- 44 -
were paid by Dole and were effectively loaned to GAC to help
market SCP Deal produce through Dole connections.
Thus, Dr. Cook concluded that petitioner's commission rate of 55
cents per package was reasonably similar to the rate that would
have been charged by an uncontrolled distributor negotiating with
an uncontrolled grower under similar circumstances.
Respondent's Expert Witnesses
Respondent submitted the expert report of Dr. Frisch. He
has a Ph.D. in economics from Harvard University and is a
managing director at Horst, Frisch, Clowery & Finan, Inc., an
independent economic consulting firm specializing in transfer
pricing and other tax-related matters. Dr. Frisch's field of
expertise is international tax in general and transfer pricing
specifically. Dr. Frisch concluded that the commissions
petitioner received from the SCP deal during the years in issue
were not arm's length.
Dr. Frisch asserted that the fact that petitioner's
commission rate was mentioned in the SCP contract does not imply
that the rate is arm's length. Dr. Frisch stated that the owners
of the Canelos group were interested in the group's overall
profits from the SCP contract and, therefore, they might have
been willing to accept a below-arm's-length commission rate for
petitioner inasmuch as the Canelos organization as a whole would
receive offsetting benefits from other provisions of the SCP
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