[Federal Register Volume 64, Number 219 (Monday, November 15, 1999)]
[Notices]
[Pages 61835-61837]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29751]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-855]


Preliminary Determination of Critical Circumstances: Certain Non-
Frozen Apple Juice Concentrate From the People's Republic of China

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

EFFECTIVE DATE: November 15, 1999.

FOR FURTHER INFORMATION CONTACT: Craig Matney or Vince Kane at (202) 
482-1778 or 482-2815, respectively, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230.

The Applicable Statute and Regulations

    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 (URAA). In addition, unless otherwise 
indicated, all citations to the Department's regulations are references 
to the provisions codified at 19 CFR Part 351 (1998).

Critical Circumstances

    On June 28, 1999, the Department of Commerce (the Department) 
initiated an investigation to determine whether imports of certain non-
frozen apple juice concentrate (NFAJC) from the People's Republic of 
China (PRC) are being, or are likely to be, sold in the United States 
at less than fair value (64 FR 36330, July 6, 1999). In the petition 
filed on June 7, 1999, petitioners alleged that there is a reasonable 
basis to believe or suspect that critical circumstances exist with 
respect to imports of NFAJC from the PRC. On July 22, 1999, the 
International Trade Commission (ITC) preliminarily determined that 
there was a reasonable grounds to believe or suspect that the domestic 
industry was being injured by reason of imports of NFAJC from the PRC 
(64 FR 40895, July 28, 1999).
    In accordance with 19 CFR 351.206(c)(2)(i), because petitioners 
submitted a critical circumstances allegation more than 20 days before 
the scheduled date of the preliminary determination, the Department 
must issue a preliminary critical circumstances determination not later 
than the date of the preliminary determination. In a policy bulletin 
issued on October 8, 1998, the

[[Page 61836]]

Department stated that it has determined that it may issue a 
preliminary critical circumstances determination prior to the date of 
the preliminary determination of dumping, assuming adequate evidence of 
critical circumstances is available (see Change in Policy Regarding 
Timing of Issuance of Critical Circumstances Determinations, 63 FR 
55364). In accordance with this policy, we are issuing a preliminary 
critical circumstances decision in this investigation of NFAJC imports 
from the PRC.
    Section 733(e)(1) of the Act provides that the Department will 
determine that critical circumstances exist if there is a reasonable 
basis to believe or suspect that: (A)(i) there is a history of dumping 
and material injury by reason of dumped imports in the United States or 
elsewhere of the subject merchandise, or (ii) the person by whom, or 
for whose account, the merchandise was imported knew or should have 
known that the exporter was selling the subject merchandise at less 
than its fair value and that there was likely to be material injury by 
reason of such sales, and (B) there have been massive imports of the 
subject merchandise over a relatively short period.

History of Dumping and Importer Knowledge

    We are not aware of any antidumping order in any country on NFAJC 
from the PRC. Therefore, we examined whether there was importer 
knowledge. In determining whether there is a reasonable basis to 
believe or suspect that an importer knew or should have known that the 
exporter was selling NFAJC at less than fair value and thereby causing 
material injury, the Department must rely on the facts before it at the 
time the determination is made. The Department normally considers 
margins of 25 percent or more for EP sales, or 15 percent or more for 
CEP sales, and a preliminary ITC determination of material injury 
sufficient to impute knowledge of dumping and the likelihood of 
resultant material injury.
    In the present case, since we have not yet made a preliminary 
finding of dumping, the most reasonable source of information 
concerning knowledge of dumping is the petition itself. In the 
petition, petitioners calculated estimated dumping margins of 91.84 
percent. The Department adjusted the estimated dumping margin to 51.74 
percent. (See Antidumping Investigation Initiation Checklist dated June 
28, 1999, at page 18.) Therefore, because the adjusted margin exceeds 
the 25 percent threshold, we preliminarily determine that importers 
knew or should have known that the exporters were dumping the subject 
merchandise.
    As to the knowledge of likely injury from such dumped imports, we 
considered the information regarding injury to the domestic industry in 
the petition. We also considered other sources of information, 
including press reports beginning in October 1998 regarding rising 
imports, falling domestic prices resulting from rising imports, and 
domestic buyers shifting to foreign suppliers. In addition to this 
information, the ITC preliminarily found material injury to the 
domestic industry due to imports of NFAJC from the PRC. Therefore, we 
preliminarily find that there is a reasonable basis to believe or 
suspect that importers knew or should have known that material injury 
from the dumped merchandise was likely.

Massive Imports

    In determining whether there are ``massive imports'' over a 
``relatively short time period,'' the Department ordinarily bases its 
analysis on import data for at least the three months preceding (the 
base period) and following (the comparison period) the filing of the 
petition. Imports normally will be considered massive when imports 
during the comparison period have increased by 15 percent or more 
compared to imports during the base period. However, as stated in the 
Department's regulations, at section 351.206(i), if the Secretary finds 
that importers, exporters, or producers had reason to believe, at some 
time prior to the beginning of the proceeding, that a proceeding was 
likely, then the Secretary may consider a time period of not less than 
three months from that earlier time.
    In this case, petitioners argue that importers, exporters, or 
producers of NFAJC from the PRC had reason to believe that an 
antidumping proceeding was likely before the filing of the petition. 
The Department examined whether various press reports regarding the 
likelihood of the filing of an antidumping petition provided a 
sufficient basis for inferring knowledge that a proceeding was likely. 
Based on our examination, we find that the press reports in October 
1998 are sufficient to establish that, by the end of October 1998, 
importers, exporters, or producers knew, or should have known, that a 
proceeding was likely. Accordingly, we preliminarily determine that it 
is more appropriate to use a comparison period starting in November 
1998.
    Respondents have argued the comparison supported by petitioners is 
distorted. In particular, they point to the nature of apple juice 
production in the PRC stating that during the months June--August, no 
apples are available and, hence, there is no juice production. 
Consequently, shipments during this period would be low. By way of 
contrast, respondents argue, the November--March period (the comparison 
period advanced by petitioners) represents the height of the production 
and shipment season.
    We have reviewed the data, and based on the shipments reported by 
the companies that provided critical circumstances data, we agree that 
the levels of shipments in July and August tend to be small relative to 
shipments in other months. The trend of shipments in June is less 
clear--sometimes, relatively large shipments have occurred in that 
month. We also examined shipments in alleged height of the season 
(November--March). Again, the pattern here is not clear: shipments in 
April and May can be higher than shipments during months of the high 
production period.
    Therefore, we agree with respondents that it would be distorted to 
compare shipments during a base period of June--October 1998 (i.e., 
including July and August) to shipments during the November 1998--March 
1999 period. To address this distortion, we have removed the July and 
August 1998 shipments from the amount considered to have been shipped 
during the base period and have added into the base period shipments 
during April and May 1998. In this way, we are comparing five calendar 
months to five calendar months. Also, because there is no consistent 
pattern demonstrating that inclusion of the April-June shipments 
distorts the base period, we believe we have addressed the production/
shipment problem identified by respondents.
    Based on this framework, pursuant to section 733(e) of the Act and 
section 351.206(h) of the Department's regulations, we preliminarily 
determine that there have been massive imports of NFAJC from the PRC 
over a relatively short time for SAAME, Lakeside, Haisheng, Andre, 
Nannan, and for all other exporters covered by this investigation, 
except Oriental and Zhonglu. For a complete discussion of our analysis, 
see Memorandum to Deputy Assistant Secretary Richard W. Moreland, dated 
November 3, 1999, on file in Room B-099 of the Department's 
headquarters.

[[Page 61837]]

Suspension of Liquidation

    In accordance with section 733(e)(2) of the Act, if it issues an 
affirmative preliminary determination of sales at less than fair value 
in this investigation, the Department will direct the U.S. Customs 
Service to suspend liquidation of all entries of NFAJC from the PRC 
from all exporters except Oriental and Zhonglu that are entered, or 
withdrawn from warehouse, for consumption on or after 90 days prior to 
the date of publication in the Federal Register of our preliminary 
determination of sales at less than fair value. The Customs Service 
shall require a cash deposit or posting of a bond equal to the 
estimated preliminary dumping margins reflected in the preliminary 
determination of sales at less than fair value published in the Federal 
Register. This suspension of liquidation will remain in effect until 
further notice.

Final Critical Circumstances Determination

    We will make a final determination of critical circumstances when 
we make our final determination regarding sales at less than fair value 
in this investigation, which is expected to be 75 days after the 
preliminary determination regarding sales at less than fair value.

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination.
    This notice is published pursuant to section 777(i) of the Act.

    Dated: November 3, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-29751 Filed 11-12-99; 8:45 am]
BILLING CODE 3510-DS-P