[Federal Register Volume 64, Number 99 (Monday, May 24, 1999)]
[Notices]
[Pages 27961-27966]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13075]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-848]


Freshwater Crawfish Tail Meat From the People's Republic of 
China; Final Results of New Shipper Review

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

ACTION: Notice of final results of new shipper review: freshwater 
crawfish tail meat from the People's Republic of China.

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SUMMARY: On February 22, 1999, the Department of Commerce (the 
Department) published the preliminary results of its new shipper review 
of the antidumping duty order on freshwater crawfish tail meat from the 
People's Republic of China (PRC). The review covers one exporter of the 
subject merchandise, Ningbo Nanlian Frozen Foods Co., Ltd. (NNL), and 
shipments of this merchandise to the United States during the period 
September 1, 1997 through March 31, 1998.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our review of the comments received, we 
have made changes to the margin calculations in the final results from 
those presented in the preliminary results.
    We have determined that NNL's U.S. sales of freshwater crawfish 
tail meat have not been made below normal value, and we will instruct 
the Customs Service not to assess antidumping duties for NNL.

EFFECTIVE DATE: May 24, 1999.

FOR FURTHER INFORMATION CONTACT: Michael Strollo, Laurel LaCivita, or 
Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C. 
20230; telephone (202) 482-3782, (202) 482-4236 and (202) 482-3020, 
respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act. In addition, unless otherwise indicated, 
all citations to the Department's regulations are to the provisions 
codified at 19 CFR part 351 (1998).

Background

    On February 22, 1999, the Department published the preliminary 
results of review (64 FR 8543). On March 24, 1999, we received comments 
from the Crawfish Processors Alliance (petitioner) and the Louisiana 
Department of Agriculture and Forestry and Bob Odom, Commissioner. We 
also received comments from NNL. On March 29, 1999, petitioner and NNL 
submitted rebuttal briefs. All parties presented their comments in a 
hearing held on March 31, 1999. The Department has now completed this 
new shipper review in accordance with section 751 of the Act.

Scope of Review

    The product covered by this review 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 order 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 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 order is 
dispositive.
    This review covers the period September 1, 1997 through March 31, 
1998.

Analysis of Comments Received

Comment 1: Valuation of Live Crawfish Input From a Basket Category

    NNL argues that the selection of Spanish Ministry of Customs data 
on prices of Spanish imports from Portugal to value the live crawfish 
input is improper. NNL contends that the HTS number under which 
crawfish falls is a basket HTS category containing products other than 
whole, live crawfish.
    NNL maintains that it placed compelling evidence on the record 
suggesting that crawfish imported into Spain from Portugal under HTS 
0306.29.10 are not just whole, live crawfish. For example, NNL cites to 
its December 21, 1998 submission, wherein NNL placed on the record an 
affidavit from a U.S. purchaser of Spanish crawfish which claimed that 
the high price of Portuguese crawfish precludes such imports from being 
only live crawfish. In that same submission, NNL included a letter from 
a Spanish crawfish tail meat producer indicating that during the peak 
crawfish season, the tail meat producer paid prices one-quarter as high 
as the Portuguese import prices used in the preliminary results of 
review. NNL also cites to its January 6, 1999 submission, wherein NNL 
placed on the record a letter from a Spanish crawfish tail meat 
producer stating that the average price paid in the peak season was 
$0.19 per pound. In its submission of March 15, 1999, NNL placed on the 
record an affidavit from a Spanish producer of crawfish tail meat, 
indicating that the Spanish producer paid an average of $0.50 per pound 
for Portuguese crawfish in 1997. Furthermore, NNL contends that the 
Spanish prices for crawfish conflict with the average U.S. price for 
wild crawfish, $0.52 per pound. NNL maintains that this body of 
evidence calls into question the accuracy of the Spanish Ministry of 
Customs import price, which was $0.91 per pound. NNL argues that where 
questions have been raised about the accuracy of surrogate data, it is 
the Department's

[[Page 27962]]

responsibility to examine that data and determine whether the import 
data from the basket category are consistent with prices in that market 
and world prices generally.
    In addition, NNL cites to the names of over 30 Portuguese 
processors it provided, which it claims have the capability of 
processing crawfish. NNL stated that it believes that one of these 
companies must be processing crawfish. NNL placed on the record an 
affidavit from a Spanish tail meat producer which claims that 
Portuguese companies do process crawfish tail meat and export it to 
Europe. Finally, NNL challenges the reliability of the evidence placed 
on the record by petitioner, which indicated that Spanish imports from 
Portugal under HTS category 0306.29.10 consist only of live crawfish. 
NNL contends that these facts cast doubt on the Department's 
conclusion, in the preliminary results of review, that the Spanish 
Ministry of Customs import data contained only whole, live crawfish. 
NNL argues that since this HTS category has been demonstrated to be too 
broad, the Department should not rely upon it in the valuation of the 
crawfish input.
    Petitioner states that NNL's challenge to evidence placed on the 
record by petitioner is misplaced since the Department did not rely on 
the pricing data contained therein, and the evidence is otherwise 
reliable. Petitioner argues that NNL has failed to provide credible 
evidence that imports under HTS category 0306.29.10 are not limited to 
live crawfish. Petitioner argues that none of the invoices or 
affidavits submitted by NNL demonstrate that the Spanish import data 
include any products other than live crawfish. Petitioner further 
argues that such price differences alone do not provide a basis for the 
abandonment of valid aggregated import data series, representing actual 
prices, on the basis of anecdotal statements such as those provided by 
NNL.
    Petitioner also notes that the existence of 30 Portuguese seafood 
processors does not demonstrate that any imports under HTS category 
0306.29.10 include processed crawfish. Petitioner contends that the 
statement of NNL's affiant, who claims to have knowledge of crawfish 
being processed in Portugal and shipped to Europe, does not constitute 
evidence that processed crawfish were imported into Spain from 
Portugal.
Department's Position
    We agree with petitioner. While the Department has ruled in the 
past that import data from basket categories can be too broad to be 
reliable, petitioners provided as evidence an affidavit from industry 
experts attesting to the fact that imports into Spain from Portugal 
consisted solely of whole, live crawfish. In addition, no other 
information has been placed on the record to substantiate NNL's claim 
that any products other than whole, live crawfish are imported into 
Spain under HTS 0306.29.10. See Memorandum to Edward Yang from Laurel 
LaCivita: Determination of Surrogate Country Selection for Crawfish 
Input, dated February 16, 1999 (Surrogate Selection Memorandum). 
Although NNL has speculated that among the more than 30 Portuguese 
seafood processors, someone has to be processing whole, live crawfish 
and shipping it to Spain under that basket category, NNL has failed to 
place any information on the record that substantiates its claim that 
crawfish are being processed in Portugal and shipped into Spain. 
Furthermore, none of its invoices or affidavits provide any evidence 
that the imports from Portugal include anything but whole, live 
crawfish. Consequently, the Department continues to determine that the 
Spanish Ministry of Customs import data is suitable as a surrogate for 
the valuation of whole, live crawfish.

Comment 2: Spanish Data Are Flawed

    NNL contends that the volume of Spanish imports of non-frozen 
Portuguese crawfish in 1997 was too low to form the basis for 
establishing the surrogate value for crawfish in this case. In 
addition, NNL argues that, until November of 1997, the quantities and 
values reported in the Spanish Ministry of Customs data were rounded. 
NNL maintains that this is important because the quantities reported 
are so small that rounding can drastically skew unit values. NNL argues 
that the low volume of imports and the rounding leads to highly 
volatile prices. As a result, NNL claims, the Spanish import data are 
flawed and should not be used in the determination of normal value.
    Petitioner contends that NNL has failed to demonstrate that Spanish 
import prices are aberrational. Petitioner claims that U.S. prices from 
the Louisiana State University (LSU) Agricultural Summary submitted by 
NNL demonstrate a similar fluctuation in price. Petitioner further 
argues that Spanish import values are not subject to the significant 
rounding errors claimed by NNL. Petitioner maintains that the use of 
numerous months of rounded data eliminates any inaccuracy that rounding 
might cause within a single month. Petitioner states that there is no 
reason to believe that rounding consistently overstates actual values 
in the Spanish import data.
Department's Position
    We agree with petitioner. In the Department's Surrogate Selection 
Memorandum, we noted that Spain exported 407 metric tons of HTS 
0306.19.10, frozen, processed crawfish during 1997. We stated that we 
considered this quantity of exports to be indicative that Spain is a 
significant producer of crawfish. We further noted that Spanish imports 
from Portugal are significantly larger in comparison both to Spanish 
imports from countries other than Portugal and U.S. imports of a 
similar HTS category, 0306.29.00.'' (Surrogate Selection Memorandum at 
p.3.) Therefore, we find that within this industry the imports from 
Portugal are significant.
    Additionally, even though the Spanish Ministry of Customs data were 
rounded, we agree with petitioner that using data for numerous months 
tends to minimize inaccuracies that might occur from rounding if only 
one month of data were used because rounding may vary in direction from 
one month to the next.
    Furthermore, as we noted in the Surrogate Selection Memorandum, 
price fluctuations are a result of supply and demand and are 
particularly endemic to agricultural products with a specific growing 
season. Fluctuations may also result from adverse growing conditions, 
such as drought or disease, and are not necessarily due to small 
quantities. Consequently, the Department continues to believe that the 
import data from the Spanish Ministry of Customs is reliable and 
accurate.

Comment 3: Spanish Data Conflicts With Other Spanish Import Data

    NNL contends that the import data from the Spanish Ministry of 
Customs also conflicts with alternative Spanish import statistics from 
the European Union and the Spanish Commercial Office of the Embassy of 
Spain. NNL argues that this shows that the Spanish data are unreliable. 
If the Department nevertheless does use such data, NNL argues, it 
should use an average of the three sources.
    Petitioner argues that the Spanish import values from other Spanish 
sources do not demonstrate that the values used by the Department are 
inaccurate. Petitioner maintains that there are similar problems with 
the alternative Spanish import data provided by NNL. In addition, 
petitioner claims that these sources are secondary sources and do not 
represent data from the Spanish department that

[[Page 27963]]

actually collects duties and records data. Petitioner maintains that 
the Department should continue to rely on the primary source data.
Department's Position
    When using imports as the basis of factor valuation, it is our 
normal practice to use official import statistics, unless evidence 
demonstrates that such data are unreliable. Here, respondents have not 
provided any evidence as to how data from any of the two alternative 
sources are collected and analyzed. In fact, as petitioners have 
suggested, data from the European Union and the Spanish Commercial 
Office of the Embassy of Spain may in fact be derivative of the Spanish 
Customs data. Consequently, we cannot conclude that data from either of 
the alternate sources contradict the import statistics or otherwise 
call into question their reliability. Therefore, we have continued to 
use official import statistics published by the Spanish Ministry of 
Customs.

Comment 4: Reliance on Affidavits

    NNL contends that the Department's reliance upon petitioner's 
affidavits is inconsistent with the Department's regulations. NNL notes 
that petitioner's affidavits of September 18, 1998, October 22, 1998, 
December 22, 1998 and January 21, 1999 were designated as business 
proprietary pursuant to 19 CFR 351.105 of the Department's regulations. 
NNL maintains that a review of these affidavits demonstrates that these 
affidavits fail to meet the strict criteria for business proprietary 
treatment set forth in 19 CFR 351.105. Therefore, NNL contends, these 
affidavits should be stricken from the record. Moreover, NNL maintains 
that petitioner has claimed proprietary treatment of affidavits in a 
transparent attempt to prevent NNL from filing information to rebut 
petitioner's affidavits. NNL claims that by hiding the name and 
location of the affiant, as well as most of the text, petitioner has 
prevented NNL from commenting on the affidavit. NNL argues that the 
Department should not base the most important decision in this case, 
the reliability of the Spanish Ministry of Customs import data, on the 
affidavits provided by petitioner.
    Petitioner argues that NNL has not been prejudiced in any way by 
the proprietary treatment of the affidavits in this case. Petitioner 
contends that the key claim in the affidavits, that crawfish of 
Portuguese origin are shipped into Spain live and that there is no 
crawfish processing in Portugal, has been on the public record since 
October 1998. Additionally, petitioner argues that NNL only makes a 
conclusory statement that a review of these affidavits demonstrates 
that they fail to meet the strict criteria set forth in 19 CFR 351.105. 
Petitioner contends that such a statement provides no basis for 
rejection of a request for proprietary treatment. Finally, petitioner 
maintains that, since NNL did not make a timely objection to the 
proprietary treatment of the January 21, 1999 affidavit, it should not 
be permitted to raise the issue in its brief.
Department's Position
    We agree with petitioner. In accordance with 19 CFR 351.105(c), the 
Department afforded business proprietary treatment to (a) some 
information in petitioner's affidavits which identified particular 
person(s) from whom business proprietary treatment was obtained 
(351.105(c)(9)) and (b) other specific information (i.e., information 
concerning specific business practices related to the production of 
crawfish tail meat in Spain, the release of which to the public would 
cause substantial harm to the competitive position of the submitter 
(351.105(c)(11))).

Comment 5: Selecting the United States as the Surrogate Country in 
Which To Value Crawfish Input

    NNL argues that the Department should use the Louisiana State 
Agricultural Summary data it provided. NNL contends that the LSU data 
is more precise and is superior to the Spanish data. NNL claims that 
the LSU data is based upon use of a comparable product, and production 
is measured in sufficient quantities to ensure a reliable calculation.
    Additionally, NNL contends that legal precedent exists for using 
U.S. data. NNL cites the Department's use of U.S. data to value 
basswood in Writing Instruments Manufacturers Association versus United 
States, 984 F. Supp. 629, 639 (Ct. Int'l Trade 1997). NNL argues that 
the Court found that Commerce's use of U.S. basswood is consistent with 
the primary objective of the statute and is supported by substantial 
evidence and otherwise in accordance with the law. NNL also cites 
Sebacic Acid from the People's Republic of China: Final Results of 
Antidumping Administrative Review (Sebacic Acid), 63 FR 43373 (August 
13, 1998).
    NNL notes that live crawfish in China is a wild, live product, the 
essential cost of which is the labor needed to obtain it. Because labor 
costs in China are a fraction of those in the United States, NNL 
argues, the Department must select the fairest, most accurate surrogate 
values possible for whole, live crawfish.
    Petitioner argues that NNL's claim that the United States is the 
next best surrogate country after Spain is inconsistent with the 
Department's practice and the record of this proceeding. Petitioner 
contends that in this proceeding, the Department has determined that 
Spain and the United States are not equally acceptable as surrogates 
for China. Petitioner suggests that the alternative U.S. data provided 
by NNL do not provide improvements in data quality over the Spanish 
import statistics for purposes of the Department's NME methodology 
because the data are unofficial and based on estimates. Petitioner 
maintains that unlike the Spanish import data, the LSU data are not 
derived directly from transaction prices. Additionally, petitioner 
contends that the methodological description provided by LSU also 
emphasizes that this is not the official document of agricultural data 
for the state and that no such official data are published for live 
freshwater crawfish production.
    Petitioner maintains that the fact that the per capita gross 
national product of Spain is more similar to that of China than the 
United States is determinative, particularly where the Spanish import 
data has not been seriously questioned. Moreover, petitioner argues 
that Commerce's practice is to use a value in a surrogate country for 
comparable merchandise before resorting to prices for identical 
merchandise in the United States.
    Finally, petitioner argues that if the Department should use the 
LSU data, wild and farmed crawfish are physically identical, and any 
valuation of live crawfish should include both farmed and wild 
crawfish. Petitioner maintains that the difference in price between 
wild and farmed crawfish is explained by the fact that they are not 
present in the market in fixed proportions during the course of the 
year. Petitioner suggests that wild crawfish come onto the market in 
large numbers during the peak season, when prices of all crawfish are 
lower. As a result, petitioner contends, annual data may show lower 
prices for wild crawfish than for farmed crawfish even though no such 
distinction occurs at any point in time in any contemporaneous period. 
Consequently, the Department should not make an adjustment to price for 
differences in physical characteristics between wild and farmed 
crawfish for the valuation of live crawfish.
Department's Position
    We agree with petitioner. Section 773(c)(4) of the statute 
instructs the Department to value factors of

[[Page 27964]]

production in one or more market economy countries that are (A) at a 
level of economic development comparable to that of the nonmarket-
economy country, and (B) significant producers of comparable 
merchandise. The Department only departs from this practice if it 
cannot find those values in a comparable economy that produces 
comparable merchandise.
    In Sebacic Acid, the Department determined that India was a 
comparable economy to China and produced merchandise comparable to 2-
octanol, a primary material input. The Department determined that when 
we have a suitable value from a comparable economy, the Department 
should not use a U.S. surrogate value. Since the Department has 
determined that import data from the Spanish Ministry of Customs are a 
suitable surrogate value from a country more comparable to China than 
is the United States, the Department continues to reject the use of the 
alternative U.S. data for the valuation of whole, live crawfish.
    Since we are continuing to use the Spanish Ministry of Customs 
import data in our final results of review, arguments concerning the 
need to adjust U.S. data are moot. Moreover, for the reasons explained 
in the original investigation, we have determined that it is not 
appropriate to adjust this surrogate value to account for alleged 
differences in the labor cost between China and the United States or 
Spain. See Notice of Final Determination of Sales at Less Than Fair 
Value: Freshwater Crawfish Tail Meat from the People's Republic of 
China, 62 FR 41347 (August 1, 1997) (Final Determination).

Comment 6: Adjustment to U.S. Price Based on Crawfish Size

    NNL argues that the LSU data should be modified since it contains 
jumbo crawfish. NNL maintains that the record shows that the crawfish 
used by Yinxian No. 2 Freezing Factory (Y2FF) to produce tail meat did 
not include jumbo crawfish. NNL claims that petitioner's own expert in 
the underlying investigation confirmed that grading was done in 
Louisiana and even provided price differentials between small and large 
crawfish. NNL suggests that these price differentials should be used as 
a basis to modify the average 1997 LSU price to a lower price.
    Petitioner argues that no adjustment for crawfish size is warranted 
and the Department should again reject this argument as it did in the 
preliminary results of review. Petitioner contends that no additional 
information or argument has been presented in this proceeding to 
warrant such an adjustment.
Department's Position
    Since we are continuing to use the Spanish Ministry of Customs 
import data in our final results of review, the issue of any adjustment 
to the alternative U.S. data is moot.

Comment 7: Surrogate Value for Crawfish Waste

    Petitioner argues that the Department should find that the 
surrogate value for crawfish scrap and waste is zero because such 
material has no commercial value in market-economy countries where 
crawfish tail meat is produced. Petitioner cites the Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from 
the People's Republic of China, 60 FR 22544 (May 8, 1995) (Furfuryl 
Alcohol) in support of its position. Petitioner also contends that the 
material imported into India under the tariff classification 
0508.00.05, the classification used for the scrap credit factor, is not 
crawfish scrap. Petitioner claims that, because the Department has 
determined that, except for the United States, the countries exporting 
crawfish scrap to India are not, in fact, producers of crawfish, and 
because the United States crawfish processors are not able to sell 
crawfish scrap, the scrap being imported by India must contain shells 
other than crawfish. Petitioner further argues that the import values 
under this tariff classification are aberrational because they exhibit 
huge and unexplained variations. Petitioner maintains that these 
variations demonstrate that the data are faulty or that imports under 
this tariff number include a number of different products with widely 
varying values. In addition, petitioner claims that the unit prices for 
this tariff classification represent an unreasonably high percentage of 
the value of live crawfish. Therefore, petitioner argues that the 
surrogate value for crawfish scrap should reflect the value of such 
scrap in market economy countries, which is zero.
    NNL argues that the Department should continue to treat the offset 
for byproduct as it did in the preliminary results. NNL contends that 
there is a demand for crawfish shells in the world (in both market and 
non-market economy countries). NNL states that information has been 
placed on the record regarding the fact that crustacean shells 
(including crawfish shells) are used to produce chitosan, and that 
chitosan has a wide and quickly growing variety of uses. NNL states 
that in India, the country in which we have valued crawfish scrap, 
crustacean shells are purchased by producers of chitosan. Therefore, 
NNL argues, there is a commercial demand and use for crawfish scrap.
    NNL further argues that the actual test for determining whether a 
by-product credit should be granted is whether the product for which a 
by-product credit is claimed is linked to the production of the subject 
merchandise, and a benefit accrues to the manufacturer (or seller) of 
the by-product. NNL maintains that it meets the two prongs of the test. 
First, crawfish shells are linked to the production of crawfish tail 
meat, and second, NNL proved at verification that an economic benefit 
accrued to them by way of the sale of the crawfish shells. Therefore, 
NNL argues, the Department's policy requires the granting of a credit.
    Finally, NNL contends that it is common for the Department to use 
comparable merchandise both as a surrogate value for the raw materials 
and for by-products. NNL argues that, while Indian HTS 0508.00.05 may 
or may not contain the specific items at issue, it does contain 
comparable merchandise, namely other shells of crustaceans, and is the 
best data on the record.
Department's Position
    We agree with NNL. In the Final Determination of Sales at Less Than 
Fair Value: Coumarin from the People's Republic of China, 59 FR 66895 
(December 28, 1994), the Department determined that the treatment of a 
by-product as an offset is consistent with generally accepted 
accounting principles (GAAP) and previous Department practice so long 
as an economic benefit accrued to the firm and the benefit was linked 
to production of the subject merchandise. We agree that GAAP allows for 
by-product offsets on the basis of production quantities. We have 
verified that the by-product is a result of the production process and 
that through the sale of crawfish shells, an economic benefit has 
accrued to NNL.
    It is the Department's practice to use comparable merchandise as a 
surrogate for valuing by-product. In the original investigation, the 
Department valued by-product using the same HTS category used in this 
new shipper review. See Final Determination. To date, no tariff 
classification exists that includes only shells of crawfish. 
Additionally, the Department has determined that the Indian HTS 
category is the best data on the record. We attempted to determine the 
composition of Indian imports under the HTS category used to value

[[Page 27965]]

the by-product during the period in which we valued factors of 
production. We were unable to obtain such information. We also 
attempted to find information regarding imports into other countries 
deemed comparable to China in terms of economic development. We 
discovered that no other tariff classifications for comparable 
merchandise are as detailed as the Indian HTS category under which we 
valued the crawfish shells. See Memorandum to Edward Yang through 
Maureen Flannery from Laurel LaCivita and Mike Strollo: Valuation of 
By-Product as an Offset in the New Shipper Review of Freshwater 
Crawfish Tail Meat from the People's Republic of China, dated May 13, 
1999.
    We disagree with petitioner's claim that, since crawfish shells 
have no value in market-economy countries, the Department should assign 
a surrogate value of zero to NNL's crawfish scrap. Petitioner cites the 
Department's treatment of corn cobs in Furfuryl Alcohol. In Furfuryl 
Alcohol, the Department valued corn cobs in its surrogate country. In 
this country, corn cobs were considered waste and had no value. Unlike 
in Furfuryl Alcohol, however, shells of crustaceans, echinoderms, and 
molluscs, what the Department considers to be comparable merchandise, 
have a value. Therefore, the Department has continued to value crawfish 
shells using the Indian surrogate value.
    Moreover, it is not uncommon for prices within the same HTS 
category to vary. See Antifriction Bearings (Other than Tapered Roller 
Bearings) and Parts Thereof from Romania; Tehnoimportexport, S.A. 
Analysis Memorandum for the Preliminary Results of the Ninth 
Administrative Review, (February 12, 1999), in which the Department 
used a steel category as a surrogate which had values ranging from 
$0.51 per kilogram to $2.72 per kilogram. While we agree that the per 
unit value of imports from Sri Lanka into India is significantly larger 
than that of imports from other countries, because it comprises such a 
large percentage of India's imports during the POR, and because there 
is no evidence to indicate it includes items other than crustacean 
shells, we have not eliminated it from the Indian import statistics 
used. Consequently, the Department continues to treat the by-product 
offset to normal value as it did in the preliminary results of review.

Comment 8: Calculation of Selling, General and Administrative (SG&A) 
Expenses

    NNL argues that while it does not object to the general methodology 
used by the Department, it is apparent that SG&A is overstated, as the 
SG&A data used by the Department include costs such as ocean freight, 
duties and sales commissions. The Department has already deducted two 
of these expenses, ocean freight and duties, from U.S. sales price. NNL 
contends that these costs are double-counted by being included in SG&A. 
Additionally, NNL argues that sales commissions are not relevant in 
this case. NNL contends that the SG&A of two Indian seafood companies 
used in the valuation of factory overhead, SG&A and profit (Alsa Marine 
and DCL Maritech) should be adjusted to avoid irrelevant costs and 
double-counting.
    Petitioner argues that the surrogate value for SG&A is intended to 
represent the costs of SG&A expenses for an enterprise producing and 
selling comparable merchandise in a market-economy country. Petitioner 
contends that it is irrelevant whether NNL paid commissions. Instead, 
petitioner maintains that the relevant issue is the valuation of 
selling expenses in the surrogate country. Petitioner argues that if 
Alsa Marine and DCL Maritech have structured their operations in such a 
way that they rely upon commissioned sales personnel to move their 
products, then commissions are clearly a part of their selling expenses 
and must be included. Petitioner argues the amounts denominated as 
``Sales Commission'' by Alsa Marine and ``ECGC Commission'' by DCL 
Maritech should, therefore, continue to be included as part of the SG&A 
ratio.
Department's Position
    We agree, in part, with NNL. For these final results, we have 
subtracted ocean freight expenses in the calculation of SG&A for Alsa 
Marine and DCL Maritech, two of the four Indian companies used to 
derive surrogate values for factory overhead, SG&A and profit. These 
expenses are not normally part of SG&A, and are subtracted from the 
U.S. price. See 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 the Final Determination of Sales at Less Than Fair 
Value: Brake Drums and Brake Rotors from the People's Republic of 
China, 62 FR 9160 (February 28, 1997), where we made adjustments to 
surrogate values for SG&A.
    On the other hand, we disagree with NNL that the line item for 
``Cess. Duty and Shipment'' should be subtracted out of our surrogate 
value for SG&A. The Department was unable to determine the proper 
definitions of ``Cess. Duty and Shipment'' based upon the financial 
statements and the notes to the financial statements of Alsa Marine 
and, therefore, could not conclude that this line item contained only 
expenses paid for duties.
    Furthermore, we disagree with NNL's claim that since commissions 
are not relevant in this case, they should be excluded from our 
calculation. The total selling expenses of the surrogate producer 
represent the total expenses incurred for selling the product, 
regardless of whether those expenses are incurred by the producer 
itself or by an agent. Furthermore, there is no evidence that the 
inclusion of commission expenses in SG&A results in double counting 
selling expenses. Therefore, we conclude that it is appropriate to 
include all other selling expenses, with the exception of ocean 
freight, incurred by the Indian seafood companies, in the calculation 
of SG&A.

Comment 9: Calculation of Profit

    NNL argues that in calculating a surrogate value for profit, the 
Department should use the actual profit data for the four Indian 
companies instead of using zero where the company incurred a loss.
Department's Position
    We disagree with NNL. Section 773(e)(2)(A) requires that profit for 
CV be based on sales in the ordinary course of trade. Negative profit, 
or loss, indicates that the surrogate company used to value profit made 
sales below the cost of production, which are outside the ordinary 
course of trade. Therefore, the Department treated the surrogate 
company's loss as zero profit. See Bicycles.

Comment 10: Exchange Rates

    Petitioner argues that the Department should use exchange rates 
based on the period of review (POR) average rather than the date of 
sale to convert surrogate values. Petitioner contends that the approach 
used in the preliminary results is inconsistent with the Department's 
practice in other NME cases. Petitioner claims that while the 
Department uses exchange rates in effect on the date of sale to 
translate the price of a U.S. sale that is stated in non-U.S. currency, 
the normal value is intended to represent a POR-average value. 
Petitioner maintains that it is inconsistent to first inflate pre-POR

[[Page 27966]]

surrogate values to the POR and then translate the inflated price to 
U.S. dollars using only the date-of-sale exchange rate.
Department's Position
    We agree with petitioner, in part. In Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From the People's Republic of 
China; Final Results of 1996-1997 Antidumping Duty Administrative 
Review, 63 FR 63842 (November 17, 1998), the Department discussed this 
issue at length and determined that using a POR-average is a more 
appropriate method for currency conversion than the date of sale as 
stated in section 351.415 of the Department's regulations.
    In this case, however, the factors of production were reported for 
a period prior to the POR and valued for a period concurrent with the 
period in which the factors were reported. Therefore, in order to 
ensure a more accurate valuation of the factors of production, we 
valued factors for the same period for which they were reported. Where 
necessary, we inflated factor values to the factor valuation period. We 
then used a simple average exchange rate to convert factor values to 
U.S. dollars.

Comment 11: Ministerial Errors Alleged by NNL

    NNL contends that the Department did not convert rupees into 
dollars when calculating domestic inland freight and, therefore, should 
correct this in its calculations for the final results of review.
Department's Position
    We agree with NNL and have corrected the error for these final 
results of review.

Final Results of Review

    As a result of our review and the comments received, we have 
changed the results from those presented in our preliminary results of 
the review. Therefore, we determine that the following weighted-average 
margin exists as a result of our review:

------------------------------------------------------------------------
                                                                 Margin
             Manufacturer/ Exporter               Time period  (percent)
------------------------------------------------------------------------
Ningbo Nanlian Frozen Foods Co., Ltd............  09/01/97-03/      0.00
                                                        31/98
------------------------------------------------------------------------

    We will instruct the Customs Service not to assess antidumping 
duties on entries of the subject merchandise from NNL made during the 
POR.
    Furthermore, the following cash deposit rates will be effective 
upon publication of this notice of final results of review for all 
shipments of freshwater crawfish tail meat from the PRC entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(2)(C) of the Act: (1) for NNL, 
which was found to merit a separate rate for the final results of this 
review, the cash deposit rate will be 0.00 percent; (2) for previously-
reviewed PRC and non-PRC exporters with separate rates, the cash 
deposit rate will be the company-specific rate established for the most 
recent period; (3) for all other PRC exporters, the cash deposit rate 
will be the PRC-wide rate, 201.63 percent; and (4) for non-PRC 
exporters of subject merchandise from the PRC, the cash deposit rate 
will be the rate applicable to the PRC supplier of that exporter. These 
deposit rates, when imposed, shall remain in effect until publication 
of the final results of the next administrative review.

Notification of Interested Parties

    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and subsequent assessment 
of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 351.305(a)(3) of the Department's 
regulations. Timely written notification of the return/destruction of 
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.
    This new shipper review and notice are issued and published in 
accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 
19 CFR 351.214.

    Dated: May 17, 1999.
Bernard Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-13075 Filed 5-21-99; 8:45 am]
BILLING CODE 3510-DS-P