2010-15925. Frozen Warmwater Shrimp From Vietnam: Initiation and Preliminary Results of Changed-Circumstances Review

AGENCY:

Import Administration, International Trade Administration, Commerce.

SUMMARY:

In response to a petition for a changed-circumstances review of Phuong Nam Co., Ltd., and Phuong Nam Foodstuff Corp., the Department of Commerce (the “Department”) is initiating a changed-circumstances review of the antidumping duty order on frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”). We have preliminarily concluded that Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd., and, as a result, should be accorded the same treatment previously accorded to Phuong Nam Co., Ltd., with regard to the antidumping duty order on frozen warmwater shrimp from Vietnam. Interested parties are invited to comment on these preliminary results.

DATES:

Effective Date: June 30, 2010.

FOR FURTHER INFORMATION CONTACT:

Scot Fullerton at [phone] or Steven Hampton at [phone], AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

The Department published the antidumping duty order on certain frozen warmwater shrimp from Vietnam on February 1, 2005. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam, 70 FR 5152 (February 1, 2005) (“VN Shrimp Order”). Phuong Nam Co., Ltd., and Phuong Nam Foodstuff Corp. (collectively “Phuong Nam”) participated in the third and fourth administrative reviews of the VN Shrimp Order and requested an administrative review, and subsequent revocation, for the fifth administrative review. On May 14, 2010, Phuong Nam informed the Department that Phuong Nam Co., Ltd., had changed its name to Phuong Nam Foodstuff Corp. and petitioned the Department to conduct a changed-circumstances review to confirm that Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd., for purposes of determining antidumping duties due as a result of the VN Shrimp Order.^[1]

Scope of the Order

The scope of this order includes certain frozen warmwater shrimp and prawns, whether wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off,^[2] deveined or not deveined, cooked or raw, or otherwise processed in frozen form.

The frozen warmwater shrimp and prawn products included in the scope of this order, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTSUS), are products which are processed from warmwater shrimp and prawns through freezing and which are sold in any count size.

The products described above may be processed from any species of warmwater shrimp and prawns. Warmwater shrimp and prawns are generally classified in, but are not limited to, the Penaeidae family. Some examples of the farmed and wild-caught warmwater species include, but are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn (Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), redspotted shrimp (Penaeus brasiliensis), southern brown shrimp (Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern rough shrimp (Trachypenaeus curvirostris), southern white shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus indicus).

Frozen shrimp and prawns that are packed with marinade, spices, or sauce are included in the scope of this order. In addition, food preparations, which are not “prepared meals,” that contain more than 20 percent by weight of shrimp or prawn are also included in the scope of this order.

Excluded from the scope are: (1) Breaded shrimp and prawns (HTS subheading 1605.20.10.20); (2) shrimp and prawns generally classified in the Pandalidae family and commonly referred to as coldwater shrimp, in any state of processing; (3) fresh shrimp and prawns whether shell-on or peeled (HTS subheadings 0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in prepared meals (HTS subheading 1605.20.05.10); (5) dried shrimp and prawns; (6) canned warmwater shrimp and prawns (HTS subheading 1605.20.10.40); (7) certain dusted shrimp; and (8) certain battered shrimp. Dusted shrimp is a shrimp-based product: (1) That is produced from fresh (or thawed-from-frozen) and peeled shrimp; (2) to which a “dusting” layer of rice or wheat flour of at least 95 percent purity has been applied; (3) with the entire surface of the shrimp flesh thoroughly and evenly coated with the flour; (4) with the non-shrimp content of the end product constituting between four and 10 percent of the product's total weight after being dusted, but prior to being frozen; and (5) that is subjected to IQF freezing immediately after application of the dusting layer. Battered shrimp is a shrimp-based product that, when dusted in accordance with the definition of dusting above, is coated with a wet viscous layer containing egg and/or milk, and pan-fried.

The products covered by this order are currently classified under the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 1605.20.10.10, and 1605.20.10.30. These HTSUS subheadings are provided for convenience and for customs purposes only and are not dispositive, but rather the written description of the scope of this order is dispositive.

Initiation of Changed-Circumstances Review

Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the “Act”), and 19 CFR 351.216, the Department will conduct a changed-circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty order which shows changed circumstances sufficient to warrant a review of the order. The information submitted by Phuong Nam supporting its claim that Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd., demonstrates changed circumstances sufficient to warrant such a review. See 19 CFR 351.216(d).

In accordance with the above-referenced regulation, the Department is initiating a changed-circumstances review to determine whether Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd. In determining whether one company is the successor-in-interest to another, the Department examines a number of factors including, but not limited to, changes in management, production facilities, supplier relationships, and customer base. See Industrial Phosphoric Acid From Israel: Final Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944 (February 14, 1994). Although no single factor will necessarily provide a dispositive indication of succession, generally, the Department will consider one company to be a successor-in-interest to another company if its resulting operation is similar to that of its predecessor. See Brass Sheet and Strip from Canada; Notice of Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the prior company, the Department will assign the new company the cash-deposit rate of its predecessor. Id.; Notice of Final Results of Changed Circumstances Antidumping Administrative Review: Polychloroprene Rubber from Japan, 67 FR 58 (January 2, 2002); see also Circular Welded Non-Alloy Steel Pipe from Korea; Final Results of Antidumping Duty Changed Circumstances Review, 63 FR 20572 (April 27, 1998), (where the Department found successorship where the company only changed its name and did not change its operations).

In its May 14, 2010, submission, Phuong Nam provided information to demonstrate that Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd. With respect to management prior to and following the name change, the submission indicates that four senior managers from Phuong Nam Co., Ltd., have retained their management positions. These four individuals were also on the company's board of directors before and after the change in name. Since the change in corporate status, Phuong Nam has eliminated two positions, Vice Director of Personnel and Vice Director of Engineering, in order to streamline the corporation.

In addition, the submission indicates that the production facilities for Phuong Nam Co., Ltd., and Phuong Nam Foodstuff Corp. are identical. Following the name change, Phuong Nam Foodstuff Corp. retained the same address and assets as Phuong Nam Co., Ltd. See Attachment 4 of Phuong Nam's May 14, 2010, submission.

Attachment 5 of Phuong Nam's submission identifies entities that supplied packaging material and shrimp to the company before and after its transformation from a limited liability company to a joint-stock company. A significant number of suppliers for the joint-stock company are identical to suppliers of the limited liability company.

Futher, Phuong Nam addressed changes to its customer base in Attachment 6 of its submission. This attachment contains two lists that identify the names and addresses of the company's customers before and after its transformation. There are numerous customers that appear on both lists, but the lists are not identical. Phuong Nam claims that changes in its customer base are due to the nature of competition in the seafood industry, where customers are periodically gained and lost.

Given the few changes noted above, we have preliminarily determined that no major changes have occurred with respect to Phuong Nam's management, production facilities, suppliers, or customer base as a result of its name change to Phuong Nam Foodstuff Corp.

When it concludes that expedited action is warranted, the Department may publish the notice of initiation and preliminary results for a changed-circumstances review concurrently. See 19 CFR 351.221(c)(3)(ii). See also Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review: Canned Pineapple Fruit from Thailand; 69 FR 30878 (June 1, 2004). We have determined that expedition of this changed-circumstances review is warranted because we have the information necessary to make a preliminary finding already on the record. In this case, we preliminarily find that Phuong Nam Foodstuff Corp. is the successor-in-interest to Phuong Nam Co., Ltd., and, as such, is entitled to Phuong Nam Co., Ltd's, cash-deposit rate with respect to entries of subject merchandise.

Should our final results remain the same as these preliminary results, effective the date of publication of the final results, we will instruct U.S. Customs and Border Protection to assign entries of merchandise produced or exported by Phuong Nam Foodstuff Corp. the antidumping duty cash-deposit rate applicable to Phuong Nam Co., Ltd.

Public Comment

Any interested party may request a hearing within 14 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held 28 days after the date of publication of this notice or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 14 days after the date of publication of this notice. Rebuttal briefs and rebuttals to written comments, which must be limited to issues raised in such briefs or comments, may be filed not later than 21 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this changed-circumstances review are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument with an electronic version included. Consistent with 19 CFR 351.216(e), we will issue the final results of this changed-circumstances review no later than 270 days after the date on which this review was initiated or within 45 days of publication of these preliminary results if all parties agree to our preliminary finding.

We are issuing and publishing this initiation and preliminary results notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and 19 CFR 351.216 and 351.221(c)(3).

Dated: June 24, 2010.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  Phuong Nam claims that this name change was required to achieve the company's goal of listing the company on the Ho Chi Minh City Stock Exchange.

2.  “Tails” in this context means the tail fan, which includes the telson and the uropods.