Suspension of Antidumping Duty Investigation: Lemon Juice From Mexico, 53995-54000 [E7-18298]
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Federal Register / Vol. 72, No. 183 / Friday, September 21, 2007 / Notices
SG&A expenses are those expenses
incurred for the operation of the corporation
as a whole and not directly related to the
manufacture of a particular product. They
include corporate general and administrative
expenses, financing expenses, and general
research and development expenses.
Additionally, direct and indirect selling
expenses incurred in the HM for sales of the
product under investigation are included.
Such expenses are allocated to COM using a
ratio of SG&A costs.
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Constructed Value (CV)
Constructed value is equal to the sum of
materials, labor and overhead (COM) and
SG&A expenses plus profit in the comparison
market and the cost of packing for
exportation to the United States.
Calculation of Suspension Agreement
Normal Values
Normal values (for purposes of the
Agreement) are calculated by adjusting the
CV and are provided for both EP and CEP
transactions. In effect, any expenses uniquely
associated with the covered products sold in
the HM are subtracted from the CV, and any
such expenses which are uniquely associated
with the covered products sold in the United
States are added to the CV to calculate the
NV.
‘‘Export Price’’—Generally, a U.S. sale is
classified as an export price sale when the
first sale to an unaffiliated person occurs
before the goods are imported into the United
States. In cases where the foreign
manufacturer knows or has reason to believe
that the merchandise is ultimately destined
for the United States, the manufacturer’s sale
is the sale subject to review. If, on the other
hand, the manufacturer sold the merchandise
to a foreign trader without knowledge of the
trader’s intention to export the merchandise
to the United States, then the trader’s first
sale to an unaffiliated person is the sale
subject to review. For EP NVs, the CV is
adjusted for movement costs and differences
in direct selling expenses such as
commissions, credit, warranties, technical
services, advertising, and sales promotion.
‘‘Constructed Export Price’’—Generally, a
U.S. sale is classified as a constructed export
price sale when the first sale to an
unaffiliated person occurs after importation.
However, if the first sale to an unaffiliated
person is made by a person in the United
States affiliated with the foreign exporter,
constructed export price applies even if the
sale occurs prior to importation, unless the
U.S. affiliate performs only clerical functions
in connection with the sale. For CEP NVs, the
CV is adjusted similar to EP sales, with
differences for adjustment to U.S. and HM
indirect selling expenses.
Home market direct selling expenses are
expenses that are incurred as a direct result
of a sale. These include such expenses as
commissions, advertising, discounts and
rebates, credit, warranty expenses, freight
costs, etc. Certain direct selling expenses are
treated individually, including:
—Commission expenses, i.e., payments to
unaffiliated parties for sales in the HM.
—Credit expenses, i.e., expenses incurred for
the extension of credit to HM customers.
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—Movement expenses, e.g., foreign inland
freight and insurance expenses,
warehousing, and foreign brokerage,
handling and port charges.
U.S. direct selling expenses are the same as
HM direct selling expenses except that they
are incurred for sales in the United States.
Movement expenses are additional expenses
associated with importation into the United
States, which typically include: U.S. inland
freight and insurance expenses; U.S.
brokerage, handling and port charges; U.S.
Customs duties, U.S. warehousing; and
international freight and insurance.
U.S. indirect selling expenses include
general fixed expenses incurred by the U.S.
sales subsidiary or affiliated exporter for
sales to the United States and may also
include a portion of indirect expenses
incurred in the HM for export sales.
The EP and CEP NVs are calculated as
follows:
For EP Transactions
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¥
¥
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=
Direct Materials.
Direct Labor.
Factory Overhead.
Cost of Manufacturing (COM).
Home Market SG&A.
Cost of Production (COP).
U.S. Packing.
Profit.
Constructed Value.
U.S. Direct Selling Expense.
U.S. Commission Expense.
U.S. Movement Expense.
U.S. Credit Expense.
HM Direct Selling Expense.
HM Commission Expense.1
HM Credit Expense.
NV for EP Sales.
Fmt 4703
Sfmt 4703
NV for CEP Sales.
1 The
Department will examine any furthermanufacturing expenses on value-added products sold to the first unaffiliated purchaser in
the United States by a person affiliated with
the foreign producer/exporter, and produced
from subject merchandise purchased directly
from that foreign producer/exporter, on a caseby-case basis and reserves the right to make
adjustments to its reporting requirements and
calculation methodology for these expenses.
For example, in cases where a producer/exporter’s affiliate makes sales of products with
significant value added to unaffiliated purchasers in the United States, or the range of
such products is significant, the Department
may adjust its reporting requirements and calculation methodology for the further manufacturing costs associated with the value-added
products. Additionally, if the ratio of a producer/exporter’s reported sales to unaffiliated
purchasers versus its sales to affiliated persons shifts over time, the Department may
make further adjustments in its reporting requirements and calculation methodology for
the further-manufacturing expenses associated with the value-added products.
2 If the company does not have HM commissions, HM indirect expenses are subtracted
only up to the amount of the U.S.
commissions.
DEPARTMENT OF COMMERCE
International Trade Administration
[A–201–835]
Suspension of Antidumping Duty
Investigation: Lemon Juice From
Mexico
Import Administration,
International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce
(‘‘the Department’’) has suspended the
antidumping duty investigation
involving lemon juice from Mexico. The
basis for this action is an agreement
between the Department and The CocaCola Company and The Coca-Cola
Export Corporation, Mexico Branch
(collectively ‘‘Coca-Cola’’) to revise their
prices to eliminate completely sales of
this merchandise to the United States at
less than fair value.
DATES: Effective Date: September 10,
2007.
AGENCY:
Direct Materials.
Direct Labor.
Factory Overhead.
Cost of Manufacturing (COM).
Home Market SG&A.
Cost of Production (COP).
U.S. Packing.
Profit.
Constructed Value.
U.S. Direct Selling Expense.
U.S. Indirect Selling Expense.
U.S. Commission Expense.
U.S. Movement Expense.
U.S. Credit Expense.
U.S. Further-Manufacturing Expenses (if
any).1
+ CEP Profit.
¥ HM Direct Selling Expense.
¥ HM Commission Expense. 2
¥ HM Credit Expense.
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BILLING CODE 3510–DS–P
For CEP Transactions
PO 00000
For CEP Transactions
[FR Doc. E7–18278 Filed 9–20–07; 8:45 am]
1 If the company does not have HM commissions, HM indirect expenses are subtracted
only up to the amount of the U.S.
commissions.
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53995
FOR FURTHER INFORMATION CONTACT:
Sally Gannon or James Kemp at (202)
482–0162 and (202) 482–5346,
respectively, Bilateral Agreements Unit,
Office of Policy, Import Administration,
International Trade Administration,
U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW.,
Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
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Background
Scope of Investigation
On October 11, 2006, the Department
initiated an antidumping duty
investigation under section 732 of the
Tariff Act of 1930, as amended (‘‘the
Act’’) to determine whether imports of
lemon juice from Mexico are being, or
are likely to be sold in the United States
at less than fair value (71 FR 61710
(October 19, 2006)). On November 3,
2007, the United States International
Trade Commission (‘‘ITC’’) notified the
Department of its affirmative
preliminary injury determination in this
case. See Lemon Juice from Argentina
and Mexico, Inv. Nos. 731–TA–1105–
1106 (Preliminary) USITC Pub. No. 3891
(November 2006). On April 19, 2007,
the Department preliminarily
determined that lemon juice is being, or
is likely to be sold in the United States
at less than fair value (‘‘LTFV’’), as
provided in section 733 of the Act
(Notice of Preliminary Determinations of
Sales at Less than Fair Value and of
Critical Circumstances in Part: Lemon
Juice from Mexico, 72 FR 20830 (April
26, 2007) (‘‘Preliminary
Determination’’)). On May 17, 2007, the
Department postponed the final
determination in this investigation until
no later than September 10, 2007
(Lemon Juice from Argentina and
Mexico: Postponement of Final
Antidumping Duty Determinations and
Extension of Provisional Measures, 72
FR 28953 (May 23, 2007)).
The Department and Coca-Cola
initialed a proposed agreement
suspending this investigation on August
10, 2007. On August 13, 2007, we
invited interested parties to provide
written comments on the proposed
suspension agreement. On August 24,
2007, the Department also invited
interested parties to provide written
comments on an issue related to the
draft suspension agreement with respect
to purchase orders and/or long-term
contracts entered into prior to
September 10, 2007. In response to our
requests for comment, on August 30,
2007, we received comments from
petitioner Sunkist Growers Inc. and
respondent Coca-Cola. We received
further comments from petitioner and
respondent on September 6, 2007, and
again from petitioner on September 7
and 10, 2007. We have taken these
comments into consideration for the
final version of the suspension
agreement.
The Department and Coca-Cola signed
the suspension agreement on September
10, 2007.
For a complete description of the
scope of the investigation, see
Agreement Suspending the
Antidumping Investigation on Lemon
Juice from Mexico, Appendix A, signed
September 10, 2007, attached hereto in
Annex 1.
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Suspension of Investigation
The Department consulted with the
parties to the proceeding and has
considered the comments submitted
with respect to the proposed suspension
agreement. In accordance with sections
734(b) and (d) of the Act, we have
determined that the agreement will
completely eliminate sales at less than
fair value, that the agreement is in the
public interest, and that the agreement
can be monitored effectively. See, Public
Interest and Effective Monitoring
Memorandum, dated September 10,
2007. See also, Percentage of Exports
Memorandum, dated September 10,
2007. We find, therefore, that the
criteria for suspension of an
investigation pursuant to sections 734(b)
and (d) of the Act have been met. The
terms and conditions of this agreement,
signed September 10, 2007, are set forth
in Annex 1 to this notice.
Pursuant to section 734(f)(2)(A) of the
Act, the suspension of liquidation of all
entries of lemon juice from Mexico
entered, or withdrawn from warehouse,
for consumption, as directed in the
Preliminary Determination is hereby
terminated. Any cash deposits on
entries of lemon juice from Mexico
pursuant to that suspension of
liquidation shall be refunded and any
bonds shall be released.
This notice is published pursuant to
section 734(f)(1)(A) of the Act.
Dated: September 10, 2007.
Michelle O’Neill,
Deputy Under Secretary for International
Trade.
Annex 1—Agreement Suspending the
Antidumping Investigation on Lemon
Juice From Mexico
Pursuant to section 734(b) of the Tariff Act
of 1930, as amended (19 U.S.C. 1673c(b)) (the
‘‘Act’’), and 19 CFR 351.208 (the
‘‘Regulations’’), the U.S. Department of
Commerce (the ‘‘Department’’) and the
signatory producers/exporters of Lemon Juice
from Mexico (the ‘‘Signatories’’) enter into
this suspension agreement (the
‘‘Agreement’’). On the basis of this
Agreement, on the effective date of this
Agreement, the Department shall suspend its
antidumping investigation initiated on
October 19, 2006 (17 FR 61710) with respect
to Lemon Juice from Mexico, subject to the
terms and provisions set forth below.
(A) Product Coverage:
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For purposes of this Agreement, the
merchandise covered is Lemon Juice, as
described in Appendix A.
(B) U.S. Import Coverage:
The signatory producers/exporters
collectively are the producers and exporters
in Mexico that accounted for substantially all
(not less than 85 percent) of the subject
merchandise imported into the United States,
as provided in the Department’s regulations
at 19 CFR 351.208(c). The Department may,
at anytime during the period of the
Agreement, require additional producers/
exporters in Mexico to sign the Agreement in
order to ensure that not less than
substantially all imports into the United
States are covered by the Agreement.
In reviewing the operation of the
Agreement for the purpose of determining
whether this Agreement has been violated or
is no longer in the public interest, the
Department will consider imports into the
United States from all sources of the
merchandise described in Section A of the
Agreement. For this purpose, the Department
will consider factors including, but not
limited to, the following: volume of trade,
pattern of trade, whether or not the reseller
is an original equipment manufacturer, and
the reseller’s export price (EP).
(C) Basis of the Agreement:
On and after the effective date of the
Agreement, each signatory producer/exporter
individually agrees to make any necessary
price revisions to eliminate completely any
amount by which the normal value (NV) of
this merchandise exceeds the U.S. price of its
merchandise subject to the Agreement. For
this purpose, the Department will determine
the NV in accordance with section 773(e) of
the Act and U.S. price in accordance with
section 772 of the Act. For details of the
Department’s calculation methodology under
this Agreement, see Appendices B and C.
(1) For the period from the effective date
of this Agreement through the release of the
first NVs, each signatory producer/exporter
agrees not to sell its merchandise subject to
this Agreement in the United States.
However, during this period and
subsequent periods, as relevant, a signatory
producer/exporter may proceed with
deliveries of subject merchandise made
pursuant to purchase orders or long-term
contracts entered into prior to September 10,
2007, if the Department determines, in
accordance with its regulations, that the
signatory producer’s/exporter’s appropriate
date of sale is the date of the purchase order
or long-term contract (see Section I(4) below).
At any time, should the Department
determine that the purchase order or longterm contract date was not the appropriate
date of sale for a signatory producer/exporter
making such deliveries, the Department may
consider such deliveries to be in violation of
this Agreement (see Section F below). Any
signatory producer/exporter making such
deliveries under this Agreement must
provide a one-time report to the Department,
within 30 days of these deliveries having
been completed, which contains a listing of
the contract or purchase order dates, the
delivery quantities, the dates of delivery, the
entry dates, and the prices at which the
subject merchandise was sold. This
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information will be subject to verification in
accordance with Section D(4) of this
Agreement.
(2) For all sales occurring on or after the
date of issuance of the first NVs, through
June 30, 2008 (‘‘Interim Period’’), each
signatory producer/exporter issued NVs by
the Department agrees not to sell its
merchandise subject to this Agreement to any
purchaser in the United States at prices that
are less than the NVs of the merchandise, as
determined by the Department on the basis
of the sales and cost information submitted
by the signatory producer/exporter in the
course of the underlying antidumping duty
investigation. The final NVs for a signatory
producer/exporter during this Interim Period
shall be issued within 14 days after the
preliminary NVs are issued pursuant to
Section E(2) of this Agreement.1
(3) For all sales occurring after the Interim
Period, each signatory producer/exporter
issued NVs by the Department agrees not to
sell its merchandise subject to this
Agreement to any purchaser in the United
States at prices that are less than the NVs of
the merchandise, as determined by the
Department on the basis of information
submitted to the Department not later than
the dates specified in Section D of this
Agreement and provided to the signatory
producer/exporter no later than June 1 of
each year. These NVs shall apply to sales
occurring during the annual period (i.e., July
through June) beginning 30 days following
the date on which the Department provides
the NVs, as stated in this paragraph.
(D) Monitoring:
Each signatory producer/exporter will
supply to the Department all information that
the Department decides is necessary to
ensure that the producer/exporter is in full
compliance with the terms of the Agreement.
As explained below, the Department will
provide each signatory producer/exporter a
detailed request for information and
prescribe a required format and method of
data compilation, not later than the
beginning of each reporting period.2
1 The issuance of the NVs for any given signatory
may be delayed depending on the following: (1)
Issues related to the underlying antidumping duty
investigation; (2) to allow sufficient time for
signatories to respond to the Department’s request
for sales and cost data; and/or (3) to resolve issues
raised in comments from interested parties or by the
Department. In accordance with section 773(f) of
the Act, the Department will examine relevant
prices and costs and, for any sales period, may
disregard particular prices or costs when the prices
are not in the ordinary course of trade, the costs are
not in accordance with the generally accepted
accounting principles, the costs do not reasonably
reflect the costs associated with the production and
sale of the merchandise, or in other situations
provided for in the Act or the Department’s
regulations. Examples of possible areas in which
adjustments may be necessary include, but are not
limited to, costs related to energy, depreciation,
transactions among affiliates, barter transactions, as
well as items that are not recognized by the home
country’s generally accepted accounting principles.
2 As noted in Section C(2) of this Agreement, the
first NVs issued for certain signatory producer/
exporters may be based on sales and cost
information submitted by those signatories in the
underlying antidumping duty investigation, and the
resulting NVs issued will apply to sales occurring
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(1) Sales Information:
The Department will require each
producer/exporter to report, in electronic
form in the prescribed format and using the
prescribed method of data compilation, each
sale of the merchandise subject to the
Agreement, either directly or indirectly to
unaffiliated purchasers in the United States,
as well as sales in the comparison market
(home or third country market, as
appropriate), including each adjustment
applicable to each sale, as specified by the
Department.
The first report of sales data, pursuant to
Section C(3) of this Agreement, shall be
submitted to the Department, in electronic
form (e.g., on diskette, zip disk, or CD ROM)
in the prescribed format and using the
prescribed method of data compilation, not
later than October 1, 2007, and shall contain
the specified sales information covering the
period July 1, 2006, through June 30, 2007.
Subsequent reports of sales data shall be
submitted to the Department not later than
October 1 of each year, and each report shall
contain the specified sales information for
the annual period ending on June 30 of that
year, except that if the Department receives
information that a possible violation of the
Agreement may have occurred, the
Department may request sales data on a more
frequent basis.
(2) Cost Information:
Producers/exporters must request NVs for
all subject merchandise that will be sold in
the United States. For those products which
the producer/exporter is requesting NVs, the
Department will require each producer/
exporter to report, in the prescribed format
and using the prescribed method of data
compilation, the following: Its actual cost of
manufacturing; selling, general and
administrative (SG&A) expenses; and profit
data on an annual basis. As indicated in
Appendix B to this Agreement, profit will be
reported by the producers/exporters on an
annual basis. Each such producer/exporter
also must report anticipated increases in
production costs in the annual period in
which the information is submitted resulting
from factors such as anticipated changes in
production yield, changes in production
process, changes in production quantities or
changes in production facilities.
The first report of cost data, pursuant to
Section C(3) of this Agreement, shall be
submitted to the Department not later than
October 15, 2007, and shall contain the
specified cost data covering the period July
1, 2006, through June 30, 2007. Each
subsequent report shall be submitted to the
Department not later than October 15 of each
year, and each report shall contain the
specified information for the annual period
ending on June 30 of that year.
(3) Special Adjustment of Normal Value:
If the Department determines that the NV
it determined for a previous annual period
was erroneous because the reported costs for
that period were inaccurate or incomplete, or
for any other reason, the Department may
adjust NV in a subsequent period or periods,
unless the Department determines that
Section F of the Agreement applies.
between the issuance date of the NVs and June 30,
2008 (Interim Period).
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(4) Verification:
Each producer/exporter agrees to permit
full verification of all cost and sales
information annually, or more frequently, as
the Department deems necessary.
(5) Bundling or Other Arrangements:
Producers/exporters agree not to
circumvent the Agreement. In accordance
with the dates set forth in Section D(1) of this
Agreement, producers/exporters will submit
a written statement to the Department
certifying that the sales reported herein were
not, or are not part of or related to, any
bundling arrangement, on-site processing
arrangement, discounts/free goods/financing
package, swap or other exchange where such
arrangement is designed to circumvent the
basis of the Agreement.
Where there is reason to believe that such
an arrangement does circumvent the basis of
the Agreement, the Department will request
producers/exporters to provide within 15
days all particulars regarding any such
arrangement, including, but not limited to,
sales information pertaining to covered and
non-covered merchandise that is
manufactured or sold by producers/
exporters. The Department will accept
written comments, not to exceed 30 pages,
from all parties no later than 15 days after the
date of receipt of such producer/exporter
information.
If the Department, after reviewing all
submissions, determines that such an
arrangement circumvents the basis of the
Agreement, it may, as it deems most
appropriate, utilize one of two options: (1)
The amount of the effective price discount
resulting from such arrangement shall be
reflected in the NV in accordance with
Section D(3) of this Agreement, or (2) the
Department shall determine that the
Agreement has been violated and take action
according to the provisions under Section F
of this Agreement.
(6) Rejection of Submissions:
The Department may reject any
information submitted after the deadlines set
forth in this section or any information
which it is unable to verify to its satisfaction.
If information is not submitted in a complete
and timely fashion, or is not fully verifiable,
the Department may calculate the NV, and/
or U.S. price, based on facts otherwise
available, as it determines appropriate,
unless the Department determines that
Section F of this Agreement applies.
(E) Disclosure and Comment:
(1) The Department may make available to
representatives of each interested party to the
proceeding, under appropriately drawn
administrative protective orders, business
proprietary information submitted to the
Department during the reporting period as
well as the results of its analysis under
section 777 of the Act.
(2) For sales during the Interim Period, the
Department will disclose to each producer/
exporter being issued NVs the preliminary
results and methodology of the Department’s
calculations of the NVs on or after the
effective date of this Agreement.3 At that
3 The Department will endeavor to issue the
preliminary NVs for the Interim Period within five
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time, the Department may also make
available such information to the interested
parties to the proceeding in accordance with
this section.
(3) Not later than May 2 of each ensuing
annual sales period, the Department will
disclose to each producer/exporter being
issued NVs the preliminary results and
methodology of the Department’s
calculations of the NVs. At that time, the
Department may also make available such
information to the interested parties to the
proceeding, in accordance with this section.
(4) Not later than 7 days after the dates of
disclosure under Sections E(2) and E(3),
respectively, of this Agreement, the parties to
the proceeding may submit written
comments to the Department, not to exceed
15 pages. After reviewing these submissions,
the Department will provide to each
producer/exporter its final NVs, as provided
in Sections C(2) and C(3), respectively, of this
Agreement. In addition, the Department may
provide such information to interested
parties, as specified in this section.
(F) Violations of the Agreement:
If the Department determines that the
Agreement is being or has been violated or
no longer meets the requirements of sections
734(b) or (d) of the Act, the Department shall
take action it determines appropriate under
section 734(i) of the Act and the regulations.
(G) Other Provisions:
In entering into the Agreement, the
signatory producers/exporters do not admit
that any sales of merchandise subject to the
Agreement have been made at less than fair
value.
(H) Termination or Withdrawal:
Termination of the suspended
investigation will be considered in
accordance with the five-year review
provisions of section 351.218 of the
Department’s regulations.
Any producer/exporter may withdraw from
the Agreement at any time upon notice to the
Department. Withdrawal shall be effective 60
days after such notice is given to the
Department. Upon withdrawal, the
Department shall follow the procedures
outlined in section 734(i)(1) of the Act.
(I) Definitions:
For purposes of the Agreement, the
following definitions apply:
(1) ‘‘U.S. price’’ means the export price or
constructed export price at which
merchandise is sold by the producer or
exporter to the first unaffiliated person in the
United States, including the amount of any
discounts, rebates, price protection or ship
and debit adjustments, and other adjustments
affecting the net amount paid or to be paid
by the unaffiliated purchaser, as determined
by the Department under section 772 of the
Act.
(2) ‘‘Normal value’’ means the constructed
value (CV) of the merchandise, as determined
by the Department under section 773 of the
Act and the corresponding sections of the
Department’s regulations, and as adjusted in
accordance with Appendix B to this
Agreement.
days after the effective date of this Agreement,
subject to the possible constraints noted in footnote
#1 of Section C(2) of this Agreement.
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(3) ‘‘Producer/Exporter’’ means (1) the
foreign manufacturer or producer, (2) the
foreign producer or reseller which also
exports, and (3) the affiliated person by
whom or for whose account the merchandise
is imported into the United States, as defined
in section 771(28) of the Act.
(4) ‘‘Date of sale’’ means the date of the
invoice as recorded in the exporter’s or
producer’s records kept in the ordinary
course of business, unless the Department
determines that a different date better reflects
the date on which the exporter or producer
establishes the material terms of sale, as
determined by the Department under its
regulations.
The effective date of this Agreement is
September 10, 2007.
For Mexican Producers/Exporters:
Dated: September 10, 2007.
Mark P. Lunn,
The Coca-Cola Company and The Coca-Cola
Export Corporation, Mexico Branch.
For U.S. Department of Commerce:
Dated: September 10, 2007.
Michelle O’Neill,
Deputy Under Secretary for Import
Administration.
Appendix A: Product Coverage
For purposes of this Agreement, the
merchandise covered includes certain lemon
juice for further manufacture, with or
without addition of preservatives, sugar, or
other sweeteners, regardless of the GPL
(grams per liter of citric acid) level of
concentration, brix level, brix/acid ratio,
pulp content, clarity, grade, horticulture
method (e.g., organic or not), processed form
(e.g., frozen or not-from-concentrate), FDA
standard of identity, the size of the container
in which packed, or the method of packing.
Excluded from the scope are: (1) Lemon
juice at any level of concentration packed in
retail-sized containers ready for sale to
consumers, typically at a level of
concentration of 48 GPL; and (2) beverage
products such as lemonade that typically
contain 20% or less lemon juice as an
ingredient.
Lemon juice is classifiable under
subheadings 2009.39.6020, 2009.31.6020,
2009.31.4000, 2009.31.6040, and
2009.39.6040 of the Harmonized Tariff
Schedule of the United States (HTSUS).
While HTSUS subheadings are provided for
convenience and customs purposes, our
written description of the scope of this
Agreement is dispositive.
Appendix B: Principles of Cost
General Framework
The cost information reported to the
Department that will form the basis of the NV
calculations for purposes of the Agreement
must be: 4
• Comprehensive in nature and based on
a reliable accounting system (i.e., a system
based on well-established standards that can
be tied to the audited financial statements);
4 See
footnote # 1 in Section C(2) of this
Agreement.
PO 00000
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Fmt 4703
Sfmt 4703
• Calculated on an annual weightedaverage basis of the plants or cost centers
manufacturing the product;
• Based on fully-absorbed costs of
production, including any downtime;
• Valued in accordance with generally
accepted accounting principles; and
• Reflective of appropriately allocated
common costs so that the costs necessary for
the manufacturing of the product are not
absorbed by other products.
Additionally, a separate figure should be
reported for each major cost component
making up the cost of production.
Cost of Manufacturing (COM)
Costs of manufacturing are reported by
major cost category and for major stages of
production. Weighted-average costs are used
for a product that is produced at more than
one facility, based on the product’s cost at
each facility and relative production
quantities.
Direct materials costs include the
acquisition costs of all materials that are
identified as part of the finished product and
may be traced to the finished product in an
economically feasible way. In contrast to
indirect materials, direct materials are
applied and assigned directly to a finished
product. Direct materials costs should
include transportation charges, import
duties, and other expenses normally
associated with obtaining the materials that
become an integral part of the finished
product.
Direct labor costs are the labor costs
identified with a specific product. These
costs are not allocated among products
except when two or more products are
produced at the same cost center. Direct labor
costs should include salary, bonus and
overtime pay, training expenses, and all
fringe benefits. Any contracted-labor expense
should reflect the actual billed cost.
Variable manufacturing overhead costs
include those production costs, other than
direct materials or direct labor, that generally
vary in total with changes in the volume of
merchandise produced at a given level of
operations. Variable manufacturing overhead
costs may include indirect materials (e.g.,
supplies used in the manufacturing process),
indirect labor (e.g. supervisory labor paid on
an hourly basis), utilities (e.g., energy), and
other variable overhead costs. Because
variable overhead costs are typically incurred
for an entire production line or factory, the
costs must be allocated to the products
produced using a reasonable basis.
Fixed manufacturing overhead costs
include those production costs that generally
do not vary in total with changes in the
volume of merchandise produced at a given
level of operations. Fixed manufacturing
overhead costs may include the costs
incurred for building or equipment rental,
depreciation, supervisory labor paid on a
salary basis, plant property taxes, and factory
administrative costs. In addition, fixed
manufacturing overhead costs include
research and development (R&D) costs which
relate specifically to the subject merchandise.
Cost of Production (COP)
COP is equal to the sum of direct materials,
direct labor, variable manufacturing
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21SEN1
Federal Register / Vol. 72, No. 183 / Friday, September 21, 2007 / Notices
overhead, and fixed manufacturing overhead
(i.e. COM) plus SG&A expenses in the home
market (HM).
SG&A expenses are those expenses
incurred for the operation of the corporation
as a whole and not directly related to the
manufacture of a particular product. They
include corporate general and administrative
expenses, financing expenses, and general
research and development expenses.
Additionally, direct and indirect selling
expenses incurred in the HM for sales of the
product under investigation are included.
Such expenses are allocated to COM using a
ratio of SG&A costs.
mstockstill on PROD1PC66 with NOTICES
Constructed Value (CV)
Constructed value is equal to the sum of
materials, labor and overhead (COM) and
SG&A expenses plus profit in the comparison
market and the cost of packing for
exportation to the United States.
Calculation of Suspension Agreement
Normal Values
Normal values (for purposes of the
Agreement) are calculated by adjusting the
CV and are provided for both EP and CEP
transactions. In effect, any expenses uniquely
associated with the covered products sold in
the HM are subtracted from the CV, and any
such expenses which are uniquely associated
with the covered products sold in the United
States are added to the CV to calculate the
NV.
‘‘Export Price’’—Generally, a U.S. sale is
classified as an export price sale when the
first sale to an unaffiliated person occurs
before the goods are imported into the United
States. In cases where the foreign
manufacturer knows or has reason to believe
that the merchandise is ultimately destined
for the United States, the manufacturer’s sale
is the sale subject to review. If, on the other
hand, the manufacturer sold the merchandise
to a foreign trader without knowledge of the
trader’s intention to export the merchandise
to the United States, then the trader’s first
sale to an unaffiliated person is the sale
subject to review. For EP NVs, the CV is
adjusted for movement costs and differences
in direct selling expenses such as
commissions, credit, warranties, technical
services, advertising, and sales promotion.
‘‘Constructed Export Price’’—Generally, a
U.S. sale is classified as a constructed export
price sale when the first sale to an
unaffiliated person occurs after importation.
However, if the first sale to an unaffiliated
person is made by a person in the United
States affiliated with the foreign exporter,
constructed export price applies even if the
sale occurs prior to importation, unless the
U.S. affiliate performs only clerical functions
in connection with the sale. For CEP NVs, the
CV is adjusted similar to EP sales, with
differences for adjustment to U.S. and HM
indirect selling expenses.
Home market direct selling expenses are
expenses that are incurred as a direct result
of a sale. These include such expenses as
commissions, advertising, discounts and
rebates, credit, warranty expenses, freight
costs, etc. Certain direct selling expenses are
treated individually, including:
—Commission expenses, i.e., payments to
unaffiliated parties for sales in the HM.
VerDate Aug<31>2005
18:17 Sep 20, 2007
Jkt 211001
—Credit expenses, i.e., expenses incurred for
the extension of credit to HM customers.
—Movement expenses, e.g., foreign inland
freight and insurance expenses,
warehousing, and foreign brokerage,
handling and port charges.
U.S. direct selling expenses are the same as
HM direct selling expenses except that they
are incurred for sales in the United States.
Movement expenses are additional expenses
associated with importation into the United
States, which typically include: U.S. inland
freight and insurance expenses; U.S.
brokerage, handling and port charges; U.S.
Customs duties, U.S. warehousing; and
international freight and insurance.
U.S. indirect selling expenses include
general fixed expenses incurred by the U.S.
sales subsidiary or affiliated exporter for
sales to the United States and may also
include a portion of indirect expenses
incurred in the HM for export sales.
The EP and CEP NVs are calculated as
follows:
For EP transactions
+
+
+
=
+
=
+
+
=
+
+
+
+
¥
¥
¥
=
Direct Materials.
Direct Labor.
Factory Overhead.
Cost of Manufacturing (COM).
Home Market SG&A.
Cost of Production (COP).
U.S. Packing.
Profit.
Constructed Value.
U.S. Direct Selling Expense.
U.S. Commission Expense.
U.S. Movement Expense.
U.S. Credit Expense.
HM Direct Selling Expense.
HM Commission Expense. 1
HM Credit Expense.
NV for EP Sales.
For CEP transactions
Direct Materials.
Direct Labor.
Factory Overhead.
Cost of Manufacturing (COM).
Home Market SG&A.
Cost of Production (COP).
U.S. Packing.
Profit.
Constructed Value.
U.S. Direct Selling Expense.
U.S. Indirect Selling Expense.
U.S. Commission Expense.
U.S. Movement Expense.
U.S. Credit Expense.
U.S. Further-Manufacturing Expense (if
any).1
+ CEP Profit.
¥ HM Direct Selling Expense.
¥ HM Commission Expense.2
¥ HM Credit Expense.
PO 00000
Frm 00020
Fmt 4703
Sfmt 4703
For CEP transactions
=
NV for CEP Sales.
1 The
Department will examine any furthermanufacturing expenses on value-added products sold to the first unaffiliated purchaser in
the United States by a person affiliated with
the foreign producer/exporter, and produced
from subject merchandise purchased directly
from that foreign producer/exporter, on a caseby-case basis and reserves the right to make
adjustments to its reporting requirements and
calculation methodology for these expenses.
For example, in cases where a producer/exporter’s affiliate makes sales of products with
significant value added to unaffiliated purchasers in the United States, or the range of
such products is significant, the Department
may adjust its reporting requirements and calculation methodology for the further manufacturing costs associated with the value-added
products. Additionally, if the ratio of a producer/exporter’s reported sales to unaffiliated
purchasers versus its sales to affiliated persons shifts over time, the Department may
make further adjustments in its reporting requirements and calculation methodology for
the further-manufacturing expenses associated with the value-added products.
2 If the company does not have HM commissions, HM indirect expenses are subtracted
only up to the amount of the U.S.
commissions.
Appendix C: Cost Allocation and NV
Methodology
1 If the company does not have HM commissions, HM indirect expenses are subtracted
only up to the amount of the U.S.
commissions.
+
+
+
=
+
=
+
+
=
+
+
+
+
+
+
53999
The following provides clarification
regarding the methodologies the Department
will use in calculating normal values under
this Agreement:
(A) For The Coca-Cola Company and The
Coca-Cola Export Corporation, Mexico
Branch (collectively, ‘‘Coexport’’):
(1) Cost Allocation for Life of Agreement:
Throughout the life of this Agreement, to
allocate common costs, the Department will
allocate 8.5 percent of the reported lemon
fruit costs and common lemon processing
costs to lemon juice and 91.5 percent of these
same costs to lemon oil for purposes of
calculating Coexport’s NVs, as detailed in
Appendix B to this Agreement.
(2) All Other Costs and Sales Expenses for
Interim Period NVs:
For the Interim Period only of this
Agreement, the Department will use all other
reported costs and sales expenses, as
adjusted by the Department, where
appropriate, for the preliminary
determination in the underlying antidumping
duty investigation, for purposes of
calculating Coexport’s NVs, as detailed in
Appendix B to this Agreement.
(3) Monitoring of Value-Added Products
after the Interim Period:
In addition to the stipulations noted in
footnote #1 to the calculation for CEP
transactions in Appendix B to this
Agreement, the Department shall normally
choose between two to three products with
significant value added, as reported by
Coexport pursuant to Section D(1) during
each NV cycle, for examination and
monitoring of the related costs and sales
expenses. For such value-added products, the
Department shall set CEP profit to equal CV
profit for purposes of the NV calculation.
(4) Invoice Offsets:
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54000
Federal Register / Vol. 72, No. 183 / Friday, September 21, 2007 / Notices
mstockstill on PROD1PC66 with NOTICES
The Department and signatory producers/
exporters agree that an arrangement wherein
Coexport bases its lemon oil sales price on
its cost which includes an offset for the sales
value of lemon juice, and later issues a credit
or additional invoice to its customer to take
into account the final cost of lemon oil, as
offset by the lemon juice revenue, is a normal
business practice which would not normally
be considered in circumvention of this
Agreement as defined in Section D(5) of this
Agreement. However, such an arrangement
will be subject to the reporting and
verification requirements of this Agreement
and to consideration by the Department
during each NV cycle.
(B) For All Other Signatories to the
Agreement:
Throughout the life of this Agreement, the
Department will use the signatories’ reported
costs and sales expenses, as adjusted by the
Department, where appropriate, for purposes
of calculating the signatories’ NVs, as
detailed in Appendix B to this Agreement.
16, 2007, Sunflag withdrew its request
for a new shipper review.
Scope of the Order
Imports covered by the order are
shipments of SSB. SSB means articles of
stainless steel in straight lengths that
have been either hot–rolled, forged,
turned, cold–drawn, cold–rolled or
otherwise cold–finished, or ground,
having a uniform solid cross section
along their whole length in the shape of
circles, segments of circles, ovals,
rectangles (including squares), triangles,
hexagons, octagons, or other convex
polygons. SSB includes cold–finished
SSBs that are turned or ground in
straight lengths, whether produced from
hot–rolled bar or from straightened and
cut rod or wire, and reinforcing bars that
have indentations, ribs, grooves, or
other deformations produced during the
[FR Doc. E7–18298 Filed 9–20–07; 8:45 am]
rolling process.
BILLING CODE 3510–DS–P
Except as specified above, the term
does not include stainless steel semi–
DEPARTMENT OF COMMERCE
finished products, cut–to-length flat–
rolled products (i.e., cut–to-length
International Trade Administration
rolled products which if less than 4.75
mm in thickness have a width
A–533–810
measuring at least 10 times the
Stainless Steel Bar from India: Notice
thickness, or if 4.75 mm or more in
of Rescission of Antidumping Duty
thickness having a width which exceeds
New Shipper Review of Sunflag Iron &
150 mm and measures at least twice the
Steel Co. Ltd.
thickness), wire (i.e., cold–formed
products in coils, of any uniform solid
AGENCY: Import Administration,
cross section along their whole length,
International Trade Administration,
which do not conform to the definition
Department of Commerce.
of flat–rolled products), and angles,
EFFECTIVE DATE: September 21, 2007.
shapes, and sections.
FOR FURTHER INFORMATION CONTACT:
The SSB subject to these reviews is
Devta Ohri, AD/CVD Operations, Office
currently classifiable under subheadings
1, Import Administration, International
7222.11.00.05, 7222.11.00.50,
Trade Administration, U.S. Department
7222.19.00.05, 7222.19.00.50,
of Commerce, 14th Street and
Constitution Avenue, NW, Washington, 7222.20.00.05, 7222.20.00.45,
7222.20.00.75, and 7222.30.00.00 of the
DC 20230; telephone (202) 482–3853.
Harmonized Tariff Schedule of the
SUPPLEMENTARY INFORMATION:
United States (HTSUS). Although the
HTSUS subheadings are provided for
Background
convenience and customs purposes, our
On February 21, 1995, the Department
written description of the scope of the
published in the Federal Register the
order is dispositive.
antidumping duty order on stainless
On May 23, 2005, the Department
steel bar (SSB) from India. See
issued a final scope ruling that SSB
Antidumping Duty Orders: Stainless
manufactured in the United Arab
Steel Bar from Brazil, India and Japan,
Emirates out of stainless steel wire rod
60 FR 9661 (February 21, 1995). On
from India is not subject to the scope of
February 28, 2007, the Department
this order. See Memorandum from Team
received a timely request from Sunflag
to Barbara E. Tillman, ‘‘Antidumping
for a new shipper review of the
Duty Orders on Stainless Steel Bar from
antidumping duty order on SSB from
India and Stainless Steel Wire Rod from
India, in accordance with 19 CFR
India: Final Scope Ruling,’’ dated May
351.214(c). On March 23, 2007, the
23, 2005, which is on file in the CRU in
Department initiated a new shipper
room B–099 of the main Department
review of Sunflag. See Stainless Steel
building. See also Notice of Scope
Bar from India: Notice of Initiation of
Antidumping Duty New Shipper Review, Rulings, 70 FR 55110 (September 20,
72 FR 15110 (March 30, 2007). On April 2005).
VerDate Aug<31>2005
18:17 Sep 20, 2007
Jkt 211001
PO 00000
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Fmt 4703
Sfmt 4703
Rescission of Review
The Department’s regulations at 19
CFR 351.214(f)(1) provide that the
Department will rescind a new shipper
review if the party that requested the
review withdraws the request within 60
days of the date of publication of the
notice of initiation of the requested
review. Sunflag withdrew its request for
a new shipper review on April 16, 2007,
which is within the 60-day deadline.
Therefore, the Department is rescinding
this new shipper review of Sunflag.
We note that Sunflag is currently
participating in the 2006–2007
antidumping duty administrative review
of SSB from India, which has the exact
same period of review as this new
shipper review, i.e., February 1, 2006,
through January 31, 2007. Therefore, we
will not issue any liquidation
instructions to U.S. Customs and Border
Protection until after the final results are
issued for the 2006–2007 antidumping
duty administrative review.
Notification Regarding Administrative
Protective Orders
This notice also serves as a reminder
to parties subject to administrative
protective order (‘‘APO’’) of their
responsibility concerning the
disposition of proprietary information
disclosed under APO in accordance
with 19 CFR 351.305(a)(3). Timely
written notification of the return or
destruction of APO materials or
conversion to judicial protective order is
hereby requested. Failure to comply
with the regulations and the terms of an
APO is a sanctionable violation.
This notice is published in
accordance with section 777(i) of the
Tariff Act of 1930, as amended, and 19
CFR 351.213(d)(4).
Dated: September 12, 2007.
Gary Taverman,
Acting Deputy Assistant Secretary for Import
Administration.
[FR Doc. E7–18710 Filed 9–20–07; 8:45 am]
BILLING CODE 3510–DS–S
DEPARTMENT OF COMMERCE
International Trade Administration
Export Trade Certificate of Review
Notice of issuance of an
amended Export Trade Certificate of
Review, Application No. 84–18A12.
ACTION:
SUMMARY: On September 17, 2007, The
U.S. Department of Commerce issued an
amended Export Trade Certificate of
Review to Northwest Fruit Exporters
(‘‘NFE’’).
E:\FR\FM\21SEN1.SGM
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]]>Agencies
[Federal Register Volume 72, Number 183 (Friday, September 21, 2007)]
[Notices]
[Pages 53995-54000]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-18298]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-201-835]
Suspension of Antidumping Duty Investigation: Lemon Juice From
Mexico
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') has suspended
the antidumping duty investigation involving lemon juice from Mexico.
The basis for this action is an agreement between the Department and
The Coca-Cola Company and The Coca-Cola Export Corporation, Mexico
Branch (collectively ``Coca-Cola'') to revise their prices to eliminate
completely sales of this merchandise to the United States at less than
fair value.
DATES: Effective Date: September 10, 2007.
FOR FURTHER INFORMATION CONTACT: Sally Gannon or James Kemp at (202)
482-0162 and (202) 482-5346, respectively, Bilateral Agreements Unit,
Office of Policy, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230.
SUPPLEMENTARY INFORMATION:
[[Page 53996]]
Background
On October 11, 2006, the Department initiated an antidumping duty
investigation under section 732 of the Tariff Act of 1930, as amended
(``the Act'') to determine whether imports of lemon juice from Mexico
are being, or are likely to be sold in the United States at less than
fair value (71 FR 61710 (October 19, 2006)). On November 3, 2007, the
United States International Trade Commission (``ITC'') notified the
Department of its affirmative preliminary injury determination in this
case. See Lemon Juice from Argentina and Mexico, Inv. Nos. 731-TA-1105-
1106 (Preliminary) USITC Pub. No. 3891 (November 2006). On April 19,
2007, the Department preliminarily determined that lemon juice is
being, or is likely to be sold in the United States at less than fair
value (``LTFV''), as provided in section 733 of the Act (Notice of
Preliminary Determinations of Sales at Less than Fair Value and of
Critical Circumstances in Part: Lemon Juice from Mexico, 72 FR 20830
(April 26, 2007) (``Preliminary Determination'')). On May 17, 2007, the
Department postponed the final determination in this investigation
until no later than September 10, 2007 (Lemon Juice from Argentina and
Mexico: Postponement of Final Antidumping Duty Determinations and
Extension of Provisional Measures, 72 FR 28953 (May 23, 2007)).
The Department and Coca-Cola initialed a proposed agreement
suspending this investigation on August 10, 2007. On August 13, 2007,
we invited interested parties to provide written comments on the
proposed suspension agreement. On August 24, 2007, the Department also
invited interested parties to provide written comments on an issue
related to the draft suspension agreement with respect to purchase
orders and/or long-term contracts entered into prior to September 10,
2007. In response to our requests for comment, on August 30, 2007, we
received comments from petitioner Sunkist Growers Inc. and respondent
Coca-Cola. We received further comments from petitioner and respondent
on September 6, 2007, and again from petitioner on September 7 and 10,
2007. We have taken these comments into consideration for the final
version of the suspension agreement.
The Department and Coca-Cola signed the suspension agreement on
September 10, 2007.
Scope of Investigation
For a complete description of the scope of the investigation, see
Agreement Suspending the Antidumping Investigation on Lemon Juice from
Mexico, Appendix A, signed September 10, 2007, attached hereto in Annex
1.
Suspension of Investigation
The Department consulted with the parties to the proceeding and has
considered the comments submitted with respect to the proposed
suspension agreement. In accordance with sections 734(b) and (d) of the
Act, we have determined that the agreement will completely eliminate
sales at less than fair value, that the agreement is in the public
interest, and that the agreement can be monitored effectively. See,
Public Interest and Effective Monitoring Memorandum, dated September
10, 2007. See also, Percentage of Exports Memorandum, dated September
10, 2007. We find, therefore, that the criteria for suspension of an
investigation pursuant to sections 734(b) and (d) of the Act have been
met. The terms and conditions of this agreement, signed September 10,
2007, are set forth in Annex 1 to this notice.
Pursuant to section 734(f)(2)(A) of the Act, the suspension of
liquidation of all entries of lemon juice from Mexico entered, or
withdrawn from warehouse, for consumption, as directed in the
Preliminary Determination is hereby terminated. Any cash deposits on
entries of lemon juice from Mexico pursuant to that suspension of
liquidation shall be refunded and any bonds shall be released.
This notice is published pursuant to section 734(f)(1)(A) of the
Act.
Dated: September 10, 2007.
Michelle O'Neill,
Deputy Under Secretary for International Trade.
Annex 1--Agreement Suspending the Antidumping Investigation on Lemon
Juice From Mexico
Pursuant to section 734(b) of the Tariff Act of 1930, as amended
(19 U.S.C. 1673c(b)) (the ``Act''), and 19 CFR 351.208 (the
``Regulations''), the U.S. Department of Commerce (the
``Department'') and the signatory producers/exporters of Lemon Juice
from Mexico (the ``Signatories'') enter into this suspension
agreement (the ``Agreement''). On the basis of this Agreement, on
the effective date of this Agreement, the Department shall suspend
its antidumping investigation initiated on October 19, 2006 (17 FR
61710) with respect to Lemon Juice from Mexico, subject to the terms
and provisions set forth below.
(A) Product Coverage:
For purposes of this Agreement, the merchandise covered is Lemon
Juice, as described in Appendix A.
(B) U.S. Import Coverage:
The signatory producers/exporters collectively are the producers
and exporters in Mexico that accounted for substantially all (not
less than 85 percent) of the subject merchandise imported into the
United States, as provided in the Department's regulations at 19 CFR
351.208(c). The Department may, at anytime during the period of the
Agreement, require additional producers/exporters in Mexico to sign
the Agreement in order to ensure that not less than substantially
all imports into the United States are covered by the Agreement.
In reviewing the operation of the Agreement for the purpose of
determining whether this Agreement has been violated or is no longer
in the public interest, the Department will consider imports into
the United States from all sources of the merchandise described in
Section A of the Agreement. For this purpose, the Department will
consider factors including, but not limited to, the following:
volume of trade, pattern of trade, whether or not the reseller is an
original equipment manufacturer, and the reseller's export price
(EP).
(C) Basis of the Agreement:
On and after the effective date of the Agreement, each signatory
producer/exporter individually agrees to make any necessary price
revisions to eliminate completely any amount by which the normal
value (NV) of this merchandise exceeds the U.S. price of its
merchandise subject to the Agreement. For this purpose, the
Department will determine the NV in accordance with section 773(e)
of the Act and U.S. price in accordance with section 772 of the Act.
For details of the Department's calculation methodology under this
Agreement, see Appendices B and C.
(1) For the period from the effective date of this Agreement
through the release of the first NVs, each signatory producer/
exporter agrees not to sell its merchandise subject to this
Agreement in the United States.
However, during this period and subsequent periods, as relevant,
a signatory producer/exporter may proceed with deliveries of subject
merchandise made pursuant to purchase orders or long-term contracts
entered into prior to September 10, 2007, if the Department
determines, in accordance with its regulations, that the signatory
producer's/exporter's appropriate date of sale is the date of the
purchase order or long-term contract (see Section I(4) below). At
any time, should the Department determine that the purchase order or
long-term contract date was not the appropriate date of sale for a
signatory producer/exporter making such deliveries, the Department
may consider such deliveries to be in violation of this Agreement
(see Section F below). Any signatory producer/exporter making such
deliveries under this Agreement must provide a one-time report to
the Department, within 30 days of these deliveries having been
completed, which contains a listing of the contract or purchase
order dates, the delivery quantities, the dates of delivery, the
entry dates, and the prices at which the subject merchandise was
sold. This
[[Page 53997]]
information will be subject to verification in accordance with
Section D(4) of this Agreement.
(2) For all sales occurring on or after the date of issuance of
the first NVs, through June 30, 2008 (``Interim Period''), each
signatory producer/exporter issued NVs by the Department agrees not
to sell its merchandise subject to this Agreement to any purchaser
in the United States at prices that are less than the NVs of the
merchandise, as determined by the Department on the basis of the
sales and cost information submitted by the signatory producer/
exporter in the course of the underlying antidumping duty
investigation. The final NVs for a signatory producer/exporter
during this Interim Period shall be issued within 14 days after the
preliminary NVs are issued pursuant to Section E(2) of this
Agreement.\1\
---------------------------------------------------------------------------
\1\ The issuance of the NVs for any given signatory may be
delayed depending on the following: (1) Issues related to the
underlying antidumping duty investigation; (2) to allow sufficient
time for signatories to respond to the Department's request for
sales and cost data; and/or (3) to resolve issues raised in comments
from interested parties or by the Department. In accordance with
section 773(f) of the Act, the Department will examine relevant
prices and costs and, for any sales period, may disregard particular
prices or costs when the prices are not in the ordinary course of
trade, the costs are not in accordance with the generally accepted
accounting principles, the costs do not reasonably reflect the costs
associated with the production and sale of the merchandise, or in
other situations provided for in the Act or the Department's
regulations. Examples of possible areas in which adjustments may be
necessary include, but are not limited to, costs related to energy,
depreciation, transactions among affiliates, barter transactions, as
well as items that are not recognized by the home country's
generally accepted accounting principles.
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(3) For all sales occurring after the Interim Period, each
signatory producer/exporter issued NVs by the Department agrees not
to sell its merchandise subject to this Agreement to any purchaser
in the United States at prices that are less than the NVs of the
merchandise, as determined by the Department on the basis of
information submitted to the Department not later than the dates
specified in Section D of this Agreement and provided to the
signatory producer/exporter no later than June 1 of each year. These
NVs shall apply to sales occurring during the annual period (i.e.,
July through June) beginning 30 days following the date on which the
Department provides the NVs, as stated in this paragraph.
(D) Monitoring:
Each signatory producer/exporter will supply to the Department
all information that the Department decides is necessary to ensure
that the producer/exporter is in full compliance with the terms of
the Agreement. As explained below, the Department will provide each
signatory producer/exporter a detailed request for information and
prescribe a required format and method of data compilation, not
later than the beginning of each reporting period.\2\
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\2\ As noted in Section C(2) of this Agreement, the first NVs
issued for certain signatory producer/exporters may be based on
sales and cost information submitted by those signatories in the
underlying antidumping duty investigation, and the resulting NVs
issued will apply to sales occurring between the issuance date of
the NVs and June 30, 2008 (Interim Period).
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(1) Sales Information:
The Department will require each producer/exporter to report, in
electronic form in the prescribed format and using the prescribed
method of data compilation, each sale of the merchandise subject to
the Agreement, either directly or indirectly to unaffiliated
purchasers in the United States, as well as sales in the comparison
market (home or third country market, as appropriate), including
each adjustment applicable to each sale, as specified by the
Department.
The first report of sales data, pursuant to Section C(3) of this
Agreement, shall be submitted to the Department, in electronic form
(e.g., on diskette, zip disk, or CD ROM) in the prescribed format
and using the prescribed method of data compilation, not later than
October 1, 2007, and shall contain the specified sales information
covering the period July 1, 2006, through June 30, 2007. Subsequent
reports of sales data shall be submitted to the Department not later
than October 1 of each year, and each report shall contain the
specified sales information for the annual period ending on June 30
of that year, except that if the Department receives information
that a possible violation of the Agreement may have occurred, the
Department may request sales data on a more frequent basis.
(2) Cost Information:
Producers/exporters must request NVs for all subject merchandise
that will be sold in the United States. For those products which the
producer/exporter is requesting NVs, the Department will require
each producer/exporter to report, in the prescribed format and using
the prescribed method of data compilation, the following: Its actual
cost of manufacturing; selling, general and administrative (SG&A)
expenses; and profit data on an annual basis. As indicated in
Appendix B to this Agreement, profit will be reported by the
producers/exporters on an annual basis. Each such producer/exporter
also must report anticipated increases in production costs in the
annual period in which the information is submitted resulting from
factors such as anticipated changes in production yield, changes in
production process, changes in production quantities or changes in
production facilities.
The first report of cost data, pursuant to Section C(3) of this
Agreement, shall be submitted to the Department not later than
October 15, 2007, and shall contain the specified cost data covering
the period July 1, 2006, through June 30, 2007. Each subsequent
report shall be submitted to the Department not later than October
15 of each year, and each report shall contain the specified
information for the annual period ending on June 30 of that year.
(3) Special Adjustment of Normal Value:
If the Department determines that the NV it determined for a
previous annual period was erroneous because the reported costs for
that period were inaccurate or incomplete, or for any other reason,
the Department may adjust NV in a subsequent period or periods,
unless the Department determines that Section F of the Agreement
applies.
(4) Verification:
Each producer/exporter agrees to permit full verification of all
cost and sales information annually, or more frequently, as the
Department deems necessary.
(5) Bundling or Other Arrangements:
Producers/exporters agree not to circumvent the Agreement. In
accordance with the dates set forth in Section D(1) of this
Agreement, producers/exporters will submit a written statement to
the Department certifying that the sales reported herein were not,
or are not part of or related to, any bundling arrangement, on-site
processing arrangement, discounts/free goods/financing package, swap
or other exchange where such arrangement is designed to circumvent
the basis of the Agreement.
Where there is reason to believe that such an arrangement does
circumvent the basis of the Agreement, the Department will request
producers/exporters to provide within 15 days all particulars
regarding any such arrangement, including, but not limited to, sales
information pertaining to covered and non-covered merchandise that
is manufactured or sold by producers/exporters. The Department will
accept written comments, not to exceed 30 pages, from all parties no
later than 15 days after the date of receipt of such producer/
exporter information.
If the Department, after reviewing all submissions, determines
that such an arrangement circumvents the basis of the Agreement, it
may, as it deems most appropriate, utilize one of two options: (1)
The amount of the effective price discount resulting from such
arrangement shall be reflected in the NV in accordance with Section
D(3) of this Agreement, or (2) the Department shall determine that
the Agreement has been violated and take action according to the
provisions under Section F of this Agreement.
(6) Rejection of Submissions:
The Department may reject any information submitted after the
deadlines set forth in this section or any information which it is
unable to verify to its satisfaction. If information is not
submitted in a complete and timely fashion, or is not fully
verifiable, the Department may calculate the NV, and/or U.S. price,
based on facts otherwise available, as it determines appropriate,
unless the Department determines that Section F of this Agreement
applies.
(E) Disclosure and Comment:
(1) The Department may make available to representatives of each
interested party to the proceeding, under appropriately drawn
administrative protective orders, business proprietary information
submitted to the Department during the reporting period as well as
the results of its analysis under section 777 of the Act.
(2) For sales during the Interim Period, the Department will
disclose to each producer/exporter being issued NVs the preliminary
results and methodology of the Department's calculations of the NVs
on or after the effective date of this Agreement.\3\ At that
[[Page 53998]]
time, the Department may also make available such information to the
interested parties to the proceeding in accordance with this
section.
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\3\ The Department will endeavor to issue the preliminary NVs
for the Interim Period within five days after the effective date of
this Agreement, subject to the possible constraints noted in
footnote 1 of Section C(2) of this Agreement.
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(3) Not later than May 2 of each ensuing annual sales period,
the Department will disclose to each producer/exporter being issued
NVs the preliminary results and methodology of the Department's
calculations of the NVs. At that time, the Department may also make
available such information to the interested parties to the
proceeding, in accordance with this section.
(4) Not later than 7 days after the dates of disclosure under
Sections E(2) and E(3), respectively, of this Agreement, the parties
to the proceeding may submit written comments to the Department, not
to exceed 15 pages. After reviewing these submissions, the
Department will provide to each producer/exporter its final NVs, as
provided in Sections C(2) and C(3), respectively, of this Agreement.
In addition, the Department may provide such information to
interested parties, as specified in this section.
(F) Violations of the Agreement:
If the Department determines that the Agreement is being or has
been violated or no longer meets the requirements of sections 734(b)
or (d) of the Act, the Department shall take action it determines
appropriate under section 734(i) of the Act and the regulations.
(G) Other Provisions:
In entering into the Agreement, the signatory producers/
exporters do not admit that any sales of merchandise subject to the
Agreement have been made at less than fair value.
(H) Termination or Withdrawal:
Termination of the suspended investigation will be considered in
accordance with the five-year review provisions of section 351.218
of the Department's regulations.
Any producer/exporter may withdraw from the Agreement at any
time upon notice to the Department. Withdrawal shall be effective 60
days after such notice is given to the Department. Upon withdrawal,
the Department shall follow the procedures outlined in section
734(i)(1) of the Act.
(I) Definitions:
For purposes of the Agreement, the following definitions apply:
(1) ``U.S. price'' means the export price or constructed export
price at which merchandise is sold by the producer or exporter to
the first unaffiliated person in the United States, including the
amount of any discounts, rebates, price protection or ship and debit
adjustments, and other adjustments affecting the net amount paid or
to be paid by the unaffiliated purchaser, as determined by the
Department under section 772 of the Act.
(2) ``Normal value'' means the constructed value (CV) of the
merchandise, as determined by the Department under section 773 of
the Act and the corresponding sections of the Department's
regulations, and as adjusted in accordance with Appendix B to this
Agreement.
(3) ``Producer/Exporter'' means (1) the foreign manufacturer or
producer, (2) the foreign producer or reseller which also exports,
and (3) the affiliated person by whom or for whose account the
merchandise is imported into the United States, as defined in
section 771(28) of the Act.
(4) ``Date of sale'' means the date of the invoice as recorded
in the exporter's or producer's records kept in the ordinary course
of business, unless the Department determines that a different date
better reflects the date on which the exporter or producer
establishes the material terms of sale, as determined by the
Department under its regulations.
The effective date of this Agreement is September 10, 2007.
For Mexican Producers/Exporters:
Dated: September 10, 2007.
Mark P. Lunn,
The Coca-Cola Company and The Coca-Cola Export Corporation, Mexico
Branch.
For U.S. Department of Commerce:
Dated: September 10, 2007.
Michelle O'Neill,
Deputy Under Secretary for Import Administration.
Appendix A: Product Coverage
For purposes of this Agreement, the merchandise covered includes
certain lemon juice for further manufacture, with or without
addition of preservatives, sugar, or other sweeteners, regardless of
the GPL (grams per liter of citric acid) level of concentration,
brix level, brix/acid ratio, pulp content, clarity, grade,
horticulture method (e.g., organic or not), processed form (e.g.,
frozen or not-from-concentrate), FDA standard of identity, the size
of the container in which packed, or the method of packing.
Excluded from the scope are: (1) Lemon juice at any level of
concentration packed in retail-sized containers ready for sale to
consumers, typically at a level of concentration of 48 GPL; and (2)
beverage products such as lemonade that typically contain 20% or
less lemon juice as an ingredient.
Lemon juice is classifiable under subheadings 2009.39.6020,
2009.31.6020, 2009.31.4000, 2009.31.6040, and 2009.39.6040 of the
Harmonized Tariff Schedule of the United States (HTSUS). While HTSUS
subheadings are provided for convenience and customs purposes, our
written description of the scope of this Agreement is dispositive.
Appendix B: Principles of Cost
General Framework
The cost information reported to the Department that will form
the basis of the NV calculations for purposes of the Agreement must
be: \4\
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\4\ See footnote 1 in Section C(2) of this Agreement.
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Comprehensive in nature and based on a reliable
accounting system (i.e., a system based on well-established
standards that can be tied to the audited financial statements);
Calculated on an annual weighted-average basis of the
plants or cost centers manufacturing the product;
Based on fully-absorbed costs of production, including
any downtime;
Valued in accordance with generally accepted accounting
principles; and
Reflective of appropriately allocated common costs so
that the costs necessary for the manufacturing of the product are
not absorbed by other products.
Additionally, a separate figure should be reported for each
major cost component making up the cost of production.
Cost of Manufacturing (COM)
Costs of manufacturing are reported by major cost category and
for major stages of production. Weighted-average costs are used for
a product that is produced at more than one facility, based on the
product's cost at each facility and relative production quantities.
Direct materials costs include the acquisition costs of all
materials that are identified as part of the finished product and
may be traced to the finished product in an economically feasible
way. In contrast to indirect materials, direct materials are applied
and assigned directly to a finished product. Direct materials costs
should include transportation charges, import duties, and other
expenses normally associated with obtaining the materials that
become an integral part of the finished product.
Direct labor costs are the labor costs identified with a
specific product. These costs are not allocated among products
except when two or more products are produced at the same cost
center. Direct labor costs should include salary, bonus and overtime
pay, training expenses, and all fringe benefits. Any contracted-
labor expense should reflect the actual billed cost.
Variable manufacturing overhead costs include those production
costs, other than direct materials or direct labor, that generally
vary in total with changes in the volume of merchandise produced at
a given level of operations. Variable manufacturing overhead costs
may include indirect materials (e.g., supplies used in the
manufacturing process), indirect labor (e.g. supervisory labor paid
on an hourly basis), utilities (e.g., energy), and other variable
overhead costs. Because variable overhead costs are typically
incurred for an entire production line or factory, the costs must be
allocated to the products produced using a reasonable basis.
Fixed manufacturing overhead costs include those production
costs that generally do not vary in total with changes in the volume
of merchandise produced at a given level of operations. Fixed
manufacturing overhead costs may include the costs incurred for
building or equipment rental, depreciation, supervisory labor paid
on a salary basis, plant property taxes, and factory administrative
costs. In addition, fixed manufacturing overhead costs include
research and development (R&D) costs which relate specifically to
the subject merchandise.
Cost of Production (COP)
COP is equal to the sum of direct materials, direct labor,
variable manufacturing
[[Page 53999]]
overhead, and fixed manufacturing overhead (i.e. COM) plus SG&A
expenses in the home market (HM).
SG&A expenses are those expenses incurred for the operation of
the corporation as a whole and not directly related to the
manufacture of a particular product. They include corporate general
and administrative expenses, financing expenses, and general
research and development expenses. Additionally, direct and indirect
selling expenses incurred in the HM for sales of the product under
investigation are included. Such expenses are allocated to COM using
a ratio of SG&A costs.
Constructed Value (CV)
Constructed value is equal to the sum of materials, labor and
overhead (COM) and SG&A expenses plus profit in the comparison
market and the cost of packing for exportation to the United States.
Calculation of Suspension Agreement Normal Values
Normal values (for purposes of the Agreement) are calculated by
adjusting the CV and are provided for both EP and CEP transactions.
In effect, any expenses uniquely associated with the covered
products sold in the HM are subtracted from the CV, and any such
expenses which are uniquely associated with the covered products
sold in the United States are added to the CV to calculate the NV.
``Export Price''--Generally, a U.S. sale is classified as an
export price sale when the first sale to an unaffiliated person
occurs before the goods are imported into the United States. In
cases where the foreign manufacturer knows or has reason to believe
that the merchandise is ultimately destined for the United States,
the manufacturer's sale is the sale subject to review. If, on the
other hand, the manufacturer sold the merchandise to a foreign
trader without knowledge of the trader's intention to export the
merchandise to the United States, then the trader's first sale to an
unaffiliated person is the sale subject to review. For EP NVs, the
CV is adjusted for movement costs and differences in direct selling
expenses such as commissions, credit, warranties, technical
services, advertising, and sales promotion.
``Constructed Export Price''--Generally, a U.S. sale is
classified as a constructed export price sale when the first sale to
an unaffiliated person occurs after importation. However, if the
first sale to an unaffiliated person is made by a person in the
United States affiliated with the foreign exporter, constructed
export price applies even if the sale occurs prior to importation,
unless the U.S. affiliate performs only clerical functions in
connection with the sale. For CEP NVs, the CV is adjusted similar to
EP sales, with differences for adjustment to U.S. and HM indirect
selling expenses.
Home market direct selling expenses are expenses that are
incurred as a direct result of a sale. These include such expenses
as commissions, advertising, discounts and rebates, credit, warranty
expenses, freight costs, etc. Certain direct selling expenses are
treated individually, including:
--Commission expenses, i.e., payments to unaffiliated parties for
sales in the HM.
--Credit expenses, i.e., expenses incurred for the extension of
credit to HM customers.
--Movement expenses, e.g., foreign inland freight and insurance
expenses, warehousing, and foreign brokerage, handling and port
charges.
U.S. direct selling expenses are the same as HM direct selling
expenses except that they are incurred for sales in the United
States. Movement expenses are additional expenses associated with
importation into the United States, which typically include: U.S.
inland freight and insurance expenses; U.S. brokerage, handling and
port charges; U.S. Customs duties, U.S. warehousing; and
international freight and insurance.
U.S. indirect selling expenses include general fixed expenses
incurred by the U.S. sales subsidiary or affiliated exporter for
sales to the United States and may also include a portion of
indirect expenses incurred in the HM for export sales.
The EP and CEP NVs are calculated as follows:
------------------------------------------------------------------------
For EP transactions
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+ Direct Materials.
+ Direct Labor.
+ Factory Overhead.
= Cost of Manufacturing (COM).
+ Home Market SG&A.
= Cost of Production (COP).
+ U.S. Packing.
+ Profit.
= Constructed Value.
+ U.S. Direct Selling Expense.
+ U.S. Commission Expense.
+ U.S. Movement Expense.
+ U.S. Credit Expense.
- HM Direct Selling Expense.
- HM Commission Expense. \1\
- HM Credit Expense.
= NV for EP Sales.
------------------------------------------------------------------------
\1\ If the company does not have HM commissions, HM indirect expenses
are subtracted only up to the amount of the U.S. commissions.
------------------------------------------------------------------------
For CEP transactions
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+ Direct Materials.
+ Direct Labor.
+ Factory Overhead.
= Cost of Manufacturing (COM).
+ Home Market SG&A.
= Cost of Production (COP).
+ U.S. Packing.
+ Profit.
= Constructed Value.
+ U.S. Direct Selling Expense.
+ U.S. Indirect Selling Expense.
+ U.S. Commission Expense.
+ U.S. Movement Expense.
+ U.S. Credit Expense.
+ U.S. Further-Manufacturing Expense (if any).\1\
+ CEP Profit.
- HM Direct Selling Expense.
- HM Commission Expense.\2\
- HM Credit Expense.
= NV for CEP Sales.
------------------------------------------------------------------------
\1\ The Department will examine any further-manufacturing expenses on
value-added products sold to the first unaffiliated purchaser in the
United States by a person affiliated with the foreign producer/
exporter, and produced from subject merchandise purchased directly
from that foreign producer/exporter, on a case-by-case basis and
reserves the right to make adjustments to its reporting requirements
and calculation methodology for these expenses. For example, in cases
where a producer/exporter's affiliate makes sales of products with
significant value added to unaffiliated purchasers in the United
States, or the range of such products is significant, the Department
may adjust its reporting requirements and calculation methodology for
the further manufacturing costs associated with the value-added
products. Additionally, if the ratio of a producer/exporter's reported
sales to unaffiliated purchasers versus its sales to affiliated
persons shifts over time, the Department may make further adjustments
in its reporting requirements and calculation methodology for the
further-manufacturing expenses associated with the value-added
products.
\2\ If the company does not have HM commissions, HM indirect expenses
are subtracted only up to the amount of the U.S. commissions.
Appendix C: Cost Allocation and NV Methodology
The following provides clarification regarding the methodologies
the Department will use in calculating normal values under this
Agreement:
(A) For The Coca-Cola Company and The Coca-Cola Export
Corporation, Mexico Branch (collectively, ``Coexport''):
(1) Cost Allocation for Life of Agreement:
Throughout the life of this Agreement, to allocate common costs,
the Department will allocate 8.5 percent of the reported lemon fruit
costs and common lemon processing costs to lemon juice and 91.5
percent of these same costs to lemon oil for purposes of calculating
Coexport's NVs, as detailed in Appendix B to this Agreement.
(2) All Other Costs and Sales Expenses for Interim Period NVs:
For the Interim Period only of this Agreement, the Department
will use all other reported costs and sales expenses, as adjusted by
the Department, where appropriate, for the preliminary determination
in the underlying antidumping duty investigation, for purposes of
calculating Coexport's NVs, as detailed in Appendix B to this
Agreement.
(3) Monitoring of Value-Added Products after the Interim Period:
In addition to the stipulations noted in footnote 1 to
the calculation for CEP transactions in Appendix B to this
Agreement, the Department shall normally choose between two to three
products with significant value added, as reported by Coexport
pursuant to Section D(1) during each NV cycle, for examination and
monitoring of the related costs and sales expenses. For such value-
added products, the Department shall set CEP profit to equal CV
profit for purposes of the NV calculation.
(4) Invoice Offsets:
[[Page 54000]]
The Department and signatory producers/exporters agree that an
arrangement wherein Coexport bases its lemon oil sales price on its
cost which includes an offset for the sales value of lemon juice,
and later issues a credit or additional invoice to its customer to
take into account the final cost of lemon oil, as offset by the
lemon juice revenue, is a normal business practice which would not
normally be considered in circumvention of this Agreement as defined
in Section D(5) of this Agreement. However, such an arrangement will
be subject to the reporting and verification requirements of this
Agreement and to consideration by the Department during each NV
cycle.
(B) For All Other Signatories to the Agreement:
Throughout the life of this Agreement, the Department will use
the signatories' reported costs and sales expenses, as adjusted by
the Department, where appropriate, for purposes of calculating the
signatories' NVs, as detailed in Appendix B to this Agreement.
[FR Doc. E7-18298 Filed 9-20-07; 8:45 am]
BILLING CODE 3510-DS-P
