Sugar From Mexico: Final Determination of Sales at Less Than Fair Value

AGENCY:

Enforcement and Compliance, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) determines that imports of sugar from Mexico are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 735 of the Tariff Act of 1930, as amended (the Act). The period of investigation is January 1, 2013, through December 31, 2013. The final weighted-average dumping margins are listed below in the section entitled “Final Determination Margins.”

DATES:

Effective Date: September 23, 2015.

FOR FURTHER INFORMATION CONTACT:

David Lindgren, AD/CVD Operations, Office VII, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3870.

SUPPLEMENTARY INFORMATION:

Background

On November 3, 2014, the Department published in the Federal Register the Preliminary Determination of sales at LTFV in the antidumping duty investigation of sugar from Mexico. The following events occurred since the Preliminary Determination was issued. Between December 3 and 16, 2014, we conducted sales and cost verifications of the two respondents in this investigation, FEESA and the GAM Group. The verification reports were issued between January 29 and March 31, 2015.

On December 19, 2014, the Department and a representative of the producers/exporters accounting for substantially all imports of sugar from Mexico, the Camara Nacional de Las Industrias Azucarera y Alcoholera, signed a suspension agreement in this investigation. On January 8, 2015, Imperial Sugar (Imperial) and AmCane Sugar LLC (AmCane) each notified the Department that they had petitioned the International Trade Commission (ITC) to conduct a review to determine whether the injurious effects of the imports of the subject merchandise are eliminated completely by the AD Suspension Agreement (a section 734(h) review). Additionally, on January 16, 2015, AmCane and Imperial submitted timely requests for the continuation of the instant investigation. On March 19, 2015, in a unanimous vote, the ITC found that the AD Suspension Agreement eliminated completely the injurious effects of imports of sugar from Mexico. On the same day, the Department announced that it would issue a decision regarding continuation of the investigations promptly after the ITC made its views and findings available. On March 24, 2015, the ITC notified the Department of its determination, and on April 10, 2015, provided a report of its views and findings to the Department. Subsequently, on April 24, 2015, the Department determined that AmCane and Imperial had standing to request continuation of this investigation and, as a result, published a continuation notice on May 4, 2015. Accordingly, on May 4, 2015, the Department announced the briefing schedule. Consistent with the schedule, case briefs were filed on May 29, 2015, and rebuttal briefs on June 12, 2015.

Scope of the Investigation

The product covered by this investigation is sugar from Mexico. Since the Preliminary Determination, the Department has updated the scope of the investigation. For a discussion of these changes, see “Scope Comments” section of the Issues and Decision Memorandum and, for a complete description of the scope of the investigation, see Appendix I to this notice.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties in this investigation are addressed in the Issues and Decision Memorandum, which is hereby adopted by this notice. A list of the issues raised is attached to this notice as Appendix II. The Issues and Decision Memorandum is a public document and is on file electronically via Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). ACCESS is available to registered users at http://access.trade.gov and it is available to all parties in the Central Records Unit, room B8024 of the main Department of Commerce building. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly at http://enforcement.trade.gov/frn/. The signed and electronic versions of the Issues and Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

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

Verification

As provided in section 782(i) of the Act, in December, 2014, we verified the sales and cost information submitted by FEESA and the GAM Group for use in our final determination. We used standard verification procedures including an examination of relevant accounting and production records, and original source documents provided by the two respondents.

Final Determination Margins

The weighted-average dumping margins are as follows:

Section 735(c)(5)(A) of the Act provides that the estimated “all-others” rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero or de minimis margins, and any margins determined entirely under section 776 of the Act. As we calculated weighted-average dumping margins for both mandatory respondents that are above de minimis and which are not based on total facts available, they are the basis for the “all others” rate. However, a weighted average would reveal proprietary information regarding the respondents' sales information. As such, we have calculated the weighted-average “all others” rate by relying on publicly-ranged information reported by FEESA and the GAM Group.

Disclosure

We will disclose the calculations performed within five days of any public announcement of this notice in accordance with 19 CFR 351.224(b).

Termination of Suspension of Liquidation

As noted above, on December 19, 2014, the Department signed the AD Suspension Agreement. Pursuant to section 734(h)(3) of the Act, suspension of liquidation ordered in the Preliminary Determination continued to be in effect pending the ITC's section 734(h) review. Following the ITC's affirmative determination, i.e., that the AD Suspension Agreement completely eliminated the injurious effects of imports of sugar from Mexico, on March 27, 2015, the Department, in accordance with section 734(h)(3) of the Act, instructed U.S. Customs and Border Protection (CBP) to terminate the suspension of liquidation of all entries of sugar from Mexico and refund all cash deposits. Pursuant to the requests for continuation discussed above, we have continued and completed the investigation in accordance with section 734(g) of the Act. We found the antidumping duty margins noted above in the “Final Determination Margins” section.

The Department will not instruct CBP to suspend liquidation or collect cash deposits calculated herein unless the AD Suspension Agreement is terminated and the Department issues an antidumping duty order. In the event that Department issues an order, consistent with sections 735(c)(1) and 736(a) of the Act, as well as 19 CFR 351.210(d) and 351.211, we will instruct CBP to suspend liquidation and require a cash deposit equal to the weighted-average amount by which normal value exceeds U.S. price, as indicated in the chart above, as follows: (1) The rate for FEESA, when adjusted for export subsidies, is 40.33 percent; (2) the rate for the GAM Group, when adjusted for export subsidies, is 41.97 percent; (3) if the exporter is not a firm identified in this investigation, but the producer is, then the rate will be the rate established for the producer of the subject merchandise; (4) the rate for all other producers or exporters, when adjusted for export subsidies, will be 40.59 percent.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we will notify the ITC of our final determination. Because our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threatening material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the AD Suspension Agreement shall have no force or effect, and the investigation shall be terminated. If the ITC determines that such injury does exist, the AD Suspension Agreement shall remain in force but the Department shall not issue an antidumping order so long as (1) the AD Suspension Agreement remains in force, (2) the AD Suspension Agreement continues to meet the requirements of subsections (c) and (d) of the Act, and (3) the parties to the AD Suspension Agreement carry out their obligations under the AD Suspension Agreement in accordance with its terms.

Return or Destruction of Proprietary Information

This notice will serve as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction or APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

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

Appendix I—Scope of the Investigation

The product covered by this investigation is raw and refined sugar of all polarimeter readings derived from sugar cane or sugar beets. The chemical sucrose gives sugar its essential character. Sucrose is a nonreducing disaccharide composed of glucose and fructose linked by a glycosidic bond via their anomeric carbons. The molecular formula for sucrose is C₁₂ H₂₂ O₁₁; the International Union of Pure and Applied Chemistry (IUPAC) International Chemical Identifier (InChI) for sucrose is 1S/C12H22O11/c13-1-4-6(16)8(18)9(19)11(21-4)23-12(3-15)10(20)7(17)5(2-14)22-12/h4-11,13-20H,1-3H2/t4-,5-,6-,7-,8+,9-,10+,11-,12+/m1/s1; the InChI Key for sucrose is CZMRCDWAGMRECN-UGDNZRGBSA-N; the U.S. National Institutes of Health PubChem Compound Identifier (CID) for sucrose is 5988; and the Chemical Abstracts Service (CAS) Number of sucrose is 57-50-1.

Sugar described in the previous paragraph includes products of all polarimeter readings described in various forms, such as raw sugar, estandar or standard sugar, high polarity or semi-refined sugar, special white sugar, refined sugar, brown sugar, edible molasses, desugaring molasses, organic raw sugar, and organic refined sugar. Other sugar products, such as powdered sugar, colored sugar, flavored sugar, and liquids and syrups that contain 95 percent or more sugar by dry weight are also within the scope of this investigation.

The scope of the investigation does not include (1) sugar imported under the Refined Sugar Re-Export Programs of the U.S. Department of Agriculture; (2) sugar products produced in Mexico that contain 95 percent or more sugar by dry weight that originated outside of Mexico; (3) inedible molasses (other than inedible desugaring molasses noted above); (4) beverages; (5) candy; (6) certain specialty sugars; and (7) processed food products that contain sugar (e.g., cereals). Specialty sugars excluded from the scope of this investigation are limited to the following: caramelized slab sugar candy, pearl sugar, rock candy, dragees for cooking and baking, fondant, golden syrup, and sugar decorations.

Merchandise covered by this investigation is typically imported under the following headings of the HTSUS: 1701.12.1000, 1701.12.5000, 1701.13.1000, 1701.13.5000, 1701.14.1000, 1701.14.5000, 1701.91.1000, 1701.91.3000, 1701.99.1010, 1701.99.1025, 1701.99.1050, 1701.99.5010, 1701.99.5025, 1701.99.5050, 1702.90.4000 and 1703.10.3000. The tariff classification is provided for convenience and customs purposes; however, the written description of the scope of this investigation is dispositive.

Appendix II—List of Topics Discussed in the Issues and Decision Memorandum

I. Summary

II. Background

III. Scope Comments

IV. Scope of the Investigation

V. Margin Calculations

VI. Discussion of the Issues

1. Imperial and AmCane's Standing to Request Continuation of the Investigation

2. Use of Revised Scope for Final Determination

3. Selection of FEESA as a Mandatory Respondent

4. Treatment of Certain FEESA Employee Expenses

5. FEESA's G&A and Financial Expenses Denominator

6. FEESA's Sales and Cost Verification Minor Corrections

7. FEESA Cost Changes Based on Verification Information

8. FEESA's Depreciation Expenses

9. Calculation of the GAM Group's Electricity Expenses

10. Offsets for Sugar Mills' Interest Income

11. Exclusion of Seedling Costs from ITLC's Cost of Production

12. The GAM Group's Final Sugar Cane Prices

13. Adjustments to Administrative Services Provided by ESOSA

14. Adjusting the GAM Group's G&A for Certain Affiliated Company Costs Recommendation