Notice of Preliminary Results of Antidumping Duty Administrative Review, Notice of Intent to Revoke in Part: Individually Quick Frozen Red Raspberries from Chile, 45000-45011 [E6-12815]
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Federal Register / Vol. 71, No. 152 / Tuesday, August 8, 2006 / Notices
DEPARTMENT OF COMMERCE
International Trade Administration
A–337–806
Notice of Preliminary Results of
Antidumping Duty Administrative
Review, Notice of Intent to Revoke in
Part: Individually Quick Frozen Red
Raspberries from Chile
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
is conducting an administrative review
of the antidumping duty order on
individually quick frozen (‘‘IQF’’) red
raspberries from Chile. The period of
review (‘‘POR’’) is July 1, 2004, through
June 30, 2005. This review covers sales
of IQF red raspberries by seven
producers/exporters. We preliminarily
find that, during the POR, sales of IQF
red raspberries were made below
normal value. Also, we intend to revoke
the antidumping duty order with
respect to Santiago Comercio Exterior
Exportaciones Sociedad Anonima
(‘‘SANCO’’). Interested parties are
invited to comment on these
preliminary results. We will issue the
final results not later than 120 days from
the date of publication of this notice.
EFFECTIVE DATE: August 8, 2006.
FOR FURTHER INFORMATION CONTACT:
Devta Ohri (Olmue, Valle Frio), Andrew
McAllister (Vitafoods), Scott Holland
(VBM), Yasmin Bordas (SANCO, Valles
Andinos), Steve Williams (Arlavan), or
Brandon Farlander, AD/CVD
Operations, Office 1, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street and Constitution
Avenue, NW, Washington DC 20230;
telephone (202) 482–3853, (202) 482–
1174, (202) 482–1279, (202) 482–3813,
(202) 482–4619, or (202) 482–0182,
respectively.
AGENCY:
SUPPLEMENTARY INFORMATION:
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Background
On July 9, 2002, the Department of
Commerce (‘‘Department’’) published an
antidumping duty order on IQF red
raspberries from Chile. See Notice of
Antidumping Duty Order: IQF Red
Raspberries From Chile, 67 FR 45460
(July 9, 2002). On July 1, 2005, the
Department published a notice of
opportunity to request administrative
review of this order. See Antidumping
or Countervailing Duty Order, Finding,
or Suspended Investigation;
Opportunity to Request Administrative
Review, 70 FR 38099 (July 1, 2005).
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On July 29, 2005, we received a
request for review of 57 companies from
the Pacific Northwest Berry Association,
Lynden, Washington, and each of its
individual members, Curt Maberry
Farm; Enfield Farms, Inc.; Maberry
Packing; and Rader Farms, Inc.
(collectively, ‘‘the petitioners’’). On July
29, 2005, we also received requests for
review from Fruticola Olmue S.A.
(‘‘Olmue’’), Alimentos Naturales
Vitafoods S.A. (‘‘Vitafoods’’), Vital Berry
Marketing S.A. (‘‘VBM’’), SANCO,1 and
Valles Andinos S.A. (‘‘Valles
Andinos’’).2 On August 19, 2005, the
petitioners requested that Sociedad
Agroindustrial Valle Frio Ltda. (‘‘Valle
Frio’’) and Arlavan S.A. (‘‘Arlavan’’) be
mandatory respondents. On August 29,
2005, we initiated an administrative
review of all 57 companies. See
Initiation of Antidumping and
Countervailing Duty Administrative
Reviews and Requests for Revocation in
Part, 70 FR 51009 (August 29, 2005).
On September 23, 2005, the
petitioners withdrew their request for
review for 50 of the 57 companies for
which they had originally requested an
administrative review. On October 14,
2005, Valles Andinos withdrew its
request for review. In accordance with
19 CFR 351.213(d)(1), on December 28,
2005, we partially rescinded this
administrative review with respect to
the 50 companies included in the
petitioners’ withdrawal request. We did
not rescind the review with respect to
Valles Andinos because the petitioners’
July 29, 2005, request for review
included a request for Valles Andinos.
See Individually Quick Frozen Red
Raspberries from Chile: Notice of Partial
Rescission of Antidumping Duty
Administrative Review, 70 FR 76771
1 On July 6, 2004, the Chilean tax authority
approved a name change for Santiago Comercio
Exterior Exportaciones Limitada (‘‘SANCO Ltda.’’)
to Santiago Comercio Exterior Exportaciones
Sociedad Anonima (‘‘SANCO S.A.’’). SANCO stated
that it underwent this restructuring because, under
Chilean law, share companies (S.A.) can more
easily add new partners. As part of the
restructuring, SANCO created a separate limited
liability company, Inversiones L.M. Ltda., that does
not participate in the production, processing, sales
process, or any other operations for SANCO’s
raspberry business. SANCO commenced exporting
the merchandise under review as SANCO S.A. to
the United States on July 30, 2004, after the
beginning of the period of review. We reviewed
SANCO’s questionnaire responses and supporting
documentation to confirm that the activities related
to SANCO’s name change are limited to those
described above. For further information, see
SANCO’s December 29, 2005, section A
supplemental questionnaire response (‘‘SQR’’), at
pages 1 through 6. Based on the information
submitted, we preliminarily determine that SANCO
S.A. is the successor-in-interest to SANCO Ltda.
2 These five companies were also included in the
petitioners’ July 29, 2005, request for review of 57
companies.
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(December 28, 2005). Thus, the seven
companies in this review are: Arlavan,
Vitafoods, Olmue, SANCO, Valle Frio,
Valles Andinos, and VBM (collectively,
‘‘the respondents’’).
On September 26, 2005, the
Department issued antidumping
questionnaires to the respondents. The
respondents submitted their initial
responses to the antidumping
questionnaire from October 2005
through May 2006. After analyzing these
responses, we issued supplemental
questionnaires to the respondents to
clarify or correct the initial
questionnaire responses. We received
timely responses to these
questionnaires. On March 22, 2006, we
requested that Valle Frio respond to the
constructed value (‘‘CV’’) portion of the
Department’s questionnaire.
On March 7, 2006, and May 26, 2006,
the Department published in the
Federal Register extensions of the time
limit for the completion of the
preliminary results of this review until
no later than June 13, 2006, and July 31,
2006, respectively, in accordance with
section 751(a)(3)(A) of the Tariff Act of
1930, as amended (‘‘the Act’’), and 19
CFR 351.213(h)(2). See Certain
Individually Quick Frozen Red
Raspberries From Chile: Notice of
Extension of Time Limit for 2004–2005
Administration Review, 71 FR 11386
(March 7, 2006); Certain Individually
Quick Frozen Red Raspberries From
Chile: Notice of Extension of Time Limit
for 2004–2005 Administrative Review,
71 FR 30378 (May 26, 2006).
Scope of the Order
The products covered by this order
are imports of IQF whole or broken red
raspberries from Chile, with or without
the addition of sugar or syrup,
regardless of variety, grade, size or
horticulture method (e.g., organic or
not), the size of the container in which
packed, or the method of packing. The
scope of the order excludes fresh red
raspberries and block frozen red
raspberries (i.e., puree, straight pack,
juice stock, and juice concentrate).
The merchandise subject to this order
is currently classifiable under
subheading 0811.20.2020 of the
Harmonized Tariff Schedule of the
United States (‘‘HTSUS’’). Although the
HTSUS subheading is provided for
convenience and customs purposes, the
written description of the merchandise
under the order is dispositive.
Verification
As provided in section 782(i) of the
Act, during March to April 2006, we
verified the information provided by
Olmue and SANCO in Chile using
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standard verification procedures,
including examination of relevant sales
and financial records, and selection of
original documentation containing
relevant information. The Department
reported its findings on July 5, July 6,
and July 27, 2006. See Memorandum to
the File, ‘‘Verification of the Sales
Response of Santiago Comercio Exterior
S.A. in the 2004–2005 Antidumping
Duty Administrative Review of
Individually Quick Frozen Red
Raspberries from Chile,’’ dated July 5,
2006 (‘‘Sales Verification Report –
SANCO’’); Memorandum to the File,
‘‘Verification of the Cost Response of
Santiago Comercio Exterior S.A. in the
Antidumping Review of Individually
Quick Frozen Red Raspberries from
Chile,’’ dated July 6, 2006 (‘‘Cost
Verification Report – SANCO’’);
Memorandum to the File, ‘‘Verification
of the Sales and Cost of Production
´
Responses of Fruticola Olmue S.A. in
the 2004–2005 Antidumping Duty
Administrative Review of Individually
Quick Frozen Red Raspberries from
Chile,’’ dated July 27, 2006
(‘‘Verification Report – Olmue’’). These
reports are on file in the Central Records
Unit (‘‘CRU’’) in room B–099 of the
main Department building.
Intent To Revoke In Part
The Department ‘‘may revoke, in
whole or part’’ an antidumping order
upon completion of a review under
section 751 of the Act. While Congress
has not specified the procedures that the
Department must follow in revoking an
order, the Department has developed a
procedure for revocation that is
described in 19 CFR 351.222(b)(2). In
determining whether to revoke an
antidumping duty order in part, the
Secretary will consider: (A) whether one
or more exporters or producers covered
by the order have sold the merchandise
at not less than normal value (‘‘NV’’) for
a period of at least three consecutive
years; (B) whether, for any exporter or
producer that the Secretary previously
has determined to have sold the subject
merchandise at less than NV, the
exporter or producer agrees in writing to
its immediate reinstatement in the
order, as long as any exporter or
producer is subject to the order, if the
Secretary concludes that the exporter or
producer, subsequent to the revocation,
sold the subject merchandise at less
than NV; and (C) whether the continued
application of the antidumping duty
order is otherwise necessary to offset
dumping.
The Department’s regulations require,
inter alia, that a company requesting
revocation submit the following: (1) a
certification that the company has sold
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the subject merchandise at not less than
NV in the current review period and
that the company will not sell at less
than NV in the future; (2) a certification
that the company sold the subject
merchandise in commercial quantities
in each of the three years forming the
basis of the receipt of such a request;
and (3) an agreement that the order will
be reinstated if the company is
subsequently found to be selling the
subject merchandise at less than fair
value. 19 CFR 351.222(e)(1)(i)-(iii). See,
e.g., Notice of Final Results of
Antidumping Duty Administrative
Review and Determination Not to
Revoke the Antidumping Duty Order:
Brass Sheet and Strip From the
Netherlands, 65 FR 742, 743 (January 6,
2000). On July 29, 2005, SANCO
submitted a certification to the effect
that for a consecutive three-year period,
including the current review period, it
sold the subject merchandise in
commercial quantities at not less than
NV and that it would continue to do so
in the future. Therefore, because we
have determined that this respondent
satisfies the requirements of 19 CFR
351.222(b), we preliminarily determine
to revoke in part the antidumping order
with respect to SANCO. See
Memorandum to Stephen J. Claeys,
Deputy Assistant Secretary,
‘‘Preliminary Determination to Revoke
in Part the Antidumping Duty Order,’’
dated July 31, 2006. This memorandum
is on file in room B–099 of the CRU.
Collapsing Determination
The Department’s regulations provide
that affiliated producers will be treated
as a single entity where: (1) those
producers have production facilities for
similar or identical products that would
not require substantial retooling of
either facility in order to restructure
manufacturing priorities; and (2) the
Department concludes that there is a
significant potential for the
manipulation of price or production. 19
CFR 351.401(f)(1). In identifying a
significant potential for the
manipulation of price or production, the
Department may consider such factors
as: (i) the level of common ownership;
(ii) the extent to which managerial
employees or board members of one
firm sit on the board of directors of an
affiliated firm; and (iii) whether
operations are intertwined, such as
through the sharing of sales information,
involvement in production and pricing
decisions, the sharing of facilities or
employees, or significant transactions
between the affiliated producers. See 19
CFR 351.401(f)(2). These factors are
illustrative, and not exhaustive.
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In its questionnaire responses, Valle
Frio indicated that it had an affiliated
producer, Agricola Framparque
(‘‘Framparque’’), during the POR. Upon
review of Valle Frio’s questionnaire
responses, we preliminarily determine
that Framparque should be collapsed
with Valle Frio for the purposes of this
review. See Memorandum to Susan
Kuhbach, Director, ‘‘Collapsing of
Sociedad Agroindustrial Valle Frio
Ltda.,’’ dated July 31, 2006.
Fair Value Comparisons
To determine whether sales of IQF red
raspberries from Chile to the United
States were made at less than NV, we
compared export price (‘‘EP’’) to NV, as
described in the ‘‘Export Price’’ and
‘‘Normal Value’’ sections of this notice.
In accordance with section 771(16) of
the Act, we considered all products sold
by the respondents in the comparison
market covered by the description in the
‘‘Scope of the Order’’ section, above, to
be foreign–like products for purposes of
determining appropriate product
comparisons to U.S. sales. In accordance
with section 773(a)(1)(C)(ii) of the Act,
in order to determine whether there was
a sufficient volume of sales in the home
market to serve as a viable basis for
calculating NV, we compared the
respondents’ volume of home market
sales of the foreign–like product to the
volumes of their U.S. sales of the subject
merchandise. See the ‘‘Normal Value’’
section, below, for further details.
We compared U.S. sales to monthly
weighted–average prices of
contemporaneous sales made in the
comparison market. Where there were
no sales of identical merchandise in the
comparison market made in the
ordinary course of trade, we compared
U.S. sales to sales of the most similar
foreign like product made in the
ordinary course of trade. Where there
were no sales of identical or similar
merchandise made in the ordinary
course of trade in the comparison
market, we compared U.S. sales to CV.
In making product comparisons,
consistent with our determination in the
original investigation, we matched
foreign like products based on the
physical characteristics reported by the
respondent in the following order:
grade, variety, form, cultivation method,
and additives. See Notice of Preliminary
Determination of Sales at Less than Fair
Value and Postponement of Final
Determination: IQF Red Raspberries
from Chile, 66 FR 67510, 67511
(December 31, 2001).
Because the respondents’
merchandise is always shipped on or
before the date of invoice, we are using
the date of shipment (i.e., guia de
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despacho/dispatch note date) as the date
of sale. See Certain Cold–Rolled and
Corrosion–Resistant Carbon Steel Flat
Products From Korea: Final Results of
Antidumping Duty Administrative
Reviews, 63 FR 13170, 13172–73 (March
18, 1998).
Export Price
For sales to the United States, we
calculated EP, in accordance with
section 772 of the Act. Section 772(a) of
the Act defines EP as the price at which
the subject merchandise is first sold
before the date of importation by the
exporter or producer outside the United
States to an unaffiliated purchaser in the
United States, or to an unaffiliated
purchaser for exportation to the United
States.
We made company–specific
adjustments as follows.
(A) Vitafoods
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
delivered duty paid (‘‘DDP’’) or cost,
insurance, and freight (‘‘CIF’’) price to
unaffiliated purchasers in the United
States. We made deductions for
movement expenses in accordance with
section 772(c)(2)(A) of the Act. These
deductions included, where
appropriate, freight incurred in
transporting merchandise to the Chilean
port, domestic brokerage and handling,
international freight, marine insurance,
U.S. brokerage and handling, and U.S.
customs duties. See Memorandum to
the File, ‘‘Preliminary Results
Calculation Memorandum for Alimentos
Naturales Vitafoods S.A.,’’ dated July
31, 2006 (‘‘Vitafoods Preliminary
Calculation Memorandum’’).
We have preliminarily excluded two
sales reported, at the Department’s
request, in Vitafoods’ U.S. sales
database. We note that these sales were
made to an unaffiliated U.S. entity for
delivery to Canada. See Vitafoods’
October 26, 2005, section A response, at
Exhibit A–5; see also Vitafoods’ July 3,
2006, SQR at page 2 and Exhibits 3S–
4 and 3S–5. The unaffiliated U.S. entity
subsequently trucked the merchandise
from Canada to the United States. See
Vitafoods’ July 28, 2006, SQR at pages
1–3 and Exhibits 1–2. Certain
documentation indicates that, at the
time of sale, the sales might have been
destined for either Canada or the United
States. Vitafoods has stated that it
considered these sales as Canadian
rather than U.S. because the only
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destination known to Vitafoods was
Canada. As we do not have conclusive
evidence that Vitafoods knew, or should
have known, at the time of sale, that the
ultimate destination of the merchandise
was the United States, the Department
is preliminarily treating these sales as
Vitafoods’ sales to Canada.
(B) Arlavan
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
free on board (‘‘FOB’’) price to
unaffiliated purchasers in the United
States.
We adjusted the reported gross unit
price, where applicable, for billing
adjustments. We made deductions from
the starting price for movement
expenses in accordance with section
772(c)(2)(A) of the Act. These
deductions included, where
appropriate, freight incurred in
transporting merchandise to the
warehouse and/or to the port, domestic
brokerage and handling, international
freight, U.S. port charges, agriculture
certificates, and U.S. brokerage and
handling.
We did not include in our calculation
certain sales listed in the U.S. sales
database because we had reason to
believe the supplier knew, or should
have known, that the ultimate
destination of the merchandise was the
United States. For further discussion,
see Memorandum to the File,
‘‘Preliminary Results Calculation
Memorandum for Arlavan, S.A.’’ dated
July 31, 2006 (‘‘Arlavan Preliminary
Calculation Memorandum’’), which is
on file in the CRU.
Because Arlavan is a reseller, and not
a producer, of merchandise, we
classified the expenses that were
reported by Arlavan as general and
administrative (‘‘G&A’’) expenses and
financial expenses as indirect selling
expenses. See Arlavan Preliminary
Calculation Memorandum.
(C) Olmue
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
cost and freight (‘‘C&F’’) price to
unaffiliated purchasers in the United
States.
We adjusted the reported gross unit
price, where applicable, for billing
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adjustments and interest revenue. We
made deductions from the starting price
for movement expenses in accordance
with section 772(c)(2)(A) of the Act.
These included, where appropriate,
inland freight incurred in transporting
merchandise to the Chilean port,
brokerage and handling, and
international freight.
We have reclassified certain
commissions paid by Olmue as indirect
selling expenses. These commissions
were not sale–specific payments to a
selling agent working on behalf of
Olmue. Rather, these expenses related to
general selling services (i.e., not directly
facilitating sales) performed by another
company. Therefore, certain reported
commissions are properly classified as
indirect selling expenses. See
Verification Report – Olmue at section
III.A. (Corporate Structure and
Organization), section XI.C.1.
(Commissions), and section XI.D.1.
(Indirect Selling Expenses); see also
Memorandum to the File, ‘‘Preliminary
Results Calculation Memorandum for
Fruticola Olmue S.A.,’’ dated July 31,
2006 (‘‘Olmue Preliminary Calculation
Memorandum’’), which is on file in the
CRU.
As a result of verification findings, we
revised the following fields in Olmue’s
U.S. sales listing: quantity, inland
freight, commissions, indirect selling
expenses, selling agent, date of
payment, credit expenses, and billing
adjustments. See Olmue Preliminary
Calculation Memorandum; see also
Verification Report – Olmue.
(D) SANCO
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
FOB or FOB plus duty paid price to
unaffiliated purchasers in the United
States.
We adjusted the reported gross unit
price, where applicable, for billing
adjustments. We made deductions from
the starting price for movement
expenses in accordance with section
772(c)(2)(A) of the Act. These included
freight incurred in transporting
merchandise to the warehouse or to the
Chilean port, warehousing, domestic
brokerage and handling, U.S. brokerage
and handling, and U.S. customs duties.
For its U.S. sales, SANCO reported
the bill of lading date as the shipment
date. As a result of verification findings,
we have revised the shipment date to
match the issuance date of the dispatch
note, because that is when the
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merchandise under review was shipped
from the plant or warehouse to the
Chilean port. We also recalculated U.S.
imputed credit expenses using the
revised date of shipment. For further
discussion, see Memorandum to the
File, ‘‘Preliminary Results Calculation
Memorandum for SANCO, S.A.’’ dated
July 31, 2006 (‘‘SANCO Preliminary
Calculation Memorandum’’), which is
on file in the CRU. See also Sales
Verification Report – SANCO.
As a result of verification findings, we
have revised the direct selling expenses,
indirect selling expenses, warehousing
expenses, inland freight expenses
incurred in Chile, brokerage and
handling expenses incurred in Chile,
and U.S. customs duties for certain U.S.
sales. See SANCO Preliminary
Calculation Memorandum. See also
Sales Verification Report – SANCO.
(E) Valle Frio
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
FOB price to unaffiliated purchasers in
the United States.
We made deductions from the starting
price for movement expenses in
accordance with section 772(c)(2)(A) of
the Act. These included, where
appropriate, inland freight incurred in
transporting merchandise to the Chilean
port, domestic brokerage and handling
expenses, and thermograph expenses.
(F) Valles Andinos
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the packed,
FOB or C&F price to unaffiliated
purchasers in the United States.
We adjusted the reported gross unit
price, where applicable, for billing
adjustments. We made deductions from
the starting price for movement
expenses in accordance with section
772(c)(2)(A) of the Act. These included
freight incurred in transporting
merchandise from the plant to the
Chilean port and domestic brokerage
and handling.
For its U.S. market sales, Valles
Andinos reported the bill of lading date
as the shipment date. We have revised
the shipment date to match the issuance
date of the dispatch note, because that
is when the merchandise under review
was shipped from the plant or
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warehouse to the Chilean port. We also
recalculated U.S. imputed credit
expenses using the revised date of
shipment. For further discussion, see
Memorandum to the File, ‘‘Preliminary
Results Calculation Memorandum for
Valles Andinos, S.A.,’’ dated July 31,
2006 (‘‘Valles Andinos Preliminary
Calculation Memorandum’’), which is
on file in the CRU.
Because Valles Andinos is principally
a reseller, we classified the expenses
that were reported by Valles Andinos as
general and administrative expenses
and financial expenses as indirect
selling expenses. See Valles Andinos
Preliminary Calculation Memorandum.
(G) VBM
We calculated EP because the
merchandise was sold prior to
importation by the exporter or producer
outside the United States to the first
unaffiliated purchaser in the United
States, and because constructed export
price methodology was not otherwise
warranted. We based EP on the DDP
price to unaffiliated purchasers in the
United States. We made deductions
from the starting price for movement
expenses in accordance with section
772(c)(2)(A) of the Act. These
deductions included, where
appropriate, domestic inland freight,
domestic brokerage and handling, pre–
sale warehousing expenses,
international freight, and U.S. customs
duties. We adjusted the reported gross
unit price, where applicable, for billing
adjustments.
Normal Value
A. Home Market Viability
Section 773(a)(1) of the Act directs
that NV be based on the price at which
the foreign like product is sold in the
home market, provided that the
merchandise is sold in sufficient
quantities (or value, if quantity is
inappropriate) and that there is no
particular market situation that prevents
a proper comparison with the EP. The
Act contemplates that quantities (or
value) will normally be considered
insufficient if they are less than five
percent of the aggregate quantity (or
value) of sales of the subject
merchandise to the United States.
In order to determine whether there
was a sufficient volume of sales in the
home market to serve as a viable basis
for calculating NV, we compared each
respondent’s volume of home market
sales of the foreign like product to its
volume of U.S. sales of the subject
merchandise, in accordance with
section 773(a)(1)(C) of the Act.
Arlavan, Olmue, SANCO, Valle Frio,
and Valles Andinos reported that their
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home market sales of IQF red
raspberries during the POR were less
than five percent of their sales of IQF
red raspberries to the United States.
Therefore, these five respondents did
not have viable home markets for
purposes of calculating NV. As its
largest third country market, Arlavan
reported Germany, Olmue and Valle
Frio reported France, SANCO reported
the United Kingdom, and Valles
Andinos reported Canada. In all
instances, sales to the third countries
exceed five percent of sales to the
United States. Accordingly, for purposes
of calculating NV, Arlavan reported its
sales to Germany, Olmue and Valle Frio
reported their sales to France, SANCO
reported its sales to the United
Kingdom, and Valles Andinos reported
its sales to Canada. In future
administrative reviews, the Department
will consider re–examining the
selection of France as Valle Frio’s
comparison market. In particular, the
Department will evaluate the
comparability of foreign–like product to
the subject merchandise.
VBM and Vitafoods reported that their
home market sales of IQF red
raspberries during the POR were more
than five percent of their sales of IQF
red raspberries to the United States.
Therefore, VBM’s and Vitafoods’ home
markets were viable for purposes of
calculating NV. Accordingly, VBM and
Vitafoods reported their home market
sales.
To derive NV for all respondents, we
made the adjustments detailed in the
‘‘Calculation of Normal Value Based on
Comparison Market Prices’’ and
‘‘Calculation of Normal Value Based on
Constructed Value’’ sections, below.
B. Cost of Production Analysis
In the most recently completed
segment of the proceeding at the time of
initiation (i.e., the first administrative
review), the Department found that
SANCO and Olmue made sales in the
comparison market at prices below the
cost of producing the merchandise and
excluded such sales from the
calculation of NV. Therefore, the
Department determined that there were
reasonable grounds to believe or suspect
that IQF red raspberry sales were made
in the comparison market at prices
below the cost of production (‘‘COP’’) in
this administrative review for SANCO
and Olmue. See section 773(b)(2)(A)(ii)
of the Act. As a result, the Department
initiated a COP inquiry for these two
respondents.
The petitioners made an allegation of
sales below the COP with respect to
Arlavan (December 12, 2005), Valles
Andinos (December 21, 2005), Vitafoods
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(December 21, 2005), VBM (December
21, 2005), and Valle Frio (March 20,
2006, supplemented on March 29,
2006). We found that the petitioners’
allegations provided the Department
with a reasonable basis to believe or
suspect that sales in the comparison
market by Arlavan, Valles Andinos,
Vitafoods, and VBM were made at
prices below the COP. Accordingly, for
these companies, we initiated an
investigation to determine whether their
comparison market sales of IQF red
raspberries were made at prices below
the COP during the POR. See
Memoranda to Susan H. Kuhbach,
Director, on the following dates: January
12, 2006 (Arlavan), January 17, 2006
(Valles Andinos), January 24, 2006
(Vitafoods), and January 20, 2006
(VBM).
For Valle Frio, we found that the
petitioners’ allegation did not provide
the Department with a reasonable basis
to believe or suspect that sales in the
comparison market were made at prices
below the COP. Therefore, we did not
initiate an investigation to determine
whether Valle Frio’s comparison market
sales of IQF red raspberries were made
at prices below the COP during the POR.
See Memorandum to Susan H. Kuhbach,
Director, ‘‘Petitioners’ Allegation of
Sales Below the Cost of Production by
Sociedad Agroindustrial Valle Frio,
Ltda.,’’ dated April 19, 2006.
Because Valles Andinos and Arlavan
are trading companies, we sent cost
questionnaires to Valles Andinos’ and
Arlavan’s suppliers. We chose the two
largest suppliers for each respondent.
For Valles Andinos, we received
complete questionnaire responses from
both suppliers. For Arlavan, we
received a complete questionnaire from
one supplier (Agricola San Antonio
Limitada (‘‘San Antonio’’)); however, as
explained below, we have not received
complete, useable information from the
other supplier (DICAF Exportaciones
Limitada (‘‘DICAF’’)).
The questionnaires we sent to the
Partner and General Manager of DICAF
were returned as undeliverable. See
Memorandum to File, ‘‘Attempts to
Deliver Section D Questionnaire in the
Antidumping Administrative Review of
Individually Quick Frozen Red
Raspberries from Chile,’’ dated April 21,
2006. In its May 15, 2006, SQR at 1,
Arlavan indicated that DICAF was
bankrupt, and Arlavan provided contact
information for Agroindustrial del
Maule (‘‘Agromaule’’), which although
separately incorporated has, effectively,
the same familial ownership as DICAF.
The Department, therefore, sent a cost
questionnaire to Agromaule in early
April 2006 and received a response from
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Agromaule’s ‘‘legal representative’’ on
May 1, 2006, which was mostly
incomplete and unusable to the
Department. The Department did,
however, receive from Arlavan and
Agromaule several supplemental
responses that assisted the Department
in further understanding the nature of
the DICAF–Agromaule relationship.
According to these responses, by August
2004, DICAF was unable to purchase its
own raw materials because the Chilean
tax authorities prohibited the company
from doing so due to the fact that it was
in arrears on taxes owed. See
Agromaule’s May 1, 2006, section D
response at 1. According to Arlavan and
Agromaule, the familial owners of
DICAF formed Agromaule in September
2004 to make a ‘‘fresh startup’’ as DICAF
was preparing for bankruptcy. See id. at
1 and Agromaule’s May 1, 2006, section
D response at 1. Agromaule purchased
raw materials and then paid DICAF to
process them. Although DICAF and
Agromaule are legally two separate
entities, the products, services, and
personnel, as well as contact
information, were the same. See
Arlavan’s May 15, 2006, SQR at 1.
According to Arlavan, beginning with
the 2004–05 growing season, the
contacts at DICAF began having Arlavan
contract for product purchases using
Agromaule forms and making payments
to Agromaule. Arlavan thus began
working with Agromaule, receiving the
same service and products it had
received from DICAF – and working
with the same people until the end of
the 2004–2005 growing season, at which
time Arlavan was informed that
Agromaule would no longer be
operating and would no longer be able
to supply Arlavan with products. See id.
at 1.
Despite the Department’s issuance of
several supplemental questionnaires,
Agromaule failed to provide the cost
information required by the Department
for these preliminary results. As a
result, the Department has applied
adverse facts available to calculate a
COP for DICAF/Agromaule. See
‘‘Individual Company Adjustments’’
and ‘‘Use of Facts Otherwise Available’’
sections, below.
1. Calculation of COP
In accordance with section 773(b)(3)
of the Act, we calculated the COP based
on the sum of the cost of materials and
fabrication for the foreign like product,
plus amounts for G&A expenses,
financial expenses, and comparison
market packing costs, where
appropriate.
We note that several respondents
reported a blended cost for purchases of
raw raspberries, i.e., they reported a
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single price for purchases of whole and
broken berries rather than different
prices for the whole and broken berries.
The Department is considering whether,
in such instances, it is appropriate to
compute these companies’ berry costs
using an alternative methodology and
we intend to solicit additional
information from these parties after the
preliminary results.
2. Individual Company Adjustments
We relied on the COP data submitted
by each respondent in its cost
questionnaire responses except in
specific instances where, based on our
review of the submissions and our
verification findings, we believe that an
adjustment is required, as discussed
below.
(A) Vitafoods
We are continuing to analyze
Vitafoods’ July 24, 2006, SQR, and may
have further modifications to its cost
data for the final results.
1) We have revised Vitafoods’ G&A
expenses to include certain proprietary
non–operating expenses. See Vitafoods
Preliminary Calculation Memorandum.
2) We have revised Vitafoods’
financial expenses to include a loss in
currency transactions. Because these
expenses relate to currency swap and
other similar agreements, they are
properly classified as financial
expenses. See Vitafoods Preliminary
Calculation Memorandum.
(B) Arlavan
We calculated a weighted–average
COP using the COP of Arlavan’s one
responding supplier (San Antonio) for
purchases from San Antonio and all
other suppliers from whom information
was not requested. As explained above,
we used adverse facts available for the
COP of the non–responsive supplier
(DICAF/Agromaule). See ‘‘Use of Facts
Otherwise Available’’ section, below.
Specifically, we calculated the simple
average of the three highest COPs of all
respondents’ suppliers and used this as
the DICAF/Agromaule COP. The
suppliers’ COPs were weighted by the
quantities of subject merchandise
purchased from them by Arlavan.
(C) Olmue
For one non–organic meeker control
number for which Olmue did not report
costs, as facts available, we assigned the
reported costs of other non–organic
meeker control numbers to the above–
mentioned control number. See ‘‘Facts
Otherwise Available’’ section, below;
see also Olmue Calculation
Memorandum.
(D) SANCO
1) SANCO valued whole quality
raspberries bagged as non–whole frozen
raspberry product at the average
purchase price of non–whole quality
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fresh raspberries rather than the average
purchase price of whole quality fresh
raspberries. We revalued whole quality
raspberries bagged as non–whole frozen
raspberry product at the average
purchase price of whole quality
raspberries. In addition, a portion of
SANCO’s freight relating to the
transportation of fresh raspberries was
omitted from the reported costs.
Therefore, we added this portion of
freight to the purchase price of fresh
raspberries. Finally, we incorporated the
two minor corrections to the raw
material cost SANCO presented at
verification (i.e., transcription errors
made in the preparation of the purchase
list and overstatement of the amount
purchased).
2) SANCO reported the G&A and
financial expenses of its affiliated frozen
fruit processor, Agroindustria Sagrada
Familia Ltda. (‘‘ASF’’), based on the
POR and included these expenses in the
variable overhead cost. To adjust for
this, we first removed the G&A and
financial expenses from variable
overhead. We then calculated G&A and
financial expense ratios based on ASF’s
2004 financial statements and applied
the ratios to SANCO’s conversion costs
(i.e., direct labor, variable overhead,
fixed overhead).
3) We adjusted SANCO’s G&A
expense ratio to include certain
depreciation expenses in the numerator
and exclude these same depreciation
expenses from the denominator. We also
included in the numerator of the G&A
expense ratio a loss on sales of fixed
assets. See Memorandum from
Frederick W. Mines to Neal Halper,
Director Office of Accounting, ‘‘Cost of
Production and Constructed Value
Adjustments for the Preliminary
Results,’’ dated July 31, 2006.
(E) Valles Andinos
We made the following adjustments to
the suppliers’ reported COP data for
non–organic frozen raspberry products:
1) For one supplier, we recalculated
direct labor expenses. For further
discussion, see Valles Andinos
Preliminary Calculation Memorandum.
2) For the same supplier, we revised
the allocation percentage applied to
packing materials, variable overhead,
and fixed overhead. Id.
3) We calculated each supplier’s COP
based on the total cost of manufacture
(‘‘COM’’) of the subject merchandise,
general and administrative expenses,
and financial expenses. The suppliers’
COPs were weighted by the quantities of
subject merchandise purchased from
them by Valles Andinos. We weight–
averaged the suppliers’ calculated COPs
on the basis of Valles Andinos’s
finished product purchases by quantity.
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Id.; see also Valles Andinos’s February
9, 2006, SQR, at pages 1–2.
We made the following adjustment to
Valles Andinos’s reported COP data for
organic frozen raspberry products:
For the small amount of organic
frozen raspberry products that Valles
Andinos produced pursuant to a tolling
arrangement, we based the COM on
Valles Andinos’s reported direct
materials and processing costs. See
Valles Andinos’s July 12, 2006, SQR at
page 1; see also Valles Andinos
Preliminary Calculation Memorandum.
(F) VBM
We did not make any changes.
We compared the adjusted weighted–
average COP for each respondent to its
comparison market sales of the foreign
like product, as required under section
773(b) of the Act, to determine whether
these sales were made at prices below
the COP within an extended period of
time (i.e., a period of one year) in
substantial quantities and whether such
prices were sufficient to permit the
recovery of all costs within a reasonable
period of time. On a model–specific
basis, we compared the revised COP to
the comparison market prices. The
prices were exclusive of any applicable
billing adjustments, movement
expenses, direct selling expenses,
commissions, indirect selling expenses,
and packing expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the
Act, where less than 20 percent of a
respondent’s sales of a given product
were at prices less than the COP, we did
not disregard any below–cost sales of
that product because we determined
that the below–cost sales were not made
in substantial quantities.
Where 20 percent or more of a
respondent’s sales of a given product
during the POR were at prices less than
the COP, we determined such sales to
have been made in substantial
quantities within an extended period of
time in accordance with section
773(b)(2)(B) of the Act. Because we
compared prices to the POR average
COP, we also determined that such sales
were not made at prices which would
permit recovery of all costs within a
reasonable period of time, in accordance
with section 773(b)(2)(D) of the Act.
Therefore, we disregarded the below–
cost sales.
For Olmue, Valles Andinos, VBM,
and Vitafoods, we found that more than
20 percent of the comparison market
sales of IQF red raspberries within an
extended period of time were made at
prices less than the COP. Further, the
prices at which the merchandise under
review was sold did not provide for the
recovery of costs within a reasonable
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period of time. Therefore, we
disregarded these below–cost sales and
used the remaining sales as the basis for
determining NV, in accordance with
section 773(b)(1) of the Act. For those
U.S. sales of IQF red raspberries for
which there were no useable
comparison market sales in the ordinary
course of trade, we compared EPs to the
CV in accordance with section 773(a)(4)
of the Act. See ‘‘Calculation of Normal
Value Based on Constructed Value’’
section, below.
C. Calculation of Normal Value Based
on Comparison Market Prices
We determined price–based NVs for
each company as follows. For all
respondents, we made adjustments for
differences in packing in accordance
with sections 773(a)(6)(A) and
773(a)(6)(B)(i) of the Act, and we
deducted movement expenses
consistent with section 773(a)(6)(B)(ii)
of the Act. In addition, where
applicable, we made adjustments for
differences in cost attributable to
differences in physical characteristics of
the merchandise pursuant to section
773(a)(6)(C)(ii) of the Act, as well as for
differences in circumstances of sale
(‘‘COS’’) in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR
351.410. We also made adjustments, in
accordance with 19 CFR 351.410(e), for
indirect selling expenses incurred on
comparison market or U.S. sales where
commissions were granted on sales in
one market but not in the other (the
‘‘commission offset’’). Specifically,
where commissions were granted in the
U.S. market but not in the comparison
market, we made a downward
adjustment to NV for the lesser of (1) the
amount of the commission paid in the
U.S. market, or (2) the amount of
indirect selling expenses incurred in the
comparison market. If commissions
were granted in the comparison market
but not in the U.S. market, we made an
upward adjustment to NV following the
same methodology. Company–specific
adjustments are described below.
(A) Vitafoods
We based comparison market prices
on the packed prices to unaffiliated
purchasers in Chile. We adjusted the
starting price by the amount of billing
adjustments and movement expenses,
including inland freight expenses from
the plant to the distribution warehouse,
warehousing, and inland freight
expenses from distribution warehouse
to the customer. We made COS
adjustments by deducting direct selling
expenses incurred for home market
sales (i.e., credit expenses and direct
selling expenses) and adding U.S. direct
selling expenses (i.e., credit expenses).
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See Vitafoods Preliminary Calculation
Memorandum.
Because the denominator used in
calculating Vitafoods’ indirect selling
expenses ratio is net of billing
adjustments, we have applied the
calculated indirect selling expenses
ratio to Vitafoods’ gross unit price net of
billing adjustments. See Vitafoods’ July
3, 2006, supplemental questionnaire
response at page 4.
(B) Arlavan
We based comparison market prices
on the packed prices to unaffiliated
purchasers in Germany. We adjusted the
starting price, where applicable, by the
amount of movement expenses,
including inland freight to the
warehouse, warehousing, inland freight
from distribution center to the Chilean
port, Chilean brokerage and customs
fees, agriculture certificates,
temperature control recorders during
transit, port charges, and international
freight. We made COS adjustments by
deducting direct selling expenses
incurred for comparison market sales
(e.g., commissions, external quality
control/biological testing, courier
charges, and credit expenses) and
adding U.S. direct selling expenses (e.g.,
commissions, external quality control/
microbiological testing, courier charges,
and credit expenses). See Arlavan
Preliminary Calculation Memorandum.
Because Arlavan is a reseller, and not
a producer, of merchandise, we
classified the expenses that were
reported by Arlavan as G&A expenses
and financial expenses as indirect
selling expenses. See Arlavan
Preliminary Calculation Memorandum.
(C) Olmue
We based comparison market prices
on the packed, C&F price to unaffiliated
purchasers in France. We adjusted the
reported gross unit price, where
applicable, for billing adjustments. We
adjusted the starting price by the
amount of movement expenses,
including inland freight to the Chilean
port, international freight, and brokerage
and handling. We made COS
adjustments by deducting direct selling
expenses incurred for comparison
market sales (e.g., microbiological/
pesticide testing, commissions, credit
expenses) and adding U.S. direct selling
expenses (e.g., microbiological/pesticide
testing, commissions, credit expenses).
See Olmue Preliminary Calculation
Memorandum.
We have reclassified certain
commissions paid by Olmue as indirect
selling expenses. These commissions
were not sale–specific payments to a
selling agent working on behalf of
Olmue. Rather, these expenses related to
general selling services (i.e., not directly
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facilitating sales) performed by another
company. Therefore, certain reported
commissions are properly classified as
indirect selling expenses. See
Verification Report – Olmue at section
III.A. (Corporate Structure and
Organization), section XI.C.1.
(Commissions), and section XI.D.1.
(Indirect Selling Expenses); see also
Olmue Preliminary Calculation
Memorandum.
As a result of verification findings, we
revised the following fields in Olmue’s
French sales listing: inland freight,
commissions, indirect selling expenses,
selling agent, date of payment, credit
expenses, billing adjustments, and date
of shipment. See Olmue Preliminary
Calculation Memorandum; see also
Verification Report – Olmue.
(D) SANCO
We based comparison market prices
on the packed prices to unaffiliated
purchasers in the United Kingdom. We
adjusted the starting price by the
amount of billing adjustments and
movement expenses, including inland
freight to the warehouse, warehousing,
inland freight to the Chilean port,
domestic brokerage and handling, and
international freight. We made COS
adjustments by deducting direct selling
expenses incurred for comparison
market sales (e.g., credit expenses,
microbiological testing) and adding U.S.
direct selling expenses (e.g., credit
expenses, microbiological testing).
For its comparison market sales,
SANCO reported the bill of lading date
as the shipment date. As a result of
verification findings, we have revised
the shipment date to match the issuance
date of the dispatch note, because that
is when the foreign–like product was
shipped from the plant or warehouse to
the Chilean port. We also recalculated
comparison market imputed credit
expenses using the revised date of
shipment. See SANCO Preliminary
Calculation Memorandum; see also
Sales Verification Report – SANCO.
As a result of verification findings, we
have revised the sale dates, payment
dates, direct selling expenses, indirect
selling expenses, warehousing expenses,
and brokerage and handling expenses
incurred in Chile for certain comparison
market sales. See SANCO Preliminary
Calculation Memorandum; see also
Sales Verification Report – SANCO.
(E) Valle Frio
We based comparison market prices
on the packed prices to unaffiliated
purchasers in France or sold to an
unaffiliated purchaser for exportation to
France. We adjusted the starting price
by the amount of movement expenses,
including, where appropriate, inland
freight from the plant to the port,
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international freight, container
handling/brokerage charges, and
thermograph expenses. We made COS
adjustments by deducting direct selling
expenses incurred for comparison
market sales (e.g., credit expenses,
commissions, microbiological/pesticide
testing, label expenses) and adding U.S.
direct selling expenses (e.g., credit
expenses, microbiological/pesticide
testing, label expenses). See
Memorandum to the File, ‘‘Preliminary
Results Calculation Memorandum for
Sociedad Agroindustrial Valle Frio
Ltda.,’’ dated July 31, 2006 (‘‘Valle Frio
Preliminary Calculation
Memorandum’’), which is on file in the
CRU.
(F) Valles Andinos
We based comparison market prices
on the packed prices to unaffiliated
purchasers in Canada. We adjusted the
starting price by the amount of
movement expenses, including inland
freight from the plant to the Chilean
port, domestic brokerage and handling,
and international freight. We made COS
adjustments by deducting direct selling
expenses incurred for comparison
market sales (e.g., credit expenses, bank
fees, and courier fees) and adding U.S.
direct selling expenses (e.g., credit
expenses, bank fees, and courier fees).
See Valles Andinos Preliminary
Calculation Memorandum.
For its comparison market sales,
Valles Andinos reported the bill of
lading date as the shipment date. We
have revised the shipment date to match
the issuance date of the dispatch note,
because that is when the foreign–like
product was shipped from the plant or
warehouse to the Chilean port. We also
recalculated comparison market
imputed credit expenses using the
revised date of shipment. See Valles
Andinos Preliminary Calculation
Memorandum.
Because Valles Andinos is principally
a reseller, we classified the expenses
that were reported by Valles Andinos as
general and administrative expenses
and financial expenses as indirect
selling expenses. See Valles Andinos
Preliminary Calculation Memorandum.
(G) VBM
We based comparison market prices
on the packed prices to unaffiliated
purchasers in VBM’s home market. We
adjusted the starting price by the
amount of movement expenses,
including inland freight to the
warehouse and warehousing. We made
COS adjustments by deducting direct
selling expenses incurred for
comparison market sales (e.g., credit
expenses) and adding U.S. direct selling
expenses (e.g., credit expenses, bank
fees, stack reservations, postage and
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handling charges, and microbiological
testing expenses). See VBM Preliminary
Calculation Memorandum.
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D. Calculation of Normal Value Based
on Constructed Value
Section 773(a)(4) of the Act provides
that where NV cannot be based on
comparison–market sales, NV may be
based on CV. Accordingly, for IQF red
raspberries for which we could not
determine the NV based on comparison
market sales, either because there were
no useable sales of a comparable
product or all sales of the comparable
products failed the COP test, we based
NV on the CV.
Section 773(e) of the Act provides that
the CV shall be based on the sum of the
cost of materials and fabrication for the
imported merchandise, plus amounts
for selling, general and administrative
(‘‘SG&A’’) expenses, profit, and U.S.
packing costs. For Arlavan, Olmue,
SANCO, and Valles Andinos, we
calculated the cost of materials and
fabrication based on the methodology
described in the ‘‘Cost of Production
Analysis’’ section, above.
For Valle Frio, we calculated CV
based on the sum of the cost of materials
and fabrication plus an amount for G&A,
and financial expenses in accordance
with section 773(e) of the Act. We relied
on the costs reported by Valle Frio and
Framparque, except that we reclassified
Framparque’s G&A and financial
expenses from overhead as they
reported them, to G&A and financial
expenses. See Memorandum from
Angela Strom to Neal Halper, Director
Office of Accounting, ‘‘Constructed
Value Calculation Adjustments for the
Preliminary Results – Sociedad
Agroindustrial Valle Frio Ltda.,’’ dated
July 31, 2006.
We based SG&A expenses and profit
for the above–mentioned respondents
on the actual amounts incurred and
realized by the respondents in
connection with the production and sale
of the foreign like product in the
ordinary course of trade for
consumption in the comparison market,
in accordance with section 773(e)(2)(A)
of the Act. We used U.S. packing costs
as described in the ‘‘Export Price’’
section, above.
We made adjustments to CV for
differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR
351.410. For comparisons to EP, we
made COS adjustments by deducting
direct selling expenses incurred on
comparison market sales from, and
adding U.S. direct selling expenses to,
CV.
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E. Use of Facts Otherwise Available
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
of the Act; (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) of the Act, the
Department shall, subject to section
782(d) of the Act, use the facts
otherwise available in reaching the
applicable determination under this
title. In applying facts otherwise
available, section 776(b) of the Act
provides that the Department may use
an inference adverse to the interests of
a party that has failed to cooperate by
not acting to the best of its ability to
comply with the Department’s requests
for information. See, e.g., Notice of Final
Determination of Sales at Less Than
Fair Value and Final Negative Critical
Circumstances: Carbon and Certain
Alloy Steel Wire Rod from Brazil, 67 FR
55792, 55794–96 (August 30, 2002).
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 Statement of Administrative
Action accompanying the Uruguay
Round Agreements Act, H.R. Rep. No.
103–316, (1994) (‘‘SAA’’) at 870.
Furthermore, ‘‘affirmative evidence of
bad faith on the part of a respondent is
not required before the Department may
make an adverse inference.’’ See Nippon
Steel Corp. v. United States, 337 F.3d
1373, 1377 (Fed. Cir. 2003);
Antidumping Countervailing Duties:
Final Rule, 62 FR 27296, 27340 (May 19,
1997). In this case, we have found that
an adverse inference is appropriate for
DICAF/Agromaule, a supplier of
Arlavan, because DICAF/Agromaule did
not act to the best of its ability to report
the data requested by the Department.
See Notice of Preliminary Results and
Partial Rescission of Antidumping Duty
Administrative Review: Individually
Quick Frozen Red Raspberries from
Chile, 69 FR 47869 (Aug. 6, 2004)
(unchanged in final); cf. Shandong
Huarong Mach. Co., Ltd. v. United
States, Slip Op. 06–88 (CIT June 9,
2006) (‘‘court agrees . . . that Company
C, as a foreign manufacturer of subject
merchandise, is an interested party
under § 1677(9)(A)’’).
The Department acknowledges record
evidence that Chilean courts declared
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DICAF bankrupt in August 2005, and
that Agromaule ceased operations in
2005. See August 27, 2005, Official
Gazette of bankruptcy declaration
decision and Taxpayer Situation
Information Statement in Arlavan’s May
15, 2005, SQR at Exhibit SD–2. See also
Agromaule’s current Taxpayer Situation
Information Statement at Exhibit SD–1
showing no tax authority stamps since
2005. However, the Department finds
that statements submitted by Arlavan
and Agromaule regarding the requested
cost information do not reconcile and
make the use of adverse facts available
appropriate.
First, Arlavan submitted a letter to the
Department indicating that Agromaule’s
legal representative was willing to
cooperate with the Department’s review,
but did not have the requisite
information needed to respond to the
Department’s questionnaire. See
Arlavan’s May 1, 2006, Letter in
Reference to Agroindustrial del Maule’s
section D response. According to
Arlavan, Agromaule’s records were
taken from the company by Agromaule’s
accounting consultant, who also ran
Agromaule’s daily operations. He left
the company in May 2005. See
Agromaule’s May 1, 2006, section D
response at 2. This same accounting
consultant had also been the General
Manager and part owner of DICAF. We
note, however, that there are close
familial relationships between
Agromaule and DICAF. See Agromaule’s
May 15, 2006, section D questionnaire
response at 3 and Agromaule’s June 5,
2006, supplemental section D
questionnaire at 2.
Arlavan’s Assistant General Manager
also contacted Agromaule’s former
accounting consultant directly. Contrary
to the assertions of Agromaule’s legal
representative, the consultant
maintained that he had no corporate
records or documents of either
Agromaule or DICAF. The consultant
refused to put this in writing and would
not respond to an email request by
Arlavan. See May 1, 2006, Letter from
Arlavan in reference to Agroindustrial
del Maule’s section D response.
These conflicting stories are difficult
to reconcile, given the close relationship
between DICAF and Agromaule. As
noted above, the familial owners of
DICAF formed Agromaule as DICAF was
preparing to enter bankruptcy.
Given the close relationship between
DICAF and Agromaule, including the
direct relationship between the
accounting consultant/GM/Partner of
DICAF and the President of Agromaule,
and the inconsistencies regarding the
whereabouts of the corporate records,
the Department preliminarily
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determines that DICAF/Agromaule did
not act to the best of its ability and
adverse inference is warranted.
Therefore, we have applied adverse
facts available pursuant to section
776(a)(2)(D) of the Act.
The Department is requesting further
documentation from Agromaule
regarding the location of the books and
records and Agromaule’s ability to
respond to the Department’s
questionnaire.
The Department is applying neutral
facts available to one of Olmue’s
reported control numbers for which it
did not provide costs. Olmue noted that
it did not have cost data for this control
number because it was not produced
during the POR. See Olmue’s February
21, 2006, supplemental questionnaire
response at page 18. Accordingly, we
have applied facts available for the costs
of this control number. Olmue’s
reported costs demonstrate that variety
and cultivation type are the only
product characteristics affecting
Olmue’s cost. Because the control
number without reported costs is a non–
organic meeker product, we have
assigned the reported costs of other
non–organic meeker control numbers to
the above–mentioned control number.
See id.; see also Olmue Calculation
Memorandum.
jlentini on PROD1PC65 with NOTICES
F. Level of Trade
Section 773(a)(1)(B)(i) of the Act
states that, to the extent practicable, the
Department will calculate NV based on
sales at the same level of trade (‘‘LOT’’)
as the EP. Sales are made at different
LOTs if they are made at different
marketing stages (or their equivalent).
See 19 CFR 351.412(c)(2). Substantial
differences in selling activities are a
necessary, but not sufficient, condition
for determining that there is a difference
in the stages of marketing. Id.; see also
Notice of Final Determination of Sales
at Less Than Fair Value: Certain Cut–toLength Carbon Steel Plate From South
Africa, 62 FR 61731, 61732 (November
19, 1997). In order to determine whether
the comparison sales were at different
stages in the marketing process than the
U.S. sales, we reviewed the distribution
system in each market (i.e., the ‘‘chain
of distribution’’),3 including selling
functions,4 class of customer (‘‘customer
3 The marketing process in the United States and
comparison market begins with the producer and
extends to the sale to the final user or customer.
The chain of distribution between the two may have
many or few links, and the respondents’ sales occur
somewhere along this chain. In performing this
evaluation, we considered each respondent’s
narrative response to properly determine where in
the chain of distribution the sale occurs.
4 Selling functions associated with a particular
chain of distribution help us to evaluate the level(s)
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category’’), and the level of selling
expenses for each type of sale.
Pursuant to section 773(a)(1)(B)(i) of
the Act, in identifying levels of trade for
EP and comparison market sales (i.e.,
NV based on either comparison market
or third country prices5), we consider
the starting prices before any
adjustments. When the Department is
unable to match U.S. sales to sales of the
foreign like product in the comparison
market at the same LOT as the EP, the
Department may compare the U.S. sale
to sales at a different LOT in the
comparison market. In comparing EP
sales at a different LOT in the
comparison market, where available
data make it practicable, we make a LOT
adjustment under section 773(a)(7)(A) of
the Act.
In this review, we determined the
following, with respect to the LOT, for
each respondent.
(A) Vitafoods
Vitafoods reported a single LOT in
each market, and claimed that the LOT
in each of these markets was the same.
Therefore, Vitafoods did not request an
LOT adjustment.
We examined the information
reported by Vitafoods regarding its
marketing processes for its U.S. and
home market sales, including customer
categories and the type and level of
selling activities performed. Vitafoods
has reported one channel of distribution
for sales to the United States. In this
channel of distribution, Vitafoods
arranges to get the subject merchandise
to the port for export. For certain sales
in this channel, Vitafoods is also the
importer of record. For other sales in
this channel, Vitafoods’ customer is the
importer of record. Because Vitafoods
has reported no significant variation in
the selling activities for these sales, we
preliminarily find that there is a single
LOT for Vitafoods’ U.S. sales.
Vitafoods has reported two channels
of distribution for its home market sales.
In the first channel of distribution
(channel 1), merchandise is transported
from the processing plant to the cold
storage warehouse, and then delivered
to the customer’s facility. In the second
channel of distribution (channel 2),
merchandise is transported from the
processing plant to the cold storage
warehouse, and then transported to the
of trade in a particular market. For purposes of
these preliminary results, we have organized the
common selling functions into four major
categories: sales process and marketing support,
freight and delivery, inventory and warehousing,
and quality assurance/warranty services.
5 Where NV is based on CV, we determine the NV
LOT based on the LOT of the sales from which we
derive selling expenses, G&A and profit for CV,
where possible.
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distribution center where it is delivered
to the customer. Because Vitafoods has
not reported substantial differences in
the selling activities for these two
channels, we preliminarily find that
there is a single LOT for Vitafoods’
home market sales.
Comparing sales in Vitafoods’ two
markets, there is no indication that there
were significantly different selling
activities or sales process activities.
Although Vitafoods did make billing
adjustments (i.e., discounts) on home
market sales, these discounts are
granted to each category of customers
and do not significantly increase the
level of selling activities performed by
Vitafoods. Vitafoods did not provide
technical services or post–sale
warehousing, or incur advertise for
either U.S. or home market sales.
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
home markets, and that Vitafoods’ U.S.
and home market sales were made at the
same LOT.
(B) Arlavan
Arlavan reported a single LOT in each
market, and claimed that the LOT in
each of these markets was the same.
Therefore, Arlavan did not request an
LOT adjustment.
We examined the information
reported by Arlavan regarding its
marketing processes for its comparison
market and U.S. sales, including
customer categories and the type and
level of selling activities performed.
Arlavan reported two channels of
distribution in the third country market
and in the United States. In the first
channel of distribution (channel 1),
merchandise purchased by Arlavan is
transported directly from the supplier
facility to the port for shipment. In the
second channel of distribution (channel
2), merchandise is purchased from a
supplier and transported to cold storage.
Then, the merchandise is sold and
shipped by Arlavan to the port of exit.
In channels 1 and 2, Arlavan is
responsible for arranging transportation
to the port in Chile. For sales to the
third country, Arlavan is responsible for
arranging international freight. For sales
to the United States, Arlavan is
responsible for arranging international
freight in a limited number of sales.
Arlavan sells to the same customer
types in channels 1 and 2. Based on
this, we preliminarily find that a single
LOT exists in both the U.S. and third
country markets.
Comparing sales in Arlavan’s two
markets, there is no indication that there
were significantly different selling
activities or sales process activities.
Although, due to clerical errors, Arlavan
did make billing adjustments for U.S.
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sales, these adjustments do not
significantly increase the level of selling
activities performed by Arlavan.
Arlavan did not grant discounts or
rebates, provide technical services, or
post–sale warehousing, or advertise on
either U.S. or comparison market sales.
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
comparison markets, and that Arlavan’s
sales to the U.S. and third country
markets were made at the same LOT.
(C) Olmue
Olmue reported a single channel of
distribution and a single LOT in the
third country and U.S. markets, and
claimed that its sales in both markets
were at the same LOT. Therefore, Olmue
did not request an LOT adjustment.
We examined the information
reported by Olmue regarding its sales
processes for its third country and U.S.
sales, including customer categories and
the type and level of selling activities
performed. Olmue reported that it sold
to similar categories of customer in
France and the United States. In both
markets, Olmue reported similar selling
activities regardless of the customer
category. Sales in both markets were
direct shipments from the plant to the
customer. Therefore, there were no
differences in the channels of
distribution between the two markets.
Also, Olmue did not grant rebates or
discounts, provide technical services or
post–sale warehousing, or advertise on
sales to the U.S. or third country
markets.
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
third country markets, and that Olmue’s
sales to the U.S. and third country
markets were made at the same LOT.
(D) SANCO
SANCO reported one channel of
distribution in the third country market.
In this channel of distribution, sales are
made directly to the customer through
short–term purchase orders. SANCO’s
customer is the importer of record.
SANCO is responsible for arranging
inland freight to the Chilean port and
international freight. Accordingly, we
preliminarily determine that the third
country sales in this channel of
distribution constitute a single LOT.
In the U.S. market, SANCO reported
two channels of distribution. In both
channels of distribution, sales are made
directly to the customer through short–
term purchase orders. In the first
channel of distribution (channel 1), the
customer is the importer of record. In
the second channel of distribution
(channel 2), SANCO is the importer of
record. For sales in channels 1 and 2,
SANCO is responsible for arranging
inland freight from the plant to the
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20:06 Aug 07, 2006
Jkt 208001
Chilean port and, on certain sales,
international freight. Because the sales
processes in these channel of
distribution were similar, we
preliminarily determine that there is a
single LOT in the United States.
Comparing sales in SANCO’s two
markets, there is no indication that there
were significantly different selling
activities or sales process activities.
SANCO also did not grant rebates or
discounts, provide technical services or
post–sale warehousing, or advertise on
either U.S. or third country sales.
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
third country markets, and that
SANCO’s sales to the U.S. and third
country markets were made at the same
LOT.
(E) Valle Frio
Valle Frio reported two channels of
distribution in the third country market
and a single channel of distribution in
the United States. Valle Frio indicated
that its sales to the United States and
third country markets were made at the
same level of trade and it did not
request a level of trade adjustment.
In the single channel of distribution
for U.S. sales, merchandise is shipped
directly to the customer on an FOB
(Chilean port) basis. For third country
sales in the first channel of distribution
(channel 1), Valle Frio shipped the
merchandise directly to the third
country market. In the second channel
of distribution (channel 2), merchandise
is sold to a Chilean customer who re–
sold the product to the third country.
For both markets, Valle Frio sold to
wholesalers and distributers, and Valle
Frio’s prices did not vary based on
channel of distribution or customer
category.
We examined the information
reported by Valle Frio regarding its
marketing processes for its third country
and U.S. sales, including customer
categories and the type and level of
selling activities performed. For sales to
the third country and United States,
Valle Frio’s selling activities were
limited to receiving and processing
orders, and, depending on the terms of
sale, arranging for delivery to the third
country. Valle Frio offered no technical
assistance, inventory maintenance
services, or advertising in either market
for IQF red raspberries, regardless of
channel of distribution. Valle Frio
indicated that all export sales require
that a microbiological analysis be
conducted in order to ensure
compliance with phytosanitary
requirements. According to Valle Frio,
all selling activities were performed in
Chile.
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45009
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
third country markets, and that Valle
Frio’s U.S. and third country sales were
made at the same LOT.
(F) Valles Andinos
Valles Andinos reported one channel
of distribution in the comparison
market. In this channel, sales are made
directly to the customer. All sales are
shipped from Valles Andinos’s
supplier’s cold storage facilities in Chile
to the port, and are delivered by sea
freight to the comparison market
customer. Accordingly, we
preliminarily determine that
comparison market sales are made at a
single LOT.
In the U.S. market, Valles Andinos
reported one channel of distribution. In
this channel, sales are made directly to
the customer. All sales are shipped from
Valles Andinos’s supplier’s cold storage
facilities in Chile to the port, and are
delivered by sea freight to the U.S.
customer. Accordingly, we
preliminarily determine that the sales
are made at a single LOT in the United
States.
Comparing sales in Valles Andinos’s
two markets, there is no indication that
there were significantly different selling
activities or sales process activities.
Valles Andinos did not grant rebates or
discounts, provide technical services or
post–sale warehousing, or advertise on
either U.S. or third country sales.
Therefore, we preliminarily find that
a single LOT exists in both the U.S. and
comparison markets, and that Valles
Andinos’s sales in the U.S. and
comparison market were made at the
same LOT.
(G) VBM
VBM reported two channels of
distribution to the United States, and
two channels of distribution in the
home market. VBM claimed that the
LOT in each of these markets was the
same, and therefore, it did not request
an LOT adjustment.
We examined the information
reported by VBM regarding its
marketing processes for its home market
and U.S. sales, including customer
categories and the types and levels of
selling activities performed. For U.S.
sales in the first channel of distribution
(channel 1), merchandise is transported
from the processing plant to the cold
storage warehouse before being
transported to the port of shipment. For
U.S. sales in the second channel of
distribution (channel 2), merchandise is
transported directly from the processing
plant to the port for shipment. VBM
reports that there are no pricing
differences between these channels of
distribution. In both channels of
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distribution, VBM is responsible for
arranging inland freight to the port in
Chile. VBM is also the importer of
record. VBM sells to the same types of
customer in both channels of
distribution. Except for small
differences regarding transportation of
the product from the processing plant to
the cold storage warehouse, there are no
differences in the selling activities for
these two channels of distribution.
Therefore, we preliminarily find that
there is a single LOT in the U.S. market.
VBM has also reported two channels
of distribution for its home market sales.
For home market sales in the first
channel of distribution (channel 1),
merchandise is transported from the
processing plant to the cold storage
warehouse, and is picked up directly
from the warehouse by the customer.
For home market sales in the second
channel of distribution (channel 2),
merchandise is picked up by the
customer at the processing plant.
Because VBM has not reported
substantial differences in the selling
activities for these two channels, we
preliminarily find that there is a single
LOT in VBM’s home market.
Comparing sales in VBM’s two
markets, there is no indication that there
were significantly different selling
activities or sales process activities.
Exporter/manufacturer
Therefore, we preliminarily find that a
single LOT exists in both the U.S. and
home markets, and that VBM’s sales in
the U.S. and home markets were made
at the same LOT.
Currency Conversion
We made currency conversions in
accordance with section 773A(a) of the
Act based on the exchange rates in effect
on the date of the U.S. sale as reported
by the Federal Reserve Bank.
Preliminary Results of Review
We preliminarily find the following
weighted–average dumping margins:
Weighted–average margin percentage
Alimentos Naturales Vitafoods S.A. ....................................................................................................
Arlavan S.A. .........................................................................................................................................
Fruticola Olmue S.A. ...........................................................................................................................
Santiago Comercio Exterior Exportaciones S.A. .................................................................................
Sociedad Agroindustrial Valle Frio Ltda./Agricola Framparque ..........................................................
Valles Andinos S.A. .............................................................................................................................
Vital Berry Marketing, S.A. ..................................................................................................................
jlentini on PROD1PC65 with NOTICES
Public Comment
Any interested party may request a
hearing within 30 days of publication of
this notice. Any hearing, if requested,
will be held 42 days after the
publication of this notice, or the first
workday thereafter. Issues raised in the
hearing will be limited to those raised
in the case and rebuttal briefs. Interested
parties may submit case briefs within 30
days of the date of publication of this
notice. Rebuttal briefs, which must be
limited to issues raised in the case
briefs, may be filed not later than 35
days after the date of publication of this
notice. 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 with an
electronic version included.
The Department will issue the final
results of this administrative review,
including the results of its analysis of
issues raised in any such written briefs
or hearing, within 120 days of
publication of these preliminary results.
Assessment Rates
Upon completion of the
administrative review, the Department
shall determine, and CBP shall assess,
antidumping duties on all appropriate
entries.
Pursuant to 19 CFR 351.212(b)(1), for
all sales made by respondents for which
they have reported the importer of
record and the entered value of the U.S.
sales, we have calculated importer–
specific assessment rates based on the
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20:06 Aug 07, 2006
Jkt 208001
ratio of the total amount of antidumping
duties calculated for the examined sales
to the total entered value of those sales.
Where the respondents did not report
the entered value for U.S. sales, we have
calculated importer–specific assessment
rates for the merchandise in question by
aggregating the dumping margins
calculated for all U.S. sales to each
importer and dividing this amount by
the total quantity of those sales. To
determine whether the duty assessment
rates were de minimis, in accordance
with the requirement set forth in 19 CFR
351.106(c)(2), we calculated importer–
specific ad valorem rates based on the
estimated entered value. Where the
assessment rate is above de minimis, we
will instruct CBP to assess duties on all
entries of subject merchandise by that
importer. Pursuant to 19 CFR
351.106(c)(2), we will instruct CBP to
liquidate without regard to antidumping
duties any entries for which the
assessment rate is de minimis (i.e., less
than 0.50 percent). The Department will
issue appraisement instructions directly
to CBP.
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 the respondent for which
it did not know its merchandise was
destined for the United States. In such
instances, we will instruct CBP to
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0.00
3.03
4.98
0.13 (de minimis)
0.36 (de minimis)
6.42
4.48
liquidate unreviewed entries at the all–
others rate if there is no rate for the
intermediate company(ies) involved in
the transaction. For a full discussion of
this clarification, see Antidumping and
Countervailing Duty Proceedings:
Assessment of Antidumping Duties, 68
FR 23954 (May 6, 2003).
Cash Deposit Requirements
If the final results remain unchanged
from these preliminary results, no future
cash deposits will be required for the
subject merchandise with respect to
SANCO. For all other exporters/
manufacturers, the following deposit
requirements will be effective upon
completion of the final results of this
administrative review for shipments of
IQF red raspberries from Chile 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 companies
will be the rates established in the final
results of this administrative review
(except no cash deposit will be required
if its weighted–average margin is de
minimis, i.e., less than 0.5 percent); (2)
for merchandise exported by
manufacturers or exporters not covered
in this review but covered in the
original less–than-fair–value
investigation or a previous review, the
cash deposit rate will continue to be the
most recent rate published in the final
determination or final results for which
the manufacturer or exporter received
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an individual rate; (3) if the exporter is
not a firm covered in this review, a
previous review, or the original
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
will be 6.33 percent, the ‘‘all others’’
rate established in Notice of Amended
Final Determination of Sales at Less
than Fair Value: IQF Red Raspberries
from Chile, 67 FR 40270 (June 12, 2002).
light–walled welded rectangular carbon
steel tubing from Argentina.
EFFECTIVE DATE: August 22, 2005.
FOR FURTHER INFORMATION CONTACT:
Edythe Artman or Minoo Hatten, Office
5, AD/CVD Operations, Import
Administration, International Trade
Administration, U.S. Department of
Commerce, 14th Street & Constitution
Avenue, NW, Washington, DC 20230;
telephone: (202) 482–3931 and (202)
482–1690, respectively.
SUPPLEMENTARY INFORMATION:
Notification to Importers
The product covered by this order is
light–walled welded carbon steel pipes
and tubes of rectangular (including
square) cross-section having a wall
thickness of less than 0.156 inch. This
merchandise is classified under item
number 7306.60.50.00 of the
Harmonized Tariff Schedule of the
United States. It was formerly classified
under item number 610.4928 of the
Tariff Schedules of the United States.
This notice also serves as a
preliminary reminder to importers of
their responsibility under 19 CFR
351.402(f)(2) 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 these
results in accordance with sections
751(a)(1) and 777(i)(1) of the Act.
Dated: July 31, 2006.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E6–12815 Filed 8–7–06; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
(A–357–802)
Light–Walled Welded Rectangular
Carbon Steel Tubing from Argentina:
Revocation of Antidumping Duty Order
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: On July 1, 2005, the
Department of Commerce initiated and
the International Trade Commission
instituted the sunset review of the
antidumping duty order on light–walled
welded rectangular carbon steel tubing
from Argentina. The International Trade
Commission determined that revocation
of this antidumping duty order would
not be likely to lead to continuation or
recurrence of material injury to an
industry in the United States within a
reasonably foreseeable time. Therefore,
the Department of Commerce is
revoking the antidumping duty order on
jlentini on PROD1PC65 with NOTICES
AGENCY:
VerDate Aug<31>2005
20:06 Aug 07, 2006
Jkt 208001
Scope of the Order
Background
On August 22, 2000, the Department
of Commerce (the Department)
published the continuation of the
antidumping duty order on light–walled
welded rectangular carbon steel tubing
from Argentina resulting from the first
sunset review of this order. See
Continuation of Antidumping Duty
Orders: Light–Walled Rectangular
Welded Carbon Steel Pipe and Tube
from Argentina and Taiwan; Circular
Welded Non–Alloy Steel Pipe and Tube
from Brazil, Korea, Mexico, and Taiwan;
Welded Carbon Steel Pipe and Tube
From India, Thailand, and Turkey; and
Small Diameter Standard and
Rectangular Steel Pipe and Tube from
Taiwan, 65 FR 50955 (August 22, 2000).
Pursuant to section 751(c) of the Tariff
Act of 1930, as amended (the Act), and
19 CFR 351.218, the Department
initiated and the International Trade
Commission (ITC) instituted the second
sunset review of this order on July 1,
2005. See Initiation of Five-year
(‘‘Sunset’’) Reviews, 70 FR 38101 (July
1, 2005); Institution of Five-year Reviews
concerning the Countervailing Duty
Order on Welded Carbon Steel Pipe and
Tube from Turkey and the Antidumping
Duty Orders on Certain Pipe and Tube
from Argentina, Brazil, India, Korea,
Mexico, Taiwan, Thailand, and Turkey,
70 FR 38204 (July 1, 2005). As a result
of its review, the Department found that
revocation of the antidumping duty
order would likely lead to continuation
or recurrence of dumping and notified
the ITC of the magnitude of the margin
likely to prevail were the order to be
PO 00000
Frm 00018
Fmt 4703
Sfmt 4703
45011
revoked. See Light–Walled Welded
Rectangular Carbon Steel Tubing from
Argentina and Taiwan; Final Results of
the Expedited Sunset Reviews of the
Antidumping Duty Orders, 70 FR 67432
(November 7, 2005). On June 29, 2006,
the ITC determined pursuant to section
751(c) of the Act that revocation of the
antidumping duty order on light–walled
welded rectangular carbon steel tubing
from Argentina would not be likely to
lead to continuation or recurrence of
material injury to an industry in the
United States within a reasonably
foreseeable time. See Certain Pipe and
Tube from Argentina, Brazil, India,
Korea, Mexico, Taiwan, Thailand, and
Turkey, 71 FR 42118 (July 25, 2006) and
ITC Publication 3867 (July 2006),
entitled Certain Pipe and Tube from
Argentina, Brazil, India, Korea, Mexico,
Taiwan, Thailand, and Turkey:
Investigation Nos. 701–TA–253 and
731–TA–132, 252, 271, 409, 410, 532–
534, and 536 (Second Review).
Determination to Revoke
As a result of the determination by the
ITC that revocation of this antidumping
duty order is not likely to lead to
continuation or recurrence of material
injury to an industry in the United
States, the Department is revoking the
order on light–walled welded
rectangular carbon steel tubing from
Argentina, pursuant to section 751(d) of
the Act. Pursuant to section 751(d)(2) of
the Act and 19 CFR 351.222(i)(2)(i), the
effective date of revocation is August 22,
2005 (i.e., the fifth anniversary of the
date of publication in the Federal
Register of the notice of continuation of
the antidumping duty order). The
Department will notify U.S. Customs
and Border Protection to discontinue
suspension of liquidation and collection
of cash deposits on entries of the subject
merchandise entered or withdrawn from
warehouse on or after August 22, 2005,
the effective date of revocation of the
antidumping duty order. The
Department will complete any pending
administrative reviews of this order and
will conduct administrative reviews of
subject merchandise entered prior to the
effective date of revocation in response
to appropriately filed requests for
review.
This five-year sunset review and
notice are in accordance with section
751(d)(2) and published pursuant to
section 777(i)(1) of the Act.
Dated: August 1, 2006.
David M. Spooner,
Assistant Secretary for Import
Administration.
[FR Doc. E6–12866 Filed 8–7–06; 8:45 am]
BILLING CODE 3510–DS–S
E:\FR\FM\08AUN1.SGM
08AUN1
Agencies
[Federal Register Volume 71, Number 152 (Tuesday, August 8, 2006)]
[Notices]
[Pages 45000-45011]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-12815]
[[Page 45000]]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-337-806
Notice of Preliminary Results of Antidumping Duty Administrative
Review, Notice of Intent to Revoke in Part: Individually Quick Frozen
Red Raspberries from Chile
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on individually quick frozen
(``IQF'') red raspberries from Chile. The period of review (``POR'') is
July 1, 2004, through June 30, 2005. This review covers sales of IQF
red raspberries by seven producers/exporters. We preliminarily find
that, during the POR, sales of IQF red raspberries were made below
normal value. Also, we intend to revoke the antidumping duty order with
respect to Santiago Comercio Exterior Exportaciones Sociedad Anonima
(``SANCO''). Interested parties are invited to comment on these
preliminary results. We will issue the final results not later than 120
days from the date of publication of this notice.
EFFECTIVE DATE: August 8, 2006.
FOR FURTHER INFORMATION CONTACT: Devta Ohri (Olmue, Valle Frio), Andrew
McAllister (Vitafoods), Scott Holland (VBM), Yasmin Bordas (SANCO,
Valles Andinos), Steve Williams (Arlavan), or Brandon Farlander, AD/CVD
Operations, Office 1, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington DC 20230; telephone (202) 482-3853,
(202) 482-1174, (202) 482-1279, (202) 482-3813, (202) 482-4619, or
(202) 482-0182, respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 9, 2002, the Department of Commerce (``Department'')
published an antidumping duty order on IQF red raspberries from Chile.
See Notice of Antidumping Duty Order: IQF Red Raspberries From Chile,
67 FR 45460 (July 9, 2002). On July 1, 2005, the Department published a
notice of opportunity to request administrative review of this order.
See Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation; Opportunity to Request Administrative Review, 70 FR
38099 (July 1, 2005).
On July 29, 2005, we received a request for review of 57 companies
from the Pacific Northwest Berry Association, Lynden, Washington, and
each of its individual members, Curt Maberry Farm; Enfield Farms, Inc.;
Maberry Packing; and Rader Farms, Inc. (collectively, ``the
petitioners''). On July 29, 2005, we also received requests for review
from Fruticola Olmue S.A. (``Olmue''), Alimentos Naturales Vitafoods
S.A. (``Vitafoods''), Vital Berry Marketing S.A. (``VBM''), SANCO,\1\
and Valles Andinos S.A. (``Valles Andinos'').\2\ On August 19, 2005,
the petitioners requested that Sociedad Agroindustrial Valle Frio Ltda.
(``Valle Frio'') and Arlavan S.A. (``Arlavan'') be mandatory
respondents. On August 29, 2005, we initiated an administrative review
of all 57 companies. See Initiation of Antidumping and Countervailing
Duty Administrative Reviews and Requests for Revocation in Part, 70 FR
51009 (August 29, 2005).
---------------------------------------------------------------------------
\1\ On July 6, 2004, the Chilean tax authority approved a name
change for Santiago Comercio Exterior Exportaciones Limitada
(``SANCO Ltda.'') to Santiago Comercio Exterior Exportaciones
Sociedad Anonima (``SANCO S.A.''). SANCO stated that it underwent
this restructuring because, under Chilean law, share companies
(S.A.) can more easily add new partners. As part of the
restructuring, SANCO created a separate limited liability company,
Inversiones L.M. Ltda., that does not participate in the production,
processing, sales process, or any other operations for SANCO's
raspberry business. SANCO commenced exporting the merchandise under
review as SANCO S.A. to the United States on July 30, 2004, after
the beginning of the period of review. We reviewed SANCO's
questionnaire responses and supporting documentation to confirm that
the activities related to SANCO's name change are limited to those
described above. For further information, see SANCO's December 29,
2005, section A supplemental questionnaire response (``SQR''), at
pages 1 through 6. Based on the information submitted, we
preliminarily determine that SANCO S.A. is the successor-in-interest
to SANCO Ltda.
\2\ These five companies were also included in the petitioners'
July 29, 2005, request for review of 57 companies.
---------------------------------------------------------------------------
On September 23, 2005, the petitioners withdrew their request for
review for 50 of the 57 companies for which they had originally
requested an administrative review. On October 14, 2005, Valles Andinos
withdrew its request for review. In accordance with 19 CFR
351.213(d)(1), on December 28, 2005, we partially rescinded this
administrative review with respect to the 50 companies included in the
petitioners' withdrawal request. We did not rescind the review with
respect to Valles Andinos because the petitioners' July 29, 2005,
request for review included a request for Valles Andinos. See
Individually Quick Frozen Red Raspberries from Chile: Notice of Partial
Rescission of Antidumping Duty Administrative Review, 70 FR 76771
(December 28, 2005). Thus, the seven companies in this review are:
Arlavan, Vitafoods, Olmue, SANCO, Valle Frio, Valles Andinos, and VBM
(collectively, ``the respondents'').
On September 26, 2005, the Department issued antidumping
questionnaires to the respondents. The respondents submitted their
initial responses to the antidumping questionnaire from October 2005
through May 2006. After analyzing these responses, we issued
supplemental questionnaires to the respondents to clarify or correct
the initial questionnaire responses. We received timely responses to
these questionnaires. On March 22, 2006, we requested that Valle Frio
respond to the constructed value (``CV'') portion of the Department's
questionnaire.
On March 7, 2006, and May 26, 2006, the Department published in the
Federal Register extensions of the time limit for the completion of the
preliminary results of this review until no later than June 13, 2006,
and July 31, 2006, respectively, in accordance with section
751(a)(3)(A) of the Tariff Act of 1930, as amended (``the Act''), and
19 CFR 351.213(h)(2). See Certain Individually Quick Frozen Red
Raspberries From Chile: Notice of Extension of Time Limit for 2004-2005
Administration Review, 71 FR 11386 (March 7, 2006); Certain
Individually Quick Frozen Red Raspberries From Chile: Notice of
Extension of Time Limit for 2004-2005 Administrative Review, 71 FR
30378 (May 26, 2006).
Scope of the Order
The products covered by this order are imports of IQF whole or
broken red raspberries from Chile, with or without the addition of
sugar or syrup, regardless of variety, grade, size or horticulture
method (e.g., organic or not), the size of the container in which
packed, or the method of packing. The scope of the order excludes fresh
red raspberries and block frozen red raspberries (i.e., puree, straight
pack, juice stock, and juice concentrate).
The merchandise subject to this order is currently classifiable
under subheading 0811.20.2020 of the Harmonized Tariff Schedule of the
United States (``HTSUS''). Although the HTSUS subheading is provided
for convenience and customs purposes, the written description of the
merchandise under the order is dispositive.
Verification
As provided in section 782(i) of the Act, during March to April
2006, we verified the information provided by Olmue and SANCO in Chile
using
[[Page 45001]]
standard verification procedures, including examination of relevant
sales and financial records, and selection of original documentation
containing relevant information. The Department reported its findings
on July 5, July 6, and July 27, 2006. See Memorandum to the File,
``Verification of the Sales Response of Santiago Comercio Exterior S.A.
in the 2004-2005 Antidumping Duty Administrative Review of Individually
Quick Frozen Red Raspberries from Chile,'' dated July 5, 2006 (``Sales
Verification Report - SANCO''); Memorandum to the File, ``Verification
of the Cost Response of Santiago Comercio Exterior S.A. in the
Antidumping Review of Individually Quick Frozen Red Raspberries from
Chile,'' dated July 6, 2006 (``Cost Verification Report - SANCO'');
Memorandum to the File, ``Verification of the Sales and Cost of
Production Responses of Fruticola Olmu[eacute] S.A. in the 2004-2005
Antidumping Duty Administrative Review of Individually Quick Frozen Red
Raspberries from Chile,'' dated July 27, 2006 (``Verification Report -
Olmue''). These reports are on file in the Central Records Unit
(``CRU'') in room B-099 of the main Department building.
Intent To Revoke In Part
The Department ``may revoke, in whole or part'' an antidumping
order upon completion of a review under section 751 of the Act. While
Congress has not specified the procedures that the Department must
follow in revoking an order, the Department has developed a procedure
for revocation that is described in 19 CFR 351.222(b)(2). In
determining whether to revoke an antidumping duty order in part, the
Secretary will consider: (A) whether one or more exporters or producers
covered by the order have sold the merchandise at not less than normal
value (``NV'') for a period of at least three consecutive years; (B)
whether, for any exporter or producer that the Secretary previously has
determined to have sold the subject merchandise at less than NV, the
exporter or producer agrees in writing to its immediate reinstatement
in the order, as long as any exporter or producer is subject to the
order, if the Secretary concludes that the exporter or producer,
subsequent to the revocation, sold the subject merchandise at less than
NV; and (C) whether the continued application of the antidumping duty
order is otherwise necessary to offset dumping.
The Department's regulations require, inter alia, that a company
requesting revocation submit the following: (1) a certification that
the company has sold the subject merchandise at not less than NV in the
current review period and that the company will not sell at less than
NV in the future; (2) a certification that the company sold the subject
merchandise in commercial quantities in each of the three years forming
the basis of the receipt of such a request; and (3) an agreement that
the order will be reinstated if the company is subsequently found to be
selling the subject merchandise at less than fair value. 19 CFR
351.222(e)(1)(i)-(iii). See, e.g., Notice of Final Results of
Antidumping Duty Administrative Review and Determination Not to Revoke
the Antidumping Duty Order: Brass Sheet and Strip From the Netherlands,
65 FR 742, 743 (January 6, 2000). On July 29, 2005, SANCO submitted a
certification to the effect that for a consecutive three-year period,
including the current review period, it sold the subject merchandise in
commercial quantities at not less than NV and that it would continue to
do so in the future. Therefore, because we have determined that this
respondent satisfies the requirements of 19 CFR 351.222(b), we
preliminarily determine to revoke in part the antidumping order with
respect to SANCO. See Memorandum to Stephen J. Claeys, Deputy Assistant
Secretary, ``Preliminary Determination to Revoke in Part the
Antidumping Duty Order,'' dated July 31, 2006. This memorandum is on
file in room B-099 of the CRU.
Collapsing Determination
The Department's regulations provide that affiliated producers will
be treated as a single entity where: (1) those producers have
production facilities for similar or identical products that would not
require substantial retooling of either facility in order to
restructure manufacturing priorities; and (2) the Department concludes
that there is a significant potential for the manipulation of price or
production. 19 CFR 351.401(f)(1). In identifying a significant
potential for the manipulation of price or production, the Department
may consider such factors as: (i) the level of common ownership; (ii)
the extent to which managerial employees or board members of one firm
sit on the board of directors of an affiliated firm; and (iii) whether
operations are intertwined, such as through the sharing of sales
information, involvement in production and pricing decisions, the
sharing of facilities or employees, or significant transactions between
the affiliated producers. See 19 CFR 351.401(f)(2). These factors are
illustrative, and not exhaustive.
In its questionnaire responses, Valle Frio indicated that it had an
affiliated producer, Agricola Framparque (``Framparque''), during the
POR. Upon review of Valle Frio's questionnaire responses, we
preliminarily determine that Framparque should be collapsed with Valle
Frio for the purposes of this review. See Memorandum to Susan Kuhbach,
Director, ``Collapsing of Sociedad Agroindustrial Valle Frio Ltda.,''
dated July 31, 2006.
Fair Value Comparisons
To determine whether sales of IQF red raspberries from Chile to the
United States were made at less than NV, we compared export price
(``EP'') to NV, as described in the ``Export Price'' and ``Normal
Value'' sections of this notice.
In accordance with section 771(16) of the Act, we considered all
products sold by the respondents in the comparison market covered by
the description in the ``Scope of the Order'' section, above, to be
foreign-like products for purposes of determining appropriate product
comparisons to U.S. sales. In accordance with section 773(a)(1)(C)(ii)
of the Act, in order to determine whether there was a sufficient volume
of sales in the home market to serve as a viable basis for calculating
NV, we compared the respondents' volume of home market sales of the
foreign-like product to the volumes of their U.S. sales of the subject
merchandise. See the ``Normal Value'' section, below, for further
details.
We compared U.S. sales to monthly weighted-average prices of
contemporaneous sales made in the comparison market. Where there were
no sales of identical merchandise in the comparison market made in the
ordinary course of trade, we compared U.S. sales to sales of the most
similar foreign like product made in the ordinary course of trade.
Where there were no sales of identical or similar merchandise made in
the ordinary course of trade in the comparison market, we compared U.S.
sales to CV. In making product comparisons, consistent with our
determination in the original investigation, we matched foreign like
products based on the physical characteristics reported by the
respondent in the following order: grade, variety, form, cultivation
method, and additives. See Notice of Preliminary Determination of Sales
at Less than Fair Value and Postponement of Final Determination: IQF
Red Raspberries from Chile, 66 FR 67510, 67511 (December 31, 2001).
Because the respondents' merchandise is always shipped on or before
the date of invoice, we are using the date of shipment (i.e., guia de
[[Page 45002]]
despacho/dispatch note date) as the date of sale. See Certain Cold-
Rolled and Corrosion-Resistant Carbon Steel Flat Products From Korea:
Final Results of Antidumping Duty Administrative Reviews, 63 FR 13170,
13172-73 (March 18, 1998).
Export Price
For sales to the United States, we calculated EP, in accordance
with section 772 of the Act. Section 772(a) of the Act defines EP as
the price at which the subject merchandise is first sold before the
date of importation by the exporter or producer outside the United
States to an unaffiliated purchaser in the United States, or to an
unaffiliated purchaser for exportation to the United States.
We made company-specific adjustments as follows.
(A) Vitafoods
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, delivered duty paid (``DDP'') or cost,
insurance, and freight (``CIF'') price to unaffiliated purchasers in
the United States. We made deductions for movement expenses in
accordance with section 772(c)(2)(A) of the Act. These deductions
included, where appropriate, freight incurred in transporting
merchandise to the Chilean port, domestic brokerage and handling,
international freight, marine insurance, U.S. brokerage and handling,
and U.S. customs duties. See Memorandum to the File, ``Preliminary
Results Calculation Memorandum for Alimentos Naturales Vitafoods
S.A.,'' dated July 31, 2006 (``Vitafoods Preliminary Calculation
Memorandum'').
We have preliminarily excluded two sales reported, at the
Department's request, in Vitafoods' U.S. sales database. We note that
these sales were made to an unaffiliated U.S. entity for delivery to
Canada. See Vitafoods' October 26, 2005, section A response, at Exhibit
A-5; see also Vitafoods' July 3, 2006, SQR at page 2 and Exhibits 3S-4
and 3S-5. The unaffiliated U.S. entity subsequently trucked the
merchandise from Canada to the United States. See Vitafoods' July 28,
2006, SQR at pages 1-3 and Exhibits 1-2. Certain documentation
indicates that, at the time of sale, the sales might have been destined
for either Canada or the United States. Vitafoods has stated that it
considered these sales as Canadian rather than U.S. because the only
destination known to Vitafoods was Canada. As we do not have conclusive
evidence that Vitafoods knew, or should have known, at the time of
sale, that the ultimate destination of the merchandise was the United
States, the Department is preliminarily treating these sales as
Vitafoods' sales to Canada.
(B) Arlavan
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, free on board (``FOB'') price to unaffiliated
purchasers in the United States.
We adjusted the reported gross unit price, where applicable, for
billing adjustments. We made deductions from the starting price for
movement expenses in accordance with section 772(c)(2)(A) of the Act.
These deductions included, where appropriate, freight incurred in
transporting merchandise to the warehouse and/or to the port, domestic
brokerage and handling, international freight, U.S. port charges,
agriculture certificates, and U.S. brokerage and handling.
We did not include in our calculation certain sales listed in the
U.S. sales database because we had reason to believe the supplier knew,
or should have known, that the ultimate destination of the merchandise
was the United States. For further discussion, see Memorandum to the
File, ``Preliminary Results Calculation Memorandum for Arlavan, S.A.''
dated July 31, 2006 (``Arlavan Preliminary Calculation Memorandum''),
which is on file in the CRU.
Because Arlavan is a reseller, and not a producer, of merchandise,
we classified the expenses that were reported by Arlavan as general and
administrative (``G&A'') expenses and financial expenses as indirect
selling expenses. See Arlavan Preliminary Calculation Memorandum.
(C) Olmue
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, cost and freight (``C&F'') price to
unaffiliated purchasers in the United States.
We adjusted the reported gross unit price, where applicable, for
billing adjustments and interest revenue. We made deductions from the
starting price for movement expenses in accordance with section
772(c)(2)(A) of the Act. These included, where appropriate, inland
freight incurred in transporting merchandise to the Chilean port,
brokerage and handling, and international freight.
We have reclassified certain commissions paid by Olmue as indirect
selling expenses. These commissions were not sale-specific payments to
a selling agent working on behalf of Olmue. Rather, these expenses
related to general selling services (i.e., not directly facilitating
sales) performed by another company. Therefore, certain reported
commissions are properly classified as indirect selling expenses. See
Verification Report - Olmue at section III.A. (Corporate Structure and
Organization), section XI.C.1. (Commissions), and section XI.D.1.
(Indirect Selling Expenses); see also Memorandum to the File,
``Preliminary Results Calculation Memorandum for Fruticola Olmue
S.A.,'' dated July 31, 2006 (``Olmue Preliminary Calculation
Memorandum''), which is on file in the CRU.
As a result of verification findings, we revised the following
fields in Olmue's U.S. sales listing: quantity, inland freight,
commissions, indirect selling expenses, selling agent, date of payment,
credit expenses, and billing adjustments. See Olmue Preliminary
Calculation Memorandum; see also Verification Report - Olmue.
(D) SANCO
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, FOB or FOB plus duty paid price to unaffiliated
purchasers in the United States.
We adjusted the reported gross unit price, where applicable, for
billing adjustments. We made deductions from the starting price for
movement expenses in accordance with section 772(c)(2)(A) of the Act.
These included freight incurred in transporting merchandise to the
warehouse or to the Chilean port, warehousing, domestic brokerage and
handling, U.S. brokerage and handling, and U.S. customs duties.
For its U.S. sales, SANCO reported the bill of lading date as the
shipment date. As a result of verification findings, we have revised
the shipment date to match the issuance date of the dispatch note,
because that is when the
[[Page 45003]]
merchandise under review was shipped from the plant or warehouse to the
Chilean port. We also recalculated U.S. imputed credit expenses using
the revised date of shipment. For further discussion, see Memorandum to
the File, ``Preliminary Results Calculation Memorandum for SANCO,
S.A.'' dated July 31, 2006 (``SANCO Preliminary Calculation
Memorandum''), which is on file in the CRU. See also Sales Verification
Report - SANCO.
As a result of verification findings, we have revised the direct
selling expenses, indirect selling expenses, warehousing expenses,
inland freight expenses incurred in Chile, brokerage and handling
expenses incurred in Chile, and U.S. customs duties for certain U.S.
sales. See SANCO Preliminary Calculation Memorandum. See also Sales
Verification Report - SANCO.
(E) Valle Frio
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, FOB price to unaffiliated purchasers in the
United States.
We made deductions from the starting price for movement expenses in
accordance with section 772(c)(2)(A) of the Act. These included, where
appropriate, inland freight incurred in transporting merchandise to the
Chilean port, domestic brokerage and handling expenses, and thermograph
expenses.
(F) Valles Andinos
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the packed, FOB or C&F price to unaffiliated purchasers in
the United States.
We adjusted the reported gross unit price, where applicable, for
billing adjustments. We made deductions from the starting price for
movement expenses in accordance with section 772(c)(2)(A) of the Act.
These included freight incurred in transporting merchandise from the
plant to the Chilean port and domestic brokerage and handling.
For its U.S. market sales, Valles Andinos reported the bill of
lading date as the shipment date. We have revised the shipment date to
match the issuance date of the dispatch note, because that is when the
merchandise under review was shipped from the plant or warehouse to the
Chilean port. We also recalculated U.S. imputed credit expenses using
the revised date of shipment. For further discussion, see Memorandum to
the File, ``Preliminary Results Calculation Memorandum for Valles
Andinos, S.A.,'' dated July 31, 2006 (``Valles Andinos Preliminary
Calculation Memorandum''), which is on file in the CRU.
Because Valles Andinos is principally a reseller, we classified the
expenses that were reported by Valles Andinos as general and
administrative expenses and financial expenses as indirect selling
expenses. See Valles Andinos Preliminary Calculation Memorandum.
(G) VBM
We calculated EP because the merchandise was sold prior to
importation by the exporter or producer outside the United States to
the first unaffiliated purchaser in the United States, and because
constructed export price methodology was not otherwise warranted. We
based EP on the DDP price to unaffiliated purchasers in the United
States. We made deductions from the starting price for movement
expenses in accordance with section 772(c)(2)(A) of the Act. These
deductions included, where appropriate, domestic inland freight,
domestic brokerage and handling, pre-sale warehousing expenses,
international freight, and U.S. customs duties. We adjusted the
reported gross unit price, where applicable, for billing adjustments.
Normal Value
A. Home Market Viability
Section 773(a)(1) of the Act directs that NV be based on the price
at which the foreign like product is sold in the home market, provided
that the merchandise is sold in sufficient quantities (or value, if
quantity is inappropriate) and that there is no particular market
situation that prevents a proper comparison with the EP. The Act
contemplates that quantities (or value) will normally be considered
insufficient if they are less than five percent of the aggregate
quantity (or value) of sales of the subject merchandise to the United
States.
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared each respondent's volume of home market sales of the
foreign like product to its volume of U.S. sales of the subject
merchandise, in accordance with section 773(a)(1)(C) of the Act.
Arlavan, Olmue, SANCO, Valle Frio, and Valles Andinos reported that
their home market sales of IQF red raspberries during the POR were less
than five percent of their sales of IQF red raspberries to the United
States. Therefore, these five respondents did not have viable home
markets for purposes of calculating NV. As its largest third country
market, Arlavan reported Germany, Olmue and Valle Frio reported France,
SANCO reported the United Kingdom, and Valles Andinos reported Canada.
In all instances, sales to the third countries exceed five percent of
sales to the United States. Accordingly, for purposes of calculating
NV, Arlavan reported its sales to Germany, Olmue and Valle Frio
reported their sales to France, SANCO reported its sales to the United
Kingdom, and Valles Andinos reported its sales to Canada. In future
administrative reviews, the Department will consider re-examining the
selection of France as Valle Frio's comparison market. In particular,
the Department will evaluate the comparability of foreign-like product
to the subject merchandise.
VBM and Vitafoods reported that their home market sales of IQF red
raspberries during the POR were more than five percent of their sales
of IQF red raspberries to the United States. Therefore, VBM's and
Vitafoods' home markets were viable for purposes of calculating NV.
Accordingly, VBM and Vitafoods reported their home market sales.
To derive NV for all respondents, we made the adjustments detailed
in the ``Calculation of Normal Value Based on Comparison Market
Prices'' and ``Calculation of Normal Value Based on Constructed Value''
sections, below.
B. Cost of Production Analysis
In the most recently completed segment of the proceeding at the
time of initiation (i.e., the first administrative review), the
Department found that SANCO and Olmue made sales in the comparison
market at prices below the cost of producing the merchandise and
excluded such sales from the calculation of NV. Therefore, the
Department determined that there were reasonable grounds to believe or
suspect that IQF red raspberry sales were made in the comparison market
at prices below the cost of production (``COP'') in this administrative
review for SANCO and Olmue. See section 773(b)(2)(A)(ii) of the Act. As
a result, the Department initiated a COP inquiry for these two
respondents.
The petitioners made an allegation of sales below the COP with
respect to Arlavan (December 12, 2005), Valles Andinos (December 21,
2005), Vitafoods
[[Page 45004]]
(December 21, 2005), VBM (December 21, 2005), and Valle Frio (March 20,
2006, supplemented on March 29, 2006). We found that the petitioners'
allegations provided the Department with a reasonable basis to believe
or suspect that sales in the comparison market by Arlavan, Valles
Andinos, Vitafoods, and VBM were made at prices below the COP.
Accordingly, for these companies, we initiated an investigation to
determine whether their comparison market sales of IQF red raspberries
were made at prices below the COP during the POR. See Memoranda to
Susan H. Kuhbach, Director, on the following dates: January 12, 2006
(Arlavan), January 17, 2006 (Valles Andinos), January 24, 2006
(Vitafoods), and January 20, 2006 (VBM).
For Valle Frio, we found that the petitioners' allegation did not
provide the Department with a reasonable basis to believe or suspect
that sales in the comparison market were made at prices below the COP.
Therefore, we did not initiate an investigation to determine whether
Valle Frio's comparison market sales of IQF red raspberries were made
at prices below the COP during the POR. See Memorandum to Susan H.
Kuhbach, Director, ``Petitioners' Allegation of Sales Below the Cost of
Production by Sociedad Agroindustrial Valle Frio, Ltda.,'' dated April
19, 2006.
Because Valles Andinos and Arlavan are trading companies, we sent
cost questionnaires to Valles Andinos' and Arlavan's suppliers. We
chose the two largest suppliers for each respondent. For Valles
Andinos, we received complete questionnaire responses from both
suppliers. For Arlavan, we received a complete questionnaire from one
supplier (Agricola San Antonio Limitada (``San Antonio'')); however, as
explained below, we have not received complete, useable information
from the other supplier (DICAF Exportaciones Limitada (``DICAF'')).
The questionnaires we sent to the Partner and General Manager of
DICAF were returned as undeliverable. See Memorandum to File,
``Attempts to Deliver Section D Questionnaire in the Antidumping
Administrative Review of Individually Quick Frozen Red Raspberries from
Chile,'' dated April 21, 2006. In its May 15, 2006, SQR at 1, Arlavan
indicated that DICAF was bankrupt, and Arlavan provided contact
information for Agroindustrial del Maule (``Agromaule''), which
although separately incorporated has, effectively, the same familial
ownership as DICAF. The Department, therefore, sent a cost
questionnaire to Agromaule in early April 2006 and received a response
from Agromaule's ``legal representative'' on May 1, 2006, which was
mostly incomplete and unusable to the Department. The Department did,
however, receive from Arlavan and Agromaule several supplemental
responses that assisted the Department in further understanding the
nature of the DICAF-Agromaule relationship. According to these
responses, by August 2004, DICAF was unable to purchase its own raw
materials because the Chilean tax authorities prohibited the company
from doing so due to the fact that it was in arrears on taxes owed. See
Agromaule's May 1, 2006, section D response at 1. According to Arlavan
and Agromaule, the familial owners of DICAF formed Agromaule in
September 2004 to make a ``fresh startup'' as DICAF was preparing for
bankruptcy. See id. at 1 and Agromaule's May 1, 2006, section D
response at 1. Agromaule purchased raw materials and then paid DICAF to
process them. Although DICAF and Agromaule are legally two separate
entities, the products, services, and personnel, as well as contact
information, were the same. See Arlavan's May 15, 2006, SQR at 1.
According to Arlavan, beginning with the 2004-05 growing season,
the contacts at DICAF began having Arlavan contract for product
purchases using Agromaule forms and making payments to Agromaule.
Arlavan thus began working with Agromaule, receiving the same service
and products it had received from DICAF - and working with the same
people until the end of the 2004-2005 growing season, at which time
Arlavan was informed that Agromaule would no longer be operating and
would no longer be able to supply Arlavan with products. See id. at 1.
Despite the Department's issuance of several supplemental
questionnaires, Agromaule failed to provide the cost information
required by the Department for these preliminary results. As a result,
the Department has applied adverse facts available to calculate a COP
for DICAF/Agromaule. See ``Individual Company Adjustments'' and ``Use
of Facts Otherwise Available'' sections, below.
1. Calculation of COP
In accordance with section 773(b)(3) of the Act, we calculated the
COP based on the sum of the cost of materials and fabrication for the
foreign like product, plus amounts for G&A expenses, financial
expenses, and comparison market packing costs, where appropriate.
We note that several respondents reported a blended cost for
purchases of raw raspberries, i.e., they reported a single price for
purchases of whole and broken berries rather than different prices for
the whole and broken berries. The Department is considering whether, in
such instances, it is appropriate to compute these companies' berry
costs using an alternative methodology and we intend to solicit
additional information from these parties after the preliminary
results.
2. Individual Company Adjustments
We relied on the COP data submitted by each respondent in its cost
questionnaire responses except in specific instances where, based on
our review of the submissions and our verification findings, we believe
that an adjustment is required, as discussed below.
(A) Vitafoods
We are continuing to analyze Vitafoods' July 24, 2006, SQR, and may
have further modifications to its cost data for the final results.
1) We have revised Vitafoods' G&A expenses to include certain
proprietary non-operating expenses. See Vitafoods Preliminary
Calculation Memorandum.
2) We have revised Vitafoods' financial expenses to include a loss
in currency transactions. Because these expenses relate to currency
swap and other similar agreements, they are properly classified as
financial expenses. See Vitafoods Preliminary Calculation Memorandum.
(B) Arlavan
We calculated a weighted-average COP using the COP of Arlavan's one
responding supplier (San Antonio) for purchases from San Antonio and
all other suppliers from whom information was not requested. As
explained above, we used adverse facts available for the COP of the
non-responsive supplier (DICAF/Agromaule). See ``Use of Facts Otherwise
Available'' section, below. Specifically, we calculated the simple
average of the three highest COPs of all respondents' suppliers and
used this as the DICAF/Agromaule COP. The suppliers' COPs were weighted
by the quantities of subject merchandise purchased from them by
Arlavan.
(C) Olmue
For one non-organic meeker control number for which Olmue did not
report costs, as facts available, we assigned the reported costs of
other non-organic meeker control numbers to the above-mentioned control
number. See ``Facts Otherwise Available'' section, below; see also
Olmue Calculation Memorandum.
(D) SANCO
1) SANCO valued whole quality raspberries bagged as non-whole
frozen raspberry product at the average purchase price of non-whole
quality
[[Page 45005]]
fresh raspberries rather than the average purchase price of whole
quality fresh raspberries. We revalued whole quality raspberries bagged
as non-whole frozen raspberry product at the average purchase price of
whole quality raspberries. In addition, a portion of SANCO's freight
relating to the transportation of fresh raspberries was omitted from
the reported costs. Therefore, we added this portion of freight to the
purchase price of fresh raspberries. Finally, we incorporated the two
minor corrections to the raw material cost SANCO presented at
verification (i.e., transcription errors made in the preparation of the
purchase list and overstatement of the amount purchased).
2) SANCO reported the G&A and financial expenses of its affiliated
frozen fruit processor, Agroindustria Sagrada Familia Ltda. (``ASF''),
based on the POR and included these expenses in the variable overhead
cost. To adjust for this, we first removed the G&A and financial
expenses from variable overhead. We then calculated G&A and financial
expense ratios based on ASF's 2004 financial statements and applied the
ratios to SANCO's conversion costs (i.e., direct labor, variable
overhead, fixed overhead).
3) We adjusted SANCO's G&A expense ratio to include certain
depreciation expenses in the numerator and exclude these same
depreciation expenses from the denominator. We also included in the
numerator of the G&A expense ratio a loss on sales of fixed assets. See
Memorandum from Frederick W. Mines to Neal Halper, Director Office of
Accounting, ``Cost of Production and Constructed Value Adjustments for
the Preliminary Results,'' dated July 31, 2006.
(E) Valles Andinos
We made the following adjustments to the suppliers' reported COP
data for non-organic frozen raspberry products:
1) For one supplier, we recalculated direct labor expenses. For
further discussion, see Valles Andinos Preliminary Calculation
Memorandum.
2) For the same supplier, we revised the allocation percentage
applied to packing materials, variable overhead, and fixed overhead.
Id.
3) We calculated each supplier's COP based on the total cost of
manufacture (``COM'') of the subject merchandise, general and
administrative expenses, and financial expenses. The suppliers' COPs
were weighted by the quantities of subject merchandise purchased from
them by Valles Andinos. We weight-averaged the suppliers' calculated
COPs on the basis of Valles Andinos's finished product purchases by
quantity. Id.; see also Valles Andinos's February 9, 2006, SQR, at
pages 1-2.
We made the following adjustment to Valles Andinos's reported COP
data for organic frozen raspberry products:
For the small amount of organic frozen raspberry products that
Valles Andinos produced pursuant to a tolling arrangement, we based the
COM on Valles Andinos's reported direct materials and processing costs.
See Valles Andinos's July 12, 2006, SQR at page 1; see also Valles
Andinos Preliminary Calculation Memorandum.
(F) VBM
We did not make any changes.
We compared the adjusted weighted-average COP for each respondent
to its comparison market sales of the foreign like product, as required
under section 773(b) of the Act, to determine whether these sales were
made at prices below the COP within an extended period of time (i.e., a
period of one year) in substantial quantities and whether such prices
were sufficient to permit the recovery of all costs within a reasonable
period of time. On a model-specific basis, we compared the revised COP
to the comparison market prices. The prices were exclusive of any
applicable billing adjustments, movement expenses, direct selling
expenses, commissions, indirect selling expenses, and packing expenses.
3. Results of the COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given product were at prices less
than the COP, we did not disregard any below-cost sales of that product
because we determined that the below-cost sales were not made in
substantial quantities.
Where 20 percent or more of a respondent's sales of a given product
during the POR were at prices less than the COP, we determined such
sales to have been made in substantial quantities within an extended
period of time in accordance with section 773(b)(2)(B) of the Act.
Because we compared prices to the POR average COP, we also determined
that such sales were not made at prices which would permit recovery of
all costs within a reasonable period of time, in accordance with
section 773(b)(2)(D) of the Act. Therefore, we disregarded the below-
cost sales.
For Olmue, Valles Andinos, VBM, and Vitafoods, we found that more
than 20 percent of the comparison market sales of IQF red raspberries
within an extended period of time were made at prices less than the
COP. Further, the prices at which the merchandise under review was sold
did not provide for the recovery of costs within a reasonable period of
time. Therefore, we disregarded these below-cost sales and used the
remaining sales as the basis for determining NV, in accordance with
section 773(b)(1) of the Act. For those U.S. sales of IQF red
raspberries for which there were no useable comparison market sales in
the ordinary course of trade, we compared EPs to the CV in accordance
with section 773(a)(4) of the Act. See ``Calculation of Normal Value
Based on Constructed Value'' section, below.
C. Calculation of Normal Value Based on Comparison Market Prices
We determined price-based NVs for each company as follows. For all
respondents, we made adjustments for differences in packing in
accordance with sections 773(a)(6)(A) and 773(a)(6)(B)(i) of the Act,
and we deducted movement expenses consistent with section
773(a)(6)(B)(ii) of the Act. In addition, where applicable, we made
adjustments for differences in cost attributable to differences in
physical characteristics of the merchandise pursuant to section
773(a)(6)(C)(ii) of the Act, as well as for differences in
circumstances of sale (``COS'') in accordance with section
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. We also made
adjustments, in accordance with 19 CFR 351.410(e), for indirect selling
expenses incurred on comparison market or U.S. sales where commissions
were granted on sales in one market but not in the other (the
``commission offset''). Specifically, where commissions were granted in
the U.S. market but not in the comparison market, we made a downward
adjustment to NV for the lesser of (1) the amount of the commission
paid in the U.S. market, or (2) the amount of indirect selling expenses
incurred in the comparison market. If commissions were granted in the
comparison market but not in the U.S. market, we made an upward
adjustment to NV following the same methodology. Company-specific
adjustments are described below.
(A) Vitafoods
We based comparison market prices on the packed prices to
unaffiliated purchasers in Chile. We adjusted the starting price by the
amount of billing adjustments and movement expenses, including inland
freight expenses from the plant to the distribution warehouse,
warehousing, and inland freight expenses from distribution warehouse to
the customer. We made COS adjustments by deducting direct selling
expenses incurred for home market sales (i.e., credit expenses and
direct selling expenses) and adding U.S. direct selling expenses (i.e.,
credit expenses).
[[Page 45006]]
See Vitafoods Preliminary Calculation Memorandum.
Because the denominator used in calculating Vitafoods' indirect
selling expenses ratio is net of billing adjustments, we have applied
the calculated indirect selling expenses ratio to Vitafoods' gross unit
price net of billing adjustments. See Vitafoods' July 3, 2006,
supplemental questionnaire response at page 4.
(B) Arlavan
We based comparison market prices on the packed prices to
unaffiliated purchasers in Germany. We adjusted the starting price,
where applicable, by the amount of movement expenses, including inland
freight to the warehouse, warehousing, inland freight from distribution
center to the Chilean port, Chilean brokerage and customs fees,
agriculture certificates, temperature control recorders during transit,
port charges, and international freight. We made COS adjustments by
deducting direct selling expenses incurred for comparison market sales
(e.g., commissions, external quality control/biological testing,
courier charges, and credit expenses) and adding U.S. direct selling
expenses (e.g., commissions, external quality control/microbiological
testing, courier charges, and credit expenses). See Arlavan Preliminary
Calculation Memorandum.
Because Arlavan is a reseller, and not a producer, of merchandise,
we classified the expenses that were reported by Arlavan as G&A
expenses and financial expenses as indirect selling expenses. See
Arlavan Preliminary Calculation Memorandum.
(C) Olmue
We based comparison market prices on the packed, C&F price to
unaffiliated purchasers in France. We adjusted the reported gross unit
price, where applicable, for billing adjustments. We adjusted the
starting price by the amount of movement expenses, including inland
freight to the Chilean port, international freight, and brokerage and
handling. We made COS adjustments by deducting direct selling expenses
incurred for comparison market sales (e.g., microbiological/pesticide
testing, commissions, credit expenses) and adding U.S. direct selling
expenses (e.g., microbiological/pesticide testing, commissions, credit
expenses). See Olmue Preliminary Calculation Memorandum.
We have reclassified certain commissions paid by Olmue as indirect
selling expenses. These commissions were not sale-specific payments to
a selling agent working on behalf of Olmue. Rather, these expenses
related to general selling services (i.e., not directly facilitating
sales) performed by another company. Therefore, certain reported
commissions are properly classified as indirect selling expenses. See
Verification Report - Olmue at section III.A. (Corporate Structure and
Organization), section XI.C.1. (Commissions), and section XI.D.1.
(Indirect Selling Expenses); see also Olmue Preliminary Calculation
Memorandum.
As a result of verification findings, we revised the following
fields in Olmue's French sales listing: inland freight, commissions,
indirect selling expenses, selling agent, date of payment, credit
expenses, billing adjustments, and date of shipment. See Olmue
Preliminary Calculation Memorandum; see also Verification Report -
Olmue.
(D) SANCO
We based comparison market prices on the packed prices to
unaffiliated purchasers in the United Kingdom. We adjusted the starting
price by the amount of billing adjustments and movement expenses,
including inland freight to the warehouse, warehousing, inland freight
to the Chilean port, domestic brokerage and handling, and international
freight. We made COS adjustments by deducting direct selling expenses
incurred for comparison market sales (e.g., credit expenses,
microbiological testing) and adding U.S. direct selling expenses (e.g.,
credit expenses, microbiological testing).
For its comparison market sales, SANCO reported the bill of lading
date as the shipment date. As a result of verification findings, we
have revised the shipment date to match the issuance date of the
dispatch note, because that is when the foreign-like product was
shipped from the plant or warehouse to the Chilean port. We also
recalculated comparison market imputed credit expenses using the
revised date of shipment. See SANCO Preliminary Calculation Memorandum;
see also Sales Verification Report - SANCO.
As a result of verification findings, we have revised the sale
dates, payment dates, direct selling expenses, indirect selling
expenses, warehousing expenses, and brokerage and handling expenses
incurred in Chile for certain comparison market sales. See SANCO
Preliminary Calculation Memorandum; see also Sales Verification Report
- SANCO.
(E) Valle Frio
We based comparison market prices on the packed prices to
unaffiliated purchasers in France or sold to an unaffiliated purchaser
for exportation to France. We adjusted the starting price by the amount
of movement expenses, including, where appropriate, inland freight from
the plant to the port, international freight, container handling/
brokerage charges, and thermograph expenses. We made COS adjustments by
deducting direct selling expenses incurred for comparison market sales
(e.g., credit expenses, commissions, microbiological/pesticide testing,
label expenses) and adding U.S. direct selling expenses (e.g., credit
expenses, microbiological/pesticide testing, label expenses). See
Memorandum to the File, ``Preliminary Results Calculation Memorandum
for Sociedad Agroindustrial Valle Frio Ltda.,'' dated July 31, 2006
(``Valle Frio Preliminary Calculation Memorandum''), which is on file
in the CRU.
(F) Valles Andinos
We based comparison market prices on the packed prices to
unaffiliated purchasers in Canada. We adjusted the starting price by
the amount of movement expenses, including inland freight from the
plant to the Chilean port, domestic brokerage and handling, and
international freight. We made COS adjustments by deducting direct
selling expenses incurred for comparison market sales (e.g., credit
expenses, bank fees, and courier fees) and adding U.S. direct selling
expenses (e.g., credit expenses, bank fees, and courier fees). See
Valles Andinos Preliminary Calculation Memorandum.
For its comparison market sales, Valles Andinos reported the bill
of lading date as the shipment date. We have revised the shipment date
to match the issuance date of the dispatch note, because that is when
the foreign-like product was shipped from the plant or warehouse to the
Chilean port. We also recalculated comparison market imputed credit
expenses using the revised date of shipment. See Valles Andinos
Preliminary Calculation Memorandum.
Because Valles Andinos is principally a reseller, we classified the
expenses that were reported by Valles Andinos as general and
administrative expenses and financial expenses as indirect selling
expenses. See Valles Andinos Preliminary Calculation Memorandum.
(G) VBM
We based comparison market prices on the packed prices to
unaffiliated purchasers in VBM's home market. We adjusted the starting
price by the amount of movement expenses, including inland freight to
the warehouse and warehousing. We made COS adjustments by deducting
direct selling expenses incurred for comparison market sales (e.g.,
credit expenses) and adding U.S. direct selling expenses (e.g., credit
expenses, bank fees, stack reservations, postage and
[[Page 45007]]
handling charges, and microbiological testing expenses). See VBM
Preliminary Calculation Memorandum.
D. Calculation of Normal Value Based on Constructed Value
Section 773(a)(4) of the Act provides that where NV cannot be based
on comparison-market sales, NV may be based on CV. Accordingly, for IQF
red raspberries for which we could not determine the NV based on
comparison market sales, either because there were no useable sales of
a comparable product or all sales of the comparable products failed the
COP test, we based NV on the CV.
Section 773(e) of the Act provides that the CV shall be based on
the sum of the cost of materials and fabrication for the imported
merchandise, plus amounts for selling, general and administrative
(``SG&A'') expenses, profit, and U.S. packing costs. For Arlavan,
Olmue, SANCO, and Valles Andinos, we calculated the cost of materials
and fabrication based on the methodology described in the ``Cost of
Production Analysis'' section, above.
For Valle Frio, we calculated CV based on the sum of the cost of
materials and fabrication plus an amount for G&A, and financial
expenses in accordance with section 773(e) of the Act. We relied on the
costs reported by Valle Frio and Framparque, except that we
reclassified Framparque's G&A and financial expenses from overhead as
they reported them, to G&A and financial expenses. See Memorandum from
Angela Strom to Neal Halper, Director Office of Accounting,
``Constructed Value Calculation Adjustments for the Preliminary Results
- Sociedad Agroindustrial Valle Frio Ltda.,'' dated July 31, 2006.
We based SG&A expenses and profit for the above-mentioned
respondents on the actual amounts incurred and realized by the
respondents in connection with the production and sale of the foreign
like product in the ordinary course of trade for consumption in the
comparison market, in accordance with section 773(e)(2)(A) of the Act.
We used U.S. packing costs as described in the ``Export Price''
section, above.
We made adjustments to CV for differences in COS in accordance with
section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons to EP,
we made COS adjustments by deducting direct selling expenses incurred
on comparison market sales from, and adding U.S. direct selling
expenses to, CV.
E. Use of Facts Otherwise Available
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 of the Act; (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) of the Act, the Department
shall, subject to section 782(d) of the Act, use the facts otherwise
available in reaching the applicable determination under this title. In
applying facts otherwise available, section 776(b) of the Act provides
that the Department may use an inference adverse to the interests of a
party that has failed to cooperate by not acting to the best of its
ability to comply with the Department's requests for information. See,
e.g., Notice of Final Determination of Sales at Less Than Fair Value
and Final Negative Critical Circumstances: Carbon and Certain Alloy
Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 30, 2002).
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 Statement of Administrative Action accompanying
the Uruguay Round Agreements Act, H.R. Rep. No. 103-316, (1994)
(``SAA'') at 870. Furthermore, ``affirmative evidence of bad faith on
the part of a respondent is not required before the Department may make
an adverse inference.'' See Nippon Steel Corp. v. United States, 337
F.3d 1373, 1377 (Fed. Cir. 2003); Antidumping Countervailing Duties:
Final Rule, 62 FR 27296, 27340 (May 19, 1997). In this case, we have
found that an adverse inference is appropriate for DICAF/Agromaule, a
supplier of Arlavan, because DICAF/Agromaule did not act to the best of
its ability to report the data requested by the Department. See Notice
of Preliminary Results and Partial Rescission of Antidumping Duty
Administrative Review: Individually Quick Frozen Red Raspberries from
Chile, 69 FR 47869 (Aug. 6, 2004) (unchanged in final); cf. Shandong
Huarong Mach. Co., Ltd. v. United States, Slip Op. 06-88 (CIT June 9,
2006) (``court agrees . . . that Company C, as a foreign manufacturer
of subject merchandise, is an interested party under Sec.
1677(9)(A)'').
The Department acknowledges record evidence that Chilean courts
declared DICAF bankrupt in August 2005, and that Agromaule ceased
operations in 2005. See August 27, 2005, Official Gazette of bankruptcy
declaration decision and Taxpayer Situation Information Statement in
Arlavan's May 15, 2005, SQR at Exhibit SD-2. See also Agromaule's
current Taxpayer Situation Information Statement at Exhibit SD-1
showing no tax authority stamps since 2005. However, the Department
finds that statements submitted by Arlavan and Agromaule regarding the
requested cost information do not reconcile and make the use of adverse
facts available appropriate.
First, Arlavan submitted a letter to the Department indicating that
Agromaule's legal representative was willing to cooperate with the
Department's review, but did not have the requisite information needed
to respond to the Department's questionnaire. See Arlavan's May 1,
2006, Letter in Reference to Agroindustrial del Maule's section D
response. According to Arlavan, Agromaule's records were taken from the
company by Agromaule's accounting consultant, who also ran Agromaule's
daily operations. He left the company in May 2005. See Agromaule's May
1, 2006, section D response at 2. This same accounting consultant had
also been the General Manager and part owner of DICAF. We note,
however, that there are close familial relationships between Agromaule
and DICAF. See Agromaule's May 15, 2006, section D questionnaire
response at 3 and Agromaule's June 5, 2006, supplemental section D
questionnaire at 2.
Arlavan's Assistant General Manager also contacted Agromaule's
former accounting consultant directly. Contrary to the assertions of
Agromaule's legal representative, the consultant maintained that he had
no corporate records or documents of either Agromaule or DICAF. The
consultant refused to put this in writing and would not respond to an
email request by Arlavan. See May 1, 2006, Letter from Arlavan in
reference to Agroindustrial del Maule's section D response.
These conflicting stories are difficult to reconcile, given the
close relationship between DICAF and Agromaule. As noted above, the
familial owners of DICAF formed Agromaule as DICAF was preparing to
enter bankruptcy.
Given the close relationship between DICAF and Agromaule, including
the direct relationship between the accounting consultant/GM/Partner of
DICAF and the President of Agromaule, and the inconsistencies regarding
the whereabouts of the corporate records, the Department preliminarily
[[Page 45008]]
determines that DICAF/Agromaule did not act to the best of its ability
and adverse inference is warranted. Therefore, we have applied adverse
facts available pursuant to section 776(a)(2)(D) of the Act.
The Department is requesting further documentation from Agromaule
regarding the location of the books and records and Agromaule's ability
to respond to the Department's questionnaire.
The Department is applying neutral facts available to one of
Olmue's reported control numbers for which it did not provide costs.
Olmue noted that it did not have cost data for this control number
because it was not produced during the POR. See Olmue's February 21,
2006, supplemental questionnaire response at page 18. Accordingly, we
have applied facts available for the costs of this control number.
Olmue's reported costs demonstrate that variety and cultivation type
are the only product characteristics affecting Olmue's cost. Because
the control number without reported costs is a non-organic meeker
product, we have assigned the reported costs of other non-organic
meeker control numbers to the above-mentioned control number. See id.;
see also Olmue Calculation Memorandum.
F. Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (``LOT'') as the EP. Sales are made at different
LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stages of marketing. Id.;
see also Notice of Final Determination of Sales at Less Than Fair
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62
FR 61731, 61732 (November 19, 1997). In order to determine whether the
comparison sales were at different stages in the marketing process than
the U.S. sales, we reviewed the distribution system in each market
(i.e., the ``chain of distribution''),\3\ including selling
functions,\4\ class of customer (``customer category''), and the level
of selling expenses for each type of sale.
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\3\ The marketing process in the United States and comparison
market begins with the producer and extends to the sale to the final
user or customer. The chain of distribution between the two may have
many or few links, and the respondents' sales occur somewhere along
this chain. In performing this evaluation, we considered each
respondent's narrative response to properly determine where in the
chain of distribution the sale occurs.
\4\ Selling functions associated with a particular chain of
distribution help us to evaluate the level(s) of trade in a
particular market. For purposes of these preliminary results, we
have organized the common selling functions into four major
categories: sales process and marketing support, freight and
delivery, inventory and warehousing, and quality assurance/warranty
services.
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Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for EP and comparison market sales (i.e., NV based on
either comparison market or third country prices\5\), we consider the
starting prices before any adjustments. When the Department is unable
to match U.S. sales to sales of the foreign like product in the
comparison market at the same LOT as the EP, the Department may compare
the U.S. sale to sales at a different LOT in the comparison market. In
comparing EP sales at a different LOT in the comparison market, where
available data make it practicable, we make a LOT adjustment under
section 773(a)(7)(A) of the Act.
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\5\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses, G&A and
profit for CV, where possible.
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In this review, we determined the following, with respect to the
LOT, for each respondent.
(A) Vitafoods
Vitafoods reported a single LOT in each market, and claimed that
the LOT in each of these markets was the same. Therefore, Vitafoods did
not request an LOT adjustment.
We examined the information reported by Vitafoods regarding its
marketing processes for its U.S. and home market sales, including
customer categories and the type and level of selling activities
performed. Vitafoods has reported one channel of distribution for sales
to the United States. In this channel of distribution, Vitafoods
arranges to get the subject merchandise to the port for export. For
certain sales in this channel, Vitafoods is also the importer of
record. For other sales in this channel, Vitafoods' customer is the
importer of record. Because Vitafoods has reported no significant
variation in the selling activities for these sales, we preliminarily
find that there is a single LOT for Vitafoods' U.S.