[Federal Register Volume 68, Number 237 (Wednesday, December 10, 2003)]
[Notices]
[Pages 68868-68874]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-30625]


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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 and New Shipper 
Reviews

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review and new shipper reviews.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review and new 
shipper reviews of the antidumping duty order on fresh garlic from the 
People's Republic of China. The period of review for the administrative 
review and the new shipper reviews is November 1, 2001, through October 
31, 2002. The reviews cover six manufacturers/exporters.
    With respect to the administrative review, we preliminarily 
determine that Jinan Yipin Corporation, Ltd., has made sales in the 
United States at prices below normal value and Shandong Heze 
International Trade and Developing Company has made sales in the United 
States at prices not below normal value. With respect to the new 
shipper reviews, we preliminarily determine that Jining Trans-High 
Trading Co., Ltd., and Zhengzhou Harmoni Spice Co., Ltd., have made 
sales in the United States at prices not below normal value. Further, 
we preliminarily determine that Top Pearl Ltd. and Wo Hing (H.K.) 
Trading Co. are not entitled to separate rates and have assigned them 
the rate for the country-wide entity.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments are requested to submit with each 
argument a statement of the issue and a brief summary of the argument.

EFFECTIVE DATE: December 10, 2003.

FOR FURTHER INFORMATION CONTACT: Minoo Hatten or Mark Ross, Office of 
Antidumping/Countervailing Duty Enforcement 3, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, DC 20230; telephone 
(202) 482-1690 or (202) 482-4794, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 1, 2002, the Department of Commerce (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, 67 FR 66612. On December 26, 2002, we published 
in the Federal Register the Notice of Initiation of Antidumping and 
Countervailing Duty Administrative Reviews (67 FR 78772) in which we 
initiated the administrative review of the antidumping duty order on 
fresh garlic from the PRC.
    We published a notice of initiation of new shipper antidumping duty 
reviews for Jining Trans-High Trading Co., Ltd. (Trans-High), Zhengzhou 
Harmoni Spice Co., Ltd. (Harmoni), and Xiangcheng Yisheng Foodstuffs 
Co., Ltd., on January 6, 2003. See Notice of Initiation of New Shipper 
Antidumping Duty Reviews: Fresh Garlic from the People's Republic of 
China, 68 FR 542.
    On January 24, 2003, the petitioners (the Fresh Garlic Producers 
Association and its individual members) submitted a request for 
alignment of the new shipper and administrative reviews. On February 
12, 21, and March 5, 2003, each respondent in the new shipper reviews 
responded in writing to the request for alignment, agreeing to waive 
the statutory time limits in the new shipper reviews. As all three of 
the respondents agreed to waive the time limits, we decided to grant 
the request for alignment of the reviews pursuant to 19 CFR 
351.214(j)(3). See memorandum to the file from Jennifer Moats entitled 
``Request Regarding Alignment of New Shipper and Administrative 
Reviews,'' dated March 10, 2003.
    One company named in the notice of initiation for the 
administrative review, Fook Huat Tong Kee Pte., Ltd., had no exports or 
sales of the subject merchandise during the period of review and, 
consequently, we rescinded the review of this company. In addition, the 
review requests for Clipper Manufacturing Ltd., Huaiyang Hongda 
Dehydrated Vegetable Company, Golden Light Trading Company, Ltd., Good 
Fate International, Phil-Sino International Trading Inc., and Mai Xuan 
Fruitex Co., Ltd., were withdrawn subsequent to the initiation of the 
administrative review and, therefore, we rescinded the review of these 
six companies. See Fresh Garlic From The People's Republic of China: 
Partial Rescission of Antidumping Duty Administrative Review, 68 FR 
46580 (August 6, 2003).
    On August 7, 2003, we extended the deadline for the issuance of the 
preliminary results of the administrative and new shipper reviews by 90 
days, until October 31, 2003 (68 FR 47020).
    On August 15, 2003, we issued supplemental questionnaires in which 
we requested information from the U.S. customers for the sales involved 
in the new shipper reviews of Trans-High and Harmoni. We received 
responses from Trans-High's and Harmoni's U.S. customers on August 29, 
2003, and on September 5, 2003, respectively. As detailed in the 
memorandum from Brian Ellman to the File dated November 25, 2003, we 
have so far been unable to contact Trans-High's U.S. customer by 
telephone, facsimile, or Federal Express regarding its incomplete 
response. As such, we intend to continue to evaluate the information on 
the record with respect to Trans-High for the final results of review.
    On September 26, 2003, the Department determined preliminarily 
that, based on the use of adverse facts available, the new shipper 
Xiangcheng Yisheng Foodstuffs Co., Ltd., sold subject merchandise to 
the United States at prices below normal value. See Fresh Garlic from 
the People's Republic of China: Preliminary Results of Antidumping Duty 
New Shipper Review for Xiangcheng Yisheng Foodstuffs Co., Ltd., 68 FR 
55583 (September 26, 2003). On October 23, 2003, the Department 
extended the deadline for issuing the preliminary results for the other 
companies in these administrative and new shipper reviews until 
December 1, 2003. See Fresh Garlic From the People's Republic of China: 
Notice of

[[Page 68869]]

Extension of Time Limit for the Preliminary Results of Antidumping Duty 
Administrative and New Shipper Reviews, (68 FR 60640).
    The petitioners have submitted recent pre-preliminary comments 
concerning Jinan Yipin. We continue to evaluate these comments and we 
will consider them for the final results of review.

Scope of the Order

    The products subject to the 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). Although the HTSUS subheadings 
are provided for convenience and customs purposes, the written 
description of the scope of this proceeding 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 U.S. Customs and Border Protection (Customs) to that 
effect.

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(the Act), we verified information provided by certain respondents 
using standard verification procedures, including on-site inspection of 
the producers' facilities, the examination of relevant sales and 
financial records, and the selection of original documentation 
containing relevant information. Our verification results are outlined 
in the public versions of the verification reports, which are on file 
in the Central Records Unit (CRU). With respect to Shandong Heze 
International Trade and Developing Company (Shandong Heze), the 
verification took place recently and, therefore, the report is still 
pending completion and not yet on file. We will issue the report 
shortly after the issuance of these preliminary results of review and 
parties can comment on the applicability of the verification findings 
to our calculations. Following issuance of these preliminary results, 
we intend to verify the factors-of-production (FOP) information which 
Jinan Yipin has submitted.

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: Bulk Aspirin From 
the People's Republic of China, 65 FR 33805 (May 25, 2000), and Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Non-
Frozen Apple Juice Concentrate from the People's Republic of China, 65 
FR 19873 (April 13, 2000)) 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) (Silicon Carbide).
    For the reasons discussed in the section below titled ``The PRC-
Wide Rate and Use of Facts Otherwise Available'', we have determined 
that Top Pearl Ltd. (Top Pearl) and Wo Hing (H.K.) Trading Co. (Wo 
Hing) do not qualify for a separate rate and are deemed to be covered 
by the PRC-entity rate.
    Jinan Yipin Corporation Ltd. (Jinan Yipin), Shandong Heze, Trans-
High, and Harmoni provided separate-rate information in their responses 
to our original and supplemental questionnaires. Accordingly, we 
performed separate-rates analyses to determine whether each producer/
exporter is independent from government control (see Notice of Final 
Determination of Sales at Less Than Fair Value: Bicycles From the 
People's Republic of China, 61 FR 56570 (April 30, 1996)).

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; (3) any other formal 
measures by the government decentralizing control of companies.
    Each respondent has placed on the record a number of documents to 
demonstrate absence of de jure control including the ``Foreign Trade 
Law of the People's Republic of China'' and the ``Administrative 
Regulations of the People's Republic of China Governing the 
Registration of Legal Corporations.'' The Department has analyzed such 
PRC laws and found that they establish an absence of de jure control. 
See, e.g., Preliminary Results of New Shipper Review: Certain Preserved 
Mushrooms From the People's Republic of China, 66 FR 30695, 30696 (June 
7, 2001). We have no information in this proceeding that would cause us 
to reconsider this determination.

2. Absence of De Facto Control

    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto governmental control of its 
export functions: (1) whether the export prices are set by, or subject 
to, the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts, and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of its management; (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide at 22587.
    As stated in previous cases, there is some evidence that certain 
enactments

[[Page 68870]]

of the PRC central government have not been implemented uniformly among 
different sectors and/or jurisdictions in the PRC. See Silicon Carbide 
at 22586-22587. Therefore, the Department has determined that an 
analysis of de facto control is critical in determining whether 
respondents are, in fact, subject to a degree of governmental control 
which would preclude the Department from assigning separate rates.
    Jinan Yipin reported that it is a limited-liability company owned 
by private investors. Shangdong Heze and Trans-High reported that they 
are limited-liability companies. Harmoni reported that it is a 
privately owned company. Each has asserted the following: (1) There is 
no government participation in setting export prices; (2) sales 
managers and authorized employees have the authority to bind sales 
contracts; (3) they do not have to notify any government authorities of 
management selections; (4) there are no restrictions on the use of 
export revenue; (5) each is responsible for financing its own losses. 
Jinan Yipin's, Shangdong Heze's, Trans-High's, and Harmoni's 
questionnaire responses do not suggest that pricing is coordinated 
among exporters. During our analysis of the information on the record 
we found no information indicating the existence of government control. 
Consequently, we preliminarily determine that Jinan Yipin, Shangdong 
Heze, Trans-High, and Harmoni have met the criteria for the application 
of a separate rate.

The PRC-Wide Rate and Use of Facts Otherwise Available

    All respondents were given the opportunity to respond to the 
Department's questionnaire. As explained above, we received 
questionnaire responses from Jinan Yipin, Shandong Heze, Trans-High, 
and Harmoni, and we have calculated a separate rate for each of these 
companies. The PRC-wide rate applies to all entries of subject 
merchandise except for entries from companies that have received their 
own rate based on the final results of a prior segment of this 
proceeding (e.g., Jinan Yipin). As discussed below, Top Pearl and Wo 
Hing are appropriately considered part of the PRC-wide entity.
    Top Pearl and Wo Hing did not respond to the Department's 
questionnaire. 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, or (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, the Department shall, subject to section 782(d), 
use the facts otherwise available in reaching the applicable 
determination under this title. Furthermore, under section 782(c) of 
the Act, a respondent has a responsibility not only to notify the 
Department if it is unable to provide requested information but also to 
provide a ``full explanation and suggested alternative forms.'' Because 
Top Pearl and Wo Hing did not respond to the questionnaire, we find 
that, in accordance with sections 776(a)(2)(A) and (B) of the Act, the 
use of total facts available is appropriate. See, e.g., Final Results 
of Antidumping Duty Administrative Review for Two Manufacturers/
Exporters: Certain Preserved Mushrooms from the People's Republic of 
China, 65 FR 50183, 50184 (August 17, 2000).
    Section 776(b) of the Act provides that, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may 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. 103-
316, at 870 (1994). Section 776(b) of the Act authorizes the Department 
to use as adverse facts- available information derived from the 
petition, the final determination from the less-than-fair-value (LTFV) 
investigation, a previous administrative review, or any other 
information placed on the record.
    On December 30, 2002, the Department issued its antidumping duty 
questionnaire to Top Pearl and Wo Hing via Federal Express. On January 
6, 2003, the questionnaire issued to Top Pearl was returned to the 
Department by Fed Ex because it had been unable to deliver the package. 
We were able to obtain a correct address for Top Pearl and re-issued 
the questionnaire on January 14, 2003. We confirmed that the 
questionnaire was signed for and received on January 16, 2003. See 
memorandum to file regarding questionnaire for Top Pearl, Ltd., dated 
January 15, 2003, and memorandum from Mark Ross, Program Manager, to 
Laurie Parkhill, Office Director, entitled ``Responses to 
Questionnaire'' dated June 27, 2003 (Status of Questionnaire Responses 
Memorandum). We also confirmed that Wo Hing signed for and received the 
questionnaire on January 2, 2003. See Status of Questionnaire Responses 
Memorandum. Because Top Pearl and Wo Hing did not provide responses to 
the Department's questionnaire, the Department is unable to determine 
Top Pearl's and Wo Hing's eligibility for a separate rate. Thus, Top 
Pearl and Wo Hing have not rebutted the presumption of government 
control and are presumed to be part of the PRC entity.
    The PRC entity (including Top Pearl and Wo Hing) failed to 
cooperate to the best of its ability in this administrative review, 
thus making the use of an adverse inference appropriate. Therefore, in 
accordance with the Department's practice, as adverse facts available, 
we have preliminarily assigned to the PRC entity (including Top Pearl 
and Wo Hing) the PRC-entity rate of 376.67 percent.
    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, a figure which it applies as facts 
available. To be considered corroborated, information must be found to 
be both reliable and relevant. Throughout the history of this 
proceeding, the highest rate ever calculated is 376.67 percent; it is 
currently the PRC-wide rate and was calculated based on information 
contained in the petition. See Notice of Final Determination of Sales 
at Less Than Fair Value: Fresh Garlic from the People's Republic of 
China, 59 FR 49058, 49059 (September 26, 1994). The information 
contained in the petition 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). Further, it was corroborated in 
subsequent reviews to the extent that the Department referred to the 
history of corroboration and found that the Department received no 
information that warranted revisiting the issue. See Fresh Garlic from 
the People's Republic of China: Final Results of Antidumping 
Administrative Review and Rescission of New Shipper Review, 67 FR 11283 
(March 13, 2002). Similarly, no information has been presented in the 
current review that calls into question the reliability of this 
information. Thus, the Department finds that the information is 
reliable.
    With respect to the relevance aspect of corroboration, the 
Department stated 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,

[[Page 68871]]

from Japan; Preliminary Results of Antidumping Duty Administrative 
Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 
57392 (November 6, 1996) (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, 61 FR at 57392. See also Fresh Cut Flowers from 
Mexico; Preliminary 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). The rate used is the rate currently applicable 
to Top Pearl, Wo Hing, and all exporters subject to the PRC-wide rate. 
Further, there is no information on the administrative record of the 
current review that indicates the application of this rate would be 
inappropriate or that the margin is not relevant. Therefore, for all 
sales of subject merchandise exported by Top Pearl and Wo Hing, 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 adverse facts available in the current review).
    With respect to Jinan Yipin, the use of adverse facts available is 
warranted because it has not provided information critical to the 
calculation of an antidumping duty margin and impeded the conduct of 
the administrative review by not providing correct and thorough 
responses to our questions, before, during, and following verification. 
These inadequacies relate to two issues: (1) whether Jinan Yipin 
reported some sales to an affiliated party as unaffiliated-party sales 
and (2) whether Jinan Yipin captured all of its indirect selling 
expenses on U.S. sales in its response.
    We find that, pursuant to section 776(a)(2)(A) of the Act, Jinan 
Yipin withheld information concerning the relationship between American 
Yipin's (Jinan Yipin's U.S. affiliate) sales manager, Edward Lee, and 
one of its customers. As described in detail in the memorandum from 
Laurie Parkhill, Office Director, AD/CVD Enforcement 3, to Jeffrey May, 
Deputy Assistant Secretary, Import Administration, dated December 1, 
2003 (Jinan Yipin Facts-Available Memorandum), the verification team 
requested information from Edward Lee and American Yipin several times 
but was given inadequate, incomplete, or incorrect responses. Although 
American Yipin finally provided answers to many of the questions which 
the Department requested, it did so only after the Department did a 
great deal of its own research and presented facts to American Yipin 
which contradicted earlier statements the company had made. 
Nonetheless, after all of these questions and responses, new and 
further issues pertaining to affiliations between affiliates of both 
American Yipin and the U.S. customer now exist on the record. Thus, 
with respect to section 776(a)(2)(C) of the Act, the inadequate 
responses we received throughout the administrative review from Jinan 
Yipin impeded our process significantly. Thus, pursuant to these 
provisions, the use of facts otherwise available is warranted in this 
case.
    Section 782(d) of the Act provides that, if the Department 
determines that a response to a request for information does not comply 
with the request, the Department shall promptly inform the person 
submitting the response of the nature of the deficiency and shall, to 
the extent practicable, provide that person with an opportunity to 
remedy or explain the deficiency in light of the time limits 
established for the completion of the review. In this administrative 
review, the Department issued its standard questionnaire and, in 
response to inadequate responses and information provided by Jinan 
Yipin, eventually it supplemented the record with three additional 
questionnaires. The Department also asked numerous questions during 
verification as new information came to light throughout the 
verification. Accordingly and pursuant to section 782(d) of the Act, 
the Department provided Jinan Yipin with numerous opportunities to 
remedy or explain deficiencies on the record.
    Pursuant to section 776(b) of the Act, the Department has 
determined that the use of an adverse inference is warranted in this 
case. Jinan Yipin and its U.S. affiliate, American Yipin, did not act 
to the best of their abilities in providing the information necessary 
to conduct this administrative review. Indeed, we learned much of the 
information now on the record only during or after verification and we 
were thus unable to evaluate the information completely by the time of 
issuance of these preliminary results of review. Thus, absent the 
necessary information on the record and the respondents' repeated 
failure to act to the best of its ability to provide the information we 
need for our calculations and analysis, the application of partial 
adverse facts available is warranted for all of the transactions to 
Jinan Yipin's U.S. customer in question. We have selected a rate of 
376.67 percent to apply to those transactions.
    As discussed above, a number used as adverse facts available must 
be corroborated, pursuant to section 776(c) of the Act. The number is 
corroborated if it is found to be both reliable and relevant. To 
determine whether the rate of 376.67 percent is both a relevant and 
reliable rate to apply to Jinan Yipin's sales to the customer in 
question (in other words, whether the rate is indicative of the 
disparity in the respondent's pricing or has probative value), we 
examined individual U.S. sales made by Jinan Yipin to customers other 
than the customer in question in the current review and the dumping 
margins on those transactions. As a result of our analysis, we found 
sales in commercial quantities with dumping margins near or exceeding 
376.67 percent. See the output of the margin program attached to the 
December 1, 2003, analysis memorandum for the preliminary results of 
review of Jinan Yipin. There is no information on the record that 
demonstrates that 376.67 percent rate is an inappropriate adverse 
facts-available rate for Jinan Yipin's sales involving the customer in 
question. Therefore, we consider the selected rate to be reliable for 
Jinan Yipin's sales to this customer and to reflect an appropriate 
adverse inference.
    We also find that Jinan Yipin withheld certain information 
pertinent to the calculation of indirect selling expenses and, thus, 
the calculation of an antidumping margin. At verification, we found 
that Edward Lee and two other employees of American Yipin also worked 
for another company as well and that, for the first three months of 
American Yipin's operations in Westwego, Louisiana, these employees did 
not receive any compensation from American Yipin but were, however, 
paid by the other company consistently.
    As discussed in detail in the Jinan Yipin Facts-Available 
Memorandum, where a respondent has failed to provide information we 
requested, pursuant to section 776(a)(2)(A) of the Act, we must rely on 
adverse facts available in determining the antidumping duty margin. 
Section

[[Page 68872]]

776(b) of the Act, provides that the Department may use an inference 
adverse to the interests of a party that has failed to cooperate by not 
acting to the best of its ability to comply with the Department's 
request for information. The Department has determined that the use of 
an adverse inference is warranted in this case because Jinan Yipin did 
not act to the best of its ability in providing the necessary or 
accurate information on indirect selling expenses.
    With respect to Jinan Yipin's failure to provide critical 
information for the calculation of U.S. indirect selling expenses, as 
adverse facts available we were able to rely on a primary source of 
information. Because we can rely on a primary source of information, 
section 776(c) of the Act regarding corroboration of the information we 
use as adverse facts available does not apply. We have identified 
payroll-related expenses in the other company's 2002 Income Statement 
and added this amount to American Yipin's indirect expenses and 
calculated an indirect selling expense factor which we have applied to 
all of American Yipin sales, thus accounting for the additional 
indirect selling expenses applicable to U.S. sales of the subject 
merchandise. Use of this information about indirect selling expenses is 
adverse to the interests of Jinan Yipin because, had it cooperated to 
the best of its ability, the amount of indirect selling expenses we 
would have deducted from the constructed export price would have been 
less. Moreover, the use of this data is inherently reliable and 
reasonable because it is based on actual selling expenses incurred in 
support of the respondent's sales of the subject merchandise during the 
current period of review. See section 776(c) of the Act. For a detailed 
discussion of the application of partial adverse facts available, 
please see the Jinan Yipin Facts-Available Memorandum.

Export Price

    In accordance with section 772(a) of the Act, we used the export-
price methodology when 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 Shandong Heze and Trans-High to unaffiliated U.S. customers. We 
made deductions, where appropriate, from the gross unit price to 
account for movement expenses such as 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 new shipper 
and administrative reviews (December 1, 2003) (FOP Memorandum).

Constructed Export Price

    In accordance with section 772(b) of the Act, we used constructed-
export-price methodology when the first sale to an unaffiliated 
purchaser occurred after importation of the merchandise into the United 
States. We calculated the constructed export price based on prices from 
Jinan Yipin and Harmoni to unaffiliated U.S. customers. We made 
deductions, where appropriate, from the gross unit price to account for 
movement expenses such as foreign inland freight, international 
freight, customs duties, and brokerage and handling. Because some 
movement expenses were provided by NME companies, we valued those 
charges based on surrogate rates from India. See FOP Memorandum.
    For a more detailed explanation of the company-specific adjustments 
that we made in the calculation of the dumping margins for these 
preliminary results, see the company-specific preliminary results 
analysis memoranda, dated December 1, 2003, on file in the CRU, Room B-
099.

Normal Value

1. Surrogate Country

    When investigating imports from an 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 the request for a list of surrogate countries (May 30, 2003). 
In addition to being among the countries comparable to the PRC in 
economic development, India is a significant producer of the subject 
merchandise. We have used India as the surrogate country and, 
accordingly, have calculated normal value using Indian prices to value 
the PRC producers' factors of production, when available and 
appropriate. We have obtained and relied upon publicly available 
information. See ``Memorandum to the File'' regarding the selection of 
a surrogate country (December 1, 2003).
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
of an administrative review and a new shipper 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 
the respondents 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.

3. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated normal 
value based on factors of production reported by the respondents for 
the period of review. To calculate normal value, we multiplied the 
reported per-unit factor quantities by publicly available surrogate 
values from India, with the exception of the surrogate value for ocean 
freight, which we obtained from an international freight company. 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. We 
calculated these freight costs based on the shortest reported distance 
from the domestic supplier to the factory and Indian

[[Page 68873]]

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 a detailed description of all the surrogate values used, see 
the FOP Memorandum.
    For those Indian rupee values not contemporaneous with the period 
of review, we adjusted for inflation using wholesale price indices for 
India published in the International Monetary Fund's International 
Financial Statistics.
    Surrogate-value data or sources to obtain such data were obtained 
from the petitioners, the respondents, and Departmental research.
    Except as specified below, we valued raw material inputs using the 
weighted-average unit import values derived from the World Trade Atlas, 
provided by the Global Trade Information Services, Inc. The source of 
these values contemporaneous with the period of review, was the 
Directorate General of Commercial Intelligence and Statistics of the 
Indian Ministry of Commerce and Industry. We valued garlic seed based 
on pricing data from the NHRDF News Letter, published by India's 
National Horticultural Research and Development Foundation. We valued 
diesel fuel and electricity based on data from the International Energy 
Agency's Energy Prices & Taxes: Quarterly Statistics (Third Quarter, 
2003). We valued water using the averages of municipal water rates from 
Asian Development Bank's Second Water Utilities Data Book: Asian and 
Pacific Region (October 1997).
    The respondents reported packing inputs consisting of mesh bags, 
cartons, plastic bands, tape, plastic jars, plastic jar lids, and metal 
clips. All of these inputs were valued using import data from the World 
Trade Atlas that covered the period of review.
    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/corrected00wages/corrected00wages.htm). The source of the wage-rate data for the Import 
Administration's website is the International Labor Organization's 
Yearbook of Labour Statistics 2001 (Geneva, 2001), chapter 5B: Wages in 
Manufacturing.
    The respondents claimed an adjustment for revenue earned on the 
sale of garlic sprouts. We find that sprouts are a by-product of garlic 
and deducted an offset amount from normal value. As a surrogate value 
for the sale of sprouts in the PRC, we used an average of Indian 
wholesale prices for green onions published by the Azadpur Agricultural 
Produce Marketing Committee.
    We valued the truck rate based on an average of truck rates that 
were published in the Indian publication Chemical Weekly during the 
period of review. We valued foreign brokerage and handling charges 
based on a value calculated for the LTFV investigation of certain hot-
rolled carbon steel flat products from India. For ocean freight, we 
obtained rate quotes from Maersk Sealand (www.maersksealand.com) dating 
from the period of review for the movement of refrigerated containers 
from the PRC to the east and west coasts of the United States. We used 
these quotes to calculate a surrogate freight rate for each coast.
    As discussed in the FOP Memorandum, the respondents and the 
petitioners submitted the publicly available financial information of 
six companies. We concluded that the financial information of four of 
the companies reflected costs incurred for highly processed food 
products and that this processing was not comparable with the 
operations of the respondent garlic companies. We concluded that the 
financial information for a fifth company was not representative of the 
financial experiences of the respondent companies because this company 
did not grow the agricultural products that it sold and, in some cases, 
performed no processing on these products. We found that the financial 
information of a tea company was most representative of the financial 
experiences of the respondent companies because it produced and 
processed a product that was not highly processed or preserved prior to 
its sale. Thus, to value factory overhead, selling, general and 
administrative expenses, and profit, we used rates based on data taken 
from the 2001/2002 financial statements of Parry Agro Industries 
Limited.

Preliminary Results of the Reviews

    For the administrative review, we preliminarily determine that the 
following dumping margins exist for the period November 1, 2001, 
through October 31, 2002:

------------------------------------------------------------------------
                                             Weighted-average percentage
                 Exporter                              margin
------------------------------------------------------------------------
Jinan Yipin Corporation, Ltd..............                        168.06
Shandong Heze International Trade and                               0.00
 Developing Company.......................
PRC-wide rate (including Top Pearl and Wo                         376.67
 Hing)....................................
------------------------------------------------------------------------

    For the new shipper reviews we preliminarily determine that the 
following dumping margins exist for the period November 1, 2001, 
through October 31, 2002:

------------------------------------------------------------------------
                                             Weighted-average percentage
    Producer and Exporter Combinations                 margin
------------------------------------------------------------------------
Grown By Jining Yun Feng Agriculture                                0.00
 Products Co., Ltd.and Exported By Jining
 Trans-High Trading Co., Ltd..............
Grown and Exported By Zhengzhou Harmoni                             0.00
 Spice Co., Ltd...........................
------------------------------------------------------------------------

    Case briefs or other written comments in at least six copies must 
be submitted to the Assistant Secretary for Import Administration no 
later than one week after the issuance of the Department's last 
verification report in these reviews. Pursuant to 19 CFR 351.309(d)(2), 
rebuttal briefs are due no later than five days after the submission of 
case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. In accordance with 19 CFR 351.310, we will 
hold a public hearing to afford interested parties an opportunity to

[[Page 68874]]

comment on arguments raised in case or rebuttal briefs, provided that 
such a hearing is requested by an interested party. If we receive a 
request for a hearing, we plan to hold the hearing three days after the 
deadline for submission of the rebuttal briefs at the U.S. Department 
of Commerce, 14th Street and Constitution Avenue, N.W., Washington, 
D.C. 20230. Interested parties who wish to request a hearing, or to 
participate if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days after the date of publication of 
the preliminary results of these reviews in the Federal Register. 
Requests should contain the following information: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs.
    The Department will publish the final results of these reviews, 
including its analysis of issues raised in any case or rebuttal briefs, 
not later than 120 days after the date of publication of this notice. 
See section 751(a)(3) of the Act and 19 CFR 351.213(h)(1).

Assessment Rates

    Upon completion of this administrative review and the new shipper 
reviews, the Department will determine, and Customs shall assess, 
antidumping duties on all appropriate entries. The Department will 
issue appropriate assessment instructions directly to Customs upon 
completion of these reviews. If these preliminary results are adopted 
in our final results of review, we will direct Customs to assess the 
resulting rates against the entered customs value for the subject 
merchandise on each of the entries of each exporters' importer/customer 
during the period of review.

Cash-Deposit Requirements

    The following cash-deposit requirements will be effective upon 
publication of the final results of the administrative review and new 
shipper reviews for 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)(2)(C) of the Act: (1) for 
subject merchandise exported by Jinan Yipin or Shangdong Heze, grown by 
Jining Yun Feng Agriculture Products Co., Ltd., and exported by Trans-
High, or grown and exported by Zhengzhou Harmoni Spice Co., Ltd., the 
cash-deposit rate will be that established in the final results of 
these reviews; (2) for all other subject merchandise exported by Trans-
High or Harmoni but not grown by Jining Yun Feng Agriculture Products 
Co., Ltd., or Zhengzhou Harmoni Spice Co., Ltd., respectively, the 
cash-deposit rate will be the PRC countrywide rate, which is 376.67 
percent; (3) for all other PRC exporters of subject merchandise which 
have not been found to be entitled to a separate rate, the cash-deposit 
rate will be the PRC-wide rate of 376.67 percent; (4) for all non-PRC 
exporters of subject merchandise, 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 Interested Parties

    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 the period of these reviews. 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 reviews 
in accordance with sections 751(a)(2)(B)(iv), 751(a)(3), and 777(i) of 
the Act.

    Dated: December 1, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-30625 Filed 12-9-03; 8:45 am]
BILLING CODE 3510-DS-S