Certain In-shell Roasted Pistachios from the Islamic Republic of Iran: Preliminary Results of Countervailing Duty Administrative Review, 38622-38626 [E6-10664]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 130 (Friday, July 7, 2006)]
[Notices]
[Pages 38622-38626]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-10664]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[C-507-601]


Certain In-shell Roasted Pistachios from the Islamic Republic of 
Iran: Preliminary Results of Countervailing Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the countervailing duty (CVD) order on certain 
in-shell roasted pistachios from the Islamic Republic of Iran (Iran) 
for the period January 1, 2004, through December 31, 2004. For 
information on the net subsidy rate for the reviewed company, please 
see the ``Preliminary Results of Review'' section of this notice. 
Interested parties are invited to comment on these preliminary results. 
(See the ``Public Comment'' section of this notice.)

EFFECTIVE DATE: July 7, 2006.

FOR FURTHER INFORMATION CONTACT: Darla Brown, AD/CVD Operations, Office 
3, Import Administration, U.S. Department of Commerce, Room 4014, 14th 
Street and Constitution Avenue NW, Washington DC 20230; telephone (202) 
482-2786.

SUPPLEMENTARY INFORMATION:

Background

    On October 7, 1986, the Department published in the Federal 
Register the CVD order on certain in-shell roasted pistachios from 
Iran. See Final Affirmative Countervailing Duty Determination and 
Countervailing Duty Order: Roasted In-Shell Pistachios from Iran, 51 FR 
35679 (October 7, 1986) (Roasted Pistachios). On October 3, 2005, the 
Department published a notice of opportunity to request an 
administrative review of this CVD order. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 70 FR 57558

[[Page 38623]]

(October 3, 2005). On October 31, 2005, we received timely requests for 
administrative review from the California Pistachio Commission (CPC) 
and Cal Pure Pistachios, Inc. (Cal Pure). The CPC and Cal Pure 
requested that the Department conduct a review with respect to Tehran 
Negah Nima Trading Company, Inc., trading as Nima Trading Company 
(Nima), the respondent company in this proceeding. On December 1, 2005, 
we initiated an administrative review of the CVD order on in-shell 
roasted pistachios from Iran covering the period of review (POR) 
January 1, 2004, through December 31, 2004. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Deferral 
of Administrative Reviews, 70 FR 72107 (December 1, 2005).
    On January 5, 2006, we issued our initial questionnaire to the 
Government of Iran (GOI) and Nima. Neither the GOI nor Nima submitted 
questionnaire responses. On February 13, 2006, Nima submitted a letter 
stating that it did not make any shipments of subject merchandise to 
the United States during the POR. On March 21, 2006, the team placed on 
the record the results of a customs data run, which indicated that Nima 
did in fact make shipments of subject merchandise to the United States 
during the POR. See March 21, 2006, memorandum to the file from Darla 
Brown, case analyst, re: customs data. Also on March 21, 2006, we sent 
a letter to Nima, asking the company to explain in writing the apparent 
discrepancy between its February 13, 2006, letter and the information 
obtained from the U.S. Customs and Border Protection (CBP). Nima did 
not respond to our March 21, 2006, letter.
    Therefore, as discussed below in the ``Use of Facts Available'' 
section of this notice, we have resorted to the facts otherwise 
available, employing an adverse inference. See Section 776 of the 
Tariff Act of 1930, as amended (the Act).
    In accordance with 19 CFR 351.213(b), this administrative review 
covers only those producers or exporters for which a review was 
specifically requested. Accordingly, this administrative review covers 
Nima and ten programs used by Nima and/or its grower(s) and 
producer(s).

Scope of Order

    The product covered by this order is all roasted in-shell pistachio 
nuts, whether roasted in Iran or elsewhere, from which the hull has 
been removed, leaving the inner hard shells and the edible meat, as 
currently classifiable in the Harmonized Tariff Schedules of the United 
States (HTSUS) under item number 0802.50.20.00. The HTSUS subheading is 
provided for convenience and customs purposes. The written description 
of the scope of this proceeding is dispositive.

Use of Facts Available

    During the course of this proceeding, we have sought information 
from the company subject to this review, Nima, and from the GOI 
pertaining to countervailable subsidy programs in Iran and their use by 
Nima and Nima's grower(s) and producer(s). Specifically, we have asked 
for information concerning Nima's and its growers' usage of the 
following programs: Provision of Credit, Provision of Fertilizer and 
Machinery, Tax Exemptions, Provision of Water and Irrigation Equipment, 
Technical Support, Duty Refunds on Imported Raw or Intermediate 
Materials Used in the Production of Export Goods, Program to Improve 
Quality of Exports of Dried Fruit, Iranian Export Guarantee Fund, GOI 
Grants and Loans to Pistachio Farmers, and Crop Insurance for 
Pistachios. In addition, we have requested information concerning 
Nima's total sales and the sales of subject merchandise made by Nima 
during the POR. See pages II-1-10 and pages III-3-12 of the 
Department's January 5, 2006, initial questionnaire. Moreover, the 
Department has sought further clarification from Nima regarding the 
discrepancy between its February 13, 2006, statement that Nima did not 
make any shipments of the subject merchandise to the United States 
during the POR and proprietary customs information on the record 
contradicting that statement.
    Section 776(a) of the Act requires the use of facts available when 
an interested party withholds information that has been requested by 
the Department, or when an interested party fails to provide the 
information requested in a timely manner and in the form required. 
Specifically, neither the GOI nor Nima submitted questionnaire 
responses to the Department. By not responding to our questionnaire, 
Nima and the GOI failed to provide information regarding subsidy 
programs in Iran, as well as Nima's sales, explicitly requested by the 
Department. Therefore, we must resort to the facts otherwise available 
pursuant to section 776(a) of the Act.
    Furthermore, section 776(b) of the Act provides that in selecting 
from among the facts available, the Department may use an inference 
that is adverse to the interests of a party if it determines that a 
party has failed to cooperate to the best of its ability. The 
Department finds that, by not providing necessary information 
specifically requested by the Department in a timely fashion, the GOI 
and Nima have failed to cooperate to the best of their abilities. 
Therefore, in selecting from among the facts available, the Department 
determines that an adverse inference is warranted.
    When employing an adverse inference in an administrative review, 
the statute indicates that the Department may rely upon information 
derived from (1) the petition, a final determination in a 
countervailing duty or an antidumping investigation, any previous 
administrative review, new shipper review, expedited antidumping 
review, section 753 review, or section 762 review; or (2) any other 
information placed on the record. See Section 776(b) of the Act and 19 
CFR 351.308(c). Thus, in applying adverse facts available, the 
Department is relying on information from Roasted Pistachios; Certain 
In-Shell Pistachios and Certain Roasted In-Shell Pistachios from the 
Islamic Republic of Iran: Final Results of New Shipper Countervailing 
Duty Reviews, 68 FR 4997 (January 31, 2003) (Pistachios New Shipper 
Reviews); Certain In-shell Pistachios from the Islamic Republic of 
Iran: Final Results of Countervailing Duty Administrative Review, 70 FR 
54027 (September 13, 2005) (2003 In-shell Pistachios); and Certain In-
shell Roasted Pistachios from the Islamic Republic of Iran: Final 
Results of Countervailing Duty Administrative Review, 71 FR 27682 (May 
12, 2006) (2003 Roasted Pistachios).
    If the Department relies on secondary information (e.g., data from 
a petition) as facts available, section 776(c) of the Act provides that 
the Department shall, ``to the extent practicable,'' corroborate such 
information using independent sources reasonably at its disposal.\1\ 
The SAA further provides that to corroborate secondary information 
means that the Department will satisfy itself that the secondary 
information to be used has probative value. See also 19 CFR 351.308(d) 
(describing the corroboration of secondary information).
---------------------------------------------------------------------------

    \1\ The Statement of Administrative Action accompanying the URAA 
clarifies that information from the petition is ``secondary 
information.'' See Statement of Administrative Action, URAA, H. Doc. 
No. 316, Vol. 1, 103d Cong. (1994) (SAA) at 870.
---------------------------------------------------------------------------

    Thus, in those instances in which it determines to apply adverse 
facts available, the Department, in order to satisfy itself that such 
information has probative value, will examine, to the extent 
practicable, the reliability and relevance of the information used. 
However, unlike other types of information, such as publicly available

[[Page 38624]]

data on the national inflation rate of a given country or national 
average interest rates, there typically are no independent sources for 
data on company-specific benefits resulting from countervailable 
subsidy programs. The only source for such information normally is 
administrative determinations, which are reliable. In the instant case, 
no evidence has been presented or obtained which contradicts the 
reliability of the evidence relied upon in previous segments of this 
proceeding.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render benefit data not 
relevant. Where circumstances indicate that the information is not 
appropriate as adverse facts available, the Department will not use it. 
See Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812 (February 22, 1996). In the instant 
case, no evidence has been presented or obtained which contradicts the 
relevance of the benefit data relied upon in previous segments of this 
proceeding. Thus, in the instant case, the Department finds that the 
information used has been corroborated to the extent practicable.

Analysis of Programs

Programs Preliminarily Determined to Be Countervailable

    Because the GOI and Nima did not provide the information necessary 
to conduct an analysis of these programs, we are making an adverse 
inference that each of these programs continues to exist, is 
countervailable, and that a benefit was conferred upon Nima and/or its 
grower(s) and supplier(s) during the POR.
    A. Provision of Fertilizer and Machinery
    In Roasted Pistachios, 51 FR at 35680, the Department found that 
growers, processors or exporters of pistachios in Iran can obtain 
fertilizer and machinery from the GOI at preferential prices.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in Roasted Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 6.65 percent ad valorem.
    B. Provision of Credit
    In Roasted Pistachios, 51 FR at 35680-81, the Department found that 
bounties or grants were provided to Iranian growers, processors, or 
exporters of pistachios under this program. Specifically, the 
Department found that agricultural cooperatives in Iran make credit 
available on terms inconsistent with commercial considerations from 
funds provided by the GOI to their members.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in Roasted Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 6.65 percent ad valorem.
    C. Tax Exemptions
    In Roasted Pistachios, 51 FR at 35681, the Department found that 
bounties or grants were provided to Iranian growers, processors, or 
exporters of pistachios under this program. Specifically, the 
Department determined that farmers benefit from legislation that 
exempts farmers and livestock breeders from paying taxes, provided they 
follow government agricultural guidelines.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in Roasted Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 6.65 percent ad valorem.
    D. Provision of Water and Irrigation Equipment
    In Roasted Pistachios, 51 FR at 35681, the Department found that 
bounties or grants were provided to Iranian growers, processors, or 
exporters of pistachios under this program. Specifically, the 
Department determined that pistachio growers in Iran may benefit from 
the construction of soil dams, flood barriers, canals, and other 
irrigation projects undertaken by the government to increase 
agricultural production.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in Roasted Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 6.65 percent ad valorem.
    E. Technical Support
    In Roasted Pistachios, 51 FR at 35681, the Department found that 
bounties or grants were provided to Iranian growers, processors, or 
exporters of pistachios under this program. Specifically, the 
Department determined that pistachio growers in Iran receive technical 
support as part of the GOI's program to support agricultural 
development, and that this technical support included research projects 
to improve cultivation techniques, as well as assistance in harvesting, 
marketing, and the use of fertilizer.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    To calculate the net subsidy rate under this program, we used the 
highest rate listed in Roasted Pistachios for this program. 
Accordingly, we preliminarily determine that the net subsidy rate for 
this program is 6.65 percent ad valorem.
    F. Duty Refunds on Imported Raw or Intermediate Materials Used in 
the Production of Export Goods
    In the Pistachios New Shipper Reviews, we found that there was 
sufficient information on the record to suggest that duties and levies 
paid in connection with the importation of intermediate materials used 
in the production of the exported commodities and goods are refunded to 
exporters, pursuant to the Third Five Year Development Plan (TFYDP) 
enacted by the GOI. See the May 8, 2002, Memorandum to Melissa G. 
Skinner

[[Page 38625]]

from the Team, re: New Subsidy Allegations, contained in the February 
2, 2006, Memorandum to the File from the Team, re: Placing Memos on the 
Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in Pistachios New 
Shipper Reviews, and thus was not among the programs addressed in 
Roasted Pistachios. However, lacking any information from Nima and the 
GOI on the record of the instant review, we find that the net subsidy 
rate of 6.65 percent, the highest rate established for an industry-wide 
program in Roasted Pistachios, is the only available information on the 
record and is therefore, as adverse facts available, the appropriate 
rate to apply to this program in these preliminary results. 
Accordingly, we preliminarily find that the net subsidy rate for this 
program is 6.65 percent ad valorem.
    G. Program to Improve Quality of Exports of Dried Fruit
    In the Pistachios New Shipper Reviews, we found that there was 
sufficient information on the record to suggest that pursuant to the 
Budget Act of 2001 - 2002, the GOI provides financial assistance to 
exporters of dried fruit and pistachios to assist them in the 
production of export quality goods. See the May 8, 2002, Memorandum to 
Melissa G. Skinner from the Team, re: New Subsidy Allegations, 
contained in the February 2, 2006, Memorandum to the File from the 
Team, re: Placing Memos on the Record.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in the Pistachios New 
Shipper Reviews, and thus was not among the programs addressed in 
Roasted Pistachios. However, lacking any information from Nima and the 
GOI on the record of the instant review, we find that the net subsidy 
rate of 6.65 percent, the highest rate established for an industry-wide 
program in Roasted Pistachios, is the only available information on the 
record and is therefore, as adverse facts available, the appropriate 
rate to apply to this program in these preliminary results. 
Accordingly, we preliminarily find that the net subsidy rate for this 
program is 6.65 percent ad valorem.
    H. Iranian Export Guarantee Fund
    In 2003 In-shell Pistachios, we found that petitioners had provided 
sufficient evidence to support their allegation that the GOI pays a 
``prize'' in the form of an export subsidy to exporters; these prizes 
are payable commensurate with the added value of export goods and 
services. See the October 27, 2004, Memorandum to Melissa G. Skinner 
from the Team, re: New Subsidy Allegations, contained in the February 
2, 2006, Memorandum to the File from the Team, re: Placing Memos on the 
Record. This program was also examined in the context of 2003 Roasted 
Pistachios.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in Roasted 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
6.65 percent, the highest rate established for an industry-wide program 
in Roasted Pistachios, is the only available information on the record 
and is therefore, as adverse facts available, the appropriate rate to 
apply to this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 6.65 
percent ad valorem.
    I. GOI Grants and Loans to Pistachio Farmers
    In 2003 In-shell Pistachios, we found that petitioners had provided 
sufficient evidence to support their allegation that the GOI's Foreign 
Exchange Reserve Account Board of Trustees agreed to provide both a 
grant of $100,000,000 and a $50,000,000 buyer's credit to Iranian 
pistachio cooperatives and pistachio farmers. See the May 8, 2002, 
Memorandum to Melissa G. Skinner from the Team, re: New Subsidy 
Allegations, contained in the February 2, 2006, Memorandum to the File 
from the Team, re: Placing Memos on the Record. This program was also 
examined in the context of 2003 Roasted Pistachios.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in Roasted 
Pistachios. However, lacking any information from Nima and the GOI on 
the record of the instant review, we find that the net subsidy rate of 
6.65 percent, the highest rate established for an industry-wide program 
in Roasted Pistachios, is the only available information on the record 
and is therefore, as adverse facts available, the appropriate rate to 
apply to this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 6.65 
percent ad valorem.
    J. Crop Insurance for Pistachios
    In 2003 In-shell Pistachios, we found that petitioners had provided 
sufficient evidence to support their allegation that the GOI 
established the Iranian Agricultural Product Insurance Act (IAPIA), 
whereby the Agricultural Bank will insure agricultural produce as a 
means of achieving the goals and policies of the agricultural sector 
and that the GOI aids farmers in securing insurance premiums at less 
than market value. See the May 8, 2002, Memorandum to Melissa G. 
Skinner from the Team, re: New Subsidy Allegations, contained in the 
February 2, 2006, Memorandum to the File from the Team, re: Placing 
Memos on the Record. This program was also examined in the context of 
2003 Roasted Pistachios.
    As further discussed above in the ``Use of Facts Available'' 
section of this notice, we have determined that the application of 
adverse facts available is warranted on the grounds that Nima and the 
GOI did not respond to our request for information. Therefore, we have 
determined as adverse facts available that this program continues to 
exist and that Nima received a countervailable benefit during the POR.
    This program was alleged for the first time in 2003 In-shell 
Pistachios, and thus was not among the programs addressed in Roasted 
Pistachios.

[[Page 38626]]

However, lacking any information from Nima and the GOI on the record of 
the instant review, we find that the net subsidy rate of 6.65 percent, 
the highest rate established for an industry-wide program in Roasted 
Pistachios, is the only available information on the record and is 
therefore, as adverse facts available, the appropriate rate to apply to 
this program in these preliminary results. Accordingly, we 
preliminarily find that the net subsidy rate for this program is 6.65 
percent ad valorem.

Preliminary Results of Review

    In accordance with 19 CFR 351.221(b)(4)(i), we have calculated an 
individual subsidy rate for Nima, the only producer/exporter subject to 
this administrative review, for the POR, i.e., calendar year 2004. We 
preliminarily determine that the total estimated net countervailable 
subsidy rate is 66.50 percent ad valorem.
    As Nima is the exporter but not the producer of subject 
merchandise, should the final results of this review remain the same as 
these preliminary results, the Department's final results of review 
will apply to all subject merchandise exported by Nima. See 19 CFR 
351.107(b).
    The Department intends to instruct CBP, within 15 days of 
publication of the final results of this review, to liquidate all 
shipments of subject merchandise exported by Nima, entered, or 
withdrawn from warehouse, for consumption during the POR at the rate 
established in this administrative review.
    We will instruct CBP to continue to collect cash deposits for non-
reviewed companies at the most recent company-specific or country-wide 
rate applicable to the company. Accordingly, the cash deposit rates 
that will be applied to non-reviewed companies covered by this order 
will be the rate for that company established in the most recently 
completed administrative proceeding. See 2003 Roasted Pistachios. These 
cash deposit rates shall apply to all non-reviewed companies until a 
review of a company assigned these rates is requested.

Public Comment

    Pursuant to 19 CFR 351.224(b), the Department will disclose to 
parties to the proceeding any calculations performed in connection with 
these preliminary results within five days after the date of the public 
announcement of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Unless otherwise indicated by the Department, case briefs must 
be submitted within 30 days after the publication of these preliminary 
results. Rebuttal briefs, which are limited to arguments raised in case 
briefs, must be submitted no later than five days after the time limit 
for filing case briefs, unless otherwise specified by the Department. 
Parties who submit argument in this proceeding are requested to submit 
with the argument: (1) a statement of the issue, and (2) a brief 
summary of the argument. Parties submitting case and/or rebuttal briefs 
are requested to provide the Department copies of the public version on 
disk. Case and rebuttal briefs must be served on interested parties in 
accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, 
within 30 days of the date of publication of this notice, interested 
parties may request a public hearing on arguments to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the date for 
submission of rebuttal briefs.
    Representatives of parties to the proceeding may request disclosure 
of proprietary information under administrative protective order no 
later than 10 days after the representative's client or employer 
becomes a party to the proceeding, but in no event later than the date 
the case briefs, under 19 CFR 351.309(c)(ii), are due. The Department 
will publish the final results of this administrative review, including 
the results of its analysis of issues raised in any case or rebuttal 
brief or at a hearing.
    This administrative review and notice are issued and published in 
accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 30, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-10664 Filed 7-6-06; 8:45 am]
BILLING CODE 3510-DS-S