Notice of Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp From Ecuador

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

December 23, 2004.

SUMMARY:

On August 4, 2004, the Department of Commerce (the Department) published its preliminary determination of sales at less-than-fair-value (LTFV) of certain frozen and canned warmwater shrimp from Ecuador. The period of investigation is October 1, 2002, through September 30, 2003.

Based on our analysis of the comments received, we have made changes in the margin calculations. Therefore, the final determination differs from the preliminary determination. The final weighted-average dumping margins for the investigated companies are listed below in the section entitled “Final Determination Margins.”

FOR FURTHER INFORMATION CONTACT:

David J. Goldberger or Terre Keaton, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-4136, or (202) 482-1280, respectively.

SUPPLEMENTARY INFORMATION:

Final Determination

We determine that certain frozen and canned warmwater shrimp from Ecuador is being, or is likely to be, sold in the United States at LTFV, as provided in section 735 of the Tariff Act of 1930, as amended (the Act). The estimated margins of sales at LTFV are shown in the “Suspension of Liquidation” section of this notice.

Case History

The preliminary determination in this investigation was published on August 4, 2004. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From Ecuador, 69 FR 47091 (Preliminary Determination).

Since the preliminary determination, the following events have occurred. During the period July through October 2004, various interested parties, including the petitioners, submitted comments on the scope of this and the concurrent investigations of certain frozen and canned warmwater shrimp.

In August and September 2004, we conducted sales and cost verifications of the questionnaire responses of the three respondents in this case, Exporklore S.A. (Exporklore), Exportadora De Alimentos S.A. (Expalsa), and Promarisco S.A. (Promarisco).

On August 13, 2004, the respondents requested a public hearing. We received case briefs on October 28, 2004, from the petitioners and the respondents. Promarisco resubmitted its brief on November 3, 2004, at the Department's request, in order to exclude unsolicited new factual information. In addition, in October 2004, Xian-Ning Seafood Co., Ltd., an interested party in the companion investigation of frozen and canned warmwater shrimp from Thailand, and two interested parties in this investigation, Eastern Fish Company, Inc., and Long John Silver's, Inc., submitted case and rebuttal briefs with respect to scope issues.

On November 5 and 10, 2004, pursuant to the Department's request, Exporklore and Expalsa, respectively, submitted revised sales and cost databases which incorporated certain changes discovered in preparation for and during verification.

On November 23, 2004, the Department convened a public hearing on scope issues. On November 29, 2004, the Department made final scope determinations with respect to shrimp scampi and dusted and battered shrimp. See the November 29, 2004, Memoranda from Edward C. Yang to Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration entitled “Scope Clarification on Shrimp Scampi”; and “Scope Clarification on Dusted Shrimp and Battered Shrimp,” respectively. See also the “Scope of Investigation” section of this notice, below, for further discussion.

Also on November 29, 2004, the Department clarified that a shrimp sauce produced by a company in the companion investigation of frozen and canned warmwater shrimp from the People's Republic of China, Lee Kum Kee (USA) Inc., is not covered by the scope of that investigation. See the November 29, 2004, Memorandum from Edward C. Yang to Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration entitled “Scope Clarification on Lee Kum Kee's Shrimp Sauce.”

Period of Investigation

The period of investigation is October 1, 2002, through September 30, 2003.

Analysis of Comments Received

The various scope issues are discussed in the “Case History” section of this notice and the separate scope memoranda. All issues raised in the case briefs by parties to this proceeding and to which we have responded are listed in the appendix to this notice and addressed in the “Issues and Decision Memorandum” (Decision Memorandum) from Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, to James J. Jochum, Assistant Secretary for Import Administration, dated December 17, 2004, which is adopted by this notice. Parties can find a complete discussion of the issues raised in this investigation and the corresponding recommendations in this public memorandum, which is on file in the Central Records Unit, room B-099 of the main Commerce Building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov/frn/index.html . The paper copy and electronic version of the Decision Memorandum are identical in content.

Scope of Investigation

The scope of this investigation includes certain warmwater shrimp and prawns, whether frozen or canned, wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off, deveined or not deveined, cooked or raw, or otherwise processed in frozen or canned form.

The frozen or canned warmwater shrimp and prawn products included in the scope of this investigation, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTSUS), are products which are processed from warmwater shrimp and prawns through either freezing or canning and which are sold in any count size.

The products described above may be processed from any species of warmwater shrimp and prawns. Warmwater shrimp and prawns are generally classified in, but are not limited to, the Penaeidae family. Some examples of the farmed and wild-caught warmwater species include, but are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn (Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), redspotted shrimp (Penaeus brasiliensis), southern brown shrimp (Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern rough shrimp (Trachypenaeus curvirostris), southern white shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus indicus).

Frozen shrimp and prawns that are packed with marinade, spices or sauce are included in the scope of the investigation. In addition, food preparations, which are not “prepared meals,” that contain more than 20 percent by weight of shrimp or prawn are also included in the scope of the investigation.

Excluded from the scope are: (1) Breaded shrimp and prawns (1605.20.10.20); (2) shrimp and prawns generally classified in the Pandalidae family and commonly referred to as coldwater shrimp, in any state of processing; (3) fresh shrimp and prawns whether shell-on or peeled (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in prepared meals (1605.20.05.10); (5) dried shrimp and prawns; (6) dusted shrimp; and (7) battered shrimp. Dusted shrimp is a shrimp-based product: (1) That is produced from fresh (or thawed-from-frozen) and peeled shrimp; (2) to which a “dusting” layer of rice or wheat flour of at least 95 percent purity has been applied; (3) with the entire surface of the shrimp flesh thoroughly and evenly coated with the flour; (4) with the non-shrimp content of the end product constituting between four and 10 percent of the product's total weight after being dusted, but prior to being frozen; and (5) that is subjected to IQF freezing immediately after application of the dusting layer. Battered shrimp is a shrimp-based product that, when dusted in accordance with the definition of dusting above, is coated with a wet viscous layer containing egg and/or milk, and par-fried.

The products covered by this scope are currently classifiable under the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 1605.20.10.10, 1605.20.10.30, and 1605.20.10.40. These HTSUS subheadings are provided for convenience and customs purposes only and are not dispositive, but rather the written description of the scope of this investigation is dispositive.

Changes Since the Preliminary Determination

Based on our analysis of the comments received and our findings at verification, we have made certain changes to the margin calculations. For a discussion of these changes, see the “Margin Calculations” section of the Decision Memorandum.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondents for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondents.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing U.S. Customs and Border Protection (CBP) to continue to suspend liquidation of all entries of certain frozen and canned warmwater shrimp from Ecuador that are entered, or withdrawn from warehouse, for consumption on or after August 4, 2004, the publication date of the preliminary determination in the Federal Register. CBP shall continue to require a cash deposit or the posting of a bond based on the estimated weighted-average dumping margin shown below. The suspension of liquidation instructions will remain in effect until further notice.

Final Determination Margins

The weighted-average dumping margins are as follows:

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will determine within 45 days whether these imports are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP officials to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

This notice serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction

We are issuing and publishing this determination and notice in accordance with sections 735(d) and 777(i) of the Act.

Appendix—Issues in the Decision Memorandum

Comments

Comment 1: Offsets for Non-Dumped Sales

Comment 2: Exclusion of Substandard Shrimp from the U.S. Sales Databases

Comment 3: “Container Weight” as Product Matching Characteristic

Comment 4: “As Sold” Versus HLSO Basis for Price and Quantity

Comment 5: “Packaging” Materials Versus “Packing” Materials

Comment 6: Expalsa's and Promarisco's Inland Freight and Testing Expense Methodology

Comment 7: Expalsa's Sales of Organic Shrimp

Comment 8: Grade as a Model-Matching Criterion for Expalsa Sales

Comment 9: Expalsa's Sales of “Non-Standard Mixes''

Comment 10: Treatment of Expalsa's Expenses for Returned Shipments

Comment 11: Expalsa's Post-Petition Filing Billing Adjustments

Comment 12: Treatment of Certain Expalsa Sales to Italy as Samples

Comment 13: Rebates on Expalsa's Italian Sales

Comment 14: Cost Changes for Expalsa's Minor Corrections of Preservative Code

Comment 15: Payments to Exporklore's Sales Agent as Rebates or Commissions

Comment 16: Methodology for Calculating Exporklore's Payment to Agent for Italian Sales

Comment 17: Ocean Freight Revenue and Expense Treatment on Exporklore C&F Sales

Comment 18: Exporklore Bank Charges

Comment 19: Exporklore's Raw Material Costs

Comment 20: Currency Adjustment in Calculation of Exporklore's Financial Expense Ratio

Comment 21: Treatment of Commissions Paid to Affiliates in Exporklore's Labor Costs

Comment 22: Spain as the Appropriate Comparison Market for Promarisco

Comment 23: Classification and Exclusion of Certain Promarisco Spanish Sales as Samples

Comment 24: Billing Adjustments and Date of Sale for Certain Promarisco U.S. Long-Term Contract Sales

Comment 25: Bonus Payment to Promarisco's Spanish Sales Agent

Comment 26: Calculation of Promarisco's Indirect Selling Expense Ratio

Comment 27: Adjustment for Unreconciled Differences in Promarisco's Cost of Manufacture

Comment 28: Input Adjustment for Promarisco's Shrimp Purchases from Affiliated Farms

Comment 29: Adjustment of Promarisco's G&A Expense Ratio to Exclude Packing Expenses