[Federal Register Volume 66, Number 92 (Friday, May 11, 2001)]
[Notices]
[Pages 24108-24114]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-11941]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-357-812]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Honey From Argentina

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

EFFECTIVE DATE: May 11, 2001.

FOR FURTHER INFORMATION CONTACT: Melissa Blackledge, Charlie Rast or 
Donna Kinsella at (202) 482-3518, (202) 482-1324 or (202) 482-0194, 
respectively; Antidumping and Countervailing Duty Enforcement Group 
III, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230.

The 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 Department of Commerce (Department) 
regulations refer to the regulations codified at 19 CFR part 351 (April 
2000).

Preliminary Determination

    We preliminarily determine that honey from Argentina is being sold, 
or

[[Page 24109]]

is likely to be sold, in the United States at less than fair value 
(LTFV), as provided in section 733 of the Act. The estimated margins of 
sales at LTFV are shown in the ``Suspension of Liquidation'' section of 
this notice.

Case History

    On October 26, 2000, the Department initiated antidumping duty 
investigations of imports of honey from Argentina and the People's 
Republic of China (China). See Initiation of Antidumping Duty 
Investigations: Honey from Argentina and the People's Republic of 
China. 65 FR 65831-65834 (November 2, 2000) (Initiation Notice). The 
petitioners in these investigations are the American Honey Producers 
Association and the Sioux Honey Association (petitioners). Since the 
initiation of the investigations, the following events have occurred 
with respect to honey from Argentina.
    On October 30, 2000, the Department requested information from the 
U.S. Embassy in Argentina to identify producers/exporters of subject 
merchandise. On November 13, 2000, the United States International 
Trade Commission (the Commission) notified the Department of its 
affirmative preliminary injury determination on imports of subject 
merchandise from Argentina and China. On November 17, 2000, the 
Commission published its preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of imports from Argentina (65 FR 69573).
    On November 27, 2000, the Department issued Section A, Question 1 
of the antidumping questionnaire to Radix, S.R.L. (Radix), HoneyMax, 
S.A. (HoneyMax), ConAgra Argentina, S.A. (ConAgra), Compania Europea 
Americana, S.A. (CEASA), Foodway, S.A. (Foodway), and Asociacion de 
Cooperativas Argentinas (ACA), requesting volume and value information 
for the POI for each exporter. We received the information requested on 
December 8, 2000. Based on this information, the Department selected 
the three largest exporters/producers by volume as respondents in this 
investigation. See Memorandum to Joseph A. Spetrini, Selection of 
Respondents, dated December 19, 2000.
    On December 19, 2000, the Department issued its antidumping 
questionnaire to Radix, ConAgra, and ACA. We requested that respondents 
respond to Section A (general information, corporate structure, sales 
practices, and merchandise produced), Section B (home market or third-
country sales), and Section C (U.S. sales) of the questionnaire.
    On January 9, 2001, ConAgra informed the Department that it would 
not be submitting responses to Sections A, B, or C of the Department's 
questionnaire. ACA and Radix submitted responses to Section A of the 
Department's questionnaire on January 10, 2001, and January 16, 2001, 
respectively. ACA filed corrections to its Section A response on 
January 30, 2001, January 31, 2001, and February 12, 2001.
    In their Section A responses, ACA and Radix indicated that they 
were both exporters, not producers, of honey. On January 11, 2001, the 
Department requested comments from interested parties on the 
Department's proposed methodology for selecting respondents for cost 
purposes in the sales below cost investigation, which was initiated by 
the Department on October 26, 2000. Because ACA and Radix stated that 
they did not produce the honey sold during the period of investigation 
(POI), the Department indicated in its letter that it intended to 
select at random 12 to 15 honey producers to serve as respondents in 
the sales below cost investigation and to use the selected producers' 
costs to derive an average country-wide cost of production for use in 
the investigation. Radix and ACA submitted comments on January 11, 
2001, and January 18, 2001. Radix and ACA filed additional comments on 
January 26, 2001, and February 23, 2001, respectively. Petitioners 
commented on January 17, 2001, January 18, 2001, January 23, 2001, 
January 26, 2001, March 30, 2001, and April 11, 2001. The Argentine 
embassy commented on January 29, 2001. On February 23, 2001, the 
Department selected 12 cost respondents and issued Section D of the 
questionnaire to the selected honey producers.
    Additional comments were submitted on behalf of the selected 
beekeepers on March 29, 2001, and April 9, 2001.
    ACA and Radix submitted responses to sections B and C of the 
Department's questionnaire on February 9, 2001, and February 16, 2001, 
respectively. ACA filed corrections to its response on February 12, 
2001, February 14, 2001, and February 20, 2001.
    Petitioners submitted comments on Radix's questionnaire responses 
on January 26, 2001, and February 20, 2001. Petitioners commented on 
ACA's original questionnaire responses on January 26, 2001, and 
February 21, 2001. ACA responded to petitioners' February 21, 2001, 
filing on February 23, 2001. Petitioners submitted additional comments 
on February 23, 2001, and February 27, 2001.
    We issued supplemental questionnaires to Radix and ACA on February 
2, 2001, and February 23, 2001. Radix responded on February 16, 2001, 
and March 16, 2001. ACA responded on February 16, 2001, and March 26, 
2001. We requested additional information from Radix on March 5, 2001 
and from ACA on March 5, 2000, March 9, 2000, and March 16, 2000. Radix 
submitted its response on March 16, 2001. ACA filed responses on March 
9, 2001, March 14, 2001, and March 16, 2001. On April 3, 2001, ACA 
filed corrections to its supplemental questionnaire response for 
Sections B through C. Petitioners submitted comments on ACA's and 
Radix's supplemental questionnaire responses on February 27, 2001, and 
March 27, 2001, respectively.
    On February 14, 2001, petitioners made a timely request for a 
fifty-day postponement of the preliminary determination pursuant to 
section 733(c)(1)(A) of the Act. On February 22, 2001, we postponed the 
preliminary determination until no later than May 4, 2001. See Honey 
From Argentina and the People's Republic of China; Notice of 
Postponement of Preliminary Determinations in Antidumping Duty 
Investigations, 66 FR 12924 (March 1, 2001).
    On February 23, 2001, the Department issued Section D of the 
Department's antidumping questionnaire to the twelve selected beekeeper 
respondents. After issuing several extensions to the beekeepers to the 
deadline for responding to Section D of the Department's questionnaire, 
on April 26, 2001, the Department received a letter on behalf of the 
twelve Argentine beekeepers, stating that they were unable to obtain 
usable cost information and would not be responding to the Department's 
Section D questionnaire. Petitioners submitted comments on April 30, 
2001, regarding the failure of the beekeepers to provide responses to 
Section D of the Department's questionnaire. On May 1, 2001, Radix 
submitted a letter to the Department withdrawing from the investigation 
and requesting that its business proprietary data be removed from the 
record and returned to Radix.

Period of Investigation

    The POI is July 1, 1999 through June 30, 2000. This period 
corresponds to the four most recent fiscal quarters prior to the filing 
of the petition (i.e., September 2000), and is in accordance with 
section 351.204(b)(1) of the Department's regulations.

[[Page 24110]]

Scope of Investigation

    For purposes of these investigations, the products covered are 
natural honey, artificial honey containing more than 50 percent natural 
honey by weight, preparations of natural honey containing more than 50 
percent natural honey by weight, and flavored honey. The subject 
merchandise includes all grades and colors of honey whether in liquid, 
creamed, comb, cut comb, or chunk form, and whether packaged for retail 
or in bulk form.
    The merchandise subject to these investigations is currently 
classifiable under subheadings 0409.00.00, 1702.90, and 2106.90.99 of 
the Harmonized Tariff Schedule of the United States (HTSUS). Although 
the HTSUS subheadings are provided for convenience and U.S. Customs 
Service (U.S. Customs) purposes, the Department's written description 
of the merchandise under investigation is dispositive.

Facts Available (FA)

    Section 776(a) of the Act provides that ``if any interested party 
or any other person--(A) withholds information that has been requested 
by the administering authority, (B) fails to provide such information 
by the deadlines for the submission of the information or in the form 
and manner requested, subject to subsections (c)(1) and (e) of section 
782, (C) significantly impedes a proceeding under this title, or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority and the 
Commission shall, subject to section 782(d), use the facts otherwise 
available in reaching the applicable determination under this title.'' 
The statute also requires that certain conditions be met before the 
Department may resort to the facts otherwise available. Where the 
Department determines that a response to a request for information does 
not comply with the request, section 782(d) of the Act provides that 
the Department will so inform the party submitting the response and 
will, to the extent practicable, provide that party the opportunity to 
remedy or explain the deficiency. If the party fails to remedy the 
deficiency within the applicable time limits, the Department may, 
subject to section 782(e) of the Act, disregard all or part of the 
original and subsequent responses, as appropriate. Briefly, section 
782(e) of the Act provides that the Department ``shall not decline to 
consider information that is submitted by an interested party and is 
necessary to the determination but does not meet all the applicable 
requirements established by the administering authority'' if the 
information is timely, can be verified, is not so incomplete that it 
cannot be used, and if the interested party acted to the best of its 
ability in providing the information. Where all of these conditions are 
met, and the Department can use the information without undue 
difficulties, the statute requires it to do so.

ConAgra

    As noted in the ``Case History'' section above, the Department 
issued its antidumping questionnaire to ConAgra on December 19, 2000. 
On January 9, 2001, ConAgra informed the Department that it would not 
be submitting responses to Sections A, B, or C of the Department's 
questionnaire. ConAgra stated that, after reviewing the questionnaire 
in detail, it determined that it did not have sufficient available 
resources in Argentina to complete the questionnaire, as requested by 
the Department. ConAgra indicated that its books and records in 
Argentina are not in a format easily translatable to the computer data 
set required by the Department, and that the personnel necessary to 
convert its books and records into the Department's format is not 
available.
    Because ConAgra failed to respond to the Department's December 19, 
2000, request for information, sections 782(d) and (e) of the Act are 
not applicable, and the Department must resort to the use of facts 
available for this respondent, in accordance with section 776(a) of the 
Act. Moreover, we have determined that ConAgra's failure to respond to 
any portions of the Department's December 19, 2000, questionnaire 
demonstrates that the company has not cooperated to the best of its 
ability. Therefore, pursuant to section 776(b) of the Act, we used an 
adverse inference in selecting a margin from among facts otherwise 
available. See Memorandum from Donna Kinsella to Richard O. Weible, 
Honey from Argentina: Preliminary Determination of Sales at Less Than 
Fair Value--The Use of Facts Available for ConAgra Argentina, S.A., and 
the Corroboration of Secondary Information, dated May 4, 2001 (ConAgra 
Facts Available Memorandum).

Radix

    As also noted in the ``Case History'' section above, on May 1, 
2001, the Department received a letter from Radix stating that it would 
not continue to participate in the Department's investigation. Radix 
explained that it was unable to file any usable cost information from 
the Argentine beekeepers despite the extensions granted to it by the 
Department. Therefore, Radix decided that it would not be beneficial to 
it to continue participating in the investigation, and it requested 
that all business proprietary data be removed from the record and 
returned to Radix. Accordingly, for purposes of our preliminary 
calculations, we will not be relying on Radix's proprietary 
information.\1\
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    \1\ In a letter of May 3, 2001, petitioners objected to the 
removal of Radix's information from the record. We will be 
addressing this issue at a later date.
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    Because Radix withdrew from the investigation and requested that 
its submitted responses be removed from the record, sections 782(d) and 
(e) of the Act are not applicable, and the Department must resort to 
the use of facts available for this respondent, in accordance with 
section 776(a) of the Act. Moreover, we have determined that Radix's 
withdrawal from the investigation demonstrates that the company has not 
cooperated to the best of its ability. Therefore, pursuant to section 
776(b) of the Act, we used an adverse inference in selecting a margin 
from among facts otherwise available. See Memorandum from Donna 
Kinsella to Richard O. Weible, Honey from Argentina: Preliminary 
Determination of Sales at Less Than Fair Value--The Use of Facts 
Available for Radix, S.R.L., and the Corroboration of Secondary 
Information, dated May 4, 2001 (Radix Facts Available Memorandum).
    As adverse facts available for ConAgra and Radix, the Department 
has applied a margin rate of 60.67 percent, the highest alleged margin 
for Argentina in the petition. This rate is the higher of the highest 
margin in the petition or the highest rate calculated for a respondent 
in the proceeding. See Final Determination of Sales at Less Than Fair 
Value; Stainless Steel Sheet and Strip in Coils from Germany; 64 FR 
30710, 30714 (June 8, 1999).
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
316, 103d Cong., 2d Sess. (1994) ( SAA) states that ``corroborate'' 
means to determine that the information used has probative value. See 
SAA at 870. In this proceeding, we considered information contained in 
the petition as the most appropriate record information to use to

[[Page 24111]]

establish the dumping margins for these uncooperative respondents 
because, in the absence of verifiable data provided by ConAgra and 
Radix, the petition information is the best approximation, using an 
adverse inference, available to the Department of ConAgra's and Radix's 
pricing and selling behavior in the U.S. market. In accordance with 
section 776(c) of the Act, we sought to corroborate the data contained 
in the petition. We reviewed the adequacy and accuracy of the 
information in the petition during our pre-initiation analysis of the 
petition, to the extent appropriate information was available for this 
purpose (e.g., import statistics and foreign market research reports). 
See Initiation Notice. For purposes of this preliminary determination, 
we attempted to corroborate the information in the petition with 
information gathered since the initiation. We compared the export price 
(EP) and constructed value (CV) data, which formed the basis for the 
highest margin in the petition, to the price and cost/expense data 
provided by the honey producers and export trading companies during the 
investigation and, to the extent practicable, found that it had 
probative value. (For a detailed analysis see ConAgra's and Radix's 
Facts Available Memoranda.)

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by ACA, covered by the description in the ``Scope of 
Investigation'' above, and sold in the comparison market during the 
POI, to be foreign like products for purposes of determining 
appropriate comparisons to U.S. sales.

Fair Value Comparisons

    To determine whether sales of honey from Argentina to the United 
States were made at LTFV, we compared the EP to the constructed value 
(CV), as described in the ``Export Price'' and ``Constructed Value'' 
sections of this notice. In accordance with section 777A(d)(1)(A)(i) of 
the Act, we calculated weighted-average EPs for comparison to CV.

Export Price

    We calculated EP in accordance with section 772(a) of the Act 
because ACA sold the merchandise directly to the first unaffiliated 
purchaser in the United States prior to the date of importation, and 
because constructed export price (CEP) methodology was not otherwise 
appropriate. We based EP for ACA on the C&F price to unaffiliated 
purchasers in the United States. We made deductions for billing 
adjustments and ``reembolso'' reimbursements, where appropriate. We 
also made adjustments for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, foreign 
brokerage and handling, international freight, and additional shipping 
costs.

Normal Value

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP. The statute 
contemplates that quantities (or value) will normally be considered 
insufficient if they are less than five percent of the aggregate 
quantity (or value) of sales of the subject merchandise to the United 
States.
    Based on information submitted by the Argentine exporting trading 
company, we found that for the exporter the aggregate volume of home 
market sales of the foreign like product was less than five percent of 
their aggregate volume of U.S. sales of the subject merchandise during 
the POI. (See the December 8, 2000, Section A, Question 1, 
questionnaire responses from the export trading company.) Consequently, 
we determined that the Argentine home market was not viable.
    Where the home market is determined not to be viable, section 
773(a)(1)(B)(ii) of the Act directs the Department to employ the price 
of sales to a third country as the basis for NV if (1) such price is 
representative, (2) the aggregate quantity (or value) of sales to that 
country is at least 5 percent of the quantity (or value) of total sales 
to the United States, and (3) the Department does not determine that 
the particular market situation in that country prevents proper 
comparison with the EP or CEP price. In this case, we found the price 
of sales to Germany to be representative. Also, the volume and value of 
ACA's sales to Germany were found to exceed 5 percent of the volume and 
value of their sales to the United States. (See the December 8, 2000, 
February 9, 2001, and March 26, 2001, submissions of ACA). Furthermore, 
based on our examination of the record information, we found no reason 
to determine that the market situation in Germany would somehow prevent 
proper comparison between NV and EP price. We therefore found Germany 
to be the appropriate comparison market pursuant to section 
773(a)(1)(B)(ii) of the Act. In deriving NV, we made certain 
adjustments described in the ``Price to CV'' section below.
    ACA originally reported invoice date as the date of sale for both 
the U.S. and third country markets. In its questionnaire responses, ACA 
indicated that invoices are generated after date of shipment from the 
warehouse for sales in both markets. Consequently, for ACA, we have 
used date of shipment as the date of sale in the U.S. and third country 
markets.
    ACA reported expenses attributable to sales to the third country 
market (Germany) incurred for sampling and/or testing honey in order to 
meet the standards of German customers. According to ACA, German 
customers require their purchases of honey to be free of antibiotic 
residuals and phenol. In its submission, these expenses were reported 
as direct selling expenses. For the reasons described below, we have 
determined to treat these expenses as indirect selling expenses for 
purposes of our preliminary determination.
    Direct expenses are typically expenses that are incurred as a 
direct and unavoidable consequence of the sale (i.e., in the absence of 
the sale these expenses would not be incurred). In other words, while 
indirect expenses generally consist of fixed expenses that are incurred 
whether or not a sale is made, direct selling expenses result from, and 
bear a direct relationship to, the particular sale in question. See 19 
CFR 351.410(c); Oil Country Tubular Goods From Mexico; Final Results of 
Antidumping Duty Administrative Review, 66 FR 15832 (March 21, 2001); 
and Canned Pineapple Fruit From Thailand: Final Results of Antidumping 
Duty Administrative Review, 65 FR 77851 (December 13, 2000).
    In this case, we found that the information provided by ACA with 
respect to sampling and/or testing honey, particularly at what point in 
time and on which merchandise they are conducted, is either 
contradictory or non-conclusive. (See the January 10, 2001,February 9, 
2001, and March 26, 2001, submissions from ACA.) In fact, the evidence 
on the record indicates that these expenses are more properly 
classified as indirect selling expenses, given that they appear to be 
incurred whether or not a sale is made. For example, in its Section B-C 
questionnaire response, ACA states that the tests in question were 
conducted on all shipments to German customers that require particular 
testing results. However, in a later submission, on March 26, 2001, ACA 
reports that since October 1999 it has performed testing according to 
German standards on all

[[Page 24112]]

lots of honey darker than a certain color (i.e., 34 mm on the pfund 
scale). It is also unclear from the record evidence whether honey, 
which is tested but which does not meet German standards, is shipped to 
other markets and how the testing expenses associated with such sales 
have been accounted for in ACA's testing expense calculations.
    As a result of contradictory and ambiguous statements made by ACA 
in its submissions to date, we found that the evidence of expenses in 
connection with sampling and/or testing honey for German customers does 
not unequivocally demonstrate that these expenses result from and bear 
a direct relationship to the sales in question within the meaning of 19 
CFR 351.410(c) and the Department's practice. Rather, the evidence 
indicates that these expenses appear to have the characteristics of 
indirect selling expenses. Accordingly, for purposes of our preliminary 
determination, we have determined to re-classify ACA's sampling and/or 
testing expenses as indirect selling expenses. However, we intend to 
fully examine this issue at verification, and will incorporate our 
findings, as appropriate, in our analysis for the final determination.
    ACA reported warranty expenses for certain third country and U.S. 
sales on a customer-specific basis. To calculate these expenses, ACA 
allocated the total warranty costs reimbursed to a particular customer 
by the total tons of honey sold to that customer during the POI. 
Notwithstanding ACA's ability to report warranty expenses on a 
customer-specific basis, we have long recognized that the nature of 
warranty expenses (i.e., that claims made for specific sales are often 
made after the close of a given period of investigation or review) 
necessitates the use of an appropriate allocation methodology. (See, 
e.g., Final Determination of Sales at Less Than Fair Value: Stainless 
Steel Sheet and Strip in Coils from Germany, 64 FR 30710, 30736-30738 
(June 8, 1999); Notice of Final Determination of Sales at Less Than 
Fair Value: Large Newspaper Printing Presses and Components Thereof, 
Whether Assembled or Unassembled, From Germany, 61 FR 38166 (July 23, 
1996); and Koenig & Bauer-Albert, et al. v. United States, 15 Fed. 
Supp.2d 834, 854 (CIT 1998).) We do not believe that ACA's customer-
specific allocation methodology takes into account an important 
additional characteristic of these expenses, namely, that they are not 
predictable at the time of the sale. Because warranty expenses are 
normally incurred after the sale is made, and are not incurred until a 
warranty claim has been received from a customer, we believe that in 
cases where warranty services are provided by the producer/exporter, 
all sales are subject to warranty expenses. Therefore, for purposes of 
the preliminary determination in this case, in order to derive a per-
unit warranty expense for all sales, we have recalculated ACA's 
warranty expenses by allocating the total reported expenses for 
warranty claims in each market over the total quantity of sales made by 
ACA in each market.

Cost of Production Analysis

    Based on our analysis of the cost allegation submitted by 
petitioners on September 29, 2000, the Department found reasonable 
grounds to believe or suspect that sales of honey produced in Argentina 
were made at prices below the cost of production (COP), in accordance 
with section 773(b)(2)(A)(i) of the Act. As a result, the Department 
attempted to conduct an investigation to determine whether respondents 
made third country sales during the POI below the honey producers' COP, 
within the meaning of section 773(b) of the Act.

A. Calculation of COP

    Because the respondent participating in this investigation is not a 
producer of the merchandise under investigation, we selected 12 honey 
producers to serve as cost respondents in the sales-below-cost 
investigation. As stated in the ``Case History'' section of this 
notice, the honey producers failed to respond to the Department's 
request for cost of production information. Because the selected honey 
producers did not provide necessary information regarding the cost of 
production of honey, we calculated COP based on the only cost data 
available on the record; i.e. cost data obtained from Argentine honey 
producer bi-monthly trade journal articles submitted in the petition. 
The Department used the average of the cost studies for March, May, 
July, September, November 1999, as provided in the petition, to derive 
an average country-wide honey producers' COP to use as the COP for the 
respondent.

B. Test of Third Country Market Prices

    We compared the COP for ACA, as calculated above, to the company's 
third country market sales of the foreign like product, less any 
applicable movement charges, billing adjustments, and selling expenses 
as required under section 773(b) of the Act, in order to determine 
whether these sales had been made at prices below the COP. In 
determining whether to disregard third country market sales below the 
COP, we examined whether such sales were made (1) within an extended 
period of time in substantial quantities, and (2) at prices which 
permitted the recovery of all costs within a reasonable period of time, 
in accordance with sections 773(b)(1)(A) and (B) of the Act.

C. Results of the COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of ACA's sales were at prices less than the COP, we did not 
disregard any below-cost sales because we determined that the below-
cost sales were not made in substantial quantities. Where 20 percent or 
more of ACA's sales during the POI were less than the COP, we 
determined such sales to have been made in substantial quantities 
within an extended period of time, in accordance with section 
773(b)(2)(B) of the Act. Because we compared prices to average costs, 
we also determined that such sales were not made at prices which would 
permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(2)(D) of the Act. Therefore, we 
disregarded those below-cost sales. Because all sales were disregarded, 
we calculated NV based on CV.

D. Constructed Value

    In accordance with section 773(e)(1) of the Act, we calculated CV 
based on the COP as calculated above plus the exporter's SG&A expenses 
and an amount for profit. In accordance with section 773(e)(2)(B)(iii) 
of the Act, and as facts available, we based profit on the September 
1999 trade journal article.

Price to CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
pursuant to the criteria described in the ``Cost of Production'' 
section above. Where appropriate, we made adjustments to CV in 
accordance with section 773(a)(8) of the Act. For comparisons to EP, we 
made COS adjustments by deducting third country direct selling expenses 
and adding U.S. direct selling expenses.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (LOT) as the EP transaction. The NV LOT 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, the U.S. LOT is also the level of the starting-price 
sale, which is usually from the exporter to the importer.

[[Page 24113]]

    To determine whether NV sales are at a different LOT than EP, we 
examine stages in the marketing process and selling functions along the 
chain of distribution between the exporter and the unaffiliated 
customer. If the comparison-market sales are at a different LOT and the 
difference affects price comparability, as manifested in a pattern of 
consistent price differences between the sales on which NV is based and 
comparison-market sales at the LOT of the export transaction, we make a 
LOT adjustment pursuant to section 773(a)(7)(A) of the Act. 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 investigation, we examined 
information from ACA regarding their reported third country market and 
EP sales, including a description of the selling activities performed 
by ACA for each channel of distribution. In identifying LOT for EP and 
third country market sales, we considered the selling functions 
reflected in the starting price before any adjustments.
    ACA claimed one level of trade in each market: One LOT representing 
sales to unaffiliated packers in the third country market; and one LOT 
representing sales in the U.S. market to unaffiliated importers, who 
resell to packers. According to ACA, because all customers in the 
third-country market are packers and all customers in the U.S. market 
are importers, the impact on ACA's pricing cannot be seen by comparing 
its prices at different LOTs in a single market. Instead, the 
difference in the LOT can be measured by the mark-up of ACA's U.S. 
export prices by its U.S. customers when the importers resell ACA's 
honey to their packer customers. ACA claimed a LOT adjustment 
equivalent to the estimated price differential between sales to 
importers and sales to packers.
    In determining whether separate LOTs existed in the third country 
and U.S. market, we examined ACA's selling functions along the chain of 
distribution between ACA and its unaffiliated customers. In reviewing 
the chains of distribution and customer categories, we found that ACA 
made sales directly to unaffiliated customers in both the third country 
market and the U.S. market.
    As indicated previously, ACA reported different categories of 
customers in the third country and U.S. markets, packers and importers 
who resell to packers, respectively. We note that while the Department 
considers the type of customer an important indicator in identifying 
differences in the LOT, the existence of different classes of customers 
is not sufficient to establish a difference in the LOTs. Whereas 
certain titles used to describe classes of customers (e.g., original 
equipment manufacturer, distributor, wholesaler, retailer) may actually 
describe LOTs, the fact that two sales were made by entities with 
titles suggesting different stages of the marketing process is not 
sufficient to establish that the two sales were made at different LOTs. 
(See Antidumping Duties: Countervailing Duties, Preamble to 19 CFR, 
351, FR 27296, 27371 (May 19, 1997).)
    In further analyzing ACA's LOT claims, we reviewed information 
available on the record regarding ACA's selling functions, in 
accordance with our practice. In its Section A questionnaire response, 
ACA stated that it performs no selling activities and offers no 
services in the U.S. or third-country markets. In its February 16, 
2001, Section A supplemental questionnaire response, ACA stated that in 
addition to arranging international freight and delivery, the only 
selling activities it performs on third country or U.S. market sales is 
the provision of warranty services. ACA indicated that it performs 
activities relating to the arrangement of international freight and 
delivery for the third country and U.S. markets to a medium degree. It 
indicated that it performs activities relating to warranty services to 
a medium degree in the third country market and to a low degree in the 
U.S. market.
    Based on the information provided by ACA, we find that the selling 
functions ACA provided to its reported channels of distribution in the 
third country and U.S. markets are the same, varying only by the degree 
to which warranty services were provided. We do not find the varying 
degree to which warranty services are provided sufficient to determine 
the existence of different marketing stages. Therefore, based upon this 
information, we have preliminarily determined that the LOT for all EP 
sales is the same as that for third country sales. Accordingly, because 
we find U.S. sales and third country sales to be at the same LOT, no 
LOT adjustment under section 773(a)(7)(A) of the Act is warranted.

Currency Conversions

    We made currency conversions into U.S. dollars in accordance with 
section 773 of the Act based on the exchange rates in effect on the 
dates of the U.S. sales, as certified by the Federal Reserve Bank.
    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. It is the Department's 
practice to find that a fluctuation exists when the daily exchange rate 
differs from the benchmark rate by 2.25 percent. The benchmark is 
defined as the moving average of rates for the past 40 business days. 
When we determine a fluctuation to have existed, we substitute the 
benchmark rate for the daily rate, in accordance with established 
practice. Further, section 773A(b) of the Act directs the Department to 
allow a 60-day adjustment period when a currency has undergone a 
sustained movement. A sustained movement has occurred when the weekly 
average of actual daily rates exceeds the weekly average of benchmark 
rates by more than five percent for eight consecutive weeks. (For an 
explanation of this method, see Policy Bulletin 96-1: Currency 
Conversions (61 FR 9434, March 8, 1996).)

Verification

    In accordance with section 782(i) of the Act, we intend to verify 
all information relied upon in making our final determinations.

Suspension of Liquidation

    In accordance with section 733(e)(2) of the Act, the Department 
will direct the Customs Service to suspend liquidation of all entries 
of subject merchandise from Argentina that are entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
this notice in the Federal Register. The Customs Service shall require 
a cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the EP, as indicated in the chart below. 
This suspension-of-liquidation will remain in effect until further 
notice.
    The margins in the preliminary determination are as follows:

                          Honey From Argentina
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
               Producer/manufacturer/exporter                   margin
                                                              (percent)
------------------------------------------------------------------------
ACA........................................................        49.93
Radix......................................................        60.67
ConAgra....................................................        60.67
All Others.................................................        49.93
------------------------------------------------------------------------

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final antidumping determinations are 
affirmative, the ITC will determine before the latter of 120

[[Page 24114]]

days after the date of this preliminary determination or 45 days after 
our final determinations, whether these imports are materially 
injuring, or threaten material injury to, the U.S. industry.

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the verification reports. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. 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.
    Section 774 of the Act provides that the Department will hold a 
hearing to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by any interested party. If a request for a 
hearing is made in an investigation, the hearing will tentatively be 
held two days after the deadline for submission of the rebuttal briefs, 
at the U.S. Department of Commerce, 14th Street and Constitution 
Avenue, NW, Washington, DC 20230. In the event that the Department 
receives requests for hearings from parties to several honey cases, the 
Department may schedule a single hearing to encompass all those cases. 
Parties should confirm by telephone the time, date, and place of the 
hearing 48 hours before the scheduled time. Interested parties who wish 
to request a hearing, or participate if one is requested, must submit a 
written request within 30 days of the publication of this notice. Oral 
presentations will be limited to issues raised in the briefs. We intend 
to make our final determination no later than 75 days after the date of 
this preliminary determination.
    This determination is published pursuant to sections 733(d) 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: May 4, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-11941 Filed 5-10-01; 8:45 am]
BILLING CODE 3510-DS-P