Ming Chao); Nongmon SMJ Products (Nongmon); SCT Co., Ltd. (SCT);
Search and Serve; Shianlin Bangkok Co., Ltd. (located at 159
Surawong Road, Suriyawong, Bangrak, Bangkok 10500 Thailand)
(Shainlin Bangkok); Star Frozen Foods Co., Ltd. (Star Frozen Foods);
and Wann Fisheries Co., Ltd. (Wann Fisheries).
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According to section 776(b) of the Act, if the Department finds
that an interested party fails to cooperate by not acting to the best
of its ability to comply with requests for information, the Department
may use an inference that is adverse to the interests of that party in
selecting from the facts otherwise available. See Notice of Final
Results of Antidumping Duty Administrative Review: Stainless Steel Bar
from India, 70 FR 54023, 54025-26 (Sep. 13, 2005);
[[Page 12092]]
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), reprinted in 1994 U.S.C.C.A.N. 4040, 4198-99.
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, 1382-83 (Fed. Cir. 2003) (Nippon). We
preliminarily find that Applied DB, Chonburi LC, Haitai, High Way
International, Merkur, Ming Chao, Nongmon, SCT, Search and Serve,
Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries 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 and provide timely information.
Therefore, an adverse inference is warranted in selecting from the
facts otherwise available with respect to these companies. See Nippon,
337 F.3d at 1382-83.
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 adverse facts available rule to induce respondents to provide the
Department with complete and accurate information in a timely manner.''
See, e.g., 04-06 Thai Shrimp Final Results and Certain Steel Concrete
Reinforcing Bars from Turkey; Final Results and Rescission of
Antidumping Duty Administrative Review in Part, 71 FR 65082, 65084
(Nov. 7, 2006).
In order to ensure that the margin is sufficiently adverse so as to
induce cooperation, we have preliminarily assigned a rate of 57.64
percent, which is the highest rate alleged in the petition, as adjusted
at the initiation of the less-than-fair-value (LTFV) investigation, to
the non-responsive companies (i.e., Applied DB, Chonburi LC, Haitai,
High Way International, Merkur, Ming Chao, Nongmon, SCT, Search and
Serve, Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries). 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, 3881 (Jan. 27, 2004). The Department believes that this rate is
sufficiently high as to effectuate the purpose of the facts available
rule (i.e., we find that this rate is high enough to encourage
participation in future segments of this proceeding in accordance with
section 776(b) of the Act).
Information from prior segments of the proceeding constitutes
secondary information and section 776(c) of the Act provides that the
Department shall, to the extent practicable, corroborate that secondary
information 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 351.308(d); see also SAA at 870.
To the extent practicable, the Department will examine the reliability
and relevance of the information to be used.
To corroborate the petition margin, we compared it to the
transaction-specific rates calculated for each respondent in this
review. We find that it is reliable and relevant because the petition
rate fell within the range of individual transaction margins calculated
for the mandatory respondents. See e.g., 04-06 Thai Shrimp Final
Results, 72 FR at 52068 and Notice of Preliminary Results of
Antidumping Duty Administrative Review; Partial Rescission and
Postponement of Final Results: Certain Softwood Lumber Products from
Canada, 71 FR 33964, 33968 (June 12, 2006). Therefore, we have
determined that the 57.64 percent margin is appropriate as AFA and are
assigning it to the uncooperative companies listed above.
Further, the Department will 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 (Feb. 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). Therefore, we examined whether any information
on the record would discredit the selected rate as reasonable facts
available. We were unable to find any information that would discredit
the selected AFA rate.
Because we did not find evidence indicating that the selected
margin is not appropriate and because this margin falls within the
range of transaction-specific margins for the mandatory respondents, we
have preliminarily determined that the 57.64 percent margin, as alleged
in the petition and adjusted at the initiation of the LTFV
investigation, is corroborated. We are, therefore, assigning this rate
to the non-responsive companies (i.e., Applied DB, Chonburi LC, Haitai,
High Way International, Merkur, Ming Chao, Nongmon, SCT, Search and
Serve, Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries). For
company-specific information used to corroborate this rate, see the
Memorandum to the File from Brianne Riker entitled, ``Corroboration of
Adverse Facts Available Rate for the Preliminary Results in the 2006-
2007 Antidumping Duty Administrative Review of Certain Frozen Warmwater
Shrimp from Thailand,'' dated February 28, 2008.
B. Thai Union
During verification, we found that Thai Union had failed to report
certain U.S. sales transactions during the POR, which should have been
included in the company's U.S. sales database in accordance with the
Department's definition of the universe of reportable transactions. We
note that certain of these transactions had not been reported because
Thai Union did not follow the Department's reporting instructions.
Specifically, these transactions included: (1) Certain export price
(EP) transactions which had been shipped prior to the POR, but which
entered the United States during the POR; (2) certain direct
constructed export price (CEP) transactions which were shipped during
the POR, but invoiced after the POR; and (3) a small quantity of
overlooked U.S. transactions which had not been included in error. We
have preliminarily determined that the margin for these sales should be
based on facts available in accordance with section 776(a)(1) of the
Act because they were not reported to the Department in response to the
Department's request for information.
[[Page 12093]]
In this case, because Thai Union did not provide the Department
with the complete information regarding its universe of POR subject
sales in a timely manner, we find that it is appropriate to resort to
facts otherwise available to account for the unreported information.
See Notice of Final Results of Antidumping Duty Administrative Review,
Rescission of Administrative Review in Part, and Final Determination to
Not Revoke Order in Part: Canned Pineapple Fruit from Thailand, 68 FR
65247 (Nov. 19, 2003), and accompanying Issues and Decision memorandum
at Comment 20b. Thai Union's failure to provide this necessary
information meets the requirements set forth in Nippon. As stated by
the Court of Appeals for the Federal Circuit during its discussion of
section 776(a) of the Act in Nippon, ``{t{time} he focus of subsection
(a) is respondent's failure to provide information. The reason for the
failure is of no moment. The mere failure of a respondent to furnish
requested information--for any reason--requires Commerce to resort to
other sources of information to complete the factual record on which it
makes its determination.''
In regard to the use of an adverse inference, section 776(b) of the
Act states that the Department may use an adverse inference if ``an
interested party has failed to cooperate by not acting to the best of
its ability to comply with a request for information* * *'' Because:
(1) Thai Union had the necessary information within its control and it
did not report this information; and (2) it failed to put forth its
maximum effort as required by the Department's questionnaire, we find
that Thai Union's failure to respond in this case clearly meets these
standards.
As AFA, we have preliminarily used the highest non-aberrant margin
calculated for any U.S. transaction for Thai Union, in accordance with
our practice. See, e.g., Static Random Access Memory Semiconductors
From Taiwan; Final Results of Antidumping Duty New Shipper Review, 65
FR 12214 (Mar. 8, 2000), and accompanying Issues and Decision
Memorandum at Comment 1; Notice of Final Determination of Sales at Less
Than Fair Value: Static Random Access Memory Semiconductors From
Taiwan, 63 FR 8909, 8912 (Feb. 23, 1998); Final Determination of Sales
at Less Than Fair Value; Stainless Steel Sheet and Strip in Coils from
Germany, 64 FR 30710, 30732 (June 8, 1999); and Notice of Final
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate from South Africa, 62 FR 61731, 61747 (Nov. 19,
1997). In selecting a facts available margin, we sought a margin that
is sufficiently adverse so as to effectuate the statutory purposes of
the AFA rule, which is to induce respondents to provide the Department
with complete and accurate information in a timely manner. We also
sought a margin that is rationally related to the transactions to which
the AFA is being applied and indicative of Thai Union's customary
selling practices. To that end, we selected the highest margin on an
individual sale in a commercial quantity that fell within the
mainstream of Thai Union's transactions (i.e., transactions that
reflect sales of products that are representative of the broader range
of models used to determine normal value).
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. This review was initiated two years after the publication of
the order.
In determining whether the antidumping duties have been absorbed by
the respondents during the POR, we presume the duties will be absorbed
for those sales that have been made at less than normal value. This
presumption can be rebutted with evidence (e.g., an agreement between
the affiliated importer and unaffiliated purchaser) that the
unaffiliated purchaser will pay the full duty ultimately assessed on
the subject merchandise. See, e.g., Certain Stainless Steel Butt-Weld
Pipe Fittings from Taiwan: Preliminary Results of Antidumping Duty
Administrative Review and Notice of Intent to Rescind, 70 FR 39735,
39737 (July 11, 2005). On September 18, 2007, we issued letters to
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union requesting proof
that the companies' unaffiliated purchasers would ultimately pay the
antidumping duties to be assessed on entries during the POR. Thai Union
did not provide any such evidence. Because Thai Union did not rebut the
duty-absorption presumption with evidence that the unaffiliated
purchaser will pay the full duty ultimately assessed on the subject
merchandise, we preliminarily find that antidumping duties have been
absorbed by Thai Union on all U.S. sales made through its affiliated
importers of record. For the percentage of such sales, see the
February, 28, 2008, Memorandum to the File from Brianne Riker, entitled
``Calculations Performed for Thai Union Frozen Products Co., Ltd./Thai
Union Seafood Co., Ltd. for the Preliminary Results of the 2006-2007
Antidumping Duty Administrative Review of Certain Frozen Warmwater
Shrimp from Thailand'' at Attachment 2.
The Rubicon Group and Thai I-Mei responded to the Department's
request for information on October 2, 2007. The Rubicon Group stated in
its submission that sample documentation submitted as part of its
section A questionnaire response shows that it included the cost of
antidumping duty deposits in its prices to unaffiliated customers.
However, because the Rubicon Group was unable to show that the
unaffiliated purchaser will pay the full duty ultimately assessed on
the subject merchandise, we find that the Rubicon Group did not rebut
the duty-absorption presumption. Thai I-Mei also was unable to rebut
the duty-absorption presumption. Therefore, because neither the Rubicon
Group nor Thai I-Mei was able to rebut the duty-absorption presumption
with evidence that the unaffiliated purchaser will pay the full duty
ultimately assessed on the subject merchandise, we preliminarily find
that antidumping duties have also been absorbed by the Rubicon Group
and Thai I-Mei on all U.S. sales made through their respective
importers of record. For the percentage of such sales by the Rubicon
Group and Thai I-Mei, see the February, 28, 2008, Memoranda to the File
from Kate Johnson and Rebecca Trainor entitled ``Second Administrative
Review of Certain Frozen Warmwater Shrimp from Thailand: Preliminary
Results Margin Calculation for the Rubicon Group'' at Attachment 2 and
``2006-2007 Administrative Review of Certain Frozen Warmwater Shrimp
from Thailand: Preliminary Results Margin Calculation for Thai I-Mei
Frozen Foods Co., Ltd'' at Attachment 1.
With respect to Pakfood, it 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, 508 F.3d 1024, 1033 (Fed.
Cir. 2007).
Comparisons to Normal Value
To determine whether sales of certain frozen warmwater shrimp from
Thailand to the United States were
[[Page 12094]]
made at less than NV, we compared the EP or CEP to the NV, as described
in the ``Constructed Export Price/Export Price'' and ``Normal Value''
sections of this notice, below.
Pursuant to section 777A(d)(2) of the Act, for Pakfood, the Rubicon
Group, and Thai I-Mei, we compared the EPs or CEPs 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.
Regarding Thai I-Mei, we have determined that this company did not
have a viable home or third country market during the POR. Therefore,
as the basis for NV, we used constructed value (CV) when making
comparisons to CEP for Thai I-Mei in accordance with section 773(a)(4)
of the Act.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by Pakfood, the Rubicon Group, and Thai Union 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 of shrimp to sales of shrimp made in the comparison
market for Pakfood, the Rubicon Group, and Thai Union 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 of shrimp to sales of shrimp of the most similar foreign like
product made in the ordinary course of trade. For Pakfood, the Rubicon
Group, and Thai Union, where there were no sales of identical or
similar merchandise, and for all of Thai I-Mei's sales, we made product
comparisons using CV.
With respect to sales comparisons involving broken shrimp, we
compared Pakfood's and the Rubicon Group's sales of broken shrimp in
the United States to its sales of comparable quality shrimp in the home
market. Where there were no sales of identical broken shrimp in the
comparison market made in the ordinary course of trade to compare to
U.S. sales, we compared U.S. sales of broken shrimp to sales of the
most similar broken shrimp made in the ordinary course of trade. Where
there were no sales of identical or similar broken shrimp, we made
product comparisons using CV.
In making the product comparisons, we matched foreign like products
based on the physical characteristics reported by Pakfood, the Rubicon
Group, and Thai Union 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.
Constructed Export Price/Export Price
For all U.S. sales made by Pakfood, as well as certain U.S. sales
made by the Rubicon Group and Thai Union, we used EP methodology, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold directly to the first unaffiliated purchaser in
the United States prior to importation and CEP methodology was not
otherwise warranted based on the facts of record.
For all U.S. sales made by Thai I-Mei, as well as certain U.S.
sales made by the Rubicon Group and Thai Union, we calculated CEP in
accordance with section 772(b) of the Act because the subject
merchandise was sold for the account of these companies by their
subsidiaries in the United States to unaffiliated purchasers.
A. Pakfood
We based EP on packed prices to the first unaffiliated purchaser in
the United States. Where appropriate, we made adjustments for billing
adjustments and discounts. We made deductions for movement expenses in
accordance with section 772(c)(2)(A) of the Act; these included, where
appropriate, foreign inland freight expenses, foreign warehousing
expenses, survey fees, foreign brokerage and handling expenses, ocean
freight expenses (offset by freight adjustments, where appropriate),
marine insurance expenses, U.S. brokerage and handling expenses, and
U.S. customs duties (including harbor maintenance fees and merchandise
processing fees).
B. The Rubicon Group
In accordance with section 772(a) of the Act, we calculated EP for
those sales where the merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation by the exporter or
producer outside the United States. We based EP on the packed price to
unaffiliated purchasers in the United States. Where appropriate, we
made adjustments for discounts. We made deductions for movement
expenses in accordance with section 772(c)(2)(A) of the Act; these
included, where appropriate, foreign inland freight expenses, foreign
warehousing expenses, foreign inland insurance expenses, foreign
brokerage and handling expenses, ocean freight expenses, marine
insurance expenses, U.S. brokerage and handling expenses, U.S. customs
duties (including harbor maintenance fees and merchandise processing
fees), and U.S. inland freight expenses (i.e., freight from port to
warehouse).
In accordance with section 772(b) of the Act, we calculated CEP for
those sales where the merchandise was first sold (or agreed to be sold)
in the United States before or after the date of importation by or for
the account of the producer or exporter, or by a seller affiliated with
the producer or exporter, to a purchaser not affiliated with the
producer or exporter. We used the earlier of shipment date from
Thailand to the customer or the U.S. affiliate's invoice date as the
date of sale for CEP sales, in accordance with our practice. See e.g.,
Certain Frozen Warmwater Shrimp from Thailand: Preliminary Results and
Partial Rescission of Antidumping Duty Administrative Review, 72 FR
52065 (Sep. 12, 2007), and accompanying Issues and Decision Memorandum
at Comment 11 (04-06 Thai Shrimp Final); Notice of Final Determination
of Sales at Less Than Fair Value and Negative Final Determination of
Critical Circumstances: Certain Frozen and Canned Warmwater Shrimp From
Thailand, 69 FR 76918 (Dec. 23, 2004), and accompanying Issues and
Decision Memorandum at Comment 10 (Thai Shrimp LTFV Investigation
Final); and Notice of Final Determination of Sales at Less Than Fair
Value: Structural Steel Beams from Germany, 67 FR 35497 (May 20, 2002),
and accompanying Issues and Decision Memorandum at Comment 2 (SS Beams
from Germany).
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we made adjustments
for discounts and rebates. We made deductions for movement expenses, in
accordance with section 772(c)(2)(A) of the Act; these included, where
appropriate, foreign inland freight expenses, foreign warehousing
expenses, foreign inland insurance expenses, foreign brokerage and
handling expenses, ocean freight expenses, marine insurance expenses,
U.S. brokerage and handling expenses, U.S. customs duties (including
harbor maintenance fees and merchandise processing fees), U.S. inland
insurance expenses, U.S. inland freight expenses (i.e., freight from
port to warehouse and
[[Page 12095]]
freight from warehouse to the customer), and U.S. warehousing expenses.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (i.e., bank charges, advertising, and imputed credit
expenses), and indirect selling expenses (including inventory carrying
costs and other indirect selling expenses).
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by the Rubicon Group and its U.S. affiliate on
their sales of the subject merchandise in the United States and the
profit associated with those sales.
C. Thai I-Mei
In accordance with section 772(b) of the Act, we calculated CEP for
those sales where the merchandise was first sold (or agreed to be sold)
in the United States before or after the date of importation by or for
the account of the producer or exporter, or by a seller affiliated with
the producer or exporter, to a purchaser not affiliated with the
producer or exporter. We used the earlier of shipment date from
Thailand to the customer or the U.S. affiliate's invoice date as the
date of sale for CEP sales, in accordance with our practice. See e.g.,
04-06 Thai Shrimp Final at Comment 11; Thai Shrimp LTFV Investigation
Final at Comment 10; and SS Beams from Germany at Comment 2.
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we made adjustments
for billing adjustments. We made deductions for movement expenses, in
accordance with section 772(c)(2)(A) of the Act; these included, where
appropriate, foreign inland freight, foreign brokerage and handling
expenses, ocean freight expenses, marine insurance expenses, U.S.
brokerage and handling, U.S. customs duties (including harbor
maintenance fees and merchandise processing fees), U.S. inland freight
expenses (i.e., freight from port to warehouse and freight from
warehouse to the customer), and U.S. warehousing expenses.
In accordance with section 772(d)(1) of the Act and 19 CFR
351.402(b), we deducted those selling expenses associated with economic
activities occurring in the United States, including direct selling
expenses (i.e., imputed credit expenses), and indirect selling expenses
(including inventory carrying costs and other indirect selling
expenses).
Pursuant to section 772(d)(3) of the Act, we calculated an amount
for profit to arrive at CEP. In accordance with section
772(f)(2)(C)(iii) of the Act, we based the CEP profit rate on Thai I-
Mei's financial statements because Thai I-Mei made sales during the POR
solely to the United States. For further discussion, see the Memorandum
to the File from Rebecca Trainor, entitled, ``Calculations Performed
for Thai I-Mei Frozen Foods Co., Ltd. for the Preliminary Results in
the 2006-2007 Antidumping Duty Administrative Review on Certain Frozen
Warmwater Shrimp from Thailand,'' dated February 28, 2008.
D. Thai Union
In accordance with section 772(a) of the Act, we calculated EP for
those sales where the merchandise was sold to the first unaffiliated
purchaser in the United States prior to importation by the exporter or
producer outside the United States. We based EP on the packed price to
unaffiliated purchasers in the United States. We made deductions for
movement expenses in accordance with section 772(c)(2)(A) of the Act;
these included, where appropriate, foreign inland freight, foreign
brokerage and handling expenses, ocean freight expenses, marine
insurance expenses, U.S. brokerage and handling expenses, and U.S.
customs duties (including harbor maintenance fees and merchandise
processing fees).
In accordance with section 772(b) of the Act, we calculated CEP for
those sales where the merchandise was first sold (or agreed to be sold)
in the United States before or after the date of importation by or for
the account of the producer or exporter, or by a seller affiliated with
the producer or exporter, to a purchaser not affiliated with the
producer or exporter. We used the earlier of shipment date from
Thailand to the customer or the U.S. affiliate's invoice date as the
date of sale for CEP sales, in accordance with our practice. See e.g.,
04-06 Thai Shrimp Final at Comment 11; Thai Shrimp LTFV Investigation
Final at Comment 10; and SS Beams from Germany at Comment 2.
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we made adjustments
for billing adjustments, discounts, and rebates. We made deductions for
movement expenses, in accordance with section 772(c)(2)(A) of the Act;
these included, where appropriate, foreign inland freight expenses,
foreign brokerage and handling expenses, demurrage expenses, ocean
freight expenses, marine insurance expenses, U.S. brokerage and
handling, U.S. customs duties (including harbor maintenance fees and
merchandise processing fees), U.S. inland freight expenses (i.e.,
freight from port to warehouse, freight from warehouse to warehouse,
and freight from warehouse to the customer), and U.S. warehousing
expenses (offset by warehouse release revenue). In accordance with
section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those
selling expenses associated with economic activities occurring in the
United States, including direct selling expenses (i.e., imputed credit
expenses, bank charges, and advertising expenses), and indirect selling
expenses (including inventory carrying costs and other indirect selling
expenses).
Pursuant to section 772(d)(3) of the Act, we further reduced the
starting price by an amount for profit to arrive at CEP. In accordance
with section 772(f) of the Act, we calculated the CEP profit rate using
the expenses incurred by Thai Union and its U.S. affiliates on their
sales of the subject merchandise in the United States and the profit
associated with those sales.
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. Based on this comparison, we
determined that Pakfood and Thai Union had viable home markets during
the POR. Consequently, we based NV on home market sales for these
respondents.
However, the petitioner has argued throughout this review that
certain of Thai Union's home market sales should not be considered for
purposes of determining NV, and that excluding such sales from the
viability test renders Thai Union's home market not viable.
Specifically, the petitioner argued that the following sales should not
be included in home market sales: (1) Sales to an affiliated producer
which are consumed in the production of non-subject merchandise (i.e.,
no downstream sale exists); and (2) sales of ``hanging'' shrimp. In
response, Thai Union has argued that its reported home market sales are
legitimate because: (1) it is the Department's practice to
[[Page 12096]]
include in the viability test sales of the foreign like product sold to
an affiliated producer in the home market consumed in the production of
non-subject merchandise; and (2) ``hanging shrimp'' is second-quality
shrimp, not a by-product. At verification, we thoroughly examined
whether the shrimp at issue are properly considered foreign like
product and were sold and/or consumed as claimed by the respondent. For
further discussion, see the ``Thai Union Verification Report'' and the
February 26, 2008, memorandum to the file from Heidi K. Schriefer
entitled, ``Verification of the Cost Response of Thai Union Frozen
Product PCL and Thai Union Seafood Company Ltd. in the 2nd
Administrative Review of the Antidumping Duty Order on Certain Frozen
Warmwater Shrimp from Thailand.''
Regarding the Rubicon Group, we determined that this respondent's
aggregate volume of home market sales of the foreign like product was
insufficient to permit a proper comparison with U.S. sales of the
subject merchandise. Therefore, we used sales to the Rubicon Group's
largest third-country market (i.e., Canada) as the basis for comparison
market sales in accordance with section 773(a)(1)(C) of the Act and 19
CFR 351.404. Finally, we determined that Thai I-Mei's aggregate volumes
of home and third country market sales of the foreign like product were
insufficient to permit a proper comparison with U.S. sales of the
subject merchandise. Therefore, we used CV as the basis for calculating
NV for Thai I-Mei, in accordance with section 773(a)(4) of the Act.
B. Affiliated-Party Transactions and Arm's-Length Test
During the POR, Pakfood and Thai Union sold the foreign like
product to affiliated customers. 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 discounts and rebates, movement charges, direct selling
expenses, and packing expenses. 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 (Nov. 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),\5\ 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. sales 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 61732-61733.
---------------------------------------------------------------------------
\5\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, general
and administrative (G&A) expenses, and profit for CV, where
possible.
---------------------------------------------------------------------------
In this administrative review, we obtained information from each
respondent regarding the marketing stages involved in making the
reported foreign market and U.S. sales, including a description of the
selling activities performed by each respondent for each channel of
distribution. Company-specific LOT findings are summarized below.
1. Pakfood
Pakfood 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 Pakfood performed the following selling functions: Providing sales
promotion/advertising, attending trade shows, maintaining customer
contact, price negotiation, invoice issuance, payment receipt, delivery
services, and packing. Accordingly, based on the core selling
functions, we find that Pakfood performed sales and marketing, freight
and delivery services, and inventory maintenance and warehousing for
U.S. sales. Because all sales in the United States are made through a
single distribution channel, we preliminarily determine that there is
one LOT in the U.S. market.
With respect to the home market, Pakfood made sales to processors,
distributors, retailers, and end-users. Pakfood stated that its home
market sales were made through a single channel of distribution,
regardless of customer category. We examined the selling activities
performed for this channel, and found that Pakfood performed the
following selling functions: Sales forecasting/market research,
providing sales promotion/advertising, attending trade shows,
maintaining customer contact, price negotiation, order processing,
invoice issuance, delivery services, providing direct sales personnel,
payment receipt, and packing. Accordingly, based on the core selling
functions, we find that Pakfood performed sales and marketing, freight
and delivery services, and inventory maintenance and warehousing at the
same relative level of intensity for all customers in the
[[Page 12097]]
home market. Because all sales in the home market are made through a
single distribution channel, 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. 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 was warranted.
2. The Rubicon Group
The Rubicon Group reported that it made both EP and CEP sales in
the U.S. market to distributors/wholesalers, retailers, and food
service industry customers. For EP sales, the Rubicon Group reported
sales through one channel of distribution (i.e., direct from the Thai
exporters to unaffiliated U.S. customers). For CEP sales, the Rubicon
Group reported that its U.S. affiliate made sales through two channels
of distribution: (1) From a warehouse; and (2) direct shipments to
customers (``drop shipments'').
We examined the selling activities performed for each channel. For
direct EP sales, the Rubicon Group reported the following selling
functions: sales forecasting/market research, sales promotion/trade
shows/advertising, inventory maintenance, order input/processing,
freight and delivery arrangements, visits/calls and correspondence to
customers, development of new packaging (with customer), packing and
after-sales services. Accordingly, based on the core selling functions,
we find that the Rubicon Group performed sales and marketing, freight
and delivery, and inventory maintenance and warehousing activities. For
CEP sales of both warehoused and drop shipment sales, the Rubicon Group
reported the following selling functions: inventory maintenance, order
input/processing, freight and delivery arrangements, and packing. As
the selling functions performed for both warehoused and drop shipment
sales were identical, we find that there was one LOT for CEP sales.
Furthermore, although the Rubicon Group reported that it performed
fewer selling functions for CEP sales than for EP sales (primarily
sales and marketing functions), we do not find that the differences are
significant enough to warrant finding different LOTs in the U.S.
market. This determination is consistent with that made in the LTFV
investigation for the Rubicon Group. See Notice of Preliminary
Determination of Sales at Less Than Fair Value; Postponement of Final
Determination, and Negative Critical Circumstances Determination:
Certain Frozen and Canned Warmwater Shrimp From Thailand, 69 FR 47100
(August 4, 2004) and Notice of Final Determination of Sales at Less
Than Fair Value and Negative Final Determination of Critical
Circumstances: Certain Frozen and Canned Warmwater Shrimp From
Thailand, 69 FR 76918 (December 23, 2004) (unchanged in final).
Moreover, although the Rubicon Group has claimed that its selling
practices in the United States have changed since the LTFV
investigation, it has not provided compelling evidence that the selling
functions by any of the Thai respondents has changed significantly
since then. See the November 28, 2007, ABC Supplemental Questionnaire
Response at pages 19-20.
With respect to the Canadian market, the Rubicon Group reported
sales to distributors/wholesalers, retailers, and end users. The
Rubicon Group stated that its Canadian sales were made through two
channels of distribution: (1) Direct to Canadian customers; and (2)
through its U.S. affiliate from a Canadian warehouse. We examined the
reported selling activities and found that the Rubicon Group performed
the following selling functions for direct sales: Sales forecasting;
market research; sales promotion; trade shows; inventory maintenance;
order input/processing; freight and delivery arrangements; visits,
calls and correspondence to customers; development of new packaging
(with customer); packing; and after-sales services. For warehoused
sales, we found that the Rubicon Group performed the following selling
functions: sales forecasting; market research; advertising; sales
promotion; trade shows; inventory maintenance; order input/processing;
freight and delivery arrangements; visits, calls and correspondence to
customers; development of new packaging (with customer); and after-
sales services. Accordingly, based on the core selling functions, we
find that the Rubicon Group performed sales and marketing, freight and
delivery, and inventory maintenance and warehousing at the same
relative level of intensity for all customers in the comparison market.
We note that, the company performed some sales and marketing activities
for warehoused sales but not for direct sales to Canadian customers.
However, we do not find that this difference, combined with some
claimed differences in the levels of the common selling functions,
amounts to a significant difference in the selling functions performed
for the two channels of distribution. Therefore, based on our overall
analysis, we found that all of the Rubicon Group's sales in the
Canadian market constituted one LOT.
After analyzing the selling functions performed for each sales
channel, we find that the distinctions in selling functions are not
material. We acknowledge that the Rubicon Group provides sales
forecasting/market research for sales to Canada and direct U.S. sales
but not for sales to its U.S. affiliate. However, we do not find that
this difference, combined with the claimed difference in the levels of
the common selling functions, amounts to a significant difference in
the selling functions performed for the two channels of distribution.
Therefore, we do not find that the U.S. LOT for CEP sales is less
advanced than the LOT for Canadian sales.
Based on the above analysis, we find that the Rubicon Group
performed essentially the same selling functions when selling to both
Canada and the United States (for both the EP and CEP sales).
Therefore, we determine that these sales are at the same LOT and no LOT
adjustment is warranted. Because we find that no difference in the LOTs
exists between markets, we have not granted a CEP offset to the Rubicon
Group.
3. Thai I-Mei
With respect to Thai I-Mei, this exporter had no viable home or
third country market during the POR. Therefore, we based NV on CV. When
NV is based on CV, the NV LOT is that of the sales from which we derive
selling, general, and administrative (SG&A) expenses and profit. See
Notice of Preliminary Determination of Sales at Less Than Fair Value
and Postponement of Final Determination: Fresh Atlantic Salmon From
Chile, 63 FR 2664 (Jan. 16, 1998), unchanged in Notice of Final
Determination of Sales at Less Than Fair Value: Fresh Atlantic Salmon
From Chile, 63 FR 31411 (June 9, 1998). In accordance with 19 CFR
351.412(d), the Department will make its LOT determination under
paragraph (d)(2) of this section on the basis of sales of the foreign
like product by the producer or exporter. Because we based the selling
expenses and profit for Thai I-Mei on the weighted-average home market
selling expenses incurred and profits earned by the other respondents
(i.e., Pakfood and Thai Union) in the administrative review, we are
able to determine the LOT of the sales from which we derived selling
expenses and profit for CV.
[[Page 12098]]
Thai I-Mei reported that it made sales through six channels of
distribution in the United States; however, it stated that the selling
activities it performed did not vary by channel of distribution. Thai
I-Mei reported performing the following selling functions for sales to
its U.S. affiliate: order input/processing, warranty service, freight
and delivery services, calls and correspondence with customers, price
negotiation, invoice issuance, payment receipt/processing, providing
samples, and packing. Accordingly, based on the core selling functions,
we find that Thai I-Mei performed sales and marketing, freight and
delivery services, and warranty services for sales to its U.S.
affiliate. Because Thai I-Mei's selling activities did not vary by
distribution channel, we preliminarily determine that there is one LOT
in the U.S. market.
As noted above, we find that Thai Union and Pakfood performed the
following core selling functions: sales and marketing, freight and
delivery services, inventory maintenance and warehousing, and warranty
services. Further, although Thai Union and Pakfood performed certain
sales and marketing functions (e.g., sales forecasting/market research,
strategic/economic planning, sales promotion/advertising/trade shows)
and inventory maintenance and warehousing functions that Thai I-Mei did
not perform, we did not find these differences to be material selling
function distinctions significant enough to warrant a separate LOT.
Thus, we determine that the NV LOT for Thai I-Mei is the same as the
LOT of Thai I-Mei's CEP sales and, as a result, no LOT adjustment is
warranted.
Regarding the CEP offset provision, as described above, it is
appropriate 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. Because we find
that no difference in LOTs exists, we do not find that a CEP offset is
warranted for Thai I-Mei.
4. Thai Union
In the U.S. market, Thai Union reported both EP and CEP sales to
wholesalers/distributors, end-users, processors, and retailers/
restaurants. Thai Union reported sales through two channels of
distribution: 1) Direct EP sales from Thai Union to unaffiliated U.S.
customers; and 2) CEP sales made to its U.S. affiliates. We examined
the selling activities performed for direct EP sales from Thai Union to
unaffiliated U.S. customers and found that Thai Union performed the
following selling functions: sales forecasting/market research, sales/
marketing support, strategic/economic planning, order input/processing,
providing direct sales personnel, providing warranty services/
guarantees, inventory maintenance, freight services, and packing.
Accordingly, based on the core selling functions, we find that Thai
Union performed sales and marketing, freight and delivery services,
inventory maintenance and warehousing, and warranty and technical
services for its EP sales.
Further, we examined the selling activities performed for CEP sales
made to Thai Union's U.S. affiliates and found that Thai Union
performed the following selling functions: order input/processing,
freight services, inventory maintenance, and packing. Accordingly,
based on the core selling functions, we find that Thai Union performed
sales and marketing, freight and delivery services, and inventory
maintenance and warehousing for its CEP sales.
We preliminarily find that Thai Union performed freight and
delivery services and inventory maintenance and warehousing at the same
level of intensity for all customers in the United States regardless of
distribution channel. In addition, although technical and warranty
services were provided for EP sales, and not for CEP sales, these
services were performed at a low level of intensity and, thus, we do
not find this to be a material selling distinction significant enough
to warrant a separate LOT. Further, although Thai Union performed
additional sales and marketing functions (i.e., sales forecasting/
market research, strategic/economic planning, providing direct sales
personnel, and sales/marketing support) for its EP sales that it did
not perform for its CEP sales, we also did not find these differences
to be material selling function distinctions significant enough to
warrant a separate LOT in the U.S. market. Therefore, we preliminarily
determine that there is one LOT in the U.S. market.
With respect to the home market, Thai Union made sales to
wholesalers/distributors, end-users, processors, and retailers/
restaurants. Thai Union stated that its home market sales were made
through two channels of distribution: (1) Ex-factory sales; and (2)
delivered sales. We examined the selling activities performed and found
that Thai Union performed the following selling functions at the same
level of intensity for both of these channels: sales forecasting/market
research/sales promotion, sales/marketing support, strategic/economic
planning, order input/processing, providing direct sales personnel,
providing warranty services/guarantees, inventory maintenance, and
packing. Additionally, for delivered sales, we find that Thai Union
provided freight and delivery services. Accordingly, based on the core
selling functions, we find that Thai Union performed sales and
marketing, inventory maintenance and warehousing, and warranty and
technical services at the same level of intensity for all customers in
the home market regardless of distribution channel. Although freight
and delivery services were performed for delivered sales, and not for
ex-factory sales, we do not find this to be a material selling
distinction significant enough to warrant a separate LOT. Therefore, we
preliminarily determine that there is one LOT in the home market.
We evaluated the core selling function categories in the U.S. and
home market LOTs and found that each of the core selling functions
(i.e., sales and marketing, inventory maintenance, freight and delivery
services, and warranty and technical support) were performed in both
the U.S. and home markets. Although there are differences in the type
of sales and marketing services provided for each market, we did not
find this to be a material selling function distinction significant
enough to warrant a separate LOT. Therefore, after analyzing the
selling functions performed in each market, we find that the
distinctions in selling functions are not material and thus, that the
home market and U.S. LOTs are the same. Accordingly, we determine that
no LOT adjustment is warranted or possible for Thai Union. Regarding
the CEP offset provision, as described above, it is appropriate 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. Because we find that no difference
in LOTs exists, we do not find that a CEP offset is warranted for Thai
Union.
D. Cost of Production Analysis
We found that the Rubicon Group had made sales below the cost of
production (COP) in the LTFV investigation, the most recently completed
segment of this proceeding as of the date the questionnaire was issued
in this review, and such sales were disregarded. See Notice of
Preliminary Determination of Sales at Less Than Fair Value,
Postponement of Final Determination, and Negative Preliminary Critical
Circumstances Determination: Certain Frozen and Canned Warmwater Shrimp
from Thailand, 69 FR 47100, 47107 (Aug. 4, 2004); unchanged in the Thai
[[Page 12099]]
Shrimp LTFV Investigation Final. Thus, in accordance with section
773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or
suspect that the Rubicon Group made sales in the third-country market
at prices below the cost of producing the merchandise in the current
review period.
Further, based on our analysis of the petitioner's allegations, we
found that there were reasonable grounds to believe or suspect that
Pakfood's and Thai Union's sales of frozen warmwater shrimp in the home
market were made at prices below their COP. Accordingly, pursuant to
section 773(b) of the Act, we initiated sales-below-cost investigations
to determine whether Pakfood's and Thai Union's sales were made at
prices below their respective COPs. See the Pakfood Cost Allegation and
the Thai Union Cost Allegation.
1. Calculation of Cost of Production
In accordance with section 773(b)(3) of the Act, we calculated the
respondents' COPs based on the sum of their costs of materials and
conversion for the foreign like product, plus amounts for 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 Pakfood, the
Rubicon Group, and Thai Union in their most recent supplemental section
D questionnaire responses for the COP calculations, except for the
following instances where the information was not appropriately
quantified or valued:
a. Pakfood
We did not make any adjustments to Pakfood's reported COP data.
b. The Rubicon Group
i. We removed purchases of finished shrimp between collapsed
affiliates from the company-specific cost of sales denominator in the
calculation of the G&A and financial expense ratios to avoid double
counting such costs.
ii. For CFF, we used cost of goods sold as the denominator in the
calculation of the G&A expense ratio.
Our revisions to the Rubicon Group's COP data are discussed in the
Memorandum to Neal Halper, Director, Office of Accounting from
Frederick W. Mines, entitled ``Cost of Production and Constructed Value
Calculation Adjustments for the Preliminary Results,'' dated February
28, 2008.
c. Thai Union
i. We excluded certain book-to-physical inventory adjustments from
Thai Union Seafood's fixed overhead costs that were double-counted in
the reported costs.
ii. We adjusted Thai Union Seafood's reported cost data to account
for additional finished production quantities that were reported as a
minor correction at the cost verification. This adjustment resulted in
the addition of two new control numbers to Thai Union Seafood's cost
database.
iii. We revised Thai Union Seafood's G&A expense ratio to exclude
export tax coupon income from the numerator and to include scrap
offsets in the denominator.
iv. We revised Thai Union Frozen's G&A expense ratio to exclude
certain income items (i.e., raw material claims, export tax coupons,
and other revenues related to interest earned on accounts receivables
and raw material claims) from the numerator and to include scrap
offsets in the denominator.
v. We revised Thai Union's consolidated financial expense ratio to
include scrap offsets in the denominator.
Our revisions to Thai Union's COP data are discussed in the
Memorandum to Neal Halper, Director, Office of Accounting, from Heidi
K. Schriefer entitled, ``Cost of Production and Constructed Value
Calculation Adjustments for the Preliminary Results--Thai Union Frozen
Products PCL and Thai Union Seafood Company, Ltd.,'' 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 (for Pakfood and Thai Union) or
comparison market sales (for the Rubicon Group) 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, adjusted for any applicable billing adjustments, were
exclusive of any applicable movement charges, rebates, discounts, and
direct and indirect selling expenses, and packing expenses, revised
where appropriate, as discussed below under the ``Price-to-Price
Comparisons'' section.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C)(i) of the Act, where less than 20
percent of a respondent's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
``substantial quantities.'' Where 20 percent or more of a respondent's
sales of a given product during the POR were at prices less than COP,
we determined that such sales have been made in ``substantial
quantities.'' See section 773(b)(2)(C) of the Act. Further, the sales
were made within an extended period of time, in accordance with section
773(b)(2)(B) of the Act, because we examined below-cost sales occurring
during the entire POR. In such cases, because we compared prices to
POR-average costs, we also determined that such sales were not made at
prices which would permit 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 specific products, more than 20 percent
of Pakfood's, the Rubicon Group's, and Thai Union's 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.
For those U.S. sales of subject merchandise for which there were no
useable home market sales in the ordinary course of trade, we compared
EPs to CV in accordance with section 773(a)(4) of the Act. See
``Calculation of Normal Value Based on Constructed Value'' section
below.
E. Calculation of Normal Value Based on Comparison Market Prices
1. Pakfood
We based NV for Pakfood on ex-factory or delivered prices to
unaffiliated customers in the home market or prices to affiliated
customers in the home market that were determined to be at arm's
length. Where appropriate, we made adjustments for billing adjustments
and discounts. We made deductions, where appropriate, from the starting
price for inland freight and warehousing expenses, under section
773(a)(6)(B)(ii) 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 circumstances-of-sale for
imputed credit expenses and bank/wire fee charges. We also made
adjustments in accordance with 19 CFR 351.410(e) for indirect
[[Page 12100]]
selling expenses incurred on comparison market or U.S. sales where
commissions were granted on sales in one market but not the other.
Specifically, where commissions were granted in the U.S. market but not
in the comparison market, we made a downward adjustment to NV for the
lesser of: (1) The amount of commission paid in the U.S. market; or (2)
the amount of indirect selling expenses incurred in the comparison
market.
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.
2. The Rubicon Group
For the Rubicon Group, we calculated NV based on delivered prices
to unaffiliated customers. Where appropriate, we made adjustments for
billing adjustments and rebates. We also made deductions for movement
expenses, including inland freight (plant to warehouse and warehouse to
port), warehousing, inland insurance, brokerage and handling, ocean
freight (offset by freight adjustments, where appropriate), third-
country inland insurance, third-country inspection fees, third-country
brokerage and handling, and third-country warehousing, under section
773(a)(6)(B)(ii) of the Act.
For third country price-to-EP comparisons, we made circumstance-of-
sale adjustments for differences in credit expenses and commissions,
pursuant to section 773(a)(6)(C) of the Act.
For third country price-to-CEP comparisons, we made deductions for
third-country credit expenses and commissions pursuant to 773(a)(6)(C)
of the Act.
We also made adjustments in accordance with 19 CFR 351.410(e) for
indirect selling expenses incurred on comparison-market or U.S. sales
where commissions were granted on sales in one market but not the
other. Specifically, where commissions were granted in the U.S. market
but not in the comparison market, we made a downward adjustment to NV
for the lesser of: 1) The amount of commission paid in the U.S. market;
or 2) the amount of indirect selling expenses incurred in the
comparison market. If the commissions were granted in the comparison
market but not in the U.S. market, we made an upward adjustment to NV
following the same methodology.
Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411.
We also deducted third-country packing costs and added U.S. packing
costs in accordance with sections 773(a)(6)(A) and (B) of the Act.
3. Thai Union
We based NV for Thai Union on ex-factory or delivered prices to
unaffiliated customers in the home market or prices to affiliated
customers in the home market that were determined to be at arm's
length. Where appropriate, we made adjustments for billing adjustments.
We made deductions, where appropriate, from the starting price for
inland freight expenses, under section 773(a)(6)(B)(ii) of the Act.
For home market price-to-EP comparisons, we made circumstance-of-
sale adjustments for differences in credit expenses, pursuant to
section 773(a)(6)(C) of the Act.
For home market price-to-CEP comparisons, we made deductions for
home market credit expenses, pursuant to 773(a)(6)(C) of the Act.
Regarding credit expenses, Thai Union reported that it had not
received payment for certain home market and U.S. sales. Consequently,
for these sales, we used a payment date of February 28, 2008 (i.e., the
date of the preliminary results), and recalculated imputed credit
expenses accordingly.
We also made adjustments in accordance with 19 CFR 351.410(e) for
indirect selling expenses incurred on comparison-market or U.S. sales
where commissions were granted on sales in one market but not the
other. Specifically, where commissions were granted in the U.S. market
but not in the comparison market, we made a downward adjustment to NV
for the lesser of: 1) The amount of commission paid in the U.S. market;
or 2) the amount of indirect selling expenses incurred in the
comparison market.
Furthermore, we made adjustments for differences in costs
attributable to differences in the physical characteristics of the
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and
19 CFR 351.411.
We also deducted home market packing costs and added U.S. packing
costs in accordance with sections 773(a)(6)(A) and (B) of the Act.
F. 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 CV. Accordingly, for
those frozen warmwater shrimp products for Pakfood, the Rubicon Group,
and Thai Union 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 comparable products failed the COP
test, we based NV on CV. For Thai I-Mei, in accordance with section
773(a)(4) of the Act, we based NV on CV because there was no viable
home or third country market.
Section 773(e) of the Act provides that 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. For Pakfood and Thai Union, we calculated the cost of materials
and fabrication based on the methodology described in the ``Cost of
Production Analysis'' section, above, and we based SG&A and profit for
each respondent on the actual amounts incurred and realized by it 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. For comparisons to
Pakfood's and Thai Union's EP, we made circumstances-of-sale
adjustments by deducting direct selling expenses incurred on comparison
market sales from, and adding U.S. direct selling expenses, to CV, in
accordance with section 773(a)(8) of the Act and 19 CFR 351.410.
For Thai I-Mei, in accordance with section 773(e) of the Act, we
calculated CV based on the sum of Thai I-Mei's cost of materials and
fabrication for the foreign like product, plus amounts for SG&A,
profit, and U.S. packing costs. The Department relied on COP data
submitted by Thai I-Mei in its most recent supplemental section D
questionnaire response for the COP calculation. Because Thai I-Mei does
not have a viable comparison market, the Department cannot determine
profit under section 773(e)(2)(A) of the Act, which requires sales by
the respondent in question in the ordinary course of trade in a
comparison market. Likewise, because Thai I-Mei does not have sales of
any product in the same general category of products as the subject
merchandise, we are unable to apply alternative (i) of section
773(e)(2)(B) of the Act. Therefore, we calculated Thai I-Mei's CV
profit and selling expenses based on alternative (ii) of this section,
in accordance with section 773(e)(2)(B)(ii) of the Act. As a result, we
calculated Thai I-Mei's CV profit and selling expenses as a weighted
average of the profit and selling expenses incurred by the other
respondents which had viable home markets in this
[[Page 12101]]
administrative review. Specifically, we calculated the weighted-average
profit and selling expenses incurred on comparison market sales made by
Pakfood and Thai Union.
For comparisons to Thai I-Mei's CEP, we deducted from CV direct
selling expenses incurred on Pakfood's and Thai Union's comparison
market sales, in accordance with section 773(a)(7)(ii)(B) of the Act.
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
------------------------------------------------------------------------
Pakfood Public Company Limited/Asia Pacific (Thailand) Company 2.40
Limited/Chaophraya Cold Storage/Okeanos Company Limited/
Takzin Samut Company Limited.................................
Andaman Seafood Co., Ltd./Chanthaburi Frozen Food Co., Ltd/ 5.24
Chanthaburi Seafoods Co., Ltd./Euro-Asian International
Seafoods Co., Ltd./Intersia Foods Co., Ltd/Phattana Seafood
Co., Ltd./Phattana Frozen Food Co., Ltd./S.C.C. Frozen
Seafood Co., Ltd/Seawealth Frozen Food Co. Ltd./Thailand
Fishery Cold Storage Public Co., Ltd/Thai International
Seafoods Co., Ltd./Wales & Co. Universe Limited..............
Thai I-Mei Frozen Foods Co., Ltd.............................. 3.02
Thai Union Frozen Products Public Co., Ltd./Thai Union Seafood 15.30
Co., Ltd.....................................................
Review-Specific Average Rate Applicable to the Following
Companies: \6\
Asian Seafoods Coldstorage Public Company Limited/Asian 6.09
Seafoods Coldstorage (Suratthani) Co., Ltd./STC Foodpak
Limited..................................................
Charoen Pokphand Foods Public Company Limited/CP 6.09
Merchandising Co., Ltd./Klang Co., Ltd./Seafoods
Enterprise Co., Ltd./Thai Prawn Culture Center Co., Ltd..
Crystal Frozen Foods Co., Ltd................................. 6.09
CY Frozen Co., Ltd........................................ 6.09
Fortune Frozen Foods (Thailand) Co., Ltd.................. 6.09
Good Fortune Cold Storage Ltd............................. 6.09
Good Luck Product Co., Ltd................................
Inter-Pacific Marine Products Co, Ltd..................... 6.09
I.T. Foods Industries Co., Ltd............................ 6.09
Kiang Huat Sea Gull Trading Frozen Food Public Company 6.09
Limited..................................................
Kingfisher Holdings Limited/KF Foods Limited.............. 6.09
Kitchens of the Ocean (Thailand) Co., Ltd.................
Kongphop Frozen Foods Co., Ltd............................ 6.09
Marine Gold Products Ltd.................................. 6.09
May Ao Co., Ltd./May Ao Foods Co., Ltd.................... 6.09
Narong Seafood Co., Ltd................................... 6.09
Ongkorn Cold Storage Co., Ltd/Thai-ger Marine Co., Ltd.... 6.09
S&D Marine Products Co., Ltd.............................. 6.09
Seafresh Industry Public Company Limited/Seafresh 6.09
Fisheries................................................
Siam Intersea Co., Ltd.................................... 6.09
SMP Food Product Co., Ltd................................. 6.09
Surapon Foods Public Co., Ltd./Surat Seafoods Co., Ltd.... 6.09
Tey Seng Cold Storage Co., Ltd./Chaiwarut Co., Ltd........ 6.09
Thai Royal Frozen Food Co., Ltd........................... 6.09
The Siam Union Frozen Foods Co., Ltd./Kosamut Frozen Foods 6.09
Co., Ltd.................................................
The Union Frozen Products Co., Ltd./Bright Sea Co., Ltd... 6.09
Transamut Food Co., Ltd................................... 6.09
Xian-Ning Seafood Co., Ltd................................ 6.09
Yeenin Frozen Foods Co., Ltd.............................. 6.09
AFA Rate Applicable to the Following Companies:
Applied DB................................................ 57.64
Chonburi LC............................................... 57.64
Haitai Seafood Co., Ltd................................... 57.64
High Way International Co., Ltd........................... 57.64
Merkur Co., Ltd........................................... 57.64
Ming Chao Ind Thailand.................................... 57.64
Nongmon SMJ Products...................................... 57.64
SCT Co., Ltd.............................................. 57.64
Search and Serve.......................................... 57.64
Shianlin Bangkok Co., Ltd. (located at 159 Surawong Road, 57.64
Suriyawong, Bangrak, Bangkok 10500 Thailand).............
Star Frozen Foods Co., Ltd................................ 57.64
Wann Fisheries Co., Ltd................................... 57.64
------------------------------------------------------------------------
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). Pursuant to
19 CFR 351.309, interested parties may submit cases briefs not later
than 30 days after the date of publication of this notice. Rebuttal
briefs, limited to issues raised in the case briefs, may be filed not
later than 35 days after the date of
[[Page 12102]]
publication of this notice. 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.
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\6\ This rate is 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.
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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 1870, 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.
For certain of Pakfood's, the Rubicon Group's, and Thai Union's
sales and all of Thai I-Mei's sales, we note that these companies
reported the entered value for the U.S. sales in question. We will
calculate importer-specific ad valorem duty assessment rates based on
the ratio of the total amount of antidumping duties calculated for the
examined sales to the total entered value of the examined sales for
that importer.
For certain of Pakfood's, the Rubicon Group's, and Thai Union's
sales, we note that these companies did not report the entered value
for the U.S. sales in question. We will calculate 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. We note that for certain
of Pakfood's and the Rubicon Group's sales of shrimp with sauce, we
will include the total quantity of the merchandise with sauce in the
denominator of the calculation of the importer-specific rate because
CBP will apply the per-unit duty rate to the total quantity of
merchandise entered, including the sauce weight. To determine whether
the duty assessment rates are de minimis, in accordance with the
requirement set forth in 19 CFR 351.106(c)(2), we will calculate
importer-specific ad valorem ratios based on the estimated entered
value.
Finally, regarding Thai Union's unreported U.S. sales, we will base
the assessment rate assigned to the corresponding entries on AFA,
determined as noted above. We will instruct CBP to collect these duties
on an importer-specific basis, where possible.
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.
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 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 5.95 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.
This 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. E8-4418 Filed 3-5-08; 8:45 am]
BILLING CODE 3510-DS-P