Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review.
In response to a request by three manufacturers/exporters of the subject merchandise: PT Dieng Djaya and PT Surya Jaya Abadi Perkasa, PT Indo Evergreen Agro Business Corp., and PT Zeta Agro Corporation, and by The Pillsbury Company, an importer of the merchandise under review, the Department of Commerce is conducting an administrative review of the antidumping duty order on certain preserved mushrooms from Indonesia. The periods of reviews are August 5, 1998, through January 31, 2000, for PT Indo Evergreen Agro Business Corp. and PT Zeta Agro Corporation, and December 31, 1998 through January 31, 2000, for PT Dieng Djaya and PT Surya Jaya Abadi Perkasa  .
We preliminarily determine that sales have been made below normal value. Interested parties are invited to comment on these preliminary results. If these preliminary results are adopted in our final results of administrative review, we will instruct the Customs Service to assess antidumping duties on all appropriate entries.
March 8, 2001.Start Further Info
FOR FURTHER INFORMATION CONTACT:
David J. Goldberger or Sophie E. Castro, Office 2, AD/CVD Enforcement Group I, Import Administration-Room B-099, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-4136 or (202) 482-0588, respectively.End Further Info End Preamble Start Supplemental 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 (URAA). In addition, unless otherwise indicated, all citations to the U.S. Department of Commerce's (the Department's) regulations are to 19 CFR part 351 (2000).
On December 31, 1998, the Department published in the Federal Register (63 FR 72268), the final affirmative antidumping duty determination of sales at less than fair value (LTFV) on certain preserved mushrooms from Indonesia. We published an antidumping duty order on February 19, 1999 (64 FR 8310).
On February 14, 2000, the Department published in the Federal Register a notice advising of the opportunity to Start Printed Page 13904request an administrative review of this order for the period August 5, 1998, through January 31, 2000 (65 FR 7348). On February 29, 2000, in accordance with 19 CFR 351.213(b), three manufacturers/exporters of the subject merchandise, PT Dieng Djaya and PT Surya Jaya Abadi (Dieng/Surya), PT Indo Evergreen Agro Business Corp. (Indo Evergreen) and PT Zeta Agro Corporation (Zeta) as well as one importer of the subject merchandise, The Pillsbury Company, requested that the Department conduct an administrative review of exports to the United States by Dieng/Surya, Indo Evergreen and Zeta. We published a notice of initiation of the review on March 30, 2000 (65 FR 16875).
On March 29, 2000, the Department issued an antidumping questionnaire to Dieng/Surya, Indo Evergreen, and Zeta. We issued supplemental questionnaires in July, September, and October 2000, and in January 2001. In May and July through October 2000, we received timely responses to the original and supplemental questionnaires. Dieng responded to an additional supplemental questionnaire in February 2001.
In June 2000, we received below-cost-sales allegations for Indo Evergreen and Zeta from the petitioners, the Coalition for Fair Preserved Mushroom Trade. In July 2000, we initiated a sales-below-cost investigation for both Indo Evergreen and Zeta.
On July 28, 2000, due to the reasons set forth in the Notice of Extension of Time Limit for the Preliminary Results of Antidumping Administrative Review: Certain Preserved Mushrooms from Indonesia, 65 FR 46426 (July 28, 2000), we extended the due date for the preliminary results. In accordance with section 751(a)(3)(A) of the Act, we extended the due date for the preliminary results by the maximum 120 days allowable.
Scope of the Review
The products covered by this review are certain preserved mushrooms, whether imported whole, sliced, diced, or as stems and pieces. The preserved mushrooms covered under this review are the species Agaricus bisporus and Agaricus bitorquis. “Preserved mushrooms” refer to mushrooms that have been prepared or preserved by cleaning, blanching, and sometimes slicing or cutting. These mushrooms are then packed and heated in containers including but not limited to cans or glass jars in a suitable liquid medium, including but not limited to water, brine, butter or butter sauce. Preserved mushrooms may be imported whole, sliced, diced, or as stems and pieces. Included within the scope of this review are “brined” mushrooms, which are presalted and packed in a heavy salt solution to provisionally preserve them for further processing.
Excluded from the scope of this review are the following: (1) All other species of mushroom, including straw mushrooms; (2) all fresh and chilled mushrooms, including “refrigerated” or “quick blanched mushrooms'; (3) dried mushrooms; (4) frozen mushrooms; and (5) “marinated,” “acidified” or “pickled” mushrooms, which are prepared or preserved by means of vinegar or acetic acid, but may contain oil or other additives.
The merchandise subject to this review is classifiable under subheadings 2003.10.0027, 2003.10.0031, 2003.10.0037, 2003.10.0043, 2003.10.0047, 2003.10.0053, and 0711.90.4000 of the Harmonized Tariff Schedule of the United States (“HTS”). Although the HTS subheadings are provided for convenience and customs purposes, our written description of the scope of this review is dispositive.
Fair Value Comparisons
To determine whether sales to the United States of certain preserved mushrooms by Dieng/Surya, Indo Evergreen and Zeta were made at less than normal value, we compared export price to the normal value, as described in the “Export Price” and “Normal Value” sections of this notice.
Pursuant to section 777A(d)(2) of the Act, we compared the export prices of individual U.S. transactions to the weighted-average normal value of the foreign like product where there were sales made in the ordinary course of trade at prices above the cost of production (COP), as discussed in the “Cost of Production Analysis” section below.
In accordance with section 771(16) of the Act, we considered all products produced by Indo Evergreen and Zeta, covered by the description in the “Scope of the Review” section, above, sold by the respondents in the home market during the period of review (“POR”), to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We compared U.S. sales to sales made in the home market within the contemporaneous window period, which extends from three months prior to the U.S. sale until two months after the sale. Where there were no sales of identical merchandise in the home 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. Where there were no sales of identical or similar merchandise in the home market to compare to U.S. sales, we compared U.S. sales to the constructed value of the product.
In making the product comparisons, we matched foreign like products based on the physical characteristics reported by the respondents in the following order: preservation method, container type, mushroom style, weight, grade, container solution and label type.
For Dieng/Surya, we compared U.S. sales to the constructed value of the product because Dieng/Surya had insufficient home market and third country sales during the POR. See “Normal Value” section below for further discussion.
Level of Trade
In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, we determine normal value based on sales in the comparison market at the same level of trade (LOT) as the export price or constructed export price (CEP) transaction. The normal value LOT is that of the starting-price sales in the comparison market or, when normal value is based on constructed value, that of the sales from which we derive selling, general and administrative (SG&A) expenses and profit. For export price, the U.S. LOT is also the level of the starting-price sale, which is usually from the exporter to an unaffiliated U.S. customer. For CEP, it is the level of the constructed sale from the exporter to an affiliated importer, after the deductions required under section 772(d) of the Act. To determine whether normal value sales are at a LOT different from export price or CEP, 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 LOT, and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which normal value is based and comparison-market sales at the LOT of the export Start Printed Page 13905transaction, we make a LOT adjustment under section 773(a)(7)(A) of the Act. For CEP sales, if the normal value level is more remote from the factory than the CEP level, and there is no basis for determining whether the difference in the levels between normal value and CEP affects price comparability, we adjust normal value under section 773(a)(7)(B) of the Act (the CEP offset provision). 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 this review, all three respondents made only export price sales during the POR. In their questionnaire responses all three respondents reported that comparison-market and export price sales to the unaffiliated customers were made at the same LOT. Furthermore, the respondents maintain that selling activities in both markets are identical. Although the information pertaining to selling functions on the record is limited, it does not appear to warrant granting a LOT adjustment.
For all three respondents we used export price calculation methodology, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly by the producer/exporter in Indonesia to the first unaffiliated purchaser in the United States prior to importation and CEP treatment was not otherwise indicated.
We calculated export price based on the packed FOB seaport prices charged to the first unaffiliated customer in the United States. We made deductions, where appropriate, for foreign inland freight, foreign inland insurance, and brokerage and handling, in accordance with section 772(c)(2)(A) of the Act.
In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating normal value, we compared the respondents' volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise, in accordance with section 773(a)(1)(C) of the Act.
Evergreen and Zeta's aggregate volume of home market sales of the foreign like product was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise. Therefore, we determined that the home market provides a viable basis for calculating normal value for both Evergreen and Zeta.
Dieng/Surya reported that its aggregate volumes of home market and third country market sales, respectively, were less than five percent of its aggregate volume of U.S. sales of the subject merchandise. Petitioners allege that Dieng/Surya refused to provide complete information concerning its home market and third country sales in a timely fashion and may have overstated its U.S. sales figures for purposes of the viability test in an effort to avoid reporting third country price information. While we acknowledge the petitioners' allegation, we note that in this case Dieng/Surya has complied with our request for information as stated in our antidumping questionnaire on page A-2. Should its home market sales not be viable for purposes of calculating normal value, our questionnaire directs respondents to provide sales to each of their three largest third country markets, provided each market meets the five-percent threshold. In this case, since none of Dieng/Surya's third country markets reaches that threshold, Dieng was not required to provide a section B questionnaire response for its third country sales. In addition, we note that Dieng/Surya's reporting in this review is consistent with that in the LTFV investigation; in the LTFV investigation, the Department verified that Dieng/Surya did not have a viable home market or third country market during the period of investigation. For these reasons, we determined that neither the home market nor any third country market was a viable basis for calculating normal value for Dieng/Surya. As a result, we used constructed value as the basis for calculating normal value for Dieng/Surya, in accordance with section 773(a)(4) of the Act.
Indo Evergreen and Zeta each reported a small percentage of sales of the foreign like product to affiliated customers. To test whether these sales to affiliated customers were made at arm's length, where possible, we compared the prices of sales to affiliated and unaffiliated customers, net of all movement charges, direct selling expenses, discounts, and packing. Where the price to the affiliated party was on average 99.5 percent or more of the price to the unaffiliated parties, we determined that the sales made to the affiliated party were at arm's length. See Preamble—Department's Final Antidumping Regulations, 62 FR 27,355 (May 19, 1997). Consistent with 19 CFR 351.403, we excluded from our analysis those sales where the price to the affiliated parties was less than 99.5 percent of the price to the unaffiliated parties.
Cost of Production Analysis
In response to the petitioners sales-below-cost allegations for Indo Evergreen and Zeta, we reviewed their allegations and determined that Indo Evergreen's and Zeta's submitted data provided reasonable grounds to believe or suspect that sales of the foreign like product under consideration for determining normal value in this review may have been at prices below the COP, pursuant to section 773(b)(2)(A)(i) of the Act. See July 7, 2000, Memorandum from the Team to Louis Apple, Office Director, AD/CVD Enforcement Group 1, Office 2, Re: Request to Initiate Cost Investigation for Respondents P.T. Zeta Agro Corporation and PT Indo Evergreen Agrobusiness Corporation. Therefore, pursuant to section 773(b)(1) of the Act, we initiated a sales-below-cost investigation of sales made by Evergreen and Zeta.
A. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated COP based on the sum of Indo Evergreen's and Zeta's cost of materials and fabrication for the foreign like product, plus amounts for home-market SG&A, interest expenses, and the cost of all expenses incidental to placing the foreign like product in condition packed ready for shipment. We relied on the home market sales and cost of production information Indo Evergreen and Zeta provided in their questionnaire responses, except for the following adjustments:
For Indo Evergreen, we adjusted the cost of manufacture for beginning and ending work-in-process. We revised Indo Evergreen's interest expense rate calculation by excluding foreign exchange gains and losses related to the non-current portion of long-term debt and reclassifying foreign exchange gains on accounts payable to general and administrative (G&A) expense. In addition, we included certain other foreign exchange gains and losses and other miscellaneous items in their G&A rate calculation. For Zeta, we adjusted the reported production quantities by deducting waste production quantities. This reduction in production quantities resulted in higher per unit cost of manufacture (COM) for Zeta. In addition, because Zeta did not include interest expense on affiliated party loans, we included an amount for interest expense in accordance with section 773(f)(2). We also reclassified foreign exchange gains on accounts payable to G&A expense. Lastly, we revised Zeta's G&A expense rate calculation by including certain other foreign exchange gains and losses and Start Printed Page 13906other miscellaneous items. For further detail see Memoranda from Sheikh Hannan to Neal Halper, dated February 28, 2001, for Indo Evergreen and Zeta.
B. Test of Home Market Prices
We compared the weighted-average, per-unit COP figures for the POR to home market sales of the foreign like product, as required by section 773(b) of the Act, in order to determine whether these sales were made at prices below the COP. In determining whether to disregard home market sales made at prices below the COP, we examined whether: (1) Within an extended period of time, such sales were made in substantial quantities; and (2) such sales were made at prices which permitted the recovery of all costs within a reasonable period of time. On a product-specific basis, we compared the COP to the home market prices, less any applicable movement charges, rebates, discounts and direct and indirect selling expenses. Because Indo Evergreen and Zeta did not report home market indirect selling expenses, we have derived those expenses from their financial statements for purposes of deducting them from home market price. For further details see Memorandum from Sophie Castro, Financial Analyst, to Irene Darzenta Tzafolias, Program Manager, Office 2, AD/CVD Enforcement Group I, Import Administration, dated February 28, 2001.
3. Results of COP Test
Pursuant to section 773(b)(2)(C), where less than 20 percent of the respondents' sales of a given product were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities.” Where twenty percent or more of the respondents” sales of a given product during the POR were at prices less than the COP, we disregard the below-cost sales where such sales were found to be made at prices which would not permit the recovery of all costs within a reasonable period of time (in accordance with section 773(b)(2)(D) of the Act).
The results of our cost tests for Indo Evergreen and Zeta indicated for certain home market products that less than twenty percent of the sales of the model were at prices below COP. We therefore retained all sales of these models in our analysis and used them as the basis for determining normal value.
Our cost tests also indicated, for both Indo Evergreen and Zeta, that for certain other home market products more than twenty percent of home market sales within an extended period of time were at prices below COP and would not permit the full recovery of all costs within a reasonable period of time. In accordance with section 773(b)(1) of the Act, we excluded these below-cost sales of these models from our analysis and used the remaining sales as the basis for determining normal value.
For Indo Evergreen and Zeta, we based normal value on the price at which the foreign like product is first sold for consumption in the exporting country, in the usual commercial quantities and in the ordinary course of trade, and at the same LOT as the export price, as defined by section 773(a)(1)(B)(i) of the Act.
Home market prices were based on either ex-factory or delivered prices. We reduced normal value for home market movement expenses, where appropriate, in accordance with section 773(a)(6)(B)(ii). We also reduced normal value for packing costs incurred in the home market, in accordance with section 773(a)(6)(B)(i), and increased normal value to account for U.S. packing expenses in accordance with section 773(a)(6)(A). We also made adjustments for differences in circumstances of sale (“COS”) in accordance with 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410, by deducting home market direct selling expenses (i.e., credit) and adding U.S. direct selling expenses (i.e., credit, U.S. warranty and bank charges), where applicable.
Finally, we made adjustments to normal value, where appropriate, for differences in costs attributable to differences in the physical characteristics of the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411.
Calculation of Constructed Value
We calculated constructed value for Indo Evergreen, Zeta and Dieng/Surya in accordance with section 773(e) of the Act, which indicates that constructed value shall be based on the sum of the respondent's cost of materials and fabrication for the foreign like product, plus amounts for SG&A, profit, and U.S. packing costs. We relied on the submitted constructed value information for Indo Evergreen and Zeta with the exception of the adjustments to COP noted above. For Dieng/Surya, we relied on the submitted constructed value information except for the following adjustments:
For Surya we revised the production quantities to be net of waste. This reduction in production quantities resulted in higher per unit COMs and packing for Surya. In addition, we disallowed Surya's cost offset for the sale of fresh mushrooms. See Memorandum from Sheikh Hannan to Neal Halper, dated February 28, 2001, for Dieng/Surya. For Dieng, we treated all reported grades as co-products with the same mushroom cost. See Notice of Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushroom from Indonesia, 63 FR 72268, 72281 (December 31, 1998).
We derived SG&A and profit in accordance with section 773(e)(2)(B)(ii) of the Act and the Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 316, 103d Cong, 2d Sess (1994), (SAA) at 169-171. See 19 CFR 351.405(b)(2) (clarifying that under section 773(e)(2)(B) of the Act, “foreign country” means the country in which the merchandise is produced), 62 FR 27296, 27412-13 (May 19, 1997). The statute directs us to use an amount which reflects SG&A and profit incurred in connection with the production and sale of a foreign like product in the ordinary course of trade, by exporters or producers that are subject to the review. See section 773(e)(2)(B)(ii) of the Act.
Because Indo Evergreen and Zeta both have a viable home market, and hence actual company-specific SG&A and profit data are available, we calculated Dieng/Surya's SG&A and profit as a weighted average of the SG&A and profit amounts experienced by Indo Evergreen and Zeta. For further details see Memorandum from Sheikh Hannan to Neal Halper, dated February 28, 2001, for Dieng/Surya.
Price-to-Constructed Value Comparisons
For Dieng/Surya, we based normal value on constructed value, in accordance with section 773(a)(4) of the Act. For price-to-constructed value comparisons, we made adjustments to constructed value for COS differences, in accordance with 773(a)(6)(C)(iii) of the Act, and 19 CFR 351.410. We made COS adjustments by deducting home market direct selling expenses (comprised of imputed credit) and adding U.S. direct selling expenses (comprised of imputed credit, warranties and bank charges).
We made currency conversions in accordance with section 773A of the Act based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York. Start Printed Page 13907
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the weighted-average dumping margins for the respective PORs are as follows:
|PT Dieng Djaya and PT Surya Jaya Abadi Perkasa||12/31/1998-01/31/2000||0.18 (de minimis).|
|PT Indo Evergreen Agro Business Corp||08/05/1998-01/31/2000||5.15|
|PT Zeta Agro Corporation||08/05/1998-01/31/2000||0.02 (de minimis).|
We will disclose calculations used in our analysis to parties to this proceeding within five days of the publication date of this notice. See 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication. See 19 CFR 351.310(c). If requested, a hearing will be held 44 days after the date of publication of this notice, or the first work day thereafter.
Issues raised in the hearing will be limited to those raised in the respective case briefs and rebuttal briefs. Case briefs from interested parties and rebuttal briefs, limited to the issues raised in the respective case briefs, may be submitted not later than 30 days and 37 days, respectively, from the date of publication of these preliminary results. See 19 CFR 351.309(c) and (d). Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument. Parties are also encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited.
The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice.
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, Room B-099, within 30 days of the date of 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 issues to be discussed. See 19 CFR 351.310(c).
The Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions directly to the Customs Service upon completion of this review. The final results of this review shall be the basis for the assessment of antidumping duties on entries of merchandise covered by the final results of this review and for future deposits of estimated duties. We will instruct the Customs Service to assess antidumping duties on all appropriate entries covered by this review if any importer-specific assessment rate calculated in the final results of this review is above de minimis (See 19 CFR 351.106(c)(1)). For assessment purposes, we intend to calculate importer-specific assessment rates for the subject merchandise by aggregating the dumping margins calculated for all U.S. sales examined and dividing this amount by the total entered value of the sales examined. In order to estimate the entered value, we will subtract applicable movement expenses from the gross sales value.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act: (1) The cash deposit rates for the reviewed companies will be those 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(C)(1), in which case the cash deposit rate 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 original 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 11.26 percent, the “All Others” rate made effective by the LTFV investigation. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification to Importers
This notice also 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 published in accordance with sections 751(a)(1) of the Act and 19 CFR 351.221. Effective January 20, 2001, Bernard T. Carreau, is fulfilling the duties of the Assistant Secretary of Import Administration.Start Signature
Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
1. In accordance with 19 CFR 351.401(f), PT Dieng Djaya and PT Surya Jaya Abadi Perkasa were determined to be affiliated companies in the original less-than-fair-value investigation, and therefore the two companies submitted a combined review request and questionnaire response.Back to Citation
2. See Notice of Antidumping Duty Order: Certain Preserved Mushroom from Indonesia, 64 FR 8310 (February 19, 1999).Back to Citation
3. The petitioners are the Coalition for Fair Preserved Mushroom Trade which includes the American Mushroom Institute and the following domestic companies: L.K. Bowman, Inc., Nottingham, PA; Modern Mushrooms Farms, Inc., Toughkernamon, PA; Monterrey Mushrooms, Inc., Watsonville, CA; Mount Laurel Canning Corp., Temple, PA; Mushrooms Canning Company, Kennett Square, PA; Southwood Farms, Hockessin, DE; Sunny Dell Foods, Inc., Oxford, PA; United Canning Corp., North Lima, OH.Back to Citation
[FR Doc. 01-5622 Filed 3-7-01; 8:45 am]
BILLING CODE 3510-DS-P