[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Notices]
[Pages 12115-12122]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4424]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-331-802]


Certain Frozen Warmwater Shrimp From Ecuador: 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 Ecuador with respect to 45 companies.\1\ The 
respondents which the Department selected for individual review are 
OceanInvest, S.A. (OceanInvest) and Promarisco, S.A. (Promarisco). The 
respondents which were not selected for individual review are listed in 
the ``Preliminary Results of Review'' section of this notice. This is 
the second administrative review of this order. The period of review 
(POR) covers February 1, 2006, through January 31, 2007.
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    \1\ This figure does not include those companies for which the 
Department is preliminarily rescinding the administrative review. 
See ``Partial Rescission of Review'' section for further discussion.
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    We preliminarily determine that sales made to the United States by 
OceanInvest have been made below normal value (NV) and that sales made 
to the United States by Promarisco have not been made below NV. In 
addition, based on the preliminary results for the respondents selected 
for individual review, we have determined a preliminary weighted-
average margin for those companies that were not selected for 
individual review but were responsive to the Department's requests for 
information.
    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: David Goldberger or Gemal Brangman, 
AD/CVD Operations, Office 2, Import Administration--Room 1117, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4136 or (202) 482-3773, respectively.

SUPPLEMENTARY INFORMATION:

Background

    In February 2005, the Department published in the Federal Register 
an antidumping duty order on certain frozen warmwater shrimp from 
Ecuador. See Notice of Amended Final Determination and Antidumping Duty 
Order: Certain Frozen Warmwater Shrimp from Ecuador, 70 FR 5156 
(February 1, 2005) (LTFV Amended Final Determination and 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 Ecuador 
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 
(February 2, 2007). On February 28, 2007, the petitioner \2\ and the 
Louisiana Shrimp Association (LSA), a domestic interested party, 
submitted timely requests that the Department conduct an administrative 
review of the sales of certain frozen warmwater shrimp made by numerous 
companies during the POR, pursuant to section 751(a) of the Tariff Act 
of 1930, as amended (the Act), and in accordance with 19 CFR 
351.213(b)(1).
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    \2\ The petitioner is the Ad Hoc Shrimp Trade Action Committee.
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    On April 5, 2007, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
See ``Duty Absorption'' section below for further discussion.
    On April 6, 2007, the Department published a notice of initiation 
of administrative review for 64 companies

[[Page 12116]]

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 (April 6, 2007) (Notice of 
Initiation).
    During the period April through July 2007, we received responses to 
the Department's Q&V questionnaire from 64 companies. Subsequently, the 
Department received timely requests for withdrawal of the 
administrative review with respect to many of the companies. On August 
24, 2007, we published a notice rescinding the administrative review 
with respect to 18 companies for which the requests for a review were 
withdrawn in a timely manner, in accordance with 19 CFR 351.213(d)(1). 
See Certain Frozen Warmwater Shrimp from Ecuador; Partial Rescission of 
Antidumping Duty Administrative Review, 72 FR 48616 (August 24, 2007).
    Based upon our consideration of the responses to the Q&V 
questionnaire and the resources available to the Department, we 
determined that it was not practicable to examine all exporters/
producers of subject merchandise for which a review request remained. 
As a result, on July 20, 2007, we selected the two largest remaining 
producers/exporters by export volume of certain frozen warmwater shrimp 
from Ecuador during the POR, OceanInvest and Promarisco, as the 
mandatory respondents in this review. See Memorandum to Stephen J. 
Claeys, Deputy Assistant Secretary for Import Administration, from 
James Maeder, Director, Office 2, AD/CVD Operations, entitled 
``Antidumping Duty Administrative Review of Certain Frozen Warmwater 
Shrimp from Ecuador: Selection of Respondents for Individual Review,'' 
dated July 20, 2007. On this same date, we issued the antidumping 
questionnaire to OceanInvest and Promarisco. We requested Promarisco 
respond to section D of the questionnaire, because we found Promarisco 
had made sales below cost in the most recently completed segment of the 
proceeding. See ``Cost of Production Analysis'' section below.
    On May 9, August 28, and September 5, 2007, the petitioner 
submitted general comments regarding the selection of the appropriate 
comparison market in this review with regard to Promarisco. Promarisco 
responded to these comments on August 31, 2007.
    We received responses to sections A, B and C of the questionnaire 
from Promarisco and OceanInvest in August and September 2007. We also 
received a response to section D of the questionnaire from Promarisco 
in September 2007.
    On October 1, 2007, we determined that Spain constitute the 
appropriate comparison market with respect to Promarisco. See 
Memorandum to James Maeder, Director Office 2, AD/CVD Operations, from 
The Team entitled ``Selection of the Appropriate Third Country Market 
for Promarisco,'' dated October 1, 2007 (Promarisco Comparison Market 
Memo).
    Also on October 1, 2007, the petitioner requested that the 
Department initiate a sales-below-cost investigation of OceanInvest. On 
October 30, 2007, we initiated this investigation. See Memorandum to 
James Maeder, Director, Office 2, AD/CVD Operations, from The Team 
entitled ``The Petitioner's Allegation of Sales Below the Cost of 
Production for OceanInvest S.A.,'' dated October 30, 2007 (OceanInvest 
COP Initiation Memo). On that date, we instructed OceanInvest to 
respond to section D of the Department's questionnaire. OceanInvest 
submitted its response to section D of the questionnaire on November 
27, 2007.
    On October 26, 2007, the Department postponed the preliminary 
results in this review until no later than February 28, 2008. See 
Certain Frozen Warmwater Shrimp From Brazil, Ecuador, India, Thailand, 
and the Socialist Republic of Vietnam: Notice of Extension of Time 
Limits for the Preliminary Results of the Second Administrative 
Reviews, 72 FR 60800 (October 26, 2007).
    During the period October 2007 through January 2008, we issued to 
Promarisco and OceanInvest supplemental sections A, B, C, and D 
questionnaires. We received responses to these supplemental 
questionnaires during the period November 2007 through February 2008.

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)

[[Page 12117]]

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.

Period of Review

    The POR is February 1, 2006, through January 31, 2007.

Partial Rescission of Review

    The Department received a no-shipment response from Exportadora del 
Oceano Pacifico OCEANPAC (Oceanpac) for which there appeared to be U.S. 
customs entries of subject merchandise. We requested data on the 
relevant entries from CBP and determined that the entries were not 
reportable transactions for Oceanpac. See Memorandum to the File 
entitled ``Reconciliation of Respondent ``No Shipment'' Statements to 
CBP Data,'' dated February 6, 2008. Under these circumstances, we 
determine that Oceanpac satisfies the requirement under 19 CFR 
351.213(d)(3) that it did not have ``entries, exports, or sales of the 
subject merchandise,'' and, consistent with the Department's practice, 
we are preliminarily rescinding the review with respect to Oceanpac. 
See, e.g., 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 (November 8, 
2005).

Duty Absorption

    On April 5, 2007, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides for the Department, if requested, 
to determine during an administrative review initiated two or four 
years after the publication of the order, whether antidumping duties 
have been absorbed by a foreign producer or exporter, if the subject 
merchandise is sold in the United States through an affiliated 
importer. Although this review was initiated two years after the 
publication of the order, neither OceanInvest nor Promarisco sold 
subject merchandise in the United States through an affiliated importer 
during the POR. Therefore, it is not appropriate to make a duty 
absorption determination with respect to OceanInvest and Promarisco in 
this segment of the proceeding within the meaning of section 751(a)(4) 
of the Act. See Agro Dutch Industries Ltd. v. United States, No. 2007-
1011 (Fed. Cir. November 20, 2007).

Comparisons to Normal Value

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

 Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by OceanInvest and Promarisco 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 non-broken shrimp to sales of non-broken shrimp 
made to Italy for OceanInvest and Spain for Promarisco 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. See ``Home 
Market Viability and Selection of Comparison Markets'' section below. 
Where there were no non-broken sales of identical merchandise in the 
comparison market made in the ordinary course of trade to compare to 
U.S. sales, we compared U.S. sales to sales of the most similar foreign 
like product made in the ordinary course of trade. In making the 
product comparisons, we matched foreign like products based on the 
physical characteristics reported by OceanInvest and Promarisco 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.

Export Price

    For all U.S. sales made by OceanInvest and Promarisco, we applied 
the EP methodology, in accordance with section 772(a) of the Act, 
because the subject merchandise was sold by the producer/exporter 
outside of the United States directly to the first unaffiliated 
purchaser in the United States prior to importation and constructed 
export price (CEP) methodology was not otherwise warranted based on the 
facts of record.

A. OceanInvest

    We based EP on FOB or delivered, duty-paid (DDP) prices to the 
first unaffiliated purchaser in the United States. We also made 
deductions to the starting price for demurrage expenses, foreign inland 
freight expenses, Ecuadorian brokerage and handling expenses, ocean 
freight expenses, U.S. customs duties (including merchandise processing 
and harbor maintenance fees), and U.S. brokerage and handling expenses, 
where appropriate, in accordance with section 772(c)(2)(A) of the Act.
    OceanInvest reported that it received periodic ``bonus payments'' 
during the POR from one of its U.S. customers. Pursuant to 19 CFR 
351.401(c), the Department may make post-sale price adjustments that 
are reasonably attributable to the subject merchandise. However, the 
preamble to the regulations states that exporters or producers should 
not be allowed ``to eliminate dumping margins by providing price 
adjustments `after the fact'.'' See Antidumping Duties; Countervailing 
Duties: Final Rule, 62 FR 27296, 27344 (May 19, 1997). In addition, the 
Department's regulations state that, ``[t]he interested party that is 
in possession of the relevant information has the burden of 
establishing to the satisfaction of the Secretary the amount and nature 
of the particular adjustment * * *'' 19 CFR 351.401; see also Statement 
of Administrative Action (SAA) accompanying the Uruguay Round 
Agreements Act (URAA), H. Rep. No. 103-316 at 829 (1994), (``[A]s with 
all adjustments which benefit a responding firm, the respondent must 
demonstrate the appropriateness of such an adjustment.''). Accordingly, 
where a price adjustment made after the fact lowers a respondent's 
dumping margin, the Department will closely examine the circumstances 
surrounding the

[[Page 12118]]

adjustment to determine whether it was a bona fide adjustment made in 
the ordinary course of business. See Canned Pineapple Fruit from 
Thailand: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review, 71 FR 70948 (December 7, 2006), and accompanying 
Issues and Decision Memorandum at Comment 1.
    According to OceanInvest, the bonus payments were made as part of 
an agreement between OceanInvest and the customer where the customer 
agreed to buy large quantities of subject merchandise from OceanInvest 
and the parties agreed to share the profits from these sales to the 
customer's customers. The ``bonus payments'' represent OceanInvest's 
profit sharing under the agreement. OceanInvest reported that it 
received periodic payments from the customer under this agreement, but 
that the payments could not be tied to specific sales. While the 
agreement outlines how the profit sharing returns are to be 
distributed, OceanInvest reports that the agreement does not provide 
any obligation for the customer to support its accounting of the profit 
sharing distribution to OceanInvest. Further, while the agreement in 
question was drafted prior to the POR, OceanInvest acknowledged that 
the agreement was not signed until the Department noted the absence of 
signatures on the copy of the agreement submitted for the record. See 
OceanInvest's December 18, 2007, supplemental questionnaire response.
    OceanInvest reported a series of payments made to it by its 
customer during the POR, but was unable to demonstrate that these 
payments are tied to the terms of the agreement. The Department cannot 
determine that the amounts of the payments are consistent with the 
distribution method outlined in the agreement. OceanInvest acknowledges 
that it does not have the ability to examine the basis for the payment 
it received. Therefore, we find that OceanInvest has failed to 
demonstrate adequately that the post-sale bonus payments were made 
consistent with the terms indicated in the agreement. As a result, we 
have disallowed this adjustment to EP.
    OceanInvest reported the demurrage expenses as a direct selling 
expense. We reclassified this item as a movement expense, consistent 
with our treatment of this item in the previous review. See Certain 
Frozen Warmwater Shrimp from Ecuador: Preliminary Results and Partial 
Rescission of Antidumping Duty Administrative Review, 72 FR 10698,10702 
(March 9, 2007) (AR1 Preliminary Results), unchanged in Certain Frozen 
Warmwater Shrimp from Ecuador: Final Results of Antidumping Duty 
Administrative Review, 72 FR 52070 (September 12, 2007) (AR1 Final 
Results).

B. Promarisco

    We based EP on DDP prices to the first unaffiliated purchaser in 
the United States. We made deductions to the starting price for foreign 
inland freight expenses, ocean freight expenses, marine insurance 
expenses, U.S. customs duties (including merchandise processing and 
harbor maintenance fees), U.S. brokerage and handling expenses, and 
U.S. warehousing expenses, where appropriate, in accordance with 
section 772(c)(2)(A) of the Act.

Normal Value

A. Home Market Viability and Selection of Comparison Markets

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise, in accordance 
with section 773(a)(1)(C) of the Act.
    In the less-than-fair-value (LTFV) investigation segment of this 
proceeding, the Department determined that a particular market 
situation existed which rendered the Ecuadorian market inappropriate 
for purposes of determining NV for the three respondents in the LTFV 
investigation, including Promarisco. See Memorandum dated June 7, 2004, 
entitled ``Home Market as Appropriate Comparison Market,'' as included 
at Exhibit A-2 of Promarisco's August 24, 2007, response to section A 
of the questionnaire. Promarisco reported that the particular market 
situation still applies to its home market sales and there is no 
information on the record to suggest otherwise. Accordingly, although 
the aggregate volume of Promarisco's home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales for the subject merchandise, because of the particular 
market situation, we could not rely on Promarisco's home market sales 
for determining NV. Therefore, we used Promarisco's sales to Spain, 
Promarisco's largest third country market, as the basis for comparison 
market sales. See Promarisco Comparison Market Memo for a more detailed 
discussion of this issue.
    Furthermore, based on our analysis of OceanInvest's questionnaire 
responses, we determined that OceanInvest'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.\4\ 
Therefore, with respect to OceanInvest, we used sales to Italy, which 
is OceanInvest's largest third country market, as the basis for 
comparison market sales in accordance with section 773(a)(1)(C) of the 
Act and 19 CFR 351.404.
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    \4\ Because OceanInvest's sales in the home market did not meet 
the viability threshold, it was unnecessary to address whether a 
particular market situation existed with respect to such sales.
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B. 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. See 
id; see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997) (Plate from South Africa). In order 
to determine whether the comparison sales were at different stages in 
the marketing process than the U.S. sales, we reviewed the distribution 
system in each market (i.e., the chain of distribution), including 
selling functions, class of customer (customer category), and the level 
of selling expenses for each type of sale.
    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices),\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).
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    \5\ Where NV is based on constructed value (CV), we determine 
the NV LOT based on the LOT of the sales from which we derive 
selling expenses, general and administrative (SG&A) expenses, and 
profit for CV, where possible.
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    When the Department is unable to match U.S. sales of the foreign 
like product in the comparison market at the same LOT as the EP or CEP, 
the Department may compare the U.S. sale to sales at a different LOT in 
the comparison market. In comparing EP or

[[Page 12119]]

CEP sales at a different LOT in the comparison market, where available 
data make it practicable, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales only, if the NV LOT is 
more remote from the factory than the CEP LOT and there is no basis for 
determining whether the difference in LOTs between NV and CEP affects 
price comparability (i.e., no LOT adjustment was practicable), the 
Department shall grant a CEP offset, as provided in section 
773(a)(7)(B) of the Act. See Plate from South Africa, 62 FR at 61732-
33.
    In this administrative review, we obtained information from 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. OceanInvest
    OceanInvest sold frozen warmwater shrimp to distributors and 
traders in the U.S. market, and distributors in the Italian market. 
OceanInvest reported that it made EP sales in the U.S. market through 
two channels of distribution: FOB sales and DDP sales. We examined the 
selling activities performed for these channels, and found that 
OceanInvest performed the following selling functions for both 
channels: Packing, order input/processing, direct sales personnel 
services, and claim services (i.e., billing adjustments). In addition, 
for DDP sales, OceanInvest made freight and delivery arrangements. 
These selling activities can be generally grouped into two core selling 
function categories for analysis: 1) sales and marketing (e.g., order 
input/processing, direct sales personnel services, claim services); and 
2) freight and delivery. Accordingly, based on the core selling 
functions, we find that OceanInvest performed sales and marketing for 
all U.S. sales, and freight and delivery services as well for certain 
U.S. sales. We do not find that the provision of freight and delivery 
services for one channel of distribution is sufficient to distinguish 
it as a separate LOT. Accordingly, we preliminarily determine that 
there is one LOT in the U.S. market.
    With respect to the Italian market, OceanInvest reported that it 
made FOB sales through one channel of distribution. We examined the 
selling activities performed for this channel, and found that 
OceanInvest performed the following selling functions: Packing, order 
input/processing, direct sales personnel services, payment of 
commissions, and claim services (i.e., billing adjustments). These 
selling activities can be generally grouped into one core selling 
function for analysis: Sales and marketing. Accordingly, we find that 
OceanInvest performed the core selling function of sales and marketing 
for all customers in the Italian market. Because all sales in the 
Italian market are made through a single distribution channel, we 
preliminarily determine that there is one LOT in the Italian market.
    Finally, we compared the EP LOT to the comparison market LOT and 
found that, with the exception of freight and delivery services 
performed on some U.S. sales, and the payment of commissions on Italian 
sales, the core selling functions performed for U.S. and Italian market 
customers are virtually identical. Therefore, we determined that sales 
to the U.S. and Italian markets during the POR were made at the same 
LOT, and as a result, no LOT adjustment was warranted.
2. Promarisco
    Promarisco made direct sales of frozen warmwater shrimp to 
retailers, food processors, restaurant chains, and distributors in the 
U.S. market, and food processors and distributors in the Spanish 
market. Promarisco reported that it made EP sales in the U.S. market on 
a DDP basis through one channel of distribution. We examined the 
selling activities performed for this channel, and found that 
Promarisco performed the following selling functions: Sales 
forecasting, sales promotion, order input/processing, payment of 
commissions, freight and delivery, and claim services. These selling 
activities can be generally grouped into two core selling function 
categories for analysis: (1) Sales and marketing (e.g., order input/
processing, sales promotion, claim services); and (2) freight and 
delivery. Accordingly, we find that Promarisco performed the core 
selling functions of sales and marketing, and freight and delivery for 
all customers in the U.S. market. Because all sales in the U.S. market 
are made through a single distribution channel, we preliminarily 
determine that there is one LOT in the U.S. market.
    With respect to the Spanish market, Promarisco reported that it 
made sales on an FOB, CIF, or CFR basis through one channel of 
distribution. We examined the selling activities performed for this 
channel, and found that Promarisco performed the following selling 
functions: Sales forecasting, sales promotion, order input/processing, 
payment of commissions, freight and delivery, and claim services. These 
selling activities can be generally grouped into two core selling 
function categories for analysis: (1) Sales and marketing (e.g., order 
input/processing, sales promotion, claim services); and (2) freight and 
delivery. Accordingly, based on the core selling functions, we find 
that Promarisco performed sales and marketing for all Spanish sales, 
and freight and delivery services for certain Spanish sales. We do not 
find that the provision of freight and delivery services for some sales 
is sufficient to distinguish it as a separate LOT. Accordingly, we 
preliminarily determine that there is one LOT in the Spanish market.
    Finally, we compared the EP LOT to the comparison market LOT and 
found that the core selling functions performed for U.S. and Spanish 
market customers are virtually identical. Therefore, we determined that 
sales to the U.S. and Spanish markets during the POR were made at the 
same LOT, and as a result, no LOT adjustment was warranted.

C. Cost of Production Analysis

    Based on our analysis of the petitioner's allegation, we found that 
there were reasonable grounds to believe or suspect that OceanInvest's 
sales of frozen warmwater shrimp in the third-country market were made 
at prices below their cost of production (COP). Accordingly, pursuant 
to section 773(b) of the Act, we initiated a sales-below-cost 
investigation to determine whether OceanInvest's sales were made at 
prices below their respective COPs. See OceanInvest COP Initiation 
Memo.
    In the LTFV investigation, the most recently completed segment of 
this proceeding as of April 6, 2007, the publication date of the 
initiation of this review, we found that Promarisco had made sales 
below the COP. See Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Certain Frozen 
and Canned Warmwater Shrimp From Ecuador, 69 FR 47091 (August 4, 2004); 
unchanged in Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Frozen and Canned Warmwater Shrimp From Ecuador, 69 FR 
76913 (December 23, 2004), and LTFV Amended Final Determination and 
Order. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, 
there are reasonable grounds to believe or suspect that Promarisco made 
sales in the third-country market at prices below the cost of producing 
the merchandise in the current review period. Accordingly, we 
instructed Promarisco

[[Page 12120]]

to respond to section D (Cost of Production) of the questionnaire.

Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated each 
respondent's COP based on the sum of its costs of materials and 
conversion for the foreign like product, plus amounts for general and 
administrative (G&A) expenses and interest expenses (see ``Test of 
Comparison Market Sales Prices'' section below for treatment of third-
country selling expenses).
    The Department relied on the COP data submitted by each respondent 
in its most recent supplemental response to section D of the 
questionnaire for the COP calculation, except for the following 
instances where the information was not appropriately quantified or 
valued.

a. OceanInvest

    We relied upon the COP data submitted by OceanInvest, including a 
correction to the raw material cost for one product that OceanInvest 
reported in its February 11, 2008, response. We recalculated the G&A 
and financial expenses reported for this product based on the revised 
total cost of manufacturing for this product. See Memorandum to Neal M. 
Halper, Director, Office of Accounting, from Gina K. Lee, Senior 
Accountant, entitled ``Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results--OceanInvest 
S.A.,'' dated February 28, 2008.

b. Promarisco

    We relied upon the COP data submitted by Promarisco with the 
exception of the financial expense ratio. We have recalculated 
Promarisco's financial expense ratio to exclude a certain interest 
income offset that was generated from assets classified as long-term 
assets. See Memorandum to Neal M. Halper, Director, Office of 
Accounting, from Christopher J. Zimpo, Accountant, entitled ``Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results--Promarisco, S.A.,'' dated February 28, 2008.

Test of Comparison Market Sales Prices

    On a product-specific basis, we compared the adjusted weighted-
average COP to the third-country sales of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
the sale prices were below the COP. For purposes of this comparison, we 
used COP exclusive of selling and packing expenses. The prices 
(inclusive of billing adjustments, where appropriate) were exclusive of 
any applicable movement charges, and direct and indirect selling 
expenses and packing expenses, revised where appropriate, as discussed 
below under the ``Price-to-Price Comparisons'' section.

Results of the COP Test

    In determining whether to disregard third-country sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Act: (1) Whether, within an extended period 
of time, such sales were made in substantial quantities; and (2) 
whether such sales were made at prices which permitted the recovery of 
all costs within a reasonable period of time in the normal course of 
trade. Where less than 20 percent of the respondent's third-country 
sales of a given product are at prices less than the COP, we do not 
disregard any below-cost sales of that product because we determine 
that in such instances the below-cost sales were not made within an 
extended period of time and in ``substantial quantities.'' Where 20 
percent or more of a respondent's sales of a given product are at 
prices less than the COP, we disregard the below-cost sales because: 
(1) They were made within an extended period of time in ``substantial 
quantities,'' in accordance with sections 773(b)(2)(B) and (C) of the 
Act, and (2) based on our comparison of prices to the weighted-average 
COPs for the POR, they were at prices which would not permit the 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(2)(D) of the Act.
    We found that, for certain specific products, more than 20 percent 
of OceanInvest's and Promarisco's third-country 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 
usable third-country sales in the ordinary course of trade, we compared 
EPs to the CV in accordance with section 773(a)(4) of the Act. See 
``Calculation of Normal Value Based on Constructed Value'' section 
below.

D. Calculation of Normal Value Based on Comparison Market Prices

1. OceanInvest
    We based NV for OceanInvest on FOB prices to unaffiliated customers 
in Italy. We made adjustments, where appropriate, to the starting price 
for billing adjustments. We made deductions, where appropriate, from 
the starting price for foreign inland freight and Ecuadorian brokerage 
and handling 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 (COS) 
for imputed credit expenses, bank fees, inspection fees, bill-of-lading 
document fees, and international courier fees. 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, as 
commissions were granted in the Italian market but not in the U.S. 
market, we deducted commissions paid in the Italian market from the 
starting price, and made an upward adjustment to NV for the lesser of 
(1) the amount of commission paid in the Italian market, or (2) the 
amount of indirect selling expenses incurred in the U.S. market.
    We also deducted comparison market packing costs and added U.S. 
packing costs, in accordance with sections 773(a)(6)(A) and (B) of the 
Act.
    OceanInvest reported certain ancillary freight-related expenses 
related to Italian sales, such as anti-narcotic inspection fees and 
bill-of-lading document fees, under the international freight expense 
variable in the third-country sales listing. We reclassified these 
expenses as selling expenses, consistent with our treatment of these 
expenses in AR1 Preliminary Results, 72 FR at 10704, unchanged in AR1 
Final Results.
2. Promarisco
    We calculated NV based on CIF, CFR or FOB prices to unaffiliated 
customers in the Spanish market. We made deductions from the starting 
price for movement expenses, including inland freight, marine 
insurance, and international freight, 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

[[Page 12121]]

773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in COS 
for imputed credit expenses. 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, as commissions were 
granted in the Spanish market but not in the U.S. market, we deducted 
commissions paid in the Spanish market from the starting price, and 
made an upward adjustment to NV for the lesser of (1) the amount of 
commission paid in the Spanish market, or (2) the amount of indirect 
selling expenses incurred in the U.S. market. We also deducted 
comparison market packing costs and added U.S. packing costs, in 
accordance with section 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 which we could not determine 
the NV based on comparison market sales because there were no usable 
sales of a comparable product, we based NV on CV.
    Section 773(e) of the Act provides that the CV shall be based on 
the sum of the cost of materials and fabrication for the imported 
merchandise, plus amounts for SG&A expenses, profit, and U.S. packing 
costs. For each respondent, we calculated the cost of materials and 
fabrication based on the methodology described in the ``Cost of 
Production Analysis'' section, above. We based SG&A and profit for each 
respondent on the actual amounts incurred and realized by the 
respondents in connection with the production and sale of the foreign 
like product in the ordinary course of trade for consumption in the 
comparison market, in accordance with section 773(e)(2)(A) of the Act.
    We made adjustments to CV for differences in COS in accordance with 
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP, 
we made COS adjustments by deducting direct selling expenses incurred 
on comparison market sales from, and adding U.S. direct selling 
expenses to, CV.

Currency Conversion

    We did not make any currency conversions pursuant to section 773A 
of the Act and 19 CFR 351.415 because all sales and cost data for both 
respondents were reported in U.S. dollars.

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:
---------------------------------------------------------------------------

    \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 adverse 
facts available.

------------------------------------------------------------------------
         Manufacturer/exporter                    Percent margin
------------------------------------------------------------------------
OceanInvest, S.A.......................  0.64
Promarisco, S.A........................   0.46 (de minimis)
----------------------------------------
   Review-Specific Average Rate Applicable to the Following Companies
                            there:&thnsp\6\
------------------------------------------------------------------------
Agrol, S.A.............................  0.64
Alquimia Marina S.A....................  0.64
Comar Cia Ltda.........................  0.64
Dunci S.A..............................  0.64
El Rosario S.A.........................  0.64
Empacadora Bilbo Bilbosa...............  0.64
Empacadora Del Pacifico S.A............  0.64
Empacadora Dufer Cia. Ltda.............  0.64
Empacadora Gran Mar S.A (Empagran).....  0.64
Empacadora Nacional....................  0.64
Empacadora y Exportadora Calvi Cia.      0.64
 Ltda.
Emprede................................  0.64
Estar C.A..............................  0.64
Exporklore, S.A........................  0.64
Exportadora Del Oceano Oceanexa C.A....  0.64
Gondi S.A..............................  0.64
Industria Pesquera Santa Priscila S.A..  0.64
Inepexa S.A............................  0.64
Jorge Luis Benitez Lopez...............  0.64
Karpicorp S.A..........................  0.64
Luis Loaiza Alvarez....................  0.64
Mardex Cia. Ltda.......................  0.64
Mariscos del Ecuador c. l. Marecuador..  0.64
Marines C.A............................  0.64
Natural Select S.A.....................  0.64
Negocios Industriales..................  0.64
Novapesca S.A..........................  0.64
Oceanmundo S.A.........................  0.64
Oceanpro...............................  0.64
Operadora y Procesadora de Productos     0.64
 Marinos S.A (Omarsa).
Oyerly S.A.............................  0.64
Pacfish S.A............................  0.64
PCC Congelados & Frescos S.A...........  0.64
Pescazul S.A...........................  0.64
Peslasa S.A............................  0.64
Phillips Seafood.......................  0.64
Procesadora del Rio Proriosa S.A.......  0.64
Promarosa Productos....................  0.64
Sociedad Nacional de Galapagos C.A       0.64
 (SONGA).
Tolyp S.A..............................  0.64
Transcity S.A..........................  0.64
------------------------------------------------------------------------

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). Interested 
parties may submit case briefs not later than 30 days after the date of 
publication of this notice. See 19 CFR 351.309(c)(1)(ii). Rebuttal 
briefs, limited to issues raised in the case briefs, may be filed not 
later than 35 days after the date of publication of this notice. See 19 
CFR 351.309(d)(1). Parties who submit case briefs or rebuttal briefs in 
this proceeding are requested to submit with each argument: (1) A 
statement of the issue; (2) a brief summary of the argument; and (3) a 
table of authorities.
    Interested parties, who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room 1117, within 30 days of the 
date of publication of this notice. Requests should contain: (1) the 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c). Issues raised in the hearing will be limited to those 
raised in the respective case briefs.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon completion of the administrative review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries, in accordance with 19 CFR 351.212. The Department will issue 
appropriate appraisement instructions for the companies subject to this 
review directly to CBP 15 days after the date of publication of the 
final results of this review.
    Regarding OceanInvest, for those sales where it reported the 
entered value of its U.S. sales, 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 those sales 
where OceanInvest did not report the

[[Page 12122]]

entered value of its U.S. sales, we will calculate customer-specific 
per-unit duty assessment rates by aggregating the total amount of 
antidumping duties calculated for the examined sales and dividing this 
amount by the total quantity of those sales. To determine whether the 
duty assessment rates are de minimis, in accordance with the 
requirement set forth in 19 CFR 351.106(c)(2), we will calculate 
importer-specific or customer-specific ad valorem ratios based on the 
estimated entered value.
    Regarding Promarisco, because it reported the entered value of all 
of its U.S. sales, we will calculate an importer-specific ad valorem 
duty assessment rate 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. We will 
calculate a single importer-specific assessment rate for Promarisco, 
consistent with our practice in AR1 Final Results. See also Ball 
Bearings and Parts Thereof from France, Germany, Italy, Japan, and 
Singapore: Final Results of the Antidumping Administrative Reviews, 
Rescission of Administrative Review in part, and Determination Not to 
Revoke Order in Part, 68 FR 35623 (June 16, 2003), and accompanying 
Issues and Decision Memorandum at Comment 9B; and Notice of Final 
Results of Antidumping Duty Administrative Review and Notice of Final 
Results of Antidumping Duty Changed Circumstances Review: Certain 
Softwood Lumber Products From Canada, 69 FR 75921 (December 20, 2004), 
and accompanying Issues and Decision Memorandum at Comment 13.
    For the responsive companies which were not selected for individual 
review, we will calculate an assessment rate based on the weighted 
average of the margin 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 or 
customer-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.
    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.

Discontinuation of Cash Deposit Requirements

    On August 15, 2007, in accordance with sections 129(b)(4) and 
129(c)(1)(B) of the Uruguay Round Agreements Act (URAA), the U.S. Trade 
Representative, after consulting with the Department and Congress, 
directed the Department to implement its determination to revoke the 
antidumping duty order on certain frozen warmwater shrimp from Ecuador. 
See Final Results of the section 129 Determination of Certain Frozen 
Warmwater Shrimp from Ecuador, 72 FR 48257 (August 23, 2007). 
Accordingly, the antidumping duty order on certain frozen warmwater 
shrimp from Ecuador was revoked effective August 15, 2007. As a result, 
we have instructed CBP to discontinue collection of cash deposits of 
antidumping duties on entries of the subject merchandise.

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. E8-4424 Filed 3-5-08; 8:45 am]
BILLING CODE 3510-DS-P