[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.
---------------------------------------------------------------------------
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\
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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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[[Page 14975]]
[GRAPHIC] [TIFF OMITTED] TN08MR13.008
[GRAPHIC] [TIFF OMITTED] TN08MR13.009
[[Page 14976]]
[GRAPHIC] [TIFF OMITTED] TN08MR13.010
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\
---------------------------------------------------------------------------
\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
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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