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Notice

Honey From Argentina: Preliminary Results of Antidumping Duty Administrative Review

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests by interested parties, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on honey from Argentina. The review covers imports of subject merchandise from three firms (see “Background” section of this notice for further explanation). The period of review (POR) is December 1, 2008, through November 30, 2009. We preliminarily determine that sales of honey from Argentina have not been made below normal value (NV) by TransHoney S.A. (TransHoney), Compania Inversora Platense S.A. (CIPSA), or Patagonik S.A. (Patagonik) during the POR. If these preliminary results are adopted in our final results of administrative review, we will issue appropriate assessment instructions to U.S. Customs and Border Protection (CBP). Interested parties are invited to comment on these preliminary results. Parties who submit argument in this review are requested to submit with the argument: (1) A statement of the issues; (2) a brief summary of the argument; and (3) a table of authorities.

DATES:

Effective Date: January 14, 2011.

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FOR FURTHER INFORMATION CONTACT:

David Cordell (Patagonik), Dena Crossland (CIPSA), or Patrick Edwards (TransHoney), AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room 7850, Washington, DC 20230; telephone (202) 482-0408, (202) 482-3362, or (202) 482-8029, respectively.

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SUPPLEMENTARY INFORMATION:

Background

On December 10, 2001, the Department published the antidumping duty order on honey from Argentina. See Notice of Antidumping Duty Order: Honey From Argentina, 66 FR 63672 (December 10, 2001). On December 1, 2009, the Department published in the Federal Register its notice of opportunity to request an administrative review of this order. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity To Request Administrative Review, 74 FR 62743 (December 1, 2009). In response, on December 31, 2009, Asociacion de Cooperativas Argentinas (ACA), Nexco S.A. (Nexco), CIPSA, Patagonik, and TransHoney requested an administrative review of the antidumping duty order on honey from Argentina for the period December 1, 2008, through November 30, 2009. In addition, on December 31, 2009, the American Honey Producers Association and Sioux Honey Association (collectively, petitioners) requested an administrative review of the antidumping duty order on honey from Argentina for the period December 1, 2008, through November 30, 2009. Specifically, the petitioners requested that the Department conduct an administrative review of entries of Start Printed Page 2656subject merchandise made by 18 Argentine producers/exporters. ACA, Nexco, CIPSA, Patagonik, and TransHoney were included in the petitioners' request for review.

On January 29, 2010, the Department initiated a review of 17 of the 18 companies for which an administrative review was requested.[1] See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Request for Revocation in Part, and Deferral of Initiation of Administrative Review, 75 FR 4770, 4772 (January 29, 2010) (Initiation Notice).

On February 17, 2010, Mielar S.A. (Mielar) and Compania Apicola Argentina S.A. (CAA) submitted a letter certifying that during the POR, neither made any shipment, sale, or U.S. entry of subject merchandise, and requested that the Department rescind the administrative review with respect to Mielar and CAA.

Also on February 17, 2010, the Department issued a memorandum to the file indicating its intention to limit the number of respondents selected for review and to select mandatory respondents based on CBP data for U.S. imports of Argentine honey during the POR. The Department encouraged all interested parties to submit comments regarding the use of CBP entry data for respondent selection purposes. See Memorandum to the File through Richard Weible, Director, Office 7, AD/CVD Operations, regarding “Honey from Argentina—United States Customs and Border Protection Entry Data for Selection of Respondents for Individual Review,” dated February 17, 2010.

On March 5, 2010, the Department selected the four producers/exporters with the largest export volume during the POR as mandatory respondents: HoneyMax S.A. (HoneyMax), Nexco, Patagonik, and TransHoney. See Memorandum to Richard Weible, “Administrative Review of the Antidumping Duty Order on Honey from Argentina: Respondent Selection Memorandum,” dated March 5, 2010. On March 9, 2010, the Department issued its antidumping questionnaire to all four mandatory respondents.

On March 31, 2010, and pursuant to 19 CFR 351.213(d)(1), the petitioners timely withdrew their request for review of HoneyMax.

On April 7, 2010, the petitioners and Nexco timely withdrew their requests for review of Nexco.

On April 16, 2010, the petitioners timely withdrew their request for review with respect to all companies except TransHoney, Patagonik, CIPSA, and ACA. Accordingly, the Department informed interested parties of its intent to rescind the review for all companies except TransHoney, Patagonik, and CIPSA, to continue with its deferral of the review with respect to ACA, and to select CIPSA as a mandatory respondent in place of Nexco. See Memorandum to the File, “2008/2009 Administrative Review of the Antidumping Duty Order on Honey from Argentina: Selection of New Mandatory Respondent,” dated April 19, 2010. On April 19, 2010, the Department issued sections A, B, and C of its antidumping questionnaire to CIPSA.

On April 29, 2010, ACA timely withdrew its request for review submitted on December 31, 2009.[2]

On September 14, 2010, the Department rescinded the administrative review with respect to fifteen companies: AGLH S.A., Algodonera Avellaneda S.A., Alimentos Naturales-Natural Foods, Alma Pura, Bomare S.A., CAA, El Mana S.A., Interrupcion S.A., Mielar, Miel Ceta SRL., Productos Afer S.A., Seabird Argentina S.A., HoneyMax, Nexco, and ACA. This rescission, in part, was based on the timely withdrawal of the request for review by the interested parties that requested the review. See Honey Extension Notice. Additionally, the Department extended the preliminary results of this administrative review to no later than January 7, 2011. Id.

On October 6, 2010, the Department determined that a “particular market situation” with respect to the honey market existed in Argentina during the POR for certain exporters under review. See Memorandum to Richard Weible, Director AD/CVD Operations, Office 7, from David Cordell and Dena Crossland, entitled “Whether a particular market situation exists such that the Argentine honey market is not an appropriate comparison market for establishing normal value,” dated October 6, 2010 (Particular Market Situation Memorandum). See also the discussion of “Selection of Comparison Market” under “Normal Value” below.

Below is the company-specific background information with respect to Patagonik, CIPSA, and TransHoney.

Patagonik

On April 6, 2010, Patagonik filed its response to the Department's section A questionnaire (Patagonik AQR). On May 7, 2010, Patagonik filed its response to sections B and C of the Department's questionnaire. Between April 2010 and November 2010, the Department issued supplemental questionnaires to Patagonik, to which it filed timely responses.

In accordance with section 773(b)(2)(A)(ii) of the Tariff Act of 1930, as amended (the Act), we automatically initiated a cost investigation in this segment of the proceeding with respect to Patagonik because we disregarded sales by Patagonik that were below the cost of production (COP) in the most recently completed segment of this proceeding.[3] On June 22, 2010, the Department selected the two largest beekeeper suppliers (by volume) of honey to Patagonik as cost respondents. See Memorandum to Richard Weible, “Selection of Cost of Production Respondents,” dated June 22, 2010 (Cost Respondents Selection Memorandum). We also recommended examining Patagonik's affiliated middleman, Azul Agronegocios S.A. (Azul).[4]

On July 1, 2010, the Department revised its selection of the cost respondents in response to Patagonik's July 1, 2010 letter noting that Azul had incorrectly identified one of the selected cost respondents. See “Revision of Cost of Production Respondent Selection: Addendum to Memorandum of June 22, 2010,” dated July 1, 2010 (Revision of Cost Respondent Selection Memorandum).

On July 14, 2010, the Department issued its cost questionnaire to the selected beekeepers and middleman to which Patagonik's suppliers responded on August 25, 2010. The Department issued a supplemental cost questionnaire to Patagonik's suppliers in November 2010 and December 2010, to which they timely responded.Start Printed Page 2657

CIPSA

On May 24, 2010, CIPSA filed its response to section A of the Department's questionnaire (CIPSA AQR). On June 9, 2010, CIPSA filed its response to sections B and C of the Department's questionnaire. Between July 2010 and October 2010, the Department issued supplemental questionnaires to CIPSA, to which it filed timely responses.

TransHoney

On April 26, 2010, TransHoney filed its response to the Department's section A questionnaire (TransHoney AQR). On May 7, 2010, TransHoney filed its response to sections B and C of the Department's questionnaire (TransHoney BQR and TransHoney CQR). Between May 2010 and October 2010, the Department issued supplemental questionnaires to TransHoney, to which it filed timely responses. On June 8, 2010, TransHoney also filed comments regarding the identification of organic honey versus standard honey.

Period of Review

The POR is December 1, 2008, through November 30, 2009.

Tolling of Deadlines

As explained in the memorandum from the Deputy Assistant Secretary (DAS) for Import Administration, the Department exercised its discretion to toll deadlines for the duration of the closure of the federal government from February 5, 2010 through February 12, 2010. Thus, all deadlines in this segment of the proceeding were extended by seven days. See Memorandum to the Record from Ronald Lorentzen, DAS for Import Administration, regarding “Tolling of Administrative Deadlines As a Result of the Government Closure During the Recent Snowstorm,” dated February 12, 2010.

On September 14, 2010, the Department published in the Federal Register a notice extending the time limits for the preliminary results of this review. See Honey Extension Notice, 75 FR at 55741. This extension established the deadline for these preliminary results as January 7, 2011. Id. at 55742.

Scope of the Order

The merchandise covered by the order is honey from Argentina. 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 covered by the order is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise under the order is dispositive.

Product Comparisons

In accordance with section 771(16) of the Act, we considered all sales of honey covered by the description in the “Scope of the Order” section of this notice, supra, which were sold in the appropriate third-country markets during the POR to be the foreign like product for the purpose of determining appropriate product comparisons to honey sold in the United States. For our discussion of market viability and selection of comparison markets, see the “Normal Value” section of this notice, infra. We matched products based on the physical characteristics reported by CIPSA, Patagonik, and TransHoney. Where there were no sales of identical merchandise in the third-country market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics and reporting instructions listed in the antidumping duty questionnaire and instructions, or to constructed value (CV), as appropriate.

Level of Trade

In accordance with section 773(a)(1)(B)(i) 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 export price (EP) or the constructed export price (CEP). The NV LOT is based on the starting price of the 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 and profit. See also 19 CFR 351.412(c)(1)(iii). 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. See 19 CFR 351.412(c)(1)(ii). For EP, it is the starting price. See 19 CFR 351.412(c)(1)(i). In this review, all mandatory respondents claimed only EP sales.

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 producer and the unaffiliated customer. See 19 CFR 351.412(c)(2). 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 under section 773(a)(7)(A) of the Act.

CIPSA reported that all of its third-country and U.S. market sales were made to importers/packers at essentially the same LOT. See CIPSA AQR at A-10 to A-11. Patagonik also reported that all of its third-country and U.S. market sales were made to importers/packers at essentially the same LOT. See Patagonik AQR at A-11 to A-13. TransHoney reported a single LOT for all U.S. and third-country market sales and the same channel of distribution. See TransHoney AQR at A-13.

The Department has determined that differing channels of distribution, alone, do not qualify as separate LOTs when selling functions performed for each customer class are sufficiently similar. See Notice of Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review: Ninth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy, 71 FR 45017, 45022 (August 8, 2006) (unchanged in Notice of Final Results of the Ninth Administrative Review of the Antidumping Duty Order on Certain Pasta from Italy, 72 FR 7011 (February 14, 2007)); see also 19 CFR 351.412(c)(2). Patagonik and CIPSA reported a single LOT for all U.S. and third-country sales. Patagonik and CIPSA claimed that their selling activities in both markets are essentially identical, and nothing on the record appears to suggest otherwise. TransHoney also reported a single LOT for all its U.S. and third-country market sales. Therefore, for TransHoney, Patagonik and CIPSA, we preliminarily determine that all reported sales are made at the same LOT, and have not made a LOT adjustment. See Patagonik AQR at A-11 to A-13, and CIPSA AQR at A-10 to A-12. For a further discussion of LOT, see Memorandum to the File, “Analysis Memorandum for Preliminary Results of the Antidumping Duty Review on Honey from Argentina for Patagonik S.A., dated January 7, 2011 (Patagonik Preliminary Analysis Memorandum); Memorandum to the File, “Analysis Memorandum for Start Printed Page 2658Preliminary Results of the Antidumping Duty Review on Honey from Argentina for Compania Inversora Platense S.A., dated January 7, 2011 (CIPSA Preliminary Analysis Memorandum); and Memorandum to the File, “Analysis Memorandum for Preliminary Results of the Antidumping Duty Review on Honey from Argentina for TransHoney S.A., dated January 7, 2011 (TransHoney Preliminary Analysis Memorandum).

Date of Sale

Pursuant to 19 CFR 351.401(i), the Department normally will use the date of invoice, as recorded in the exporter's or producer's records kept in the ordinary course of business, as the date of sale, but may use a date other than the date of invoice if it better reflects the date on which the material terms of sale are established. For Patagonik and CIPSA, the Department used the invoice date as the date of sale for both its comparison and U.S. market sales for these preliminary results. Patagonik and CIPSA assert that changes in ordered terms have occurred in the past and their customers know they can request changes to an order prior to shipment. See Patagonik's June 14, 2010, supplemental questionnaire response at BC-5 and 6, and CIPSA's August 2, 2010, supplemental questionnaire response at 14, 22, and 23. As in past segments of this proceeding, we determine that there is potential for change to the essential terms of sale between the contract date and invoice date and therefore invoice date continues to be the appropriate date of sale with respect to Patagonik's sales in the U.S. and comparison markets. Additionally, we preliminarily determine that invoice date is the appropriate date of sale with respect to CIPSA's sales in the U.S. and third-country markets because of the potential for change to the essential terms of sale between the order date and invoice date. However, in some instances for Patagonik's sales, shipment occurred prior to invoice and, consistent with past segments of this proceeding and the Department's practice, we used the shipment date as the date of sale for those sales.

For TransHoney, the Department, consistent with its practice, used the reported date of invoice as the date of sale for both the third-country and U.S. markets. We thoroughly examined the date of sale issue for TransHoney and found that changes to the essential terms of sale can and did occur between the order date and invoice date, which is coincident with the date of actual shipment. See TransHoney BQR at B-12 and TransHoney CQR at C-11; see also TransHoney AQR at A-16 and TransHoney July 26, 2010, supplemental questionnaire response at 5-6. Consequently, we preliminarily find that invoice date is the appropriate date of sale with respect to TransHoney's and its affiliated entity's [5] sales in the U.S. and comparison markets.

Export Price

Section 772(a) of the Act defines EP as “the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States, as adjusted under {section 772(c) of the Act}.” Section 772(b) of the Act defines CEP as “the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter,” as adjusted under sections 772(c) and (d). For purposes of this administrative review, CIPSA, Patagonik and TransHoney classified their U.S. sales as EP because all of their sales were made before the date of importation directly to unaffiliated purchasers in the U.S. market. For purposes of these preliminary results, we have accepted these classifications. We based EP on prices to unaffiliated customers in the United States and made adjustments for movement expenses.

Normal Value

1. Selection of Comparison Market

In accordance with section 773(a)(1)(C) of the Act, to determine whether there was 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 or equal to five percent of the aggregate volume of U.S. sales), we compared Patagonik, CIPSA, and TransHoney's respective aggregate volume of home market sales of the foreign like product to their respective aggregate volume of U.S. sales of subject merchandise. Patagonik and CIPSA's volume of home market sales were both greater than five percent of the aggregate volume of U.S. sales; however, TransHoney had no home market sales during the POR. As a result, we preliminarily find that TransHoney's home market does not provide a viable basis for calculating NV.

With respect to CIPSA and Patagonik, section 773(a)(1)(c)(iii) of the Act provides that the Department may determine that home market sales are inappropriate as a basis for determining NV if the particular market situation would not permit a proper comparison with EP and CEP. In its supplemental questionnaires dated April 16, 2010, and July 8, 2010, the Department asked Patagonik and CIPSA to provide further information in order to evaluate the market situation in Argentina with respect to honey, to which responses were filed on May 18, 2010, and August 2, 2010, respectively.

On October 6, 2010, the Department determined that a particular market situation does, in fact, exist with respect to CIPSA's and Patagonik's sales of honey in Argentina, rendering the Argentine market inappropriate for purposes of determining NV.6 See Particular Market Situation Memorandum.

When sales in the home market are not suitable to serve as the basis for NV, section 773(a)(1)(B)(ii) of the Act provides that sales to a third-country market may be utilized if: (i) The prices in such market are representative; (ii) the aggregate quantity of the foreign like product sold by the producer or exporter in the third-country market is five percent or more of the aggregate quantity of the subject merchandise sold in or to the United States; and (iii) the Department does not determine that a particular market situation in the third-country market prevents a proper comparison with the EP or CEP. In terms of volume of sales (and with five percent or more of sales by quantity to the United States), TransHoney reported Germany as its largest third country market, CIPSA reported Italy as its third-country market during the POR, and Patagonik reported the United Kingdom as its third-country market during the POR.

The record shows the aggregate quantity of TransHoney's and its affiliate [7] Einsof Trade S.A. (Einsof)'s sales to Germany is greater than five percent of TransHoney's sales to the United States. In addition, the Department preliminarily determines there is no evidence on the record to demonstrate that these prices in Germany are not representative. See TransHoney AQR at Exhibit A.1. Nor is Start Printed Page 2659there evidence that any other third country market to which TransHoney sells would offer greater similarity of product to that sold to the United States. Further, we find there is no particular market situation in Germany with respect to TransHoney or Einsof that would prevent a proper comparison to EP. As a result, we preliminarily find TransHoney's and its affiliate's sales to Germany serve as the most appropriate basis for NV.

In addition to looking at volume, we also examined product similarity for Patagonik and CIPSA, and found that the product sold to the largest third country market was similar to that sold to the United States. See Patagonik's May 18, 2010, supplemental section A questionnaire response at A-1 to A-3, CIPSA AQR at A-17, and CIPSA's June 9, 2010, section B questionnaire response at Exhibit B.3. Thus, the Department determines to select Italy as the appropriate comparison market for CIPSA and the United Kingdom as the appropriate comparison market for Patagonik.

Therefore, NV for all companies is based on its third-country sales to unaffiliated purchasers made in commercial quantities and in the ordinary course of trade. For NV, we used the prices at which the foreign like product was first sold for consumption in the usual commercial quantities, in the ordinary course of trade, and at the same LOT as the EP. We calculated NV as noted in the “Price-to-Price Comparisons” section of this notice, infra.

2. Cost of Production

In the previous segment of this proceeding, the Department disregarded sales made by Patagonik that were found to be below its COP. See 06-07 Final Results. Therefore, pursuant to section 773(b)(2)(A)(ii) of the Act, there were reasonable grounds to believe or suspect that the respondent made sales of the foreign like product in the home market at prices below the COP within the meaning of section 773(b) of the Act, as below cost sales made by Patagonik were disregarded in the most recently completed investigation. Id. On June 22, 2010, the Department selected the two largest beekeeper suppliers (by volume) of honey to Patagonik as cost respondents. See Cost Respondents Selection Memorandum and Revision of Cost Respondent Selection Memorandum. Accordingly, on July 14, 2010, the Department requested that Patagonik's beekeepers and middleman respond to section D (Cost of Production/Constructed Value) of the Department's antidumping duty questionnaire.

A. Cost of Production Analysis

To calculate a COP and CV for the merchandise under consideration, the Department selected the two largest beekeepers by volume and the largest middleman, all of whom provided honey to Patagonik during the POR. See Cost Respondents Selection Memorandum and Revision of Cost Respondent Selection Memorandum.

B. Calculation of COP

We relied on the COP data submitted by the two beekeeper respondents and the middleman in their questionnaire responses. For additional details, see Memorandum to Neal M. Halper, Director of Office of Accounting, “Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results—Patagonik S.A.'s Beekeeper Respondents/Collector of Honey,” dated January 7, 2011.

C. Test of Third-Country Prices and Results of the Cost of Production Test

We calculated a simple average COP using the COP of Patagonik's two respondent suppliers (Beekeeper 1 and Beekeeper 2) and the costs of the middleman supplier. This average COP was applied to these beekeepers as well as to all other beekeeper suppliers from whom information was not requested. In determining whether to disregard third-country market sales made at prices below the COP, in accordance with sections 773(b)(1)(A) and (B) of the Act, we examined: (1) Whether, within an extended period of time, such sales were made in substantial quantities; and (2) whether such sales were made at prices which permitted the recovery of all costs within a reasonable period of time in the normal course of trade. Where less than 20 percent of the respondent's third-country market sales of a given model (i.e., control number, or CONNUM) were at prices below the COP during the POR, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made within an extended period of time and in “substantial quantities.” Where 20 percent or more of the respondent's third-country market sales of a given model were at prices less than COP during the POR, we disregarded the below-cost sales because: (1) They were made within an extended period of time in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of prices to the COP for the POR, they were 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.

We found Patagonik did not have any models for which 20 percent or more of sales volume (by weight) were below cost during the POR. Therefore we did not disregard any of Patagonik's third-country sales and included all such sales in our calculation of NV.

Affiliation

According to section 771(33) of the Act, the Department determines affiliation using a variety of criteria. TransHoney submitted, as part of its sales database, the third-country market sales made by another Argentine exporter, Einsof, a company with which TransHoney claims to be affiliated. To determine affiliation between companies, the Department analyzed TransHoney's responses and found that, pursuant to section 771(33)(F) of the Act, TransHoney and Einsof are affiliated because they are under common control. Specific matters related to the common control are proprietary in nature. For further details, see Memorandum to Richard Weible, “Antidumping Duty Administrative Review of Honey from Argentina: Analysis of the Relationship Between TransHoney S.A. (TransHoney) and Einsof Trade S.A. (Einsof),” dated January 7, 2011 (TransHoney/Einsof Affliation Memorandum).

Furthermore, in certain circumstances the Department will treat two or more affiliated producers as a single entity and determine a single weighted-average margin for that entity, in order to determine margins accurately and to prevent manipulation that would undermine the effectiveness of the antidumping law. See 19 CFR 351.401(f).

While 19 CFR 351.401(f) applies only to producers, the Department has found it to be instructive in determining whether non-producers should be collapsed and has used the criteria in the regulation in its analysis. See TransHoney/Einsof Affliation Memorandum; see e.g., Honey from Argentina: Final Results of Antidumping Duty Administrative Review, 70 FR 19926, 19926 (April 15, 2005); and Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp From Brazil, 69 FR 76910 (December 23, 2004) and accompanying Issues and Decision Memorandum at Comment 5. The U.S. Court of International Trade (CIT) has found that collapsing exporters is consistent with a “reasonable Start Printed Page 2660interpretation of the {antidumping duty} statute.” See Hontex Enterprises, Inc. v. United States, 248 F. Supp. 2d. 1323, 1338 (CIT 2003) (Hontex). The CIT further noted that “to the extent that Commerce has followed its market economy collapsing regulations the {non-market economy (NME)} exporter collapsing methodology is necessarily permissible.” See Hontex, 248 F. Supp. 2d at 1342.

During the POR, TransHoney and Einsof collectively purchased honey for export sales from beekeepers and other collectors. See TransHoney AQR at A-3, A-8, and A-9. As a result, none of the affiliated parties possess production facilities that manufacture subject merchandise. Rather, they act as resellers of the product. In addition, TransHoney and Einsof did not operate independently as evidenced by shared facilities, employees and management, See TransHoney AQR at A-10 and TransHoney's June 8, 2010, supplemental questionnaire response at SA-5. Given these factors, the Department preliminarily concludes that the factors laid out in 19 CFR 351.401(f)(2)(ii) and (iii) are relevant to the issue of whether TransHoney and Einsof are affiliated exporters/resellers that should be treated as a single entity for purposes of establishing dumping duties. The Department preliminarily finds that, based on management overlap and intertwined relations, the relationship between these companies is such that both should be treated as a single entity for purposes of this administrative review and should receive a single antidumping duty rate. For further details, see TransHoney/Einsof Affiliation Memorandum.

With respect to Patagonik, Patagonik reported that under the Department's rules, Patagonik is considered to be affiliated with Azul, a honey collector, warehouser, processor, and reseller. See Patagonik's AQR at A-4. Patagonik cites Azul's 2008 acquisition of the assets of Colmenares Santa Rosa, the affiliated company from which Patagonik previously obtained warehousing and inventory management services. Id. Patagonik notes that during the POR, Azul only supplied Patagonik with honey although Patagonik did purchase honey from other unaffiliated beekeepers during the POR. Id. at A-3 and A-5. In addition, the testing and classification of the honey is carried out by a laboratory owned by Patagonik, which is located at Azul's warehouse. Id. at A-5. Patagonik also reported that Azul was granted an export license in November 2009. See Patagonik's November 29, 2010, supplemental questionnaire response at 1.

In terms of ownership, Patagonik states Azul is owned by six equal partners, one of whom, Mauricio Bigñe, is both president of Azul and Patagonik, and manages certain operations of Azul. Id. at A-6. In terms of Patagonik, the company states that Patagonik is owned by two equal shareholders, but that Mauricio Bigñe served as president of Patagonik and that the other investor had no day-to-day management responsibilities during the POR. Id. at A-4 and 6.

The Department has analyzed Patagonik's responses and, pursuant to section 771(33)(F) of the Act, determines that Patagonik and Azul are affiliated. The Department analyzed whether to determine to treat Patagonik and Azul as a single entity for purposes of this administrative review and whether Patagonik and Azul should receive a single antidumping duty rate. The Department preliminarily concludes that the factors laid out in 19 CFR 351.401(f)(2)(ii) and (iii) are relevant to the issue of whether Patagonik and Azul are affiliated exporters/resellers that should be treated as a single entity. The Department preliminarily finds, based on management overlap and intertwined operations, as well as the fact that Azul also has an export license and thus has the ability to export on its own account, that these companies should be treated as a single entity for purposes of this administrative review and should receive a single antidumping duty rate. For further details, see Memorandum to Richard Weible, “Antidumping Duty Administrative Review of Honey from Argentina: Analysis of the Relationship Between Patagonik S.A. (Patagonik) and Azul Agronegocios S.A. (Azul),” dated January 7, 2011.

Price-to-Price Comparisons

Patagonik

We based NV on the third-country prices to unaffiliated purchasers. We made adjustments, where applicable, for movement expenses in accordance with section 773(a)(6)(B) of the Act. Where appropriate, we made circumstance-of-sale adjustments for credit pursuant to section 773(a)(6)(C) of the Act. We also made adjustments, where applicable, for other direct selling expenses, in accordance with section 773(a)(6)(C) of the Act. Additionally, we adjusted gross unit price for billing adjustments and freight reveune, where applicable. See 19 CFR 351.401(c).

We preliminarily reclassified some of Patagonik's reported direct selling expenses (namely, certain testing expenses) as indirect selling expenses, consistent with our treatment of testing expenses in prior reviews with respect to Patagonik. See, e.g., Honey From Argentina: Preliminary Results of New Shipper Review, 71 FR 67850, 67853 (November 24, 2006) (New Shipper Preliminary Results) [8] (unchanged in Honey from Argentina: Final Results of New Shipper Review, 72 FR 19177 (April 17, 2007)). Thus, we have not included certain of Patagonik's testing expenses among the direct selling expenses for which we made adjustments in these preliminary results. For more information, see Patagonik Preliminary Analysis Memorandum.

CIPSA

We calculated NV based on prices to unaffiliated purchasers in the third-country market and matched U.S. sales to NV. We made adjustments, where applicable, for movement expenses in accordance with section 773(a)(6)(B) of the Act. Where appropriate, we made circumstances-of-sale adjustments for credit and other direct selling expenses (e.g., certain Argentine government-requested testing expenses) in accordance with section 773(a)(6)(C) of the Act. Additionally, we reclassified one of CIPSA's reported direct selling expenses (e.g., certain customer-requested testing expenses) as an indirect selling expense. We also disregarded a certain claimed direct selling expense (i.e., blending), which we determined in prior decisions is more appropriately treated as a COP expense. See, e.g., New Shipper Preliminary Results, 71 FR at 67853; see also CIPSA Preliminary Analysis Memorandum.

TransHoney

We calculated NV based on prices to unaffiliated purchasers on the third-country market and matched U.S. sales to NV. We made adjustments, where applicable, for movement expenses in accordance with section 773(a)(6)(B) of the Act. Where appropriate, we made circumstances-of-sale adjustments for credit and other direct selling expenses (e.g., certain Argentine government-requested testing expenses) in accordance with section 773(a)(6)(C) of the Act. Additionally, we reclassified one of TransHoney's reported direct selling expenses (namely, certain customer-requested testing expenses) as an indirect selling expense. We also Start Printed Page 2661disregarded a certain claimed direct selling expenses (i.e., blending), which we determined in prior decisions is more appropriately treated as a COP expense. See, e.g., New Shipper Preliminary Results, 71 FR at 67853; see also TransHoney Preliminary Analysis Memorandum.

With respect to TransHoney's request to incorporate organic honey as a model match criterion, the Department preliminarily determines not to consider organic source as a criterion for matching honey sold in the third-country and U.S. markets because TransHoney did not provide sufficient evidence (i.e., quantitative and qualitative features, etc.) to support its claim that there is a physical difference reflected in a cost differential between organic and non-organic honey. Therefore, we found an insufficient basis to consider the request for purposes of our product matching criteria. Accordingly, we have preliminarily disregarded the field ORGANICT/U and are relying solely on the product characteristics specified in the Department's questionnaire (i.e., type, color, and form).

Currency Conversions

The Department's preferred source for daily exchange rates is the Federal Reserve Bank. See Preliminary Results of Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip in Coils from France, 68 FR 47049, 47055 (August 7, 2003) (unchanged in Notice of Final Results of Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip in Coils From France, 68 FR 69379 (December 12, 2003)). However, the Federal Reserve Bank does not track or publish exchange rates for the Argentine peso. Therefore, we made currency conversions from Argentine pesos to U.S. dollars based on the daily exchange rates from Factiva, a Dow Jones retrieval service. Factiva publishes exchange rates for Monday through Friday only. We used the rate of exchange on the most recent Friday for conversion dates involving Saturday through Sunday where necessary.

Preliminary Results of Review

As a result of our review, we preliminarily determine the following weighted-average dumping margins exists for the period December 1, 2008, through November 30, 2009:

ExporterWeighted-Average margin (percentage)
Compania Inversora Platense S.A0.00.
Patagonik S.A. and Azul Agronegocios S.A0.27 (de minimis).
TransHoney S.A. and Einsof Trade S.A0.00.

Disclosure and Request for Public Hearing and Comments

The Department will disclose the calculations performed within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within thirty days of publication. See 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date pursuant to 19 CFR 351.310(d). Interested parties may submit case briefs or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments may be filed no later than 35 days after the date of publication of this notice. Parties who submit arguments in these proceedings are requested to submit with the argument: (1) A statement of the issues, (2) a brief summary of the argument, and (3) a table of authorities. Further, parties submitting case briefs, rebuttal briefs, and written comments should provide the Department with an additional copy of the public version of any such argument on diskette. The Department will issue final results of this administrative review, including the results of our analysis of the issues in any such case briefs, rebuttal briefs, and written comments or at a hearing, within 120 days of publication of these preliminary results.

Assessment

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), where entered values were reported, we calculated importer-specific ad valorem assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total customs value of the sales used to calculate those duties. Where entered values were not reported, we calculated importer- or customer- (where the importer was unknown) specific per-unit assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total quantity of the sales used to calculate those duties. These rates will be assessed uniformly on all of Patagonik's, CIPSA's, and TransHoney's entries made during the POR. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of the final results of this review.

The Department clarified its “automatic assessment” regulation on May 6, 2003. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This clarification will apply to entries of subject merchandise during the POR produced by companies included in these final results of review for which the reviewed companies did not know their merchandise was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediate company(ies) involved in the transaction.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of honey from Argentina 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 rate for each specific company listed above will be that 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 any previously-reviewed or investigated company 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 or the less-than-fair-value 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) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be the all-others rate from the investigation (30.24 percent). See Notice of Antidumping Duty Order; Honey From Argentina, 66 FR at 63673. These cash deposit requirements, when Start Printed Page 2662imposed, shall remain in effect until further notice.

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.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Start Signature

Dated: January 7, 2011.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

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Footnotes

1.  In accordance with 19 CFR 351.213(c), the Department deferred for one year the initiation of the administrative review with respect to ACA. See Honey From Argentina: Notice of Extension of Time Limit for Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 75 FR 55741, 55741 n.1 (September 14, 2010) (Honey Extension Notice).

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2.  The withdrawal of the request for review was submitted by ACA based on the Department's notification in the Federal Register revoking the antidumping duty order with respect to honey exported by ACA effective December 1, 2008. Because the order covering honey from Argentina is revoked with respect to ACA, all entries of subject merchandise exported by ACA will be liquidated without regard to antidumping duties. Accordingly, there will be no relevant entries that might be subject to an antidumping review. See Honey from Argentina: Final Results of Antidumping Duty Administrative Review and Determination to Revoke Order in Part, 75 FR 23674 (May 4, 2010).

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3.  See Honey from Argentina: Final Results of Antidumping Duty Administrative Review and Determination to Revoke Order in Part, 74 FR 32107, 32108-09 (July 7, 2009) (06-07 Final Results).

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4.  For a detailed discussion of Patagonik's relationship with Azul, see the “Affiliation” section below.

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5.  See “Affiliation” discussion section below.

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6.  As noted above, TransHoney reported that it had no domestic sales during the POR.

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7.  See “Affiliation” section, infra.

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8.  Where we note “that certain claimed direct expenses in the third-country market are being re-classified as either indirect selling expenses or as part of the cost of production, for the reasons outlined in the accompanying Analysis Memoranda.”

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[FR Doc. 2011-790 Filed 1-13-11; 8:45 am]

BILLING CODE 3510-DS-P