[Federal Register Volume 78, Number 46 (Friday, March 8, 2013)]
[Notices]
[Pages 14967-14979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-05483]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-201-820]


Fresh Tomatoes From Mexico: Suspension of Antidumping 
Investigation

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

DATES: Effective Date: March 4, 2013.

SUMMARY: The Department of Commerce has suspended the antidumping 
investigation involving fresh tomatoes from Mexico. The basis for the 
suspension of the antidumping investigation is an agreement between the 
Department of Commerce and producers/exporters accounting for 
substantially all imports of fresh tomatoes from Mexico wherein each 
signatory producer/exporter has agreed to revise its prices to 
eliminate completely the injurious effects of exports of this 
merchandise to the United States.

FOR FURTHER INFORMATION CONTACT: Judith Wey Rudman or Julie Santoboni 
at (202) 482-0192 or (202) 482-3063, respectively; Office of Policy, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street & Constitution Avenue NW., 
Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On February 2, 2013, the Department of Commerce (the Department) 
and Mexican tomato growers/exporters accounting for a significant 
percentage of all fresh tomatoes imported into the United States from 
Mexico initialed a proposed agreement to suspend the antidumping 
investigation on fresh tomatoes from Mexico. The Department released 
the proposed agreement to interested parties on February 2, 2013 and 
afforded them an opportunity to comment on the initialed agreement by 
February 11, 2013. Several interested parties filed comments.
    Based on this proposed agreement, and the anticipation that the 
Mexican tomato growers/exporters would withdraw from the 2008 
Suspension Agreement on Fresh Tomatoes from Mexico (see Suspension of 
Antidumping Investigation: Fresh Tomatoes from Mexico, 73 FR 4831 
(January 28, 2008) (2008 Agreement)) in order to enter into a new 
agreement if an acceptable agreement was reached, the Department 
published a notice of intent to terminate the suspension agreement and 
resume the antidumping investigation, and intent to terminate the 
sunset review on February 8, 2013. See Fresh Tomatoes from Mexico: 
Intent to Terminate Suspension Agreement and Resume Antidumping 
Investigation and Intent to Terminate Sunset Review, 78 FR 9366 
(February 8, 2013).
    On February 28, 2013, Mexican tomato growers/exporters accounting 
for a significant percentage of all fresh tomatoes imported into the 
United States from Mexico provided written notice to the Department of 
their withdrawal from the 2008 Agreement, effective 90 days from the 
date of their withdrawal letter (i.e., May 29, 2013), or earlier, at 
the Department's discretion. The Department accepted the Mexican tomato 
growers/exporters' withdrawal from the 2008 Agreement, effective March 
1, 2013. See Termination of Suspension Agreement, Termination of Five-
year Sunset Review and Resumption of Investigation, publication 
pending.
    On March 4, 2013, the Department signed a new suspension agreement 
(2013 Suspension Agreement) with certain growers/exporters of fresh 
tomatoes from Mexico. The 2013 Suspension Agreement is attached to this 
notice of Suspension of Antidumping Investigation.

Scope of the Investigation

    The merchandise subject to this investigation is all fresh or 
chilled tomatoes (fresh tomatoes) which have Mexico as their origin, 
except for those tomatoes which are for processing. For purposes of 
this investigation, processing is defined to include preserving by any 
commercial process, such as canning, dehydrating, drying, or the 
addition of chemical substances, or converting the tomato product into 
juices, sauces, or purees. Fresh tomatoes that are imported for cutting 
up, not further processing (e.g., tomatoes used in the preparation of 
fresh salsa or salad bars), are covered by this Agreement.
    Commercially grown tomatoes, both for the fresh market and for 
processing, are classified as Lycopersicon esculentum. Important 
commercial varieties of fresh tomatoes include common round, cherry, 
grape, plum, greenhouse, and pear tomatoes, all of which are covered by 
this investigation.
    Tomatoes imported from Mexico covered by this investigation are 
classified under the following subheading of the Harmonized Tariff 
Schedules of the United States (HTSUS), according to the season of 
importation: 0702. Although the HTSUS numbers are provided for 
convenience and customs purposes, the written description of the scope 
of this investigation is dispositive.

Suspension of Investigation

    The Department consulted with the Mexican tomato growers/exporters 
and the petitioners and has considered the comments submitted by 
interested parties with respect to the proposal to suspend the 
antidumping investigation. In accordance with section 734(c) of the 
Tariff Act of 1930 (the Act), we have determined that extraordinary 
circumstances are present in this case, as defined by section 
734(c)(2)(A) of the Act. See the memorandum titled ``Existence of 
Extraordinary Circumstances'' from Lynn Fischer Fox,

[[Page 14968]]

Deputy Assistant Secretary for Policy and Negotiations, to Paul 
Piquado, Assistant Secretary for Import Administration, dated March 4, 
2013.
    The 2013 Suspension Agreement provides that the subject merchandise 
will be sold at or above the established reference price and, for each 
entry of each exporter, the amount by which the estimated normal value 
exceeds the export price (or constructed export price) will not exceed 
15 percent of the weighted-average amount by which the estimated normal 
value exceeded the export price (or constructed export price) for all 
less-than-fair-value entries of the producer/exporter examined during 
the course of the investigation. We have determined that the 2013 
Suspension Agreement will eliminate completely the injurious effect of 
exports to the United States of the subject merchandise and prevent the 
suppression or undercutting of price levels of domestic fresh tomatoes 
by imports of that merchandise from Mexico. See the memorandum titled 
``The Prevention of Price Suppression or Undercutting of Price Levels 
in the 2013 Suspension Agreement on Fresh Tomatoes from Mexico'' from 
Lynn Fischer Fox, Deputy Assistant Secretary for Policy and 
Negotiations, to Paul Piquado, Assistant Secretary for Import 
Administration.
    We have also determined that the 2013 Suspension Agreement is in 
the public interest and can be monitored effectively, as required under 
section 734(d) of the Act. See the memorandum titled ``Public Interest 
Assessment of the Agreement Suspending the Antidumping Duty 
Investigation on Fresh Tomatoes from Mexico'' from Lynn Fischer Fox, 
Deputy Assistant Secretary for Policy and Negotiations, to Paul 
Piquado, Assistant Secretary for Import Administration, dated March 4, 
2013.
    For the reasons outlined above, we find that the 2013 Suspension 
Agreement meets the criteria of section 734(c) and (d) of the Act.

International Trade Commission

    In accordance with section 734(f) of the Act, the Department has 
notified the International Trade Commission of the 2013 Suspension 
Agreement.

Suspension of Liquidation

    The suspension of liquidation ordered in the preliminary 
affirmative determination in this case published on November 1, 1996 
(Notice of Preliminary Determination of Sales at Less Than Fair Value 
and Postponement of Final Determination: Fresh Tomatoes from Mexico, 61 
FR 56608 (November 1, 1996) (Preliminary Determination)) and resumed on 
March 1, 2013, shall continue to be in effect, subject to section 
734(h)(3) of the Act. Section 734(f)(2)(B) of the Act provides that the 
Department may adjust the security required to reflect the effect of 
the 2013 Suspension Agreement. The Department has found that the 2013 
Suspension Agreement eliminates completely the injurious effects of 
imports and, thus, the Department is adjusting the security required 
from signatories to zero. The security rates in effect for imports from 
non-signatory growers remain as published in the Preliminary 
Determination.
    Notwithstanding the 2013 Suspension Agreement, the Department will 
continue the investigation if it receives such a request within 20 days 
after the date of publication of this notice in the Federal Register, 
in accordance with section 734(g) of the Act.

Administrative Protective Order Access

    The Administrative Protective Orders (APOs) that the Department 
granted in the original investigation phase and the resumed 
investigation segment of this proceeding remain in place. While the 
investigation is suspended, parties subject to those APOs may retain, 
but may not use, information received under those APOs. All parties 
wishing access to business proprietary information submitted during the 
administration of the 2013 Suspension Agreement must submit APO 
applications in accordance with the Department's regulations currently 
in effect. See section 777(c)(1) of the Act; 19 CFR 351.103, 351.304, 
351.305 and 351.306. An APO for the administration of the 2013 
Suspension Agreement will be placed on the record within five days of 
the date of publication of this notice in the Federal Register.
    We are issuing and publishing this determination under section 
734(f) of the Act.

    Dated: March 4, 2013.
Paul Piquado,
Assistant Secretary for Import Administration.

Suspension of Antidumping Investigation: Fresh Tomatoes From Mexico

    Pursuant to section 734(c) of the Tariff Act of 1930, as amended 
(19 U.S.C. 1673c(c)) (the Act), and section 351.208 of the U.S. 
Department of Commerce (the Department) regulations (19 CFR 351.208 
(2012)),\1\ the signatory producers/exporters of fresh tomatoes from 
Mexico (signatories) and the Department enter into this Suspension 
Agreement (Agreement). On the basis of this Agreement, the Department 
shall suspend its antidumping duty investigation, the initiation of 
which was published on April 25, 1996 (61 FR 18377), with respect to 
fresh tomatoes from Mexico, subject to the terms and provisions set out 
below.
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    \1\ The resumption of the investigation and negotiation of a new 
suspension agreement were conducted in accordance with the 
Department's regulations in effect at the time of the original 
investigation, 19 CFR 353.18 (1996). Because this Agreement 
constitutes a new segment of the proceeding, the Agreement is 
governed by the regulations currently in effect. 19 CFR 351.701; see 
also San Vicente Camalu SPR de Ri v. United States, 491 F. Supp. 2d 
1186 (CIT 2007).
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I. Product Coverage

    The merchandise subject to this Agreement is all fresh or chilled 
tomatoes (fresh tomatoes) which have Mexico as their origin, except for 
those tomatoes which are for processing. For purposes of this 
Agreement, processing is defined to include preserving by any 
commercial process, such as canning, dehydrating, drying, or the 
addition of chemical substances, or converting the tomato product into 
juices, sauces, or purees. In Appendix F of this Agreement the 
Department has outlined the procedure that signatories must follow for 
selling subject merchandise for processing. Fresh tomatoes that are 
imported for cutting up, not further processing (e.g., tomatoes used in 
the preparation of fresh salsa or salad bars), are covered by this 
Agreement.
    Commercially grown tomatoes, both for the fresh market and for 
processing, are classified as Lycopersicon esculentum. Important 
commercial varieties of fresh tomatoes include common round, cherry, 
grape, plum, greenhouse, and pear tomatoes, all of which are covered by 
this Agreement.
    Tomatoes imported from Mexico covered by this Agreement are 
classified under the following subheadings of the Harmonized Tariff 
Schedules of the United States (HTSUS), according to the season of 
importation: 0702. Although the HTSUS numbers are provided for 
convenience and customs purposes, the written description of the scope 
of this Agreement is dispositive.

II. U.S. Import Coverage

    In accordance with section 734(c)(1) of the Act, the signatories 
are the producers and exporters in Mexico which account for 
substantially all of the subject merchandise imported into the United 
States. The Department may at any time during the period of the 
Agreement require additional producers/exporters in Mexico to sign

[[Page 14969]]

the Agreement in order to ensure that not less than substantially all 
imports into the United States are subject to the Agreement.

III. Basis for the Agreement

    In order to satisfy the requirements of section 734(c)(1)(A) of the 
Act, each signatory individually agrees that, in order to prevent price 
suppression or undercutting, it will not sell in the United States, on 
and after the effective date of the Agreement, merchandise subject to 
the Agreement at prices that are less than the reference price, in 
accordance with Appendix A to this Agreement.
    In order to satisfy the requirements of section 734(c)(1)(B) of the 
Act, each signatory individually agrees that for each entry the amount 
by which the estimated normal value exceeds the export price (or the 
constructed export price) will not exceed 15 percent of the weighted 
average amount by which the estimated normal value exceeded the export 
price (or the constructed export price) for all less-than-fair-value 
entries of the producer/exporter examined during the course of the 
investigation, in accordance with the Act and the Department's 
regulations and procedures, including but not limited to the 
calculation methodologies described in Appendix B of this Agreement.

IV. Monitoring of the Agreement

A. Import Monitoring
    1. The parties to this Agreement acknowledge that the signatories 
intend to establish a joint industry-Government-of-Mexico working group 
(``Working Group'') that will regularly monitor and reconcile Mexican 
export data and identify and address any inconsistencies or 
irregularities. The Working Group will refer any alleged violations 
(either those discovered during its monitoring exercises or those 
reported by the Department) to the Mexican Government for appropriate 
action. For further information, please see information provided at: 
http://ia.ita.doc.gov/tomato.
    2. The Department will monitor entries of fresh tomatoes from 
Mexico to ensure compliance with section III of this Agreement.
    3. The Department will review publicly available data and other 
official import data, including, as appropriate, records maintained by 
U.S. Customs and Border Protection, to determine whether there have 
been imports that are inconsistent with the provisions of this 
Agreement.
    4. The Department will review, as appropriate, data it receives 
from the Working Group and through any data exchange program between 
U.S. and Mexican government agencies, to determine whether there have 
been imports that are inconsistent with the provisions of this 
Agreement.
B. Compliance Monitoring
    1. The Department may require, and each signatory agrees to 
provide, confirmation, through documentation provided to the 
Department, that the price received on any sale subject to this 
Agreement was not less than the established reference price. The 
Department may require that such documentation be provided and be 
subject to verification.
    2. The Department may require and each signatory agrees to report 
in the prescribed format and using the prescribed method of data 
compilation, each sale of the merchandise subject to this Agreement, 
either directly or indirectly to unrelated purchasers in the United 
States, including each adjustment applicable to each sale, as specified 
by the Department. Each signatory agrees to permit review and on-site 
inspection of all information deemed necessary by the Department to 
verify the reported information.
    3. The Department may only initiate administrative reviews under 
section 751(a) of the Act in the month immediately following the 
anniversary month, upon request or upon its own initiative, to ensure 
that exports of fresh tomatoes from Mexico satisfy the requirements of 
section 734(c)(1)(A) and (B) of the Act. The Department may perform 
verifications pursuant to administrative reviews conducted under 
section 751 of the Act.
    4. At any time it deems appropriate, and without prior notice, the 
Department will conduct verifications of parties handling signatory 
merchandise to determine whether they are selling signatory merchandise 
in accordance with the terms of this Agreement. The Department will 
also conduct verifications at the association level at locations and 
times it deems appropriate.
C. Shipping and Other Arrangements
    1. All reference prices will be expressed in U.S. $/lb in 
accordance with Appendix A of this Agreement. Subject to paragraph 24 
of Annex 703.2 of the North American Free Trade Agreement, the quality 
of each entry of fresh tomatoes exported to the United States from 
Mexico will conform with any applicable U.S. Department of Agriculture 
minimum grade, size, and/or quality import requirements in effect.
    2. The parties to this Agreement acknowledge that in accordance 
with Mexican regulations, Mexican tomato growers and non-grower 
exporters exporting to the United States will become signatories to the 
Agreement. Signatories will fully comply with all requirements of 
Mexican regulations concerning identification, tracking, verification 
and inspection by the relevant Mexican authorities including the 
Ministry of Economy (SECON), the Ministry of Agriculture (SAGARPA), 
SAGARPA's National Food Health, Safety and Quality Service (SENASICA) 
and Customs. In accordance with Mexican regulations, non-compliance 
will result in the revocation of export privileges. For further 
information, please see information provided at: http://ia.ita.doc.gov/tomato.
    3. Signatories agree not to circumvent the Agreement and to 
undertake measures that will help to prevent circumvention. For 
example, each signatory will take the following actions:
    a. It is the responsibility of each signatory to ensure that sales 
of its merchandise are made consistent with the requirements of this 
Agreement. To that end, each signatory shall enter into a contract with 
the party that is responsible for the first sale of its subject 
merchandise to an unaffiliated customer in the United States (the 
Selling Agent) that incorporates the terms of this Agreement.\2\ It is 
the responsibility of each signatory to confirm and ensure that the 
Selling Agent holds a valid and effective license issued pursuant to 
the Perishable Agricultural Commodities Act of 1930, as amended (7 
U.S.C. 499a et seq.) (PACA).\3\
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    \2\ For purposes of this Agreement, a Selling Agent can be an 
importer, agent, distributor, or any entity that facilitates the 
transaction between the signatory and the first unaffiliated U.S. 
customer that meets the definition of ``commission merchant'', 
``dealer'' or ``broker'', as those terms are defined in section 1(b) 
of the PACA (7 U.S.C. 499a(b)). A commission merchant, dealer or 
broker operating as a Selling Agent without a valid and effective 
PACA license is operating subject to license.
    \3\ This may be done by using ``PACA SEARCH'' on the PACA Web 
site at www.usda.gov/paca, or by calling the PACA National License 
Center Customer Service line at 1-800-495-7222, ext 1.
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    Through a contractual arrangement signatories shall also require 
the Selling Agent to establish a contract with third parties to ensure 
that adjustments for spoilage or other claims inconsistent with the 
Agreement will not be permitted. Further, this contractual arrangement 
must establish that the Selling Agent maintain documentation 
demonstrating that sales of their

[[Page 14970]]

merchandise are made consistent with the requirements of this 
Agreement.
    b. Each signatory will label its boxes of subject merchandise that 
are exported to the United States with its name, signatory 
identification number, and a statement that ``These Tomatoes Were 
Grown/Exported By a Signatory of the 2013 Suspension Agreement.'' \4\ 
Alternatively, if the signatory that exports the tomatoes is different 
from the entity that grew the tomatoes, it will label the boxes with 
its name and its signatory identification number. Each signatory also 
will label its boxes with the type of tomato and the growing/production 
method of the product being shipped in the box, i.e., open field; 
adapted environment; or controlled environment.
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    \4\ Signatories may continue to use boxes with markings from the 
2008 Suspension Agreement through September 30, 2013, but they must 
add the growing method of the product being shipped to the existing 
labeling on the box.
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    For purposes of this Agreement, controlled environment tomatoes are 
limited to those tomatoes grown in a fully-enclosed permanent aluminum 
or fixed steel structure clad in glass, impermeable plastic, or 
polycarbonate using automated irrigation and climate control, including 
heating and ventilation capabilities, in an artificial medium using 
hydroponic methods.
    c. Each signatory will label its boxes of fresh tomatoes sold in 
Mexico with its name and the statement ``Prohibida Su Exportacion a los 
EUA/Not for Export to the United States''.
    4. Not later than thirty days after the end of each quarter, each 
signatory will submit a written statement to the Department certifying 
that all sales during the most recently completed quarter were at net 
prices (after rebates, backbilling, discounts for quality and other 
claims) at or above the reference prices in effect and were not part of 
or related to any act or practice which would have the effect of hiding 
the real price of the fresh tomatoes being sold (e.g., a bundling 
arrangement, discounts/free goods/financing package, end-of-year 
rebates, swap, or other exchange). Each signatory that did not export 
tomatoes to the United States during any given quarter will submit a 
written statement to the Department certifying that it made no sales to 
the United States during the most recently completed quarter. Each 
signatory agrees to permit full verification of its certification as 
the Department deems necessary. Failure to provide a quarterly 
certification may be considered a violation of the Agreement.
D. Rejection of Submissions
    The Department may reject: (1) Any information submitted after the 
deadlines set forth in this Agreement; (2) any submission that does not 
comply with the filing, format, translation, service, and certification 
of documents requirements under 19 CFR 351.303; (3) submissions that do 
not comply with the procedures for establishing business proprietary 
treatment under 19 CFR 351.304; (4) submissions that do not comply with 
any other applicable regulations, as appropriate, or any information 
that it is unable to verify to its satisfaction. If information is not 
submitted in a complete and timely fashion or is not fully verifiable, 
the Department may use facts otherwise available for the basis of its 
decision, as it determines appropriate, unless the Department 
determines that section V applies.
E. Compliance Consultations
    1. When the Department identifies, through import or compliance 
monitoring or otherwise, that sales may have been made at prices 
inconsistent with section III of this Agreement, the Department will 
notify each signatory which it believes is responsible through their 
associations' counsel or directly, in the event that the signatory is 
not represented by counsel. The Department will consult with each such 
party for a period of up to sixty days to establish a factual basis 
regarding sales that may be inconsistent with section III of this 
Agreement.
    2. During the consultation period, the Department will examine any 
information that it develops or which is submitted, including 
information requested by the Department under any provision of this 
Agreement.
    3. If the Department is not satisfied at the conclusion of the 
consultation period that sales by such signatory are being made in 
compliance with this Agreement, the Department may evaluate under 
section 751 of the Act whether this Agreement is being violated, as 
defined in section V.F of this Agreement, by such signatory. Without 
prejudice to the provisions of section VI.B of this Agreement, in no 
event will the Department terminate the Agreement under this provision 
outside of the scope of a review under section 751.
F. Operations Consultations
    The Department will consult with the signatories regarding the 
operations of this Agreement. A party to the Agreement may request such 
consultations in any April or September (i.e., prior to the beginning 
of each season).
    Notwithstanding the previous paragraph, the parties may agree to 
revise the reference prices at any time.

V. Violations of the Agreement

    A. ``Violation'' means noncompliance with the terms of this 
Agreement, whether through an act or omission, except for noncompliance 
that may be considered inconsequential and inadvertent, or does not 
substantially frustrate the purposes of this Agreement.
    B. If the Department determines that there has been a violation of 
the Agreement or that the Agreement no longer meets the requirements of 
sections 734(c) or (d) of the Act, the Department shall take action it 
determines appropriate under section 734(i) of the Act and the 
Department's regulations.
    C. Pursuant to section 734(i) of the Act, the Department will refer 
any intentional violations of the Agreement to U.S. Customs and Border 
Protection. Any person who intentionally commits a violation of the 
Agreement shall be subject to a civil penalty assessed in the same 
amount, in the same manner, and under the same procedures as the 
penalty imposed for a fraudulent violation of section 592(a) of the 
Act. A fraudulent violation of section 592(a) of the Act is punishable 
by a civil penalty in an amount not to exceed the domestic value of the 
merchandise. For purposes of the Agreement, the domestic value of the 
merchandise will be deemed to be not less than the reference price, as 
the signatories agree not to sell the subject merchandise at prices 
that are less than the reference price or to ensure that sales of the 
subject merchandise are made consistent with the terms of the 
Agreement.
    D. In addition, the Department will examine the activities of 
signatories, their Selling Agents, and any other party to a sale 
subject to the Agreement to determine whether any activities conducted 
by any party aided or abetted another party's violation of the 
Agreement. If any such parties are found to have aided or abetted 
another party's violation of the Agreement, they shall be subject to 
the same civil penalties described in section V.C. above.
    Signatories to this Agreement consent to the release of all 
information presented to or obtained by the Department during the 
conduct of verifications with U.S. Customs and Border Protection and/or 
the U.S. Department of Agriculture. Further, through a contractual 
arrangement, signatories shall require that the Selling

[[Page 14971]]

Agent consent to the release of all information presented to or 
obtained by the Department during the conduct of verifications with 
U.S. Customs and Border Protection and/or the U.S. Department of 
Agriculture.
    E. A violation of this Agreement by a Selling Agent may also 
constitute an unfair trade practice that violates the PACA.\5\ The 
Department, a signatory, or any other interested person may file with 
the Secretary of Agriculture a written notification of any alleged 
violation of the PACA pursuant to section 6(b) of the PACA (7 U.S.C. 
499f(b)). Upon receipt of a written notification, USDA will examine the 
allegation and determine whether further investigation, issuance of a 
letter of warning, or administrative complaint is warranted. Failure of 
a PACA licensee to cooperate with an ongoing investigation can lead to 
suspension of license and publication thereof. When an administrative 
complaint is filed, a finding by an administrative law judge that a 
PACA licensee or an entity operating subject to license has engaged in 
repeated and flagrant violations of the PACA can result in the 
assessment of a civil penalty, or suspension or revocation of the PACA 
license and/or publication thereof. Ensuing licensing and employment 
restrictions are mandated by the PACA. Notice of disciplinary actions 
taken against a licensee or an entity subject to license is released to 
the public.
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    \5\ Although not a party to this Agreement, the actions of an 
unaffiliated buyer who is a PACA licensee or is operating subject to 
license that aid or abet a violation of the Agreement may constitute 
an unfair trade practice that violates the PACA.
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    F. The following activities shall be considered violations of the 
Agreement:
    1. Sales that are at net prices (after rebates, backbilling, 
discounts for quality and other claims) that are below the reference 
price.
    2. Any act or practice which would have the effect of hiding the 
real price of the fresh tomatoes being sold (e.g., a bundling 
arrangement, commingling tomato products, discounts/free goods 
financing package, swap, or other exchange).
    3. Sales that are not in accordance with the terms and conditions 
applied by the Department when calculating prices for transactions 
involving adjustments due to changes in condition after shipment as 
detailed in Appendix D of this Agreement.
    4. Selling signatory tomatoes to Canada in a manner that is not 
consistent with the requirements of Appendix E of this Agreement.
    5. Selling signatory tomatoes for processing in the United States 
in a manner that is not consistent with the requirements of Appendix F 
of this Agreement.
    6. Labeling boxes in a manner that is inconsistent with the 
labeling provisions of section IV.C.3.b. and c. above for the apparent 
purpose of circumventing this Agreement.
    7. Repeated or routine over filling of boxes beyond reasonable 
variations in weights for the apparent purpose of circumventing this 
Agreement.
    8. Any other act or practice that the Department finds is in 
violation of this Agreement.

VI. Other Provisions

    A. In entering into this Agreement the signatories do not admit 
that any exports of fresh tomatoes from Mexico are having or have had 
an injurious effect on fresh tomato producers in the United States, 
have caused the suppression or undercutting of prices, or have been 
sold at less than fair value.
    B. The signatories or the Department may withdraw from this 
Agreement upon ninety days written notice to the other party.
    C. Upon request, the Department will advise any signatory of the 
Department's methodology for calculating its export price (or 
constructed export price) and normal value in accordance with the Act 
and the Department's regulations and procedures, including but not 
limited to, the calculation methodologies described in Appendix B of 
this Agreement.

VII. Disclosure and Comment

    This section provides for disclosure and comment on consultations 
not involving a review under section 751 of the Act.
    A. If the Department proposes to revise the reference price(s) as a 
result of consultations under this Agreement, not later than two months 
prior to the first day of each semi-annual period, the Department will 
disclose the results and the methodology of the Department's 
calculation of the preliminary reference price(s) established for that 
upcoming semi-annual period.
    B. Not later than seven days after the date of disclosure under 
paragraph VII.A, the parties to the proceeding may submit written 
comments concerning the proposed reference price(s) to the Department, 
not to exceed fifteen pages. After reviewing these submissions, the 
Department will provide the final reference price(s) for the upcoming 
semi-annual period, normally within thirty days after the date of 
disclosure under paragraph VII.A.
    C. The Department may make available to representatives of each 
interested party to the proceeding, under appropriately drawn 
administrative protective orders, any business proprietary information 
submitted to and/or collected by the Department pursuant to section IV 
of this Agreement, as well as the results of the Department's analysis 
of that information.

VIII. Duration of the Agreement

    This Agreement has no scheduled termination date. Termination of 
the suspended investigation will be considered in accordance with the 
five-year review provisions of section 351.218 of the Department's 
regulations.

IX. Effective Date

    The effective date of the Agreement is March 4, 2013.
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Paul Piquado
Assistant Secretary for Import Administration U.S. Department of 
Commerce

March 4, 2013
Date

    The following parties hereby certify that the members of their 
organization agree to abide by all terms of the Agreement:

H. Armando Borboa Lopez, President
(Name and Title of Certifying Official)

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(Signature of Certifying Official)

For CAADES, Sinaloa, A.C.

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Date

William Manuel Hedrick Villalobos, President
(Name and Title of Certifying Official)

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(Signature of Certifying Official)

For Consejo Agricola de Baja California, A.C.

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Date

Carlos Enrique Cueto Rodriguez, President

(Name and Title of Certifying Official)

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(Signature of Certifying Official)

For Asociacion Mexicana de Horticultura Protegida, A.C.

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Date

Gaspar Zaragoza Iberri, President
(Name and Title of Certifying Official)

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(Signature of Certifying Official)

For Union Agricola Regional de Sonora, Productores de Hortalizas Frutas 
y Legumbres


[[Page 14972]]


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Date

Basilio Gatzionis Torres, President
(Name and Title of Certifying Official)

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(Signature of Certifying Official)

For Confederacion Nacional de Productores de Hortalizas
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Date

Appendix A--Suspension Of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Reference Price

    Consistent with the requirements of section 734(c) of the Act, 
to eliminate completely the injurious effect of exports to the 
United States and to prevent the suppression or undercutting of 
price levels of domestic fresh tomatoes, the Department and the 
signatory producer/exporters of the subject merchandise hereby agree 
to adopt the reference prices calculated based on a similar 
methodology to that outlined in the November 1, 1996, agreement 
suspending the antidumping investigation involving fresh tomatoes 
from Mexico, as amended on August 14, 1998. See Suspension of 
Antidumping Investigation; Fresh Tomatoes from Mexico, 61 FR 56618, 
56620 (November 1, 1996), October 28, 1996, Memorandum to Robert S. 
LaRussa titled ``The Prevention of Price Suppression or Undercutting 
of Price Levels in the Suspension Agreement Covering Fresh Tomatoes 
from Mexico,'' Amendment to the Suspension Agreement on Fresh 
Tomatoes from Mexico, 63 FR 43674 (August 14, 1998), and Final 
Results of Analysis of Reference Prices and Clarifications and 
Corrections; Agreement Suspending the Antidumping Duty Investigation 
on Fresh Tomatoes from Mexico, 68 FR 62281 (November 3, 2003). For 
purposes of this Agreement, the reference prices have been updated 
to reflect recent pricing data, as well as to include additional 
reference prices for fresh tomatoes grown in a controlled 
environment and specialty tomatoes. For purposes of this Agreement, 
controlled environment tomatoes are limited to those tomatoes grown 
in a fully-enclosed permanent aluminum or fixed steel structure clad 
in glass, impermeable plastic, or polycarbonate using automated 
irrigation and climate control, including heating and ventilation 
capabilities, in an artificial medium using hydroponic methods. For 
purposes of this Agreement, specialty tomatoes include grape, 
cherry, heirloom and cocktail tomatoes.
    Accordingly, the reference prices are as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
July 1 through October 22......  Open Field and Adapted           0.2458
                                  Environment, other
                                  than specialty.
                                 Controlled Environment,          0.3251
                                  other than specialty.
                                 Specialty--loose.......          0.3568
                                 Specialty--packed......          0.4679
October 23 through June 30.....  Open Field and Adapted           0.31
                                  Environment, other
                                  than specialty.
                                 Controlled Environment,          0.41
                                  other than specialty.
                                 Specialty--loose.......          0.45
                                 Specialty--packed......          0.59
------------------------------------------------------------------------

    These reference prices will remain in effect unless modified in 
accordance with the provisions of paragraph IV.F of the Agreement or 
as described below. The Department reserves the right to modify its 
methodology in establishing a reference price, if appropriate, and 
will do so in accordance with the provisions of paragraph IV.F of 
the Agreement.
    The term ``reference price'' refers to the price F.O.B. from the 
Selling Agent. The reference price includes all palletizing and 
cooling charges incurred prior to shipment from the Selling Agent. 
The actual movement or handling expenses beyond the point of entry 
into the United States (e.g., McAllen, Nogales, Otay Mesa) must be 
added to the reference price and must reflect the cost for an arm's-
length transaction. The chart below contains examples of certain 
minimum common trucking charges based on average U.S. long haul 
trucking rates calculated by the USDA observed during January 
through September 2012.

----------------------------------------------------------------------------------------------------------------
                      F.O.B. Nogales to:                         Los Angeles        New York         Chicago
----------------------------------------------------------------------------------------------------------------
Rate ($US)/Per Truckload.....................................           $1337            $5988            $4396
----------------------------------------------------------------------------------------------------------------

    Parties should refer to ``Agricultural Refrigerated Truck 
Quarterly'', which can be found at http://www.ams.usda.gov/fv/mncs/fvwires.htm to obtain examples of common trucking charges for prior 
seasons and to Market News Truck Rate Report, http://www.ams.usda.gov/mnreports/fvwtrk.pdf to obtain common trucking 
charges pertinent to the current season. Where the Selling Agent 
sells through an affiliated party, the transfer price from the 
Selling Agent to the affiliate must be at or above the reference 
price and any subsequent sale to an unaffiliated party must include 
the actual cost of markups (e.g., trucking charges) that reflect 
arm's-length costs. For guidance on the trucking-charge markup for 
such resales, parties should also refer to Market News Truck Rate 
Report, http://www.ams.usda.gov/mnreports/fvwtrk.pdf.
    During the Department's verifications of parties handling 
signatory merchandise it will ascertain whether: (1) The handling 
expenses beyond the point of entry into the United States are added 
to the reference price and reflect the actual cost for an arm's-
length transaction; and (2) the transfer price from the Selling 
Agents to their affiliates are at or above the applicable reference 
price and that any subsequent sale to an unaffiliated party includes 
the appropriate markups (e.g., trucking charges) that reflect arm's-
length expenses.
    The reference price for each type of box shall be determined 
based on the average weights stated in the chart contained in 
Appendix C of the Agreement.

Appendix B--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Analysis of Prices at Less Than Fair Value

A. Normal Value

    The cost or price information reported to the Department that 
will form the basis of the normal value (NV) calculations for 
purposes of the Agreement must be comprehensive in nature and based 
on a reliable accounting system (e.g., a system based on well-
established standards and can be tied either to the audited 
financial statements or to the tax return filed with the Mexican 
government).

1. Based on Sales Prices in the Comparison Market

    When the Department bases normal value on sales prices, such 
prices will be the prices at which the foreign like product is first 
sold for consumption in the comparison market in the usual 
commercial quantities and in the ordinary course of trade. Also, to 
the extent practicable, the comparison shall be made at the same 
level of trade as the export price (EP) or constructed export price 
(CEP).
    Calculation of NV:

Gross Unit Price
     Billing Adjustments
    - Movement Expenses
    - Discounts and Rebates
    - Direct Selling Expenses
    - Commissions
    - Home Market Packing Expenses
= Normal Value (NV)

2. Constructed Value

    When normal value is based on constructed value, the Department 
will compute constructed values (CVs) for each growing season, as 
appropriate, based on the

[[Page 14973]]

sum of each respondent's growing and harvesting costs for each type 
of tomato, plus amounts for selling, general and administrative 
expenses (SG&A), U.S. packing costs, and profit. The Department will 
collect this cost data for an entire growing season in order to 
determine the accurate per-unit CV of that growing season.
    Calculation of CV:

+ Direct Materials
+ Direct Labor
+ Factory overhead
= Cost of Manufacturing
    + Home Market SG&A*
= Cost of Production
    + U.S. Packing
    + Profit*
= Constructed Value (CV)

    * SG&A and profit are based on home-market sales of the foreign 
like product made in the ordinary course of trade. SG&A includes 
financing but not movement expenses.

B. Export Price and Constructed Export Price

    EP and CEP refer to the two types of calculated prices for 
merchandise imported into the United States. Both EP and CEP are 
based on the price at which the subject merchandise is first sold to 
a person not affiliated with the foreign producer or exporter.
    Calculation of EP:

Gross Unit Price
- Movement Expenses
- Discounts and Rebates
 Billing Adjustments
+ Packing Expenses
+ Rebated Import Duties
= Export Price (EP)

    Calculation of CEP:
Gross Unit Price
    - Movement Expenses
    - Discounts and Rebates
     Billing Adjustments
    - Direct Selling Expenses
    - Indirect Selling Expenses that relate to commercial activity 
in the United States
    - The cost of any further manufacture or assembly incurred in 
the United States
    - CEP Profit
    + Rebated Import Duties
    - Commissions
= Constructed Export Price (CEP)

C. Fair Comparisons

    To ensure that a fair comparison with EP or CEP is made, the 
Department will make adjustments to normal value. The Department 
will adjust for physical differences between the merchandise sold in 
the United States and the merchandise sold in the home market. For 
EP sales, the Department will add in U.S. direct selling expenses, 
U.S. commissions \1\ and packing expenses. For CEP sales, the 
Department will subtract the amount of the CEP offset, if warranted, 
and add in U.S. packing expenses.
---------------------------------------------------------------------------

    \1\ If there are not commissions in both markets, then the 
Department will apply a commission offset.
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Appendix C--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Box Weights

    The Department has the sole authority to make revisions to the 
Box Weight Charts used to apply the applicable reference price to 
particular box configurations. The reference prices for each pack 
style or box configuration shall be determined based on the average 
net weights stated in the Box Weight Charts below.
    The Department intends to commence and complete a box weighing 
exercise within 12 months following the signature of this Agreement, 
and thereafter, at such times as considered appropriate by the 
Department.
    All weighing exercises may occur at a U.S. Customs and Border 
Protection (CBP) port facility, at U.S. Selling Agent facilities, in 
bonded compounds, or at signatory packhouses, at the sole discretion 
of the Department. For weighing exercises conducted at a CBP port 
facility, the Department will coordinate with CBP in its collection 
and review of data for calculating and monitoring box-specific 
average weights for any winter or summer season, as appropriate.
    The Department will provide 14 hours advance notice to the 
signatories (through their associations' counsel or directly to the 
signatories, in the event that they are not represented by counsel) 
of the commencement of any box weighing exercise. Subject to 
approval by the Department and CBP, as appropriate, the Department 
will undertake best efforts to ensure that at least two, but no more 
than four representatives of the signatories are permitted access to 
a port or other facility to observe the box weighing exercise. 
Observers will be chosen by the signatory associations. Any requests 
for additional observers from signatories not represented by 
association counsel will be considered by the Department. In the 
event that no otherwise qualified observers are permitted by CBP to 
enter a port facility, the Department will either delay the exercise 
until at least one qualified observer is present or, at its 
discretion, will conduct the box weighing exercise at an alternate 
location.\1\
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    \1\ Assuming proper notice is provided and necessary government 
approval is granted, it is the signatories' responsibility to ensure 
that their representatives observe the box weighing exercise, or the 
right to observe is waived.
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    To derive representative average net weights \2\ for each box 
type in the charts below, and any configurations that may be added, 
the Department will weigh twenty sample boxes from ten shippers for 
high-volume pack types,\3\ a minimum of two shippers for low-volume 
pack types, and five shippers for all other pack types. All shippers 
will be randomly chosen, without notice to the specific shippers.
---------------------------------------------------------------------------

    \2\ Average net weights are calculated by deducting the tare 
weight from the average gross box weight. For each twenty-box 
sample, the tare weight will be calculated by weighing a minimum of 
two empty boxes. If the differences in the weights of the boxes 
exceed two-hundredths of a pound, additional boxes will be weighed 
to establish the tare. Irrespective of any deviation, the average 
weight of five boxes will be sufficient to establish the tare.
    \3\ The 25 pound box configuration is an example of a high-
volume pack type.
---------------------------------------------------------------------------

    Observers may raise bona fide challenges to the recording of the 
weight of a particular box at the time it is weighed and must 
specify the nature of the challenge.\4\ The parties will endeavor to 
resolve any such challenges immediately at the time of the weighing. 
A box weight will not be recorded if a bona fide challenge is not 
resolved. No challenges to the weight of a box will be considered 
once its weight has been recorded.
---------------------------------------------------------------------------

    \4\ Examples of bona fide challenges may include the non-random 
selection of trucks, loads or boxes, or selection of wet, damaged, 
or compromised boxes or pallets.
---------------------------------------------------------------------------

    If the Department determines to revise an average weight figure 
based upon information that an average weight on the chart is no 
longer accurate or to provide an average weight for a box 
configuration not currently on the chart, the Department will 
provide at least fifteen days notice to signatories (through their 
associations' counsel or directly to the signatories, in the event 
that they are not represented by counsel) prior to the effective 
date of such revised average weights for purposes of this Agreement. 
The Department will determine the revised average weight in 
accordance with the procedure described above.
    In the event that a signatory intends to export subject 
merchandise to the United States in a box for which there is no 
average weight on the chart, the signatory shall notify the 
Department in writing no later than five business days prior to the 
date of the first exportation of such boxes to the United States. 
Signatories can obtain from the Department's Web site a copy of the 
suggested form for submitting this information. See ``Notification 
of Intent to Ship Tomatoes in a New Pack Type'' at http://ia.ita.doc.gov/tomato/2013-agreement/documents/suggested_forms/. 
This information must be submitted to the Department in accordance 
with the filing instructions set forth in the Department's 
regulations. The Department shall allow any interested party to 
submit written comments, not to exceed ten pages, on the appropriate 
average weight for the box within seven days after the filing of the 
written notification by the signatory, and the Department shall 
inform the signatory or its representative of the average weight for 
the box no later than thirty days after filing of the written 
notification by the signatory. A signatory's failure to notify the 
Department of intended shipments of tomatoes in boxes for which 
there is no average weight on the box weight chart may constitute a 
violation of the Agreement.

[[Page 14974]]

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Appendix D--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Procedures for Making Adjustments to the Sales Price Due 
to Certain Changes In Condition After Shipment

    The purpose of this appendix is to explain the procedures for 
making adjustments to the sales price of signatory tomatoes due to 
certain changes in condition after shipment, such that the sales 
price for any tomatoes accepted in a lot \11\ does not fall below 
the reference price. The procedures outlined in this appendix only 
apply if the adjustment reduces the net sales price below the 
reference price.
---------------------------------------------------------------------------

    \11\ For these purposes, a lot is defined as a grouping of 
tomatoes in a particular shipment that is distinguishable by packing 
type.
---------------------------------------------------------------------------

    As explained in Appendix A of the Agreement, the term 
``reference price'' refers to the price F.O.B. from the Selling 
Agent. The reference price includes all palletizing and cooling 
charges incurred prior to shipment from the Selling Agent. The 
actual movement or handling expenses beyond the point of entry into 
the United States (e.g., McAllen, Nogales, Otay Mesa) must be added 
to the reference price and must reflect the cost for an arm's-length 
transaction.
    Appendix G of the Agreement outlines specific actions that 
signatories should take to ensure that their efforts to abide by the 
Agreement are upheld in any claims taken to the U.S. Department of 
Agriculture under PACA.
    To facilitate the verification of claims for changes in 
condition after shipment, the contract between the signatory and the 
Selling Agent must establish that all paper work be completed within 
15 business days after the USDA inspection, and that claims be 
resolved within 15 business days after the USDA inspection, unless 
the claim is referred to PACA for mediation. Failure to complete 
this paperwork in a timely manner may constitute a violation of the 
Agreement. When filing quarterly certifications with the Department, 
signatories should report the number of lots on which claims for 
condition defects were granted, the total volume of tomatoes 
destroyed or donated, and the total value of claims granted. 
Signatories can obtain from the Department's Web site a copy of the 
suggested form for submitting the quarterly certification 
information. See ``Quarterly Certification'' at http://ia.ita.doc.gov/tomato/2013-agreement/documents/suggested_forms/.

A. Contractual Terms for Rejecting All or Part of a Lot

    1. A USDA inspection certificate must be provided to support 
claims for rejection of all or part of a lot. Further, no 
adjustments will be made for failure to meet suitable shipping 
conditions unless supported by an unrestricted USDA inspection.
    2. If the USDA inspection indicates that the lot has: 1) Over 8% 
soft/decay condition defects; 2) over 15% of any one condition 
defect; or 3) greater than 20% total condition defects, the receiver 
may reject the lot or may accept a portion of the lot and reject the 
quantity of tomatoes lost during the salvaging process. In those 
instances, price adjustments will be calculated as described below. 
For purposes of this Agreement, a condition defect is any defect 
listed in the chart in part A.5 below. When a lot of tomatoes has 
condition defects in excess of those outlined above as documented on 
a USDA inspection certificate, the documented percentage of the 
tomatoes with condition defects are considered DEFECTIVE tomatoes.
    3. No adjustments will be made for failure to meet suitable 
shipping conditions if the USDA inspection certificate does not 
indicate one of the condition thresholds outlined above.
    4. The USDA inspection must be called for no more than eight 
hours from the time of arrival at the destination specified by the 
receiver and be performed in a timely fashion thereafter. If there 
is more than one USDA inspection on a given lot, the inspection 
certificate corresponding to the first inspection is the one that 
will be used for making any adjustment to the sales price. However, 
if an appeal inspection is conducted which reverses the original 
inspection, it will supersede the first inspection, as long as the 
appeal inspection is requested within a reasonable amount of time 
not to exceed 12 hours from the first inspection.
    The first receiver of the product, regardless of whether that 
receiver is acting as an agent or a broker for an unrelated 
purchaser or whether the receiver is the unrelated purchaser acting 
on its own right, must specify the city/metropolitan area of the 
destination of the product. The inspection will take place at the 
destination of delivery as specified prior to shipment.

[[Page 14977]]

    No adjustments will be granted for a USDA inspection at a 
destination which is different from the destination specified by the 
first receiver of the product. In the event that the first receiver 
does not specify the city/metropolitan area of the destination of 
the product, the six-hour period within which an inspection may be 
requested will begin to run at such time as title to the product 
transfers to the unrelated purchaser, for example, upon loading of 
the product at the first handler's (importer's) warehouse in an 
F.O.B. transaction and upon delivery of the product to the first 
buyer's warehouse in a delivered sale.
    A person or company shall be considered an agent or broker for 
an unrelated purchaser: (1) When that person or company falls within 
the description of types of broker operations set forth in 7 CFR 
46.27; or (2) have provided a broker's memorandum of sale as set 
forth in 7 CFR 46.28(a). The following paragraphs apply if a broker 
or dealer is involved in the transaction.
    A broker, unlike a dealer, does not take ownership or control of 
the tomatoes but arranges for delivery directly to the vendor or 
purchaser. Because a broker never takes ownership or control over 
the tomatoes, the customer and not the broker may request an 
inspection, and only the customer is entitled to any resulting 
adjustments. The inspection would take place at the customer's 
destination, as specified in the broker's contract with the Selling 
Agent.
    When a dealer is involved in the sale, the destination of 
delivery stated in the contract is where the inspection is to take 
place. If the dealer does not specify the destination of delivery, 
the default destination of delivery is the warehouse of the Selling 
Agent. With respect to a lot of tomatoes that is owned or controlled 
by a dealer, it is the responsibility of the dealer to request an 
inspection of the tomatoes in his possession in a timely manner, if 
he deems it necessary. If the dealer does not request an inspection 
in a timely manner (i.e., within eight hours from the time of 
arrival at the destination specified by the dealer) and resells the 
tomatoes to a third party, which does request an inspection, the 
dealer is then responsible for all costs and adjustments pertaining 
to the inspection and the condition or quality of the tomatoes.
    5. Under this Agreement, adjustments to the sales price of 
signatory tomatoes will be permitted only for condition defects. The 
term ``condition defect'' is intended to have the same definition 
recognized by the Specialty Crops Inspection Division of the United 
States Department of Agriculture, with the exception of abnormal 
coloring, soil spot, blossom end discoloration, and surface 
discoloration (silvery-white and gold fleck), and, therefore, covers 
the following items:

------------------------------------------------------------------------
                            Condition Defects
-------------------------------------------------------------------------
1) Sunken Discolored Areas
2) Sunburn
3) Internal Discoloration
4) Freezing and Freezing Injury
5) Chilling Injury
6) Abnormally Soft and Watery Fruit
7) Cuts and Broken Skins (unhealed)
8) Soft/Decay
9) Bruises
10) Nailhead Spot
11) Skin Checks
12) Decayed/Moldy Stems
13) Waxy Blister
14) White Core
15) Shriveling
16) Discolored Seed Areas
17) Insect/Worm Injury (alive when present)
------------------------------------------------------------------------

    6. In calculating the transaction price for lots subject to an 
adjustment claim for condition defects, as defined above, the 
tomatoes classified as DEFECTIVE will be treated as rejected and as 
not having been sold.

B. Contractual Terms for Rejection of Partial Loads

    If the lot contains condition defects greater than those 
outlined above and the receiver does not reject the entire lot of 
tomatoes, the Department will factor certain adjustments into the 
transaction price, provided that the following conditions apply:
    1. The price invoiced to and paid by the receiver for the 
accepted tomatoes must not fall below the reference price.
    2. The Selling Agent may reimburse the receiver for actual 
destruction costs associated with the DEFECTIVE tomatoes. If 
properly documented, these expenses will not be considered in the 
calculation of the price of the accepted tomatoes.
    3. The Selling Agent may reimburse the receiver for the portion 
of freight expenses allocated to the DEFECTIVE tomatoes. If properly 
documented, these expenses will not be considered in the calculation 
of the price of the accepted tomatoes.
    4. If the Selling Agent follows the guidelines outlined below, 
it may reimburse the receiver for repacking charges directly 
associated with salvaging and reconditioning the lot. If properly 
documented, these expenses will not be considered in the calculation 
of the price of the accepted tomatoes.
    a. If the salvaging and reconditioning activity is performed by 
a party unaffiliated with the Selling Agent's customer the fee 
charged for the service may be reimbursed if the Selling Agent's 
customer can provide evidence for such costs (i.e., specifically, 
proof-of-payment documentation for the invoice from the repacker).
    b. If the salvaging and reconditioning activity is performed by 
the Selling Agent's customer or a party affiliated with the Selling 
Agent, the direct labor costs or, in lieu thereof, one-half of the 
ordinary and customary repacking charges may be reimbursed. To 
substantiate such costs the Selling Agent's customer or party 
affiliated with the Selling Agent must provide detailed records of 
the labor cost incurred for repacking or, where applicable, evidence 
of the ordinary and customary repacking costs.
    5. The Selling Agent may reimburse the receiver for the 
inspection fees listed on the USDA inspection certificate. If 
properly documented, these expenses will not be considered in the 
calculation of the price of the accepted tomatoes.
    6. Any reimbursements from, by, or on behalf of the Selling 
Agent that are not specifically mentioned in items B.2, B.3, B.4, or 
B.5 above, or that are not properly documented, will be factored 
into the calculation of the price for the accepted tomatoes.
    7. The receiver may not resell the DEFECTIVE tomatoes. The 
receiver may choose to have the DEFECTIVE tomatoes destroyed, 
donated to non-profit food banks, or returned to the Selling Agent. 
The DEFECTIVE tomatoes may not be sold.\2\
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    \2\ Tomatoes for processing must be handled in accordance with 
the guidelines set forth in Appendix F of the Agreement.
---------------------------------------------------------------------------

    8. In addition, for each transaction involving adjustments due 
to changes in condition after shipment the Selling Agent must 
obtain/maintain the following documents/information:

--Shipper name.
--Shipping manifest.
--Details of the shipper invoice, including invoice number, date, 
brand, tomato type, quantity (boxes), and value.
--Documentation supporting the freight expenses incurred for the 
original shipment.
--USDA inspection certificate.
--Detailed listing of the expenses incurred in salvaging the non-
DEFECTIVE tomatoes and documentation supporting the expenses.
--Description of the destruction or donation process and 
documentation from the landfill or food bank.
--Proof-of-payment documentation for any destruction costs.
--A statement that ``No monies or other compensation was received 
for the destroyed or donated tomatoes.''
--Signature of a responsible official at the receiver.

C. Contractual Terms for Rejection of Full Loads

    In cases where the receiver has rejected the full lot of 
tomatoes based on condition defects, the Selling Agent may choose to 
have the entire lot destroyed, donated to non-profit food banks, or 
returned. If the entire lot is destroyed or donated, the Selling 
Agent will require the receiver to provide the documentation noted 
above for partial-lot rejections. Further, the Selling Agent may 
reimburse the receiver for ordinary and customary expenses that the 
receiver incurred with respect to the lot, including those expenses 
associated with the destruction or donation process, as long as the 
Selling Agent obtains the support documentation specified above 
under B.8. The Department will treat such transactions as ``non-
sales'' provided that adequate support documentation is available.
    Alternatively, the Selling Agent may sell the entire rejected 
lot to another receiver. In that case, the price paid must be not 
less than the reference price plus all costs incurred (e.g., 
transportation, commissions, etc.) from the F.O.B. port of entry to 
the final receiver. If the final receiver finds that the lot 
contains condition defects greater than those outlined above, it 
shall follow the directions stated above with respect to rejection 
of partial loads.

[[Page 14978]]

D. Contractual Terms for Partial vs. Unrestricted Lot Inspections

    As explained in part A.1 above, the Department will only allow 
adjustments to the transaction price for condition defects if the 
USDA inspection is unrestricted. During the time between the call 
for inspection and the arrival of the USDA inspector, the receiver 
might sell part of the lot and, therefore, by the time the USDA 
inspector arrives, that part is not available for inspection. If the 
USDA inspector is allowed full access to the partial lot, the 
Department will consider this an unrestricted partial-lot 
inspection. Alternatively, if the USDA inspector is not allowed full 
access to the partial lot, the Department will deem it a restricted 
inspection. No adjustments will be made for failure to meet suitable 
shipping conditions if the USDA inspection is restricted. For 
purposes of this Agreement, when calculating an adjustment for 
failure to meet suitable shipping conditions where an unrestricted 
partial-lot inspection has taken place, only the portion of the lot 
inspected is eligible for adjustment. The portion of the lot that 
the receiver sold prior to the inspection will not be eligible for 
an adjustment based on the USDA inspection.
    For example, before the USDA inspector arrives, the receiver 
sells 140 boxes of 5x5s from a lot identified as 160 5x5s on the 
invoice. When the USDA inspector arrives, the receiver requesting 
the inspection provides full access to the partial lot within its 
possession. The inspector finds that the partial lot of 20 5x5s has 
soft/decay condition defects of 25 percent and notes this on this 
inspection certificate. Under the Agreement, only the 20 5x5s are 
eligible for an adjustment for failure to meet suitable shipping 
conditions, and the 140 5x5s that the receiver already sold will not 
be eligible for an adjustment based on the USDA inspection.

Appendix E--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Contractual Arrangement for Documenting Sales of Signatory 
Merchandise to Canada

    Based on our experience in this proceeding, it is common 
practice for the signatory's Selling Agent to enter the merchandise 
into the United States for consumption and then re-export it to 
Canada. The purpose of this appendix is to: (1) Outline the process 
that each signatory to this Agreement must follow to ensure that the 
Selling Agent properly documents sales to Canada as such and (2) 
ensure that the signatory notifies the Canadian customer that any 
resales of its merchandise from Canada into the United States must 
be in accordance with the terms of this Agreement.
    To document sales of Mexican tomatoes to Canada properly, this 
Agreement requires that such transactions be made pursuant to a 
contractual arrangement where each signatory requires that the 
Selling Agent that facilitates the sale to Canada maintain the 
following information in its files:
    1. Signatory name and identification number;
    2. Shipping manifest;
    3. An invoice identifying sale date, brand, tomato type, 
quantity (boxes), and value; and
    4. Entry documentation from Canadian Customs (i.e., Landing Form 
(Form B3) or the Canada Customs Coding Form).
    If a signatory to the Agreement or its Selling Agent does not 
document a sale to Canada in accordance with the procedures outlined 
above, the Department will consider the transaction a U.S. sale. 
Failure to properly document a sale to Canada may constitute a 
violation of the Agreement.
    We also require signatories to ensure that the Canadian customer 
is notified that any resale of the signatory merchandise from Canada 
into the United States must be in accordance with the terms of the 
Agreement and that any movement or handling expenses beyond the 
point of export from Mexico must be added to the reference price and 
must reflect the actual cost for an arm's-length transaction. 
Signatories can obtain from the Department's Web site a copy of the 
suggested form for providing such notification. See ``Form for 
Notifying Canadian Customer That Resales of Signatory Merchandise 
Into the United States Are Covered by the Terms of the 2013 
Suspension Agreement'' at http://ia.ita.doc.gov/tomato/2013-agreement/documents/suggested_forms/. Further, through contractual 
arrangement each signatory must require that the Selling Agent 
maintain evidence in its files to document that the Canadian 
customer was notified that any resales of the signatory merchandise 
from Canada into the United States must be in accordance with the 
terms of the Agreement.

Appendix F--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Procedure Signatories Must Follow for Selling Subject 
Merchandise for Processing

    Sales to the United States of signatory tomatoes for processing 
must be:
    1. Sold directly to a processor (in other words, the first 
purchaser in the United States of tomatoes for processing must be an 
actual processor);
    2. Accompanied by an ``Importer's Exempt Commodity Form''--Form 
FV-6, within the meaning of 7 CFR 980.501(a)(2) and 980.212(I), 
should be used for all tomatoes for processing that are covered by 
the Federal Marketing Order 966 (Marketing Order); tomatoes for 
processing that are not covered by the Marketing Order (e.g., romas, 
grape tomatoes, greenhouse tomatoes and any tomatoes that are 
entered during the part of the year that the Marketing Order is not 
in effect) must be accompanied by the ``2013 Suspension Agreement--
Tomatoes for Processing Exemption Form''. The exempt commodity form 
must be maintained by the importer and presented to U.S. Customs and 
Border Protection upon request and both the Selling Agent and the 
processor must maintain a copy of the form.
    3. Shipped in a packing form that is not typical of tomatoes for 
the fresh market (e.g., bulk containers in excess of 50 lbs)--
examples of typical fresh-market packing forms are identified in the 
Box-Weight Chart in Appendix C of the Agreement; and
    4. Clearly labeled on the packaging as ``Tomatoes for 
Processing''.
    Signatories can obtain from the Department's Web site an example 
of the ``2013 Suspension Agreement--Tomatoes for Processing 
Exemption Form''. See http://ia.ita.doc.gov/tomato/2013-agreement/documents/suggested_forms/. If a party in the United States 
facilitates the transaction, through contractual arrangement each 
signatory must require that the party follow the procedures outlined 
above. Failure to properly document sales to processors may 
constitute a violation of the Agreement.
    Sales of signatory merchandise to a processor after importation 
into the United States are a violation of the Agreement.

Appendix G--Suspension of Antidumping Investigation--Fresh Tomatoes 
From Mexico--Specific Actions That Signatories Should Take To Ensure 
That Their Efforts To Abide by the Agreement Are Upheld in Any Claims 
Taken to the U.S. Department of Agriculture Under the Perishable 
Agricultural Commodities Act

    This appendix provides guidance on the specific actions 
signatories can take to ensure that their efforts to abide by the 
Agreement are upheld in any claims taken to the Department of 
Agriculture under PACA.
    Payment disputes arising under the Agreement are actionable and/
or able to be resolved under the PACA dispute resolution procedure. 
PACA will uphold actions taken by a signatory or a signatory's 
representative (collectively ``signatory'') to comply with the 
Agreement to the extent that the sales contract for the transaction 
at issue establishes that the sale is subject to the terms of the 
Agreement.
    In other words, if, prior to making the sale, the signatory, or 
the Selling Agent acting on behalf of the signatory through a 
contractual arrangement, informs the customer that the sale is 
subject to the terms of the Agreement and identifies those terms, 
PACA will recognize the identified terms of the Agreement as 
integral to the sales contract. In particular, signatories should 
inform their customers that their contractual agreement to allow 
defect claim adjustments is limited in accordance with the 
Agreement, including:
    * Claims for adjustments must be supported by an unrestricted 
USDA inspection called for no more than eight hours from the time of 
arrival at the receiver and performed in a timely fashion 
thereafter.
    * The USDA inspection must find that the condition defects 
exceed the thresholds outlined in Appendix D above.
    * Any price adjustments will be limited to the actual percentage 
of condition defects as documented by a USDA inspection certificate.
    * The price adjustments will be limited to actual destruction 
costs, the allocated freight expense, and salvaging and 
reconditioning expenses calculated in accordance with Appendix D 
above.
    * The customer may not resell any DEFECTIVE tomatoes. Instead, 
they must be destroyed, returned or donated to a non-profit food 
bank. Signatories should provide

[[Page 14979]]

a copy of the Agreement to any customer which may be unfamiliar with 
its terms or which has questions about those terms.
    The process by which a signatory could provide evidence to PACA 
that its sales contracts were made subject to the terms of the 
Agreement including, in particular, those terms listed above is 
outlined below.
    * The signatory should maintain written documentation 
demonstrating that it had informed its customers and the customers 
accepted that the sales were subject to the terms of the Agreement 
prior to issuing the invoice. A signed contract to that effect would 
be the best evidence of that fact; however, a purchase by the 
customer after being informed of the relevance of the Agreement is 
evidence of acceptance.
    * The signatory should send letters to its customers via 
registered mail, return receipt requested, overnight mail, or email 
with a confirmation received from the recipient, informing the 
customers that, as a signatory to the Agreement, all of the 
signatory's sales are subject to the terms of the Agreement and 
that, by purchasing from them, the buyer agrees to those terms. The 
letter should also indicate that the signatory's sales personnel do 
not have authority to alter the terms of the Agreement.
    * In addition, the signatory should include a statement on its 
order confirmation sheets that its contract with the buyer is 
subject to the terms of the Agreement as detailed in the signatory's 
``pre-season'' letter and maintain a copy of the order confirmations 
and fax receipts demonstrating that they were sent to the customer 
prior to making the sale. If the sale is to a first-time purchaser 
that did not receive a ``pre-season'' letter, a letter should be 
supplied to the buyer prior to making a sale.
    PACA does not require any one particular form of written 
documentation but USDA officials have confirmed that, if signatories 
maintain written evidence demonstrating that their customers were 
informed that their sales were made subject to the terms of the 
Agreement prior to sale, PACA will recognize those terms as part of 
the sales contract.

[FR Doc. 2013-05483 Filed 3-7-13; 8:45 am]
BILLING CODE 3510-DS-P