01-8661. Notice of Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Duty Administrative Review: Fresh Atlantic Salmon From Chile

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests by eleven producers/exporters of subject merchandise and the petitioners, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on fresh Atlantic salmon from Chile. This review covers eleven producers/exporters of the subject merchandise. The period of review (POR) is July 1, 1999, through June 30, 2000.

We preliminarily determine that sales of subject merchandise by the respondents under review have not been made below normal value (NV). If these preliminary results are adopted in our final results, we will instruct the U.S. Customs Service to liquidate appropriate entries of subject merchandise during the POR without regard to antidumping duties.

We are also preliminarily rescinding this review with respect to two producers.

Interested parties are invited to comment on these 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. Further, we would appreciate parties submitting comments to provide the Department with an additional copy of the public version of any such comments on diskette.

EFFECTIVE DATE:

April 9, 2001.

FOR FURTHER INFORMATION CONTACT:

Edward Easton or Gabriel Adler, at [phone] or [phone], respectively; AD/CVC Enforcement Office V, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street & Constitution Avenue, NW, Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (URAA). In addition, unless otherwise indicated, all citations to the Department's regulations are to 19 CFR Part 351 (2000).

Case History

On July 30, 1998, the Department issued an antidumping duty order on fresh Atlantic salmon from Chile. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Fresh Atlantic Salmon from Chile, 63 FR 40699 (July 30, 1998). On July 20, 2000, the Department issued a notice of opportunity to request the second administrative review of this order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 65 FR 45037 (July 20, 2000).

On July 28 and July 31, 2000, the following companies requested that the Department conduct an administrative review for the period from July 1, 1999, through June 30, 2000: (1) Cultivadora de Salmones Linao Ltda. (Linao); (2) Cultivos Marinos Chiloe Ltda. (Cultivos Marinos); (3) Fiordo Blanco, S.A. (Fiordo Blanco); (4) Pesca Chile S.A. (Pesca Chile); (5) Pesquera Eicosal Ltda. (Eicosal); (6) Pesquera Mares Australes (Mares Australes); (7) Salmones Mainstream S.A. (Mainstream); (8) Salmones Multiexport Ltda. (Multiexport); (9) Salmones Pacific Star (Pacific Star); (10) Salmones Pacifico Sur, S.A. (Pacifico Sur); and (11) Salmones Tecmar, S.A. (Tecmar).

Also on July 31, 2000, in accordance with 19 CFR 351.213(b)(1), the Coalition for Fair Atlantic Salmon Trade (the petitioners) requested a review of 83 producers/exporters of fresh Atlantic salmon. As explained below, the petitioners subsequently withdrew their request for review of 70 of these companies.

On August 25, 2000, we issued the notice of initiation of this antidumping duty administrative review, covering the period July 1, 1999, through June 30, 2000. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 65 FR 53980 (September 6, 2000).

Per letters filed on September 12 and 26, and October 16, 2000, the petitioners withdrew their request for review for all companies except the following: (1) Chisal S.A. (Chisal); (2) Cultivos Marinos; (3) Eicosal; (4) Fitz Roy S.A. (Fitz Roy); (5) Fiordo Blanco; (6) Linao; (7) Mainstream; (8) Mares Australes; (9) Multiexport; (10) Pacific Star; (11) Pacifico Sur; (12) Pesca Chile; and (13) Tecmar. The Department published a notice rescinding the review with respect to the other 70 companies named by the petitioners. See Partial Rescission of Antidumping Duty Administrative Review, 65 FR 81487 (December 26, 2000).

Partial Rescission of Antidumping Duty Administrative Review

Chisal and Fitz Roy each certified to the Department that it had not shipped subject merchandise to the United States during the POR. Our examination of entry data for U.S. imports confirmed that neither company had shipped subject merchandise to the United States during the POR. Therefore, pursuant to 19 CFR 315.213(d)(3), we preliminarily rescinding the review with respect to these two companies.

Scope of the Review

The product covered by this review is fresh, farmed Atlantic salmon, whether imported “dressed” or cut. Atlantic salmon is the species Salmo salar, in the genus Salmo of the family salmoninae. “Dressed” Atlantic salmon refers to salmon that has been bled, gutted, and cleaned. Dressed Atlantic salmon may be imported with the head on or off; with the tail on or off; and with the gills in or out. All cuts of fresh Atlantic salmon are included in the scope of the review. Examples of cuts include, but are not limited to: crosswise cuts (steaks), lengthwise cuts (fillets), lengthwise cuts attached by skin (butterfly cuts), combinations of crosswise and lengthwise cuts (combination packages), and Atlantic salmon that is minced, shredded, or ground. Cuts may be subjected to various degrees of trimming, and imported with the skin on or off and with the “pin bones” in or out.

Excluded from the scope are (1) fresh Atlantic salmon that is “not farmed” (i.e., wild Atlantic salmon); (2) live Atlantic salmon; and (3) Atlantic salmon that has been subject to further processing, such as frozen, canned, dried, and smoked Atlantic salmon, or processed into forms such as sausages, hot dogs, and burgers.

The merchandise subject to this investigation is classifiable as item numbers 0302.12.0003 and 0304.10.4093, 0304.90.1009, 0304.90.1089, and 03040.90.9091 of the Harmonized Tariff Schedule of the United States (HTSUS). although the HTSUS statistical reporting numbers are provided for convenience and customs purposes, the written description of the merchandise is dispositive.

Fair Value Comparisons

We compared the EP or CEP to the 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 of products sold in the United States and comparison markets that are identical with respect to the matching characteristics. Pursuant to section 771(16) of the Act, all products produced by the respondents that fit the definition of the scope of the review and were sold in the comparison markets during the POR fall within the definition of the foreign like product. We have relied on four criteria to match U.S. sales of subject merchandise to comparison market sales of the foreign like product: form, grade, weight band, and trim. As in the first administrative review, we have determined that it is generally not possible to match products of dissimilar forms, grades, and weight bands, because there are significant differences among products that cannot be accounted for by means of a difference-in-merchandise adjustment; we did, where appropriate, make comparisons of merchandise with different trims. (Unlike the other three physical characteristics, trim is the result of a processing operation with readily identifiable differences in the variable cost of manufacturing, which permits the comparison of similar products with a difference-in-merchandise adjustment.) See Notice of Final Results of Antidumping Duty Administrative Review: Fresh Atlantic Salmon from Chile, 65 FR 78472 (December 15, 2000). Where there were no appropriate sales of comparable merchandise, we compared the merchandise sold in the United States to constructed value (CV).

Collapse of Affiliated Parties

Section 351.401(f)(1) of the Department's regulations provides for affiliated producers of subject merchandise to be treated as a single entity (i.e., collapsed), where (1) those producers have production facilities for similar or identical products that would not require substantial retooling of either facility in order to restructure manufacturing priorities and (2) the Department concludes that there is a significant potential for manipulation of price or production. Section 351.401(f)(2) of the Department's regulations provides factors for the Department to consider when looking for a significant potential for manipulation of price or production, namely (i) the level of common ownership; (ii) the extent to which managerial employees or board members of one firm sit on the board of directors of an affiliated firm; and (iii) whether operations are intertwined, such as through the sharing of sales information, involvement in production and pricing decisions, the sharing of facilities or employees, or significant transactions between the affiliated producers.

The questionnaire responses submitted by respondent Mares Australes on October 13, 2000, and other information on the record of this review, provide evidence that during the POR Mares Australes was affiliated with another producer of subject merchandise, Marine Harvest S.A. (Marine Harvest), and that the above-referenced criteria for collapsing these companies were met.

First, the record establishes that Mares Australes and Marine Harvest were under common ownership by another company. Therefore, the two companies are affiliated under section 771(33)(F) the Act (which deems “two or more persons directly or indirectly controlling, controlled by, or under common control with, any person” to be affiliated).

Second, Mares Australes and Marine Harvest had production facilities for similar or identical products that would not require substantial retooling of either facility to restructure manufacturing priorities, inasmuch as the vast majority of their sales of subject merchandise involved premium-grade fillets of fresh Atlantic salmon.^[1]

Third, there was a significant potential for manipulation of price or production, inasmuch as (i) the two companies were entirely under common control; (ii) throughout the POR, the two companies were in the process of merging their management structure, and, by the end of the period, were under common management; and (iii) the two companies shared sales information through their common management, and also had significant transactions between them.

Given this, the Department has preliminarily determined to collapse Mares Australes and Marine Harvest.^[2] The preliminary dumping margin calculated for Mares Australes reflects sales and cost data provided by both Mares Australes and Marine Harvest.^[3]

Export Price and Constructed Export Price

For the price to the United States, we used, as appropriate, EP or CEP as defined sections 772(a) and 772(b) of the Act, respectively. Section 772(a) of the Act defines EP as the price at which the subject merchandise is first sold by the exporter or producer outside the United States to an unaffiliated purchaser for exportation to the United States, before the date of importation, or to an unaffiliated purchaser for exportation to the United States. Section 772(b) of the Act defines CEP as the price at which the subject merchandise is first sold inside the United States before or after the date of importation, by or for the account of the producer or exporter of the merchandise, or by a seller affiliated with the producer or exporter, to an unaffiliated purchaser, as adjusted under subsections 772(c) and (d) of the Act.

For all respondents, we calculated EP and CEP, as appropriate, based on the packed prices charged to the first unaffiliated customer in the United States. Where sales were made through an unaffiliated consignment broker, we did not consider the consignment broker to be the customer; rather, we considered the customer to be the consignment broker's customer.

In accordance with section 772(c)(2) of the Act, we reduced the EP and CEP by movement expenses and export taxes and duties, where appropriate. Section 772(d)(1) of the Act provides for additional adjustments to CEP. In this case, CEP sales were made through unaffiliated consignment brokers for the account of the producer/exporter. Consistent with past practice, for these sales we deducted from the CEP commissions charged to, and other direct expenses incurred for the account of, the producer/exporter. See Notice of Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Administrative Review: Fresh Atlantic Salmon From Chile, 65 FR 48457, 48460 (August 8, 2000). We did not deduct an amount for CEP profit for these sales, because the commission already contains an element for profit realized by the unaffiliated consignment broker.

We determined the EP or CEP for each company as follows:

Cultivos Marinos

We calculated an EP for all of Cultivos Marinos' sales because the merchandise was sold directly by Cultivos Marinos 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 made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include foreign inland freight, international freight, U.S. brokerage and U.S. duties. We also deducted the amount for billing adjustments from the starting price and added duty drawback, in accordance with section 772(c)(1)(B) of the Act.

Eicosal

We calculated an EP for all of Eicosal's sales because the merchandise was sold directly by Eicosal 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 made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, U.S. brokerage and U.S. duties. We also deducted the amount for billing adjustments from the starting price and added duty drawback, in accordance with section 772(c)(1)(B) of the Act.

Fiordo Blanco

During the POR, Fiordo Blanco made CEP transactions. We calculated a CEP for sales made by Fiordo Blanco's affiliated U.S. reseller after importation of the subject merchandise into the United States. CEP sales were based on the packed price for exportation to the Untied States. We made deductions from the starting price fro rebates, as well as movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, brokerage and handling, and U.S. duties. We also added the amount for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

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 direct selling expenses incurred by the affiliated reseller in the United States. We also deducted an amount for profit in accordance with section 772(d)(3) of the Act.

Linano

During the POR, Liano made both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Linao 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 for the account of the producer/exporter by an unaffiliated consignment broker in the Untied States after the date of importation. EP and CEP sales were based on the packed, delivered and duty-paid (DDP) U.S. port and C&F U.S. port prices for exportation to the United States. We made deductions from the starting price for discounts and rebates, as well as movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, U.S. brokerage, and U.S. duties. We also deducted the amount for billing adjustments from the starting price and added the amount for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

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 expenses and industry association fees), and indirect selling expenses incurred in the United States by the unaffiliated consignment broker on behalf of the exporter which was charged to the respondent separately from the commission.

Mainstream

We calculated an EP for all of Mainstream's sales because the merchandise was sold directly by Mainstream 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 made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, brokerage and handling, and U.S. customs duties. We also deducted the amount for billing adjustments from the starting price and added duty drawback, in accordance with section 772(c)(1)(B) of the Act.

Mares Australes

During the POR, Mares Australes had both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Mares Australes to the first unaffiliated purchaser in the Untied States prior to importation, and CEP was not otherwise warranted based on the facts of record. We calculated a CEP for sales made by Mares Australes' affiliated U.S. reseller after importation of the subject merchandise into 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 inland freight, customs brokerage fees, international freight, U.S. customs duties and U.S. handling charges. We also added duty drawback, in accordance with section 772(c)(1)(B) of the Act.

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 direct selling expenses (including credit expenses and miscellaneous direct selling expenses), and indirect selling expenses incurred by the affiliated reseller in the United States. We also deducted from CEP an amount for profit in accordance with section 772(d)(3) of the Act.

Multiexport

During the POR, Multiexport made both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Multiexport 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 for the account of the producer/exporter by an affiliated reseller in the United States after the date of importation. EP and CEP sales were based on the packed price for exportation to the United States. We made deductions from the starting price for rebates, as well as movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, and U.S. duties. We also added the amounts for delivery revenues and for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

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 direct selling expenses (including credit expenses and miscellaneous direct selling expenses), and indirect selling expenses incurred by the affiliated reseller in the United States. We also deducted from CEP an amount for profit in accordance with section 772(d)(3) of the Act.

Pacific Star

We calculated an EP for all of Pacific Star's sales because the merchandise was sold directly by Pacific Star 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 made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, customs brokerage and handling fees, international freight, U.S. customs duties and U.S. handling charges. We also added duty drawback, in accordance with section 772(c)(1)(B) of the Act.

Pacifico Sur

During the POR, Pacifico Sur made EP transactions. We calculated an EP for sales where the merchandise was sold directly by Pacifico Sur to the first unaffiliated purchaser in the United States prior to importation, and CEP was not otherwise warranted based on the facts of record. EP sales were based on the packed DDP U.S. port and C&F port prices 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 inland freight, international freight, U.S. brokerage, and U.S. duties. We also added the amount for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

Pesca Chile

During the POR, Pesca Chile made both EP and CEP transactions. We calculated an EP for sales where the merchandise was sold directly by Pesca Chile 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 for the account of the producer/exporter by an affiliated reseller in the United States after the date of importation. We made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, U.S. brokerage, and U.S. duties. We also added the amount for duty drawback, in accordance with section 772(c)(1)(B) of the Act.

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 and other direct selling expenses (credit, inspection association fees, and airline service charges). We also deducted from CEP an amount for profit in accordance with section 772(d)(3) of the Act.

Tecmar

We calculated an EP for all of Tecmar's sales because the merchandise was sold directly by Tecmar 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 made deductions from the starting price for movement expenses in accordance with section 772(c)(2)(A) of the Act. These include inland freight, international freight, U.S. brokerage and handling, and U.S. duties. We also added the amount for duty drawback to the starting price, in accordance with section 772(c)(1)(B) 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 by Cultivos Marinos and Eicosal, we determined that the quantity of foreign like product sold in Chile permitted 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 sales in the home market was more than five percent of the quantity of sales to the U.S. market. Accordingly, for those two respondents we based NV on home market sales.

Respondents Fiordo Blanco, Linao, Mainstream, Mares Australes, Multiexport, Pacific Star, Pacifico Sur, Pesca Chile, and Tecmar did not have viable home markets, as defined above. Therefore, for these respondents, in accordance with section 773(a)(1)(C) of the Act, we based NV on the price at which the foreign like product was first sold for consumption in each respondent's largest third-country market. For Mainstream, Mares Australes, Multiexport and Pesca Chile, the largest third-country market is Brazil; for Tecmar, the largest third-country market is Argentina and for Fiordo Blanco, the largest third country market is Canada.

Respondents Linao, Pacific Star and Pacifico Sur did not have any viable comparison market. Therefore, in accordance with section 773(e) of the Act, we based NV for these respondents on CV.

We note that on November 14, 2000, the petitioners alleged the existence of particular market situations in the home market, Argentina and Brazil, and argued that the Department should not rely on sales in those markets as the basis for normal value. The allegations were based on the fact that the vast majority of sales by these companies to the United States consisted of fillets, while nearly all of their sales to the home market, Argentina and Brazil consisted of whole salmon. The petitioners also argued that the home, Argentine and Brazilian markets for premium-grade salmon (the grade of salmon principally sold in the United States) were developed only very recently.

We have not accepted these allegations for purposes of the preliminary results of this review. By way of background, we note that the Department examined allegations of particular market situations in both the investigation and the first administrative review. In the investigation, the petitioners alleged that home market sales by two respondents reflected a particular market situation, and the Department agreed, finding that the respondents' home market sales involved almost exclusively off-quality merchandise, which local customers picked up at the producers' facilities for salvage prices. In the first review, the petitioners again filed an allegation that home market sales by certain respondents, as well as sales to Brazil by Mainstream, reflected a particular market situation. The Department disagreed, finding that these respondents had made significant sales of premium-grade salmon to customers with an established demand for such merchandise, and that the markets in question, while established in recent years, provided a legitimate demand for sales of comparable merchandise. See Notice of Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Antidumping Duty Review: Fresh Atlantic Salmon from Chile, 65 FR 48457 (August 8, 2000), at note 2, and the “Issues and Decision Memorandum for the Final Results of the First Administrative Review of Fresh Atlantic Salmon from Chile” (dated November 16, 2000), Comment 5, at 7.

In the instant review, we similarly find that the home market and third country sales in question do not reflect a particular market situation. These sales involved premium-grade salmon purchased by customers with a specific demand for such merchandise. The markets in question, while developed more recently than the U.S. market for fresh Atlantic salmon, are legitimate and allow for proper comparisons of U.S. sales to sales of the foreign like product.^[4]

B. Cost of Production Analysis

Based on timely allegation filed by the petitioners, we initiated a cost of production (COP) investigation of Multiexport, to determine whether sales were made at prices below the COP. See Memorandum From Case Analysts to Gary Taverman, dated January 10, 2001. In addition, because we disregarded below-cost sales in the calculation of the final results of the first administrative review of Eicosal and Pacific Star, we had reasonable grounds to believe or suspect that home market sales of the foreign like product by these companies have been made at prices below the COP during the period of the second review. Therefore, pursuant to section 773(b)(1) of the Act, we also initiated COP investigations of sales by Eicosal and Pacific Star.^[5]

1. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated the weighted-average COP, by model, based on the sum of materials, fabrication, and general expenses. We relied on the submitted COPs except in the specific instances noted below, where the submitted costs were not appropriately quantified or valued.

2. Test of Comparison Market Sales Prices

As required by section 773(b) of the Act, we compared the adjusted weighted-average COP for each respondent subject to a cost investigation of the comparison-market sales prices 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

We disregarded below-cost sales where (1) 20 percent or more of a respondent's sales of a given product were made at prices below the COP and thus such sales were made within an extended period of time in substantial quantities in accordance with sections 773(b)(2)(B) and (C) of the Act, and (2) based on 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 time period, in accordance with section 773(b)(2)(D) of the Act. Eicosal was the only respondent for which we disregarded comparison market sales.

C. Calculation of Normal Value Based on Comparison-Market Prices

We determined price-based NVs for respondent companies as follows. For all respondents, we made adjustments for any differences in packing, in accordance with section 773(a)(6) of the Act, and we deducted movement expenses pursuant to section 773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made adjustments for differences in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of the Act. We also made adjustments, pursuant to 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).

Company-specific adjustments are described below.

Cultivos Marinos

We based home market prices on the packed, delivered or ex factory prices to unaffiliated purchasers in Chile. We adjusted the starting price for foreign inland freight. We made COS adjustments by deducting direct selling expenses incurred for home market sales (credit) and adding U.S. direct selling expenses (credit). We also deducted home market packing expenses and added U.S. packing expenses.

Eicosal

We based home market prices on the packed, FOB airport or delivered prices to unaffiliated purchasers in Chile. We adjusted the starting price for foreign inland freight. We made COS adjustments by deducting direct selling expenses incurred for home market sales (credit expense) and adding U.S. direct selling expenses (credit expense). We also deducted home market packing expenses and added U.S. packing expenses.

Fiordo Blanco

We based third-country market prices on the packed, FOB port of entry or delivered prices to unaffiliated purchasers in Canada. We adjusted for the following movement expenses: Foreign inland freight, international freight, brokerage and handling charges and U.S. custom fees. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (including credit and warranty expenses) and adding U.S. direct selling expenses (including credit and warranty expenses). We also added the amount for third-country duty drawback to the starting price. In addition, we deducted third-country packing expenses and added U.S. packing expenses.

Mainstream

We based third-country market prices on the packed, FOB airport prices to unaffiliated purchasers in Brazil. We adjusted for the following movement expenses: Foreign inland freight, international freight, customs fees and airport handling charges. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (credit) and adding U.S. direct selling expenses (credit). We also added the amount for third-country duty drawback to the starting price. In addition, we deducted third-country packing expenses and added U.S. packing expenses.

Mares Australes

We based third-country market prices on the packed prices to unaffiliated purchasers in Brazil. We adjusted for the following movement expenses: Foreign inland freight, international freight and brokerage and handling. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (credit and re-packing expenses) and adding U.S. direct selling expenses, including credit. We also added the amount for third-country duty drawback to the starting price. In addition, we deducted third-country packaging expenses and added U.S. packing expenses.

Multiexport

We based third-country market prices on the packed prices to unaffiliated purchasers in Brazil. We adjusted for the following movement expenses: Foreign inland freight, international freight and brokerage and handling. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales, including credit, and adding U.S. direct selling expenses, including credit. We also added the amount for third-country duty drawback to the starting price. In addition, we deducted third-countries packing expenses and added U.S. packing expenses.

Pesca Chile

We based third-country market prices on the packed prices to unaffiliated purchasers in Brazil. We adjusted for the following movement expenses: Foreign inland freight, international freight and brokerage and handling. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (including credit, airline service charges and inspection expenses). We also added an amount for third-county duty drawback to the starting price. In addition, we deducted third-country packing expending and added U.S. packing expenses.

Tecmar

We based third-country market prices on the packed, FOB plant or C&F port city prices to unaffiliated purchasers in Argentina. We adjusted for the following movement expenses: Foreign inland freight, international freight and brokerage and handling. We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (including credit, quality control, and health certification) and adding U.S. directs expenses (including credit, quality control, and health certification). We also added the amount for third-country duty drawback to the starting price. In addition, we deducted third-country packing expenses and added U.S. packing expenses.

D. Calculation of Normal Value Based on Constructed Value

For those sales for which we could not determine NV based on comparison-market sales because there were no contemporaneous sales of a comparable product in the ordinary course of trade, we compared EP, or CEP, to CV. Section 773(e) of the Act provides that CV shall be based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for selling, general and administrative expenses (SG&A), profit, and U.S. packing, For Eicosal, Fiordo Blanco, Mares Australes, Multiexport, Pacific Star, and Tecmar, we calculated CV based on the methodology described in the COP section 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 comparison market to calculate SG&A expenses and profit. For Linao and Pacifico Sur, which had no comparison market sales, we calculated CV following the same methodology, except that we relied on the weighted-average SG&A and profit ratios of the two respondents that had a viable home market, consistent with section 773(e)(2)(B)(ii) of the Act.

For price-to-CV comparisons, we made adjustments to CV for COS differences, pursuant to section 773(a)(8) of the Act. Company-specific adjustments are described below.

Eicosal

We made COS adjustments by deducting direct selling expenses incurred for home market sales (credit expense) and adding U.S. direct selling expenses (credit expense).

Fiordo Blanco

We made COS adjustments by deducting direct selling expenses incurred for third-country sales (including credit and warranty expenses) and adding U.S. direct expenses (including credit and re-packing expenses).

Linao

We made COS adjustments by adding U.S. direct selling expenses (including credit, inspection and certification expenses) and deducting the weighted-average direct selling expenses incurred by the two respondents that had a viable home market during the period.

Mares Australes

We made COS adjustments by deducting direct selling expenses incurred for third-country sales (credit, re-packing expenses, and miscellaneous direct selling expenses) and adding U.S. direct selling expenses (credit expenses and miscellaneous direct selling expenses).

Multiexport

We made COS adjustments by deducting direct selling expenses incurred for home market sales (credit expense) and adding U.S. direct selling expenses (credit expense).

Pacific Star

We made COS adjustments by adding U.S. direct selling expenses (including credit and inspection expenses) and deducting the weighted-average direct selling expenses incurred by the two respondents that had a viable home market during the period.

Pacifico Sur

We made COS adjustments by adding U.S. direct selling expenses (including credit and inspection expenses) and deducting the weighted-average direct selling expenses incurred by the two respondents that had a viable home market during the period. Because Pacifico Sur had commissions in the U.S. market, we also adjusted the CV by a commission offset, based on the weighted-average indirect selling expenses incurred by the two respondents that had a viable home market during the period.

Tecmar

We made COS adjustments by deducting direct selling expenses incurred for third-country market sales (credit, quality control, and health certification expenses) and adding U.S. direct selling expenses (credit, quality control, and health certification expenses).

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 sale in the comparison market or, when the 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 the export to the 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 with U.S. sales, 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 pursuant to section 773(a)(7)(A) of the Act. 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 pursuant to section 773(a)(7)(B) of the Act (the CEP offset provision).

To apply these guidelines in this review, we obtained information from each respondent about the marketing stage involved in its reported U.S. and comparison-market sales, including a description of the selling activities performed by the respondent for each of its channels of distribution. In identifying levels of trade for EP and comparison 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 pursuant to section 772(d) of the Act. Generally, if the claimed levels of trade are the same, the 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.

In conducting our level-of-trade analysis for each respondent, we took into account the specific customer types, channels of distribution, and selling practices of each respondent. We found that, for all respondents, the fact pattern was virtually identical. Sales to both the U.S. and comparison markets were made to distributors, retailers, and, less commonly, to further-processors. In all cases, the selling functions performed by the respondents for the different customer types and channels of distribution were very limited, and identical in both markets. Therefore, for all respondents, we found that there was a single level of trade in the United States, and a single, identical level of trade in the comparison market. As such, it was not necessary to make any level of trade adjustments.

Currency Conversion

We made currency conversions into U.S. dollars in accordance with section 773A of the Act, based on exchange rates in effect on the date of the U.S. sale, as certified by the Federal Reserve Bank.

Preliminary Results of Review

As a result of this review, we preliminarily determine that the following weighted-average margins exist for the period July 1, 1999, through June 30, 2000:

Exporter/manufacturer	Weighted- average margin percentage
Cultivos Marinos	1 0.02
Eicosal	0.00
Fiordo Blanco	1 0.27
Linao	1 0.11
Mainstream	1 0.02
Mares Australes	0.00
Multiexport	0.00
Pacific Star	0.00
Pacifico Sur	0.00
Pesca Chile	1 0.06
Tecmar	0.00
1 De minimis.

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties of this proceeding in accordance with 19 CFR 351.224(b). An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 44 days after the date of publication, or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 37 days after the date of publication. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument and (3) a table of authorities. Further, we would appreciate it if parties submitting written comments would provide the Department with an additional copy of the public version of any such comments on diskette. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results.

Pursuant to 19 CFR 351.212(b), the Department calculated an assessment rate on all appropriate entries. We calculated importer-specific duty assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of the examined sales for that importer. Where the assessment rate is above de minimis, we will instruct the U.S. Customs Service to assess duties on all entries of subject merchandise by that importer.

Cash Deposit Requirements

The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of fresh Atlantic salmon from Chile 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 4.57 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(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entities 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. Effective January 20, 2001, Bernard T. Carreau is fulfilling the duties of the Assistant Secretary for Import Administration.

Dated: April 2, 2001.

Bernard T. Carreau,

Deputy Assistant Secretary, Import Administration.

Footnotes

1.  We note that the operation of Mares Australes and Marine Harvest were not identical. For instance, Marine Harvest had its own processing plant, while Mares Australes subcontracted procession; Mares Australes had access to feed from a closely affiliated supplier, while Marine Harvest obtained most of its feed from unaffiliated suppliers. Nonetheless, the operations of the two companies produced virtually indistinguishable premium-grade salmon.

2.  We note that Marine Harvest was found to be dumping at de minimis levels in the LTFV investigation, and was excluded from the antidumping order on fresh Atlantic salmon from Chile. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Fresh Atlantic Salmon from Chile, 63 FR 40699 (July 30, 1998). Therefore, entries from the Harvest during the POR were not suspended. However, to the extent that Mares Australes and Marine Harvest became affiliated during the period of this review, and that the standard for collapsing is met, it is necessary to incorporate the sales and cost data of Marine Harvest in the Calculation of the dumping margin for Mares Australes during the period.

3.  Mares Australes submitted Marine Harvest data through questionnaire responses dated November 27, 2000, and January 10 and February 2, 2001.

4.  We note that during the antidumping investigation, certain respondents had argued that a particular market situation existed in the Japanese market because sales to the market consisted almost entirely of whole salmon, while U.S. sales consisted almost entirely of fillets. The petitioners objected to those arguments, arguing that sales of whole fish constituted sales of the foreign like product, and should be used to calculate normal value regardless of their degree of comparability to sales of fillets. The Department agreed with the petitioners in that case. See Notice of Final Determination of Sales at Less Than Fair Value: Fresh Atlantic Salmon From Chile, 63 FR 31411, 31418 (Comment 4).

5.  On January 6, 2001, the petitioners also filed a cost allegation with respect to Pesca Chile. On March 6, 2001, the Department determined that this allegation was inadequate, and did not initiate a cost investigation with respect to that respondent. See Memorandum from Case Analyst to Holly Kuga, Acting Deputy Assistant Secretary for Import Administration, dated February 22, 2001.