[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Notices]
[Pages 67510-67513]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32112]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-337-806]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: IQF Red Raspberries From 
Chile

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

ACTION: Notice of preliminary determination of sales at less than fair 
value and postponement of final determination.

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SUMMARY: We preliminarily determine that individually quick frozen 
(``IQF'') red raspberries from Chile are being, or are likely to be, 
sold in the United States at less than fair value, as provided in 
section 733(b) of the Tariff Act of 1930, as amended. The estimated 
dumping margins are shown in the ``Suspension of Liquidation'' section 
of this notice.
    Interested parties are invited to comment on this preliminary 
determination (see the ``Public Comment'' section of this notice).

EFFECTIVE DATE: December 31, 2001.

FOR FURTHER INFORMATION CONTACT: Annika O'Hara, Cole Kyle, or Blanche 
Ziv, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-3798, (202) 482-1503, or 
(202) 482-4207, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute

    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. In addition, unless 
otherwise indicated, all citations to the Department of Commerce's 
(``the Department'') regulations are to 19 CFR Part 351 (April 2001).

Background

    Since the initiation of this investigation (see Initiation of 
Antidumping Duty Investigation: IQF Red Raspberries from Chile, 66 FR 
34407 (June 28, 2001) (``Initiation Notice'')), the following events 
have occurred:
    On July 9 and 10, 2001, we solicited comments from interested 
parties regarding the criteria to be used for model-matching purposes. 
Interested parties filed comments from July 18, 2001 through August 3, 
2001.
    On July 16, 2001, the United States International Trade Commission 
(``ITC'') preliminarily determined that there is a reasonable 
indication that imports of IQF red raspberries from Chile are 
materially injuring the United States industry (66 FR 38740 (July 25, 
2001)).
    On July 19, 2001, we selected the three largest producers/exporters 
of IQF red raspberries from Chile as the mandatory respondents in this 
proceeding. See Memorandum to Susan Kuhbach from Annika O'Hara entitled 
``Respondent Selection'' which is on file in the Central Records Unit 
(``CRU'') in room B-099 of the main Department building.
    We issued antidumping questionnaires to Comercial Fruticola 
(``Comfrut''), Exportadora Frucol (``Frucol''), and Fruticola Olmue 
(``Olmue'') on August 3, 2001. We received responses to Section A of 
the questionnaire on August 31, 2001 and responses to Sections B, C, 
and D on September 25, 2001. We issued supplemental questionnaires 
between October 16 and November 30, 2001, to which we received 
responses in November and December 2001. We received comments from the 
petitioners on each of the respondents' questionnaire responses. 
Subsequently, we received comments from the respondents on the 
petitioners' comments concerning the respondents' questionnaire 
responses.
    On October 12, 2001, the petitioners made a timely request to 
postpone the preliminary determination pursuant to 19 CFR 351.205(e). 
On October 18, 2001, we postponed the preliminary determination until 
no later than December 12, 2001. See Notice of Postponement of 
Preliminary Antidumping Duty Determination: IQF Red Raspberries from 
Chile, 66 FR 53775 (October 24, 2001).
    On December 12, 2001, the Department further postponed the 
preliminary determination in this investigation pursuant to section 
351.205(b)(2) of the regulations and section 733 (c)(1)(B)(i)(II) of 
the Act due to several novel costs issues involved in this 
investigation. See Notice of Postponement of Preliminary Antidumping 
Duty Determination: IQF Red Raspberries from Chile, 66 FR 65177 
(December 18, 2001).

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2)(A) of the Act, on December 12, 2001, 
Comfrut, Frucol, and Olmue, requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination until not later than 135 
days after the date of the publication of the preliminary determination 
in the Federal Register, and extend the provisional measures to not 
more than six months. In accordance with 19 CFR 351.210(b)(2)(ii), 
because (1) our preliminary determination is affirmative, (2) Comfrut, 
Frucol, and Olmue account for a significant proportion of exports of 
the subject merchandise, and (3) no compelling reasons for denial 
exist, we are granting the respondents' request and are

[[Page 67511]]

postponing the final determination until no later than 135 days after 
the publication of this notice in the Federal Register. Suspension of 
liquidation will be extended accordingly.

Scope of the Investigation

    The products covered by this investigation are imports of IQF whole 
or broken red raspberries from Chile, with or without the addition of 
sugar or syrup, regardless of variety, grade, size or horticulture 
method (e.g., organic or not), the size of the container in which 
packed, or the method of packing. The scope of the investigation 
excludes fresh red raspberries and block frozen red raspberries (i.e., 
puree, straight pack, juice stock, and juice concentrate).
    The merchandise subject to this investigation is classifiable under 
0811.20.2020 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheading is provided for convenience 
and customs purposes, the written description of the merchandise under 
investigation is dispositive.

Comments on the Scope

    On August 30, 2001, the respondents filed a letter with the 
Department seeking confirmation that frozen raspberries known as 
``dirty crumbles'' are not covered by the scope of this investigation. 
On September 12, 2001, the petitioners submitted a letter opposing the 
respondents' interpretation of the scope. The parties' arguments are 
summarized in a September 26, 2001, memorandum to Susan Kuhbach from 
the Team, in which the Department determined that ``dirty crumbles'' 
are included in the scope of this investigation. This memorandum is on 
file in the CRU.

Period of Investigation

    The period of investigation (``POI'') is April 1, 2000, through 
March 31, 2001.

Fair Value Comparisons

    To determine whether sales of IQF red raspberries from Chile to the 
United States were made at less than fair value (``LTFV''), we compared 
the export price (``EP'') to the normal value, as described in the 
``Export Price'' and ``Normal Value'' sections of this notice. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI 
weighted-average EPs to NVs.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondents in the comparison market 
during the POI that fit the description in the ``Scope of the 
Investigation'' section of this notice to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
We compared U.S. sales to sales of identical merchandise in the 
comparison market made in the ordinary course of trade, where possible. 
Where there were no sales of identical merchandise in the comparison 
market made in the ordinary course of trade to compare to U.S. sales, 
we compared U.S. sales to sales of the most similar foreign like 
product made in the ordinary course of trade. To determine the 
appropriate product comparisons, we considered the following physical 
characteristics of the products in order of importance: grade; variety; 
form; cultivation method; and additives.

Export Price

    For all respondents, we calculated EP, in accordance with section 
772(a) of the Act, because the merchandise was sold to the first 
unaffiliated purchaser in the United States prior to importation by the 
exporter or producer outside the United States, or to an unaffiliated 
purchaser for exportation to the United States. We based EP on the 
packed ex-factory, C&F, FOB, or delivered price to the unaffiliated 
purchasers in the United States. We made deductions from the starting 
price for movement expenses, including inland freight, warehousing, 
marine insurance, brokerage and handling, and international freight, in 
accordance with section 772(c)(2)(A) of the Act, where appropriate. We 
increased EP, where appropriate, for duty drawback in accordance with 
section 772(c)(1)(B) of the Act.

Normal Value

A. Home Market Viability

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared each respondent's volume of home market sales of the 
foreign like product to its volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    Comfrut, Frucol, and Olmue reported that their home market sales of 
IQF red raspberries during the POI were less than five percent of their 
sales of IQF red raspberries in the United States. Therefore, none of 
the three respondents had a viable home market for purposes of 
calculating normal value. Comfrut and Frucol reported that the United 
Kingdom was their largest viable third country market, and Olmue 
reported that France was its largest viable third country market. 
Accordingly, Comfrut and Frucol reported their sales to the United 
Kingdom and Olmue reported its sales to France for purposes of 
calculating normal value.

B. Cost of Production Analysis

    Based on our analysis of an allegation contained in the petition, 
we found at the initiation of this investigation that there were 
reasonable grounds to believe or suspect that the respondents' sales of 
the subject merchandise in their respective comparison markets were 
made at prices below their cost of production (``COP''). Accordingly, 
pursuant to section 773(b) of the Act, we initiated a country-wide 
sales-below-cost investigation (see Initiation Notice, 66 FR 34409).
1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication of the 
foreign like product, plus an amount for general and administrative 
expenses (``G&A''), interest expenses, and comparison market packing 
costs (see the ``Test of Comparison Market Sales Prices'' section below 
for treatment of comparison market selling expenses). We relied on the 
COP data submitted by the respondents, except where noted below:
    Comfrut:
    a. We revised Comfrut's interest expense to include the current 
portion of the net loss on monetary correction.
    b. We revised Comfrut's affiliated processor's reported costs for 
two items. First, we revised the affiliate's interest expense to 
include the current portion of the net loss on monetary correction. 
Second, we weight-averaged the affiliated processor's revised COP. We 
then increased Comfrut's costs to include the higher of the transfer 
price or cost of the major input, processing services. See December 20, 
2001, Calculation Memorandum for Comfrut, for further information.
    Frucol:
    a. We increased the per-unit conversion costs using the correct 
total quantity of raspberries processed. Also, we increased the total 
cost of manufacturing to include all of the affiliated processor's 
expenses shown on its tax return. We used the tax return as the basis 
of costs for the affiliated processor because it does not prepare any 
financial statements.
    b. We revised the combined general and administrative (``G&A'') 
expenses to include land rent associated with the processing plant and 
general expenses.

[[Page 67512]]

We increased the cost of goods sold used in the denominator of the rate 
calculation to include the additional expenses shown on the affiliated 
processor's tax return.
    c. We revised the combined interest expense to include the current 
portion of the net loss on monetary correction. We increased the cost 
of goods sold used in the denominator of the rate calculation to 
include the additional expenses shown on the affiliated processor's tax 
return.
    See Memorandum from Aleta Habeeb to Neal Halper, Director Office of 
Accounting, dated December 19, 2001, ``Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary 
Determination.''
    Olmue:
    We revised Olmue's interest expense to include the current portion 
of the net loss on monetary correction. See December 20, 2001, 
Calculation Memorandum for Olmue for further information.
2. Test of Comparison Market Sales Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the comparison market sales of the foreign like product, 
as required under section 773(b) of the Act, in order to determine 
whether the sale prices were below the COP. The prices were exclusive 
of any applicable movement charges, billing adjustments, commissions, 
warranty expenses, and other direct and indirect selling expenses. In 
determining whether to disregard home market sales made at prices less 
than their COP, we examined, in accordance with sections 773(b)(1)(A) 
and (B) of the Act, 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.
3. Results of the COP Test
    Pursuant to section 773(b)(1), where less than 20 percent of a 
respondent's sales of a given product during the POI are at prices less 
than the COP, we do not disregard any below-cost sales of that product, 
because we determine that in such instances the below-cost sales were 
not made in ``substantial quantities.'' Where 20 percent or more of a 
respondent's sales of a given product during the POI are at prices less 
than the COP, we determine that the below-cost sales represent 
``substantial quantities'' within an extended period of time, in 
accordance with section 773(b)(1)(A) of the Act. In such cases, we also 
determine whether such sales were made at prices which would not permit 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(1)(B) of the Act.
    We found that for each respondent, for certain specific products, 
more than 20 percent of the comparison market sales were at prices less 
than the COP and thus the below-cost sales were made within an extended 
period of time in substantial quantities. In addition, these sales were 
made at prices that did not provide for the recovery of costs within a 
reasonable period of time. We therefore excluded these sales and used 
the remaining sales, if any, as the basis for determining NV, in 
accordance with section 773(b)(1).
    For Comfrut and Olmue's U.S. sales of subject merchandise for which 
there were no comparable comparison market sales in the ordinary course 
of trade (e.g., sales that passed the cost test), we compared those 
sales to constructed value (``CV''), in accordance with section 
773(a)(4) of the Act.

C. Calculation of Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. Accordingly, for 
Comfrut and Olmue, when sales of comparison products could not be 
found, either because there were no sales of a comparable product or 
all sales of the comparable products failed the COP test, we based NV 
on CV.
    In accordance with section 773(e)(1) and (e)(2)(A) of the Act, we 
calculated CV based on the sum of the cost of materials and fabrication 
for the subject merchandise, plus amounts for selling expenses, G&A, 
including interest, profit and U.S. packing costs. We made the same 
adjustments to the CV costs as described in the ``Calculation of COP'' 
section of this notice. In accordance with section 773(e)(2)(A) of the 
Act, we based selling expenses, G&A and profit on the amounts incurred 
and realized by the respondent in connection with the production and 
sale of the foreign like product in the ordinary course of trade for 
consumption in the foreign country.

D. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP. Sales are made at different 
LOTs if they are made at different marketing stages (or their 
equivalent) 19 CFR 351.412(c)(2). Substantial differences in selling 
activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997). In order to determine whether the 
comparison sales were at different stages in the marketing process than 
the U.S. sales, we reviewed the distribution system in each market 
(i.e., the ``chain of distribution''),\1\ including selling 
functions,\2\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
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    \1\ The marketing process in the United States and comparison 
markets begins with the producer and extends to the sale to the 
final user or customer. The chain of distribution between the two 
may have many or few links, and the respondents' sales occur 
somewhere along this chain. In performing this evaluation, we 
considered the narrative responses of each respondent to properly 
determine where in the chain of distribution the sale appears to 
occur.
    \2\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of this preliminary determination, 
we have organized the common selling functions into four major 
categories: sales process and marketing support, freight and 
delivery, inventory and warehousing, and quality assurance/warranty 
services. Other selling functions unique to specific companies were 
considered, as appropriate.
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    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales (i.e., NV based on 
either home market or third country prices \3\), we consider the 
starting prices before any adjustments. See Micron Technology, Inc. v. 
United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 2001) (affirming 
this methodology).
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    \3\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, G&A and 
profit for CV, where possible.
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    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the 
EP, the Department may compare the U.S. sale to sales at a different 
LOT in the comparison market. In comparing EP sales at a different LOT 
in the comparison market, where available data show that the difference 
in LOT affects price comparability, we make a LOT adjustment under 
section 773(a)(7)(A) of the Act.
    Comfrut and Frucol have reported that they sell to distributors in 
both the comparison market and in the United States. Olmue has reported 
that it sells to trading companies and end users in the comparison 
market and to trading companies and distributors in the United States. 
Each respondent has reported a single channel of distribution and a 
single level of trade in each market, and has not requested a level of 
trade adjustment. We examined the information reported by the 
respondents regarding their marketing processes for

[[Page 67513]]

making the reported home market and U.S. sales, including the type and 
level of selling activities performed and customer categories. See 
December 19 and 20, 2001, Calculation Memorandum for Comfrut, Frucol, 
and Olmue for further information. As Comfrut, Frucol, and Olmue have 
reported, we found a single level of trade in the United States, and a 
single, identical level of trade in the comparison market. Thus, it was 
unnecessary to make any LOT adjustment for comparison of EP and third 
country prices.

E. Calculation of Normal Value Based on Comparison Market Prices

    We calculated NV based on ex-factory or delivered prices to 
unaffiliated customers in the comparison market. We made adjustments to 
the starting price for interest revenue and billing adjustments, where 
appropriate. We made deductions for movement expenses, including inland 
freight, warehousing, brokerage and handling expenses, and 
international freight, under section 773(a)(6)(B)(ii) of the Act. In 
addition, we made adjustments under section 773(a)(6)(C)(iii) of the 
Act and 19 CFR 351.410 for differences in circumstances of sale for 
imputed credit expenses, commissions, warranties, and other direct 
selling expenses, where appropriate.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also deducted comparison market packing costs and 
added U.S. packing costs in accordance with section 773(a)(6)(A) and 
(B) of the Act.

F. Calculation of Normal Value Based on Constructed Value

    For price-to-CV comparisons, we made adjustments to CV in 
accordance with section 773(a)(8) of the Act. We made adjustments to CV 
for differences in circumstances of sale in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. In addition, we added 
U.S. packing costs.

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 reported by the Dow Jones.\4\
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    \4\ We normally make 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. In this case, where costs and expenses were 
reported in Chilean pesos, we made currency conversions based on the 
exchange rates in effect on the dates of the U.S. sales as reported 
by the Dow Jones because the Federal Reserve Bank does not track the 
Chilean peso-to-dollar exchange rate.
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Verification

    As provided in section 782(i) of the Act, we will verify all 
information relied upon in making our preliminary determination.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
the Customs Service to suspend liquidation of all imports of subject 
merchandise (except for entries of Comfrut or Frucol because these 
companies have de minimis and zero margins, respectively) that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We will 
instruct the Customs Service to 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. These suspension-of-
liquidation instructions will remain in effect until further notice. 
The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                              Weighted-average  margin
           Exporter/manufacturer                     percentage
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Comercial Fruticola.......................  0.31 (de minimis)
Exportadora Frucol........................  0.00
Fruticola Olmue...........................  5.54
All Others................................  5.54
------------------------------------------------------------------------

    Pursuant to section 735(c)(5)(A), we have excluded from the 
calculation of the all-others rate margins which are zero or de 
minimis. 

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination. If our final determination is affirmative, 
the ITC will determine before the later of 120 days after the date of 
this preliminary determination or 45 days after our final determination 
whether these imports are materially injuring, or threaten material 
injury to, the U.S. industry.

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

Public Comment

    Case briefs for this investigation must be submitted no later than 
one week after the issuance of the last verification report. Rebuttal 
briefs must be filed within five days after the deadline for submission 
of case briefs. A list of authorities relied upon, 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. Section 774 of the Act provides 
that the Department will hold a public 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 an 
interested party. If a request for a hearing is made in this 
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. 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 to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days of the publication of this notice. Requests should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and (3) a list of the issues to be discussed. 
Oral presentations will be limited to issues raised in the briefs.
    We will make our final determination no later than 135 days after 
the publication of this notice in the Federal Register.
    This determination is published pursuant to sections 733(f) and 
777(i) of the Act.

    Dated: December 20, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-32112 Filed 12-28-01; 8:45 am]
BILLING CODE 3510-DS-P