[Federal Register Volume 66, Number 107 (Monday, June 4, 2001)]
[Notices]
[Pages 29930-29933]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-13957]



[[Page 29930]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-351-605]


Frozen Concentrated Orange Juice from Brazil; Preliminary Results 
and Partial Rescission of Antidumping Duty Administrative Review

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

SUMMARY: In response to a request by the petitioners and one producer/
exporter of the subject merchandise, the Department of Commerce is 
conducting an administrative review of the antidumping duty order on 
frozen concentrated orange juice from Brazil. This review covers four 
manufacturers/exporters of the subject merchandise to the United 
States. This is the thirteenth period of review, covering May 1, 1999, 
through April 30, 2000.
    We have preliminarily determined that sales have been made below 
the normal value by Citrovita Agro-Industrial Ltda. in this review. In 
addition, we have preliminarily determined to rescind the review with 
respect to Branco Peres Citrus S.A., CTM Citrus S.A., and Sucorrico 
S.A. because they had no shipments of subject merchandise to the United 
States during the period of review. If these preliminary results are 
adopted in the final results of this administrative review, we will 
instruct the Customs Service to assess antidumping duties on all 
appropriate entries.
    We invite interested parties to comment on these preliminary 
results. Parties who wish to submit comments in this proceeding are 
requested to submit with each argument: (1) A statement of the issue; 
and (2) a brief summary of the argument.

EFFECTIVE DATE: June 4, 2001.

FOR FURTHER INFORMATION CONTACT: Irina Itkin, Office of AD/CVD 
Enforcement, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone (202) 482-
0656.

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 are to the Department's regulations 
at 19 CFR part 351 (2000).

Background

    On May 16, 2000, the Department of Commerce (the Department) 
published in the Federal Register a notice of ``Opportunity to Request 
an Administrative Review'' of the antidumping duty order on frozen 
concentrated orange juice (FCOJ) from Brazil (65 FR 31141).
    In accordance with 19 CFR 351.213(b)(1), on May 12, 2000, one 
producer and exporter of FCOJ, Citrovita Agro Industrial Ltda. 
(Citrovita), requested an administrative review of the antidumping 
order covering the period May 1, 1999, through April 30, 2000. On May 
31, 2000, the petitioners, Florida Citrus Mutual, Caulkins Indiantown 
Citrus Co., Citrus Belle, Citrus World, Inc., Orange-Co of Florida, 
Inc., Peace River Citrus Products, Inc., and Southern Gardens Citrus 
Processors Corp., also requested an administrative review for the 
following four producers and exporters of FCOJ: Branco Peres Citrus 
S.A. (Branco Peres); Citrovita and its affiliated parties (Cambuhy MC 
Industrial Ltda. (Cambuhy) and Cambuhy Citrus Comercial e Exportadora 
(Cambuhy Exportadora)); CTM Citrus S.A. (CTM); and Sucorrico S.A. 
(Sucorrico).
    On July 7, 2000, the Department initiated an administrative review 
for Branco Peres, Citrovita and its affiliates Cambuhy and Cambuhy 
Exportadora, CTM, and Sucorrico (65 FR 41942), and consequently issued 
questionnaires to them.
    On July 12, July 21, and August 24, 2000, respectively, CTM, Branco 
Peres, and Sucorrico informed the Department that they had no shipments 
of subject merchandise to the United States during the period of review 
(POR). We have confirmed this with the Customs Service with regard to 
CTM and Sucorrico. See the memorandum from Jason M. Hoody to the File, 
entitled ``U.S. Customs Data Query for Entries During the 1999-2000 
Antidumping Duty Administrative Review on Frozen Concentrated Orange 
Juice from Brazil,'' dated May 30, 2001 (the Customs memo). 
Consequently, in accordance with 19 CFR 351.213(d)(3) and consistent 
with our practice, we are preliminarily rescinding our review for CTM 
and Sucorrico. For further discussion, see the ``Partial Rescission of 
Review'' section of this notice, below.
    Regarding Branco Peres, we were informed by the Customs Service 
that there was an entry of subject merchandise during the POR withdrawn 
from a bonded warehouse, which was produced by Branco Peres. See the 
Customs memo. Consequently, we asked Branco Peres to explain the 
circumstances surrounding this entry. Banco Peres responded that it had 
reported the sale associated with the entry in question in the prior 
1997-1998 administrative review of this proceeding. Because we reviewed 
the sale associated with this entry in the context of the 1997-1998 
administrative review completed August 11, 1999, we have determined 
that Branco Peres did not have any reviewable entries during this POR. 
Accordingly, we also are preliminarily rescinding our review of Branco 
Peres and intend to order liquidation of the entry in question at the 
rate in effect at the time of entry, in accordance with our practice. 
For further discussion, see the ``Partial Rescission of Review'' 
section of this notice, below.
    In August and September 2000, we received a response from Citrovita 
to sections A through C and section D, respectively, of the our 
questionnaire. In September 2000, November 2000, January 2001, and 
March 2001, we issued supplemental questionnaires to Citrovita. We 
received responses to these questionnaires in October 2000, December 
2000, February 2001, and March 2001.

Scope of the Review

    The merchandise covered by this review is frozen concentrated 
orange juice from Brazil. The merchandise is currently classifiable 
under item 2009.11.00 of the Harmonized Tariff Schedule of the United 
States (HTSUS). The HTSUS item number is provided for convenience and 
for customs purposes. The written description of the scope of this 
proceeding is dispositive.

Period of Review

    The POR is May 1, 1999, through April 30, 2000.

Partial Rescission of Review

    As noted above, Branco Peres, CTM and Sucorrico informed the 
Department that they had no shipments of subject merchandise to the 
United States during the POR. We have confirmed this with the Customs 
Service and with information submitted by Branco Peres from a previous 
segment of this proceeding. See the memorandum from Jason M. Hoody to 
the File, entitled ``U.S. Sales of Branco Peres in the 1997-1998 
Antidumping Duty Administrative Review on Frozen Concentrated Orange 
Juice from Brazil,'' dated May 30, 2001. Therefore, in accordance with 
19 CFR 351.213(d)(3) and consistent with the Department's practice, we 
are preliminarily rescinding our review with respect to Branco Peres, 
CTM and

[[Page 29931]]

Sucorrico. (See e.g., Certain Welded Carbon Steel Pipe and Tube from 
Turkey; Final Results and Partial Rescission of Antidumping 
Administrative Review, 63 FR 35190, 35191 (June 29, 1998); and Certain 
Fresh Cut Flowers from Colombia; Final Results and Partial Rescission 
of Antidumping Duty Administrative Review, 62 FR 53287, 53288 (Oct. 14, 
1997).)

Affiliated Producers

    During the previous administrative review, a sister company to 
Citrovita's parent company purchased another Brazilian producer of FCOJ 
and that producer's affiliated trading company (i.e., Cambuhy and 
Cambuhy Exportadora, respectively). In that segment of the proceeding, 
we determined that it was appropriate to treat Citrovita and these 
affiliated parties as a single entity using the criteria outlined in 19 
CFR 351.401(f). See Notice of Final Results of Antidumping 
Administrative Review: Frozen Concentrated Orange Juice from Brazil, 65 
FR 60406, 60407 (Oct. 11, 2000) (FCOJ 1998-1999 Final Results). Because 
neither Citrovita nor Cambuhy has provided any new evidence showing 
that this finding no longer holds true, we have continued to treat 
Citrovita and Cambuhy as a single entity and to calculate a single 
margin for them.\1\ (See e.g., Certain Welded Carbon Steel Pipes and 
Tubes from Thailand: Preliminary Results of Antidumping Duty 
Administrative Review, 64 FR 17998, 17999 (April 13, 1999) (unchanged 
by the final results).) Regarding Cambuhy Exportadora, however, 
Citrovita provided information demonstrating that this company did not 
function as a producer of FCOJ during the POR. Accordingly, we have not 
collapsed Cambuhy Exportadora with Citrovita and Cambuhy for purposes 
of the preliminary results.
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    \1\ Hereinafter, these companies will be referred to 
collectively as ``Citrovita,'' unless otherwise noted.
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Comparison Methodology

    To determine whether sales of FCOJ from Brazil to the United States 
were made at less than normal value (NV), we compared the export price 
(EP) to the NV for Citrovita, as specified in the ``Export Price'' and 
``Normal Value'' sections of this notice, below.
    When making comparisons in accordance with section 771(16) of the 
Act, we considered all products sold in the home market as described in 
the ``Scope of the Review'' section of this notice, above, that were in 
the ordinary course of trade for purposes of determining appropriate 
product comparisons to U.S. sales. Where there were no sales of 
merchandise in the home market made in the ordinary course of trade 
(i.e., sales within the contemporaneous window which passed the cost 
test), we compared U.S. sales to constructed value (CV) in accordance 
with section 773(a)(4) of the Act.

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 as EP. The NV level of trade is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive selling, general and 
administrative expenses (SG&A) and profit. For EP, it is also the level 
of the starting-price sales, which is usually from the exporter to 
importer.
    To determine whether NV sales are at a different level of trade 
than EP sales, we examine stages in the marketing process and selling 
functions along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different level of trade, and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison-
market sales at the level of trade of the export transaction, we make a 
level-of-trade adjustment under section 773(a)(7)(A) of the Act.
    Citrovita claimed that it made home market and U.S. sales at only 
one level of trade (i.e., sales to end users). Because Citrovita 
performed the same selling activities for sales to all customers in the 
home market and the United States, we determined that these sales are 
at the same level of trade. Therefore, no level of trade adjustment is 
warranted for Citrovita.

Export Price

    For sales by Citrovita, we based the starting price on EP, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold to unrelated purchasers in the United States prior 
to importation and because constructed export price methodology was not 
otherwise applicable.
    We based EP on the gross unit price to the first unaffiliated 
purchaser in the United States. Where appropriate, we made deductions 
for foreign inland freight, foreign brokerage and handling expenses, 
ocean freight, marine insurance, U.S. customs duty, and U.S. brokerage 
and handling expenses, in accordance with section 772(c)(2)(A) of the 
Act.

Normal Value

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is greater than five percent of the aggregate volume of U.S. sales), we 
compared the volume of Citrovita's home market sales of the foreign 
like product to the volume of U.S. sales of subject merchandise, in 
accordance with 19 CFR 351.404(b). Based on this comparison, we 
determined that Citrovita had a viable home market during the POR. 
Consequently, we based NV on home market sales.
    Pursuant to section 773(b)(2)(A)(ii) of the Act, there were 
reasonable grounds to believe or suspect that Citrovita had made home 
market sales at prices below its cost of production (COP) in this 
review because the Department disregarded sales that failed the cost 
test for Citrovita in the most recently completed administrative 
review. (See Frozen Concentrated Orange Juice from Brazil: Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 64 FR 43650, 43652 (August 11, 1999).) As a result, the 
Department initiated an investigation to determine whether Citrovita 
made home market sales during the POR at prices below its COP.
    We calculated the COP based on the sum of Citrovita's and its 
affiliated producer's costs of materials and fabrication for the 
foreign like product, plus amounts for SG&A expenses and packing costs, 
in accordance with section 773(b)(3) of the Act.
    We used the reported COP amounts to compute a weighted-average COP 
during the POR, except in the following instances in which the costs 
were not appropriately quantified or valued:
    1. We valued the cost of fruit provided by an affiliated party 
using the affiliate's COP for Citrovita, and the market price for 
Cambuhy, in accordance with sections 773(f)(2) and (3) of the Act. We 
adjusted the reported cost of fresh fruit by allocating the affiliates' 
costs over only the quantity of good oranges.
    2. For Citrovita and Cambuhy, we recalculated the offset for costs 
related to tolled products to exclude certain items which related 
solely to the respondent's own production.
    3. For Citrovita, we included loss on sale of fixed assets and 
other operating expenses in the general and administrative (G&A) rate 
calculation.

[[Page 29932]]

For Cambuhy, we included loss on the sale of fixed assets and other 
operating income in the G&A rate calculation.
    4. We recalculated the net financing expense of Citrovita and 
Cambuhy based on their fiscal year financial statements that most 
closely related to the POR. We adjusted the financial statement amounts 
for long-term interest income which is not permitted as an offset to 
financial expenses. (See Notice of Final Determination of Sales at Less 
Than fair Value: Certain Pasta from Italy, 61 FR 30326, 30359 (June 14, 
1996).)
    For further discussion of these adjustments, see the cost 
calculation memorandum from Peter Scholl and Sheikh M. Hannan to Neal 
Halper, dated May 30, 2001.
    We compared the COP to home market prices of the foreign like 
product, as required under section 773(b) of the Act, in order to 
determine whether these sales had been made at prices below the COP. On 
a product-specific basis, we compared the COP to home market prices, 
less any applicable movement charges, selling expenses, and packing 
costs.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined whether such sales were made: (1) In 
substantial quantities within an extended period of time; and (2) at 
prices which permitted the recovery of all costs within a reasonable 
period of time in the normal course of trade. See section 773(b)(1) of 
the Act.
    Pursuant to section 773(b)(2)(c)(i) of the Act, where less than 20 
percent of a company's sales of a given product are made at prices less 
than the COP, we do not disregard any below-cost sales of that product 
because we determine that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of Citrovita's 
sales of a given product were at prices below the COP, we found that 
sales of the merchandise were made in ``substantial quantities'' within 
an extended period of time, as defined in section 773(b)(2)(B) and (C) 
of the Act. In this case, we also determine 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. Consequently, we disregarded the below-cost sales in 
determining NV.
    We found that 100 percent of Citrovita's home market sales within 
an extended period of time were made at prices less than the COP. 
Further, the prices did not provide for the recovery of costs within a 
reasonable period of time. We therefore disregarded the below-cost 
sales and compared EP to CV, in accordance with section 773(a)(4) of 
the Act.
    In accordance with section 773(e) of the Act, we calculated CV 
based on the sum of the respondent's cost of materials, fabrication, 
SG&A, financing expenses, profit, and U.S. packing costs, adjusted as 
noted above. Because Citrovita made no sales at prices above the COP 
during the POR, we calculated profit, SG&A, and financing expenses in 
accordance with section 773(e)(2)(B)(iii) of the Act. Specifically, we 
used the profit rate and selling expenses calculated for Citrovita in 
the most recent prior segment of this proceeding (see the memorandum 
from Jason Hoody to the File, entitled ``Placement of Business 
Proprietary Information from the 1998-1999 Administrative Review on the 
Record of the 1999-2000 Administrative Review of Frozen Concentrated 
Orange Juice from Brazil,'' dated May 30, 2001). We used the general 
and administrative expenses and net financing expenses as experienced 
during the fiscal year that most closely corresponded to the POR.
    Pursuant to section 773(a)(6)(C)(iii) of the Act, we made 
circumstance-of-sale adjustments to CV for differences in credit 
expenses (offset by interest revenue).

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) 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 for the daily rate, in accordance with established practice.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margin exists for the period May 1, 1999, through April 30, 
2000:

------------------------------------------------------------------------
                                                               Percent
                   Manufacturer/exporter                       margin
------------------------------------------------------------------------
Citrovita Agro Industrial Ltda/Cambuhy MC Industrial Ltda.        15.98
------------------------------------------------------------------------

    The Department will disclose to parties the calculations performed 
in connection with these preliminary results within five days of the 
date of publication of this notice. Interested parties may request a 
hearing within 30 days of the publication. Any hearing, if requested, 
will be held seven days after the date rebuttal briefs are filed. 
Interested parties may submit case briefs not later than 30 days after 
the date of publication of this notice. Rebuttal briefs, limited to 
issues raised in the case briefs, may be filed not later than 37 days 
after the date of publication of this notice. The Department will 
publish a notice of the final results of this administrative review, 
which will include the results of its analysis of issues raised in any 
such case briefs, within 120 days of the publication of these 
preliminary results.
    Upon completion of this administrative review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. We have calculated importer-specific 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales, as appropriate. These rates will be assessed uniformly on 
all entries of particular importers made during the POR. The Department 
will issue appraisement instructions directly to the Customs Service.
    Further, the following deposit requirements will be effective for 
all shipments of FCOJ from Brazil entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results 
of this administrative review, as provided for by section 751(a)(1) of 
the Act: (1) The cash deposit rates for Citrovita and Cambuhy will be 
the rate established in the final results of this review, except if the 
rate is less than 0.50 percent and, therefore, de minimis within the 
meaning of 19 CFR 351.106, 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 less-than-fair-value 
(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) the cash deposit rate for all 
other manufacturers or exporters will continue to be 1.96 percent, the 
all others rate established in the LTFV investigation.

[[Page 29933]]

    These 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 entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: May 30, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-13957 Filed 6-1-01; 8:45 am]
BILLING CODE 3510-DS-P