[Federal Register Volume 75, Number 70 (Tuesday, April 13, 2010)]
[Notices]
[Pages 18794-18800]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8422]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-351-840]
Certain Orange Juice From Brazil: Preliminary Results of
Antidumping Duty Administrative Review and Notice of Intent Not To
Revoke Antidumping Duty Order in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request by the petitioners and two producers/
exporters of the subject merchandise, the Department of Commerce (the
Department) is conducting an administrative review of the antidumping
duty order on certain orange juice (OJ) from Brazil of those two
producers/exporters of the subject merchandise to the United States.
This is the third period of review (POR), covering March 1, 2008,
through February 28, 2009.
We have preliminarily determined that sales to the United States
have been made below normal value (NV). If these preliminary results
are adopted in the final results of this review, we will instruct U.S.
Customs and Border Protection (CBP) to assess antidumping duties on all
appropriate entries.
DATES: Effective Date: April 13, 2010.
FOR FURTHER INFORMATION CONTACT: Elizabeth Eastwood or Hector
Rodriguez, 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) 482-3874 or (202) 482-0629, respectively.
SUPPLEMENTARY INFORMATION:
Background
In March 2006, the Department published in the Federal Register an
antidumping duty order on certain orange juice from Brazil. See
Antidumping Duty Order: Certain Orange Juice from Brazil, 71 FR 12183
(Mar. 9, 2006) (OJ Order). Subsequently, on March 2, 2009, the
Department published in the Federal Register a notice of opportunity to
request an administrative review of the antidumping duty order of
certain orange juice from Brazil for the period March 1, 2008, through
February 28, 2009. See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity To Request
Administrative Review, 74 FR 9077 (Mar. 2, 2009).
In accordance with 19 CFR 351.213(b)(2), in March 2009, the
Department received requests to conduct an administrative review of the
antidumping duty order on OJ from Brazil from two producers/exporters
of the subject merchandise, Fischer S.A. Comercio, Industria, and
Agricultura (Fischer) and Sucocitrico Cutrale, S.A. (Cutrale). In
Cutrale's request for an administrative review, Cutrale also requested
revocation of the antidumping duty order with respect to its sales of
subject merchandise, pursuant to 19 CFR 351.222(b).
In accordance with 19 CFR 351.213(b)(1), also in March 2009, the
petitioners (Florida Citrus Mutual, A. Duda & Sons, Citrus World Inc.,
and Southern Gardens Citrus Processing Corporation), requested that the
Department conduct an administrative review for Cutrale and Fischer. In
April 2009, the Department initiated an administrative review for each
of these companies. See Initiation of Antidumping and Countervailing
Duty Administrative Reviews and Request for Revocation in Part, 74 FR
19042 (Apr. 27, 2009). In May 2009, we issued questionnaires to Cutrale
and Fischer.
In June 2009, we received responses to section A of the
questionnaire (i.e., the section covering general information) from
Cutrale and Fischer, as well as responses to sections B and C of the
questionnaire (i.e., the sections covering sales in the home market and
United States) and section D (i.e., the section covering cost of
production (COP)/constructed value (CV)).
In June, August, and September 2009, we issued four supplemental
sales questionnaires to Fischer, three supplemental questionnaires to
Cutrale and one cost questionnaire and supplemental each to Cutrale and
Fischer. We received responses to these supplemental questionnaires
from July through October 2009.
In September and October 2009, the Department verified the U.S.
sales data reported by Fischer's U.S. affiliate, Citrosuco North
America Inc. (CNA), and the COP/CV data reported by Fischer,
respectively.
On October 28, 2009, the Department extended the deadline for the
preliminary results in this review until no later than March 31, 2010.
See Certain Orange Juice from Brazil: Notice of Extension of Time
Limits for the Preliminary Results of Antidumping Duty Administrative
Review, 74 FR 55540 (Oct. 28, 2009).
In November and December 2009, the Department verified Cutrale's
and Fischer's sales information in Brazil and the U.S. sales data
reported by Cutrale's U.S. affiliate, Citrus Products Inc (CPI). Also,
in November, we issued and
[[Page 18795]]
received a final cost supplemental questionnaire from Cutrale.
In January 2010, the Department verified Cutrale's COP/CV data
reported by Cutrale. In February 2010, as explained in the memorandum
from the Deputy Assistant Secretary for Import Administration, the
Department 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 April 7, 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.
In March 2010, at the request of the Department, Cutrale and
Fischer submitted revised U.S. and home market sales databases. Also in
March 2010, the Department requested that Cutrale report U.S. sales
data related to exports of subject merchandise produced by unaffiliated
Brazilian producers. In April 2010, Cutrale informed the Department
that it did not have any such sales to unaffiliated customers in the
United States during the POR.
Scope of the Order
The scope of this order includes certain orange juice for transport
and/or further manufacturing, produced in two different forms: (1)
Frozen orange juice in a highly concentrated form, sometimes referred
to as frozen concentrated orange juice for manufacture (FCOJM); and (2)
pasteurized single-strength orange juice which has not been
concentrated, referred to as not-from-concentrate (NFC). At the time of
the filing of the petition, there was an existing antidumping duty
order on frozen concentrated orange juice (FCOJ) from Brazil. See
Antidumping Duty Order; Frozen Concentrated Orange Juice from Brazil,
52 FR 16426 (May 5, 1987). Therefore, the scope of this order with
regard to FCOJM covers only FCOJM produced and/or exported by those
companies which were excluded or revoked from the pre-existing
antidumping order on FCOJ from Brazil as of December 27, 2004. Those
companies are Cargill Citrus Limitada, Coinbra-Frutesp (SA), Cutrale,
Fischer, and Montecitrus Trading S.A.
Excluded from the scope of the order are reconstituted orange juice
and frozen concentrated orange juice for retail (FCOJR). Reconstituted
orange juice is produced through further manufacture of FCOJM, by
adding water, oils and essences to the orange juice concentrate. FCOJR
is concentrated orange juice, typically at 42 Brix, in a frozen state,
packed in retail-sized containers ready for sale to consumers. FCOJR, a
finished consumer product, is produced through further manufacture of
FCOJM, a bulk manufacturer's product.
The subject merchandise is currently classifiable under subheadings
2009.11.00, 2009.12.25, 2009.12.45, and 2009.19.00 of the Harmonized
Tariff Schedule of the United States (HTSUS). These HTSUS subheadings
are provided for convenience and for customs purposes only and are not
dispositive. Rather, the written description of the scope of the order
is dispositive.
Determination Not to Revoke Order, in Part
The Department may revoke, in whole or in part, an antidumping duty
order upon completion of a review under section 751 of the Tariff Act
of 1930, as amended (the Act). While Congress has not specified the
procedures that the Department must follow in revoking an order, the
Department has developed a procedure for revocation that is described
in 19 CFR 351.222. This regulation requires, inter alia, that a company
requesting revocation must submit the following: (1) A certification
that the company has sold the subject merchandise at not less than NV
in the current review period and that the company will not sell subject
merchandise at less than NV in the future; (2) a certification that the
company sold commercial quantities of the subject merchandise to the
United States in each of the three years forming the basis of the
request; and (3) an agreement to immediate reinstatement of the order
if the Department concludes that the company, subsequent to the
revocation, sold subject merchandise at less than NV. See 19 CFR
351.222(e)(1). Upon receipt of such a request, the Department will
consider: (1) Whether the company in question has sold subject
merchandise at not less than NV for a period of at least three
consecutive years; (2) whether the company has agreed in writing to its
immediate reinstatement in the order, as long as any exporter or
producer is subject to the order, if the Department concludes that the
company, subsequent to the revocation, sold the subject merchandise at
less than NV; and (3) whether the continued application of the
antidumping duty order is otherwise necessary to offset dumping. See 19
CFR 351.222(b)(2)(i).
On March 31, 2009, Cutrale requested revocation of the antidumping
duty order with respect to its sales of subject merchandise, pursuant
to 19 CFR 351.222(b). This request was accompanied by certification
that: (1) Cutrale sold the subject merchandise at not less than NV
during the current POR and will not sell the merchandise at less than
NV in the future; and (2) it sold subject merchandise to the United
States in commercial quantities for a period of at least three
consecutive years. Cutrale also agreed to immediate reinstatement of
the antidumping duty order, as long as any exporter or producer is
subject to the order, if the Department concludes that, subsequent to
the revocation, it sold the subject merchandise at less than NV.
After analyzing Cutrale's request for revocation, we preliminarily
find that it does not meet all of the criteria under 19 CFR 351.222(b).
In this case, our preliminary margin calculation shows that Cutrale
sold the subject merchandise at less than NV during the current review
period. See ``Preliminary Results of the Review'' section below.
Moreover, Cutrale's certification, which predated our final results of
the second administrative review, was based on the erroneous belief
that it would receive a zero or de minimis margin in their second
administrative review. However, Cutrale received antidumping duty
margins above de minimis in the second administrative review. See
Certain Orange Juice from Brazil: Final Results of Antidumping Duty
Administrative Review, 74 FR 40167 (Aug. 11, 2009). Therefore, we
preliminarily determine that Cutrale does not qualify for revocation of
the order on orange juice pursuant to 19 CFR 351.222(b)(2), and that
the order with respect to merchandise produced and exported by Cutrale
should not be revoked.
Comparisons to Normal Value
To determine whether sales of OJ by Cutrale and Fischer to the
United States were made at less than NV, we compared constructed export
price (CEP) to the NV, as described in the ``Constructed Export Price''
and ``Normal Value'' sections of this notice.
Pursuant to section 777A(d)(2) of the Act, we compared the 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.
[[Page 18796]]
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by Cutrale and Fischer 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 OJ
to sales of OJ in the home market within the contemporaneous window
period, which extends from three months prior to the month of the first
U.S. sale until two months after the last U.S. sale. Where there were
no sales of identical merchandise in the home market made in the
ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade. In making product comparisons, we matched
foreign like products based on the physical characteristics reported by
the respondents in the following order of importance: Product type and
organic designation. Where there were no sales of identical or similar
merchandise, we made product comparisons using CV, as discussed in the
``Calculation of Normal Value Based on Constructed Value'' section
below. See section 773(a)(4) of the Act.
Constructed Export Price
For all U.S. sales made by Cutrale and Fischer, we used the CEP
methodology specified in section 772(b) of the Act because the subject
merchandise was sold for the account of these respondents by their U.S.
subsidiaries in the United States to unaffiliated purchasers.
A. Cutrale
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. In this case, we are treating all of Cutrale's
U.S. sales as CEP sales because they were made in the United States by
Cutrale's U.S. affiliate, CPI, on behalf of Cutrale, within the meaning
of section 772(b) of the Act.
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. For sales made pursuant to futures
contracts, we adjusted the reported gross unit price (i.e., the notice
price) to include gains and losses incurred on the futures contract
which resulted in the shipment of subject merchandise. Where
appropriate, we made adjustments for billing adjustments and rebates.
In addition, 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 warehousing expenses;
foreign brokerage and handling expenses; ocean freight; U.S. brokerage
and handling (offset by customer-specific reimbursements); U.S. customs
duties, harbor maintenance fees and merchandise processing fees (offset
by U.S. duty drawback and customs duty reimbursements); U.S. inland
freight expenses (i.e., freight from port to warehouse); and U.S.
warehousing expenses. We capped reimbursements for brokerage and
handling expenses by the amount of brokerage and handling expenses
incurred on the subject merchandise, in accordance with our practice.
See Certain Orange Juice from Brazil: Final Results and Partial
Rescission of Antidumping Duty Administrative Review, 73 FR 46584 (Aug.
11, 2008), and accompanying Issues and Decision Memorandum (2005-2007
OJ from Brazil) at Comment 7; see also Certain Orange Juice from
Brazil: Final Results of Antidumping Duty Administrative Review, 74 FR
40167 (Aug. 11, 2009), and accompanying Issues and Decision Memorandum
at Comment 3 (2007-2008 OJ from Brazil). We also capped U.S. customs
duty reimbursements, as well as U.S. duty drawback, by the amount of
U.S. customs duties incurred on the subject merchandise, in accordance
with our practice. Id.
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, commissions, imputed credit expenses, and
repacking (offset by pallet revenue)), and indirect selling expenses
(including inventory carrying costs and other indirect selling
expenses). We capped U.S. pallet revenue by the amount of repacking
expenses, in accordance with our practice. In addition, we recalculated
inventory carrying costs using the manufacturing costs reported in
Cutrale's most recent cost response, adjusted as noted in the
``Calculation of Cost of Production'' section of this notice, below.
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 Cutrale and its U.S. affiliate on their sales
of the subject merchandise in the United States and the profit
associated with those sales.
For further discussion of the changes made to Cutrale's reported
U.S. sales data, see the April 7, 2010, memorandum from Blaine Wiltse,
Analyst, to the File, entitled ``Calculation Adjustments for
Sucocitrico Cutrale Ltda. for the Preliminary Results'' (Cutrale Sales
Calculation Memo).
B. Fischer
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. In this case, we are treating all of Fischer's
U.S. sales as CEP sales because they were made in the United States by
Fischer's U.S. affiliate, CNA, on behalf of Fischer, within the meaning
of section 772(b) of the Act.
We based CEP on the packed delivered prices to unaffiliated
purchasers in the United States. Where appropriate, we made adjustments
for billing adjustments 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 brokerage and handling expenses; ocean
freight expenses; bunker fuel surcharges; marine insurance expenses;
U.S. brokerage and handling expenses; U.S. customs duties, harbor
maintenance fees and merchandise processing fees (offset by U.S. duty
drawback and customs duty reimbursements); U.S. inland freight expenses
(i.e., freight from port to customer); and U.S. warehousing expenses.
We capped reimbursements for U.S. customs duties, as well as U.S. duty
drawback, by the amount of U.S. customs duties incurred on the subject
merchandise, in accordance with our practice. See 2005-2007 OJ from
Brazil at Comment 7 and 2007-2008 OJ from Brazil at Comment 3. Further,
we determined that the international freight expenses provided by
Fischer's affiliated freight provider were not at arm's length.
Therefore, for all sales shipped by Fischer's affiliate, we assigned
the international freight rate
[[Page 18797]]
charged by Fischer's affiliate to an unaffiliated party to restate them
on an arm's-length basis. For further discussion, see the April 7,
2010, memorandum to the file from Hector Rodriguez, Analyst, entitled
``Calculations Performed for Fischer S.A. Comercio, Industria, e
Agricultura for the Preliminary Results in the 08-09 Antidumping Duty
Administrative Review of Certain Orange Juice from Brazil'' (Fischer
Sales Calculation Memo).
In accordance with sections 772(d)(1) and (2) 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., additional processing expenses, imputed credit
expenses, and repacking), and indirect selling expenses (including
inventory carrying costs, other indirect selling expenses, and storage
insurance expenses).
We made no adjustment to the price for CEP profit, pursuant to
section 772(d)(3) of the Act, because Fischer incurred a loss during
the POR and it is the Department's practice to not use ``negative
profit'' rates in its calculations. See, e.g., Low Enriched Uranium
from France: Final Results of Antidumping Duty Administrative Review,
71 FR 52318 (Sept. 5, 2006), and accompanying Issues and Decision
Memorandum at Comment 8; and Frozen Concentrated Orange Juice From
Brazil; Final Results and Partial Rescission of Antidumping Duty
Administrative Review, 64 FR 43650, 43653 (Aug. 11, 1999).
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.
We determined that the aggregate volume of home market sales of the
foreign like product for both respondents was sufficient to permit a
proper comparison with its U.S. sales of the subject merchandise.
B. 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 export price (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 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., NV based on either home
market or third country prices),\1\ 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).
---------------------------------------------------------------------------
\1\ 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.
---------------------------------------------------------------------------
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. sale 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 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 61732-33.
In this administrative review, we obtained information from each
respondent regarding the marketing stages involved in making the
reported home 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. Cutrale
Cutrale reported that it made CEP sales through one channel of
distribution in the United States (i.e., sales via an affiliated
reseller) and thus the selling activities it performed did not vary by
the type of customer. We examined the selling activities performed for
this channel and found that Cutrale performed the following selling
functions: Maintaining weekly contact with the customer; preparing
quarterly and annual sales forecasts and corresponding shipping
schedules; packing; arranging delivery to the port of exportation and
the provision of customs clearance/brokerage services; and maintaining
inventory at the port of exportation. See the February 25, 2010,
memorandum to the file from Elizabeth Eastwood, Senior Analyst, Office
2, entitled ``Verification of the Sales Response of Sucocitrico Cutrale
Ltda. (Cutrale) in the 2008-2009 Antidumping Duty Administrative Review
of Certain Orange Juice from Brazil'' (Cutrale home market sales
verification report).
Selling activities can be generally grouped into four selling
function categories for analysis: (1) Sales and marketing; (2) freight
and delivery; (3) inventory maintenance and warehousing; and (4)
warranty and technical support. See 2007-2008 OJ from Brazil at Comment
2 and Certain Frozen Warmwater Shrimp From India: Preliminary Results
and Preliminary Partial Rescission of Antidumping Duty Administrative
Review, 74 FR 9991, 9996 (Mar. 9, 2009), unchanged in Certain Frozen
Warmwater Shrimp from India: Final Results and Partial Rescission of
Antidumping Duty Administrative Review, 74 FR 33409 (July 13, 2009).
Based on these selling function categories, we find that Cutrale
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, Cutrale reported that it made
sales through one channel of distribution (i.e., direct sales to soft
drink manufacturers). We examined the selling activities performed for
home market sales, and found that Cutrale performed the following
selling functions: Maintaining weekly contact with customers; visiting
the customer and permitting the customer to visit the factory;
preparing
[[Page 18798]]
sales estimates five times a year; order processing; advertising via
sponsorship of a soccer team and signs placed on tankers; packing;
inventory maintenance at the factory; and arranging delivery to home
market customers. See Cutrale home market sales verification report at
pages 7-10. In addition to these functions, Cutrale also claimed that
it offered engineering services, technical assistance, and guarantees
to home market customers. However, at verification, Cutrale
acknowledged that it did not in fact provide any of these services
during the POR. Id. Accordingly, based on the four selling function
categories listed above, we find that Cutrale performed sales and
marketing, and inventory maintenance and warehousing for home market
sales. Because all home market sales are made through a single
distribution channel, we preliminarily determine that there is one LOT
in the home market for Cutrale.
Finally, we compared the CEP LOT to the home market LOT and found
that the selling functions performed for U.S. and home market customers
do not differ significantly. Specifically, we found that the
differences were limited to the following activities: (1) Visits with
customers in the home market but not to/from CPI; (2) Cutrale performed
limited advertising in the home market (such as the sponsorship of a
local soccer team in Brazil and advertising related to the company's
fortieth anniversary); and (3) Cutrale input orders into the company's
computer system for home market sales (vs. the shipment of merchandise
from a quarterly shipping schedule for U.S. sales).
According to 19 CFR 351.412(c)(2), the Department will determine
that sales are made at different levels of trade if they are made at
different marketing stages (or their equivalent). Substantial
differences in selling activities are a necessary, but not sufficient,
condition for determining that there is a difference in the stage of
marketing. Therefore, because we determine that substantial differences
in Cutrale's selling activities do not exist across markets, we
determine that sales to the U.S. and home markets during the POR were
made at the same LOT. As a result, neither an LOT adjustment nor a CEP
offset is warranted for Cutrale. This determination is consistent with
findings in previous reviews. See, e.g., 2005-2007 OJ from Brazil at
Comment 5, and 2007-2008 OJ from Brazil.
2. Fischer
Fischer reported that it made CEP sales through one channel of
distribution in the United States (i.e., sales via an affiliated
reseller) and thus the selling activities it performed did not vary by
the type of customer. We examined the selling activities performed for
this channel and found that Fischer performed the following selling
functions: Customer contact and price negotiation; order processing;
arranging for freight and the provision of customs clearance/brokerage
services; and inventory maintenance. Selling activities can be
generally grouped into four selling function categories for analysis:
(1) Sales and marketing; (2) freight and delivery; (3) inventory
maintenance and warehousing; and (4) warranty and technical support.
Accordingly, based on these selling function categories, we find that
Fischer 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, Fischer reported that it made
sales through one channel of distribution and that the selling
activities it performed did not vary by the type of customer. We
examined the selling activities performed for home market sales, and
found that Fischer performed the following selling functions: Customer
contact and price negotiation; order processing; arranging for freight;
cold storage and inventory maintenance; sales and marketing support;
and technical assistance. Accordingly, based on the selling function
categories listed above, we find that Fischer performed sales and
marketing, freight and delivery services, inventory maintenance and
warehousing, and warranty and technical support for home market sales.
Because all home market sales are made through a single distribution
channel, we preliminarily determine that there is one LOT in the home
market for Fischer.
Finally, we compared the CEP LOT to the home market LOT and found
that the selling functions performed for U.S. and home market customers
do not differ significantly. Therefore, we determine that sales to the
U.S. and home markets during the POR were made at the same LOT, and as
a result, neither a LOT adjustment nor a CEP offset is warranted for
Fischer.
C. Cost of Production Analysis
We found that both Cutrale and Fischer made sales below the COP in
the 2005-2007 administrative review, the most recently completed
segment of this proceeding as of the date of initiation of this review,
and such sales were disregarded. See 2005-2007 OJ from Brazil, 73 FR at
46585. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act,
there are reasonable grounds to believe or suspect that Cutrale and
Fischer made home market sales at prices below the cost of producing
the merchandise in the current POR.
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 home market selling expenses).
The Department relied on the COP data submitted by each respondent
in its most recently submitted cost database for the COP calculation,
except in the following instances:
a. Cutrale
i. In accordance with the transactions disregarded rule (i.e.,
section 773(f)(2) of the Act) we adjusted Cutrale's cost of
manufacturing (COM) to reflect the market value of oranges that were
purchased from an affiliate as well as the market value of by-products
that were sold to affiliated parties;
ii. We adjusted Cutrale's reported COM to remove ICMS taxes from
the by-product revenue;
iii. We revised Cutrale's general and administrative expense rate
to include the net loss on routine disposals of fixed assets in the
numerator and reduce the cost of goods sold (COGS), used as the
denominator, by the by-product revenue; and
iv. We revised Cutrale's financial expense rate to reduce the COGS,
used as the denominator, by packing expenses and the by-product
revenue.
For further discussion of these adjustments, see the April 7, 2010,
Memorandum from Angie Sepulveda, Accountant, to Neal M. Halper,
Director, Office of Accounting, entitled ``Cost of Production and
Constructed Value Adjustments for the Preliminary Results--Sucocitrico
Cutrale Ltda.''
b. Fischer
i. We adjusted Fischer's COM to reflect market price for the sale
of certain by-products to an affiliated party;
ii. We revised Fischer's G&A calculation to include ``other''
operating expenses related to provisions and disposal of fixed assets;
and
iii. We adjusted Fischer's financial ratio numerator to include
long-term interest expense from an affiliated party
[[Page 18799]]
and exchange rate variations (net), and we adjusted the financial ratio
denominator for selling expenses and by-product sales.
See the April 7, 2010, Memorandum from Christopher J. Zimpo,
Accountant, to Neal M. Halper, Director Office of Accounting, entitled
``Cost of Production and Constructed Value Calculation Adjustments for
the Preliminary Results--Fischer S.A. Comercio, Industria and
Agricultura.''
2. Test of Comparison Market Sales Prices
On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales prices of the foreign like
product, as required under section 773(b) of the Act, in order to
determine whether the sales prices were below the COP. For purposes of
this comparison, we used COP exclusive of selling and packing expenses.
The prices (inclusive of billing adjustments, where appropriate) were
exclusive of any applicable movement charges, direct and indirect
selling expenses and packing expenses. We revised Cutrale's selling
expenses as discussed below under the ``Calculation of Normal Value
Based on Comparison Market Prices'' section.
3. Results of the COP Test
In determining whether to disregard home market sales made at
prices below the COP, we examined, 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 home 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 when: (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 products, more than 20 percent of
Cutrale's and Fischer's home 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. We therefore excluded these
sales from our analysis. We used the remaining sales as the basis for
determining NV for Cutrale, in accordance with section 773(b)(1) of the
Act. However, because all of Fischer's home market sales failed the
cost test, we based NV on CV for this company.
D. Calculation of Normal Value Based on Comparison Market Prices
For Cutrale, we calculated NV based on ex-factory prices to
unaffiliated customers. We adjusted the reported prices to account for
the difference between the standard and actual brix levels at which the
foreign like product was sold, using facts available under section
776(a) of the Act. As facts available, we used the highest actual brix
level observed at verification for any reported home market sale. We
find that facts available is warranted in this instance because to date
Cutrale failed to provide useable data related to its actual brix
levels. Nonetheless, we have afforded Cutrale a final opportunity to
provide the necessary information, and we will consider this
information, if submitted in a timely manner for the final results in
this review.
We made adjustments, where appropriate, to the starting price for
billing adjustments, in accordance with 19 CFR 351.401(c). We also made
adjustments, where appropriate, to the starting price for Brazilian
taxes, in accordance with section 773(a)(6)(B)(iii) of the Act. We made
deductions to the starting price for foreign warehousing expenses
(offset by warehousing revenue) in accordance with section
773(a)(6)(B)(ii) of the Act. We capped warehousing revenue by the
amount of warehousing expenses incurred on home market sales, in
accordance with our practice. See 2007-2008 OJ from Brazil at Comment
3. We made deductions from the starting price for home market credit
expenses (offset by interest revenue) pursuant to section 773(a)(6)(C)
of the Act. We recalculated credit expenses to base the home market
interest rate on Cutrale's actual borrowings during the POR. Where
applicable, in accordance with 19 CFR 351.410(e), we offset any
commission paid on a U.S. sale by reducing the NV by the amount of home
market indirect selling expenses and inventory carrying costs, up to
the amount of the U.S. commission. We calculated home market inventory
carrying costs using the manufacturing costs reported in Cutrale's most
recent cost response, adjusted as noted in the ``Calculation of Cost of
Production'' section of this notice, above. For further discussion of
these adjustments, see the Cutrale Sales Calculation Memo.
We deducted home market packing costs and added U.S. packing costs,
where appropriate, in accordance with sections 773(a)(6)(A) and (B) of
the Act.
Finally, 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.
E. 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, because
Fischer made no home market sales in the ordinary course of trade, we
based NV for Fischer 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. We calculated the cost
of materials, fabrication and G&A financial expenses based on the
methodology described in the ``Cost of Production Analysis'' section,
above. Because Fischer did not have home market sales in the ordinary
course of trade, the Department cannot determine profit under section
773(e)(2)(A) of the Act, which requires sales by the respondent in
question in the ordinary course of trade in a comparison market.
Likewise, because Fischer does not have sales of any product in the
same general category of products as the subject merchandise, we are
unable to apply alternative (i) of section 773(e)(2)(B) of the Act.
Moreover, because the only respondent in this administrative review
other than Fischer is Cutrale, we are unable to apply alternative (ii)
of section 773(e)(2)(B) of the Act (i.e., the weighted average of the
actual amounts incurred and realized by exporters or producers that are
subject to this review (other than the exporter or producer described
in clause (i)), because using Cutrale's actual amounts would disclose
Cutrale's business proprietary data.
Therefore, we calculated Fischer's CV profit and selling expenses
based on alternative (iii) of this section, in accordance with section
773(e)(2)(B)(iii) of the Act. As a result, we calculated Fischer's CV
profit and selling expenses using its own data for home market
[[Page 18800]]
sales in the ordinary course of trade in the most recently completed
segment of this proceeding (i.e., the 2007-2008 administrative review).
For further discussion, see the Fischer Sales Calculation Memo.
For comparisons to CEP, we deducted home market direct selling
expenses from CV. Id. We also made adjustments, where applicable, for
home market indirect selling expenses to offset U.S. commissions. See
19 CFR 351.410(e).
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A of the Act and 19 CFR 351.415, based on the exchange rates
in effect on the dates of the U.S. sales as certified by the Federal
Reserve Bank.
Preliminary Results of the Review
We preliminarily determine that weighted-average dumping margins
exist for the respondents for the period March 1, 2008, through
February 28, 2009, as follows:
------------------------------------------------------------------------
Percent
Manufacturer/exporter margin
------------------------------------------------------------------------
Sucocitrico Cutrale, S.A................................... 8.29
Fischer S.A. Comercio, Industria, and Agricultura.......... 5.26
------------------------------------------------------------------------
Disclosure and Public Hearing
The Department will disclose to parties the calculations performed
in connection with these preliminary results within five days of the
date of publication of this notice. See 19 CFR 351.224(b). Pursuant to
19 CFR 351.309, interested parties may submit cases briefs not later
than 30 days after the date of publication of this notice. Rebuttal
briefs, limited to issues raised in the case briefs, may be filed not
later than five days after the time limit for filing the case briefs.
Parties who submit case briefs or rebuttal briefs in this proceeding
are requested to submit with each argument: (1) A statement of the
issue; (2) a brief summary of the argument; and (3) a table of
authorities. See 19 CFR 351.309(c)(2).
Pursuant to 19 CFR 351.310(c), interested parties who wish to
request a hearing, or to participate if one is requested, must submit a
written request to the Assistant Secretary for Import Administration,
Room 1870, within 30 days of the date of publication of this notice.
Requests should contain: (1) The party's name, address and telephone
number; (2) the number of participants; and (3) a list of issues to be
discussed. Id. Issues raised in the hearing will be limited to those
raised in the respective case briefs. The Department intends to issue
the final results of this administrative review, including the results
of its analysis of the issues raised in any written briefs, not later
than 120 days after the date of publication of this notice, pursuant to
section 751(a)(3)(A) of the Act.
Assessment Rates
Upon completion of the administrative review, the Department shall
determine, and CBP shall assess, antidumping duties on all appropriate
entries, in accordance with 19 CFR 351.212. The Department will issue
appropriate appraisement instructions for the companies subject to this
review directly to CBP 15 days after the date of publication of the
final results of this review.
We will calculate importer-specific ad valorem duty assessment
rates based on the ratio of the total amount of antidumping duties
calculated for the examined sales to the total entered value of the
sales. We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any importer-specific
assessment rate calculated in the final results of this review is above
de minimis. Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to
liquidate without regard to antidumping duties any entries for which
the assessment rate is de minimis. See 19 CFR 351.106(c)(1). The final
results of this review shall be the basis for the assessment of
antidumping duties on entries of merchandise covered by the final
results of this review and for future deposits of estimated duties,
where applicable.
The Department clarified its ``automatic assessment'' regulation on
May 6, 2003. See Antidumping and Countervailing Duty Proceedings:
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment
Policy Notice). This clarification will apply to entries of subject
merchandise during the POR produced by companies included in these
final results of review for which the reviewed companies did not know
that the merchandise they sold to the intermediary (e.g., a reseller,
trading company, or exporter) was destined for the United States. In
such instances, we will instruct CBP to liquidate unreviewed entries at
the all-others rate if there is no rate for the intermediary involved
in the transaction. See Assessment Policy Notice for a full discussion
of this clarification.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results of this administrative review, as provided by section
751(a)(2)(C) of the Act: (1) The cash deposit rate for each specific
company listed above will be that established in the final results of
this review, except if the rate is less than 0.50 percent and,
therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in
which case the cash deposit rate will be zero; (2) for previously
reviewed or investigated companies not participating in this review,
the cash deposit rate will continue to be the company-specific rate
published for the most recent period; (3) if the exporter is not a firm
covered in this review, or the original less than fair value (LTFV)
investigation, but the manufacturer is, the cash deposit rate will be
the rate established for the most recent period for the manufacturer of
the merchandise; and (4) the cash deposit rate for all other
manufacturers or exporters will continue to be 16.51 percent, the all-
others rate made effective by the LTFV investigation. See OJ Order, 71
FR at 12184. These deposit requirements, when imposed, shall remain in
effect until further notice.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and notice are published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.
Dated: April 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-8422 Filed 4-12-10; 8:45 am]
BILLING CODE 3510-DS-P