[Federal Register Volume 63, Number 68 (Thursday, April 9, 1998)]
[Notices]
[Pages 17357-17364]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-9435]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-489-501]
Notice of Preliminary Results and Partial Rescission of
Antidumping Duty Administrative Review: Canned Pineapple Fruit From
Thailand
AGENCY: Import Administration, International Trade Administration,
Department of Commerce
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SUMMARY: In response to requests by four producers/exporters of subject
merchandise and by the petitioners,\1\ the Department of Commerce is
conducting an administrative review of the antidumping duty order on
canned pineapple fruit from Thailand. This review covers seven
producers/exporters of the subject merchandise. The period of review is
July 1, 1996, through June 30, 1997.
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\1\ Maui Pineapple Co. Ltd. and the International Longshoremen's
and Warehousemen's Union.
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We preliminarily determine that sales have been made below normal
value. If these preliminary results are adopted in our final results,
we will instruct the U.S. Customs Service to assess antidumping duties
based on the difference between the export price or constructed export
price and the normal value.
Interested parties are invited to comment on the preliminary
results. Parties who submit arguments are requested to submit with each
argument: (1) a statement of the issue; and (2) a brief summary of the
argument.
EFFECTIVE DATE: April 9, 1998.
FOR FURTHER INFORMATION CONTACT: Charles Riggle or Kris Campbell, AD/
CVD Enforcement Group I, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-0650 or (202) 482-3813, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
regulations provided in 19 CFR Part 351, as published in the Federal
Register on May 19, 1997 (62 FR 27296).
Background
On July 18, 1995, we published in the Federal Register the
antidumping duty order on canned pineapple fruit from Thailand (60 FR
36775). On July 21, 1997, we published in the Federal Register the
notice of Opportunity to Request an Administrative Review of this
order, covering the period July 1, 1996, through June 30, 1997 (62 FR
38973). On July 31, 1997, the petitioners requested a review of 26
producers/exporters of canned pineapple fruit (CPF), in accordance with
19 CFR 351.213(b)(1). On August 22, 1997, the petitioners withdrew
their request for review for all companies except: (1) The Prachuab
Fruit Canning Co. Ltd. (Prachuab); (2) Vita Food Factory (1989) Co.
Ltd. (Vita); and (3) Siam Fruit Canning (1988) Co. Ltd. (SIFCO).
On July 31, 1997, the following producers/exporters of canned
pineapple fruit requested a review in accordance with 19 CFR
351.213(b)(2): (1) Siam Food Products Public Co. Ltd. (SFP); (2) Thai
Pineapple Canning Industry (TPC); (3) The Thai Pineapple Public Co.
Ltd. (TIPCO); (4) Malee Sampran Factory Public Co. Ltd. (Malee); and
(5) Dole Food Company Inc., Dole Packaged Foods Company and Dole
Thailand Ltd. (collectively, Dole).
On August 28, 1997, we published the notice of initiation of this
antidumping duty administrative review covering the period July 1,
1996, through June 30, 1997 (62 FR 45621).
Partial Rescission of Antidumping Duty Administrative Review
On October 6, 1997, Dole withdrew its request for a review. Because
there was no other request for a review of Dole, and because Dole's
letter withdrawing its request for a review was timely filed, we are
rescinding the review with respect to Dole in accordance with 19 CFR
351.213(d)(1).
Scope of the Review
The product covered by this review is canned pineapple fruit. For
purposes of the review, CPF is 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
[[Page 17358]]
HTSUS subheadings are provided for convenience and for customs
purposes, our written description of the scope is dispositive.
Duty Absorption
On February 12, 1998, the petitioners requested that the Department
investigate the extent to which duty absorption has occurred in this
review. Section 351.213(j)(1) of our regulations provides that we will
determine whether antidumping duties have been absorbed by an exporter
or producer subject to the review if requested by a domestic interested
party within 30 days of the date of publication of the notice of
initiation. Because the petitioners' request was untimely filed, we
have not investigated the occurrence of duty absorption in this review.
Use of Facts Available
We have determined Vita's antidumping rate based on the facts
available because this respondent failed to participate fully in, and
has significantly impeded, this review. On January 8, 1998, counsel for
Vita notified us that it had withdrawn its representation of, and entry
of appearance on behalf of, this company. On January 9, 1998, we
contacted Vita to determine whether the company planned to continue as
a respondent in this review. Vita notified the Department on January
12, 1998, that it planned to continue in this review.
On January 20, 1998, we notified Vita that we had not received its
response to our January 2, 1998, supplemental section A questionnaire.
Vita notified the Department on January 22, 1998, that it had no
knowledge of the supplemental section A questionnaire. Because we
initially issued the supplemental section A questionnaire to counsel
for Vita prior to its withdrawal as Vita's representative, we sent
another copy of the questionnaire directly to Vita on January 27, 1998,
and granted Vita additional time, until February 4, 1998, to respond.
We also provided Vita with instructions on how to file submissions with
the Department, instructions for serving such submissions to interested
parties, and an interested parties list for this review. On the same
date, we also sent a supplemental questionnaire for sections B and C
directly to Vita by certified mail.
The record shows that on February 5, 1998, we again informed Vita
that we had not received its response to the supplemental questionnaire
for section A. At the same time, we reminded Vita of the February 6,
1998, deadline for its response to section D of the questionnaire
(which we issued directly to the company on January 13, 1998), and its
February 11, 1998, deadline for its response to the supplemental
questionnaire for sections B and C. We have not received responses to
any of these information requests.
Because Vita did not respond to our requests for information,
without which we are unable to perform an analysis of its pricing
practices, we preliminarily determine that the use of facts available
is appropriate, in accordance with section 776(a) of the Act.
Specifically, by failing to respond to section D of the questionnaire,
Vita has precluded the Department from conducting an analysis to
determine whether its comparison-market (Germany) sales prices were
below the cost of production (COP) in substantial quantities. In
addition, by not responding to the supplemental questionnaires, Vita
has failed to provide information regarding its selling practices in
the United States and Germany. Accordingly, we determine that, pursuant
to section 776(b) of the Act, it is appropriate to make inferences
adverse to the interests of Vita because it failed to cooperate to the
best of its ability.
Where we must base the entire dumping margin for a respondent in an
administrative review on facts available because that respondent failed
to cooperate by not acting to the best of its ability to comply with a
request for information, section 776(b) of the Act authorizes the use
of inferences adverse to the interests of that respondent in choosing
facts available. Section 776(b) of the Act also authorizes the
Department to use as adverse facts available information derived from
the petition, the final determination, a previous administrative
review, or other information placed on the record. Due to Vita's
failure to cooperate, we have preliminarily assigned to Vita as adverse
facts available a rate of 55.77 percent, the highest rate calculated
for any respondent during any segment of this proceeding. This rate was
calculated for a respondent in the less-than-fair-value (LTFV)
investigation.
Because information from prior segments of the proceeding
constitutes secondary information, section 776(c) of the Act provides
that the Department shall, to the extent practicable, corroborate that
secondary information from independent sources reasonably at its
disposal. The Statement of Administrative Action (SAA) provides that
corroborate means simply that the Department will satisfy itself that
the secondary information to be used has probative value. See H.R. Doc.
316, vol. 1, at 870 (1994).
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. However, unlike other types of information,
such as input costs or selling expenses, there are no independent
sources for calculated dumping margins. Thus, in an administrative
review, if the Department chooses as total adverse facts available a
calculated dumping margin from a prior segment of the proceeding, it is
not necessary to question the reliability of the margin for that time
period. With respect to the relevance aspect of corroboration, however,
the Department will consider information reasonably at its disposal as
to whether there are circumstances that would render a margin
inappropriate. Where circumstances indicate that the selected margin is
not appropriate as adverse facts available, the Department will
disregard the margin and determine an appropriate margin. See, e.g.,
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty
Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (where the
Department disregarded the highest margin as adverse facts available
because the margin was based on another company's uncharacteristic
business expense resulting in an unusually high margin). In this
review, we are not aware of any circumstances that would render the use
of the margin selected for Vita as inappropriate.
Fair Value Comparisons
We compared the export price (EP) or constructed export price (CEP)
to the normal value (NV), as described in the Export Price and
Constructed Export Price and Normal Value sections of this notice. We
first attempted to compare contemporaneous sales 2 of
products sold in the U.S. and comparison markets that were identical
with respect to the following characteristics: weight, form, variety,
and grade. Where we were unable to compare sales of identical
merchandise, we 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. Where there were no
appropriate comparison market sales of comparable merchandise, we
compared the
[[Page 17359]]
merchandise sold in the United States to constructed value (CV).
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\2\ For all companies except Prachuab and TPC, we matched U.S.
and comparison market sales using invoice date as the date of sale
for both markets. Our use of other dates as the date of sale for
Prachuab and TPC is discussed in the company-specific sections of
this notice.
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On January 8, 1998, the Court of Appeals for the Federal Circuit
issued a decision in CEMEX v. United States, 133 F.3d 897 (Fed. Cir.
1998) (CEMEX). In that case, based on the pre-URAA version of the Act,
the Court ruled that the Department may not resort immediately to CV as
the basis for foreign market value (now normal value) when we find home
market sales of the identical or most similar merchandise to be outside
the ordinary course of trade. This issue was not raised by any party in
this proceeding. However, the URAA amended the definition of sales
outside the ordinary course of trade to include sales disregarded
pursuant to the cost test. See Section 771(15) of the Act.
Consequently, pursuant to this court decision, we have reconsidered our
practice and have determined that, where we find comparison market
sales of merchandise identical or most similar to that sold in the
United States to be outside the ordinary course of trade, it would be
inappropriate to resort directly to CV as the basis for NV. Instead, we
will compare other sales of similar merchandise to the U.S. sales, if
such other sales exist and are otherwise appropriate. The Department
will use CV as the basis for NV only when there are no above-cost sales
that are otherwise suitable for comparison.
Therefore, in this proceeding, when making comparisons in
accordance with section 771(16) of the Act, we considered all
comparison market sales of the foreign like product that were in the
ordinary course of trade for purposes of determining appropriate
product comparisons to U.S. sales. Where there were no comparison
market sales of identical merchandise made in the ordinary course of
trade, we compared U.S. sales to comparison market sales of the most
similar foreign like product made in the ordinary course of trade,
based on characteristics listed above. Thus, we have implemented the
Court's decision in CEMEX.
Export Price and Constructed Export Price
For the price to the United States, we used, as appropriate, EP or
CEP as defined in sections 772(a) and 772(b) of the Act, respectively.
We determined the EP or CEP for each company as follows.
TPC
During the POR, TPC made both EP and CEP transactions. We
calculated an EP for sales where the merchandise was sold directly by
TPC to the first unaffiliated purchaser in the United States prior to
importation and CEP was not otherwise warranted based on the facts of
record. We calculated a CEP for sales made by TPC's affiliated U.S.
reseller, Mitsubishi International Corporation (MIC), after importation
of the subject merchandise into the United States. EP and CEP were
based on the packed FOB, CIF, or delivered price to unaffiliated
purchasers in, or for exportation to, the United States. We made
deductions for discounts and rebates, including early payment
discounts, promotional allowances, freight allowances, and billback
discounts and rebates. We also made deductions for movement expenses in
accordance with section 772(c)(2)(A) of the Act. These include inland
freight from plant to port of exportation, foreign brokerage and
handling, other miscellaneous foreign port charges, international
freight, marine insurance, U.S. customs brokerage, U.S. customs duty,
harbor maintenance fees, merchandise processing fee, and U.S. inland
freight expenses (freight from port to warehouse and freight from
warehouse to the customer).
In accordance with section 772(d)(1) of the Act, for CEP sales we
deducted from the starting price those selling expenses that were
incurred in selling the subject merchandise in the United States,
including commissions, direct selling expenses (credit costs, warranty
expenses), and indirect selling expenses incurred by MIC in the United
States. We also deducted from CEP an amount for profit in accordance
with section 772(d)(3) of the Act.
Consistent with our findings in the first period of
review,3 we have based TPC's date of sale on the contract
date for EP transactions and on the invoice date for CEP transactions.
Although TPC suggested in its questionnaire response that invoice date
was the appropriate date of sale for EP as well as CEP transactions, it
did not provide evidence of any changes in the material terms of sale
(price and quantity) between the contract date and invoice date for EP
transactions.
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\3\ See Notice of Final Results of Antidumping Duty
Administrative Review: Canned Pineapple fruit From Thailand, 63 FR
7392, 7394 (February 13, 1998) (Final Results).
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TIPCO
We calculated an EP for all of TIPCO's sales because the
merchandise was sold either directly by TIPCO or indirectly through its
U.S. affiliate, TIPCO Marketing Co. (TMC), to the first unaffiliated
purchaser in the United States prior to importation, and CEP was not
otherwise warranted based on the facts of record. Sales through TMC
involved direct shipment from TIPCO to the unaffiliated customer,
without any merchandise entering TMC's physical inventory. Further,
TMC's involvement in the sales process for indirect sales was limited
to that of a processor of sales documentation. We calculated EP based
on the packed FOB or CIF price to unaffiliated purchasers for
exportation to the United States. We made deductions from the starting
price for movement expenses in accordance with section 772(c)(2)(A) of
the Act. These include foreign movement expenses (brokerage and
handling, port charges, stuffing expenses, and inland freight),
international freight, U.S. customs duties, and U.S. brokerage and
handling.
SFP
We calculated an EP for all of SFP's sales because the merchandise
was sold directly by SFP to the first unaffiliated purchaser in the
United States prior to importation, and CEP was not otherwise warranted
based on the facts of record. SFP has one employee located in the
United States who communicates with U.S. customers regarding SFP's U.S.
sales. However, the information on record indicates that SFP's Bangkok
office is responsible for confirming orders, issuing the invoice direct
to the customer, and for arranging for shipment to the U.S. port.
Accordingly, we have preliminarily determined that the activity
performed by SFP's U.S. employee does not rise above the level of a
processor of paperwork and communications link.
We calculated EP based on the packed FOB or C&F price to
unaffiliated purchasers for exportation to the United States. We made
deductions from the starting price for discounts. We also made
deductions for foreign inland movement expenses and for international
freight in accordance with section 772(c)(2)(A) of the Act.
Malee
We calculated an EP for all of Malee's sales because the
merchandise was sold either directly by Malee or indirectly through its
U.S. affiliate, Icon Foods LLC (Icon), to the first unaffiliated
purchaser in the United States prior to importation, and CEP was not
otherwise warranted based on the facts of record. Sales through Icon
involved direct shipment from Malee to the unaffiliated customer,
without any merchandise entering Icon's physical inventory. Further,
Icon's involvement in the sales process for indirect sales was limited
to
[[Page 17360]]
that of a processor of sales documentation. We calculated EP based on
the packed FOB or CIF price to unaffiliated purchasers for exportation
to the United States. We made deductions from the starting price for
movement expenses in accordance with section 772(c)(2)(A) of the Act.
These included foreign movement expenses (brokerage and handling and
inland freight to the port of exportation), international freight,
marine insurance and U.S. customs duties.
Prachuab
We calculated an EP for all of Prachuab's sales because the
merchandise was sold directly by Prachuab to the first unaffiliated
purchaser in the United States prior to importation, and CEP was not
otherwise warranted based on the facts of record. We calculated EP
based on the packed, FOB or C&F price to unaffiliated purchasers for
exportation to the United States. We made deductions from the starting
price for foreign movement expenses (including inland freight and
containerization charges) and international freight in accordance with
section 772(c)(2)(A) of the Act. We based Prachuab's date of sale on
shipment date because the information on the record indicates that: (1)
Prachuab's date of shipment occurs within 3-5 days of its date of
invoice and (2) Prachuab records its sales based on date of shipment.
SIFCO
We calculated an EP for all of SIFCO's sales because the
merchandise was sold directly by SIFCO to the first unaffiliated
purchaser in the United States prior to importation, and CEP was not
otherwise warranted based on the facts of record. We calculated EP
based on the packed, FOB price to unaffiliated purchasers for
exportation to the United States. We made deductions from the starting
price for foreign inland movement expenses in accordance with section
772(c)(2)(A) of the Act.
Normal Value
A. Selection of Comparison Markets
Based on a comparison of the aggregate quantity of home market
sales and U.S. sales, we determined that, with the exception of Malee,
the quantity of foreign like product each respondent sold in the
exporting country did not permit a proper comparison with the sales of
the subject merchandise to the United States because the quantity of
each company's sales in its home market was less than five percent of
the quantity of its sales to the U.S. market. See section 773(a)(1) of
the Act. For these respondents, in accordance with section
773(a)(1)(B)(ii) of the Act, we have based NV on the price at which the
foreign like product was first sold for consumption in each
respondent's largest third-country market, i.e., Germany for TPC and
SFP, Finland for TIPCO, and Japan for Prachuab and SIFCO.
For Malee, the quantity of foreign like product sold in Thailand
did permit a proper comparison with the sales of the subject
merchandise to the United States pursuant to section 773(a)(1)(B) of
the Act, because the quantity of Malee's sales in its home market was
more than five percent of the quantity of its sales to the U.S. market.
Accordingly, we have based NV on Malee's sales in Thailand.
B. Cost of Production Analysis
Based on timely allegations filed by the petitioners, we initiated
COP investigations of Vita, Prachuab and SIFCO, to determine whether
sales were made at prices below the COP. See Memoranda from Case
Analysts to Richard W. Moreland, dated January 12, 1998 (Vita), January
27, 1998 (Prachuab) and February 27, 1998 (SIFCO). In addition, because
we disregarded below-cost sales in the last completed review of TPC,
TIPCO and SFP, 4 and in the last completed segment of the
proceeding involving Malee (i.e., the less-than-fair-value
investigation), we had reasonable grounds to believe or suspect that
sales by these companies of the foreign like product under
consideration for the determination of NV in this review may have been
made at prices below the COP, as provided by section 773(b)(2)(A)(ii)
of the Tariff Act. Therefore, pursuant to section 773(b)(1) of the Act,
we initiated a COP investigation of sales by TPC, TIPCO, SFP, Malee,
Vita, Prachuab and SIFCO in the comparison market.
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\4\ See Final Results, 63 FR 7392 (February 13, 1998).
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We conducted the COP analysis as described below.
1. Calculation of COP/Fruit Cost Allocation
In accordance with section 773(b)(3) of the Act, we calculated the
weighted-average COP, by model, based on the sum of the costs of
materials, fabrication, general expenses, and packing costs. We relied
on the submitted COPs except in the specific instances noted below,
where the submitted costs were not appropriately quantified or valued.
The Department's long-standing practice, now codified at section
773(f)(1)(A) of the Act, is to rely on a company's normal books and
records if such records are in accordance with home country generally
accepted accounting principles (GAAP) and reasonably reflect the costs
associated with production of the merchandise. In addition, as the
statute indicates, the Department considers whether an accounting
methodology, particularly an allocation methodology, has been
historically used by the company. See section 773(f)(1)(A) of the Act.
In previous segments of this proceeding, the Department has determined
that joint production costs (i.e., pineapple and pineapple processing
costs) cannot be reasonably allocated to canned pineapple on the basis
of weight. See Final Determination of Sales at Less Than Fair Value:
Canned Pineapple Fruit From Thailand, 60 FR 29553, 29561 (June 5,
1995)), and Final Results, 63 FR 7392, 7398.5 For instance,
cores and shells are used in juice production, while trimmed and cored
pineapple cylinders are used in CPF production. Because these various
parts of a pineapple are not interchangeable when it comes to CPF
versus juice production, it would be unreasonable to value all parts of
the pineapple equally by using a weight-based allocation methodology.
Several respondents that revised their fruit cost allocation
methodologies during the 1995-96 POR changed to weight-based
methodologies and did not incorporate any measure of the qualitative
factor of the different parts of the pineapple. As a result, such
methodologies, although in conformity with Thai GAAP, do not reasonably
reflect the costs associated with production of CPF. Therefore, for
companies whose fruit cost allocation methodology is weight-based, we
requested that they recalculate fruit costs allocated to CPF based on a
net realizable value (NRV) methodology. Consistent with prior segments
of this proceeding, the NRV methodology that we requested respondents
to use was based on company-specific historical amounts for sales and
separable costs during the five-year period of 1990 through 1994. We
made this request of all companies in this review except for Malee.
Because Malee already allocates
[[Page 17361]]
fruit costs on a basis that reasonably takes into account qualitative
differences between pineapple parts used in CPF versus juice products
in its normal accounting records, we have not required Malee to
recalculate its reported costs using the NRV methodology.
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\5\ The Court of International Trade (CIT) ruled in favor of the
respondents who challenged the Department's position that joint
production costs cannot be reasonably allocated to canned pineapple
on the basis of weight. The Thai Pineapple Public Co. Ltd., et al.
v. United States, Slip Op. 96-182 (CIT November 8, 1996). That
decision is currently being reviewed by the Court of Appeals for the
Federal Circuit.
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We made the following company-specific adjustments to the cost data
submitted in this review.
Prachuab
While Prachuab provided its historical NRV data as requested, it
calculated its variable fruit costs using POR-specific NRV data.
Therefore, we have recalculated Prachuab's fruit costs using the
historical five-year NRV data indicated above.
SIFCO
SIFCO used a weight-based methodology to calculate its variable
fruit costs. Therefore, we have recalculated SIFCO's fruit costs using
the historical five-year NRV data from SIFCO's February 20, 1998
submission.
In addition, we noted that SIFCO's databases contained missing
values for packing expenses. Therefore, for sales to the United States
and for sales to Japan, we used per-unit packing expenses provided in
SIFCO's February 12, 1998 submission. SIFCO used a weight-based
methodology.
SFP
SFP's reported fruit costs were based on NRV data for the 1992-95
period. Further, the NRV ratio was based on a ratio of standard cases
of solid products to standard cases of juice products, which is
distortive because the weighting factors used to derive standard cases
of solid and juice products are not equivalent. Therefore, we have
recalculated SFP's fruit costs using the 1990-94 NRV ratio that was
verified in the previous review.
2. Test of Comparison Market Sales Prices
As required under section 773(b) of the Act, we compared the
adjusted weighted-average COP for each respondent to the comparison
market sales of the foreign like product, in order to determine whether
these sales had been made at prices below the COP within an extended
period of time in substantial quantities, and whether such prices were
sufficient to permit the recovery of all costs within a reasonable
period of time. On a product-specific basis, we compared the revised
COP to the comparison market prices, less any applicable movement
charges, taxes, rebates, commissions and other direct and indirect
selling expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given product were made at prices
below the COP, we did not disregard any below-cost sales of that
product because we determined that the below-cost sales were not made
in ``substantial quantities.'' Where 20 percent or more of a
respondent's sales of a given product were made at prices below the
COP, we disregarded the below-cost sales because: (1) such sales were
found to be made within an extended period of time in substantial
quantities in accordance with sections 773(b)(2) (B) and (C) of the
Act; and (2) based on comparisons of price to weighted-average COPs for
the POR, we determined that the below-cost sales of the product were at
prices which would not permit recovery of all costs within a reasonable
period of time, in accordance with section 773(b)(2)(D) of the Act.
We found that, for certain CPF products, TIPCO, SFP, TPC, Malee,
Prachuab, and SIFCO made comparison market sales at prices below the
COP within an extended period of time in substantial quantities.
Further, we found that these sales prices did not permit the recovery
of costs within a reasonable period of time. We therefore excluded
these sales from our analysis in accordance with section 773(b)(1) of
the Act.
C. Calculation of Normal Value Based on Comparison Market Prices
We determined price-based NVs for each company as follows. For all
respondents, we made adjustments for differences in packing in
accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act,
and we deducted movement expenses consistent with section
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made
adjustments for differences in cost attributable to differences in
physical characteristics of the merchandise pursuant to section
773(a)(6)(C)(ii) of the Act, as well as for differences in
circumstances of sale (COS) in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We also made
adjustments, in accordance with 19 CFR 351.410(e), for indirect selling
expenses incurred on comparison market or U.S. sales where commissions
were granted on sales in one market but not in the other (the
commission offset). Specifically, where commissions were granted in the
U.S. market but not in the comparison market, we made a downward
adjustment to normal value for the lesser of (1) the amount of the
commission paid in the U.S. market, or (2) the amount of indirect
selling expenses incurred in the comparison market. If commissions were
granted in the comparison market but not in the U.S. market, we made an
upward adjustment to normal value following the same methodology.
Company-specific adjustments are described below.
TPC
We based third-country market prices on the packed, ex-factory, or
delivered prices to unaffiliated purchasers in Germany. We adjusted for
the following movement expenses: inland freight from plant to port of
exportation, foreign brokerage and handling, other miscellaneous
foreign port charges, and international freight. For comparisons to EP,
we made COS adjustments by deducting direct selling expenses incurred
for third-country market sales (credit expenses, letter of credit
charges, warranties and bank charges) and adding U.S. direct selling
expenses (credit expenses, letter of credit charges, bank charges, and
warranties). For comparisons to CEP, we made COS adjustments by
deducting direct selling expenses incurred on third-country market
sales and adding U.S. direct selling expenses other than those deducted
from the starting price in calculating CEP pursuant to section 772(d)
of the Act (i.e., we added expenses for letters of credit and bank
charges incurred by TPC in Thailand). We offset commission expenses in
the manner described above. We denied TPC's claimed CEP offset for the
reasons stated in the Level of Trade section below.
TPC claimed that because there were frequent changes in the
material terms of sale between the contract date and the invoice date
with respect to comparison market sales, the invoice date was the
appropriate comparison market date of sale. We agree that TPC has
demonstrated that invoice date is the appropriate date of sale in the
comparison market, based on such changes to the material terms of sale.
However, as noted in the Export Price and Constructed Export Price
section above, contrary to our findings in the first review, TPC
incorrectly claimed that invoice date was the appropriate date of sale
for both EP and CEP transactions, and reported comparison market sales
made 90 days before the earliest invoice date of U.S. sales. Because we
have determined that contract date, not invoice date, is the
[[Page 17362]]
appropriate date of sale for EP transactions, we have matched such
sales to comparison market sales based on U.S. contract date. Since the
contract date precedes the invoice date, we do not have all comparison
market sales made 90 days before the contract date of the first U.S.
sale. Accordingly, we resorted to constructed value where we were
unable to match EP sales to contemporaneous comparison market sales
(i.e., those sales made during the same month, 90 days before, or 60
days after, the contract date of the U.S. sale).
TIPCO
We based third-country market prices on the packed, FOB prices to
unaffiliated purchasers in Finland. We adjusted for the following
movement expenses: brokerage and handling, port charges, liner
expenses, stuffing expenses and foreign inland freight. We made COS
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses and bank charges) and adding U.S.
direct selling expenses (credit expenses and bank charges). We offset
commission expenses in the manner described above.
SFP
We based third-country market prices on the packed, FOB prices to
unaffiliated purchasers in Germany. We adjusted for the following
movement expenses: foreign inland freight and port charges. We made COS
adjustments by deducting direct selling expenses incurred for third-
country market sales (credit expenses and bank charges) and adding U.S.
direct selling expenses (credit expenses and bank charges).
Malee
We based home market prices on the packed, delivered prices to
unaffiliated purchasers in Thailand. We adjusted for foreign inland
freight. We made COS adjustments by deducting direct selling expenses
incurred for home market sales (credit expenses, warranty expenses,
advertising expenses and commissions) and adding U.S. direct selling
expenses (credit expenses, bank charges and commissions). No other
adjustments to NV were claimed or allowed.
Prachuab
We based third-country market prices on the packed, FOB or C&F
prices to unaffiliated purchasers in Japan. We adjusted for the
following movement expenses: foreign inland freight, containerization
charges, and international freight. We made COS adjustments by
deducting direct selling expenses incurred for third-country market
sales (credit expenses, bank charges and commissions) and adding U.S.
direct selling expenses (credit expenses, bank charges and
commissions). As with Prachuab's U.S. sales, we based the date of sale
of Prachuab's comparison market sales on shipment date.
SIFCO
We based third-country market prices on the packed, C&F prices to
unaffiliated purchasers in Japan. We adjusted for the following
movement expenses: foreign inland freight and international freight. We
made COS adjustments by deducting direct selling expenses incurred for
third-country market sales (credit expenses, bank charges and
commissions) and adding U.S. direct selling expenses (credit expenses,
bank charges and commissions).
D. Calculation of Normal Value Based on Constructed Value
For those CPF products for which we could not determine the NV
based on comparison market sales because there were no contemporaneous
sales of a comparable product in the ordinary course of trade, we
compared the EP or CEP to CV. In accordance with section 773(e)(1) of
the Act, we calculated CV based on the sum of the cost of manufacturing
(COM) of the product sold in the United States, plus amounts for
general expenses, comparison market profit, and U.S. packing costs. We
calculated each respondent's CV based on the methodology described in
the Calculation of COP section of this notice, above. In accordance
with section 773(e)(2)(A) of the Act, we used the actual amounts
incurred and realized by each respondent in connection with the
production and sale of the foreign like product, in the ordinary course
of trade, for consumption in the foreign country to calculate general
expenses and comparison market profit.
For price-to-CV comparisons, we made adjustments to CV for COS
differences, in accordance with section 773(a)(8) of the Act and 19 CFR
351.410. For comparisons to EP, we made COS adjustments by deducting
direct selling expenses incurred on comparison market sales and adding
U.S. direct selling expenses. For comparisons to CEP, we made COS
adjustments by deducting direct selling expenses incurred on comparison
market sales and adding U.S. direct selling expenses other than those
deducted from the starting price in calculating CEP pursuant to section
772(d) of the Act (i.e., we added letter of credit expenses and bank
charges for TPC). We also made adjustments, where applicable, for the
commission offset in the manner described above.
Level of Trade/CEP Offset
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 level of trade as the EP or CEP transaction. The NV level of
trade is that of the starting-price sales in the comparison market or,
when NV is based on CV, that of the sales from which we derive SG&A
expenses and profit. For EP sales, the U.S. level of trade is also the
level of the starting-price sale, which is usually from exporter to
importer. For CEP sales, it is the level of the constructed sale from
the exporter to the importer.
To determine whether NV sales are at a different level of trade
than EP or CEP, 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 level of trade, 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 level of trade of the export transaction, we make a
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
Finally, for CEP sales, if the NV level is more remote from the factory
than the CEP level and there is no basis for determining whether the
difference in the levels between NV and CEP affects price
comparability, we adjust NV under section 773(a)(7)(B) of the Act (the
CEP offset provision). See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from
South Africa, 62 FR 61731 (November 19, 1997).
In implementing these principles in this review, we obtained
information from each respondent about the marketing stage involved in
the reported U.S. and comparison market sales, including a description
of the selling activities performed by the respondents for each channel
of distribution. In identifying levels of trade for EP and third-
country market sales, we considered the selling functions reflected in
the starting price before any adjustments. For CEP sales, we considered
only the selling activities reflected in the price after the deduction
of expenses and profit under section 772(d) of the Act. We expect that,
if claimed levels of trade are the same, the
[[Page 17363]]
functions and activities of the seller should be similar. Conversely,
if a party claims that levels of trade are different for different
groups of sales, the functions and activities of the seller should be
dissimilar.
Our level-of-trade analysis for each respondent is described below.
TPC
During the POR, TPC made sales through multiple channels of
distribution in both the U.S. and German markets. In the United States,
TPC made both direct sales to unaffiliated customers and sales through
its affiliated U.S. reseller MIC. In Germany, TPC made both direct
sales and indirect sales through an affiliated reseller in the
Netherlands, Princes Foods B.V. (Princes). We compared the selling
activities performed by TPC for EP sales to the activities performed by
TPC and MIC for CEP sales (after excluding those selling activities
related to the expenses deducted under section 772(d) of the Act), and
found them to be both limited in scope and essentially identical. The
functions that TPC performed on both direct and indirect sales were
limited to negotiation of prices, processing of purchase orders, and
invoicing. Therefore, we find that there is a single level of trade in
the United States for both EP and CEP sales.
Similarly, we compared the selling functions and activities
performed by TPC for direct sales to Germany to the functions and
activities performed by TPC and Princes for indirect sales to Germany.
These activities were also limited to negotiating prices with German
customers, invoicing those customers, and making limited sales calls.
In essence, the only difference in selling activity between TPC's
direct and indirect sales to Germany is that indirect sales involved
the issuance of an additional invoice among affiliated parties, and
this difference does not establish a significantly more advanced
marketing stage. Therefore, we have considered TPC's direct and
indirect sales to Germany as being at a single level of trade. Because
the selling functions performed for TPC's sales in the two markets are
essentially the same, irrespective of channel of distribution, we find
that all of TPC's sales were made at a single level of trade.
Therefore, no level of trade adjustment or CEP offset is warranted in
the calculation of TPC's dumping margin.
Malee
Malee reported that all of its sales made to the United States were
to importer/distributors and involved minimal selling functions on the
part of Malee. Malee claimed two different levels of trade for its
sales in the home market: (1) factory-direct sales involving minimal
selling functions, and which are at a level of trade identical to the
EP level of trade; and (2) sales through Malee Supply (1994) Co. Ltd.
(Malee Supply), an affiliated reseller.
Malee made direct sales to hotels, restaurants and industrial
users. Malee claimed that its only selling function on direct sales was
delivery of the product to the customer. Malee reported numerous
selling functions undertaken by Malee Supply for its resales to small
wholesalers, retailers and end-users. In addition to maintaining
inventory, Malee Supply also handled all advertising during the POR.
The advertising was directed at the ultimate consumer. Malee also
reported that Malee Supply replaces damaged or defective merchandise
and, as necessary, breaks down packed cases into smaller lot sizes for
many sales.
Our examination of the selling activities, selling expenses, and
customer categories involved in these two channels of distribution
indicates that they constitute separate levels of trade, and that the
direct sales are made at the same level as Malee's U.S. sales.
Accordingly, we matched Malee's U.S. sales to direct sales made in the
home market. Because we were able to match all U.S. sales in this
manner to sales made at the same level of trade, without resorting to
home market sales made through the other level of trade, we did not
reach the issue of whether a level-of-trade adjustment was appropriate
under the facts of this case.
SFP, TIPCO, Prachuab and SIFCO
In this review, SFP, TIPCO, Prachuab and SIFCO claimed that all of
their sales were made through a similar channel of distribution (direct
sales to customers in export markets) and involved identical selling
functions, irrespective of market. In examining these selling
functions, we found that sales activities were limited to negotiation
of prices, processing of purchase orders/contracts, invoicing, and
collection of payment; there was little or no strategic and economic
planning, advertising or sales promotion, technical services, technical
assistance, or after-sale service performed in either market.
Therefore, for these four respondents we have preliminarily found that
there is a single (and identical) level of trade in each market, and no
level-of-trade adjustment is required for comparison of U.S. sales to
third-country sales.
Currency Conversion
For purposes of the preliminary results, we made currency
conversions in accordance with section 773A(a) of the Act, based on the
official exchange rates published by the Federal Reserve. Section
773A(a) of the Act directs the Department to use a daily exchange rate
in order to convert foreign currencies into U.S. dollars, unless the
daily rate involves a fluctuation. In accordance with the Department's
practice, we have determined as a general matter that a fluctuation
exists when the daily exchange rate differs from a benchmark by 2.25
percent. The benchmark is defined as the rolling average of rates for
the past 40 business days. When we determine that a fluctuation exists,
we substitute the benchmark for the daily rate.
Preliminary Results of Review
As a result of this review, we preliminarily determine that the
following margin exists for the period July 1, 1996, through June 30,
1997:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Siam Food Products Public Company Ltd...................... 0.59
The Thai Pineapple Public Company, Ltd..................... 5.24
Thai Pineapple Canning Industry Corp., Ltd................. 4.78
Malee Sampran Factory Public Company Ltd................... 1.01
The Prachuab Fruit Canning Co. Ltd......................... 10.96
Siam Fruit Canning (1988) Co. Ltd.......................... 14.19
Vita Food Factory (1989) Co. Ltd........................... 55.77
------------------------------------------------------------------------
We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the publication date of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within thirty days of publication. See 19 CFR 351.310(c). If
requested, a hearing will be held 44 days after the publication of this
notice, or the first workday thereafter. Interested parties may submit
case briefs within 30 days of the date of publication of this notice.
Rebuttal briefs, limited to issues raised in the case briefs, may be
filed not later than 37 days after the date of publication. The
Department will publish a notice of the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such written comments.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate
[[Page 17364]]
entries. Individual differences between EP/CEP and NV may vary from the
percentages stated above. Upon completion of this review, the
Department will issue appraisement instructions directly to the U.S.
Customs Service.
Furthermore, the following deposit rates will be effective upon
publication of the final results of this administrative review for all
shipments of CPF from Thailand entered, or withdrawn from warehouse,
for consumption on or after the publication date, as provided by
section 751(a)(1) of the Act: (1) the cash deposit rate for companies
listed above will be the rate established in the final results of this
review, except if the rate is less than 0.5 percent and, therefore, de
minimis, the cash deposit will be zero; (2) for previously reviewed or
investigated companies not listed above, the cash deposit rate will
continue to be the company-specific rate published for the most recent
period; (3) if the exporter is not a firm covered in this review, a
prior review, or the 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) if neither the
exporter nor the manufacturer is a firm covered in this or any previous
review conducted by the Department, the cash deposit rate will be 24.64
percent, the All Others rate established in the LTFV investigation.
These cash deposit requirements, when imposed, shall remain in
effect until publication of the final results of the next
administrative review.
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402 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 determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: April 2, 1998.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 98-9435 Filed 4-8-98; 8:45 am]
BILLING CODE 3510-DS-P
