[Federal Register Volume 68, Number 239 (Friday, December 12, 2003)]
[Notices]
[Pages 69377-69379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E3-00550]


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DEPARTMENT OF COMMERCE

Interntational Trade Administration

[A-570-855]


Certain Non-Frozen Apple Juice Concentrate from the People's 
Republic of China: Notice of Court Decision and Suspension of 
Liquidation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY:  On November 20, 2003, in Yantai Oriental Juice Co., et al. v. 
United States and Coloma Frozen Foods, Inc., et al., Court No. 00-
00309, Slip Op. 03-150, the Court of International Trade (``CIT'') 
affirmed the Department of Commerce's (``the Department's'') remand 
determinations and entered a judgment order. This litigation related to 
the Department's 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 
accompanying Issues and Decision Memorandum (April 6, 2000) (``Issues 
and Decision Memorandum''), and

[[Page 69378]]

Notice of Amended Final Determination of Sales at Less Than Fair Value 
and Antidumping Duty Order: Certain Non-Frozen Apple Juice Concentrate 
from the People's Republic of China, 65 FR 35606 (June 5, 2000) 
(collectively, ``Final Determination'').
    In its remand determinations, the Department reviewed the record 
evidence regarding the selection of a surrogate country; the valuation 
of juice apples, steam coal, and ocean freight; and the calculation of 
selling, general and administrative (``SG&A'') expenses, overhead, and 
profit. The Department found that Turkey, rather than India was the 
appropriate surrogate country. Juice apples, SG&A, overhead and profit 
were valued using surrogate value information from Turkey. Steam coal 
was valued using a domestic Indian price and the ocean freight rate was 
revised to include a rate for Detroit.
    As the remand determinations resulted in changes to calculated 
company-specific margins, the Department also recalculated the separate 
rate margin it applied to producers/exporters that responded to the 
Department's separate rate (``Section A'') questionnaire but were not 
selected to respond (``separate-rate companies''). The calculated 
antidumping rate for Xian Yang Fuan Juice Co., Ltd. (``Fuan''), Xian 
Asia Qin Fruit Co., Ltd. (``Asia''), Changsha Industrial Products & 
Minerals Import & Export Corporation (``Changsha Industrial''), and 
Shandong Foodstuffs Import & Export Corporation (``Shandong 
Foodstuffs'') (collectively ``separate-rate companies'') is 3.83 
percent.
    The remand determinations also resulted in weighted average margins 
of zero percent for Yantai Oriental Juice Co. (``Oriental''), Qingdao 
Nannan Foods Co. (``Nannan''), Sanmenxia Lakeside Fruit Juice Co. Ltd. 
(``Lakeside''), Shaanxi Haisheng Fresh Fruit Juice Co. (``Haisheng''), 
and SDIC Zhonglu Juice Group Co. (``Zhonglu''). Therefore, these 
companies will be excluded from the antidumping duty order on certain 
non-frozen apple juice concentrate (``AJC'') from the People's Republic 
of China (``PRC'').
    The PRC-wide rate of 51.74 percent is unchanged from our final 
determination in the investigation.
    Consistent with the decision of the U.S. Court of Appeals for the 
Federal Circuit in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 
1990) (``Timken''), the Department will continue to order the 
suspension of liquidation of the subject merchandise until there is a 
``conclusive'' decision in this case. If the case is not appealed, or 
if it is affirmed on appeal, the Department will instruct U.S. Customs 
and Border Protection to terminate the suspension of liquidation for 
Oriental, Nannan, Lakeside, Haisheng, and Zhonglu and revise the cash 
deposit rate from the investigation for Fuan, Asia, Changsha 
Industrial, and Shandong Foodstuffs.

EFFECTIVE DATE:  December 12, 2003.

FOR FURTHER INFORMATION CONTACT: Audrey Twyman or John Brinkmann, AD/
CVD Enforcement Group I, Office 1, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
3534 or (202) 482-4126, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Following publication of the Final Determination, Oriental, Nannan, 
Lakeside, Haisheng, Zhonglu, Fuan, Asia, Changsha Industrial and 
Shandong Foodstuffs (collectively the ``respondents''), filed lawsuits 
with the CIT challenging the Department's Final Determination.
    In the underlying investigation, the Department was required to 
choose a surrogate country based on ``significant production'' of 
``comparable merchandise'' and ``economic comparability'' to the PRC. 
The Department selected India because it is economically comparable to 
the PRC, and a significant producer of apples and single strength apple 
juice, products the Department found to be comparable to AJC. The 
Department then valued the juice apples, SG&A, overhead, profit, steam 
coal and other factors of production in India. In calculating ocean 
freight rates, the Department included freight rates to Detroit in its 
calculation of an East Coast freight rate.
    The Court remanded five issues to the Department.
    First, the Court questioned the Department's reliance on a market 
study included in the petition and an annual report for an Indian 
company as the basis for determining that India was a significant 
producer of comparable merchandise. In particular, the Court found the 
Department had not corroborated the market study, nor had it explained 
the connection between the market study and the annual report, and the 
Department's conclusion that India was a significant producer of AJC. 
The Court similarly rejected the Department's determination that 
India's status as a significant producer of apples was relevant to the 
Department's treatment of India as a significant producer of comparable 
merchandise.
    The Court directed the Department to develop sufficient evidence 
from the record of India's suitability as the surrogate market economy 
country for AJC production, or, if it could not, to select another 
suitable country.
    Second, the Court instructed the Department to provide an 
explanation of why the distortions caused by the Government of India's 
market intervention scheme did not disturb the fair market value of 
Indian apples. The Court also directed the Department to explain why it 
treated government subsidies that enabled producers to lower their 
prices as market distorting, but did not apply the same treatment to 
such subsidies that raise prices. Furthermore, the Court requested that 
the Department explain why the price paid by Himachal Pradesh 
Horticultural Produce Marketing & Processing Corp., a government-
controlled entity, should be considered a market-derived price.
    Third, for steam coal valuation, the Department used Indian import 
statistics data because it found that the value was contemporaneous 
with the period of investigation and because there was no evidence to 
suggest that the data was aberrational or unreliable. The Court 
instructed the Department either to recalculate normal value using 
Indian domestic prices for steam coal, or explain why the use of 
domestic prices for steam coal was not appropriate during the period of 
investigation.
    Fourth, the Court argued that the Department's use of data from the 
Reserve Bank of India Bulletin, rather than data from an Indian 
producer to value SG&A and overhead was not supported by substantial 
evidence on the record and instructed the Department to either 
recalculate these values using the financial statement of an Indian 
producer, or fully explain why the Department felt that the Reserve 
Bank of India Bulletin gave better financial data.
    Finally, the Court instructed the Department to explain its 
reasoning for not calculating a separate Detroit freight rate and to 
explain why the Department did not weigh its calculation to reflect 
accurately the volume of merchandise actually shipped to each 
destination.
    To assist it in complying with the Court's instructions, the 
Department opened the record and requested new information concerning 
possible surrogate countries. The petitioners submitted data supporting 
the use of Poland, while the respondents pointed to Turkish data that 
they had placed on the record in the investigation.
    The ``Draft Results Pursuant to Court Remand'' (``First Draft 
Results'') was released to the parties on November 6,

[[Page 69379]]

2002. In its First Draft Results, pursuant to the analysis followed by 
the Court, the Department concluded that the record did not support its 
determination in the investigation that India was a significant 
producer of AJC. Instead, the Department determined that Turkey was a 
more appropriate surrogate country for the PRC because it was the 
country most economically comparable to the PRC that was also a 
significant producer of AJC.
    Accordingly, the Department amended its calculations using Turkish 
data to value juice apples, SG&A expenses, overhead, and profit. The 
Department also changed its valuations of steam coal and East Coast 
freight. Because the Department's recalculated company-specific margins 
were all zero percent, the Department also recalculated the margin for 
the separate-rate companies by weighting the calculated margins of zero 
with the PRC-wide rate of 51.74%, resulting in a separate rates margin 
of 28.33%.
    Comments on the First Draft Results were received from all parties 
on November 12, 2002. On November 15, 2002, the Department responded to 
the Court's Order by filing its ``Redetermination Pursuant to Court 
Remand.'' (``First Redetermination''). The Department's First 
Redetermination was similar to the First Draft Results except for the 
inclusion of the Department's response to comments submitted by the 
petitioners and respondents. The final margins in the First 
Redetermination were identical to the First Draft Results.
    The CIT affirmed, in part, the Department's First Redetermination 
on March 21, 2003. See Yantai Oriental Juice Co., et al. v. United 
States and Coloma Frozen Foods, Inc., et al. Court No. 00-00309, Slip 
Op. 03-33 (March 21, 2003). The Court affirmed the Department's 
calculation of company-specific margins but remanded the calculation of 
the antidumping margin for the separate-rate companies because the 
Court found that the Department's methodology, weight-averaging the 
PRC-wide rate and the zero margins, was not supported by substantial 
evidence on the record.
    Accordingly, the ``Draft Redetermination Pursuant to Court Remand'' 
(``Second Draft Results'') was released to the parties on April 18, 
2003. In its Second Draft Results, the Department reviewed the record 
evidence and, based on information on the record, calculated a normal 
value and export price for the separate rate companies. Using this 
information, the Department calculated estimated margins for the 
separate rate companies and weight-averaged these margins with the zero 
margins for the fully-investigated companies and derived a separate 
rate of 4.91 percent.
    Comments on the Second Draft Results were received on April 23, 
2003. On May 5, 2003, the Department responded to the Court's Order of 
Remand by filing its ``Redetermination Pursuant to Court Remand.'' 
(``Second Redetermination''). The Department's Second Redetermination 
differed from the Second Draft Results in that in calculating export 
price, we removed the fully-investigated companies' constructed export 
price sales, and adjusted our calculations to reflect the different 
terms of sale. These changes resulted in a weighted-average separate-
rate margin of 3.83%.
    The CIT affirmed the Department's Second Redetermination on 
November 20, 2003. See Yantai Oriental Juice Co., et al. v. United 
States and Coloma Frozen Foods, Inc., et al. Court No. 00-00309, Slip 
Op. 03-150 (November 20, 2003).

Suspension of Liquidation

    The U.S. Court of Appeals for the Federal Circuit, in Timken, held 
that the Department must publish notice of a decision of the CIT or the 
Federal Circuit which is not ``in harmony'' with the Department's Final 
Determination. Publication of this notice fulfills that obligation. The 
Federal Circuit also held that the Department must suspend liquidation 
of the subject merchandise until there is a ``conclusive'' decision in 
the case. Therefore, pursuant to Timken, the Department must continue 
to suspend liquidation pending the expiration of the period to appeal 
the CIT's November 20, 2003, decision or, if that decision is appealed, 
pending a final decision by the Federal Circuit. In the event that the 
CIT's ruling is not appealed, or if appealed and upheld by the Court of 
Appeals for the Federal Circuit, the Department will instruct U.S. 
Customs and Border Protection to revise cash deposit rates and 
liquidate relevant entries covering the subject merchandise effective 
the date of publication of this notice in the Federal Register.

    Dated: December 5, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E3-00550 Filed 12-11-03; 8:45 am]
BILLING CODE 3510-DS-S