Honey From Argentina: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests by interested parties, the Department of Commerce (the Department) is conducting an administrative review of the antidumping order of honey from Argentina. The review covers seven firms. The period of review (POR) is December 1, 2002 through November 30, 2003.

We preliminarily determine that sales of honey from Argentina have been made below the normal value (NV) in the case of Nutrin S.A (Nutrin). In the case of the other six respondents, Asociacion de Cooperativas Argentinas (ACA), Compania Apicola Argentina (CAA), HoneyMax S.A. (HoneyMax), Seylinco S.A. (Seylinco), TransHoney S.A. (TransHoney), and Nexco S.A. (Nexco), we preliminary determine a zero or de minimis margin. If these preliminary results are adopted in our final results of administrative review, we will instruct Customs and Border Protection (CBP) to assess antidumping duties based on the difference between the export price (EP) or constructed export price (CEP) and NV. Interested parties are invited to comment on these preliminary results. Parties who submit argument in these proceedings are requested to submit with the argument: (1) A statement of the issues, (2) a brief summary of the argument, and (3) a table of authorities.

EFFECTIVE DATE:

December 27, 2004.

FOR FURTHER INFORMATION CONTACT:

David Cordell for TransHoney and for CAA, Brian Sheba for HoneyMax and Seylinco, Angela Strom for ACA, Nexco and Nutrin, or Robert James, AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Room 7866, Washington, DC 20230; telephone (202) 482-0649 OR (202) 482-0408.

SUPPLEMENTARY INFORMATION:

Background

On December 10, 2001, the Department published the antidumping duty order on Honey from Argentina. See Notice of Antidumping Duty Order: Honey from Argentina, 66 FR 63672. On December 31, 2003, the American Honey Producers Association and the Sioux Honey Association (collectively, petitioners) requested an administrative review of the antidumping duty order on honey from Argentina in response to the Department's notice of opportunity to request a review published in the Federal Register. Petitioners requested the Department review entries of subject merchandise made by 13 Argentine producers/exporters. In addition, the Department received requests for review from five Argentine exporters. On January 15, 2004, petitioners withdrew four of their 13 requests. The Department initiated the review for the remaining nine companies. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 69 FR 3117-3119 (January 22, 2004).

On February 18, 2004, petitioners withdrew their requests for review for a further two companies. The Department subsequently rescinded the review with respect to these two companies Compania Europea Americana, S.A. and Radix S.r.L. See Honey from Argentina: Notice of Partial Rescission of Antidumping Duty Administrative Review, 69 FR 12121 (March 15, 2004).

On February 11, 2004, the Department issued sections A, B, and C of the antidumping questionnaire to all exporters subject to review. We received responses on March 22 and April 6, 2004, (ACA); March 3 and March 29, 2004, (HoneyMax); March 19 and April 2, 2004, (Nexco); March 10 and April 2, 2004, (Seylinco); March 17, and April 2, 2004, (TransHoney); March 18 and April 2, 2004, (CAA). We received no response from Nutrin. After numerous attempts to contact counsel for Nutrin, on June 24, 2004, Nutrin's counsel stated Nutrin would not be responding to the Department's requests for information. See Memoranda to the File dated April 7, 2004, and June 24, 2004. We received no comments from petitioners.

The Department issued additional supplemental questionnaires on April 16 (TransHoney); March 30, May 6, July 26, and August 20 (CAA); April 15 and May 4 (ACA); April 15 and July 30 (Nexco); May 6 and August 2 (Honeymax) and May 6 (Seylinco). We received responses to these additional supplemental questionnaires on May 3 (TransHoney); May 6, May 20, August 16, September 3, September 20, September 27, and September 29 (CAA); April 28 and May 12 (ACA); May 7 and August 13 (Nexco); May 20 (Seylinco); and May 27 and August 23 (HoneyMax). On June 30, 2004, the Department determined a “particular market situation” existed in Argentina during the POR. See the discussion of “Selection of Comparison Market” under “Normal Value” below.

Consequently on June 30, 2004, the Department issued a supplemental questionnaire to CAA's affiliate, Mielar S.A. (Mielar), requesting a Section B sales database covering sales by Mielar to Germany, Mielar's largest third-country market. Mielar filed its Section B sales database on July 21, 2004.

On November 5, 2004, CAA responded to the Department's request for audited financial statements for the 2003 fiscal year for Mielar. On November 16, 2004, the Department rejected an untimely submission purporting to describe the adjustments made to reconcile the unaudited financial statements to the audited financial report.

On August 11, 2004, the Department extended the time limit for issuance of the preliminary results of the administrative review to December 20, 2004. See Honey from Argentina; Extension of Time Limit for Preliminary Results of Administrative Review, 69 FR 48843 (August 11, 2004).

Because the Department disregarded certain ACA sales at prices below the cost of production (COP) in the most recently completed segment of the proceeding at the time of initiation of this review, namely the investigation, the Department initiated a cost investigation and selected six of ACA's unaffiliated suppliers to serve as cost respondents. On April 29, 2004, the Department issued Section D questionnaires to four honey suppliers (three beekeepers and one middleman). On May 5, 2004, the Department selected a new beekeeper to replace one of the original cost respondents. On May 10, 2004, the Department issued its Section D questionnaire to the final two beekeepers. On June 17, 2004, the Department excused the middleman for ACA from responding to Section D. On June 22, 2004, the Department received responses from the five beekeepers serving as the cost respondents. Supplemental questionnaires were issued on August 5, 2004, to two beekeepers and on August 10, 2004, to the three other beekeepers. Responses to these supplemental questionnaires were received on September 9, 2004.

Scope of the Review

The merchandise covered by this order is honey from Argentina. The products covered are natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight, and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb, or chunk form, and whether packaged for retail or in bulk form.

The merchandise covered by this order is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise under this order is dispositive.

Verification

As provided in section 782(i) of the Tariff Act of 1930, as amended (the Act), we verified sales information provided by CAA and cost information provided by ACA, using standard verification procedures such as the examination of relevant sales and financial records. Our verification results are outlined in the public and proprietary versions of our verification reports, which are on file in the Central Records Unit (CRU) in room B-099 of the main Department building. See CAA's Sales Verification Report, dated December 20, 2004, and Verification of ACA and selected beekeepers, dated November 26, 2004, on file in the CRU.

Product Comparison

In accordance with section 771(16) of the Act, we considered all sales of honey covered by the description in the “Scope of the Review” section of this notice, supra, which were sold in the respective third-country markets during the POR to be the foreign like product for the purpose of determining appropriate product comparisons to honey sold in the United States. We matched products based on the physical characteristics reported by CAA, ACA, HoneyMax, Nexco, Seylinco, and TransHoney. Where there were no sales of identical merchandise in the third-country market to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics and reporting instructions listed in the antidumping duty questionnaire and instructions, or to constructed value (CV), as appropriate.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, we determine NV based on sales in the home market at the same level of trade (LOT) as EP or the CEP. The NV LOT is that of the starting-price sales in the home market or, when NV is based on CV, that of the sales from which we derive selling, general and administrative (SG&A) expenses and profit. For CEP, it is the level of the constructed sale from the exporter to an affiliated importer after the deductions required under section 772(d) of the Act.

To determine whether NV sales are at a different LOT than CEP, we examine stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. If the comparison-market sales are at a different LOT and the difference affects price comparability, as manifested in a pattern of consistent price differences between the sales on which NV is based and comparison-market sales at the LOT of the export transaction, we make an LOT adjustment under section 773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is more remote from the factory than the CEP level and there is no basis for determining whether the difference in the levels between NV and CEP affects price comparability, we adjust NV under section 773(a)(7)(B) of the Act (the CEP-offset provision). See Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731, 61732-33 (November 19, 1997).

ACA reported two LOTs in the third-country market corresponding to differing channels of distribution: (1) Sales to packers and (2) sales to importers. The Department has determined that differing channels of distribution, alone, do not qualify as separate LOTs when selling functions performed for each customer class are sufficiently similar. See 19 CFR 351412(c)(2). We found that the selling functions ACA provided to its reported channels of distribution in the third-country and U.S. markets were virtually the same, varying only by the degree to which warranty services were provided. We do not find the varying degree of warranty services alone sufficient to determine the existence of different marketing stages. See Final Determination of Honey from Argentina 66 FR 50611 (Comment 18); Preliminary Results; Honey from Argentina, 69 FR 62168 (January 6, 2004). Thus, we have determined there is only one LOT for ACA's sales to all markets. See ACA's Analysis Memorandum, dated December 20, 2004.

CAA, HoneyMax, Nexco, Seylinco, and TransHoney reported a single LOT for all U.S. and third-country sales. Each company claimed that its selling activities in both markets are identical, although we note Seylinco sold to two general classes of customers in both the U.S. and Germany. For CAA, HoneyMax, Nexco, Seylinco, and TransHoney, we determine that all reported sales are made at the same LOT, and we have no need to make an LOT adjustment. See Analysis Memoranda for CAA, HoneyMax, Nexco, Seylinco, and TransHoney, dated December 20, 2004.

Comparisons

To determine whether sales of subject merchandise made by CAA, ACA, HoneyMax, Nexco, Seylinco, and TransHoney to the United States were made at less than fair value, we compared the EP or CEP, to the NV, as described below. Pursuant to section 777A(d)(2) of the Act, we compared the EP or CEP of individual U.S. transactions to the monthly weight-averaged NV of the foreign like product where there were sales at prices above the COP, as discussed in the “Cost of Production Analysis” section below.

Transactions Investigated

Section 351.401(i) of the Department's regulations states that the Department normally will use date of invoice, as recorded in the exporter's or producer's records kept in the ordinary course of business, as the date of sale, but may use a date other than the date of invoice if it better reflects the date on which material terms of sale are established. For ACA, the Department, consistent with its practice, used the reported shipment date as the date of sale for both its third-country and U.S. markets since shipment occurred prior to invoice date. See Notice of Final Determinations of Sales at Less than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat from Canada, 68 FR 52741 (September 5, 2003), and accompanying Decision Memo at Comment 3. CAA, TransHoney, and Nexco reported the earlier of either shipment date or invoice date as the date of sale for both markets. Seylinco reported the invoice date as the date of sale for both markets. HoneyMax reported the shipment date as the date of sale for U.S. sales; however, we used the invoice date for its third-country market sales.

Export Price and Constructed Export Price

Section 772(a) of the Act defines EP as “the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States. * * *,” as adjusted under subsection (c). Section 772(b) of the Act defines CEP as “the price at which the subject merchandise is 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 of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter. * * *,” as adjusted under subsections (c) and (d). For purposes of this administrative review, HoneyMax classified all of its U.S. sales as CEP because all of its U.S. sales were made through its wholly owned U.S. affiliate to unaffiliated purchasers in the United States. ACA, CAA, Nexco, Seylinco, and TransHoney have classified their U.S. sales as EP because all of their sales were made before the date of importation directly to unaffiliated purchasers in the U.S. market. For purposes of these preliminary results, we have accepted these classifications.

Affiliation

On June 30, 2004, the Department determined that CAA, Mielar, and El Chelibo (Chelibo) are affiliated within the meaning of section 771(3)(B) of the Act, and that the Department should treat the three companies as a single entity for the purposes of this administrative review. See Decision Memorandum of Relationship of CAA, Chelibo and Mielar in the 2002-2003 Administrative Review of AD Order on Honey from Argentina from David Cordell through Robert James to Richard Weible, dated June 30, 2004.

Normal Value

1. Selection of Comparison Market

In accordance with section 773(a)(1)(C) of the Act, to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV (i.e., the aggregate volume of home market sales of the foreign like product is greater than or equal to five percent of the aggregate volume of U.S. sales), we compare each company's aggregate volume of home market sales of the foreign like product to its aggregate volume of U.S. sales of subject merchandise. For HoneyMax, Nexco, Seylinco, and TransHoney, the aggregate volume of sales in the home market of the foreign like product was less than five percent of the aggregate volume of U.S. sales of the subject merchandise. Therefore, we determined for these companies that sales in the home market did not provide a viable basis for calculating NV.

In addition, section 773(a)(1)(C)(iii) provides that the Department may determine that home market sales are inappropriate as a basis for determining NV if the particular market situation would not permit a proper comparison with EP or CEP. During the first review of this order, the Department found a particular market situation rendered the Argentine market inappropriate for the calculation of NV because of, among other reasons, the export-oriented nature of the Argentine honey industry. See Honey from Argentina-Preliminary Results of Anti-Dumping Duty Administrative Review, 69 FR 621 (January 6, 2004) Honey From Argentina: Final Results of Antidumping Duty Administrative Review (No Changes) 69 FR 30283 (May 27, 2004). On May 4 and May 12, 2004, the Department asked ACA and CAA, respectively, to provide further information in order to evaluate the market situation in Argentina with respect to honey, and on May 12 and May 20, 2004, respectively, ACA and CAA responded to the Department's request. ACA states the circumstances in this review are the same as in the first review, while CAA argues the honey sold in the home market is identical or similar to the honey sold in the United States and in the third-country markets, arguing against finding a “particular market situation” in Argentina. [?USGPO Galley End:?]

On June 30, 2004, the Department determined that a particular market situation does, in fact, exist with respect to ACA's and CAA's sales of honey in Argentina, rendering the Argentine market inappropriate for purposes of determining NV. See Decision Memorandum “Analysis of Particular Market Place Situation” from Angela Strom through Robert James to Richard Weible, dated June 30, 2004.

When sales in the home market are not suitable to serve as the basis for NV, section 773(a)(1)(B)(ii) of the Act provides that sales to a third-country market may be utilized if (i) the prices in such market are representative; (ii) the aggregate quantity of the foreign like product sold by the producer or exporter in the third-country market is five percent or more of the aggregate quantity of the subject merchandise sold in or to the United States; and (iii) the Department does not determine that a particular market situation in the third-country market prevents a proper comparison with the U.S. price. CAA, Nexco, TransHoney, and Seylinco reported Germany as their largest third-country market during the POR, in terms of volume of sales (and with five percent or more of sales, by quantity, to the United States). ACA reported the United Kingdom as its largest third-country market during the POR, in terms of volume of sales (and with five percent or more of sales to the United States). Honeymax reported Australia as its largest third-country market during the POR, in terms of volume of sales (and with five percent or more of sales to the United States). See, e.g., Notice of Preliminary Results of Antidumping Duty Administrative Review, Preliminary Determination To Revoke the Order in Part, and Partial Rescission of Antidumping Duty Administrative Review: Fresh Atlantic Salmon From Chile, 67 FR 51186 (August 7, 2002) (selecting the largest third-country market as the basis for NV). The Department preliminarily determines that the prices in Germany, the United Kingdom, and Australia are representative and no particular market situation exists that would prevent a proper comparison to EP or CEP. As a result, for Nexco, TransHoney, CAA, and Seylinco, NV is based on sales to Germany. For HoneyMax, NV is based on sales to Australia. Finally, for ACA, NV is based on sales to the United Kingdom.

In summary, therefore, NV for all companies is based on third-country market sales to unaffiliated purchasers made in commercial quantities and in the ordinary course of trade. For NV, we used the prices at which the foreign like product was first sold for consumption in the usual commercial quantities, in the ordinary course of trade, and, to the extent possible, at the same LOT as the EP or CEP, as appropriate. We calculated NV as noted in the “Price-to-CV Comparisons” and “Price-to-Price Comparisons” sections of this notice.

Background

2. Cost of Production

The Department disregarded certain sales made by ACA to its comparison market at prices below the cost of producing the subject merchandise in the investigation of this antidumping duty order. See Notice of Final Determination of Sales at Less Than Fair Value; Honey from Argentina, 66 FR 50611 (October 4, 2001) and Notice of Amended Final Determination of Sales at Less Than Fair Value; Honey from Argentina, 66 FR 58434 (Nov 21, 2001) (Final Determination). Because the investigation was the most recently completed segment of this proceeding upon initiation of this administrative review, the Department determined there are reasonable grounds to believe or suspect that ACA made sales in the comparison market at prices below the cost of producing the merchandise in this review. See section 773(b)(2)(A) of the Act. Therefore, we initiated a COP inquiry for ACA to determine whether ACA made sales in the comparison market at prices below the respective COP.

A. Cost of Production Analysis

We initiated a company-specific sales-below-cost investigation with respect to ACA. As previously stated in this proceeding, ACA again indicated that it is an exporter, not a producer, of subject merchandise in this review. On March 22, 2004, ACA submitted a list of its unaffiliated honey suppliers, which identified companies, individuals, and cooperatives operating as either producers (beekeepers) or intermediaries (middlemen) in ACA's honey purchases. To calculate a representative COP and CV for the merchandise under consideration, the Department followed the same methodology relied upon in the first administrative review. The Department selected five beekeepers and one middleman from ACA's list of suppliers. See Memorandum to the File: “Cost Respondents,” dated April 23, 2004. On June 17, 2004, the Department notified ACA that it would excuse the selected middleman from responding to the Department's cost questionnaire. The cost information placed on the record by the beekeepers in the current administrative review obviated the need to obtain the middleman costs for purposes of our cost analysis. Thus, as in the previous review, the COP information for ACA was based upon the cost data provided by its five largest beekeeper suppliers.

B. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated a COP for each beekeeper supplier based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for general and administrative (G&A) expenses. We then added the associated selling expenses that ACA incurred to calculate the final COP figure.

(1) Common and Individual Cost Respondent Adjustments

We relied on the COP data submitted by each beekeeper in its cost questionnaire response, except for the adjustments as discussed below.

We adjusted the reported labor costs for all beekeepers. Virtually all of the labor provided was performed by either the owners or by a small number of hired laborers. For reporting purposes, the majority of the cost respondents relied on estimated labor hours and rates for the tasks performed by owners and their employees. Two of the five beekeeper suppliers could not provide any type of supporting documentation for the reported salaries and labor costs reported for their employees. In addition, none of the beekeepers were able to provide support for the reported owners' labor costs. Therefore, to calculate employee labor costs for each of the beekeepers, we relied on the salaries reported for employees from three beekeepers who maintained and provided supporting documentation. For these three beekeepers, we calculated a weighted-average labor cost using the labor costs reported for employees and the quantity of honey produced in kilograms. We then compared this calculated labor cost to the reported labor cost, and used the higher of the two amounts. For the owner's labor costs, we imputed a labor cost retrieved from the Argentine Government's Bulletin For Agricultural Workers. We indexed the owner's salary from the 1995 publication to the November 2003 Argentine Peso Value using the wholesale price index (IPIM). See Cost of Production Adjustments for the Preliminary Results—Associacion de Cooperativas Argentinas (“ACA”) Beekeeper Respondents, dated December 20, 2004, (ACA Cost Memorandum).

With respect to feed for their hives, the beekeepers did not keep formal records on consumption rates or inventory. Similar to the previous review, we calculated a per-kilogram feed cost for each beekeeper based on the cost studies from the petition. For each beekeeper, we compared the calculated per-unit feed cost figures to those reported by the beekeeper, and relied on the higher of the two.

(2) Individual Cost Respondent Adjustments

For two of the beekeeper cost respondents, we made minor cost adjustments based on information provided in a supplemental questionnaire response and our findings at verification. See (ACA Cost Memorandum).

C. Test of Third-Country Prices and Results of the Cost of Prodcution Test

In determining whether to disregard third country market sales made at prices below the COP, in accordance with sections 773(b)(1)(A) and (B) of the Act, we examined: (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 model (i.e., CONNUM) were at prices below the COP, we did not disregard any below-cost sales of that model because we determined that the below-cost sales were not made within an extended period of time and in “substantial quantities.” Where 20 percent or more of the respondent's home market sales of a given model were at prices less than COP, we disregarded 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. Therefore, for purposes of this administrative review, we disregarded below-cost sales made by ACA where 20 percent or more of the respondent's home market sales of a given model were at prices less than COP, and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

Price-to-Price Comparisons

ACA

For those product comparisons for which there were sales at prices above the COP, we based NV on the third-country market prices to unaffiliated purchasers. In accordance with section 773(a)(6)(B) of the Act, we made adjustments, where applicable, for movement expenses. In accordance with section 773(a)(6)(C) of the Act, we made circumstance-of-sale adjustments for credit and other direct selling expenses where appropriate. We note that for certain claimed direct expenses in the third-country market, the Department has re-classified them as indirect for the reasons outlined in the accompanying Analysis Memorandum. See ACA's Sales Analysis Memorandum, dated December 20, 2004.

CAA

In accordance with section 773(a)(6)(B) of the Act, we based NV on the third-country prices to unaffiliated purchasers. We made adjustments, where applicable, for movement expenses. In accordance with section 773(a)(6)(C) of the Act, we made circumstance-of-sale adjustments for credit and other direct selling expenses, where appropriate. We note that for certain claimed direct expenses in the third country market, the Department has re-classified these expenses as indirect for the reasons outlined in the accompanying Analysis Memorandum. See CAA's Analysis Memorandum, dated December 20, 2004.

HoneyMax

In accordance with section 773(a)(6)(B) of the Act, we based NV on the third country market prices to unaffiliated purchasers. We made adjustments, where applicable, for movement expenses. We made circumstance-of-sale adjustments for credit, where appropriate, in accordance with section 773(a)(6)(C). We also made adjustments, where applicable, for other direct selling expenses pursuant to section 773(a)(6)(C) of the Act. During the POR, HoneyMax stored honey at a warehouse owned by an affiliate. Although a contract stipulated a monthly rental fee for the warehouse, in fact, HoneyMax compensated its affiliate for use of the warehouse space by means of improvements made to the warehouse itself. Because no warehouse rent expenses are included in HoneyMax's income statement or part of warehouse expenses in HoneyMax's sales database, we have imputed warehouse rent expenses using the monthly rental fee set forth in the lease between HoneyMax and its affiliate. These changes included a warehouse improvement amortization expense made during the POR from HoneyMax's financial statements as part of HoneyMax's overall warehouse expenses. See HoneyMax Analysis Memorandum, dated December 20, 2004, at 4.

Nexco

We based NV on the third-country prices to unaffiliated purchasers. In accordance with section 773(a)(6)(B) of the Act, we made adjustments, where applicable, for movement expenses. We made circumstance-of-sale adjustments for credit and other direct selling expenses where appropriate, in accordance with section 773(a)(6)(C) of the Act. See Nexco's Analysis Memorandum, dated December 20, 2004.

Seylinco

We based NV on the third-country prices to unaffiliated purchasers. We made adjustments, where applicable, for movement expenses in accordance with section 773(a)(6)(B) of the Act. Where appropriate, we made circumstance-of-sale adjustments for credit pursuant to section 773(a)(6)(C) of the Act. We also made adjustments, where applicable, for other direct selling expenses, in accordance with section 773(a)(6)(C) of the Act. See Seylinco's Analysis Memorandum, dated December 20, 2004.

TransHoney

We based NV on the third-country prices to unaffiliated purchasers. We made adjustments, where applicable, for movement expenses in accordance with section 773(a)(6)(B) of the Act. We made circumstance-of-sale adjustments for credit and other direct selling expenses, where appropriate, in accordance with section 773(a)(6)C of the Act. See TransHoney's Analysis Memorandum, dated December 20, 2004.

Nutrin

Use of Facts Otherwise Available

We determine that the use of total adverse facts available is appropriate for the preliminary results with respect to Nutrin. Section 776(a)(1) of the Act mandates that the Department use facts available if necessary information is not available on the record of the proceeding. Section 776(a)(2) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides such information but the information cannot be verified, the Department shall, subject to sections 782(d) and (e) of the Act, use facts otherwise available in reaching the applicable determination. In applying facts otherwise available, section 776(b) of the Act further provides that the Department may use an inference that is adverse to the interests of that party, if the Department finds an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information.”

Nutrin did not respond to the Department's antidumping questionnaire; thus, it has failed to supply the information necessary for the Department to conduct a margin analysis for purposes of this review. After requesting this review, Nutrin did not comply with the Department's information requests, neglected to return phone calls from the Department, and failed to place any information on the record throughout the entire course of this review. Nutrin failed to participate in this administrative review and, thus, failed to cooperate to the best of its ability. See Memorandum to the File from Angela Strom (documenting phone calls and Nutrin's failure to respond to the Department's requests), dated April 7, 2004, and Memorandum to the File from Angela Strom (Nutrin's counsel confirming Nutrin would not participate in this review), dated June 24, 2004.

Because Nutrin failed to cooperate by not acting to the best of its ability, we have determined that the application of adverse facts available (AFA) is warranted within the meaning of section 776(b) of the Act. When making adverse inferences, the Department has the authority to consider the extent to which a party may benefit from its own lack of cooperation, deeming adverse inferences appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (SAA) accompanying the Uruguay Round Agreements Act, H. Doc. No. 103-316, at 870 (1994). Section 776(b) of the Act authorizes the Department to use as adverse facts available (AFA) information derived from the petition, the final determination from the less-than-fair-value (LTFV) investigation, a previous administrative review, or any other information placed on the record.

Because no information was placed on the record with respect to Nutrin in this review, the Department was unable to calculate a dumping margin for Nutrin. Consequently, we relied on information from the petition and final determination. Specifically, we are applying to Nutrin the highest margin determined in any segment of this proceeding, 55.15 percent, which was applied to a non-cooperative respondent during the investigation. This is the highest estimated dumping margin, adjusted for export subsidies, set forth in the LTFV investigation. See Final Determination, 66 FR 5834; Notice of Order, 66 FR 63672 (December 10, 2001).

We note that information from the petition constitutes “secondary information.” See SAA at 870. Section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate secondary information used for facts available by reviewing independent sources reasonably at its disposal. The SAA further provides that the word “corroborate” means the Department will satisfy itself that the secondary information used has probative value. As explained in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings Four Inches or Less in Outside Diameter, and Components Thereof, from Japan: Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Review, 61 FR 57391, 57392 (November 6, 1996) (TRBs), in order to corroborate secondary information the Department will examine, to the extent practicable, the reliability and relevance of the information used. Where circumstances indicate the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin. See TRBs at 61 FR 57392; see also Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 1996).

The implementing regulation for section 776 of the Act, at 19 CFR 351.308(d), states “{t}he fact that corroboration may not be practicable in a given circumstance will not prevent the Secretary from applying an adverse inference as appropriate and using the secondary information in question.” The SAA also recognizes that the corroboration process must be flexible enough to induce future cooperation from respondents. Specifically, section (b) of the SAA states the fact that corroboration may not be practicable in a given circumstance will not prevent the Department from applying an adverse inference. See Fresh Garlic from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Rescission in Part, 69 FR 70638 (December 7, 2004).

Because the data used to calculate CV in the petition (i.e., COP figures, exporter's selling and general expenses (SG&A), and profit rates) were based upon independent sources, foreign market research, and financial statements from the relevant parties involved, the Department believes this information has probative value. In deriving the margin, the Department used the calculated CV and compared it to sales prices derived from foreign market research and U.S. import statistics. The margin of 60.67 percent, adjusted downwardly for export subsidies in the order, ultimately yielded 55.15 percent. See Antidumping Duty Order.

In addition, because Nutrin currently is subject to the “All Others” rate of 30.24 percent, the Department determines that assigning a rate of 55.15 percent will prevent Nutrin from benefitting from its failure to respond to the Department's requests for information. See “The Use of Facts Available for Nutrin S.A. and Corroboration of Secondary Information,” from Richard Weible, Office Director, to Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, dated December 20, 2004 (Corroboration Memorandum). Further, throughout this proceeding, the highest rate, 55.15 percent, was applied to an uncooperative respondent, Conagra, in the antidumping duty investigation, and this rate continues to apply to the firm. See Notice of Antidumping Order: Honey From Argentina, 66 FR 63672 (December 10, 2001).

This margin was derived from information in the petition, which was corroborated in the investigation stage of this proceeding. See Initiation of Antidumping Duty Investigations: Honey from Argentina and the People's Republic of China, 65 FR 65831 (November 2, 2000) and Notice of Final Determination of Sales at Less than Fair Value; Honey From Argentina, 66 FR 50611 (October 4, 2001). Because Nutrin failed to cooperate, no additional information has been presented in the current review that would call into question the reliability or relevance of the margin, or the calculation on which it was based. Because there is no information on the record of this review that would render the application of this rate inappropriate or the margin irrelevant, we are applying the highest dumping margin from this proceeding, 55.15 percent, to Nutrin and have satisfied the corroboration requirements under section 776(c) of the Act. See e.g., Garlic From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and New Shipper Reviews, 68 FR 68868 (December 10, 2003); (Results Unchanged) Final Results, 69 FR 33626 (June 16, 2004).

Currency Conversion

The Department's preferred source for daily exchange rates is the Federal Reserve Bank. See Preliminary Results of Antidumping Duty Administrative Review: Stainless Steel Sheet and Strip in Coins from France, 68 FR 47049 (August 7, 2003). However, the Federal Reserve Bank does not track or publish exchange rates for the Argentine Peso. Therefore, we made currency conversions based on the daily exchange rates from Factiva, a Dow Jones & Reuters Retrieval Service. Factiva publishes exchange rates for Monday through Friday only. We used the rate of exchange on the most recent Friday for conversion dates involving Saturday through Sunday where necessary.

Preliminary Results of Review

As a result of our review, we preliminarily determine the following weighted-average dumping margins exist for the period December 1, 2002, through November 30, 2003:

The Department will disclose calculations performed within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). An interested party may request a hearing within thirty days of publication. See 19 CFR 351.310(c). Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date pursuant to 19 CFR 351.310(d). Interested parties may submit case briefs or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments, may be filed no later than 35 days after the date of publication of this notice. Parties who submit arguments in these proceedings are requested to submit with the argument: (1) A statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities. Further, we would appreciate it if parties submitting case briefs, rebuttal briefs, and written comments would provide the Department with an additional copy of the public version of any such argument on diskette. The Department will issue final results of this administrative review, including the results of our analysis of the issues in any such case briefs, rebuttal briefs, and written comments or at a hearing, within 120 days of publication of these preliminary results.

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we calculated importer-specific ad valorem assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total customs value of the sales used to calculate those duties. This rate will be assessed uniformly on all entries of that particular importer made during the POR. The Department will issue appropriate appraisement instructions directly to CBP upon completion of the review.

Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of honey from Argentina entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Act:

(1) The cash deposit rates for all companies reviewed will be the rates established in the final results of review;

(2) For any previously reviewed or investigated company not listed above, the cash deposit rate will continue to be the company-specific rate published in the most recent period;

(3) If the exporter is not a firm covered in this review or the 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) If neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be the “all others” rate from the investigation (30.24 percent). See Notice of Final Determination of Sales at Less Than Fair Value; Honey From Argentina, 66 FR 50611 (Oct. 4, 2001), Notice of Amended Final Determination of Sales at Less Than Fair Value; Honey From Argentina, 66 FR 58434 (Nov. 21, 2001) (Final Determination), and Notice of Antidumping Duty Order; Honey From Argentina, 66 FR 63672 (Dec. 10, 2001) (Notice of AD Order).

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.

We are issuing and publishing this notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.