Fresh Kiwifruit From New Zealand; Final Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

[A-614-801]

Fresh Kiwifruit From New Zealand; Final Results of Antidumping

Administrative Review

AGENCY: Import Administration, International Trade Administration,

Commerce.

ACTION: Notice of Final Results of Antidumping Duty Administrative

Review.

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SUMMARY: On April 10, 1996, the Department of Commerce (the Department)

published the preliminary results of its administrative review of the

antidumping duty order on fresh kiwifruit from New Zealand. The review

cover one exporter, the New Zealand Kiwifruit Marketing Board (NZKMB),

and the period from June 1, 1994, through May 31, 1995. Based on our

analysis of the comments received, we have revised the dumping margin

for NZKMB.

EFFECTIVE DATES: September 3, 1996.

FOR FURTHER INFORMATION CONTACT: Paul M. Stolz or Thomas F. Futtner,

Import Administration, International Trade Administration, U.S.

Department of Commerce, 14th Street and Constitution Avenue, NW.,

Washington, DC 20230; telephone (202) 482-4474 or 482-3814,

respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 10, 1996, the Department published the preliminary results

(61 FR 15924) of its administrative review of the antidumping duty

order on fresh kiwifruit from New Zealand (57 FR 23203 (June 2, 1992)).

The Department has now completed this administrative review in

accordance with section 751 of the Tariff Act of 1930, as amended (the

Act). Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (the Act), by the

Uruguay Round Agreements Act (URAA). In addition, unless otherwise

indicated, all citations to the Departments regulations are to the

current regulations, as amended by the interim regulations published in

the Federal Register on May 11, 1995 (60 FR 25130).

Scope of the Review

The product covered by the order under review is fresh kiwifruit.

Processed kiwifruit, including fruit jams, jellies, pastes, purees,

mineral waters, or juices made from or containing kiwifruit, are not

covered under the scope of the order. The subject merchandise is

currently classifiable under subheading 0810.90.20.60 of the Harmonized

Tariff Schedule (HTS). Although the HTS number is provided for

convenience and customs purposes, our written description of the scope

of this review is dispositive.

Analysis of Comments Received

We invited interested parties to comment on the preliminary

results. We received timely comments from respondent, the New Zealand

Kiwifruit Marketing Board (NZKMB), and petitioner, the California

Kiwifruit Commission.

Comment 1

The petitioner alleged a number of specific ministerial errors

pertaining to the application of the computer program used by the

Department and submitted specific suggested program edits.

Respondents also alleged ministerial errors pertaining to the

computer program. In one instance, respondent alleged a ministerial

error with regard to transportation insurance, and petitioner argued

that this was not an error. This issue is considered in comment 2. In

all other instances there was no disagreement between the petitioner

and respondent concerning the alleged

[[Page 46439]]

ministerial errors made by the Department.

The errors alleged by the petitioner and respondent related to the

following: 1) exchange rates were incorrectly applied; 2) certain

indirect selling expenses were erroneously labeled as direct expenses

while certain direct expenses were labeled as indirect; 3) delivery

premiums were not added to the starting price for both U.S. and New

Zealand sales; 4) inventory carrying costs were not included in home

market indirect selling expenses; 5) imputed credit expenses were

deducted from the price in performing the cost test; 6) General and

Administrative (G&A) expenses were double counted.

DOC Position

With respect to the ministerial error allegations other than that

which is considered in comment 2, the Department has incorporated the

suggested edits into the computer program. (See memorandum to the file

dated July 22, 1996, for a detailed description of all adjustments

made.)

Comment 2

Respondent claims that transportation insurance expenses to U.S.

sales should not be deducted from the constructed export price (CEP)

starting price as this is an indirect selling expense. Respondent

states that these expenses are incurred in New Zealand and are

therefore not direct U.S. expenses. Furthermore, respondent states that

in the Department's analysis memorandum for the preliminary

determination in this proceeding, the Department stated that it

intended to treat transportation insurance as an indirect selling

expense.

Petitioner states that transportation insurance should be deducted

from the CEP starting price because it is an expense identifiable with

U.S. sales regardless of whether respondent considers it to be a direct

or indirect selling expense.

DOC Position

Although the Department did indicate in its analysis memorandum for

the preliminary results that it was treating transportation insurance

as an indirect selling expense, upon reassessment of this point, we

agree with petitioner that transportation insurance should be deducted

from CEP as it should similarly be deducted from New Zealand normal

value (NV). Transportation insurance is a movement expense and can be

linked to specific shipments to different markets. We have made the

appropriate adjustments to the computer program to deduct the amount of

transportation insurance allocated to U.S. sales for the CEP starting

price and New Zealand NV.

Comment 3

Petitioner argues that although New Zealand home market sales

exceeded five percent of U.S. sales during the period of review (POR),

particular market conditions in New Zealand during the POR were such

that the Department should not consider that market to be viable.

Petitioner claims that particular market conditions in New Zealand did

not permit proper comparisons between New Zealand sales and U.S. sales.

Petitioner relies on an exception outlined in the URAA Statement of

Administrative Action (SAA) at 151-152: ``The Administration intends

that Commerce will normally use the five percent threshold except where

some unusual situation renders its application inappropriate. * * * In

unusual situations * * * home market sales constituting more than five

percent of sales to the United States could be considered not viable.''

Petitioner states that the New Zealand market was distorted because New

Zealand law and respondent's own regulations establish respondent as

the exclusive exporter of export quality kiwifruit from New Zealand.

Petitioner claims that New Zealand has been a ``dumping ground'' for

production that cannot be sold in export markets, thus driving down

domestic prices. Finally, petitioner claims that all home market sales

are below cost, and that this should be a factor in evaluating the

viability of the market. Petitioner requested that the Department

require respondent to submit Japanese sales and that the Department use

this information to establish NV.

The respondent asserts that the URAA explicitly and clearly

establishes that a home market is considered viable if home market

sales equal or exceed five percent of U.S. sales. Respondent notes that

the SAA at 151, establishes an exception to this rule for ``particular

market situations.'' Respondent notes that such circumstances only

exist where ``* * * a single sale in the home market constitutes five

percent of sales to the United States or there is government control

over pricing to such an extent that home market prices cannot be

considered to be competitively set. It may also be the case that a

particular market situation could arise from differing patterns of

demand in the United States and in the foreign market. For example, if

significant price changes are closely correlated with holidays which

occur at different times of the year in the two markets, the prices in

the foreign market may not be suitable for comparison to prices in the

United States.'' Respondent asserts that none of these situations

prevailed in the New Zealand home market during the POR.

DOC Position

We disagree with petitioner. The home market clearly meets the

quantitative standard set forth in 19 U.S.C. 1677b(a)(1)(C). We note

that, in past reviews of kiwifruit from New Zealand, where the

quantitative test was based on third country markets rather than the

U.S. market, the New Zealand home market was not viable. Under the new

law, viability is determined on the basis of the relationship between

home market sales and U.S. sales. Since sales of subject merchandise in

New Zealand substantially exceeded five percent of those in the U.S.

market, the quantitative test of the home market under current law is

satisfied.

Petitioner alleges that the New Zealand market is an inappropriate

basis for normal value because the ``particular market situation in the

exporting country does not permit a proper comparison with the export

price or constructed export price,'' as these terms are used in 19

U.S.C. 1677b(a)(1)(C)(iii). The SAA that accompanied the URAA, at 822,

establishes that a ``particular market situation'' might exist where a

single sale in the home market exceeds the quantitative viability

threshold or where there is government control over pricing to such an

extent that home market prices cannot be considered to be competitively

set. The SAA also mentions situations in which demand patterns are

different in the foreign market and the United States.

As the language of the SAA makes clear, we are not limited by the

examples of ``particular market situations'' described in that

document. However, based on the evidence on the record, we find that

there is no ``particular market situation,'' within the meaning of 19

U.S.C. 1677b(a)(1)(c)(iii) which warrants a departure from the normal

five percent test. We are not persuaded by petitioner's assertion that,

during the POR, New Zealand was used as a ``dumping ground'' for

production that could not be sold in export markets. The record does

not demonstrate that kiwifruit sold in export markets by the NZKMB is

of higher quality than kiwifruit sold in the home market by the NZKMB.

Nor does NZKMB's dominance in the exportation of kiwifruit from New

Zealand establish that there were price controls in the New Zealand

kiwifruit market. Indeed, evidence on the record

[[Page 46440]]

demonstrates that the NZKMB is not strictly the exclusive exporter of

kiwifruit from New Zealand. Sales of kiwifruit by any grower, reseller

or other party, to the Australian market is permissible under New

Zealand law. Also, New Zealand resellers of kiwifruit are permitted to

export to other markets if they are licensed by the NZKMB. Thus export

markets and export pricing are not subject to absolute control and

manipulation by the NZKMB. Even if the NZKMB were in a position to

manipulate export prices, there is no evidence on the record that the

NZKMB acts on behalf of the New Zealand government to control prices in

the home market. As a result, we find that petitioners have not

presented evidence of ``price control'' sufficient to satisfy the

``particular market situation'' standard under the new law.

A finding of sales below cost of production does not, in and of

itself, establish that a ``particular market situation'' exists. It is

the Department's longstanding practice to first determine whether the

home market is viable and then to determine whether sales are made

below cost of production. In this review, we applied the below-cost

test, as described in the preliminary results of review, and found that

within an extended period of time, substantially more than 80 percent

of the home market sales were sold at prices below the COP, which would

not permit the recovery of all costs within a reasonable period of

time. Since a substantial number of sales were made below cost we

relied on constructed value (CV). Since the remaining above-cost

sale(s) in this review segment had no corresponding model matches, we

also relied on CV where sale(s) were above-cost.

For these reasons, based on the evidence on the record, we find

that the New Zealand market does not represent a ``particular market

situation'' within the meaning of 19 U.S.C. 1677b(a)(1)(C)(iii). As a

result, we reaffirm our preliminary determination on this issue.

Final Results of Review

As a result of comments received and programming errors corrected,

we have revised our preliminary results.

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Margin

Manufacturer/exporter (Percent)

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New Zealand Kiwifruit Marketing Board...................... 2.81

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The Customs Service shall assess antidumping duties on all

appropriate entries. Individual differences between U.S. price and NV

may vary from the percentage stated above. The Department will issue

appraisement instructions concerning the respondent directly to the

U.S. Customs Service.

Furthermore, the following 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

these final results of administrative review, as provided for by

section 751(a)(1) of the Act: (1) the cash deposit rate for the review

firm will be 2.81 percent; and (2) the cash deposit rate for

merchandise exported by all other manufacturers and exporters will be

the ``all others'' rate of 98.60 percent established in the less-than-

fair-value investigation; in accordance with the Department practice.

See Floral Trade Council v. United States, 822 F. Supp. 766 (1993), and

Federal Mogul Corporation, 822 F. Supp. 782 (1993).

These deposit requirements shall remain in effect until publication

of the final results of the next administrative review. This notice

serves as the final reminder to importers of their responsibility under

19 CFR 353.26 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 notice also serves as a 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 353.34(d). Timely written notification or

conversion to judicial protective order is hereby requested. Failure to

comply with the regulations and the terms of the APO is a sanctionable

violation.

This administrative review and notice are in accordance with

section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.

Dated: August 22, 1996.

Robert S. La Russa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 96-22412 Filed 8-30-96; 8:45 am]

BILLING CODE 3510-DS-M