[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