[Federal Register Volume 67, Number 3 (Friday, January 4, 2002)]
[Notices]
[Pages 562-565]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 02-245]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-337-804]
Certain Preserved Mushrooms From Chile: Preliminary Results of
Antidumping Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping administrative
review.
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SUMMARY: In response to a timely request from the petitioner,\1\ on
January 31, 2001, the Department of Commerce published a notice of
initiation of an administrative review of the antidumping duty order on
certain preserved mushrooms from Chile with respect to Nature's Farm
Products (Chile) S.A., Ravine Foods Inc., and Compania Envasadora del
Atlantico covering the period December 1, 1999, through November 30,
2000.
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\1\ The petitioner is 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.
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We preliminarily determine that sales have been made below normal
value. Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: January 4, 2002.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Sophie E.
Castro, Office 2, AD/CVD Enforcement Group I, Import Administration,
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.
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 (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).
Background
On October 22, 1998, the Department published in the Federal
Register the final affirmative antidumping duty determination of sales
at less than fair value (LTFV) on certain preserved mushrooms from
Chile (see Notice of Final Determination of Sales at Less Than Fair
Value: Certain Preserved Mushrooms from Chile, 63 FR 56613, (LTFV Final
Determination)). We published an antidumping duty order on December 2,
1998 (see Notice of Antidumping Duty Order: Certain Preserved Mushrooms
from Chile, 63 FR 66529).
On January 31, 2001, the Department published a notice of
initiation of an administrative review of the antidumping duty order on
certain preserved mushrooms from Chile with respect to Nature's Farm
Products (Chile) S.A. (NFC), Ravine Foods Inc (Ravine), and Compania
Envasadora del Atlantico (CEA) (see Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 66 FR 8378). On February 8,
2001, the Department issued the antidumping questionnaire to: NFC via
its U.S. parent, Nature Farm Products, Inc. (NFP/USA); Ravine, a
Canadian company; and CEA, a Colombian company.
NFP/USA advised the Department on February 13, 2001, that NFC did
not export or sell the subject merchandise to the United States, nor
did NFP/USA import or sell the subject merchandise to the United
States. However, NFP/USA advised the Department to send a copy of the
questionnaire directly to NFC (see Memorandum to the File dated
February 13, 2001, which summarizes information received from NFP/USA),
which the Department had already sent on February 12, 2001. We did not
receive a response from NFC, nor did we receive a response from Ravine.
We received a questionnaire response from CEA in April 2001. We
issued supplemental questionnaires in May and August 2001. CEA
responded to these questionnaires in June, July, August and September
2001. On October 4, 2001, CEA's counsel confirmed in a telephone
conversation that the entry of the subject merchandise reported in
CEA's questionnaire response had already been liquidated by the Customs
Service (see Memorandum to the File from Sophie Castro dated October 9,
2001).
In November 2001, we requested information concerning CEA's
reported sale transaction from NFC, NFP/USA, and CEA's customer, Horley
Trading Co., Ltd. (Horley). We received responses from NFP/USA and
Horley; we did not receive a response from NFC.
On July 19, 2001, 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 Chile, 66 FR
37640 (July 19, 2001), we extended the due date for the preliminary
results to November 15, 2001, in accordance with section 751(a)(3)(A)
of the Act. On November 19, 2001, we again extended the due date of the
preliminary results to December 31, 2001, in accordance with section
751(a)(3)(A) of the Act (see Notice of Extension of Time Limit for the
Preliminary Results of Antidumping Administrative Review: Certain
Preserved Mushrooms from Chile, 66 FR 57937 (November 19, 2001)).
Scope of the Order
The products 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,
[[Page 563]]
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 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 is currently 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). Although the
HTSUs subheadings are provided for convenience and customs purposes,
the written description of the scope of this order is dispositive.
Determination of Exporter/Respondent
According to the information developed in this review, CEA
purchased provisionally preserved (i.e., brined) mushrooms in bulk
containers from NFC. CEA reported that it subsequently retorted and
repacked the subject merchandise into commercial-size cans and sold and
shipped them to its U.S. customer, Horley. These cans were packed with
the Nature's Farm brand on the label and the statement ``Distributed by
Nature's Farm Products, Inc.'' on the label. CEA reported its sale to
Horley for purposes of this review and stated that, to the best of its
knowledge, NFC did not have knowledge that the merchandise was destined
for the United States at the time of NFC's sale to CEA.
We have determined, based on our analysis of the information
provided by CEA, NFP/USA, and Horley, that the first party with
knowledge of destination was NFC and therefore the relevant transaction
in accordance with section 772(a) of the Act is NFC's sale to CEA for
exportation to the United States. Although CEA claims that it is the
first party in the chain of distribution who had knowledge that the
ultimate destination of the sale was the United States, our
determination that NFC is the exporter who had knowledge of destination
is based on evidence that NFC was affiliated with NFP/USA, that NFP/USA
and Horley are affiliated, and that NFP/USA and Horley were engaged in
sales negotiations with CEA immediately prior to or at the same time as
their affiliate NFC sold subject merchandise to CEA.
Horley and NFP/USA
Horley and NFP/USA both claim to be unaffiliated with each other.
They claim that Horley merely has a licensing, rental, and commission
agreement with NFP/USA, which enables Horley to use the NFP/USA brand
on canned mushroom labels, and that NFP/USA's senior staff members are
employed with Horley only in the role of ``technical consultants.''
Among the specific ``persons'' considered in reaching an affiliated
decision are officers and directors of organizations, employer and
employee, and ``any person who controls any other person or such
persons.'' See section 771(33) of the Act. Moreover, ``a person shall
be considered to control another person if the person is legally or
operationally in a position to exercise restraint or direction over the
other person.''
The Statement of Administrative Action, H. Doc. No. 103-316, Vol. 1
(1994) (SAA) at 838 states that ``[t]he traditional focus on control
through stock ownership fails to address adequately modern business
arrangements, which often find one firm operationally in a position to
exercise restraint or direction over another even in the absence of an
equity relationship. A company may be in a position to exercise
restraint or direction, for example, through corporate or family
groupings, franchises, or joint venture agreements, debt financing, or
close supplier relationships in which the supplier or buyer becomes
reliant upon the other.''
There are several factors on the record which lead us to believe
that NFP/USA and its officers exercise control over Horley legally or
operationally. NFP/USA claims that it ceased import operations
immediately prior to Horley's commencement of business operations.
Horley established an office at NFP/USA's facility, and the two
entities continue to share the facility to this day. Furthermore,
Horley commenced negotiations on the import of the subject merchandise
from CEA even before it was legally incorporated, but only after NFP/
USA, who was initially contacted by CEA, referred the business to
Horley. In fact, NFP/USA's president is the only person on the record
identified as negotiating the sale with CEA on Horley's behalf.
Furthermore, NFP/USA's president is also the only person who has
provided factual information on Horley's behalf in response to our
questionnaires, although NFP/USA's vice president certified Horley's
December 3, 2001, factual submission under 19 CFR 351.303(g)(1). In
addition, Horley's accountant also has been employed as NFP/USA's
accounting manager. Besides shared managers and shared facilities,
Horley also shares something much more obvious with NFP/USA--NFP/USA's
name. Horley has the rights to all of NFP/USA's brand names, according
to the licensing agreement submitted to the Department. Therefore,
although Horley does not market itself as NFP/USA, it markets its
products as NFP/USA goods. Thus, for all intents and purposes, taken as
a whole, we believe that the record demonstrates that NFP/USA and its
officers have shepherded and significantly controlled Horley's
transactions with CEA.
In Ta Chen Stainless Steel Pipe, 1999 Ct. Intl. Trade LEXIS 110
(October 28, 1999) (Ta Chen), the Department found two companies, Ta
Chen and Sun, to be affiliated. In making this determination, the
Department cited a number of factors, including (a) historical ties
between the companies, (b) former Ta Chen employees working for Sun;
and (c) Sun's distribution solely of Ta Chen products. See id. at 115-
117. The Court of International Trade (CIT) affirmed the Department's
affiliation determination, stating, ``[e]ven if each of the individual
connections between Ta Chen and Sun, standing alone, may not be
sufficient to establish control, Commerce's conclusion that the
numerous connections between Ta Chen and Sun were indicative of control
was reasonable. Commerce did not rely on any one factor in concluding
that Ta Chen and Sun were affiliated parties, rather, it determined
that the combination of factors was sufficient proof of affiliation.''
See id.
We find that the circumstances in this case are comparable to those
contemplated in the SAA and similar to those in Ta Chen. The totality
of factors demonstrate that NFP/USA and Horley are affiliated
companies. The two companies share officers, business opportunities,
office space, and product brand names. Such a relationship between
these two companies indicates that NFP/USA controls Horley for purposes
of this review, within the meaning of section 771(33)(G) of the Act.
[[Page 564]]
NFP/USA and NFC
As discussed in both the Notice of Preliminary Determination of
Sales at Less Than Fair Value: Certain Preserved Mushrooms From Chile,
63 FR 41786 (August 5, 1998), and the LTFV Final Determination, NFP/USA
and NFC are closely affiliated companies. For example, all of NFC's
sales in the LTFV investigation were made through NFP/USA as
constructed export price transactions. NFP/USA incurred the expense for
certain NFC production activities (see LTFV Final Determination, 63 FR
at 56614). Further, NFP/USA acknowledged that ``NFP/USA is the primary
funding source of NFP's operations'' (id., 63 FR at 56623). The record
of this review shows no change in this status until February 2000.
Accordingly, NFP/USA was clearly affiliated with NFC when NFC sold its
brined mushrooms to CEA in January 2000. Furthermore, CEA indicated in
its questionnaire responses that it only pursued business with NFC
after it was confident that Horley would purchase canned mushrooms from
CEA (see CEA's December 7, 2001, submission at page 3). Thus, Horley
was in sales negotiations with CEA at the same time NFP/USA's affiliate
NFC was negotiating to sell the subject merchandise to CEA. As
discussed above, Horley and NFP/USA are affiliated companies.
Accordingly, we believe that the weight of the evidence supports our
finding that NFC had knowledge at the time of its sale to CEA, through
its affiliation with NFP/USA, that the ultimate destination of its sale
of brined mushrooms to CEA was the United States.
NFP/USA claims that it agreed to sever its affiliation with NFC in
November 1999 (see NFP/USA's December 3, 2001, submission at page 5).
However, NFP/USA provided no evidence on the record of such an
agreement. Moreover, NFP/USA acknowledges that NFC and NFP/USA remained
legally affiliated until the formal transfer of NFP/USA's stock in
February 2000.
NFP/USA and NFC were legally affiliated at the time of NFC's sale
of brined mushrooms to CEA through NFP/USA's equity in NFC, as well as
through their strong historical ties. Given that the subject
merchandise was produced by NFC, and that it ultimately arrived in the
United States in Horley's, and thereby NFP/USA's, control under the
Nature's Farm brand name, the record evidence leads us also to conclude
that NFC had knowledge of the ultimate destination of the product when
it was sold to CEA.
Use of Facts Otherwise Available
As stated above under ``Case History,'' the Department initiated an
administrative review of three companies: Ravine, NFC, and CEA.
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person (A) withholds information that has been requested
by the administering authority; (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782; (C) significantly impedes a proceeding under this title; or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority shall, subject
to section 782(d), use the facts otherwise available in reaching the
applicable determination under this title.'' Because Ravine and NFC
have provided no information, we are assigning Ravine and NFC margins
on the basis of the facts available, in accordance with section 776(a)
of the Act. As we have determined that CEA's sale should be considered
a sale by NFC, we have included this transaction in the rate assigned
to NFC.
Ravine
As noted above, Ravine did not respond to the Department's
questionnaire. Therefore, the Department was unable to issue further
questionnaires and review Ravine's information pursuant to sections
782(d) and 782(e) of the Act. Because of its refusal to cooperate in
this review, we determine that the application of a rate based on facts
available is appropriate pursuant to section 776(a)(2) of the Act.
NFC
As discussed above, NFC did not respond either to the Department's
questionnaire, nor to the Department's November 2001 request for
information. Thus we determine that the application of facts available
is appropriate in the case of NFC.
Application of Adverse Facts Available
Because Ravine and NFC have refused to participate in this
administrative review, we preliminarily determine that an adverse
inference is warranted in selecting facts otherwise available, in
accordance with section 776(b) of the Act (see, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Persulfates from The
People's Republic of China, 62 FR 27222, 27224 (May 19, 1997); and
Certain Grain-Oriented Electrical Steel From Italy: Final Results of
Antidumping Duty Administrative Review, 62 FR 2655 (January 17, 1997)
(applying an adverse inference, as explained in detailed in Preliminary
Results of Antidumping Duty Administrative Review: Certain Grain-
Oriented Electrical Steel From Italy, 61 FR 36551, 36552, (July 11,
1996))).
Section 776(b) of the Act provides that, if the Department finds
that an interested party ``has failed to cooperate by not acting to the
best of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of the
party as facts otherwise available. Adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See SAA at 870.
Furthermore, ``an affirmative finding of bad faith on the part of the
respondent is not required before the Department may make an adverse
inference.'' See Antidumping Duties; Countervailing Duties: Final Rule,
62 FR 27296, 27340 (May 19, 1997).
Section 776(b) of the Act authorizes the Department to use as
adverse facts available information derived from the petition, the
final determination from the LTFV investigation, a previous
administrative review, or any other information placed on the record.
Under section 782(c) of the Act, a respondent has a responsibility not
only to notify the Department if it is unable to provide requested
information, but also to provide a ``full explanation and suggested
alternative forms.''
Ravine and NFC failed to respond to our request for information in
any manner, thereby failing to comply with this provision of the
statute and making it impossible for the Department to conduct an
administrative review of their sales or entries. Therefore, we have
determined that Ravine and NFC failed to cooperate to the best of their
abilities and we have made an adverse inference in applying the facts
available.
In this proceeding, the only rate that has been in effect has been
the rate of 148.51% calculated for NFC and All Others in the LTFV Final
Determination. Information from prior segments of the proceeding
constitutes secondary information and section 776(c) of the Act
provides that the Department shall, to the extent practicable,
corroborate that secondary information from independent sources
reasonably at its disposal. The SAA provides that ``corroborate'' means
that the Department will satisfy itself that the secondary information
to be used has probative value (see SAA at 870).
To corroborate secondary information, the Department will, to the
extent
[[Page 565]]
practicable, examine the reliability and relevance of the information
to be used. See Preliminary Results of Antidumping Duty Administrative
Reviews and Partial Termination of Administrative Review: Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan,
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter,
and Components Thereof from Japan, 61 FR 57392 (November 6, 1996)
(TRBs). However, unlike other types of information, such as input costs
or selling expenses, there are no independent sources for calculated
dumping margins. Thus, in an administrative review, if the Department
chooses as adverse facts available a calculated dumping margin from a
prior segment of the proceeding, it is not necessary to question the
reliability of the margin for that time period. With respect to the
relevance aspect of corroboration, however, the Department ``will
consider information reasonably at its disposal as to whether there are
circumstances that would render a margin inappropriate. Where
circumstances indicate that the selected margin is not appropriate as
adverse facts available, the Department will disregard the margin and
determine an appropriate margin'' (id.; see also TRBs and Fresh Cut
Flowers from Mexico; Final Results of Antidumping Duty Administrative
Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the Department
disregarded the highest margin as adverse facts available because the
margin was based on another company's uncharacteristic business expense
resulting in an unusually high margin)).
As noted above, the highest calculated margin (and the only
calculated margin) in the history of this proceeding is 148.51 percent.
In the instant review, there are no circumstances indicating that this
margin is inappropriate as facts available. Moreover, this rate is
currently applicable to all subject merchandise. Assigning a lower
rate, even if one were available, would effectively reward these
companies for their failure to cooperate. Therefore, we find that the
148.51 percent rate is corroborated to the greatest extent practicable
in accordance with section 776(c) of the Act.
Preliminary Results of the Review
As a result of this review, we preliminarily determine that the
dumping margin for the POR is as follows:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
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Nature's Farm Products (Chile) S.A. (including merchandise 148.51
shipped by the Colombian firm Compania Envasadora del
Atlantico)..................................................
Ravine Foods................................................. 148.51
------------------------------------------------------------------------
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).
Assessment Rates
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 on an importer-specific basis. We are also
instructing Customs to apply a specific rate to all entries
manufactured by NFC and sold to CEA.
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 rate for the reviewed
company will be that established in the final results of this review;
(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 148.51 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 section 751(a)(1) of the Act and 19 CFR 351.221.
Dated: December 28, 2001.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 02-245 Filed 1-3-02; 8:45 am]
BILLING CODE 3510-DS-P