69 FR 76910, December 23, 2004

DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-838]

Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp From Brazil

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: December 23, 2004.

SUMMARY: On August 4, 2004, the Department of Commerce (the Department) 
published its preliminary determination of sales at less than fair 
value (LTFV) of certain frozen and canned warmwater shrimp from Brazil. 
The period of investigation is October 1, 2002, through September 30, 
2003.
    Based on our analysis of the comments received, we have made 
changes in the margin calculations. Therefore, the final determination 
differs from the preliminary determination. The final weighted-average 
dumping margins for the investigated companies are listed below in the 
section entitled ``Final Determination Margins.''

FOR FURTHER INFORMATION CONTACT: Rebecca Trainor or Kate Johnson, 
AD/CVD Operations, Office 2, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street 
and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4007 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Final Determination

    We determine that certain frozen and canned warmwater shrimp from 
Brazil is being, or is likely to be, sold in the United States at LTFV, 
as provided in section 735 of the Tariff Act of 1930, as amended (the 
Act). The estimated margins of sales at LTFV are shown in the 
``Suspension of Liquidation'' section of this notice.

Case History

    The preliminary determination in this investigation was published 
on August 4, 2004. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp from Brazil, 69 FR 47081 
(Preliminary Determination). We amended the preliminary determination 
to correct certain ministerial errors made in the margin calculation 
for Empresa de Armazenagem Frigorifica Ltda. (EMPAF), which we 
determined to be significant under 19 CFR 351.224(g). See Notice of 
Amended Preliminary Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp from Brazil, 69 FR 52860 
(August 30, 2004).
    Since the amended preliminary determination, the following events 
have occurred. During the period July through October 2004, various 
interested parties, including the petitioners,\1\ submitted comments on 
the scope of this and the concurrent investigations of certain frozen 
and canned warmwater shrimp.
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    \1\ The petitioners in this investigation are the Ad Hoc Shrimp 
Trade Action Committee (an ad hoc coalition representative of U.S. 
producers of frozen and canned warmwater shrimp and harvesters of 
wild-caught warmwater shrimp), Versaggi Shrimp Corporation, and 
Indian Ridge Shrimp Company.
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    On September 1, 2004, Norte Pesca, S.A. withdrew from this 
investigation. During the period September 6--17, 2004, and September 
29--October 1, 2004, we conducted the sales and cost verifications of 
the questionnaire responses of EMPAF and Central de

[[Page 76911]]

Industrializacao e Distribuicao de Alimentos Ltda. (CIDA).
    On September 3, 2004, CIDA and the Association of Brazilian Shrimp 
Farmers (ABCC) requested a hearing. EMPAF requested a hearing on 
September 28, 2004. On October 20 and 26, 2004, Xian-Ning Seafood Co., 
Ltd., an interested party in the companion investigation of frozen and 
canned warmwater shrimp from Thailand, submitted case and rebuttal 
briefs, respectively.\2\ We received case briefs on November 3, 2004, 
from the petitioners, CIDA, EMPAF, ABCC, and two other interested 
parties in this investigation, Eastern Fish Company, Inc. and Long John 
Silver's, Inc.\3\ On November 12, 2004, we received rebuttal briefs 
from the petitioners, CIDA, EMPAF, Eastern Fish Company, Inc. and Long 
John Silver's, Inc.\4\ On November 17, 2004, CIDA, EMPAF and ABCC 
withdrew their requests for a hearing.
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    \2\ These briefs related only to scope issues.
    \3\ The briefs submitted by Eastern Fish Company, Inc. And Long 
John Silver's, Inc. related only to scope issues.
    \4\ Id.
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    On November 12, 2004, and November 15, 2004, pursuant to the 
Department's request, we received revised sales and cost databases from 
CIDA and EMPAF, respectively, which incorporated certain changes 
discovered in preparation for and during verification.
    On November 23, 2004, the Department convened a public hearing on 
scope issues. On November 29, 2004, the Department made final scope 
determinations with respect to shrimp scampi and dusted and battered 
shrimp. See the November 29, 2004, Memoranda from Edward C. Yang to 
Barbara E. Tillman, Acting Deputy Assistant Secretary for Import 
Administration entitled, ``Scope Clarification on Shrimp Scampi'; and 
``Scope Clarification on Dusted Shrimp and Battered Shrimp,'' 
respectively. See also the ``Scope of Investigation'' section of this 
notice, below, for further discussion.\5\
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    \5\ In addition to these scope determinations, the Department 
previously made five other scope determinations: (1) On May 21, 
2004, the Department declined to expand the scope of this 
investigation to include fresh (never frozen) shrimp; (2) on July 2, 
2004, pursuant to a request from Ocean Duke Corporation, an 
interested party in the companion investigation of frozen and canned 
warmwater shrimp from Thailand, the Department found that its 
``Seafood Mix'' is excluded from the scope of this investigation; 
(3) on July 2, 2004, the Department found that salad shrimp, sold in 
counts of 250 pieces or higher, are included within the scope of the 
this investigation; (4) on July 2, 2004, the Department found that 
Macrobrachium rosenbergii and organic shrimp are included within the 
scope of this investigation; and (5) on July 2, 2004, the Department 
found that peeled shrimp are included within the scope of this 
investigation.
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    Also on November 29, 2004, the Department clarified that a shrimp 
sauce produced by a company in the companion investigation of frozen 
and canned warmwater shrimp from the People's Republic of China, Lee 
Kum Kee (USA) Inc., is not covered by the scope of that investigation. 
See the November 29, 2004, Memorandum from Edward C. Yang to Barbara E. 
Tillman, Acting Deputy Assistant Secretary for Import Administration 
entitled, ``Scope Clarification on Lee Kum Kee's Shrimp Sauce.''

Period of Investigation

    The period of investigation is October 1, 2002, through September 
30, 2003.

Analysis of Comments Received

    The various scope issues are discussed in the ``Case History'' 
section of this notice and the separate scope memoranda. All other 
issues raised in the case and rebuttal briefs by parties in this 
investigation are addressed in the ``Issues and Decision Memorandum'' 
(Decision Memorandum) from Barbara E. Tillman, Acting Deputy Assistant 
Secretary for Import Administration, to James J. Jochum, Assistant 
Secretary for Import Administration, dated December 17, 2004, which is 
adopted by this notice. Parties can find a complete discussion of the 
issues raised in this investigation and the corresponding 
recommendations in this public memorandum, which is on file in the 
Central Records Unit, room B-099 of the main Commerce Building (CRU). 
In addition, a complete version of the Decision Memorandum can be 
accessed directly on the Web at http://ia.ita.doc.gov/frn/index.html. 
The paper copy and electronic version of the Decision Memorandum are 
identical in content.

Scope of Investigation

    The scope of this investigation includes certain warmwater shrimp 
and prawns, whether frozen or canned, wild-caught (ocean harvested) or 
farm-raised (produced by aquaculture), head-on or head-off, shell-on or 
peeled, tail-on or tail-off,\6\ deveined or not deveined, cooked or 
raw, or otherwise processed in frozen or canned form.
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    \6\ ``Tails'' in this context means the tail fan, which includes 
the telson and the uropods.
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    The frozen or canned warmwater shrimp and prawn products included 
in the scope of this investigation, regardless of definitions in the 
Harmonized Tariff Schedule of the United States (HTSUS), are products 
which are processed from warmwater shrimp and prawns through either 
freezing or canning 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 the investigation. 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 the investigation.
    Excluded from the scope are: (1) Breaded shrimp and prawns 
(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 (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in 
prepared meals (1605.20.05.10); (5) dried shrimp and prawns; (6) dusted 
shrimp; and (7) 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 par-fried.

[[Page 76912]]

    The products covered by this scope are currently classifiable 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, 1605.20.10.30, and 1605.20.10.40. These HTSUS 
subheadings are provided for convenience and customs purposes only and 
are not dispositive, but rather the written description of the scope of 
this investigation is dispositive.

Changes Since the Preliminary Determination

    Based on our analysis of the comments received and our findings at 
verification, we have made certain changes to the margin calculations. 
For a discussion of these changes, see the ``Margin Calculations'' 
section of the Decision Memorandum.

Use of Facts Available for Norte Pesca

    On September 1, 2004, two weeks prior to the Department's planned 
verification of Norte Pesca's submitted cost and sales information, 
Norte Pesca notified the Department that it no longer intended to 
participate in this investigation. See Letter from Norte Pesca to the 
U.S. Secretary of Commerce on file in the CRU. As a result, we were 
unable to verify the information submitted by Norte Pesca. By ceasing 
to participate, Norte Pesca significantly impeded the investigation. 
Pursuant to sections 776(a)(2)(C) and (D) of the Act, if an interested 
party significantly impedes the investigation or provides information 
that cannot be verified, the Department shall use, subject to sections 
782(d) and (e) of the Act, facts otherwise available in reaching the 
applicable determination.
    Once we determine that the use of facts available is warranted, 
section 776(b) of the Act further permits us to apply an adverse 
inference if we make the additional finding that ``a respondent has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information.'' By ceasing to participate in the 
investigation and precluding the verification of its submitted cost and 
sales information, Norte Pesca did not act to the best of its ability 
as required by section 776(b) of the Act. Consequently, we have 
determined to make an adverse inference in determining the dumping 
margin for Norte Pesca. See Notice of Final Determination of Sales at 
Less Than Fair Value: Polyvinyl Alcohol From the Republic of Korea, 68 
FR 47540 (August 11, 2003).
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available (AFA) information derived from the petition, a 
final investigation determination, a previous administrative review, or 
any other information placed on the record. The Department's practice 
when selecting an adverse rate from among the possible sources of 
information is to ensure that the margin is sufficiently adverse to 
induce respondents to provide the Department with complete and accurate 
information in a timely manner.'' See Carbon and Certain Alloy Steel 
Wire Rod from Brazil, Notice of Final Determination of Sales at Less 
Than Fair Value and Final Negative Critical Circumstances, 67 FR 55792 
(August 30, 2002); Static Random Access Memory Semiconductors from 
Taiwan, Final Determination of Sales at Less than Fair Value, 63 FR 
8909, (February 23, 1998). The Department applies AFA ``to ensure that 
the party does not obtain a more favorable result by failing to 
cooperate than if it had cooperated fully.'' See Uruguay Round 
Agreements Act, Statement of Administrative Action, H.R. Doc. No. 103-
316, vol. 1, at 870 (1994)(SAA).
    As total AFA we have assigned to exports of the subject merchandise 
produced by Norte Pesca the rate of 67.80, which is the rate assigned 
to Norte Pesca in the preliminary determination. We find that this rate 
is sufficiently adverse to serve the purposes of facts available, 
explained above. See Memorandum to Louis Apple, Director, AD/CVD 
Operations, Office 2, Import Administration, Final Determination of 
Certain Frozen and Canned Warmwater Shrimp from Brazil: Use of Facts 
Available for Norte Pesca, dated December 17, 2004, on file in the CRU 
(AFA Memorandum).
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information in using the facts otherwise available, it 
must, to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. We have 
interpreted ``corroborate'' to mean that we will, to the extent 
practicable, examine the reliability and relevance of the information 
submitted. See Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel 
Products From Brazil: Notice of Final Determination of Sales at Less 
Than Fair Value, 65 FR 5554 (February 4, 2000); See, e.g., Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, from Japan; Preliminary Results of Antidumping 
Duty Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996).
    As detailed in the AFA Memorandum, in selecting the AFA rate for 
Norte Pesca, we did not use either of the two highest of the three 
petition rates because we were unable to corroborate them with 
independent information reasonably at our disposal and we have an 
alternative that we find to be sufficiently adverse to effectuate the 
purpose of the AFA provision of the statute. We did not use the 
remaining petition rate because it was lower than Norte Pesca's 
preliminary margin, and as such would not accomplish the objectives of 
AFA, stated above. Thus, we assigned the rate of 67.80 percent, which 
was based on information submitted by Norte Pesca in its questionnaire 
responses and database submissions, and remains on the record of this 
investigation. Because this information was provided to us by the 
respondent, it is not considered to be secondary information, and 
therefore, needs not be corroborated. We conclude that this data, 
although unverified, continues to be the best information reasonably 
available to us to effectuate the purpose of AFA.

Collapsing CIDA With Its Affiliated Processor

    CIDA and its processing company, Cia Exportadora de Produtus do Mar 
(``Produmar''), are two separate companies owned and operated by 
members of the same family. In the preliminary determination, 
consistent with 19 CFR 351.401(h) of the Department's regulations, we 
determined that Produmar was an affiliated toller rather than a 
manufacturer or producer, because it neither acquired ownership nor 
controlled the sale of the subject merchandise. See Preliminary 
Determination at 47087. Therefore, rather than collapsing these two 
entities and using Produmar's costs in our COP and CV calculations, we 
applied the ``major input'' rule, and used the transfer price for 
Produmar's processing services. We stated that given the nature of the 
affiliation between the entities at issue, we recognized that a related 
issue could arise as to whether there is a potential for manipulation 
of price or production and, if so, whether the two entities should 
receive the same dumping rate. Based on this recognition, we solicited 
comments from the parties as to whether to collapse CIDA and Produmar 
in the final determination.

[[Page 76913]]

    Since the preliminary determination, and as detailed in the 
December 17, 2004, Issues and Decision Memorandum, the extent to which 
the two companies operate as a single entity has become apparent, such 
that we believe there to be significant potential for manipulation of 
price and production between CIDA and Produmar. Therefore, we have 
collapsed the two entities for the final determination. Accordingly, we 
have used the actual costs incurred by Produmar in valuing the 
processing services it provided to CIDA, and we have assigned the two 
companies a single dumping margin.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the respondents (except for Norte Pesca as 
discussed above) for use in our final determination. We used standard 
verification procedures including examination of relevant accounting 
and production records, and original source documents provided by the 
respondents.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing U.S. Customs and Border Protection (CBP) to continue to 
suspend liquidation of all entries of certain frozen and canned 
warmwater shrimp from Brazil that are entered, or withdrawn from 
warehouse, for consumption on or after August 4, 2004, the publication 
date of the preliminary determination in the Federal Register or, in 
the case of EMPAF, August 30, 2004, the publication date of the amended 
preliminary determination. CBP shall continue to require a cash deposit 
or the posting of a bond based on the estimated weighted-average 
dumping margins shown below. The suspension of liquidation instructions 
will remain in effect until further notice.

Final Determination Margins

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                       margin
                                                             percentage
------------------------------------------------------------------------
Empresa de Armazenagem Frigorifica Ltda. (EMPAF)..........         10.70
Central de Industrializacao e Distribuicao de Alimentos             9.69
 Ltda. (CIDA)/Cia Exportadora de Produtos do Mar
 (Produmar)...............................................
Norte Pesca S.A...........................................         67.80
All Others................................................         10.40
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    In accordance with section 735(c)(5)(A) of the Act, we have based 
the ``all others'' rate on the weighted average of the dumping margins 
calculated for the exporters/manufacturers investigated in this 
proceeding. The ``all others'' rate is derived exclusive of all de 
minimis margins and margins based entirely on AFA.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (ITC) of our determination. As our final 
determination is affirmative, the ITC will determine within 45 days 
whether these imports are causing material injury, or threat of 
material injury, to an industry in the United States. If the ITC 
determines that material injury or threat of injury does not exist, the 
proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order directing 
CBP officials to assess antidumping duties on all imports of the 
subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after the effective date of the suspension of 
liquidation.
    This notice serves as the only reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely written 
notification of return/destruction of APO materials or conversion to 
judicial protective order is hereby requested. Failure to comply with 
the regulations and the terms of an APO is a sanctionable violation. We 
are issuing and publishing this determination and notice in accordance 
with sections 735(d) and 777(i) of the Act.

    Dated: December 17, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.

Appendix--Issues in the Decision Memorandum

Comments

General Issues
    Comment 1: Offsets for Non-Dumped Comparisons
    Comment 2: Calculation of the ``All Others'' Rate

Company-Specific Issues

CIDA
    Comment 3: Billing Adjustments
    Comment 4: Insurance Payments as an Offset to General and Administrative Expenses
    Comment 5: Collapsing CIDA with its Affiliated Processor
    Comment 6: Cost Allocation Methodology
    Comment 7: Ration and Larva Costs
    Comment 8: Loss on Sale of Fixed Assets
    Comment 9: ICMS Taxes
    Comment 10: Change in Raw Shrimp Inventory
    Comment 11: Prompt Payment Discounts

EMPAF
    Comment 12: Presumed Credit and IPI Export Credit Premium Revenue
    Comment 13: Brazilian Indirect Selling Expenses
    Comment 14: U.S. Indirect Selling Expenses
    Comment 15: Container Weight
    Comment 16: SPECIES Product Characteristic
    Comment 17: Accounting Errors Prior to the Cost Reporting Period
    Comment 18: Double Counting Indirect Selling Expenses
    Comment 19: Amortization of Pre-Operational Costs
    Comment 20: Allocation of Depreciation to Work-in-Process Inventory
    Comment 21: Other Adjustments to Shrimp Costs

Norte Pesca
    Comment 22: Adverse Facts Available Rate for Norte Pesca

[FR Doc. 04-28110 Filed 12-21-04; 8:45 am]