Certain Frozen Warmwater Shrimp From Thailand: Preliminary Results and Preliminary Partial Rescission of Antidumping Duty Administrative Review, 12088-12102 [E8-4418]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 45 (Thursday, March 6, 2008)]
[Notices]
[Pages 12088-12102]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-4418]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-822]


Certain Frozen Warmwater Shrimp From Thailand: Preliminary 
Results and Preliminary Partial Rescission of Antidumping Duty 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain frozen 
warmwater shrimp from Thailand with respect to 42 \1\ companies. The 
four respondents which the Department selected for individual review 
are Andaman Seafood Co., Ltd., Chanthaburi Frozen Food Co., Ltd. (CFF), 
Chanthaburi Seafoods Co., Ltd., Euro-Asian International Seafoods Co., 
Ltd., Intersia Foods Co., Ltd. (Intersia Foods) (formerly Y2K Frozen 
Foods Co., Ltd. (Y2K Frozen Foods)), Phattana Seafood Co., Ltd., 
Phattana Frozen Food Co., Ltd., S.C.C. Frozen Seafood Co., Ltd., 
Seawealth Frozen Food Co., Ltd., Thailand Fishery Cold Storage Public 
Co., Ltd., Thai International Seafoods Co., Ltd., and Wales & Co. 
Universe Limited (collectively ``the Rubicon Group''); Pakfood Public 
Company Limited and its affiliated subsidiaries, Asia Pacific 
(Thailand) Company Limited, Chaophraya Cold Storage Company Limited, 
Okeanos Company Limited, and Takzin Samut Company Limited (collectively 
``Pakfood''); Thai I-Mei Frozen Foods Co., Ltd. (Thai I-Mei); and Thai 
Union Frozen Products Public Co., Ltd. (Thai Union Frozen), Thai Union 
Seafood Co., Ltd. (Thai Union Seafood) (collectively ``Thai Union''). 
The respondents which were not selected for individual review are 
listed in the ``Preliminary Results of Review'' section of this notice. 
This is the second administrative review of this order. The review 
covers the period February 1, 2006, through January 31, 2007.
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    \1\ This figure does not include those companies for which the 
Department is preliminarily rescinding the administrative review.
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    We preliminarily determine that sales were made by Pakfood, the 
Rubicon Group, Thai I-Mei, and Thai Union below normal value (NV). In 
addition, based on the preliminary results for the respondents selected 
for individual review, we have preliminarily determined a weighted-
average margin for those companies that were not selected for 
individual review but were responsive to the Department's requests for 
information. For those companies which were not responsive to the 
Department's requests for information, we have preliminarily assigned 
to them a margin based on adverse facts available (AFA).
    If the preliminary results are adopted in our final results of 
administrative review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries. Interested parties are invited to comment on the preliminary 
results.

EFFECTIVE DATE: March 6, 2008.

FOR FURTHER INFORMATION CONTACT: Irina Itkin, AD/CVD Operations, Office 
2, Import Administration--Room 1870, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0656.

SUPPLEMENTARY INFORMATION:

Background

    In February 2005, the Department published in the Federal Register 
an antidumping duty order on certain frozen warmwater shrimp from 
Thailand. See Notice of Amended Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater 
Shrimp from Thailand, 70 FR 5145 (Feb. 1, 2005) (Shrimp Order). On 
February 2, 2007, the Department published in the Federal Register a 
notice of opportunity to request an administrative review of the 
antidumping duty order of certain frozen warmwater shrimp from

[[Page 12089]]

Thailand for the period February 1, 2006, through January 31, 2007. See 
Antidumping and Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 72 FR 5007 
(Feb. 2, 2007). In response to timely requests from interested parties, 
pursuant to 19 CFR 351.213(b)(1) and (2), to conduct an administrative 
review of the sales of certain frozen warmwater shrimp made by numerous 
companies during the period of review (POR), the Department initiated 
an administrative review for 142 companies and requested that each 
provide data on the quantity and value (Q&V) of its exports of subject 
merchandise to the United States during the POR. These companies are 
listed in the Department's notice of initiation. See Notice of 
Initiation of Administrative Reviews of the Antidumping Duty Orders on 
Certain Frozen Warmwater Shrimp from Brazil, Ecuador, India and 
Thailand, 72 FR 17100, 17107-09 (Apr. 6, 2007).
    On April 5, 2007, the petitioner \2\ requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
See the ``Duty Absorption'' section, below, for further discussion.
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    \2\ The petitioner is the Ad Hoc Shrimp Trade Action Committee.
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    During the period April through July 2007, we received responses to 
the Department's Q&V questionnaire from 99 companies. We were unable to 
locate three companies and we did not receive responses to this 
questionnaire from 12 companies. For further discussion, see the 
``Application of Facts Available'' section of this notice, below.
    In its April 23, 2007, Q&V questionnaire response, the Rubicon 
Group stated that one of its affiliates, Y2K Frozen Foods, changed its 
corporate structure prior to the initiation of this review and is now 
doing business under the name Intersia Foods. As a result, on May 7, 
2007, we solicited information on this change from the Rubicon Group. 
The Rubicon Group supplied this information on May 21, 2007. After 
analyzing this information, we preliminarily find that Intersia Foods 
is the successor-in-interest to Y2K Frozen Foods. For further 
discussion, see the ``Successor-in-Interest'' section of this notice, 
below.
    On July 5, 2007, in accordance with 19 CFR 351.213(d)(1), the 
Louisiana Shrimp Association (LSA) withdrew its request for review for 
six companies (i.e., Anglo-Siam Seafoods Co., Ltd., Gallant Ocean 
(Thailand) Co., Ltd., Li-Thai Frozen Foods Co., Ltd., Queen Marine Food 
Co., Ltd., Smile Heart Foods Co., Ltd., and Thai World Imports and 
Exports), with respect to which the petitioner also withdrew its 
request on March 16, 2007.
    On July 16, 2007, we requested information from I.T. Foods 
Industries Co., Ltd. (I.T. Foods) regarding its April 24, 2007, Q&V 
questionnaire response stating that it had no shipments or entries of 
subject merchandise into the United States during the POR because, 
based on information obtained from CBP, it appeared that I.T. Foods 
did, in fact, have such shipments or entries. For further discussion, 
see the ``Application of Weighted-Average Margin to I.T. Foods'' 
section of this notice, below.
    Based upon our consideration of the responses to the Q&V 
questionnaire received and the resources available to the Department, 
we determined that it was not practicable to examine all exporters/
producers of subject merchandise for which a review was requested. As a 
result, on July 19, 2007, we selected the four largest producers/
exporters of certain frozen warmwater shrimp from Thailand during the 
POR, Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union, as the 
mandatory respondents in this proceeding. See the Memorandum to Stephen 
J. Claeys from James Maeder entitled, ``2006-2007 Antidumping Duty 
Administrative Review on Certain Frozen Warmwater Shrimp from Thailand: 
Selection of Respondents for Individual Review,'' dated July 17, 2007. 
On this same date, we issued the antidumping duty questionnaire to 
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union.
    On August 16, 2007, I.T. Foods provided information to the 
Department indicating that it did, in fact, have reportable 
transactions during the POR. Therefore, we did not rescind the 
administrative review with respect to this company and are 
preliminarily assigning to it a weighted-average margin calculated for 
the companies selected for individual review because, based on its 
response: (1) The discrepancy between the Q&V questionnaire response 
and the CBP data appeared to be an inadvertent oversight; (2) the 
quantity of the exports in question was so small that it would not have 
had an impact on our selection of respondents; and (3) the company has 
been responsive to our requests for information. For further 
discussion, see the ``Application of Weighted-Average Margin to I.T. 
Foods'' section of this notice, below.
    We received responses to sections A, B, C, and D of the 
questionnaire from Pakfood, the Rubicon Group, Thai Union, and Thai I-
Mei in August, September, and October 2007.
    On September 5, 2007, we published a notice rescinding the 
administrative review with respect to 69 companies for the following 
reasons: (1) The request for an administrative review for the company 
was withdrawn in a timely manner; (2) the company had no shipments of 
subject merchandise to the United States during the POR; (3) the Q&V 
questionnaire sent to the company was returned to the Department 
because of an ``undeliverable'' address; or (4) the company name was a 
duplicate name. See Certain Frozen Warmwater Shrimp from Thailand; 
Partial Rescission of Antidumping Duty Administrative Review, 72 FR 
50931 (Sept. 5, 2007) (Partial Rescission Notice). See also, the 
Memorandum to the File from Brianne Riker entitled, ``Intent to Rescind 
in Part the Antidumping Duty Administrative Review on Frozen Warmwater 
Shrimp from Thailand,'' dated August 8, 2007.
    On September 28, 2007, the petitioner requested that the Department 
initiate a sales-below-cost investigation for Pakfood and Thai Union. 
We initiated sales-below-cost investigations for Pakfood and Thai Union 
on October 5, 2007. See the October 5, 2007, Memoranda to James Maeder 
from The Team entitled, ``The Petitioner's Allegation of Sales Below 
the Cost of Production for Pakfood Company Limited'' (Pakfood Cost 
Allegation) and ``The Petitioner's Allegation of Sales Below the Cost 
of Production for Thai Union Frozen Products PCL and Thai Union Seafood 
Company, Ltd.'' (Thai Union Cost Allegation).
    On October 26, 2007, the Department postponed the preliminary 
results in this review until no later than February 28, 2008. See 
Certain Frozen Warmwater Shrimp From Brazil, Ecuador, India, Thailand, 
and the Socialist Republic of Vietnam: Notice of Extension of Time 
Limits for the Preliminary Results of the Second Administrative 
Reviews, 72 FR 60800 (Oct. 26, 2007).
    During the period October 2007 through February 2008, we issued to 
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union supplemental 
questionnaires regarding sections A, B, C, and D of the original 
questionnaire. We received responses to these questionnaires during the 
period November 2007 through February 2008.
    We conducted sales and cost verifications at Thai Union and its 
U.S. affiliate in January and February 2008.
    On February 20, 2008, Thai Union submitted a revised sales database 
which incorporated certain minor

[[Page 12090]]

corrections to its data discovered at verification.

Scope of the Order

    The scope of this order includes certain frozen warmwater shrimp 
and prawns, whether wild-caught (ocean harvested) or farm-raised 
(produced by aquaculture), head-on or head-off, shell-on or peeled, 
tail-on or tail-off,\3\ deveined or not deveined, cooked or raw, or 
otherwise processed in frozen form.
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    \3\ ``Tails'' in this context means the tail fan, which includes 
the telson and the uropods.
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    The frozen warmwater shrimp and prawn products included in the 
scope of this order, regardless of definitions in the Harmonized Tariff 
Schedule of the United States (HTSUS), are products which are processed 
from warmwater shrimp and prawns through freezing and which are sold in 
any count size. The products described above may be processed from any 
species of warmwater shrimp and prawns. Warmwater shrimp and prawns are 
generally classified in, but are not limited to, the Penaeidae family. 
Some examples of the farmed and wild-caught warmwater species include, 
but are not limited to, whiteleg shrimp (Penaeus vannemei), banana 
prawn (Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant 
river prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus 
monodon), redspotted shrimp (Penaeus brasiliensis), southern brown 
shrimp (Penaeus subtilis), southern pink shrimp (Penaeus notialis), 
southern rough shrimp (Trachypenaeus curvirostris), southern white 
shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western 
white shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus 
indicus).
    Frozen shrimp and prawns that are packed with marinade, spices or 
sauce are included in the scope of this order. In addition, food 
preparations, which are not ``prepared meals,'' that contain more than 
20 percent by weight of shrimp or prawn are also included in the scope 
of this order.
    Excluded from the scope are: (1) Breaded shrimp and prawns (HTSUS 
subheading 1605.20.10.20); (2) shrimp and prawns generally classified 
in the Pandalidae family and commonly referred to as coldwater shrimp, 
in any state of processing; (3) fresh shrimp and prawns whether shell-
on or peeled (HTSUS subheadings 0306.23.00.20 and 0306.23.00.40); (4) 
shrimp and prawns in prepared meals (HTSUS subheading 1605.20.05.10); 
(5) dried shrimp and prawns; (6) canned warmwater shrimp and prawns 
(HTSUS subheading 1605.20.10.40); (7) certain dusted shrimp; and (8) 
certain battered shrimp. Dusted shrimp is a shrimp-based product: (1) 
That is produced from fresh (or thawed-from-frozen) and peeled shrimp; 
(2) to which a ``dusting'' layer of rice or wheat flour of at least 95 
percent purity has been applied; (3) with the entire surface of the 
shrimp flesh thoroughly and evenly coated with the flour; (4) with the 
non-shrimp content of the end product constituting between four and 10 
percent of the product's total weight after being dusted, but prior to 
being frozen; and (5) that is subjected to IQF freezing immediately 
after application of the dusting layer. Battered shrimp is a shrimp-
based product that, when dusted in accordance with the definition of 
dusting above, is coated with a wet viscous layer containing egg and/or 
milk, and par-fried.
    The products covered by this order are currently classified under 
the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 
1605.20.10.10, and 1605.20.10.30. These HTSUS subheadings are provided 
for convenience and for customs purposes only and are not dispositive, 
but rather the written description of the scope of this order is 
dispositive.

Successor-in-Interest

    In making a successor-in-interest determination, the Department 
normally examines several factors including, but not limited to, 
changes in: (1) Management; (2) production facilities; (3) supplier 
relationships; and (4) customer base. See Notice of Final Results of 
Changed Circumstances Antidumping Duty Administrative Review: 
Polychloroprene Rubber From Japan, 67 FR 58 (Jan. 2, 2002), and Brass 
Sheet and Strip from Canada; Final Results of Antidumping Duty 
Administrative Review, 57 FR 20460 (May 13, 1992). While no one of 
these factors is dispositive, the Department will generally consider 
the new company to be the successor to the previous company if its 
resulting operation is not materially dissimilar to that of its 
predecessor. See Industrial Phosphoric Acid from Israel; Final Results 
of Antidumping Duty Changed Circumstances Review, 59 FR 6944 (Feb. 14, 
1994); and Notice of Final Determination of Sales at Less Than Fair 
Value and Affirmative Final Determination of Critical Circumstances: 
Certain Orange Juice from Brazil, 71 FR 2183 (Jan. 13, 2006).
    As noted above, on April 23, 2007, the Rubicon Group informed the 
Department that its affiliated producer Y2K Frozen Foods is now doing 
business under the name Intersia Foods. As a result, on May 7, 2007, we 
requested that the Rubicon Group address the four factors noted above 
(i.e., management, production facilities for the subject merchandise, 
supplier relationships, and customer base) with respect to this change 
in corporate structure in order to determine whether Intersia Foods 
Co., Ltd. is the successor-in-interest to Y2K Frozen Foods.
    On May 21, 2007, the Rubicon Group responded to the Department's 
request. In this submission, the Rubicon Group provided evidence to 
demonstrate that Intersia Foods is the successor-in-interest to Y2K 
Frozen Foods. Specifically, the Rubicon Group stated that there were no 
changes to Y2K Frozen Foods' management, production facilities for the 
subject merchandise, supplier relationships, or customer base as a 
result of the change in corporate structure. According to the Rubicon 
Group, Y2K Frozen Foods officially changed its name to Intersia Foods 
on June 24, 2004, in order to more clearly identify the company as a 
foods business. Based on our analysis of the Rubicon Group's May 21, 
2007, submission, we find that Intersia Foods' organizational 
structure, management, production facilities, supplier relationships, 
and customers have remained essentially unchanged. Further, we find 
that Intersia Foods operates as the same business entity as Y2K Frozen 
Foods with respect to the production and sale of certain frozen 
warmwater shrimp. Thus, we find that Intersia Foods is the successor-
in-interest to Y2K Frozen Foods, and, as a consequence, its exports of 
certain frozen warmwater shrimp are subject to this proceeding.

Partial Rescission of Review

    In February 2007, the Department received timely requests, in 
accordance with 19 CFR 351.213(b)(1), from the petitioner and the LSA 
to conduct a review of Lucky Union Foods Co., Ltd. (Lucky Union), 
Songkla Canning PCL (Songkla), and Thai Union Manufacturing Co., Ltd. 
(Thai Union Manufacturing), which are affiliated with Thai Union, a 
respondent in this review. The Department initiated a review of these 
three companies and requested that they supply data on the quantity and 
value of their exports of shrimp during the POR. On April 23, 2007, 
Thai Union submitted a response

[[Page 12091]]

to the Department's Q&V questionnaire, in which it indicated that only 
two of its companies, Thai Union Frozen and Thai Union Seafood, 
exported subject merchandise to the United States during the POR, while 
Lucky Union, Songkla, and Thai Union Manufacturing did not produce or 
export frozen shrimp the United States during the POR. We confirmed 
this information at Thai Union's sales verification. See the February 
13, 2008, memorandum to the file from Irina Itkin and Brianne Riker 
entitled, ``Verification of the Sales Response of Thai Union Frozen 
Products Public Co., Ltd./Thai Union Seafood Co., Ltd. in the 
Antidumping Administrative Review of Certain Frozen Warmwater Shrimp 
from Thailand'' (``Thai Union Verification Report'') at pages 3 and 10. 
Therefore, because Lucky Union, Songkla, and Thai Union Manufacturing 
had no shipments of subject merchandise to the United States during the 
POR, in accordance with 19 CFR 351.213(d)(3), and consistent with the 
Department's practice, we are preliminarily rescinding our review with 
respect to them. See, e.g., Certain Frozen Warmwater Shrimp from 
Thailand: Final Results and Final Partial Rescission of Antidumping 
Duty Administrative Review, 72 FR 52065, 52067 (Sept. 12, 2007) (04-06 
Thai Shrimp Final Results); Certain Steel Concrete Reinforcing Bars 
From Turkey; Final Results, Rescission of Antidumping Duty 
Administrative Review in Part, and Determination To Revoke in Part, 70 
FR 67665, 67666 (Nov. 8, 2005).

Application of Weighted-Average Margin to I.T. Foods

    In its April 24, 2007, response to the Q&V questionnaire, I.T. 
Foods claimed that it had no shipments or entries of subject 
merchandise into the United States during the POR. However, when we 
attempted to confirm this claim with data obtained from CBP, we found 
that there were entries of merchandise into the United States produced 
and/or exported by I.T. Foods that appeared to be within the scope of 
the antidumping duty order. See the Memorandum to the File from Brianne 
Riker entitled, ``2006-2007 Administrative Review of Certain Frozen 
Warmwater Shrimp from Thailand: Entry Documents from U.S. Customs and 
Border Protection,'' dated June 12, 2007. Therefore, on July 16, 2007, 
we requested information from I.T. Foods to explain this discrepancy.
    On August 16, 2007, I.T. Foods provided information to the 
Department indicating that it did, in fact, have reportable 
transactions of subject merchandise during the POR of ``tiny shrimp.'' 
See the August 16, 2007, letter to the Department from I.T. Foods. 
Therefore, we did not rescind the administrative review with respect to 
this company and are preliminarily assigning to it the weighted-average 
margin calculated for the companies selected for individual review 
because, based on its response: (1) The discrepancy between the Q&V 
questionnaire response and the CBP data appeared to be an inadvertent 
oversight; (2) the quantity of the exports in question was so small 
that it would not have had an impact our selection of respondents; and 
(3) the company has been responsive to our requests for information. 
Upon issuance of the final results of this administrative review, we 
will instruct CBP to assess antidumping duties on I.T. Foods' entries 
of subject merchandise at the weighted-average rate.
    In addition, based on the information provided by I.T. Foods, we 
also have preliminarily determined certain other merchandise produced/
exported by I.T. Foods (i.e., ``shrimp balls'') that entered the United 
States during the POR is not subject to the scope of the order because 
the shrimp content of this product is limited to shrimp flavoring. See 
the August 16, 2007, letter to the Department from I.T. Foods. 
Therefore, upon issuance of the final results of this administrative 
review, we will instruct CBP to liquidate I.T. Foods' entries of non-
subject merchandise (i.e., ``shrimp balls'') without regard to 
antidumping duty liability.

Period of Review

    The POR is February 1, 2006, through January 31, 2007.

Application of Facts Available

    Section 776(a) of the Tariff Act of 1930, as amended (the Act), 
provides that the Department will apply ``facts otherwise available'' 
if, inter alia, necessary information is not available on the record or 
an interested party: 1) Withholds information that has been requested 
by the Department; 2) fails to provide such information within the 
deadlines established, or in the form or manner requested by the 
Department, subject to subsections (c)(1) and (e) of section 782 of the 
Act; 3) significantly impedes a proceeding; or 4) provides such 
information, but the information cannot be verified.
    In this administrative review, 13 companies failed to respond 
completely to the Department's requests for information. Therefore, we 
preliminarily determine that it is appropriate to assign these 
companies dumping margins, either in whole or in part, based on facts 
available. These companies are discussed below.

A. Companies That Failed To Respond to the Q&V Questionnaire

    As discussed in the ``Background'' section, above, in April 2007, 
the Department requested that all companies subject to the review 
respond to the Department's Q&V questionnaire for purposes of mandatory 
respondent selection. The original deadline to file a response was 
April 23, 2007. Of the 142 companies subject to this review, 60 
companies did not respond to the Department's initial request for 
information. Subsequently in May and June 2007, the Department issued 
two letters to these companies affording them additional opportunities 
to submit a response to the Department's Q&V questionnaire. However, 12 
of these companies also failed to respond to the Department's 
additional Q&V questionnaires.\4\ On July 19, 2007, the Department 
placed documentation on the record confirming delivery of the 
questionnaires to each company. See the Memorandum to the File from 
Brianne Riker entitled, ``Placing Delivery Information on the Record of 
the 2006-2007 Antidumping Duty Administrative Review on Certain Frozen 
Warmwater Shrimp from Thailand,'' dated July 19, 2007. By failing to 
respond to the Department's Q&V questionnaire, these companies withheld 
requested information and significantly impeded the proceeding. Thus, 
pursuant to sections 776(a)(2)(A) and (C) of the Act, because these 
companies did not respond to the Department's questionnaire, the 
Department preliminarily finds that the use of total facts available is 
appropriate.
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    \4\ These companies are: Applied DB; Chonburi LC; Haitai Seafood 
Co., Ltd. (Haitai); High Way International Co., Ltd. (High Way 
International); Merkur Co., Ltd. (Merkur); Ming Chao Ind Thailand 
(Ming Chao); Nongmon SMJ Products (Nongmon); SCT Co., Ltd. (SCT); 
Search and Serve; Shianlin Bangkok Co., Ltd. (located at 159 
Surawong Road, Suriyawong, Bangrak, Bangkok 10500 Thailand) 
(Shainlin Bangkok); Star Frozen Foods Co., Ltd. (Star Frozen Foods); 
and Wann Fisheries Co., Ltd. (Wann Fisheries).
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    According to section 776(b) of the Act, if the Department finds 
that an interested party fails to cooperate by not acting to the best 
of its ability to comply with requests for information, the Department 
may use an inference that is adverse to the interests of that party in 
selecting from the facts otherwise available. See Notice of Final 
Results of Antidumping Duty Administrative Review: Stainless Steel Bar 
from India, 70 FR 54023, 54025-26 (Sep. 13, 2005);

[[Page 12092]]

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 (Aug. 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, Vol. 1, at 870 
(1994) (SAA), reprinted in 1994 U.S.C.C.A.N. 4040, 4198-99. 
Furthermore, ``affirmative evidence of bad faith on the part of a 
respondent is not required before the Department may make an adverse 
inference.'' See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27340 (May 19, 1997); see also Nippon Steel Corp. v. 
United States, 337 F.3d 1373, 1382-83 (Fed. Cir. 2003) (Nippon). We 
preliminarily find that Applied DB, Chonburi LC, Haitai, High Way 
International, Merkur, Ming Chao, Nongmon, SCT, Search and Serve, 
Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries did not act to 
the best of their abilities in this proceeding, within the meaning of 
section 776(b) of the Act, because they failed to respond to the 
Department's requests for information and provide timely information. 
Therefore, an adverse inference is warranted in selecting from the 
facts otherwise available with respect to these companies. See Nippon, 
337 F.3d at 1382-83.
    Section 776(b) of the Act provides that the Department may use as 
AFA information derived from: (1) The petition; (2) the final 
determination in the investigation; (3) any previous review; or (4) any 
other information placed on the record.
    The Department's practice, when selecting an AFA rate from among 
the possible sources of information, has been to ensure that the margin 
is sufficiently adverse ``as to effectuate the statutory purposes of 
the adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
See, e.g., 04-06 Thai Shrimp Final Results and Certain Steel Concrete 
Reinforcing Bars from Turkey; Final Results and Rescission of 
Antidumping Duty Administrative Review in Part, 71 FR 65082, 65084 
(Nov. 7, 2006).
    In order to ensure that the margin is sufficiently adverse so as to 
induce cooperation, we have preliminarily assigned a rate of 57.64 
percent, which is the highest rate alleged in the petition, as adjusted 
at the initiation of the less-than-fair-value (LTFV) investigation, to 
the non-responsive companies (i.e., Applied DB, Chonburi LC, Haitai, 
High Way International, Merkur, Ming Chao, Nongmon, SCT, Search and 
Serve, Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries). See 
Notice of Initiation of Antidumping Duty Investigations: Certain Frozen 
and Canned Warmwater Shrimp From Brazil, Ecuador, India, Thailand, the 
People's Republic of China and the Socialist Republic of Vietnam, 69 FR 
3876, 3881 (Jan. 27, 2004). The Department believes that this rate is 
sufficiently high as to effectuate the purpose of the facts available 
rule (i.e., we find that this rate is high enough to encourage 
participation in future segments of this proceeding in accordance with 
section 776(b) of the Act).
    Information from prior segments of the proceeding constitutes 
secondary information and section 776(c) of the Act provides that the 
Department shall, to the extent practicable, corroborate that secondary 
information from independent sources reasonably at its disposal. The 
Department's regulations provide that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See 19 CFR 351.308(d); see also SAA at 870. 
To the extent practicable, the Department will examine the reliability 
and relevance of the information to be used.
    To corroborate the petition margin, we compared it to the 
transaction-specific rates calculated for each respondent in this 
review. We find that it is reliable and relevant because the petition 
rate fell within the range of individual transaction margins calculated 
for the mandatory respondents. See e.g., 04-06 Thai Shrimp Final 
Results, 72 FR at 52068 and Notice of Preliminary Results of 
Antidumping Duty Administrative Review; Partial Rescission and 
Postponement of Final Results: Certain Softwood Lumber Products from 
Canada, 71 FR 33964, 33968 (June 12, 2006). Therefore, we have 
determined that the 57.64 percent margin is appropriate as AFA and are 
assigning it to the uncooperative companies listed above.
    Further, the Department will consider information reasonably at its 
disposal as to whether there are circumstances that would render a 
margin inappropriate. Where circumstances indicate that the selected 
margin is not appropriate as AFA, the Department may disregard the 
margin and determine an appropriate margin. See, e.g., Fresh Cut 
Flowers from Mexico; Final Results of Antidumping Duty Administrative 
Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the Department 
disregarded the highest calculated margin as AFA because the margin was 
based on a company's uncharacteristic business expense resulting in an 
unusually high margin). Therefore, we examined whether any information 
on the record would discredit the selected rate as reasonable facts 
available. We were unable to find any information that would discredit 
the selected AFA rate.
    Because we did not find evidence indicating that the selected 
margin is not appropriate and because this margin falls within the 
range of transaction-specific margins for the mandatory respondents, we 
have preliminarily determined that the 57.64 percent margin, as alleged 
in the petition and adjusted at the initiation of the LTFV 
investigation, is corroborated. We are, therefore, assigning this rate 
to the non-responsive companies (i.e., Applied DB, Chonburi LC, Haitai, 
High Way International, Merkur, Ming Chao, Nongmon, SCT, Search and 
Serve, Shianlin Bangkok, Star Frozen Foods, and Wann Fisheries). For 
company-specific information used to corroborate this rate, see the 
Memorandum to the File from Brianne Riker entitled, ``Corroboration of 
Adverse Facts Available Rate for the Preliminary Results in the 2006-
2007 Antidumping Duty Administrative Review of Certain Frozen Warmwater 
Shrimp from Thailand,'' dated February 28, 2008.

B. Thai Union

    During verification, we found that Thai Union had failed to report 
certain U.S. sales transactions during the POR, which should have been 
included in the company's U.S. sales database in accordance with the 
Department's definition of the universe of reportable transactions. We 
note that certain of these transactions had not been reported because 
Thai Union did not follow the Department's reporting instructions. 
Specifically, these transactions included: (1) Certain export price 
(EP) transactions which had been shipped prior to the POR, but which 
entered the United States during the POR; (2) certain direct 
constructed export price (CEP) transactions which were shipped during 
the POR, but invoiced after the POR; and (3) a small quantity of 
overlooked U.S. transactions which had not been included in error. We 
have preliminarily determined that the margin for these sales should be 
based on facts available in accordance with section 776(a)(1) of the 
Act because they were not reported to the Department in response to the 
Department's request for information.

[[Page 12093]]

    In this case, because Thai Union did not provide the Department 
with the complete information regarding its universe of POR subject 
sales in a timely manner, we find that it is appropriate to resort to 
facts otherwise available to account for the unreported information. 
See Notice of Final Results of Antidumping Duty Administrative Review, 
Rescission of Administrative Review in Part, and Final Determination to 
Not Revoke Order in Part: Canned Pineapple Fruit from Thailand, 68 FR 
65247 (Nov. 19, 2003), and accompanying Issues and Decision memorandum 
at Comment 20b. Thai Union's failure to provide this necessary 
information meets the requirements set forth in Nippon. As stated by 
the Court of Appeals for the Federal Circuit during its discussion of 
section 776(a) of the Act in Nippon, ``{t{time}  he focus of subsection 
(a) is respondent's failure to provide information. The reason for the 
failure is of no moment. The mere failure of a respondent to furnish 
requested information--for any reason--requires Commerce to resort to 
other sources of information to complete the factual record on which it 
makes its determination.''
    In regard to the use of an adverse inference, section 776(b) of the 
Act states that the Department may use an adverse inference if ``an 
interested party has failed to cooperate by not acting to the best of 
its ability to comply with a request for information* * *'' Because: 
(1) Thai Union had the necessary information within its control and it 
did not report this information; and (2) it failed to put forth its 
maximum effort as required by the Department's questionnaire, we find 
that Thai Union's failure to respond in this case clearly meets these 
standards.
    As AFA, we have preliminarily used the highest non-aberrant margin 
calculated for any U.S. transaction for Thai Union, in accordance with 
our practice. See, e.g., Static Random Access Memory Semiconductors 
From Taiwan; Final Results of Antidumping Duty New Shipper Review, 65 
FR 12214 (Mar. 8, 2000), and accompanying Issues and Decision 
Memorandum at Comment 1; Notice of Final Determination of Sales at Less 
Than Fair Value: Static Random Access Memory Semiconductors From 
Taiwan, 63 FR 8909, 8912 (Feb. 23, 1998); Final Determination of Sales 
at Less Than Fair Value; Stainless Steel Sheet and Strip in Coils from 
Germany, 64 FR 30710, 30732 (June 8, 1999); and Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731, 61747 (Nov. 19, 
1997). In selecting a facts available margin, we sought a margin that 
is sufficiently adverse so as to effectuate the statutory purposes of 
the AFA rule, which is to induce respondents to provide the Department 
with complete and accurate information in a timely manner. We also 
sought a margin that is rationally related to the transactions to which 
the AFA is being applied and indicative of Thai Union's customary 
selling practices. To that end, we selected the highest margin on an 
individual sale in a commercial quantity that fell within the 
mainstream of Thai Union's transactions (i.e., transactions that 
reflect sales of products that are representative of the broader range 
of models used to determine normal value).

Duty Absorption

    On April 5, 2007, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides for the Department, if requested, 
to determine during an administrative review initiated two or four 
years after the publication of the order, whether antidumping duties 
have been absorbed by a foreign producer or exporter, if the subject 
merchandise is sold in the United States through an affiliated 
importer. This review was initiated two years after the publication of 
the order.
    In determining whether the antidumping duties have been absorbed by 
the respondents during the POR, we presume the duties will be absorbed 
for those sales that have been made at less than normal value. This 
presumption can be rebutted with evidence (e.g., an agreement between 
the affiliated importer and unaffiliated purchaser) that the 
unaffiliated purchaser will pay the full duty ultimately assessed on 
the subject merchandise. See, e.g., Certain Stainless Steel Butt-Weld 
Pipe Fittings from Taiwan: Preliminary Results of Antidumping Duty 
Administrative Review and Notice of Intent to Rescind, 70 FR 39735, 
39737 (July 11, 2005). On September 18, 2007, we issued letters to 
Pakfood, the Rubicon Group, Thai I-Mei, and Thai Union requesting proof 
that the companies' unaffiliated purchasers would ultimately pay the 
antidumping duties to be assessed on entries during the POR. Thai Union 
did not provide any such evidence. Because Thai Union did not rebut the 
duty-absorption presumption with evidence that the unaffiliated 
purchaser will pay the full duty ultimately assessed on the subject 
merchandise, we preliminarily find that antidumping duties have been 
absorbed by Thai Union on all U.S. sales made through its affiliated 
importers of record. For the percentage of such sales, see the 
February, 28, 2008, Memorandum to the File from Brianne Riker, entitled 
``Calculations Performed for Thai Union Frozen Products Co., Ltd./Thai 
Union Seafood Co., Ltd. for the Preliminary Results of the 2006-2007 
Antidumping Duty Administrative Review of Certain Frozen Warmwater 
Shrimp from Thailand'' at Attachment 2.
    The Rubicon Group and Thai I-Mei responded to the Department's 
request for information on October 2, 2007. The Rubicon Group stated in 
its submission that sample documentation submitted as part of its 
section A questionnaire response shows that it included the cost of 
antidumping duty deposits in its prices to unaffiliated customers. 
However, because the Rubicon Group was unable to show that the 
unaffiliated purchaser will pay the full duty ultimately assessed on 
the subject merchandise, we find that the Rubicon Group did not rebut 
the duty-absorption presumption. Thai I-Mei also was unable to rebut 
the duty-absorption presumption. Therefore, because neither the Rubicon 
Group nor Thai I-Mei was able to rebut the duty-absorption presumption 
with evidence that the unaffiliated purchaser will pay the full duty 
ultimately assessed on the subject merchandise, we preliminarily find 
that antidumping duties have also been absorbed by the Rubicon Group 
and Thai I-Mei on all U.S. sales made through their respective 
importers of record. For the percentage of such sales by the Rubicon 
Group and Thai I-Mei, see the February, 28, 2008, Memoranda to the File 
from Kate Johnson and Rebecca Trainor entitled ``Second Administrative 
Review of Certain Frozen Warmwater Shrimp from Thailand: Preliminary 
Results Margin Calculation for the Rubicon Group'' at Attachment 2 and 
``2006-2007 Administrative Review of Certain Frozen Warmwater Shrimp 
from Thailand: Preliminary Results Margin Calculation for Thai I-Mei 
Frozen Foods Co., Ltd'' at Attachment 1.
    With respect to Pakfood, it did not sell subject merchandise in the 
United States through an affiliated importer. Therefore, it is not 
appropriate to make a duty-absorption determination in this segment of 
the proceeding within the meaning of section 751(a)(4) of the Act. See 
Agro Dutch Industries Ltd. v. United States, 508 F.3d 1024, 1033 (Fed. 
Cir. 2007).

Comparisons to Normal Value

    To determine whether sales of certain frozen warmwater shrimp from 
Thailand to the United States were

[[Page 12094]]

made at less than NV, we compared the EP or CEP to the NV, as described 
in the ``Constructed Export Price/Export Price'' and ``Normal Value'' 
sections of this notice, below.
    Pursuant to section 777A(d)(2) of the Act, for Pakfood, the Rubicon 
Group, and Thai I-Mei, we compared the EPs or CEPs of individual U.S. 
transactions to the weighted-average NV of the foreign like product 
where there were sales made in the ordinary course of trade, as 
discussed in the ``Cost of Production Analysis'' section, below.
    Regarding Thai I-Mei, we have determined that this company did not 
have a viable home or third country market during the POR. Therefore, 
as the basis for NV, we used constructed value (CV) when making 
comparisons to CEP for Thai I-Mei in accordance with section 773(a)(4) 
of the Act.

 Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by Pakfood, the Rubicon Group, and Thai Union 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. Pursuant to 19 CFR 351.414(e)(2), we 
compared U.S. sales of shrimp to sales of shrimp made in the comparison 
market for Pakfood, the Rubicon Group, and Thai Union within the 
contemporaneous window period, which extends from three months prior to 
the month of the U.S. sale until two months after the sale. Where there 
were no sales of identical merchandise in the comparison market made in 
the ordinary course of trade to compare to U.S. sales, we compared U.S. 
sales of shrimp to sales of shrimp of the most similar foreign like 
product made in the ordinary course of trade. For Pakfood, the Rubicon 
Group, and Thai Union, where there were no sales of identical or 
similar merchandise, and for all of Thai I-Mei's sales, we made product 
comparisons using CV.
    With respect to sales comparisons involving broken shrimp, we 
compared Pakfood's and the Rubicon Group's sales of broken shrimp in 
the United States to its sales of comparable quality shrimp in the home 
market. Where there were no sales of identical broken shrimp in the 
comparison market made in the ordinary course of trade to compare to 
U.S. sales, we compared U.S. sales of broken shrimp to sales of the 
most similar broken shrimp made in the ordinary course of trade. Where 
there were no sales of identical or similar broken shrimp, we made 
product comparisons using CV.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by Pakfood, the Rubicon 
Group, and Thai Union in the following order: cooked form, head status, 
count size, organic certification, shell status, vein status, tail 
status, other shrimp preparation, frozen form, flavoring, container 
weight, presentation, species, and preservative.

Constructed Export Price/Export Price

    For all U.S. sales made by Pakfood, as well as certain U.S. sales 
made by the Rubicon Group and Thai Union, we used EP methodology, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold directly to the first unaffiliated purchaser in 
the United States prior to importation and CEP methodology was not 
otherwise warranted based on the facts of record.
    For all U.S. sales made by Thai I-Mei, as well as certain U.S. 
sales made by the Rubicon Group and Thai Union, we calculated CEP in 
accordance with section 772(b) of the Act because the subject 
merchandise was sold for the account of these companies by their 
subsidiaries in the United States to unaffiliated purchasers.

A. Pakfood

    We based EP on packed prices to the first unaffiliated purchaser in 
the United States. Where appropriate, we made adjustments for billing 
adjustments and discounts. We made deductions for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these included, where 
appropriate, foreign inland freight expenses, foreign warehousing 
expenses, survey fees, foreign brokerage and handling expenses, ocean 
freight expenses (offset by freight adjustments, where appropriate), 
marine insurance expenses, U.S. brokerage and handling expenses, and 
U.S. customs duties (including harbor maintenance fees and merchandise 
processing fees).

B. The Rubicon Group

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on the packed price to 
unaffiliated purchasers in the United States. Where appropriate, we 
made adjustments for discounts. We made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Act; these 
included, where appropriate, foreign inland freight expenses, foreign 
warehousing expenses, foreign inland insurance expenses, foreign 
brokerage and handling expenses, ocean freight expenses, marine 
insurance expenses, U.S. brokerage and handling expenses, U.S. customs 
duties (including harbor maintenance fees and merchandise processing 
fees), and U.S. inland freight expenses (i.e., freight from port to 
warehouse).
    In accordance with section 772(b) of the Act, we calculated CEP for 
those sales where the merchandise was first sold (or agreed to be sold) 
in the United States before or after the date of importation by or for 
the account of the producer or exporter, or by a seller affiliated with 
the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. We used the earlier of shipment date from 
Thailand to the customer or the U.S. affiliate's invoice date as the 
date of sale for CEP sales, in accordance with our practice. See e.g., 
Certain Frozen Warmwater Shrimp from Thailand: Preliminary Results and 
Partial Rescission of Antidumping Duty Administrative Review, 72 FR 
52065 (Sep. 12, 2007), and accompanying Issues and Decision Memorandum 
at Comment 11 (04-06 Thai Shrimp Final); Notice of Final Determination 
of Sales at Less Than Fair Value and Negative Final Determination of 
Critical Circumstances: Certain Frozen and Canned Warmwater Shrimp From 
Thailand, 69 FR 76918 (Dec. 23, 2004), and accompanying Issues and 
Decision Memorandum at Comment 10 (Thai Shrimp LTFV Investigation 
Final); and Notice of Final Determination of Sales at Less Than Fair 
Value: Structural Steel Beams from Germany, 67 FR 35497 (May 20, 2002), 
and accompanying Issues and Decision Memorandum at Comment 2 (SS Beams 
from Germany).
    We based CEP on the packed delivered prices to unaffiliated 
purchasers in the United States. Where appropriate, we made adjustments 
for discounts and rebates. We made deductions for movement expenses, in 
accordance with section 772(c)(2)(A) of the Act; these included, where 
appropriate, foreign inland freight expenses, foreign warehousing 
expenses, foreign inland insurance expenses, foreign brokerage and 
handling expenses, ocean freight expenses, marine insurance expenses, 
U.S. brokerage and handling expenses, U.S. customs duties (including 
harbor maintenance fees and merchandise processing fees), U.S. inland 
insurance expenses, U.S. inland freight expenses (i.e., freight from 
port to warehouse and

[[Page 12095]]

freight from warehouse to the customer), and U.S. warehousing expenses.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., bank charges, advertising, and imputed credit 
expenses), and indirect selling expenses (including inventory carrying 
costs and other indirect selling expenses).
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by the Rubicon Group and its U.S. affiliate on 
their sales of the subject merchandise in the United States and the 
profit associated with those sales.

C. Thai I-Mei

    In accordance with section 772(b) of the Act, we calculated CEP for 
those sales where the merchandise was first sold (or agreed to be sold) 
in the United States before or after the date of importation by or for 
the account of the producer or exporter, or by a seller affiliated with 
the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. We used the earlier of shipment date from 
Thailand to the customer or the U.S. affiliate's invoice date as the 
date of sale for CEP sales, in accordance with our practice. See e.g., 
04-06 Thai Shrimp Final at Comment 11; Thai Shrimp LTFV Investigation 
Final at Comment 10; and SS Beams from Germany at Comment 2.
    We based CEP on the packed delivered prices to unaffiliated 
purchasers in the United States. Where appropriate, we made adjustments 
for billing adjustments. We made deductions for movement expenses, in 
accordance with section 772(c)(2)(A) of the Act; these included, where 
appropriate, foreign inland freight, foreign brokerage and handling 
expenses, ocean freight expenses, marine insurance expenses, U.S. 
brokerage and handling, U.S. customs duties (including harbor 
maintenance fees and merchandise processing fees), U.S. inland freight 
expenses (i.e., freight from port to warehouse and freight from 
warehouse to the customer), and U.S. warehousing expenses.
    In accordance with section 772(d)(1) of the Act and 19 CFR 
351.402(b), we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct selling 
expenses (i.e., imputed credit expenses), and indirect selling expenses 
(including inventory carrying costs and other indirect selling 
expenses).
    Pursuant to section 772(d)(3) of the Act, we calculated an amount 
for profit to arrive at CEP. In accordance with section 
772(f)(2)(C)(iii) of the Act, we based the CEP profit rate on Thai I-
Mei's financial statements because Thai I-Mei made sales during the POR 
solely to the United States. For further discussion, see the Memorandum 
to the File from Rebecca Trainor, entitled, ``Calculations Performed 
for Thai I-Mei Frozen Foods Co., Ltd. for the Preliminary Results in 
the 2006-2007 Antidumping Duty Administrative Review on Certain Frozen 
Warmwater Shrimp from Thailand,'' dated February 28, 2008.

D. Thai Union

    In accordance with section 772(a) of the Act, we calculated EP for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States. We based EP on the packed 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 included, where appropriate, foreign inland freight, foreign 
brokerage and handling expenses, ocean freight expenses, marine 
insurance expenses, U.S. brokerage and handling expenses, and U.S. 
customs duties (including harbor maintenance fees and merchandise 
processing fees).
    In accordance with section 772(b) of the Act, we calculated CEP for 
those sales where the merchandise was first sold (or agreed to be sold) 
in the United States before or after the date of importation by or for 
the account of the producer or exporter, or by a seller affiliated with 
the producer or exporter, to a purchaser not affiliated with the 
producer or exporter. We used the earlier of shipment date from 
Thailand to the customer or the U.S. affiliate's invoice date as the 
date of sale for CEP sales, in accordance with our practice. See e.g., 
04-06 Thai Shrimp Final at Comment 11; Thai Shrimp LTFV Investigation 
Final at Comment 10; and SS Beams from Germany at Comment 2.
    We based CEP on the packed delivered prices to unaffiliated 
purchasers in the United States. Where appropriate, we made adjustments 
for billing adjustments, discounts, and rebates. We made deductions for 
movement expenses, in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, foreign inland freight expenses, 
foreign brokerage and handling expenses, demurrage expenses, ocean 
freight expenses, marine insurance expenses, U.S. brokerage and 
handling, U.S. customs duties (including harbor maintenance fees and 
merchandise processing fees), U.S. inland freight expenses (i.e., 
freight from port to warehouse, freight from warehouse to warehouse, 
and freight from warehouse to the customer), and U.S. warehousing 
expenses (offset by warehouse release revenue). In accordance with 
section 772(d)(1) of the Act and 19 CFR 351.402(b), we deducted those 
selling expenses associated with economic activities occurring in the 
United States, including direct selling expenses (i.e., imputed credit 
expenses, bank charges, and advertising expenses), and indirect selling 
expenses (including inventory carrying costs and other indirect selling 
expenses).
    Pursuant to section 772(d)(3) of the Act, we further reduced the 
starting price by an amount for profit to arrive at CEP. In accordance 
with section 772(f) of the Act, we calculated the CEP profit rate using 
the expenses incurred by Thai Union and its U.S. affiliates on their 
sales of the subject merchandise in the United States and the profit 
associated with those sales.

Normal Value

A. Home Market Viability and Selection of Comparison Markets

    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 volume of home market sales of the foreign like product 
to the volume of U.S. sales of the subject merchandise, in accordance 
with section 773(a)(1)(C) of the Act. Based on this comparison, we 
determined that Pakfood and Thai Union had viable home markets during 
the POR. Consequently, we based NV on home market sales for these 
respondents.
    However, the petitioner has argued throughout this review that 
certain of Thai Union's home market sales should not be considered for 
purposes of determining NV, and that excluding such sales from the 
viability test renders Thai Union's home market not viable. 
Specifically, the petitioner argued that the following sales should not 
be included in home market sales: (1) Sales to an affiliated producer 
which are consumed in the production of non-subject merchandise (i.e., 
no downstream sale exists); and (2) sales of ``hanging'' shrimp. In 
response, Thai Union has argued that its reported home market sales are 
legitimate because: (1) it is the Department's practice to

[[Page 12096]]

include in the viability test sales of the foreign like product sold to 
an affiliated producer in the home market consumed in the production of 
non-subject merchandise; and (2) ``hanging shrimp'' is second-quality 
shrimp, not a by-product. At verification, we thoroughly examined 
whether the shrimp at issue are properly considered foreign like 
product and were sold and/or consumed as claimed by the respondent. For 
further discussion, see the ``Thai Union Verification Report'' and the 
February 26, 2008, memorandum to the file from Heidi K. Schriefer 
entitled, ``Verification of the Cost Response of Thai Union Frozen 
Product PCL and Thai Union Seafood Company Ltd. in the 2nd 
Administrative Review of the Antidumping Duty Order on Certain Frozen 
Warmwater Shrimp from Thailand.''
    Regarding the Rubicon Group, we determined that this respondent's 
aggregate volume of home market sales of the foreign like product was 
insufficient to permit a proper comparison with U.S. sales of the 
subject merchandise. Therefore, we used sales to the Rubicon Group's 
largest third-country market (i.e., Canada) as the basis for comparison 
market sales in accordance with section 773(a)(1)(C) of the Act and 19 
CFR 351.404. Finally, we determined that Thai I-Mei's aggregate volumes 
of home and third country market sales of the foreign like product were 
insufficient to permit a proper comparison with U.S. sales of the 
subject merchandise. Therefore, we used CV as the basis for calculating 
NV for Thai I-Mei, in accordance with section 773(a)(4) of the Act.

B. Affiliated-Party Transactions and Arm's-Length Test

    During the POR, Pakfood and Thai Union sold the foreign like 
product to affiliated customers. To test whether these sales were made 
at arm's-length prices, we compared, on a product-specific basis, the 
starting prices of sales to affiliated and unaffiliated customers, net 
of all discounts and rebates, movement charges, direct selling 
expenses, and packing expenses. Pursuant to 19 CFR 351.403(c) and in 
accordance with the Department's practice, where the price to the 
affiliated party was, on average, within a range of 98 to 102 percent 
of the price of the same or comparable merchandise sold to unaffiliated 
parties, we determined that sales made to the affiliated party were at 
arm's length. See Antidumping Proceedings: Affiliated Party Sales in 
the Ordinary Course of Trade, 67 FR 69186, 69187 (Nov. 15, 2002) 
(establishing that the overall ratio calculated for an affiliate must 
be between 98 percent and 102 percent in order for sales to be 
considered in the ordinary course of trade and used in the NV 
calculation). Sales to affiliated customers in the comparison market 
that were not made at arm's-length prices were excluded from our 
analysis because we considered these sales to be outside the ordinary 
course of trade. See 19 CFR 351.102(b).

C. 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 or CEP. 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 (Nov. 19, 1997) (Plate from South Africa). 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), including 
selling functions, class of customer (customer 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 LOTs 
for EP and comparison market sales (i.e., NV based on either home 
market or third country prices),\5\ we consider the starting prices 
before any adjustments. For CEP sales, we consider only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act. See Micron Technology, Inc. v. 
United States, 243 F. 3d 1301, 1314 (Fed. Cir. 2001). When the 
Department is unable to match U.S. sales of the foreign like product in 
the comparison market at the same LOT as the EP or CEP, the Department 
may compare the U.S. sales to sales at a different LOT in the 
comparison market. In comparing EP or CEP sales at a different LOT in 
the comparison market, where available data make it practicable, we 
make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, 
for CEP sales only, if the NV LOT is more remote from the factory than 
the CEP LOT and there is no basis for determining whether the 
difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa, 62 FR at 61732-61733.
---------------------------------------------------------------------------

    \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, general 
and administrative (G&A) expenses, and profit for CV, where 
possible.
---------------------------------------------------------------------------

    In this administrative review, we obtained information from each 
respondent regarding the marketing stages involved in making the 
reported foreign market and U.S. sales, including a description of the 
selling activities performed by each respondent for each channel of 
distribution. Company-specific LOT findings are summarized below.
1. Pakfood
    Pakfood reported that it made EP sales in the U.S. market through a 
single channel of distribution (i.e., direct sales to distributors). We 
examined the selling activities performed for this channel and found 
that Pakfood performed the following selling functions: Providing sales 
promotion/advertising, attending trade shows, maintaining customer 
contact, price negotiation, invoice issuance, payment receipt, delivery 
services, and packing. Accordingly, based on the core selling 
functions, we find that Pakfood performed sales and marketing, freight 
and delivery services, and inventory maintenance and warehousing for 
U.S. sales. Because all sales in the United States are made through a 
single distribution channel, we preliminarily determine that there is 
one LOT in the U.S. market.
    With respect to the home market, Pakfood made sales to processors, 
distributors, retailers, and end-users. Pakfood stated that its home 
market sales were made through a single channel of distribution, 
regardless of customer category. We examined the selling activities 
performed for this channel, and found that Pakfood performed the 
following selling functions: Sales forecasting/market research, 
providing sales promotion/advertising, attending trade shows, 
maintaining customer contact, price negotiation, order processing, 
invoice issuance, delivery services, providing direct sales personnel, 
payment receipt, and packing. Accordingly, based on the core selling 
functions, we find that Pakfood performed sales and marketing, freight 
and delivery services, and inventory maintenance and warehousing at the 
same relative level of intensity for all customers in the

[[Page 12097]]

home market. Because all sales in the home market are made through a 
single distribution channel, we preliminarily determine that there is 
one LOT in the home market.
    Finally, we compared the EP LOT to the home market LOT and found 
that the core selling functions performed for U.S. and home market 
customers are virtually identical. Therefore, we determined that sales 
to the U.S. and home markets during the POR were made at the same LOT, 
and as a result, no LOT adjustment was warranted.
2. The Rubicon Group
    The Rubicon Group reported that it made both EP and CEP