[Federal Register Volume 67, Number 154 (Friday, August 9, 2002)]
[Notices]
[Pages 51822-51827]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-20235]



[[Page 51822]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic from the People's Republic of China: Preliminary 
Results of Antidumping Duty Administrative Review, Partial Rescission 
of Administrative Review, and Intent to Rescind Administrative Review 
in Part

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review, Partial Rescission of Administrative Review, and 
Intent to Rescind Administrative Review in Part.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on fresh garlic from the People's Republic of 
China. The period of review is November 1, 2000, through October 31, 
2001. Five companies named in the initiation of this review had no 
exports or sales of the subject merchandise during the period of review 
and, consequently, we are rescinding the review of these companies. In 
addition, we are rescinding our review of two companies which are not 
located within the People's Republic of China and which we have not 
been able to contact for information, because available evidence 
indicates no sales or exports subject to this review. Therefore, this 
review covers fourteen exporters of the subject merchandise. We intend 
to rescind the review of one company because we have determined that 
the company is not the appropriate respondent for the sales of which 
the review was requested. We preliminarily determine that eight of the 
companies are not entitled to a separate rate and will be assigned the 
PRC-entity rate. We preliminarily determine that three respondent 
companies, not located within a non-market economy, have failed to 
cooperate by not acting to the best of their ability to comply with our 
requests for information and, as a result, should be assigned a rate 
based on adverse facts available. Finally, we have preliminarily 
determined that one respondent did not make sales to the United States 
at prices below normal value.
    We invite interested parties to comment on these preliminary 
results. Parties that submit comments are requested to submit with each 
argument (1) a statement of the issue and (2) a brief summary of the 
argument.

EFFECTIVE DATE: August 9, 2002.

FOR FURTHER INFORMATION CONTACT: Edythe Artman or Catherine Cartsos, 
Office of AD/CVD Enforcement 3, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C., 20230; telephone: (202) 
482-3931 and (202) 482-1757, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    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 Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to 19 CFR Part 351 (April 2001).

Background

    On October 30, 2001, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on fresh garlic from the People's Republic of China (PRC). See 
Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 66 FR 
54750 (October 30, 2001). We received three requests for administrative 
review on November 30, 2001. Clipper Manufacturing Ltd. (Clipper) and 
Taian Fook Huat Tong Kee Foods Co. (FHTK) each requested a review of 
its own sales of subject merchandise to the United States during the 
period of review (POR). The petitioner, the Fresh Garlic Producers 
Association and its individual members, requested reviews of the sales 
of sixteen companies with addresses in the PRC or Hong Kong, including 
Clipper and FHTK. In addition, it requested reviews of sales of subject 
merchandise of two companies with addresses in Thailand and two 
companies with addresses in the Philippines.
    We published a notice of initiation of antidumping administrative 
reviews on December 19, 2001. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 66 FR 65470 (December 19, 
2001).
    On January 8, 2002, we issued a letter requesting quantity and 
value information to all of the companies listed in our notice of 
initiation. In the case of Rizhao Hanxi Fisheries& Comprehensive 
Development Co., Ltd. (Rizhao), we issued the letter to the Embassy of 
the PRC and the China Chamber of Commerce for Import and Export of 
Foodstuffs, Native Produce, and Animal By-Products (China Chamber of 
Commerce) and requested that they forward the letter to the appropriate 
address. Details of our mailings and the responses that we received are 
set forth in a ``Memorandum to Richard W. Moreland'' regarding 
responses to quantity-and-value letters (May 16, 2002) (Q&V Response 
Memorandum). (All cited memoranda and decision memoranda are on file in 
the Central Records Unit (CRU), Main Commerce Building, Room B-099.) As 
a result of the responses to our letter, we issued complete 
questionnaires to Clipper and FHTK on February 28, 2002.
    During the period April through July 2002, the Department received 
responses to sections A, C, and D of the original and supplemental 
questionnaires from FHTK and Clipper. On May 17, 2002, we requested 
that these companies and the petitioner provide comments on the 
surrogate-country selection and publicly available information for 
valuing the factors of production. We received comments and information 
from FHTK on June 13, 2002, and from the petitioner on June 14, 2002. 
Clipper did not provide comments or information. With respect to FHTK, 
we intend to verify its factors-of-production and sales information 
prior to issuing the final results of review.

Scope of the Order

    The products covered by this antidumping duty order are all grades 
of garlic, whole or separated into constituent cloves, whether or not 
peeled, fresh, chilled, frozen, provisionally preserved, or packed in 
water or other neutral substance, but not prepared or preserved by the 
addition of other ingredients or heat processing. The differences 
between grades are based on color, size, sheathing, and level of decay.
    The scope of this order does not include the following: (a) garlic 
that has been mechanically harvested and that is primarily, but not 
exclusively, destined for non-fresh use; or (b) garlic that has been 
specially prepared and cultivated prior to planting and then harvested 
and otherwise prepared for use as seed.
    The subject merchandise is used principally as a food product and 
for seasoning. The subject garlic is currently classifiable under 
subheadings 0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060, 
0710.80.9750, 0711.90.6000, and 2005.90.9700 of the Harmonized Tariff 
Schedule of the United States (HTSUS).

[[Page 51823]]

 Although the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the scope of this order is 
dispositive. In order to be excluded from the antidumping duty order, 
garlic entered under the HTSUS subheadings listed above that is (1) 
mechanically harvested and primarily, but not exclusively, destined for 
non-fresh use or (2) specially prepared and cultivated prior to 
planting and then harvested and otherwise prepared for use as seed must 
be accompanied by declarations to the Customs Service to that effect.

Separate Rates

    The Department has treated the PRC as a non-market-economy (NME) 
country in all past antidumping investigations (see, e.g., Notice of 
Final Determination of Sales at Less Than Fair Value: Creatine 
Monohydrate from the People's Republic of China, 64 FR 71104 (December 
20, 1999), and Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Preserved Mushrooms from the People's Republic of China, 
63 FR 72255 (December 31, 1998)) and in prior segments of this 
proceeding. A designation as an NME remains in effect until it is 
revoked by the Department. See section 771(18)(C) of the Act. 
Accordingly, there is a rebuttable presumption that all companies 
within the PRC are subject to government control and, thus, should be 
assessed a single antidumping duty rate.
    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in NME countries a single rate, 
unless an exporter can affirmatively demonstrate an absence of 
government control, both in law (de jure) and in fact (de facto), with 
respect to exports. To establish whether a company is sufficiently 
independent to be entitled to a separate, company-specific rate, the 
Department analyzes each exporting entity in an NME country under the 
test established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991) (Sparklers), as amplified by the Notice of Final Determination 
of Sales at Less Than Fair Value: Silicon Carbide from the People's 
Republic of China, 59 FR 22585 (May 2, 1994).
    Several companies located within the PRC did not respond to our 
letter requesting quantity and value information. These companies are 
Foshan Foodstuffs Import & Export Company, Jinan Import & Export 
Corporation, Jinxiang Foreign Trade Corporation, Jinxiang Hong Chong 
Fruits & Vegetable Products Company, Ltd., Quingdao Rui Sheng Food 
Company, Ltd., Rizhao, Shandong Commercial Group Corporation, and 
Zhejiang Materials Industry International Co., Ltd. We have confirmed 
that all of these companies received our letter except for Rizhao, 
which, as noted above, we attempted to contact through the Embassy of 
the PRC and the China Chamber of Commerce. Because none of the eight 
companies responded to our request for information regarding separate 
rates, we preliminarily determine that these respondent-companies do 
not merit separate rates. See, e.g., Natural Bristle Paint Brushes and 
Brush Heads from the People's Republic of China; Preliminary Results of 
Antidumping Duty Administrative Review, 61 FR 57389 (November 6, 1996). 
Consequently, consistent with the statement in our notice of 
initiation, we find that, because these companies do not qualify for 
separate rates, they are deemed to be covered by the PRC-entity rate.
    Hong Kong companies are treated as market-economy companies (see 
Application of U.S. Antidumping and Countervailing Duty Laws to Hong 
Kong, 62 FR 42965 (August 11, 1997)). Wo Hing (H.K.) Trading Co. (Wo 
Hing) has an address in Hong Kong and did not respond to our January 8, 
2002, request for information. Without any information concerning its 
corporate ownership, we presume that it is a Hong Kong entity. Thus, we 
determine that it qualifies for a company-specific rate.
    Similarly, two other non-responding companies have addresses 
outside the PRC. Golden Light Trading Company, Ltd. (Golden Light), has 
an address in Thailand and Phil-Sino International Trading Inc. (Phil-
Sino) has an address located in the Philippines. We presume that these 
are market-economy companies. Thus, we determine that they both qualify 
for a company-specific rate.
    FHTK's submissions establish that Taian Fook Huat Tong Kee Foods 
Co., Ltd., is a PRC-company that is wholly owned by Fook Huat Tong Kee 
Pte., Ltd., a Singaporean company. Fook Huat Tong Kee Pte., Ltd., is 
wholly owned by a Singaporean holding company that is publicly traded. 
Because there is no PRC ownership of Taian Fook Huat Tong Kee Foods 
Co., Ltd., we determine that a separate-rate analysis is not required 
for this company because its parent company is beyond the jurisdiction 
of the PRC government. See Certain Cut-to-Length Carbon Steel Plate 
from Romania: Preliminary Results of Antidumping Duty Administrative 
Review, 64 FR 48581, 48582 (September 7, 1999) (unchanged in final). 
Consequently, FHTK qualifies for a company-specific rate.

Partial Rescission of Administrative Review

    In response to our January 8, 2002, letter requesting quantity and 
value information, five companies responded that they were neither 
producers nor exporters of the subject merchandise. These companies 
were Zen Continental Co., Inc., Rich Shipping Co., Ltd., United 
Shipping Agency Co., Ltd., Asia Pacific Express Company, Ltd., and 
C.I.F. Transportation (HK) Co., Ltd. Their individual responses are 
discussed in and attached to the Q&V Response Memorandum. Each of the 
companies responded that they are involved in the shipping or freight 
industry and that they are not producers or exporters of the subject 
merchandise. We confirmed with the Customs Service that none of them 
were listed as manufacturers or exporters of the subject merchandise 
during the POR. In addition, there is no information on the record to 
indicate that the companies had sales or exports of subject 
merchandise.
    Thus, we find that Zen Continental Co., Inc., Rich Shipping Co., 
Ltd., United Shipping Agency Co., Ltd., Asia Pacific Express Company, 
Ltd., and C.I.F. Transportation (HK) Co., Ltd., made no entries, 
exports, or sales of the subject merchandise during the POR that are 
subject to the administrative review. Consequently, we are rescinding 
the review with respect to each of them pursuant to 19 CFR 
351.213(d)(3).
    We were unable to contact two companies, Top Pearl Ltd. and Good 
Fate International that had addresses in Hong Kong and the Philippines, 
respectively. Despite our repeated attempts to contact these companies, 
the letters we sent to these companies were returned to us as not 
deliverable. For details of our attempts to contact the companies, see 
Q&V Response Memorandum. We confirmed through data from the Customs 
Service that neither Top Pearl nor Good Fate were listed as 
manufacturers or exporters of the subject merchandise during the POR. 
Thus, because we have been unable to locate these companies and because 
there is no evidence on the record that these companies had exports or 
sales of the subject merchandise subject to this review, we are 
rescinding the review with respect to each of them pursuant to 19 CFR 
351.213(d). In the event there are any entries during the POR of 
subject merchandise exported by these companies during the POR, we will 
instruct the Customs Service to

[[Page 51824]]

assess antidumping duties at the rate equal to the cash deposit of 
estimated duties required on that merchandise at the time of entry, or 
withdrawal from warehouse, for consumption. See 19 CFR 351.212(c). For 
future entries of subject merchandise from these companies, the cash 
deposit rate will be the rate applicable to the PRC supplier of the 
merchandise.

Intent to Rescind in Part

    Pursuant to section 772(a) of the Act, the Department reviews the 
sales of the subject merchandise by the seller who first had knowledge 
that the merchandise was destined for export to the United States. 
Clipper, a trading company located in Hong Kong, requested a review of 
its sales of fresh garlic to a reported U.S. customer. Clipper 
identified Chengwu Hechang Vegetable Co., Ltd. (Chengwu), and Anhui 
Weifu Foods Co., Ltd. (Anhui), as its suppliers in its questionnaire 
responses. Both companies are PRC-based processors of fresh garlic. 
Because Chengwu and Anhui did not have export licenses and were unable 
to maintain U.S.-dollar bank accounts, they used the services of PRC-
based export agents to sell subject merchandise during the POR. The 
export agents shipped the subject merchandise directly from the PRC to 
the United States. Clipper paid the export agents in U.S. dollars. The 
export agents paid Chengwu and Anhui in Chinese renminbi.
    Clipper acknowledges in its April 6, 2002, questionnaire response 
and June 13, 2002, supplemental questionnaire response that Chengwu and 
Anhui had knowledge of the U.S. destination of the subject merchandise 
at the time of sale. See the response to section A of the 
questionnaire, dated April 6, 2002, p. 16, and response to the 
supplemental questionnaire, dated June 13, 2002, p. 9. Furthermore, all 
of the shipping and export documentation that Clipper submitted to the 
Department established the U.S. destination of the merchandise. Thus, 
the export agents had knowledge of the U.S. destination of the subject 
merchandise. See response to section A of the questionnaire, dated 
April 6, 2002, exhibit A-11, and response to the supplemental 
questionnaire, dated June 13, 2002, exhibit SA-8.
    Clipper asserts that the export agents never took title to the 
subject merchandise. The invoices and wire transfers between Clipper 
and the export agents establish, however, that sales transactions did 
occur between the two parties. By contrast, Clipper provided no 
documentation of a transaction between Clipper and Anhui or between 
Clipper and Chengwu despite repeated requests for such documentation. 
See response to section A of the questionnaire, dated April 6, 2002, 
exhibit A-11, and response to the supplemental questionnaire, dated 
June 13, 2002, exhibit SA-9.
    Section 772(a) of the Act states in part:
    The term ``export price'' means the price at which the subject 
merchandise is first sold (or agreed to be sold) before the date of 
importation by the producer or exporter of the subject merchandise 
outside of the United States to an unaffiliated purchaser in the United 
States or to an unaffiliated purchaser for exportation to the United 
States...
    Accordingly, we have interpreted section 772(a) of the Act to mean 
that we are to use the price at which the first party in the chain of 
distribution who has knowledge of the U.S. destination of the 
merchandise sells the subject merchandise, either directly to a U.S. 
purchaser or to an intermediary such as a trading company. The party 
making such a sale, with knowledge of destination, is the appropriate 
party to be reviewed. Our focus is on the first party in the chain of 
distribution with knowledge of the U.S. destination rather than on the 
first chronological sale of the merchandise. One restriction to this 
rule is that, in NME cases, we do not base export price on internal 
transactions between two companies located in the NME. See Fresh Garlic 
from the People's Republic of China; Final Results of Antidumping Duty 
Administrative Review and Partial Termination of Administrative Review, 
62 FR 23758, 23759 (May 1, 1997).
    Applying these principles, we do not intend to review Clipper's 
sales to its U.S. customer because the PRC export agents had knowledge 
of the U.S. destination when they made the sales to Clipper. Further, 
we know Chengwu and Anhui had knowledge of the ultimate destination of 
this merchandise. We also believe that the PRC export agents had 
knowledge, accordingly, of the destination of the goods as well. 
Because of their knowledge and the fact that the sales from the agents 
to Clipper were the first non-intra-NME sales in the chain of 
distribution, these sales are the appropriate basis for determining the 
export price. We therefore intend to rescind this review as it applies 
to Clipper.
    The Department did not receive a request for review of the PRC 
export agents during the anniversary month of the publication of the 
antidumping duty order. See 19 CFR 351.213(b). Therefore, it is not 
appropriate to conduct a review of the sales at issue. Furthermore, 
because Clipper is not an appropriate respondent for review of the 
sales, it is our intent to rescind the administrative review with 
respect to this company.

Non-Responding Companies

A. Use of the PRC-Wide Rate

    For the eight companies located within the PRC which received our 
request for information but did not respond to that request, we find 
that they do not qualify for a separate rate for reasons discussed in 
the ``Separate Rates'' section above. Therefore, we preliminarily 
determine that they will be assigned the PRC-wide rate as part of the 
PRC-entity for the results of this review.

B. Use of Adverse Facts Available

    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 Department shall, subject to section 
782(d) of the Act, use the facts otherwise available in reaching the 
applicable determination under this title.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits, the Department 
may, subject to section 782(e) of the Act, disregard all or part of the 
original and subsequent responses, as appropriate. Section 782(e) of 
the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all the applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, and is not so incomplete that it cannot be 
used, and if the interested party acted to the best of its ability in 
providing the information.

[[Page 51825]]

 Where all of these conditions are met, the statute requires the 
Department to use the information, if it can do so without undue 
difficulty.
    According to section 776(b) of the Act, 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 use information that is adverse to the interests of the 
party as facts otherwise available. Adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See Statement 
of Administrative Action (SAA) accompanying the URAA, H. Doc. No. 316, 
103d Cong., 2d Session at 870 (1994). Furthermore, ``an affirmative 
finding of bad faith on the part of the respondent is not required 
before the Department may make an adverse inference.'' Antidumping 
Duties; Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 
1997).
    An adverse inference may include reliance on information derived 
from the petition, the final determination in the investigation, any 
previous review, or any other information placed on the record. See 
section 776(b) of the Act. However, section 776(c) provides that, when 
the Department relies on secondary information rather than on 
information obtained in the course of a review, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. The SAA states 
that the independent sources may include published price lists, 
official import statistics and customs data, and information obtained 
from interested parties during the particular investigation or review. 
See SAA at 870. The SAA clarifies that ``corroborate'' means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. Id. As noted in Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996) (TRBs), to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used. However, 
because there are no independent sources from which the Department can 
derive calculated dumping margins, unlike other types of information 
such as input costs or selling expenses, the only source for margins is 
previous administrative determinations.
    Three companies that are not located within an NME country, Golden 
Light, Phil-Sino, and Wo Hing, did not respond to our request for 
information. We have confirmed that they received our letter but opted 
not to respond. For details of our mailing, see the Q&V Response 
Memorandum. Moreover, as discussed in the ``Separate Rates'' section 
above, we have determined that each of the companies qualify for a 
company-specific rate. Because the companies did not respond to our 
request for information, we find it necessary, under section 776(a)(2) 
of the Act, to use facts otherwise available as the basis for the 
preliminary results of review for these three companies.
    In addition, we find that Golden Light, Phil-Sino, and Wo Hing each 
failed to cooperate by not acting to the best of its ability to comply 
with a request for information. Thus, we find it appropriate to use an 
inference that is adverse to the interests of each of these companies 
in selecting from among the facts otherwise available. By doing so, we 
ensure that the companies will not obtain a more favorable result by 
failing to cooperate than had they cooperated fully in the review.
    Further, we find it necessary to use facts otherwise available as 
the basis for the rate for the PRC-entity, including the eight PRC 
companies who opted not to respond to our request for information, and 
that it is appropriate to use an inference that is adverse in the 
selection of these facts. In this way, we ensure that these exporters 
will not obtain a more favorable result by failing to cooperate than 
had they cooperated fully in the review.
    The only rate that has ever been assigned in this proceeding is 
376.67 percent, a rate that is currently the PRC-wide rate and that was 
calculated based on information contained in the petition. The rate was 
corroborated for the preliminary results of the first administrative 
review. See Fresh Garlic from the People's Republic of China; 
Preliminary Results of Antidumping Duty Administrative Review and 
Partial Termination of Administrative Review, 61 FR 68229, 68230 
(December 27, 1996). We corroborated the information in subsequent 
reviews to the extent that we noted the history of corroboration and 
found that we had not received any information that warranted 
revisiting the issue. See Fresh Garlic from the People's Republic of 
China; Preliminary Results of Antidumping Duty New Shipper Review, 
Preliminary Results of Antidumping Duty Administrative Review, and 
Partial Rescission of Administrative Review, 66 FR 44596 (August 24, 
2001). Similarly, no information has been presented in the current 
review that calls into question the reliability of this rate. Thus, we 
find that the information is reliable.
    With respect to the relevance aspect of corroboration, the 
Department stated in TRBs that it will ``consider information 
reasonably at its disposal as to whether there are circumstances that 
would render a margin irrelevant. Where circumstances indicate that the 
selected margin is not appropriate as adverse facts available, the 
Department will disregard the margin and determine an appropriate 
margin.'' See TRBs at 61 FR 57392. See also Fresh Cut Flowers from 
Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 
6812, 6814 (February 22, 1996) (disregarding the highest margin in the 
case as best information available because the margin was based on 
another company's uncharacteristic business expense resulting in an 
extremely high margin). There is no information on the record that the 
application of this rate would be inappropriate in the administrative 
review or that the margin is not relevant; therefore, we have applied, 
as adverse facts available, the 376.67 percent margin from a prior 
administrative review of this order and have satisfied the 
corroboration requirements under section 776(c) of the Act. See 
Persulfates from the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review, 66 FR 18439, 18441 (April 9, 
2001) (employing a petition rate used as adverse facts available in a 
previous segment as the adverse facts available in the current review).
    Therefore, we preliminarily determine that the rate of 376.67 
percent should be used as the adverse facts available for the 
preliminary results of review for Golden Light, Phil-Sino, and Wo Hing. 
We also preliminarily determine that the rate of 376.67 percent should 
be used as the adverse facts available for the preliminary results of 
review for the PRC-entity and, accordingly, applies to Foshan 
Foodstuffs Import & Export Company, Jinan Import & Export Corporation, 
Jinxiang Foreign Trade Corporation, Jinxiang Hong Chong Fruits & 
Vegetable Products Company, Ltd., Quingdao Rui Sheng Food Company, 
Ltd., Rizhao, Shandong Commercial Group Corporation, and Zhejiang 
Materials Industry International Co., Ltd.

[[Page 51826]]

Fair Value Comparisons

    To determine whether sales of fresh garlic to the United States by 
FHTK were made at less than fair value, we compared the export price of 
the subject merchandise to normal value, as described in the ``Export 
Price'' and ``Normal Value'' sections below.

Export Price

    In accordance with section 772(a) of the Act, we used export-price 
methodology because the first sale to an unaffiliated purchaser was 
made outside the United States before importation of the merchandise 
into the United States. We calculated the export price based on prices 
from FHTK to the unaffiliated U.S. customers. We made deductions, where 
appropriate, from the gross unit price to account for foreign inland 
freight, international freight, customs duties, and brokerage and 
handling. Because certain domestic charges, such as those for foreign 
inland freight, were provided by NME companies, we valued those charges 
based on surrogate rates from India. See ``Memorandum to the File'' 
regarding the factors valuation for the preliminary results of the 
administrative review (August 2, 2002) (FOP Memorandum).

Normal Value

1. Surrogate Country

    When investigating imports from a NME country, section 773(c)(1) of 
the Act directs the Department to base normal value, in most 
circumstances, on the NME producer's factors of production valued in a 
surrogate market-economy country or countries considered to be 
appropriate by the Department. In accordance with section 773(c)(4) of 
the Act, in valuing the factors of production, the Department shall 
use, to the extent practicable, the prices or costs of factors of 
production in one or more market-economy countries that are at a level 
of economic development comparable to the NME country and are 
significant producers of comparable merchandise. The sources of the 
surrogate factor values are discussed under the ``Factor Valuations'' 
section below.
    The Department has determined that India, Pakistan, Indonesia, Sri 
Lanka, and the Philippines are countries comparable to the PRC in terms 
of economic development. See ``Memorandum to Laurie Parkhill'' 
regarding 2000-2001 administrative review and new shipper reviews of 
the antidumping duty order on fresh garlic from the People's Republic 
of China (February 28, 2002). In addition to being among the countries 
comparable to the PRC in economic development, India is a significant 
producer of the subject merchandise. We used India as the surrogate 
country and, accordingly, we have calculated normal value using Indian 
prices to value the PRC producer's factors of production, when 
available and appropriate. We have obtained and relied upon publicly 
available information wherever possible. See ``Memorandum to the File'' 
regarding the selection of a surrogate country (August 2, 2002).
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
of an administrative review, interested parties may submit publicly 
available information to value the factors of production until 20 days 
following the date of publication of these preliminary results.

2. Factors of Production

    Section 773(c)(1) of the Act provides that the Department shall 
determine the normal value using a factors-of-production methodology if 
(1) the merchandise is exported from an NME country and (2) the 
information does not permit the calculation of normal value using home-
market prices, third-country prices, or constructed value under section 
773(a) of the Act. Factors of production include the following 
elements: (1) hours of labor required, (2) quantities of raw materials 
employed, (3) amounts of energy and other utilities consumed, and (4) 
representative capital costs. We used factors of production reported by 
FHTK for materials, energy, labor, and packing. We valued all the input 
factors using publicly available, published information, as discussed 
in the ``Surrogate Country'' and ``Factor Valuations'' sections of this 
notice. In accordance with 19 CFR 351.408(c)(1), where a producer 
sources an input from a market economy and pays for it in market-
economy currency, the Department employs the actual price paid for the 
input to calculate the factors-based normal value. See also Lasko Metal 
Products v. United States, 437 F.3d 1442, 1445-1446 (CAFC 1994). 
Therefore, where FHTK had market-economy inputs and paid for these 
inputs in a market-economy currency, we used the actual prices paid for 
those inputs in our calculations.

3. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated normal 
value based on factors of production reported by FHTK for the POR. To 
calculate normal value, we multiplied the reported per-unit factor 
quantities by publicly available Indian surrogate values. In selecting 
the surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
by including freight costs to make them delivered prices. For a 
detailed description of all the surrogate values used, see the FOP 
Memorandum.
    We added a surrogate freight cost, using the shortest reported 
distance from the domestic supplier to the factory, to Indian import 
surrogate values. This adjustment is in accordance with the decision in 
Sigma Corporation v. United States, 117 F. 3d 1401, 1407-08 (CAFC 
1997).
    For those Indian rupee values not contemporaneous with the POR, we 
adjusted for inflation using wholesale price indices for India 
published in the International Monetary Fund's International Financial 
Statistics. For those U.S. dollar-denominated values not 
contemporaneous with the POR, we adjusted for inflation using producer 
price indices published on the Federal Reserve Bank website 
(www.dallasfed.org/htm/data/data/wsop03sa.tab.htm).
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the Monthly Trade 
Statistics of Foreign Trade of India Volume II Imports(Indian Import 
Statistics) for the time period April 2001 through September 2001. 
Where POR-specific Indian import statistics were not available, we used 
Indian import statistics from an earlier period (i.e., April 2001 
through June 2001). Surrogate-value data or sources to obtain such data 
were obtained from FHTK, the petitioner, and Department research.
    We valued water based on data from the Asian Development Bank's 
Second Water Utilities Data Book: Asian and Pacific Region (October 
1997). We valued electricity based on data from the International 
Energy Agency's Energy Prices& Taxes: Quarterly Statistics(First 
Quarter, 2000). We relied on the same source for data used to value 
gasoline.
    FHTK reported packing inputs consisting of mesh bags, cartons, 
packing belts, wood and nails. The wood and nails were used to 
construct pallets on which to transport the packed cartons of garlic. 
We used Indian Import Statistics data for the period April 2001 through 
September 2001 to value all of these inputs.
    We valued the truck rate based on average truck rates that were 
published in the Indian daily, The Financial Express(February 14, 
2000). We valued brokerage and handling charges based on a value 
calculated for the less-than-

[[Page 51827]]

fair-value investigation of stainless steel wire rod from India.
    As we explained in our FOP memorandum, we have not been able to 
locate financial information of a publicly-traded Indian fresh garlic 
producer or an Indian producer of other fresh vegetables. Of the 
publicly available financial information currently on the record, the 
financial information of three Indian producers of preserved mushrooms 
constitutes the information from the industry most comparable to the 
fresh garlic industry. Thus, to value factory overhead, selling, 
general and administrative expenses, and profit, we used rates based on 
data taken from the financial information of the mushroom producers. 
Specifically, we calculated the rates based on the 1999/2000 financial 
statements of Himalaya International Ltd., Flex Foods Ltd., and Agro 
Dutch Foods Ltd.
    For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC 
regression-based wage rate that appears on the website for Import 
Administration (http://ia.ita.doc.gov/wages) under the listing of wage 
rates for NME countries revised in May 2000. The source of the wage-
rate data for the Import Administration's website is the International 
Labor Organization's 1999 Year Book of Labour Statistics (Geneva, 
1999), ch.5B.

Preliminary Results of the Review

    We preliminarily determine that the following dumping margins exist 
for the period November 1, 2000, through October 31, 2001:

------------------------------------------------------------------------
                                                        Weighted-average
                       Exporter                        percentage margin
------------------------------------------------------------------------
Golden Light Trading Company, Ltd....................             376.67
Phil-Sino International Trading Inc..................             376.67
Wo Hing (H.K.) Trading Co............................             376.67
Taian Fook Huat Tong Kee Foods Co.\1\................               0.00
PRC-wide rate........................................             376.67
------------------------------------------------------------------------
\1\ For duty assessment purposes, the results of this review apply only
  to subject merchandise that was produced and exported to the United
  States by this company.

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). 
Case briefs must be submitted within 30 days of the date of publication 
of this notice; case briefs regarding FHTK must be submitted no later 
than seven days after the issuance of the Department's verification 
report. Rebuttal briefs, limited to issues raised in the case briefs, 
must be filed within five days after the deadline for submission of 
case briefs. Parties who submit argument in these proceedings are 
requested to submit with the argument a statement of the issue, a brief 
summary of the argument with an electronic version included, and a 
table of authorities.
    Pursuant to 19 CFR 351.310, any interested party may request a 
hearing within 30 days of the date of publication of this notice. Any 
hearing, if requested, will be held three days after the deadline for 
submission of the rebuttal briefs or the first workday thereafter. In 
accordance with 19 CFR 351.309(c)(ii), issues raised in hearings will 
be limited to those raised in the case and rebuttal briefs.
    The Department will publish the final results of this 
administrative review, including the results of its analysis of issues 
raised in any case or rebuttal brief, not later than 120 days after the 
date of publication of this notice.

Assessment Rates

    Upon completion of this administrative review, the Department will 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we 
have calculated an exporter/importer (or customer)-specific assessment 
value for merchandise subject to this review. The Department will issue 
appropriate appraisement instructions directly to the Customs Service 
upon completion of this review. If these preliminary results are 
adopted in our final results of review, we will direct the Customs 
Service to assess the resulting assessment rates against the entered 
customs values for the subject merchandise on each of the importer's/
customer's entries during the review period.

Cash-Deposit Requirements

    The following cash-deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) for merchandise 
exported by FHTK, the cash-deposit rate will be that established in the 
final results of this review, except if the rate is less than .50 
percent and therefore de minimis within the meaning of 19 CFR 
351.106(c)(1), in which case the cash-deposit rate will be zero; (2) 
for all other PRC exporters, the rate will continue to be the PRC-wide 
rate of 376.67 percent; (3) for Golden Light, Phil-Sino, and Wo Hing, 
the cash-deposit rate will be that established in the final results of 
this review; and (4) for all other non-PRC exporters of subject 
merchandise from the PRC, including Clipper, Top Pearl Ltd., and Good 
Fate International, the cash-deposit rate will be the rate applicable 
to the PRC supplier of that exporter. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.

Notification to Importers

    This notice also serves as a preliminary 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 the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these preliminary results of review 
in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    DATED: August 2, 2002.
Faryar Shirzad,
Assistant Secretary forImport Administration.
[FR Doc. 02-20235 Filed 8-8-02; 8:45 am]
BILLING CODE 3510-DS-S