SUPPLEMENTARY INFORMATION:

Background

On February 19, 1999, the Department of Commerce (“Department”) published in the Federal Register an amended final determination and antidumping duty order on certain preserved mushrooms from India (64 FR 8311), which included a cash deposit rate for Ponds India Limited (“Ponds”). In the course of the first administrative review, the Department noted that Ponds had become Hindustan Lever Limited (“HLL”). See Certain Preserved Mushrooms From India: Final Results of Antidumping Duty Administrative Review, 66 FR 42507, 42508 (August 13, 2001). On October 17, 2002, HLL submitted a request that the Department initiate a changed-circumstances review to confirm that its wholly-owned subsidiary, KICM (MADRAS) Limited, is its successor-in-interest and should be entitled to the same cash deposit rate. The Department determined that HLL's request was incomplete and could not serve as a basis to initiate a changed-circumstances review. See Letter from Department to HLL Re: Certain Preserved Mushrooms from India: Request for Changed-Circumstances Review (October, 28, 2002). On November 6, 2002, HLL submitted supplemental information and documentation, and renewed its request that the Department conduct a changed-circumstances review to determine whether KICM should receive the same antidumping duty treatment as is accorded to HLL with respect to the subject merchandise.

Scope of the Order

The product covered by this order are certain preserved mushrooms whether imported whole, sliced, diced, or as stems and pieces. The preserved mushrooms covered under this order 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, ( printed page 78417) brine, butter or butter sauce. Preserved mushrooms may be imported whole, sliced, diced, or as stems and pieces. Included within the scope of the order 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 order 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 order are 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 (HTSUS). HTSUS subheadings are provided for convenience and customs purposes. The written description of the scope of this order is dispositive.

Initiation and Preliminary Results of Review

In its November 6, 2002, submission, HLL advised the Department that, effective July 1, 2002, its wholly-owned subsidiary, KICM had acquired its entire mushroom business. According to the submission, HLL transferred the entire mushroom business to KICM on June 30, 2002. The transfer took place without any discontinuity of operations. HLL suspended mushroom operations at the close of business on June 30, 2002; KICM began mushroom operations at the opening of business on July 1, 2002. In its submission, HLL states and provides supporting documentation that all personnel, operations, and facilities remain essentially unchanged. In accordance with section 751(b) of the Tariff Act of 1930, as amended (“the Act”) and 19 CFR 351.216, the Department has determined that there is a sufficient basis to initiate a changed-circumstances review to determine whether KICM is the successor-in-interest to HLL.

In making such a successor-in-interest determination, the Department examines several factors including, but not limited to, changes in: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base. See e.g., Polychloroprene Rubber from Japan: Final Results of Changed Circumstances Review, 67 FR 58 (January 2, 2002) ( Polychloroprene Rubber from Japan), and Brass Sheet and Strip from Canada: Final Results of Antidumping Duty Administrative Review, 57 FR 20460 (May 13, 1992) ( Canadian Brass). While no single or several of these factors will necessarily provide a dispositive indication, the Department will generally consider the new company to be the successor to the previous company if its resulting operation is not materially dissimilar to that of its predecessor. See e.g., Polychloroprene Rubber from Japan, Industrial Phosphoric Acid from Israel: Final Results of Changed Circumstances Review, 59 FR 6944, 6946 (February 14, 1994), Canadian Brass, and Fresh and Chilled Atlantic Salmon from Norway: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, 63 FR 50880, 50881 (September 23, 1998). Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will accord the new company the same antidumping and countervailing duty treatment as its predecessor.

We preliminarily determine that KICM is the successor-in-interest to HLL, following HLL's transfer and KICM's acquisition of HLL's mushroom business. HLL submitted documentation attached to its November 6, 2002 submission supporting its claims that KICM's acquisition of its mushroom business resulted in no changes in either production facilities, supplier relationships, customer base, or management. This documentation consisted of: (1) HLL's Published Annual Report for 2001 specifying KICM as one of its wholly-owned subsidiaries; (2) copies of the resolutions passed by the Board of Directors of HLL and KICM, respectively, that authorized KICM's acquisition of the mushroom business; and (3) a copy of the agreement for the sale and transfer of the mushroom business from HLL to KICM. The documentation described in items (2) and (3) above demonstrates that (i) all employees of HLL, including management, have been transferred to KICM, (ii) the business is being sold as a going concern, and (iii) there were no changes in management structure, supplier relationships, production facilities, or customer base.

When warranted the Department may publish the notice of initiation and preliminary determination concurrently. See19 CFR 221(c)(3)(ii). The Department has determined that such action is warranted because HLL has provided prima facie evidence that KICM is its successor-in-interest.

For the forgoing reasons, we preliminarily determine that KICM is the successor-in-interest to HLL and, thus, should receive the same antidumping duty treatment with respect to certain preserved mushrooms from India as the former HLL.

Public Comment

Any interested party may request a hearing within 10 days of publication of this notice. Any hearing, if requested, will be held no later than 21 days after the date of publication of this notice, or the first workday thereafter. Case briefs from interested parties may be submitted not later than 7 days after the date of publication of this notice. Rebuttal briefs, limited to the issues raised in those comments, may be filed not later than 14 days after the date of publication of this notice. All written comments shall be submitted in accordance with 19 CFR 351.303. Persons interested in attending the hearing, if one is requested, should contact the Department for the date and time of the hearing. The Department will publish the final results of this changed circumstances review, including the results of its analysis of issues raised in any written comments.

We are issuing and publishing this determination and notice in accordance with sections 751(b) and 777(i)(1) of the Act and section 351.216 of the Department's regulations.