[Federal Register Volume 62, Number 148 (Friday, August 1, 1997)]
[Notices]
[Pages 41347-41359]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-20281]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-848]


Notice of Final Determination of Sales at Less Than Fair Value: 
Freshwater Crawfish Tail Meat From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: August 1, 1997.

FOR FURTHER INFORMATION CONTACT: Elisabeth Urfer, Rebecca Trainor, or 
Maureen Flannery, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-4052, (202) 482-0666, or (202) 482-3020, respectively.

The Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act) are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Rounds Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations as codified at 19 CFR Part 353 (April 1, 1996).

Final Determination

    We determine that freshwater crawfish tail meat (crawfish tail 
meat) from the People's Republic of China (PRC) is being, or is likely 
to be, sold in the United States at less than fair value (LTFV), as 
provided in section 735 of the Act.

Case History

    The Crawfish Processors Alliance is the petitioner in this 
investigation. As discussed in the preliminary determination, the 
following PRC exporters submitted full questionnaire responses in a 
timely manner: China Everbright Trading Company (China Everbright), 
Binzhou Prefecture Foodstuffs Import and Export Corp. (Binzhou), 
Yancheng Fengbao Aquatic Food Co., Ltd. (Yancheng Fengbao), Yancheng 
Foreign Trade Corp. (Yancheng FTC), Huaiyin Foreign Trade Corp. 
(Huaiyin FTC), Jiangsu Cereals, Oils & Foodstuffs Import & Export Corp. 
(Jiangsu Cereals), Jiangsu Light Industrial Products Import & Export 
(Group) Yangzhou Co. (Jiangsu Light), Lianyungang Yupeng Aquatic 
Products (Yupeng), Jiangsu Overseas Group Corp. (Jiangsu Overseas), 
Anhui Cereals, Oils and Foodstuffs Import & Export Corp. (Anhui 
Cereals), Qidong Baolu Aquatic Products Co., Ltd. (Qidong Baolu), 
Shandong Foodstuffs Import & Export parte. Corp. (Shandong), Nantong 
Delu Aquatic Food Co., Ltd. (Nantong Delu), Huaiyin Ningtai Fisheries 
Co., Ltd. (Huaiyin Ningtai), and Yancheng Baolong Aquatic Foods Co., 
Ltd. (Yancheng Baolong). Four of these firms, Anhui Cereals, Qidong 
Baolu, Shandong, and Jiangsu Overseas, reported no shipments during the 
period of investigation (POI). The Department selected the following 
six exporters (collectively referred to as ``respondents'') and their 
respective suppliers, to examine in this investigation: (1) China 
Everbright; (2) Binzhou; (3) Huaiyin FTC; (4) Yancheng FTC; (5) Jiangsu 
Light; and (6) Yupeng. See Notice of Preliminary Determination of Sales 
at Less Than Fair Value: Freshwater Crawfish Tail Meat From the 
People's Republic of China 62 FR 14393 (March 26, 1997) (preliminary 
determination).
    Since the preliminary determination in this investigation, the 
following events have occurred:
    On April 3, 1997, we requested additional information regarding the 
size and grading of crawfish in Spain and the United States. We 
received a response from petitioner on April 17, 1997. In April and May 
1997 we verified the respondents' questionnaire responses. On May 13, 
1997, we received a request for a clarification of the scope of this 
investigation from Red Chamber Co. (Red Chamber). Red Chamber requested 
that the Department determine that shell-on crawfish tails produced in 
and exported from China to the United States are not within the scope 
of the investigation. On June 9, 1997, we received a request for a 
suspension agreement from respondents; however, no suspension agreement 
resulted from this request. Petitioner and respondents submitted case 
briefs on June 9, 1997, and rebuttal briefs on June 17, 1997. A public 
hearing was held on June 24, 1997.

Scope of the Investigation

    The product covered by this investigation is freshwater crawfish 
tail meat, in all its forms (whether washed or with fat on, whether 
purged or unpurged), grades, and sizes; whether frozen, fresh, or 
chilled; and regardless of how it is packed, preserved, or prepared. 
Excluded from the scope of the investigation are live crawfish and 
other whole crawfish, whether boiled, frozen, fresh, or chilled. Also 
excluded are saltwater crawfish of any type, and parts thereof. 
Freshwater crawfish tail meat is currently classifiable in the

[[Page 41348]]

Harmonized Tariff Schedule of the United States (HTS) under item 
numbers 0306.19.00.10 and 0306.29.00.00. The HTS subheadings are 
provided for convenience and Customs purposes only. The written 
description of the scope of this investigation is dispositive.

Period of Investigation

    The POI is March 1, 1996 through August 31, 1996.

Separate Rates

    Each of the participating respondent exporters has requested a 
separate, company-specific antidumping rate. For four of these 
respondents, we are able to calculate an antidumping margin that is not 
based on total facts available. These respondents, Binzhou, Huaiyin, 
China Everbright, and Yancheng FTC, are owned by all the people.
    As stated in Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 
2, 1994) (Silicon Carbide), and Final Determination of Sales at Less 
Than Fair Value: Furfuryl Alcohol from the People's Republic of China, 
60 FR 22545 (May 8, 1995) (Furfuryl Alcohol), ownership of a company by 
all the people does not require the application of a single rate. 
Accordingly, all four are eligible for consideration for a separate 
rate.
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test originally set forth in the 
Notice of Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991) (Sparklers), and amplified in Silicon Carbide. Under the separate 
rates criteria, the Department assigns separate rates in nonmarket 
economy (NME) cases only if respondents can demonstrate the absence of 
both de jure and de facto governmental control over export activities.
1. De Jure Control
    The respondents have placed on the administrative record a number 
of documents to demonstrate absence of de jure control. Respondents 
submitted the Civil Law of the People's Republic of China, issued on 
April 12, 1988 (the Civil Law) and the ``Law of the People's Republic 
of China on Industrial Enterprises Owned by the Whole People,'' adopted 
April 13, 1988 (the Industrial Enterprises Law). The Department has 
previously determined that the Civil Law does not confer de jure 
independence on the branches of government-owned and controlled 
enterprises. See Sigma Corp. v. United States, 890 F. Supp. 1077, 1080 
(CIT 1995). However, the Industrial Enterprises Law has been analyzed 
by the Department in past cases and has been found to sufficiently 
establish an absence of de jure control of companies ``owned by the 
whole people,'' such as those participating in this case. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Partial-Extension Steel 
Drawer Slides with Rollers from the People's Republic of China, 60 FR 
29571, 29573 (June 5, 1995) (Steel Drawer Slides); Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Honey from 
the People's Republic of China, 60 FR 14725, 14727 (March 20, 1995); 
and Furfuryl Alcohol. The Industrial Enterprises Law provides that 
enterprises owned by ``the whole people'' shall make their own 
management decisions, be responsible for their own profits and losses, 
choose their own suppliers, and purchase their own goods and materials. 
The Regulations of the People's Republic of China for Controlling the 
Registration of Enterprises as Legal Persons (Legal Persons 
Regulations), issued on July 13, 1988 by the State Administration for 
Industry and Commerce of the PRC, provide that, to qualify as legal 
persons, companies must have the ``ability to bear civil liability 
independently'' and the right to control and manage their businesses. 
These regulations also state that, as an independent legal entity, a 
company is responsible for its own profits and losses. See Notice of 
Final Determination of Sales at Less Than Fair Value: Manganese Metal 
from the People's Republic of China, 60 FR 56046 (November 6, 1995) 
(Manganese Metal). Respondents have also submitted the ``Foreign Trade 
Law of the People's Republic of China,'' enacted May 12, 1994 (the 
Foreign Trade Law), which allows producers to export without using 
trading companies, and further demonstrates the absence of de jure 
control. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Bicycles from the People's Republic of China, 61 FR 19026 (April 
30, 1996) (Bicycles); and Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Melamine 
Institutional Dinnerware Products from the People's Republic of China, 
61 FR 43337 (August 22, 1996) (Melamine). We have also placed on the 
record of this case the ``Law of the People's Republic of China on 
Chinese Contractual Joint Ventures'' (April 13, 1988) which has been 
submitted as evidence of absence of de jure control with respect to 
Chinese-foreign joint venture corporations in other proceedings. See 
our Concurrence Memorandum dated March 18, 1997 (Preliminary 
Concurrence Memorandum); and Notice of Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determinations: 
Brake Drums and Brake Rotors from the People's Republic of China, 61 FR 
53190, 53192 (October 10, 1996) (Brake Drums and Rotors). The articles 
of this law authorize joint venture companies to make their own 
operational and managerial decisions. At verification, we examined a 
MOFTEC-issued lists of goods that are restricted for export, and we 
confirmed that crawfish tail meat does not appear on these lists. We 
also confirmed that the PRC government does not impose quotas or 
licensing restrictions on crawfish tail meat.
    In sum, in prior cases, the Department has analyzed the Chinese 
laws and regulations on the record in this case, and found that they 
establish an absence of de jure control. We have no new information in 
these proceedings which would cause us to reconsider this 
determination.
2. De Facto Control
    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See, e.g., Silicon Carbide and Furfuryl Alcohol.
    Respondents have asserted the following: (1) They establish their 
own export prices; (2) they negotiate contracts without guidance from 
any governmental entities or organizations; (3) they make their own 
personnel decisions; and (4) they retain the proceeds of their export 
sales, use profits according to their business needs, and have the 
authority to obtain loans. In addition, respondents' questionnaire 
responses indicate that company-specific pricing during the POI does 
not suggest coordination

[[Page 41349]]

among exporters. During verification proceedings, Department officials 
reviewed such evidence as sales documents, company correspondence which 
documented price negotiations, company business plans, and bank 
statements. See, e.g., Verification of Sales for Huaiyin Foreign Trade 
Corporation (Huaiyin) in the Antidumping Duty Investigation of 
Freshwater Crawfish Tail Meat from the People's Republic of China 
(PRC), dated June 2, 1997 and Verification of Sales for Binzhou 
Perfecture Foodstuffs Import and Export Corp. (Binzhou) in the 
Antidumping Duty Investigation of Freshwater Crawfish Tail Meat from 
the People's Republic of China (PRC), dated June 2, 1997. We examined 
each company's business license and confirmed the issuing authority 
does not impose any type of restriction on respondents' businesses. We 
also discussed with company officials the processes involved with 
setting prices, electing management, and determining business plans and 
sales targets. We found that each company sets its own prices, 
negotiates contracts, selects its own management, and retain proceeds 
from export sales. This information supports a finding that there is a 
de facto absence of governmental control of export functions. 
Consequently, we are applying separate rates to the respondents for 
which we can calculate an antidumping margin that is not based on total 
facts available.
    In addition, we attempted to conduct a separate rates verification 
for Yancheng Fengbao, which claimed to be an exporter of subject 
merchandise during the POI in its December 13, 1996 separate rates 
response to section A of the Department's questionnaire. This company 
had not been selected for our investigation. At verification we found 
that Yancheng Fengbao had served only as a supplier, not an exporter, 
of crawfish tail meat during the POI. See Verification of Separate 
Rates for Yancheng Fengbao Aquatic Foods Company, Ltd., June 6, 1997, 
and the ``Rate for Respondents Not Selected'' section of this notice. 
Because Yancheng Fengbao is not an exporter, we have not granted 
Yancheng Fengbao a separate rate.

China-Wide Rate

    We are applying a single antidumping deposit rate--the China-wide 
rate--to all exporters in the PRC other than those firms that were 
fully responsive to our requests for information. This determination is 
based on our presumption that the export activities of the companies 
that failed to respond are controlled by the PRC government. See, e.g., 
Sigma Corp. v. the United States, 1997 U.S. App. LEXIS 16506 (Fed. Cir. 
July 7, 1997).
    We did not receive a response from the PRC's Ministry of Foreign 
Trade and Economic Cooperation (MOFTEC) to our letter requesting the 
identification of producers and exporters, and information regarding 
the production and sales of crawfish tail meat exported to the United 
States. Furthermore, we received only limited information with respect 
to the Chinese crawfish industry from the China Chamber of Commerce for 
Import & Export of Foodstuffs, Native Produce, & Animal By-Products 
(the China Chamber). Therefore, we do not know the universe of PRC 
crawfish tail meat exporters. The petition named 61 PRC producers and/
or exporters of crawfish tail meat and we received responses from 
fifteen exporters. Furthermore, we have evidence on the record 
confirming that there are at least some additional exporters. See 
Memorandum to the File: Crawfish Import Statistics, dated March 31, 
1997 (PIERS Data Memorandum). Therefore, we conclude that not all 
exporters of crawfish tail meat responded to our questionnaire.
    Further, consistent with Department practice, we presume government 
control of these and all other PRC companies which have not established 
that they are entitled to separate rates. As discussed above, all PRC 
exporters that have not qualified for a separate rate have been treated 
as a single enterprise subject to government control. Because that 
single enterprise failed to respond to the Department's requests for 
information, that single enterprise is considered to be uncooperative.
    Section 776(a)(2) of the Act provides that:

    If an interested party or any other person--(A) withholds 
information that has been requested by the administering authority; 
(B) fails to provide such information by the deadlines for the 
submission of the information or in the form and manner requested, 
subject to subsections (c)(1) and (e) of section 782; (C) 
significantly impedes a proceeding under this title; or (D) provides 
such information but the information cannot be verified as provided 
in section 782(i), the administering authority * * * shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.

    Accordingly, the Department based the China-wide antidumping rate 
on facts otherwise available. In addition, section 776(b) of the Act 
provides that, if the Department finds that an interested party ``has 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information,'' the Department may draw an inference 
that is adverse to the interests of that party in selecting from among 
the facts otherwise available. Section 776(b) provides that such an 
adverse inference may be based on secondary information, including 
information drawn from the petition.
    The non-responding exporters have failed to cooperate by not acting 
to the best of their ability to comply with the Department's request 
for information. Accordingly, consistent with section 776(b)(1) of the 
Act, we have drawn an adverse inference, and applied as total adverse 
facts available, the margin from the petition, as adjusted. See 
Memorandum from Elisabeth Urfer to Edward Yang, Corroboration of 
Petition, March 18, 1997 (Corroboration Memorandum), on file in Room B-
099 of the Commerce Department.
    Section 776(c) of the Act provides that when the Department relies 
on ``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information with independent sources 
reasonably at the Department's disposal. The Statement of 
Administrative Action (SAA) accompanying the URAA clarifies that the 
petition is ``secondary information.'' See SAA at 870. The SAA also 
clarifies that ``corroborate'' means to determine whether the 
information used has probative value. Id.
    In accordance with this requirement, we corroborated the margins in 
the petition to the extent practicable. See Corroboration Memorandum. 
The petitioner based export prices on actual FOB and CIF price 
quotations from exporters of Chinese crawfish tail meat. We compared 
the starting prices used by petitioner to prices derived from U.S. 
import statistics, and found that the similarity to the import 
statistics corroborated the starting prices in the petition. See, e.g., 
Notice of Final Determination of Sales at Less Than Fair Value: 
Circular Welded Non-Alloy Steel Pipe from South Africa, 61 FR 24271, 
24273 (May 14, 1996); and Brake Drums and Rotors. Petitioner made 
deductions to the export price for foreign inland freight, using the 
average distance between cities where crawfish tail meat is processed 
in the PRC and the ports from which the majority of Chinese crawfish 
tail meat is exported. We could not corroborate the freight rate used 
by petitioner with other information on the record; therefore, we 
adjusted the freight rate used in the petition based on the surrogate 
value used in the margin calculations. We made no other adjustments to 
export price. Petitioner based normal value

[[Page 41350]]

(NV) on surrogate factor values obtained from Spanish import data and 
publicly available information from India. We confirmed the accuracy of 
petitioner's NV data by comparing the values used in the petition with 
values obtained from publicly available information collected in these 
and previous NME investigations. We adjusted petitioner's NV 
calculation using current Spanish import statistics. See Corroboration 
Memorandum.

Rate for Respondents Not Selected

    As stated above, several PRC companies which reported shipments 
during the POI submitted full questionnaire responses in a timely 
manner and claimed eligibility for separate rates, but were not 
selected for analysis in this investigation. It would be inappropriate 
to assign these fully cooperative respondents a rate based on adverse 
facts available. Therefore, we have assigned these cooperative 
respondents a weighted-average dumping margin based on the calculated 
margins of the four selected respondents that fully cooperated, except 
those that were zero or de minimis. See Brake Drums and Rotors. As 
noted in the separate rates section above, our verification of Yancheng 
Fengbao revealed that Yancheng Fengbao was not an exporter of crawfish 
tail meat during the POI. Therefore, for the final determination, we 
are removing Yancheng Fengbao from the group of exporters to whom we 
are assigning a cooperative weighted-average antidumping margin.

Facts Available

    Section 776(a)(2)(D) of the Act provides that if an interested 
party provides information that cannot be verified, the Department 
shall, subject to Section 782(d) of the Act, use the facts otherwise 
available in reaching the applicable determination. For a further 
discussion of the use of facts otherwise available, see the ``China-
Wide Rate'' section above.
    Consistent with sections 776 (a)(2) and (b)(1) of the Act, we have 
determined to assign an antidumping margin based on total adverse facts 
available to two exporters, Jiangsu Light and Yupeng. We have assigned 
total facts available to Jiangsu Light because: (1) Jiangsu Light 
failed to report three of the factories which supplied a significant 
portion of subject merchandise sold during the POI; (2) Jiangsu Light 
failed to report a significant portion of its U.S. sales; (3) Jiangsu 
Light failed to report U.S. sales commissions; and (4) we could not 
verify the factors of production for one of Jiangsu Light's reported 
suppliers, Baoying Coldstorage Factory (Baoying). We have also assigned 
Yupeng, a producer and exporter, a margin based on the total facts 
available, because we could not verify Yupeng's factors of production. 
At verification, we also found several discrepancies, including 
misreported quantities, total prices, terms of sale and shipment dates, 
for a significant portion of Yupeng's reported U.S. sales. As total 
facts available, we have assigned the corroborated margin from the 
petition. See the Final Concurrence Memorandum, dated July 24, 1997 
(Final Concurrence Memorandum).

Fair Value Comparisons

    To determine whether respondents' sales of the subject merchandise 
to the United States were made at less than fair value, we compared 
United States Price (USP) to NV, as described in the ``United States 
Price'' and ``Normal Value'' sections of this notice.

United States Price

    We based USP on export price (EP) in accordance with section 772(a) 
of the Act, because the crawfish tail meat was sold directly to the 
first unaffiliated purchaser in the United States prior to importation, 
and constructed export price methodology was not otherwise indicated by 
the facts in this case. In accordance with section 777A(d)(1)(A)(i) of 
the Act, we compared POI-wide weighted average NVs to POI-wide 
weighted-average EPs.
    We corrected the respondents' data for errors and minor omissions 
submitted to the Department or found at verification, as follows:
1. China Everbright
    We calculated EP in accordance with our preliminary calculations, 
except that, based on findings at verification, we: (1) Corrected 
freight distances and removed inland insurance expenses; (2) corrected 
the terms of sale for all sales; and (3) corrected the unit price, ship 
date, and supplier for certain U.S. sales where these items were 
incorrectly reported.
2. Binzhou
    We calculated EP in accordance with our preliminary calculations 
except that, based on findings at verification, we: (1) Excluded two 
U.S. sales which we found had been made before the POI; (2) corrected 
freight distances and removed inland insurance expenses; (3) changed 
ship dates and sale dates, and adjusted quantities, for certain sales; 
and (4) substituted the NVs for the factories that actually supplied 
the merchandise sold, based upon our determination that certain sales 
had been incorrectly reported as being made by particular factories.
3. Huaiyin
    We calculated EP in accordance with our preliminary calculations 
except that, based on findings at verification, we: (1) Corrected 
freight distances, removed inland freight insurance and added expenses 
incurred for marine insurance and brokerage expenses; (2) changed the 
terms of sale for all reported sales; and (3) changed ship dates and 
adjusted quantities for certain sales.
4. Yancheng Foreign Trade
    We calculated EP in accordance with our preliminary calculations 
except that we corrected inland freight distances and the terms of sale 
for certain sales where these items were incorrectly reported.
5. Yupeng
    As noted above, we used total facts available for Yupeng.
6. Jiangsu Light
    As noted above, we used total facts available for Jiangsu Light.

Normal Value

Factors of Production
    We calculated NV based on factors of production cited in the 
preliminary determination, making adjustments for specific verification 
findings. To calculate NV, we multiplied the verified factors of 
production usage rates by the appropriate surrogate values for the 
various inputs. We have used the same surrogate sources as in the 
preliminary determination and have used more recent publications where 
available. We are applying facts available to our calculation of NV for 
both Baoying and Lianyungang Haifu Aquatic Farming Corporation (Haifu), 
producers for Jiangsu Light and China Everbright, respectively. As 
facts available, we are using the corroborated NV from the petition. We 
are using facts available for Baoying because we were unable to verify 
reported input amounts for several significant inputs. We are using 
facts available for Haifu because, at verification: (1) We could not 
reconcile Haifu's sales and cost data, (2) Haifu could not demonstrate 
how reported labor factors were calculated, and (3) we could not verify 
reported water usage amounts. See Final Analysis Memorandum from 
Elisabeth Urfer to the file, dated July 24, 1997 (Final Analysis 
Memorandum).

[[Page 41351]]

    At verification, we found that several factories did not use all of 
the reported packing materials, and reported incorrect per-unit packing 
material usage amounts. We also found discrepancies between reported 
and actual distances between each factory and its supplier of various 
inputs. In our calculation of NV for the final determination, we are 
using the actual per-unit amounts, the actual distances and the actual 
packing materials used, as found at verification. See the Final 
Analysis Memorandum.
    Based on our findings at verification, we have made additional 
company specific adjustments as follows:
    1. Qidong Baolu: We calculated NV in accordance with our 
preliminary calculations except for the following changes based on 
findings at verification: (1) We corrected reported per-unit amounts 
for tail meat, by-product, electricity, unskilled labor, skilled labor, 
indirect labor, unskilled packing labor, and skilled packing labor; (2) 
because we were unable to verify water usage rates, we used, as facts 
available, the highest of ranged public water amounts submitted in the 
public versions of the December 23, 1996 section D submissions for 
other factories; (3) we have removed labels from the calculation since 
these are not used by Qidong Baolu, and have added a factor for plastic 
bands which Qidong Baolu did not originally report; and (4) we 
corrected the distances between Qidong Baolu and its suppliers of 
packing materials, and the usage amounts for packing materials.
    2. Haifu: As noted above, we are basing our calculation of NV for 
Haifu entirely on the facts available.
    3. Jiangsu Gangyu Shakou Freezer Factory (Shakou): We calculated NV 
in accordance with our preliminary calculations except that, based on 
findings at verification, we: (1) Corrected reported per-unit amounts 
for tail meat, by-product, coal, water, electricity, indirect labor, 
skilled labor, unskilled labor, skilled packing labor, and unskilled 
packing labor; (2) removed the paper and labels which Shakou does not 
use to package crawfish tail meat; and (3) replaced reported distances 
for suppliers of packing materials and per-unit amounts of packing 
materials with actual distances and amounts, respectively.
    4. Jiangsu Gangyu Pengchen Aquatic Company (Pengchen): We 
calculated NV in accordance with our preliminary calculations except 
that, based on findings at verification, we: (1) Corrected per-unit 
usage amounts for by-product, coal, and electricity; (2) used, as facts 
available, the highest total ranged public water usage figure submitted 
in the December 23, 1996 section D submissions for other factories, 
since we were unable to verify reported water amounts; (3) used, as 
facts available, the higher of the corroborated petition rate for labor 
or the highest total ranged public labor usage figure submitted in the 
December 23, 1996 submissions for other factories, since we were unable 
to verify reported labor usage rates; (4) removed the packing materials 
of paper and labels which Pengchen does not use to package crawfish 
tail meat; and 5) replaced reported distances for suppliers of packing 
materials and per-unit amounts of packing materials with actual 
distances and amounts, respectively.
    5. * * * \1\: We calculated NV in accordance with our preliminary 
calculations except that, based on findings at verification, we: (1) 
Corrected per-unit amounts for by-product, electricity, unskilled 
labor, unskilled packing labor and water; (2) removed the labels which 
* * * does not use to package crawfish tail meat; and (3) replaced 
reported distances for suppliers of packing materials and per-unit 
amounts of packing materials with actual distances and amounts, 
respectively.
---------------------------------------------------------------------------

    \1\ The name of this factory is business proprietary 
information.
---------------------------------------------------------------------------

    6. Yupeng: As noted above, we are applying total facts available to 
Yupeng.
    7. Xinghua Meat Processing Factory (Xinghua): Since we are using 
the total facts available for Jiangsu Light, the exporter which Xinghua 
supplied during the POI, we are not using Xinghua's factors of 
production data for the final determination.
    8. Yancheng Fengbao: We calculated NV in accordance with our 
preliminary calculations except that, based on findings at 
verification, we: (1) Included expenses which Yancheng Fengbao incurs 
for barge freight for the transportation of coal, and valued this 
freight expense using an August 1993 U.S. Embassy Cable which was used 
in Steel Drawer Slides; (2) removed labels from the calculation since 
we found that Fengbao does not use this input to package crawfish tail 
meat; (3) replaced reported distances for suppliers of packing 
materials and per-unit amounts of packing materials with actual 
distances and amounts, respectively; (4) used, as facts available, the 
highest total ranged public water usage figure submitted in the 
December 23, 1996 section D submissions for other factories, since we 
were unable to verify reported water amounts; and (5) used, as facts 
available, the higher of the corroborated petition rate for labor or 
the highest total ranged public labor usage figure submitted in the 
December 23, 1996 submissions for other factories, since we were unable 
to verify reported labor usage rates.
    9. Baoying: As noted above, we are basing our calculation of NV for 
Baoying entirely on the facts available.
    10. Jiangsu Funing Aquatic Corporation: We calculated NV in 
accordance with our preliminary calculations except that, based on 
findings at verification, we: (1) Corrected reported per-unit amounts 
for tail meat, by-product, water, electricity, indirect labor, skilled 
labor, unskilled labor, skilled packing labor, and unskilled packing; 
and (2) replaced reported distances for suppliers with actual 
distances.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by 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 respondents.

Additional Changes for the Final Determination

    For the final determination, we have recalculated labor using data 
from the 1996 Yearbook of Labor Statistics (YLS), which provides more 
contemporaneous labor rates for India than the 1995 edition used for 
the preliminary determination. See the Final Analysis Memorandum.

Summary of Comments Received

    Comment 1: Market-Oriented Industry: Respondents argue that they 
have responded to every inquiry and have submitted all information in 
their power to submit, all of which supports the conclusion that the 
crawfish tail meat industry in the PRC is a market-oriented industry 
(MOI). Respondents further argue that to require them to develop 
information about every other potential producer or exporter, including 
all the companies which have gone out of business, is overly burdensome 
and fundamentally unfair. They assert that there is no readily 
available source of the type of information the Department requires and 
that no individual respondent has the ability to provide information 
about other unrelated companies. Respondents contend that, if the 
Department truly intends to recognize and encourage the changes in the 
PRC by which some industries are market

[[Page 41352]]

oriented, the Department ought not demand proof which is impossible to 
obtain.
    Respondents argue that the MOI analysis in this case is relatively 
simple, as the components of the crawfish industry are few. Respondents 
maintain that Congress expects the Department to use actual data from 
the NME when doing so provides the most fair and accurate calculation. 
Respondents assert that the costs of the two most significant input 
factors in the processing of crawfish tail meat, the raw material (live 
crawfish), and labor, are determined by market forces. As support, 
respondents cite data on the record which they claim establish that 
prices paid to fisherman for live crawfish in the PRC vary from company 
to company, and fluctuate based on market supply and demand. 
Furthermore, respondents claim the crawfish tail meat prices charged by 
exporters are negotiated between the exporters and their customers, and 
are in no way controlled by the PRC government. Respondents also 
maintain that information on the record establishes that the PRC 
government has no control over wages paid to workers in crawfish 
processing factories and export companies. Respondents further contend 
that the cost of utilities such as coal and electricity are not 
controlled by the government and that data on the record reveals that 
prices paid for these utilities are subject to market forces. 
Respondents maintain that regulation of utilities in the PRC is not a 
valid reason for denying MOI treatment because U.S. utilities, as well 
as the utilities industries in many other market economy countries, are 
regulated. In support of the above arguments, respondents cite to 
applicable PRC laws which have been submitted for the record in this 
case.
    Respondents claim that, although land in the PRC is collectively 
owned or owned by ``all the people,'' companies still contract for the 
use of land. Respondents argue that government ownership of land cannot 
suffice to conclude that the crawfish industry is not market oriented. 
Respondents cite to exhibit AE of their February 7, 1997 submission, 
which provides evidence that in Hong Kong, a country considered by the 
Department to be a market economy, ``All land * * * is held by the 
government, which sells or grants leasehold interests.'' Respondents 
assert that a similar situation exists in Louisiana where wild crawfish 
are harvested by individual fisherman from a common property: the 
Atchafalaya Basin. Respondents note that, as in the PRC, individual 
fisherman in Louisiana harvest crawfish from a common resource without 
paying for the privilege. In summary, respondents argue that the 
crawfish industry in the PRC is a newly established, niche industry 
which operates freely, according to market forces alone, and is 
essentially the same as the industry in the United States. Respondents 
maintain that there is no evidence that any part of the crawfish 
industry in the PRC is controlled by the government, and that therefore 
the crawfish industry is a prime candidate for MOI treatment.
    Petitioner argues that the Chinese crawfish tail meat industry 
should not be treated as an MOI because the conditions to allow normal 
value to be based on NME country prices and costs as stipulated in 
section 773(c)(1)(B) of the Act have not been met in this case.
    Petitioner maintains that, given the large number of companies that 
did not respond to the Department's questionnaire, and the failure of 
the Chinese government to respond to the Department's request for 
information, the Department cannot determine the universe of Chinese 
crawfish producers, and therefore cannot make a determination with 
respect to industry conditions required for the existence of an MOI. 
Petitioner contends that both the respondents and the PRC government 
had ample opportunity to provide information concerning the Chinese 
crawfish industry. Petitioner states that there are other cases in 
which the Department was similarly unable to determine whether the 
industry in question was market-oriented because it did not receive a 
response from the Chinese government. Petitioner argues that the 
Department should not change its long-established practice of requiring 
information about all producers and exporters in order to accommodate 
respondents in this case.
    Petitioner asserts that the one-page letter from the China Chamber 
of Commerce dated March 6, 1997 does not provide enough detail or 
support for the statements made in the letter. Petitioner claims that 
the statement contained in this letter, that ``the total export volume 
of the 15 respondents was close to the total import volume to the U.S., 
and therefore, they reflected the general situation of this industry in 
our country in all aspects,'' is contradicted by other evidence on the 
record. Petitioner maintains that the discrepancies which the 
Department found between the volume and value of crawfish tail meat 
exported during the POI as reported by the respondents, and the volume 
and value contained in the U.S. import statistics also indicate the 
lack of complete information regarding the universe of PRC producers 
and exporters.
    Even if the universe of producers and exporters could be 
determined, petitioner asserts that MOI conditions are still not met 
because labor in China is not market determined, and because 
respondents failed to demonstrate that certain utilities, including 
coal and electricity, are purchased at market-determined prices. 
Petitioner argues that coal and electricity are significant inputs used 
in the production of crawfish tail meat, and that in its past practice, 
the Department has pointed out the problem with finding an MOI when 
significant material inputs are not based on market-determined prices. 
Petitioner cites a World Bank discussion paper entitled ``The Sectoral 
Foundations of China's Development,'' which the Department cited in 
Silicon Carbide, and which states:

that much of the coal supply of the PRC is subject to central 
regulation of both price and allocation. Coal not subject to central 
regulation is often subject to regulation by provincial price 
boards. The PRC's coal market is also distorted by substantial ``in-
plan'' production.

Petitioner further contends that labor in China is not market-
determined because workers in China are not free to move from one 
province to another, but are required to obtain work visas. Petitioner 
claims that these restrictions on workers' movements distort the labor 
rates in the PRC. In summary, petitioner supports the finding of the 
Department in the preliminary determination that the Chinese crawfish 
industry is not an MOI, and argues that this decision should be 
affirmed in the final determination.
    Respondents counter that petitioner's assertion that workers are 
not free to move from one province to another in the PRC is untrue, and 
is not supported by any evidence on the record. Respondents also refute 
petitioner's claim that the number of exporters named in the petition 
who responded to the Department's questionnaire constitutes only a 
small percentage of the entire PRC crawfish industry. Respondents argue 
the 15 companies who responded to the Department's questionnaires 
account for approximately 60-80% of the total product involved in this 
investigation. Respondents assert that the Department should not 
penalize cooperating respondents simply because, allegedly, some 
smaller exporters failed to respond. Respondents maintain that all the 
evidence before the Department supports the conclusion that the 
industry is entirely market-driven.

[[Page 41353]]

    Department's Position: We continue to determine that the crawfish 
tail meat industry in the PRC does not constitute an MOI. In past 
cases, the Department has identified three conditions which must be met 
in order for an MOI to exist:

    (1) For the merchandise under review, there must be virtually no 
government involvement in setting prices or amounts to be produced;
    (2) The industry producing the merchandise under review should 
be characterized by private or collective ownership; and
    (3) Market-determined prices must be paid for all significant 
inputs, whether material or non-material (e.g., labor and overhead), 
and for all but an insignificant portion of all the inputs 
accounting for the total value of the merchandise under review.

    Preliminary Determination, 62 FR at 14394. See also Amendment to 
Final Determination of Sales at Less than Fair Value and Amendment to 
Antidumping Duty Order: Chrome-plated Lug Nuts from the People's 
Republic of China, 57 FR 15054 (April 24, 1992) (Lug Nuts Amended 
Final); Final Determination of Sales at Less than Fair Value: 
Sulfanilic Acid from the People's Republic of China, 57 FR 29705 (July 
6, 1992); and Porcelain-on-Steel Cooking Ware from the People's 
Republic of China; Preliminary Results of Antidumping Duty 
Administrative Review, 62 FR 4250, 4251 (January 29, 1997). ``The 
Department's analysis with respect to such claims centers around a 
government's role in economic activity.'' Pure and Alloy Magnesium from 
the Russian Federation; Notice of Preliminary Determination of Sales at 
Less Than Fair Value, 59 FR 55427, 55430 (November 7, 1994). Consistent 
with past practice, we require information on the entire industry, or 
virtually the entire industry, in order to make an affirmative 
determination that an industry is market oriented. See, e.g., Chrome-
Plated Lug Nuts from the People's Republic of China; Final Results of 
Administrative Review, 61 FR 58514, 58516 (November 15, 1996). We 
require this information early in the proceeding to allow time to 
obtain home market prices and/or cost data from respondents, should we 
make an affirmative MOI determination. As stated in the preliminary 
determination, we received questionnaire responses from only 25 percent 
of the 61 exporters named in the petition, and our analysis of Port 
Import/Export Reporting Services (PIERS) import data revealed that 
several Chinese exporters who did not respond to our questionnaire 
exported the subject merchandise into the U.S. during the POI.
    Although we received a letter from the China Chamber on March 6, 
1997, this letter did not adequately respond to the Department's 
original request for information, and did not provide the necessary 
information regarding the universe of PRC crawfish producers and 
exporters. Moreover, the letter was submitted too late in the 
proceeding for us to obtain the additional information necessary to 
fully analyze the respondents' MOI request. The China Chamber did not 
submit any other evidence on this issue. See Memorandum to the File, 
``Letter Submitted by Respondent's in the Investigation of Freshwater 
Crawfish Tail Meat From the People's Republic of China,'' dated March 
18, 1997.
    We note that Mr. Zhang Zhibiao of the China Chamber stated at the 
public hearing in this case, held on June 24, 1997, that the China 
Chamber had collected detailed information regarding the crawfish 
industry. However, the China Chamber failed to provide the Department 
with the results of this research, nor did it inform us that it had 
collected this information until the time of the public hearing. 
Therefore, we were not able to consider this information in our 
analysis of whether the crawfish tail meat industry is an MOI.
    In sum, there is insufficient data on the record to support an MOI 
finding.
    Comment 2: Surrogate Value for Live Crawfish: Respondents argue 
that Spanish import statistics that the Department used in the 
preliminary determination should not be used as a surrogate value for 
the raw material input of live crawfish, because there is no evidence 
that the crawfish imported into Spain from Portugal are of the same 
type, grade, or size as that which is customarily used for tail meat. 
Respondents correctly note that Spain does not have a crawfish tail 
meat production industry. According to respondents, it is also a fact 
``that most, if not all, tail meat comes from small crawfish.'' 
Respondents' Rebuttal Brief at 3. Therefore, respondents conclude, 
Spain would only import crawfish suitable for sale as whole crawfish, 
meaning the crawfish imported from Portugal ``most likely * * * contain 
substantially more large and medium crawfish, and possibly none of the 
small, peeler variety.'' Id. at 4. On this basis, respondents argue 
that the crawfish imported into Spain cannot serve as a surrogate value 
for the crawfish input processed into tail meat in the PRC.
    In addition, respondents contend that, contrary to petitioner's 
statements, information on the record indicates that Louisiana crawfish 
are graded according to size. This record information, they claim, 
establishes that prices vary according to size, with the largest sizes 
obtaining the highest price. Respondents cite to the Memorandum from 
the Department's crawfish team to Joseph A. Spetrini, dated April 4, 
1997, ``Meeting with Domestic Crawfish Processors and Farmers'' 
(Louisiana Memorandum), which states that Louisiana crawfish larger 
than 15 pieces per pound are classified as ``jumbo'' crawfish. 
Respondents maintain that this memorandum contradicts all other 
evidence on the record, including the findings of the International 
Trade Commission (ITC). Respondents argue that the timing of the 
meeting--long after the POI and after the preliminary determination--
indicates that Louisiana processors had a strong incentive to show that 
all sizes of crawfish are used for tail meat. However, respondents 
claim that the use of larger sizes of crawfish in tail meat would run 
contrary to the economic interests of processors. In support of their 
argument, respondents also cite to the ITC finding that only 15 percent 
of Louisiana crawfish is used for tail meat. Respondents further 
maintain that all the information on the record in this investigation 
confirms that, at least to some extent, all processors grade crawfish, 
if no more than by removing the largest crawfish to be sold whole 
boiled, at premium prices.
    Alternatively, respondents argue that, if the Department continues 
to use an average price to compute the cost of live crawfish, the 
Department must adjust that price by removing the prices of large 
crawfish to derive a more accurate estimate of the cost of the raw 
material which is actually used for tail meat. Respondents argue that 
large crawfish, in both the PRC and the United States, are 
systematically removed, or graded out, and sold whole. Respondents 
imply that, for this reason, they pay less for the smaller crawfish 
they use to produce tail meat. Respondents assert that the use of an 
unadjusted average price to value the live crawfish input, as was done 
in the preliminary determination, is methodologically incorrect because 
it includes the prices of the most expensive, larger grades of 
crawfish, and overestimates the fair cost of the raw material used for 
tail meat in China. Respondents cite information on the record 
indicating that smaller peeler grade crawfish is less expensive 
throughout the world, including POI prices for three different sizes of 
crawfish in Spain.
    Respondents assert that, in appropriate cases, the Department

[[Page 41354]]

routinely adjusts raw material inputs for qualitative differences. 
Respondents cite several determinations, including Manganese Metal, in 
which the Department was unable to develop surrogate value information 
for the actual chemical used by NME respondents, and therefore used a 
substitute chemical, with necessary adjustments made to the price of 
the substitute to reflect appropriate concentration levels. See also 
Final Determination of Sales at Less Than Fair Value: Certain Helical 
Spring Lock Washers from the People's Republic of China, 58 FR 48833, 
48836 (September 20, 1993); Notice of Final Determination of Sales at 
Less Than Fair Value: Pure Magnesium from the Ukraine, 60 FR 16432, 
16433 (March 30, 1995); and Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, From the People's Republic of China; Final 
Results of Antidumping Duty Administrative Review and Revocation in 
Part of Antidumping Duty Order, 62 FR 6189 (February 11, 1997). The 
purpose of the Department's surrogate value methodology, according to 
respondents, is to derive a fair and accurate value of the subject 
merchandise. Respondents contend that, to achieve these statutory 
objectives in this case, the Department must make adjustments to the 
price of crawfish imported into Spain.
    Petitioner argues that publicly available published information 
(PAPI) used to value factors of production should be readily available 
to both parties in the investigation, and adjustments made to PAPI as 
suggested by respondents, would introduce uncertainty and unfairness 
into the NME methodology. Petitioner contends that adjustments to the 
raw material value of live crawfish are unwarranted because respondents 
have not provided evidence that only small and peeler-grade crawfish 
are used to produce tail meat in China.
    Petitioner argues that the Department correctly valued the input of 
live crawfish based on the average Spanish import price for fresh (not 
frozen) crawfish imported from Portugal during the period of January 
through November 1996. Petitioner also affirms the Department's choice 
of publicly available contemporaneous import information published by 
the Spanish Ministry of Customs in Madrid. Petitioner argues that Spain 
is a significant producer of whole crawfish, and that whole crawfish is 
a comparable product within the meaning of section 773(c)(4)(B) of the 
Act. In support of the Department's decision that Spain is a 
significant producer of comparable merchandise, petitioner cites to the 
Concurrence Memorandum which states that Spain exported 704 tons of 
fresh and frozen crawfish during 1996. Petitioner adds that Spain is 
also at a level of economic development more comparable to China than 
other countries which were significant producers of a comparable 
product.
    Petitioner claims that the record does not support respondents' 
contention that only small, peeler-grade crawfish are used by the 
Chinese crawfish tail meat processors. Petitioner argues that 
information contained in its April 18, 1997 submission reveals that 
Chinese processors use all sizes of crawfish, including large and jumbo 
sizes, for tail meat. Petitioner also cites to this submission as 
evidence on the record that live crawfish imported from Portugal are 
ungraded, random-count crawfish which are graded by machine in the 
Spanish processing plants. Citing to the Verification Report of Qidong 
Baolu Aquatic Products, Co., Ltd., dated June 3, 1997 (Qidong 
Verification Report), at p. 4., petitioner asserts that the statements 
made by company officials during verification provides further evidence 
that all sizes of live crawfish are processed into tail meat in the 
PRC. Petitioner notes that, as evidenced by findings from the 
Department's trip to Louisiana, field grading is rarely used in the 
U.S. crawfish industry. (See the Louisiana Memorandum.)
    Department's Position: We continue to determine that the average 
Spanish import price for fresh (not frozen) crawfish imported from 
Portugal is the most appropriate surrogate market economy basis for 
valuing whole crawfish, the primary input for crawfish tail meat. As a 
threshold matter, Spain exported over 704 tons of crawfish, and 
imported over 354 tons of crawfish during 1996, amounts which we have 
determined are significant within the meaning of section 773(c)(4)(B) 
of the Act. Moreover, although Spain is not at a level of economic 
development comparable to that of the PRC, the per capita gross 
national product (GNP) of Spain is more similar to that of China than 
is the per capita GNP of the United States, the only other known 
significant producer of comparable merchandise.
    Furthermore, we disagree with respondents' argument that Spain uses 
only large crawfish. We find that Spanish processors import and use all 
sizes of crawfish. The information provided by the United States 
Foreign Commercial Service (USFCS) office in Barcelona, Spain supports 
our conclusion. The USFCS reported that the range of sizes used by a 
processor in Spain fall mostly within the medium size category and 
include some large and some small sizes as well. See the Preliminary 
Concurrence Memorandum. The Department relied upon this evidence for 
the preliminary determination. Moreover, because of the critical nature 
of this issue in this case, after the preliminary determination we 
invited interested parties to submit any available information 
regarding the crawfish industry and grading system (if any) in both 
Spain and the United States. See Department Letter to the Parties, 
April 3, 1997. Respondents failed to offer any actual evidence 
contradicting the determination that all sizes of crawfish are imported 
and processed in Spain. By contrast, petitioner submitted evidence 
supporting the Department's conclusion. See Letter to William M. Daley 
from the Crawfish Processors Alliance dated April 17, 1997.
    On this basis, although Spain does not process crawfish into tail 
meat, we have determined that the crawfish imported from Portugal into 
Spain for processing is comparable to the crawfish input used by PRC 
processors in the production of tail meat. Further, respondents do not 
contest that the processing of seafood in India is comparable to the 
processing of crawfish into tail meat in the PRC. We consider whole 
crawfish to be a ``comparable product'' for the purpose of selecting a 
raw material surrogate, just as Indian processed seafood is a 
comparable product for purposes of valuing factory overhead, SG&A and 
profit in accordance with Section 773(c)(4) of the Act. Therefore, we 
have reasonably complied with the requirements of section 773(c)(4)(B) 
that, ``to the extent possible,'' we rely upon factor information from 
one or more market economy countries that are ``significant producers 
of comparable merchandise.''
    Furthermore, the record does not support respondents' contention 
that, in the PRC, large crawfish are systematically removed, or graded 
out, and sold whole. At verification, we found that Chinese processors 
purchase mixed sizes of harvested crawfish by the kilogram, rather than 
on the basis of particular sizes; there is no evidence on the record 
that PRC crawfish harvesters routinely grade crawfish by size in the 
field. We also found that certain Chinese producers do not grade out 
large crawfish even after purchase; thus, at least some Chinese 
producers process all sizes of live crawfish into tail meat. See, e.g., 
the Qidong Verification Report. Furthermore, there is no evidence in 
the record indicating that

[[Page 41355]]

any Chinese processor pays higher prices for mixed size crawfish based 
upon the processor's intent to grade out the larger crawfish later for 
sale at a premium price. Further, as demonstrated above, the Spanish 
use all sizes of crawfish without grading out the large variety. 
Therefore, we reject respondents' argument that we should adjust the 
average import statistics price for mixed crawfish imported into Spain 
from Portugal by somehow removing the allegedly more expensive prices 
corresponding to large crawfish.
    Similarly, the Department's determinations cited by respondents are 
not applicable. In each of those cases, the Department found that a 
certain chemical compound or other product, which was used as a factor 
of production in the NME country, was measurably different from the 
most comparable input in the surrogate country. Therefore, the 
Department adjusted the surrogate product price to reflect the 
appropriate chemical concentration levels. See Pure Magnesium from the 
Ukraine, 60 FR at 16433; Helical Spring Lock Washers from the PRC, 58 
FR at 48833. Because the material input product in the present case, 
crawfish, is the same in Spain and the PRC, there is no reason to 
adjust the Spanish surrogate prices. As demonstrated above, producers 
in both countries buy mixed crawfish, for which they pay a single 
price, regardless of whether they intend to grade the crawfish and 
regardless of the intended use.
    Comment 3: Adjustment for Labor Costs: Respondents further argue 
that the Department should adjust the surrogate raw material cost to 
reflect the large differential in labor rates between the United States 
or Spain and the PRC, using the differences between the U.S. or Spanish 
labor rates and the Indian labor rate, depending upon whether Spain or 
the United States is used to value harvested crawfish. Respondents 
state that information on the record establishes that the crawfish tail 
meat industry is labor intensive, and that it is recognized that the 
PRC has a competitive advantage in this industry because of its low 
labor rates. Moreover, respondents assert that the most significant 
cost component of the raw material, live crawfish, is the remuneration 
to the fishermen or laborers who harvest the crawfish. Respondents 
claim that in the PRC, the costs for harvesting live crawfish are 
substantially lower, not only because of low labor costs but also 
because there is no investment component for harvesting crawfish; all 
crawfish are wild and harvested from common resources such as lakes. 
Respondents maintain that, therefore, whether the Department uses U.S. 
or Spanish import prices to value the raw material input of live 
crawfish, the surrogate price must be adjusted for the differentials in 
labor rates and costs in order to derive a fair and accurate estimate 
of the true cost of the raw material used in the PRC.
    Petitioner argues that the Department should not adjust the raw 
material input to reflect differential labor costs of harvesting live 
crawfish. Petitioner asserts that respondents' suggestion of using NME 
labor rates to adjust market-economy labor rates is contrary to the 
purpose of the NME factors of production methodology. Petitioner claims 
that the use of presumptively unreliable NME data would taint reliable 
market economy data.
    Department's Position: We disagree with respondents. We have 
determined that it is not appropriate to adjust the surrogate value to 
account for alleged differences between the labor cost in the country 
in which the input is valued and the labor costs in another country 
which is more economically comparable to the NME country. The fact that 
Spain is a country not comparable to India or the PRC does not 
necessarily mean that the import price would be different between the 
two countries.
    In this case, we relied upon the import price for Spain, a country 
which is not economically comparable to the PRC. Respondents do not 
contest the Department's authority under section 773(c)(4) of the Act 
to rely upon surrogate value data from Spain in the absence of data 
from an economically comparable country. Contrary to respondents' 
assertions, however, we do not find that an adjustment based on wage 
rate differentials is warranted. This type of adjustment is not 
required by the statute, nor do we consider such an adjustment to be 
feasible.
    Section 773(c)(1) of the Act requires the Department to value the 
factors of production ``based on the best available information . . . 
in a market economy country or countries considered to be appropriate 
by the [Department].'' Section 773(c)(4) adds that, ``to the extent 
possible,'' the factors should be valued in an economically comparable 
country. ``The statute does not specify what constitutes best available 
information. Therefore, these decisions are within [the Department's] 
discretion.'' Shieldalloy, 947 F. Supp. at 532.
    First, we disagree that the low wage rates in the PRC are relevant. 
It is precisely because prices and costs (including wages) in the PRC 
are not market determined that we are using the NME methodology, which 
relies on surrogate values.
    Second, it would be purely speculative to base such an adjustment 
on a difference in wage rates between Spain and a comparable surrogate 
country. It is far from certain what effect, if any, differences in 
wage rates would have on the total cost or the price of the product in 
a comparable surrogate country. Moreover, for the Department to attempt 
such an adjustment, whether to account for the alleged impact of a 
differential in labor rates, or any other costs underlying the price of 
the imported product would require a complex economic analysis. There 
are a number of factors, including production and regional demand and 
supply functions as well as the availability of input substitutions, 
which may impact substantially upon the ultimate market price for a 
particular imported product. The impact of these factors would be 
difficult if not impossible to determine with any certainty. For 
instance, in the instant case, there are a number of factors which 
would be extremely difficult to know, including the relative 
productivity of the labor used in harvesting crawfish and capital 
investment.
    Furthermore, the determinations cited by respondents are not 
applicable. These determinations reflect the Department's practice of 
adjusting for physical differences between the input produced in the 
NME country and the input on which the surrogate value is based. All of 
the determinations cited by respondents, including the CIT's decision 
in Shieldalloy Metallurgical Corp. v. United States, 947 F. Supp. 525 
(CIT 1996), involved adjustments of this nature. In contrast, the 
adjustment sought by respondents in this case involves an external 
cost, labor, incurred to produce or obtain the identical input.
    Comment 4: Application of the Facts Available: Pursuant to section 
776(a) and (b) of the Act, petitioner argues that the Department should 
use total facts otherwise available or partial facts otherwise 
available, as appropriate, to calculate the margins for those Chinese 
companies that failed to cooperate by not acting to the best of their 
ability to comply with the Department's requests for information. 
Petitioner contends that the Department should apply the China-wide 
rate to those companies that responded to the questionnaire but 
knowingly or recklessly provided false, incorrect, or incomplete 
information. Petitioner specifically advocates the application of the 
facts otherwise available for the companies whose reported data was 
either unverifiable,

[[Page 41356]]

misreported or incomplete. Petitioner requests the application of total 
facts available because of the following findings at verification: (1) 
Respondents acknowledged that the cost of certain packing materials for 
one factory was submitted for all factories. (2) For several 
respondents, counsel acknowledged that reported inland freight 
distances were based on ``guesses.'' (3) A consultant for respondents 
acknowledged that, for Fengbao, he used estimated total input and 
output figures used to calculate factor usage rates for raw materials, 
by-products, and labor input. (4) A consultant for respondents 
attributed inconsistencies between reported and verified figures at 
Baoying to illegible faxes. These inconsistencies were found in almost 
every category of factors of production data, and petitioner notes that 
the consultant tried to decipher the illegible documentation without 
attempting to verify the accuracy of the information. (5) Jiangsu Light 
failed to report a certain percentage of its sales during the POI. (6) 
Binzhou reported high-priced sales made prior to the POI as sales made 
during the POI, and these sales comprised a significant percentage of 
the value of Binzhou's total sales reported for the POI. (7) Shakou 
failed to report a portion of direct and indirect labor hours. (8) 
Baoying failed to report a portion of temporary labor hours. (9) 
Huaiyin misrepresented the terms of sale for all reported sales, and 
thereby failed to report certain movement expenses.
    Petitioner contends that the Department should apply total facts 
available to certain respondents because, as petitioner claims is 
indicated by the above, they knowingly or recklessly submitted false, 
incorrect, or incomplete information. Petitioner argues that such 
conduct undermines the investigation and therefore warrants punishment 
through the application of the China-wide rate of 201.63 percent.
    For discrepancies that do not involve an element of bad faith, such 
as the submission of correct data that nonetheless could not be 
verified due to inadequate bookkeeping records, petitioner advocates 
the application of partial facts otherwise available. Petitioner 
requests that the Department use the highest adverse result from either 
the petition or the respondents' submission as partial facts otherwise 
available. Petitioner cites the Notice of Final Determination of Sales 
at Less Than Fair Value: Persulfates from the People's Republic of 
China, 62 FR 27222, 27225 (May 19, 1997) (Persulfates), in which the 
Department applied the ``greatest weight'' used for packing material to 
a respondent who failed to cooperate by not acting to the best of its 
ability to provide such information.
    Respondents argue that the Department should not penalize 
cooperating companies for mistakes made in good faith. Respondents 
claim there were several circumstances in this case which contributed 
to difficulties in providing completely error-free responses within the 
deadlines imposed by the Department. Respondents note that the 
Department requested responses during the off-season when PRC crawfish 
processing plants were closed and when most of the individual 
representatives with detailed information were unavailable. 
Furthermore, respondents assert that the crawfish industry in the PRC 
is a new industry and is characterized by unsophisticated ``mom and 
pop'' operations, which, in many cases, lack sophisticated accounting 
systems or records. Respondents also point to the fact that some of the 
discrepancies found at verification revealed that the correct 
information was more favorable to respondents than the incorrectly 
reported estimates. For example, some companies significantly 
overestimated the distances between suppliers and factories. Therefore, 
respondents assert that mistakes such as these were not intentional 
means of trying to understate costs. In view of the foregoing, 
respondents attest that they acted in complete good faith and provided 
the best information possible under the circumstances; thus, punishment 
for mistakes made would be unreasonable and unfair.
    Department's Position: We agree with the petitioner's argument with 
respect to our general practice of using the facts otherwise available, 
and our application of total facts available for certain companies. 
However, we disagree with some of petitioner's recommendations. Section 
776(a)(2)(D) of the Act provides that if an interested party provides 
information that cannot be verified, the Department shall, subject to 
section 782(d), use the facts otherwise available in reaching the 
applicable determination. In addition, as petitioner noted, section 
776(b) provides that adverse inferences may be used against a party 
that has failed to cooperate by not acting to the best of its ability 
to comply with requests for information. Department officials made 
numerous requests over the course of verification for documentation 
supporting the reported usage rates for inputs such as labor and water. 
Despite these requests, several companies failed to provide supporting 
documentation to explain one or several reported per-unit input 
amounts. However, we do not believe that it would be appropriate to 
apply total facts available to companies who cooperated with the 
Department to the best of their ability with respect to the majority of 
their reported information, yet could not support reported values for 
one or two items. In the case of Haifu, Pengchen, and Yancheng Fengbao, 
for which we could not verify reported usage amounts for labor, we are 
using, as facts available, the higher of the corroborated labor factor 
from the petition or the highest of the ranged public labor amounts 
submitted in the December 23, 1996 section D submissions for other 
factories. For Yancheng Fengbao, Qidong, and Pengchen, where we could 
not verify reported water usage rates, we are using, as facts 
available, the highest of the ranged public information amounts 
submitted in the December 23, 1996 section D submissions for other 
factories. The petition does not contain a usage amount for water.
    Where we found small discrepancies which could be explained, such 
as by clerical errors, we determined that it is best to use the actual 
data as found at verification. Huaiyin, for example, incorrectly 
reported its terms of sale; we consider this to be a clerical error 
rather than evidence of non-cooperation, and we are therefore 
substituting the actual terms of sale. Similarly, our final NV 
calculation for Shakou reflects the additional labor hours that we 
found at verification. At Binzhou, two sales which were reported as 
having been made during the POI were actually made before the POI. 
Therefore, we have removed these sales from the data base sales 
listing. We acknowledge that respondents in many cases estimated 
reported distances and packing material usage rates. However, we have 
determined that it is appropriate to use the actual amounts and 
distances as found at verification, rather than facts available, given 
the relatively minor nature of the factor in the NV calculation, and 
the fact that reported amounts and distances were generally higher than 
the verified amounts. See the ``Normal Value'' section of this notice.
    We are also using the facts available for our entire NV 
calculations for Haifu and Baoying because we could not verify certain 
significant factors of production for these two suppliers. For 
suppliers Pengchen, Yancheng Fengbao, and Qidong Baolu, we are using 
partial facts available in our calculation of NV because we could not 
verify usage amounts for one or two inputs.

[[Page 41357]]

    We have determined that the application of the total facts 
available is warranted where respondents failed to provide requested 
information for several different inputs/reported items, and failed to 
report significant sales data. As discussed in the ``Facts Available'' 
section above, we are applying total adverse facts available to Jiangsu 
Light and Yupeng.
    Comment 5: Whether Shell-on Crawfish Tails are included in the 
Scope of the Investigation: Red Chamber, an interested party in this 
investigation, requested that the Department issue a scope 
clarification to determine that shell-on crawfish tails produced in and 
exported from China, and sold to the United States, are not within the 
scope of the antidumping duty investigation. Red Chamber described its 
patented process for creating shell-on crawfish tails by removing the 
heads and by making a U-shaped incision to remove the belly shell from 
the crawfish tail.
    Red Chamber argues that the Department made a ministerial error by 
omitting the word ``peeled'' from the scope of the investigation. Red 
Chamber claims that, unlike the crawfish tail meat described in the 
scope as stated in the petition, shell-on crawfish tails are neither 
peeled nor blanched. The entire tail, including the meat still attached 
to the shell, is exported to the United States, and is not further 
processed in the United States or in a third country prior to sale to 
the final consumer. The consumer peels the tails after cooking them.
    Red Chamber contends that, by omitting the word peeled from the 
scope of the investigation contained in the initiation, and the 
preliminary determination, the Department failed to define the scope of 
the investigation in accordance with the petition, and therefore 
committed a ministerial error. Red Chamber cites the description of 
crawfish tail meat in the petition which specifically includes peeled 
as a characteristic of crawfish tail meat.

    Tail meat is a peeled crawfish product, which is usually 
blanched prior to peeling. Whole crawfish, including live and whole 
boiled crawfish, whether frozen, fresh, or chilled, are not included 
within the scope of the petition.

Antidumping Petition, in the Matter of: Crawfish Tail Meat from China, 
September 20, 1996 (Petition), at 3-4.
    Red Chamber also notes that in the clarification of the petition, 
petitioner stated that ``In the United States, crawfish are sold 
primarily in three forms: (1) Live, (2) whole boiled, and (3) tail meat 
(that is peeled) * * *'' Letter to the U.S. Department of Commerce from 
Will E. Leonard and James Taylor, Jr., Ablondi, Foster, Sobin & 
Davidow, P.C., on behalf of petitioners, dated October 7, 1996 
(supplement to the petition), at 1-2. Red Chamber further cites the 
supplement to the petition, where petitioner defines the forms of tail 
meat as ``(1) Fresh or frozen, (2) washed or with fat on, and (3) 
purged or unpurged, or (4) some combination of these forms.'' 
Supplement to the petition at page 2. Based on these definitions, Red 
Chamber asserts that petitioners specifically excluded unblanched, 
unpeeled, shell-on tails in all their forms and claims that, in their 
case brief, petitioners cite no authority to justify the Department 
ignoring the express language of the petition.
    Red Chamber argues that the Department performs only a ministerial 
role in reviewing a petition and initiating an antidumping duty 
investigation and, therefore, is required to define the scope as 
precisely drawn in the petition. In support of this contention 
regarding the ministerial role of the Department, Red Chamber cites to 
19 CFR 351.201(b) of the Department's regulations. Red Chamber further 
cites to NTN Bearing Corp of America v. United States 747 F. Supp. 726 
(September 7, 1990) where NTN Bearing Company argued that upon receipt 
of an antidumping petition, the Department's role in examining its 
sufficiency is limited to a ministerial function. Red Chamber maintains 
that in the current case, the petition is narrowly drawn and very 
specific and, therefore, the Department may not provide its own 
interpretation of the scope. Red Chamber claims that petitioners admit 
numerous times that peeled tail meat is the subject of their petition 
and acknowledge that they are required to specifically define the 
intended scope of their petition. Red Chamber asserts that this error 
meets the test of ``significant ministerial error'' as defined in 
either section 351.224(g) (1) or (2) of the regulations because the 
exclusion of unblanched, unpeeled, shell-on tails from the scope of the 
proceeding is tantamount to a zero-percent weighted-average dumping 
margin, as compared to the China-wide rate of 201.63 percent found in 
the preliminary determination. Red Chamber further argues that the 
Department should reject petitioner's request that the Department 
define the scope in accordance with the definition for the tariff 
number and the General Rules of Interpretation (GRI) contained in the 
HTS. Red Chamber notes that tariff numbers contained in the scope are 
not dispositive and, by extension, the definitions associated with 
those tariff numbers are not relevant. Red Chamber contends that 
petitioner cannot convince the Department to expand the scope of the 
investigation on the basis of speculation of possible future 
circumvention attempts on the part of Red Chamber. Red Chamber argues 
that there is no authority to include a product in the scope of an 
order based on pure speculation of future circumvention by importers of 
that product.
    Respondents agree with Red Chamber that shell-on tails, as 
described above, should not be included within the scope of this 
investigation.
    Petitioner argues that the Department should deny the request by 
Red Chamber that the Department clarify the scope of the investigation 
to exclude shell-on crawfish tail meat. Petitioner cites the scope of 
the investigation, which states that ``the product covered by this 
investigation is freshwater crawfish tail meat, in all its forms * * 
*'' Petitioner argues that, since shell-on crawfish tails are simply 
another form of crawfish tail meat, they are included in the scope of 
the investigation. Petitioner states that in its description of the 
subject merchandise, the word ``peeled'' was used because peeled tail 
meat was the only form of the product with which petitioner was 
familiar at the time. Petitioner claims that it was not aware then, or 
now, of the existence of shell-on crawfish tail meat in the marketplace 
and, therefore, did not intentionally omit shell-on tail meat from the 
scope. Petitioner notes that the scope description contained in the 
notice of initiation does not include the word ``peeled.'' Petitioner 
further argues that according to the GRI 2 (a) of the HTS, tail meat 
with its shell on is ``unfinished'' tail meat, and that a tariff 
description covers the product described whether ``finished or 
unfinished.'' Petitioner maintains that if the Department were to 
exclude shell-on tail meat from the scope of this investigation, 
respondents could easily flood the market with crawfish tail meat and 
continue the injury already caused to the petitioner by imported 
frozen, peeled tail meat. Petitioner contends that frozen shell-on 
crawfish tail meat could be imported in large quantities, either 
directly into the United States or through Mexico, where it could be 
blanched and peeled with little or no capital investment.
    Department's Position: We disagree with Red Chamber. The courts 
have repeatedly held that the Department ``has inherent authority to 
define the scope of an antidumping duty investigation.'' NTN Bearing 
Corp. of

[[Page 41358]]

America v. United States, 747 F. Supp. 726, 731 (CIT 1990). The 
Department ``generally exercises this broad discretion to define and 
clarify the scope of an antidumping investigation in a manner which 
reflects the intent of the petition.'' Kern-Liebers USA, Inc. v. United 
States, 881 F. Supp. 618, 621 (CIT 1995) (quoting Minebea Co. v. United 
States, 782 F. Supp. 117, 120 (CIT 1992), aff'd on other grounds, 984 
F.2d 1178 (Fed. Cir. 1993)). However, the Department's discretion 
permits interpreting the petition in such a way as to best effectuate 
not only the intent of the petition, but the overall purpose of the 
antidumping law as well. As stated by the CIT in NTN Bearing, the case 
cited by Red Chamber, if the Department ``determine[s] the petition to 
be overly broad, or insufficiently specific to allow proper 
investigation, or in any other way defective, it possesse[s] the 
inherent authority to redefine and clarify the parameters of its 
investigation.'' 747 F. Supp. at 731; accord Torrington Co. v. United 
States, 745 F. Supp. 718, 721-22 (CIT 1990). Moreover, contrary to Red 
Chamber's argument, the Department may fashion the scope of an order so 
as to prevent circumvention by parties in the future ``employing 
inventive import strategies.'' NTN Bearing at 731.
    In the present case, the petition described the merchandise subject 
to the investigation as crawfish tail meat ``in all its forms.'' 
Antidumping Petition, Sept. 20, 1996, at 3. The petition did not state 
that ``unpeeled'' tail meat was to be excluded from the scope; the 
petition merely described tail meat as ``a peeled crawfish product.'' 
Id. at 4. Later, in responding to the Department's request to further 
explain the different forms in which tail meat might enter the United 
States, the petitioner emphasized its intent only to exclude fresh tail 
meat (as opposed to frozen). Letter on behalf of petitioner, Oct. 7, 
1996, at 1-2. Again, while referring to tail meat generally as 
``peeled,'' the petitioner did not indicate an intent to exclude 
``unpeeled'' tail meat from the scope of the investigation. Id.
    In its initiation notice and preliminary determination, the 
Department adopted the scope of the petition, and described the covered 
merchandise as crawfish tail meat ``in all its forms.'' However, the 
Department specifically deleted reference to the adjective ``peeled.'' 
This omission on the Department's part did not constitute a ministerial 
error, as Red Chamber contends. Rather, the Department adopted the 
phrase ``in all its forms'' in order to make the scope appropriately 
comprehensive and inclusive. Referring to ``peeled'' tail meat would 
unnecessarily narrow the scope of the investigation, and would leave 
any resulting order open to circumvention.
    Moreover, the Department's definition of the scope of its 
investigation is not inconsistent with the intent of the petitioner. In 
the first place, the petitioner has not used the word ``peeled'' 
consistently in all of its submitted descriptions of the subject 
merchandise. More pointedly, in responding to Red Chamber's request, 
the petitioner has expressly supported the Department's definition of 
the scope of the investigation. As noted above, in the petitioner's 
view, crawfish tail meat, ``in all its forms,'' includes ``unpeeled'' 
as well as ``peeled'' merchandise. So-called ``shell-on'' crawfish 
tails are simply another form of crawfish tail meat, which are 
therefore included within the scope of the investigation.
    For the foregoing reasons, the Department properly included 
unpeeled crawfish tail meat within the scope of its investigation. To 
the extent crawfish tail meat with the shell on is unpeeled, it is 
included within the scope. In any event, shell-on tail meat falls 
within the category of crawfish tail meat ``in all its forms,'' and is 
therefore included within the scope of the investigation.

Additional Change to Calculation Due to Ministerial Error

    We have changed international freight for all exporters due to a 
ministerial error found in the program. In the preliminary 
determination we inadvertently multiplied the value for international 
freight, expressed in dollars, by the Indian exchange rate. For the 
final determination we have not multiplied international freight by the 
exchange rate.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1) of the Act, we are directing 
the Customs Service to continue to suspend liquidation of all entries 
of crawfish tail meat from the PRC that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of our 
notice of the preliminary determination in the Federal Register. We 
will instruct the Customs Service to require a cash deposit or posting 
of bond equal to the weighted-average amount by which the NV exceeds EP 
as indicated in the chart below. This suspension of liquidation will 
remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                                Weight  
                                                               average  
               Manufacturer/producer/exporter                   margin  
                                                              percentage
------------------------------------------------------------------------
China Everbright Trading Company...........................       156.77
Binzhou Prefecture Foodstuffs Import Export Corp...........       119.39
Huaiyin Foreign Trade Corp.................................        91.50
Yancheng Foreign Trade Corp................................       108.05
Jiangsu Cereals, Oils & Foodstuffs Import & Export Corp....       122.92
Yancheng Baolong Aquatic Foods Co., Ltd....................       122.92
Anhui Cereals, Oils and Foodstuffs Import & Export Corp....       122.92
Nantong Delu Aquatic Food Co., Ltd.........................       122.92
China-wide Rate............................................       201.63
------------------------------------------------------------------------

    The China-wide rate applies to all entries of subject merchandise 
except for entries from exporters that are identified individually 
above.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
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 material injury, does not exist, the proceeding will be 
terminated and

[[Page 41359]]

all securities posted will be refunded or canceled.
    If the ITC determines that material injury, or threat of material 
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 Customs 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 determination is published pursuant to section 733(f) of the 
Act.

Jeffrey P. Bialos,
Acting Assistant Secretary for Import Administration.
    Dated: July 24, 1997.
[FR Doc. 97-20281 Filed 7-31-97; 8:45 am]
BILLING CODE 3510-DS-P