[Federal Register Volume 67, Number 3 (Friday, January 4, 2002)]
[Pages 562-565]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-245]



International Trade Administration


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 


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, 

    \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.

    We preliminarily determine that sales have been made below normal 
value. Interested parties are invited to comment on these preliminary 

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.


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 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, 
    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]]


    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.


    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.


    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, 
    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 
    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 

[[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:

                    Manufacturer/exporter                      (percent)
Nature's Farm Products (Chile) S.A. (including merchandise        148.51
 shipped by the Colombian firm Compania Envasadora del
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 

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]