Certain Frozen Warmwater Shrimp from Thailand: Preliminary Results of Antidumping Duty Administrative Review and Final Results of Partial Rescission of Antidumping Duty Administrative Review, 12188-12199 [2010-5588]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 75, Number 49 (Monday, March 15, 2010)]
[Notices]
[Pages 12188-12199]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-5588]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-549-822]


Certain Frozen Warmwater Shrimp from Thailand: Preliminary 
Results of Antidumping Duty Administrative Review and Final Results of 
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 165 companies.\1\ The 
three respondents which the Department selected for individual 
examination are Marine Gold Products Limited (MRG); Pakfood Public 
Company Limited and its affiliates\2\; and the Rubicon Group.\3\ The 
respondents which were not selected for individual examination are 
listed in the ``Preliminary Results of Review'' section of this notice. 
This is the fourth administrative review of this order. The review 
covers the period February 1, 2008, through January 31, 2009.\4\
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    \1\ This figure excludes twenty companies for which we are 
rescinding the review due to the fact that they made no shipments of 
the subject merchandise during the period of review (POR). See 
``Partial Rescission of Review'' section, below.
    \2\ Asia Pacific (Thailand) Company Limited, Chaophraya Cold 
Storage Company Limited, Okeanos Company Limited, Okeanos Food 
Company Limited, and Takzin Samut Company Limited (collectively, 
Pakfood).
    \3\ Andaman Seafood Co., Ltd. (Andaman), Wales & Co. Universe 
Limited (Wales), Chanthaburi Frozen Food Co., Ltd. (CFF), 
Chanthaburi Seafoods Co., Ltd. (CSF), Intersia Foods Co., Ltd. 
(formerly Y2K Frozen Foods Co., Ltd.), Phatthana Seafood Co., Ltd. 
(PTN), Phatthana Frozen Food Co., Ltd. (PFF), Thailand Fishery Cold 
Storage Public (collectively, the Rubicon Grou Co., Ltd. (TFC), Thai 
International Seafood Co., Ltd. (TIS), S.C.C. Frozen Seafood Co., 
Ltd. (SCC), and Sea Wealth Frozen Food Co., Ltd. (Sea Wealth) 
(collectively, the Rubicon Group).
    \4\ Because of the partial revocation of the antidumping duty 
order, effective January 16, 2009, the POR is February 1, 2008, 
through January 15, 2009, for Thai I-Mei Frozen Foods Co., Ltd. 
(Thai I-Mei) and the Rubicon Group. See Implementation of the 
Findings of the WTO Panel in United States-Antidumping Measure on 
Shrimp from Thailand: Notice of Determination Under Section 129 of 
the Uruguay Round Agreements Act and Partial Revocation of the 
Antidumping Duty Order on Frozen Warmwater Shrimp from Thailand, 74 
FR 5638, 5639 (January 30, 2009) (Section 129 Determination); 
Certain Frozen Warmwater Shrimp from Thailand: Final Results of 
Antidumping Duty Changed Circumstances Review and Notice of 
Revocation in Part, 74 FR 52452 (October 13, 2009).
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    We preliminarily determine that sales were made by MRG, Pakfood and 
the Rubicon Group below normal value (NV). In addition, based on the 
preliminary results for the respondents selected for individual 
examination, we have preliminarily determined a weighted-average margin 
for those companies that were not individually examined.
    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.

FOR FURTHER INFORMATION CONTACT: Kate Johnson or David Goldberger, AD/
CVD Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC, 20230; telephone (202) 482-
4929 and (202) 482-4136, respectively.

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 (February 1, 2005). On February 4, 
2009, 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 Thailand for the period 
February 1, 2008, through January 31, 2009. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 74 FR 6013 (February 4, 
2009). 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 shrimp made by numerous companies during the POR, the 
Department initiated an administrative review for 185 companies. These 
companies are listed in the Department's notice of initiation. See 
Certain Frozen Warmwater Shrimp from Brazil, India, and Thailand: 
Notice

[[Page 12189]]

of Initiation of Administrative Reviews, 74 FR 15699 (April 7, 2009).
    Between March and May 2009, the Department received submissions 
from certain companies that indicated they had no shipments of subject 
merchandise to the United States during the POR.
    On April 21, 2009, the Ad Hoc Shrimp Trade Action Committee 
(hereafter, Domestic Producers) requested that the Department determine 
whether antidumping duties had been absorbed during the POR. See the 
``Duty Absorption'' section, below, for further discussion.
    Based upon 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 
May 13, 2009, we preliminarily selected the three largest producers/
exporters of shrimp from Thailand during the POR, MRG, Pakfood and the 
Rubicon Group, for individual examination in this segment of the 
proceeding. See the May 13, 2009, memorandum entitled ``Selection of 
Respondents for Individual Review.'' On May 18, 2009, we issued the 
antidumping duty questionnaire to the three mandatory respondents.
    On July 7, 2009, in accordance with 19 CFR 351.213(d)(1), the 
Domestic Producers withdrew their request for review for the following 
eighteen companies: Anglo-Siam Seafoods Co., Ltd.; Applied DB Ind; 
Chonburi LC; Gallant Ocean (Thailand) Co., Ltd. (Gallant Ocean); Haitai 
Seafood Co., Ltd.; High Way International Co., Ltd.; Li-Thai Frozen 
Foods Co., Ltd.; Merkur Co., Ltd.; Ming Chao Ind Thailand; Nongmon SMJ 
Products; Queen Marine Food Co., Ltd.; SCT Co., Ltd.; Search & Serve; 
Smile Heart Foods Co., Ltd.; Shianlin Bangkok Co., Ltd.; Star Frozen 
Foods Co., Ltd.; Thai World Imports & Exports; and Wann Fisheries Co., 
Ltd.
    In July and August 2009, we received responses to sections A (i.e., 
the section covering general information about the company), B (i.e., 
the section covering comparison-market sales), and C (i.e., the section 
covering U.S. sales) of the antidumping duty questionnaire from each of 
the respondents. We also received responses to section D (the section 
covering cost of production (COP) and constructed value (CV)) of the 
questionnaire from Pakfood and the Rubicon Group.
    On August 6, 2009, the Domestic Producers requested that the 
Department initiate a sales-below-cost investigation of MRG. On 
September 10, 2009, we initiated this investigation. See September 10, 
2009, memorandum entitled ``The Domestic Producers' Allegation of Sales 
Below the Cost of Production for Marine Gold Products Ltd.'' As a 
result, we instructed MRG to respond to section D of the Department's 
questionnaire, which it submitted on October 22, 2009.
    During the period September 2009 through January 2009, we issued to 
the three mandatory respondents supplemental questionnaires regarding 
sections A, B, C, and D of the original questionnaire. We received 
responses to these questionnaires during the period October 2009 
through February 2010.
    On September 25, 2009, the Department issued a memorandum 
indicating that it intended to rescind the administrative review with 
respect to 37 respondent companies, and invited comments on this action 
from interested parties. See the September 25, 2009, memorandum 
entitled ``Intent to Rescind in Part the Antidumping Duty 
Administrative Review on Certain Frozen Warmwater Shrimp from 
Thailand'' (Intent to Rescind Memorandum). No party commented on the 
Intent to Rescind Memorandum.
    On October 20, 2009, the Department postponed the preliminary 
results in this review until no later than March 1, 2009. See Certain 
Frozen Warmwater Shrimp From India and Thailand: Notice of Extension of 
Time Limits for the Preliminary Results of the Fourth Administrative 
Reviews, 74 FR 53700 (October 20, 2009).
    As explained in the memorandum from the Deputy Assistant Secretary 
for Import Administration, the Department has exercised its discretion 
to toll deadlines for the duration of the closure of the Federal 
Government from February 5, through February 12, 2010. Thus, all 
deadlines in this segment of the proceeding have been extended by seven 
days. The revised deadline for the preliminary results of this review 
is now March 8, 2010. See Memorandum to the Record from Ronald 
Lorentzen, DAS for Import Administration, regarding ``Tolling of 
Administrative Deadlines As a Result of the Government Closure During 
the Recent Snowstorm,'' dated February 12, 2010.
    On November 17, 2009, we issued a letter to all interested parties 
in this review inviting comments on a proposal made by MRG requesting 
that the Department modify the reporting of one of the product matching 
characteristics, cooked form. We received comments on December 1, 2009, 
from the Rubicon Group, the Domestic Producers, the American Shrimp 
Processors Association (ASPA) (hereafter, Domestic Processors), and the 
Louisiana Shrimp Association (LSA). MRG submitted rebuttal comments on 
December 11, 2009. Our determination with respect to MRG's proposal is 
discussed in the ``Product Comparisons'' section below.
    We conducted verifications of MRG's sales and cost responses in 
December 2009 and February 2010, respectively.

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,\5\ deveined or not deveined, cooked or raw, or 
otherwise processed in frozen form.
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    \5\ ``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

[[Page 12190]]

(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.

Partial Rescission of Review

    As stated above, on September 25, 2009, the Department issued a 
memorandum indicating that it intended to rescind the administrative 
review with respect to 37 respondent companies, including the 18 
companies listed in the Domestic Producers' July 7, 2009, submission 
wherein the Domestic Producers withdrew their request for review of 
these companies. However, because the Domestic Processors did not 
withdraw their review request for any of the companies listed in the 
Domestic Producers' July 7, 2009, submission and, therefore, there 
remains an outstanding review request for each of these companies, we 
are not rescinding the review with respect to these companies, except 
Wann Fisheries Co., Ltd.\6\
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    \6\ Wann Fisheries Co., Ltd. submitted a no-shipment statement 
on May 6, 2009. Accordingly, we are rescinding the review with 
respect to this company based on our confirmation of its statement, 
as discussed below.
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    In accordance with 19 CFR 351.213(d)(3), we are rescinding the 
review with respect to the following 19 companies that submitted 
letters indicating that they had no shipments of subject merchandise 
during the POR: 1) American Commercial Transport, Inc. ; 2) Ampai 
Frozen Food Co., Ltd.; 3) F.A.I.T. Corporation Limited; 4) Far East 
Cold Storage, Ltd.; 5) Grobest Frozen Foods Co., Ltd.; 6) Inter-Oceanic 
Resources Co., Ltd.; 7) Leo Transport Corporation, Ltd.; 8) Lucky 
Unions Foods Co., Ltd.; 9) MKF Interfood (2004) Co., Ltd.; 10) Siam 
Canadian Foods Co., Ltd.; 11) Siam Ocean Frozen Foods Co., Ltd.; 12) 
Sky Fresh Co., Ltd.; 13) Songkla Canning (PCL); 14) Suree Interfoods 
Co., Ltd.; 15) Thai Excel Foods Co., Ltd.; 16) Thai Union Manufacturing 
Co., Ltd.; 17) Thai Yoo Ltd., Part.; 18) V. Thai Food Product Co., 
Ltd.; and 19) Wann Fisheries Co., Ltd. We reviewed CBP data and 
confirmed that there were no entries of subject merchandise during the 
POR from any of these companies. Consequently, in accordance with 19 
CFR 351.213(d)(3) and consistent with our practice, we are rescinding 
our review of the companies listed above. See, e.g., Certain Steel 
Concrete Reinforcing Bars From Turkey; Final Results and Rescission of 
Antidumping Duty Administrative Review in Part, 71 FR 65082, 65083 
(November 7, 2006).
    In addition, we are rescinding the review with respect to Euro-
Asian International Seafoods Co., Ltd. because it is not a producer 
and/or exporter of the subject merchandise and the CBP data confirm 
that there were no entries of subject merchandise during the POR from 
this company. See Intent to Rescind Memorandum.

Period of Review

    The POR is February 1, 2008, through January 31, 2009. See Footnote 
2.

Duty Absorption

    On April 21, 2009, the Domestic Producers requested that the 
Department determine whether antidumping duties had been absorbed 
during the POR. Section 751(a)(4) of the Tariff Act of 1930, as amended 
(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 four 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 NV. 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); unchanged in Notice of Final Results and Final Rescission in 
Part of Antidumping Duty Administrative Review: Certain Stainless Steel 
Butt-Weld Pipe Fittings From Taiwan, 70 FR 73727 (December 13, 2005). 
On May 18, 2009, we requested proof that the Rubicon Group's 
unaffiliated purchasers would ultimately pay the antidumping duties to 
be assessed on entries during the POR. The Rubicon Group did not 
provide any such evidence. Because the Rubicon Group 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 the Rubicon Group on all U.S. sales made through its 
affiliated importer of record. For the percentage of such sales, see 
the March 8, 2010, memorandum entitled ``Rubicon Preliminary Results 
Margin Calculation'' at Attachment 2.
    With respect to MRG and Pakfood, neither respondent sold 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 shrimp from Thailand to the United 
States were made at less than NV, we compared the export price (EP) or 
constructed export price (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 MRG, Pakfood and the 
Rubicon Group 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

[[Page 12191]]

the ordinary course of trade, as discussed in the ``Cost of Production 
Analysis'' section, below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by MRG, Pakfood and the Rubicon Group 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 MRG and Pakfood (home market) and the Rubicon Group (Canada) 
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 the most 
similar foreign like product made in the ordinary course of trade. For 
MRG, Pakfood and the Rubicon Group, where there were no sales of 
identical or similar merchandise in the comparison market made in the 
ordinary course of trade to compare to U.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 sales of comparable quality shrimp in the 
comparison 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. MRG did not make sales of broken 
shrimp to the United States during the POR.
    In making the product comparisons, we matched foreign like products 
based on the physical characteristics reported by MRG, Pakfood and the 
Rubicon Group 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.
    As noted above, on November 17, 2009, we issued a letter to all 
interested parties in this review inviting comments on MRG's request 
that the Department modify the reporting requirements for one of the 
product matching characteristics, ``cooked form.'' The proposed 
revision would allow a distinction to be made between shrimp cooked 
before peeling and shrimp cooked after peeling.
    In comments submitted on December 1, 2009, the Domestic Producers 
maintained that the Department's consideration of MRG's request should 
be consistent with the ``compelling reasons'' standard, and that any 
change in reporting requirements should apply across all shrimp 
reviews.\7\ The Domestic Producers argued that, based on the record of 
these reviews, there is no compelling reason for the proposed 
modification, as no other party to these proceedings has supported it, 
and there is very little independent market-based support for 
distinguishing between shrimp cooked before and after peeling.
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    \7\ The Department is currently conducting administrative 
reviews of the antidumping duty orders on Certain Frozen Warmwater 
Shrimp from India, the People's Republic of China, Thailand, and the 
Socialist Republic of Vietnam.
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    Also on December 1, 2009, we received comments from the Domestic 
Processors, the LSA, and the Rubicon Group opposing MRG's proposed 
alteration to the reporting requirements for ``cooked form.'' The 
Domestic Processors and LSA argued that the differences in cooking 
process identified by MRG appear to overlap almost completely with the 
preservative characteristic already accounted for in the model-match 
methodology. They claimed that the physical differences that MRG 
attributes to the different cooking processes are in fact largely the 
result of differences in preservative use; therefore, the cooking 
process is not commercially significant, while preservative use is. 
Furthermore, the Rubicon Group stated that it could not comply with 
MRG's proposed change, because it does not distinguish products that 
are cooked before peeling from those that are cooked after peeling in 
its records. Moreover, the Rubicon Group argued, MRG has not 
demonstrated that the differences in price noted by MRG in its proposal 
resulted from cooking at different stages of production, as opposed to 
other factors, such as selling at different times during the POR. The 
Rubicon Group added that cooking before or after peeling has no bearing 
on its own pricing.
    In its December 11, 2009, rebuttal comments, MRG explained that 
cooking before peeling results in a brighter-colored cooked shrimp that 
customers prefer. MRG stated that it charges a price premium for such 
products to account for the higher processing costs incurred by 
partially-peeling the shrimp to an ``EZ peel'' form and deveining it 
prior to cooking, and then fully peeling the shrimp after cooking. MRG 
argued that the Domestic Producers' comments failed to address these 
additional costs. Without accounting for these factors, MRG stated, the 
Department would fail to make an accurate determination of dumping, as 
required by law. In response to APSA's and LSA's arguments, MRG stated 
that the difference in preservative does not account for the difference 
in processing costs and sale price premiums that cooking before peeling 
generates. MRG added that its own pricing data refutes the Rubicon 
Group's contention that cooking before, versus after, peeling bears no 
relationship to price.
    While MRG's questionnaire response appears to support its 
contention that it charges somewhat higher prices for shrimp cooked 
before peeling and incurs some additional costs for such shrimp, we 
note that cooking process is not a physical characteristic of the 
merchandise under consideration. Whether the shrimp is cooked before or 
after peeling does not change the fact that the shrimp is cooked. What 
MRG seeks to distinguish in its argument is that shrimp cooked before 
peeling is of a different appearance - brighter color - than shrimp 
cooked after peeling. Thus, it is the difference in appearance that MRG 
attempts to distinguish through the cooked form physical 
characteristic.
    Normally, when considering whether to revise the model-match 
methodology established in a less-than-fair-value (LTFV) investigation, 
the Department ``will not modify that methodology in subsequent 
proceedings unless there are compelling reasons' to do so . A party 
seeking to modify an existing model-match methodology has alternative 
means to demonstrate that ``compelling reasons'' exist to do so. {The 
Department{time}  will find that ``compelling reasons'' exist if a 
party proves by ``compelling and convincing evidence'' that the 
existing model-match criteria ``are not reflective of the merchandise 
in question,'' that there have been changes in the relevant industry, 
or that ``there is some other compelling reason present, which requires 
a change.'' See Fagersta Stainless AB v.United States, 577 F. Supp. 2d 
1270 (CIT 2008).
    Under this standard, MRG has failed to demonstrate that compelling 
and convincing evidence exists to alter the model-match methodology to 
account for the perceived difference in the color of the shrimp. MRG 
has not provided evidence that there have been changes in the shrimp 
industry to warrant a new product characteristic based on shrimp

[[Page 12192]]

color intensity. Moreover, MRG has not provided evidence that other 
factors such as preservative differences do not account for the 
perceived differences in shrimp color. With respect to the differences 
in price and cost cited by MRG, we note that it is not unusual for 
products falling within the same product code to have some price and 
cost differences. Finally, we find no other compelling reason to modify 
the model-match criteria to account for the intensity of the shrimp 
color. Accordingly, we are not accepting MRG's proposal to revise the 
cooked form physical characteristic reporting in order to reflect 
perceived differences in shrimp color.

Constructed Export Price/Export Price

    For all U.S. sales made by MRG, and certain U.S. sales made by 
Pakfood and the Rubicon Group, 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 
before the date of importation by the producer or exporter of the 
subject merchandise outside the United States, and CEP methodology was 
not otherwise warranted based on the facts of record.
    For certain U.S. sales made by Pakfood and the Rubicon Group, we 
calculated CEP in accordance with section 772(b) of the Act because the 
subject merchandise was first sold (or agreed to be sold) in the United 
States 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.

A. MRG

    We based EP on C&F or DDP (delivered, duty paid) prices to the 
first unaffiliated purchaser in the United States. Where appropriate, 
we made adjustments to the starting price for billing adjustments and 
rebates. We made deductions, where appropriate, for foreign inland 
freight expenses, warehousing expenses, foreign brokerage and handling 
expenses (including survey fees, gate charges, and other fees), 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. pre-sale warehousing 
expenses in accordance with section 772(c)(2)(A) of the Act.
    MRG reported payments to one U.S. customer as reimbursements for 
marine insurance expenses. At verification, we were unable to confirm 
that these payments to the customer were associated with marine 
insurance premium reimbursements. See Memorandum to the File entitled 
``Verification of the Sales Response of Marine Gold Products Co., 
Ltd.'' dated January 21, 2010, at pages 14-15. Accordingly, we have 
reclassified these payments as rebates to the customer.

B. Pakfood

    We based EP on C&F or DDP prices to the first unaffiliated 
purchaser in the United States. Where appropriate, we made adjustments 
to the starting price for discounts. We made deductions, where 
appropriate, for foreign inland freight expenses, pre-sale warehousing 
expenses, survey fees, 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(c)(2)(A) of the Act.
    We based CEP on DDP prices 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 warehousing expenses, foreign inland insurance expenses, 
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(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 (e.g., bank charges, express mail fees, 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 Pakfood on its sales of the subject 
merchandise in the United States and the profit associated with those 
sales.

C. The Rubicon Group

    We based EP on the price to the first unaffiliated purchaser in the 
United States. Where appropriate, we made adjustments to the starting 
price 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, 
gate charges, foreign warehousing expenses, foreign inland insurance 
expenses, foreign brokerage and handling expenses, ocean freight 
expenses (offset by freight refunds, where appropriate), 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).
    We based CEP on 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, gate charges, foreign 
warehousing expenses, foreign inland insurance expenses, foreign 
brokerage and handling expenses, ocean freight expenses (offset by 
freight refunds, where appropriate), 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 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 (e.g., bank charges, commissions, 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.

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

[[Page 12193]]

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 
MRG and Pakfood had viable home markets during the POR. Consequently, 
we based NV on home market sales for MRG and Pakfood.
    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 the Rubicon Group's sales to 
Canada as the basis for comparison-market sales in accordance with 
section 773(a)(1)(C) of the Act and 19 CFR 351.404.

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

    During the POR, Pakfood sold the foreign like product to affiliated 
customers in the comparison market. 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. See 
Id.; see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997) (Plate from South Africa). In order 
to determine whether the comparison-market 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., where NV is based on either 
home market or third country prices),\8\ 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 at a more advanced stage 
of distribution than the LOT of the CEP 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-
33.
---------------------------------------------------------------------------

    \8\ 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. MRG

    MRG reported that it made EP sales in the U.S. market through a 
single channel of distribution (i.e., direct sales to unaffiliated 
distributors). We examined the selling activities performed for this 
channel and found that MRG performed the following selling functions: 
sales forecasting/market research, sales promotion/trade shows/
advertising, visits/calls and correspondence with customers, order 
processing/sales documentation, inventory maintenance, delivery 
services, warranty services, and packing. These selling activities can 
be generally grouped into three selling function categories for 
analysis: 1) sales and marketing; 2) freight and delivery services; 
and, 3) warranty and technical support. Accordingly, we find that MRG 
performed sales and marketing, freight and delivery services, and 
warranty and technical support at the same relative level of intensity 
for all 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, MRG made sales to processors, 
trading companies, distributors, and restaurants. MRG stated that its 
home market sales were made through two channels of distribution: 1) 
sales to one customer which purchases shrimp for processing into non-
subject merchandise; and 2) sales to all other customers. We examined 
the selling activities performed for these channels, and found that MRG 
performed the following selling functions for both channels: sales 
forecasting/market research, visits/calls and correspondence with 
customers, order processing/sales documentation, inventory maintenance, 
limited delivery services, warranty services, and packing. These 
selling activities can be generally grouped into three selling function 
categories for analysis: 1) sales and marketing; 2) freight and 
delivery services; and, 3) warranty and technical support. Accordingly, 
we find that MRG performed sales and marketing, freight and delivery 
services, and warranty and technical support at the same relative level 
of intensity for all customers in the home market, except for sales 
forecasting/market research and inventory maintenance, which were 
performed at a low-to-medium level of intensity for one home market 
channel, and not performed for the other home market channel. After 
analyzing the selling functions performed for each sales channel in the 
home market, we find that the distinctions in selling

[[Page 12194]]

functions are not material. Therefore, based on our overall analysis, 
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 selling functions performed for U.S. and home market customers 
are essentially the same. Therefore, we preliminarily determine 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 is warranted.

2. Pakfood

    Pakfood reported that it made EP and CEP sales through a single 
channel of distribution (i.e., direct sales to distributors), and 
performed the following selling functions for sales to U.S. customers: 
sales forecasting/market research, sales promotion/advertising, 
procurement/sourcing services, order processing, direct sales 
personnel, provision of cash discounts, payment of commissions, freight 
and delivery services, and packing. These selling activities can be 
generally grouped into two selling function categories for analysis: 1) 
sales and marketing; and 2) freight and delivery services. Accordingly, 
we find that Pakfood performed sales and marketing, and freight and 
delivery services at the same relative level of intensity for all U.S. 
customers. 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, direct 
from factory to customer, and that it performed the following selling 
functions for sales to home market customers: sales forecasting/market 
research, sales promotion/advertising, procurement/sourcing services, 
order processing, direct sales personnel, provision of cash discounts, 
freight and delivery services, and packing. These selling activities 
can be generally grouped into two selling function categories for 
analysis: 1) sales and marketing; and 2) freight and delivery services. 
Accordingly, we find that Pakfood performed sales and marketing, and 
freight and delivery services at the same relative level of intensity 
for all customers in the 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 U.S. LOT to the home market LOT and found 
that the selling functions performed for U.S. and home market customers 
are virtually identical, with the exception of commission payments made 
for U.S. sales which is not a sufficient basis to determine that the 
U.S. LOT is different from the home market LOT. Moreover, although 
there are some differences in the level of intensity at which some of 
the selling functions were performed in the two markets, we find that 
these differences are not material. Therefore, based on our overall 
analysis, we preliminarily determine 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.

3. The Rubicon Group

    The Rubicon Group reported that it made both EP and CEP sales in 
the U.S. market to distributors/wholesalers, retailers, and food 
service industry customers. For EP sales, the Rubicon Group reported 
sales through one channel of distribution (i.e., direct from the Thai 
exporters to unaffiliated U.S. customers). For CEP sales, the Rubicon 
Group reported that its U.S. affiliate made sales through two channels 
of distribution: 1) from a warehouse; and 2) direct shipments to 
customers (``drop shipments'').
    We examined the selling activities performed for each channel. For 
direct EP sales, the Rubicon Group reported the following selling 
functions: sales forecasting/market research, sales promotion/trade 
shows, inventory maintenance, order input/processing, freight and 
delivery arrangements, visits, calls and correspondence to customers, 
development of new packaging (with customer), packing and after-sales 
services. These selling activities can be generally grouped into four 
categories for analysis: 1) sales and marketing; 2) freight and 
delivery services; 3) inventory maintenance and warehousing; and 4) 
warranty and technical support. Accordingly, we found that the Rubicon 
Group performed selling functions related to sales and marketing, 
freight and delivery, inventory maintenance and warehousing, and 
warranty and technical support at the same relative level of intensity 
for EP sales. As there was only one channel of distribution for EP 
sales, we found that there was one LOT for EP sales.
    For both warehoused and drop-shipment CEP sales, the Rubicon Group 
reported the following selling functions: inventory maintenance, order 
input/processing, freight and delivery arrangements, and packing. As 
the selling functions performed for both warehoused and drop- shipment 
sales were identical, we found that there was one LOT for CEP sales.
    With respect to the Canadian market, the Rubicon Group reported 
sales to distributors/wholesalers, retailers, and end users. The 
Rubicon Group stated that its Canadian sales were made through two 
channels of distribution: 1) direct to Canadian customers; and 2) 
through its U.S. affiliate from a Canadian warehouse. We examined the 
reported selling activities and found that the Rubicon Group performed 
the following selling functions for direct sales to Canada: sales 
forecasting; market research; sales promotion; trade shows; inventory 
maintenance; order input/processing; freight and delivery arrangements; 
visits, calls and correspondence to customers; development of new 
packaging (with customer); packing; and after-sales services. For 
warehoused sales to Canada, we found that the Rubicon Group (including 
the Thai packers\9\, Rubicon Resources and Wales, an affiliate of the 
Thai packers) performed the following selling functions: sales 
forecasting; market research; sales promotion; trade shows; inventory 
maintenance; order input/processing; freight and delivery arrangements; 
visits, calls and correspondence to customers; development of new 
packaging and new markets (with customer); packing; and after-sales 
services. These selling activities can be generally grouped into four 
selling function categories: 1) sales and marketing; 2) freight and 
delivery services; 3) inventory maintenance and warehousing; and 4) 
warranty and technical support. Accordingly, we found that the Rubicon 
Group performed selling functions related to sales and marketing, 
freight and delivery, inventory maintenance and warehousing, and 
warranty and technical support at the same relative level of intensity 
for all customers in the comparison market. Therefore, we found that 
all of the Rubicon Group's sales in the Canadian market constituted one 
LOT.
---------------------------------------------------------------------------

    \9\ The following companies in the Rubicon Group produced 
subject merchandise during the POR and are collectively referred to 
as the ``Thai packers'': Andaman, CSF, CFF, PTN, PFF, TFC, TIS, SCC, 
and Sea Wealth.
---------------------------------------------------------------------------

    In comparing the EP LOT to the Canadian market LOT we found that 
the selling functions performed for U.S. and Canadian customers were 
the same. Therefore, we determined that the LOT for Canadian sales was 
the same as the LOT for EP sales. Consequently, we

[[Page 12195]]

matched EP sales to comparison-market sales at the same LOT and no LOT 
adjustment was warranted.
    In comparing the Canadian LOT to the CEP LOT, we found that the 
selling activities performed by the Thai packers for CEP sales were 
significantly fewer than the selling activities that were performed for 
the Canadian sales. The Thai packers performed the following selling 
functions for Canadian sales: sales forecasting; market research; sales 
promotion; advertising; trade shows; inventory maintenance; order 
input/processing; freight and delivery arrangements; visits, calls and 
correspondence to customers; development of new packaging and new 
markets (with customer); packing; and after-sales services. The only 
selling functions that the Thai packers provided for CEP sales were 
inventory maintenance, order input/processing, freight and delivery 
arrangements, and packing. Therefore, the Thai packers provided many 
more selling functions for Canadian sales than they provided for CEP 
sales, thus making the Canadian market LOT more advanced than the CEP 
LOT.
    Based on the above analysis, we considered the CEP LOT to be 
different from the Canadian market LOT and to be at a less advanced 
stage of distribution than the Canadian market LOT. Accordingly, we 
could not match CEP sales to sales at the same LOT for Canadian sales, 
nor could we determine a LOT adjustment based on the Rubicon Group's 
Canadian sales because there was only one LOT in Canada. Therefore, it 
was not possible to determine if there was a pattern of consistent 
price differences between the sales on which NV is based and Canadian 
sales at the LOT of the export transaction. See section 773(a)(7)(A) of 
the Act. Furthermore, we have no other information that provides an 
appropriate basis for determining a LOT adjustment. Consequently, 
because the data available did not form an appropriate basis for making 
a LOT adjustment but the Canadian market LOT was at a more advanced 
stage of distribution than the CEP LOT, we made a CEP offset to NV in 
accordance with section 773(a)(7)(B) of the Act. The CEP offset was 
calculated as the lesser of: (1) the indirect selling expenses incurred 
on the third-country sales, or (2) the indirect selling expenses 
deducted from the starting price in calculating CEP.

D. Cost of Production Analysis

    Based on our analysis of the Domestic Producers' allegation, we 
found that there were reasonable grounds to believe or suspect that 
MRG's sales of shrimp in the home market were made at prices below its 
COP. Accordingly, pursuant to section 773(b) of the Act, we initiated a 
sales-below-cost investigation to determine whether MRG's sales were 
made at prices below its COP. See September 10, 2009, memorandum 
entitled ``The Domestic Producers' Allegation of Sales Below the Cost 
of Production for Marine Gold Products Ltd.''
    We found that Pakfood and the Rubicon Group made sales below the 
COP in the 2006-2007 administrative review, the most recently completed 
segment of this proceeding as of the date of the initiation of this 
administrative review, and such sales were disregarded. See Certain 
Frozen Warmwater Shrimp from Thailand: Preliminary Results and 
Preliminary Partial Rescission of Antidumping Duty Administrative 
Review, 73 FR E8-4418 (March 6, 2008); unchanged in Certain Frozen 
Warmwater Shrimp from Thailand: Final Results and Final Partial 
Rescission of Antidumping Duty Administrative Review, 73 FR 50933 
(August 29, 2008). Thus, in accordance with section 773(b)(2)(A)(ii) of 
the Act, there are reasonable grounds to believe or suspect that 
Pakfood and the Rubicon Group made sales in their respective comparison 
markets at prices below the cost of producing the merchandise in the 
current review period.

1. Calculation of Cost of Production

    In accordance with section 773(b)(3) of the Act, we calculated the 
respondents' COPs based on the sum of their costs of materials and 
conversion for the foreign like product, plus amounts for G&A expenses 
and interest expenses (see ``Test of Comparison-Market Sales Prices'' 
section below for treatment of comparison-market selling expenses and 
packing costs).
    The Department relied on the COP data submitted by MRG, Pakfood, 
and the Rubicon Group in their most recent supplemental responses to 
section D of the questionnaire for the COP calculations.

2. Test of Comparison-Market Sales Prices

    On a product-specific basis, we compared the weighted-average COP 
to the prices of home market sales (for MRG and Pakfood) or third-
country sales (for the Rubicon Group) of the foreign like product, as 
required under section 773(b) of the Act, in order to determine whether 
the sale prices were below the COP. For purposes of this comparison, we 
used COP exclusive of selling and packing expenses. The prices, 
adjusted for any applicable billing adjustments, were exclusive of any 
applicable movement charges, rebates, discounts, and direct and 
indirect selling expenses, and packing expenses.

3. Results of the COP Test

    In determining whether to disregard comparison-market sales made at 
prices below the COP, we examine, in accordance with sections 
773(b)(1)(A) and (B) of the Act: 1) whether, within an extended period 
of time, such sales were made in substantial quantities; and 2) whether 
such sales were made at prices which permitted the recovery of all 
costs within a reasonable period of time in the normal course of trade. 
Where less than 20 percent of the respondent's comparison-market sales 
of a given product are at prices less than the COP, we do not disregard 
any below-cost sales of that product because we determine that in such 
instances the below-cost sales were not made within an extended period 
of time and in ``substantial quantities.'' Where 20 percent or more of 
a respondent's sales of a given product are at prices less than the 
COP, we disregard the below-cost sales because: 1) they were made 
within an extended period of time in ``substantial quantities,'' in 
accordance with sections 773(b)(2)(B) and (C) of the Act, and 2) based 
on our comparison of prices to the weighted-average COPs for the POR, 
they were at prices which would not permit the recovery of all costs 
within a reasonable period of time, in accordance with section 
773(b)(2)(D) of the Act.
    We found that, for certain specific products, more than 20 percent 
of MRG's, Pakfood's and the Rubicon Group's comparison-market sales 
were at prices less than the COP and, in addition, such sales did not 
provide for the recovery of costs within a reasonable period of time. 
Therefore, we excluded these sales and used the remaining sales as the 
basis for determining NV, in accordance with section 773(b)(1) of the 
Act.
    For those U.S. sales of subject merchandise for which there were no 
useable comparison-market sales in the ordinary course of trade, we 
compared EPs or CEPs to the CV in accordance with section 773(a)(4) of 
the Act. See ``Calculation of Normal Value Based on Constructed Value'' 
section below.

E. Calculation of Normal Value Based on Comparison-Market Prices

1. MRG

    We based NV for MRG on ex-factory or delivered prices to 
unaffiliated customers in the home market. We

[[Page 12196]]

made deductions, where appropriate, from the starting price for inland 
freight expenses, under section 773(a)(6)(B)(ii) of the Act.
    We made adjustments under section 773(a)(6)(C) of the Act for 
differences in circumstances-of-sale for imputed credit expenses and 
bank fees, where appropriate. We also made adjustments in accordance 
with 19 CFR 351.410(e) for indirect selling expenses incurred on 
comparison-market or U.S. sales where commissions were granted on sales 
in one market but not the other. Specifically, where commissions were 
granted in the U.S. market but not in the comparison market, we made a 
downward adjustment to NV for the lesser of: 1) the amount of 
commission paid in the U.S. market; or 2) the amount of indirect 
selling expenses incurred in the comparison market.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411.
    We also deducted home market packing costs and added U.S. packing 
costs, in accordance with section 773(a)(6)(A) and (B) of the Act.

2. Pakfood

    We based NV for Pakfood on ex-factory or delivered prices to 
unaffiliated customers in the home market, or prices to affiliated 
customers in the home market that were determined to be at arm's 
length. Where appropriate, we made adjustments for billing adjustments. 
We made deductions, where appropriate, from the starting price for 
inland freight and pre-sale warehousing expenses, under section 
773(a)(6)(B)(ii) of the Act.
    For NV-to-EP comparisons, we made circumstance-of-sale adjustments 
for differences in credit expenses and bank charges, pursuant to 
section 773(a)(6)(C) of the Act. We also made adjustments in accordance 
with 19 CFR 351.410(e) for indirect selling expenses incurred on 
comparison-market or U.S. sales where commissions were granted on sales 
in one market but not the other. Specifically, where commissions were 
granted in the U.S. market but not in the comparison market, we made a 
downward adjustment to NV for the lesser of: 1) the amount of 
commission paid in the U.S. market; or 2) the amount of indirect 
selling expenses incurred in the comparison market.
    For NV-to-CEP comparisons, we made deductions for home market 
credit expenses and bank charges, pursuant to 773(a)(6)(C) of the Act.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411.
    We also deducted home market packing costs and added U.S. packing 
costs, in accordance with section 773(a)(6)(A) and (B) of the Act.

3. The Rubicon Group

    For the Rubicon Group, we calculated NV based on prices to 
unaffiliated customers. Where appropriate, we made adjustments for 
billing adjustments and rebates. We also made deductions for movement 
expenses, including inland freight, pre-sale warehousing, inland 
insurance, marine insurance, brokerage and handling, gate charges, 
inspection charges, customs duties, and ocean freight (offset by 
freight refunds, where appropriate), under section 773(a)(6)(B)(ii) of 
the Act.
    For NV-to-EP comparisons, we made circumstance-of-sale adjustments 
for differences in credit expenses, bank charges, and commissions, 
pursuant to section 773(a)(6)(C) of the Act.
    For NV-to-CEP comparisons, we made deductions for third-country 
credit expenses, bank charges, commissions, and repacking expenses, 
pursuant to 773(a)(6)(C) of the Act. In addition, we made a CEP offset 
in accordance with section 773(a)(7)(B) of the Act, as discussed above 
in the ``Level of Trade'' section.
    We also made adjustments in accordance with 19 CFR 351.410(e) for 
indirect selling expenses incurred on comparison-market or U.S. sales 
where commissions were granted on sales in one market but not the 
other. Specifically, where commissions were granted in the U.S. market 
but not in the comparison market, we made a downward adjustment to NV 
for the lesser of: 1) the amount of commission paid in the U.S. market; 
or 2) the amount of indirect selling expenses incurred in the 
comparison market. If the commissions were granted in the comparison 
market but not in the U.S. market, we made an upward adjustment to NV 
for the lesser of: 1) the amount of commission paid in the comparison 
market; or 2) the amount of indirect selling expenses incurred in the 
U.S. market.
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411.
    We also deducted third-country packing costs and added U.S. packing 
costs in accordance with sections 773(a)(6)(A) and (B) of the Act.

F. Calculation of Normal Value Based on Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. Accordingly, for 
those shrimp products sold by MRG, Pakfood and the Rubicon Group in the 
United States for which we could not determine the NV based on 
comparison-market sales, either because there were no useable sales of 
a comparable product or all sales of comparable products failed the COP 
test, we based NV on CV.
    Section 773(e) of the Act provides that CV shall be based on the 
sum of the cost of materials and fabrication for the imported 
merchandise, plus amounts for selling, general and administrative 
(SG&A) expenses, profit, and U.S. packing costs. For the Rubicon Group, 
Pakfood, and Marine Gold, we calculated the cost of materials and 
fabrication based on the methodology described in the ``Cost of 
Production Analysis'' section, above, and we based SG&A and profit for 
each respondent on the actual amounts incurred and realized by it in 
connection with the production and sale of the foreign like product in 
the ordinary course of trade for consumption in the comparison market, 
in accordance with section 773(e)(2)(A) of the Act.
    For comparisons to EP, we made circumstances-of-sale adjustments by 
deducting direct selling expenses incurred on comparison-market sales 
from, and adding U.S. direct selling expenses to, CV, in accordance 
with section 773(a)(8) of the Act and 19 CFR 351.410. For comparisons 
to CEP, we made circumstance-of-sale adjustments by deducting 
comparison- market direct selling expenses from CV. We also made 
adjustments, when applicable, for indirect selling expenses incurred on 
comparison-market or U.S. sales where commissions were granted in one 
market but not the other. See 19 CFR 351.410(e).

Currency Conversion

    We made currency conversions into U.S. dollars for all spot 
transactions by MRG, Pakfo