E7-25057. Canned Pineapple Fruit from Thailand: Preliminary Results of Antidumping Duty New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting a semiannual new shipper review of the antidumping duty order on canned pineapple fruit (CPF) from Thailand in response to a request from C & A Products Co., Ltd. (C&A). The period of review (POR) is July 1, 2006 through December 31, 2006. The domestic interested party for this proceeding is Maui Pineapple Company Ltd. (petitioner).

We preliminarily determine that C&A's sales are bona fide transactions. In addition, we preliminarily determine that C&A made its U.S. sales during the POR at prices above normal value. If these preliminary results are adopted in the final results of this review, we will instruct U.S. Customs and Border Protection (CBP) to liquidate entries subject to this review without regard to antidumping duties. If these preliminary results are not adopted in the final results and the assessment rate calculated in the final results of this review is above de minimis (i.e., at or above 0.50 percent), we will instruct CBP to assess antidumping duties on all appropriate entries covered by this review.

Interested parties are invited to comment on these preliminary results. The final results will be issued 90 days after the date of issuance of these preliminary results, unless extended.

EFFECTIVE DATE:

December 27, 2007.

FOR FURTHER INFORMATION CONTACT:

Myrna Lobo, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

The Department published the antidumping duty order on CPF from Thailand on July 18, 1995. See Notice of Antidumping Duty Order and Amended Final Determination: Canned Pineapple Fruit from Thailand, 60 FR 36775 (July 18, 1995) (Antidumping Duty Order). On December 15, 2006, the Department received a timely request from C&A, in accordance with 19 CFR 351.214(c), to conduct a semiannual new shipper review of the anitdumping duty order on CPF from Thailand. This request was rejected by the Department and C&A resubmitted its request for review on January 22, 2007. This resubmission was still timely in accordance with 19 CFR 351.214(d). On February 22, 2007, the Department found that the request for review with respect to C&A met all of the requirements set forth in 19 CFR 351.214(b) and initiated a semiannual new shipper review of the antidumping duty order on CPF from Thailand for the period, July 1 through December 31, 2006. See Canned Pineapple Fruit from Thailand: Initiation of New Shipper Antidumping Duty Review, 72 FR 9305 (March 1, 2007).

On March 9, 2007, the Department issued the initial questionnaire to C&A.¹ On March 30, 2007, the Department received C&A's section A response, and on April 23, 2007, the Department received C&A's sections B and C questionnaire response. However, the Department initially rejected C&A's sections A, B and C questionnaire responses. See Letter from Maureen A. Flannery, Program Manager, AD/CVD Operations, Office 6, to Mr. Worawat Chinpinkyo, C & A Products Co., Ltd. dated May 9, 2007 on file in room B-099, the Central Records Unit of the main Commerce building (CRU). On May 23, 2007 we received C&A's revised sections A, B and C responses. On July 5, 2007, the Department issued a supplemental questionnaire to C&A and C&A responded on July 20, 2007. A second and third supplemental questionnaire were issued to C&A on November 7 and November 21, 2007, and C&A responded on November 16 and November 27, 2007, respectively. On December 10, 2007, C&A submitted revised databases on their U.S. and Russian sales due to missing information in the databases submitted in their previous response. On June 5, 2007, the petitioner submitted deficiency comments on C&A's section A questionnaire response.

On April 18, 2007, petitioner filed an allegation that C&A's comparison market sales were being made at prices below the cost of production. Since petitioner's allegation was based on C&A's section A response dated March 30, 2007 which was removed from the record, the Department rejected petitioner's allegation. On June 5, 2007 petitioner resubmitted its sales below cost allegation. On August 9, 2007, the Department determined not to initiate a cost of production investigation because petitioner did not provide a reasonable basis to believe or suspect that C&A was selling CPF at prices below the cost of production in the comparison market. See Memorandum to Barbara E. Tillman, Director, AD/CVD Operations, Office 6 from the Team on Petitioner's Allegation of Sales Below the Cost of Production by C&A Products Co., Ltd. dated August 9, 2007 (Cost Allegation Memo) on file in the CRU.

On August 15, 2007, the Department published a notice extending the deadline for the preliminary results to December 19, 2007. See Canned Pineapple Fruit from Thailand: Extension of Time Limit for Preliminary Results of Antidumping Duty New Shipper Review, 72 FR 45733 (August 15, 2007).

Verification

The Department intends to conduct a sales verification of C&A's responses following the preliminary results of this review.

Period of Review

This review covers the period July 1, 2006 through December 31, 2006.

Scope of the Order

The product covered by this order is CPF, defined as pineapple processed and/or

prepared into various product forms, including rings, pieces, chunks, tidbits, and crushed pineapple, that is packed and cooked in metal cans with either pineapple juice or sugar syrup added. CPF is currently classifiable under subheadings 2008.20.0010 and 2008.20.0090 of the Harmonized Tariff Schedule of the United States (“HTSUS”). HTSUS 2008.20.0010 covers CPF packed in a sugar-based syrup; HTSUS 2008.20.0090 covers CPF packed without added sugar (i.e.,juice-packed). Although these HTSUS subheadings are provided for convenience and for customs purposes, the written description of the scope is dispositive. There have been no scope rulings for the subject order.

Bona Fides Analysis of U.S. Sales

For the reasons stated below, we preliminarily find C&A's reported U.S. sales during the POR to be bona fide transactions based on the totality of the facts on the record. In evaluating whether or not sales in a new shipper review are commercially reasonable, and therefore bona fide, the Department considers, inter alia, such factors as: (1) the timing of the sale; (2) the price and quantity; (3) the expenses arising from the transaction; (4) whether the goods were resold at a profit; and (5) whether the transaction was made on an arm's-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246, 1250 (Ct. Int'l Trade 2005), citing American Silicon Techs. v. United States, 110 F. Supp. 2d 992, 995 (Ct. Int'l Trade 2000). Accordingly, the Department considers a number of factors in its bona fide s analysis, “all of which may speak to the commercial realities surrounding an alleged sale of subject merchandise.” See Hebei New Donghua Amino Acid Co., Ltd. v. United States, 374 F. Supp. 2d 1333, 1342 (Ct. Int'l Trade 2005), citing Fresh Garlic from the PRC: Final Results of Administrative Review and Rescission of New Shipper Review, 67 FR 11283 (March 13, 2002), and accompanying Issues and Decision Memorandum: New Shipper Review of Clipper Manufacturing Ltd.

Specifically, we find that: (1) the per-unit prices of C&A's sales were within the range of the unit values for other entries of subject merchandise during the POR; (2) the quantity of C&A's shipments were within the range of other shipments of subject merchandise entered during the POR; (3) the expenses arising from the transactions were not unusual; and (4) C&A's sales were made between unaffiliated parties at arm's length. See Memorandum to Barbara E. Tillman, Office Director, through Dana Mermelstein, Program Manager, from Myrna Lobo, International Trade Compliance Analyst regarding Antidumping Duty New Shipper Review of Canned Pineapple Fruit from Thailand: Bona Fides Analysis of Sales Reported by C & A Products Co., Ltd., dated concurrently with this notice and on file in the CRU (Bona Fides Memo).

Therefore, pursuant to 19 CFR 351.214(b)(2), we are preliminarily treating C&A's sales of canned pineapple fruit to the United States as appropriate transactions for review.

Fair Value Comparisons

To determine whether C&A's sales of CPF from Thailand were made in the United States at less than normal value (NV), we compared the export price (EP) to the NV, as described in the U.S. Price and Normal Value section of this notice in accordance with section 777A(d)(2) of the Tariff Act of 1930, as amended (“the Act”).

Product Comparisons

In accordance with section 771(16)(A) of the Act, we considered all products sold in the comparison market as described in the Scope of the Order section of this notice, above, that were in the ordinary course of trade for purposes of determining appropriate product comparisons to the U.S. sales. In accordance with sections 771(16)(B) and (C) of the Act, where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade, we compared U.S. sales to sales of the most similar foreign like product based on the characteristics listed in sections B and C of our antidumping questionnaire: weight, form, variety and grade. We found that there were no comparison sales of foreign like product that were identical in these respects to the merchandise sold in the United States, and therefore compared U.S. products with the most similar merchandise sold in the comparison market based on the characteristics listed above, in that order of priority.

Date of Sale

Regarding date of sale, the Department's regulations at 19 CFR 351.401(i) state that the Department will normally use the date of invoice as the date of sale, unless a different date better reflects the date on which the material terms of sale are established. C&A reported invoice date as the date of sale for all sales in both the U.S. and comparison markets. We have analyzed the data on the record and preliminarily determine that invoice date is the appropriate date of sale for all U.S. and comparison market sales under review.

U.S. Price

We used EP methodology for C&A's U.S. sales, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly to the first unaffiliated purchaser in the United States prior to importation, and constructed export price methodology was not otherwise warranted based on the facts of record. In accordance with sections 772(a) and (c) of the Act, we calculated EP using prices C&A charged for packed subject merchandise shipped on an FOB basis. We made deductions for movement expenses, including charges for terminal handling, bill of lading preparation, shipping fee and where applicable cargo declaration document charges. Further, we treated C&A's reported commissions to its customer as discounts because the record shows that the amounts reported by C&A as commissions were in actuality reductions in price to C&A's unaffiliated customer, and that no principal-agent relationship exists between C&A and its U.S. customer. These discounts were deducted from U.S. price. See Analysis Memorandum for C & A Products Co., Ltd. (C&A Preliminary Analysis Memo) dated concurrently with this notice.

Normal Value

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the comparison market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade (LOT) as the EP sale. See “Level of Trade” section below. After testing comparison market viability, we calculated NV for C&A as discussed below.

Home Market Viability and Selection of Comparison Market

In order to determine whether there is a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e.,the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of C&A's home market sales of the foreign like product to the volume of its U.S. sales of subject merchandise, in accordance with section 773(a)(1)(C) of the Act. Based on this comparison, we determined that C&A's home market was not viable during the POR. Consequently, the Department considered C&A's sales to third countries, and selected Russia as the appropriate comparison market because Russia was the largest third country market and no other third country market offered greater product similarity. We therefore based NV on C&A's sales to Russia.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine NV based on sales in the comparison market at the same LOT as EP. The NV LOT is that of the starting-price sales in the comparison market or, when NV is based on constructed value, that of the sales from which we derive selling expenses, G&A expenses, and profit. For EP, the U.S. LOT is also the level of the starting-price sale, which is usually from the exporter to the unaffiliated U.S. customer.

To determine whether NV sales are at a different LOT than EP sales, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison market sales are at a different LOT and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison market sales at the LOT of the export transaction, we make an LOT adjustment under section 773(a)(7)(A) of the Act.

C&A reported that it made export sales to four customer categories during the period of review (i.e., to resellers, wholesalers, retailers and traders). C&A further reported that it performs identical selling functions for all customers in the U.S. and comparison markets, except for sales through the trader for which it did not perform certain marketing functions. Further, C&A reported that its selling activities do not vary by customer category and it performs the same functions for all customers.

After analyzing the data on the record with respect to these selling functions, we find that there were not sufficient differences in the selling functions performed for different customer categories to determine that sales are made at more than one level of trade. We therefore find a single level of trade exists for all of C&A's sales to the U.S. and a single level of trade exists for all sales to the Russian market, and that the LOT in each market is the same.

Calculation of Normal Value

We based NV on the starting prices of C&A's sales to the comparison market adjusting for billing adjustments where applicable pursuant to section 773(a)(1)(A) of the Act. Pursuant to section 773(a)(6)(B)(ii) of the Act, we made deductions for movement expenses (i.e., inland freight and warehousing, terminal handling expenses, bill of lading and shipping fees) when appropriate.

C&A reported commissions on its comparison market sales. Based on our analysis of the documentation on the record, we preliminarily find that C&A's reported commissions are more appropriately considered to be discounts or brokerage fees, and we made deductions for them. In accordance with section 771(33) of the Act, we examined C&A's relationships with the parties it reported as selling agents and to whom C&A claimed it paid commissions. Based on the criteria the Department normally examines in determining a principal/agent relationship, we find that with respect to Russia, the parties identified by C&A as agents are intermediaries operating on their own behalf or on behalf of the customer, and that a principal/agent relationship does not exist. See e.g. Stainless Steel Bar from Germany: Final Results of New Shipper Review, and accompanying Issues and Decision Memorandum at Comment 2, 72 FR 39059, (July 17, 2007). Further, upon review of evidence on the record, we found the amounts reported as commissions are more properly treated as discounts or brokerage charges rather than as commissions. As a result, we have reclassified these expenses for margin calculation purposes.

Pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c), we deducted comparison market direct selling expenses (i.e., credit expenses) and added U.S. direct selling expenses (i.e., credit expenses). In accordance with sections 773(a)(6)(A) and (B) of the Act, we deducted comparison market packing costs and added U.S. packing costs. We made an adjustment to NV to account for differences in physical characteristics of the merchandise, in accordance with section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411(a). We based this adjustment on the difference in the variable costs of manufacturing for the foreign like product and subject merchandise. See 19 CFR 351.411(b). See C&A Preliminary Analysis Memo.

Currency Conversion

In accordance with sections 773A(a) of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. See also 19 CFR 351.415.

Preliminary Results of New Shipper Review

As a result of our review, we preliminarily determine that the following percentage margin exists for C&A for the period July 1, 2006, through December 31, 2006:

Manufacturer/Exporter	Margin
C & A Products Co., Ltd.	0.00 %

Cash Deposit Requirements

The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of the new shipper review, as provided by section 751(a)(2)(C) of the Act: 1) the cash deposit rate for C&A (i.e., for subject merchandise both manufactured and exported by C&A) will be that established in the final results of this review, except if the rate is less than 0.50 percent, and therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; 2) for previously reviewed or investigated companies not participating in this review, the cash deposit rate will continue to be the company-specific rate published for the most recent period; 3) if the exporter is not a firm covered in these reviews or the original less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and 4) the cash deposit rate for all other manufacturers or exporters will continue to be the all-others rate established in the LTFV investigation. These requirements, when imposed, shall remain in effect until further notice.

Assessment Rate

Upon completion of the new shipper review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries, in accordance with 19 CFR 351.212. The Department intends to issue assessment instructions for C&A directly to CBP 15 days after the date of publication of the final results of this new shipper review.

Pursuant to 19 CFR 351.212(b)(1), we will calculate an importer-specific assessment rate on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales and the total entered value of the examined sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if the importer-specific assessment rate calculated in the final results of this review is above de minimis (i.e., at or above 0.50 percent). Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the assessment rate is zero or de minimis (i.e., less than 0.50 percent). See 19 CFR 351.106(c)(1).

The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review.

Disclosure and Public Hearing

The Department will disclose to parties the calculations performed in connection with these preliminary results within five days of the date of publication of this notice. See 19 CFR 351.224(b). Pursuant to 19 CFR 351.309, interested parties may submit cases briefs not later than 30 days after the date of publication of this notice. Rebuttal briefs, limited to issues raised in the case briefs, may be filed not later than 5 days after the deadline for filing the case briefs. Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument: 1) a statement of the issue; 2) a brief summary of the argument; and 3) a table of authorities.

Interested parties who wish to request a hearing or to participate if one is requested must submit a written request to the Assistant Secretary for Import Administration, Room B-099, within 30 days of the date of publication of this notice. Requests should contain: 1) the party's name, address and telephone number; 2) the number of participants; and 3) a list of issues to be discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs.

The Department will issue the final results of this review, including the results of its analysis of issues raised in any written briefs, within 90 days of publication of these preliminary results, unless the final results are extended. See section 751(a)(3)(A) of the Act and 19 CFR 351.213(h).

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This new shipper review is issued and published in accordance with sections 751(a)(2)(B)(iv) and 777(i)(1) of the Act, as well as 19 CFR 351.214(i).

Dated: December 19, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

Footnotes

1.  Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing of all home market sales, or, if the home market is not viable, of sales in the most appropriate third-country market (this section is not applicable to respondents in non-market economy cases). Section C requests a complete listing of U.S. sales. Section D requests information on the cost of production of the foreign like product and the constructed value of the merchandise under investigation. Section E requests information on further manufacturing.