[Federal Register Volume 68, Number 241 (Tuesday, December 16, 2003)]
[Notices]
[Pages 69988-69994]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31017]



[[Page 69988]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-863]


Honey from the People's Republic of China: Preliminary Results of 
First Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of first antidumping duty 
administrative review.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce (the Department) is conducting the first 
administrative review of the antidumping duty order on honey from the 
People's Republic of China. The period of review for those entities 
with an affirmative critical circumstances finding is February 10, 
2001, through November 30, 2002. For all other companies, the period of 
review is May 11, 2001, through November 30, 2002. Two companies named 
in the initiation of this review had no exports or sales of the subject 
merchandise during their applicable period of review, and consequently 
we rescinded the review of these companies. In addition, we rescinded 
our review of three companies that are participating in new shipper 
reviews covering the period February 10, 2001, through November 30, 
2002. We preliminarily determine that three companies 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 make sales to the United States of 
the subject merchandise 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(s).

EFFECTIVE DATE: December 16, 2003.

FOR FURTHER INFORMATION CONTACT: Angelica Mendoza or Brandon Farlander 
at (202) 482-3019 or (202) 482-0182, respectively; Antidumping and 
Countervailing Duty Enforcement Group III, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

Background

    On December 17, 2002, the Department published a notice of 
opportunity to request an administrative review of the antidumping duty 
order on honey from the People's Republic of China (PRC), 67 FR 77222 
(December 17, 2002). On December 31, 2002, the Department received a 
timely request from the American Honey Producers Association and the 
Sioux Honey Association (collectively, petitioners) requesting that the 
Department conduct an administrative review of the antidumping duty 
order on honey shipments exported to the United States from the 
following PRC honey producers/exporters during the period of May 11, 
2001, through November 30, 2002: (1) Anhui Native Produce Import & 
Export Corp. (Anhui), (2) Henan Native Produce and Animal By-Products 
Import & Export Company (Henan), (3) High Hope International Group 
Jiangsu Foodstuffs Import and Export Corp. (High Hope), (4) Inner 
Mongolia Autonomous Region Native Produce and Animal By-Products Import 
& Export Corp. (Inner Mongolia), (5) Kunshan Foreign Trade Company 
(Kunshan), (6) Shanghai Eswell Enterprise Co., Ltd. (Shanghai Eswell), 
(7) Shanghai Xiuwei International Trading Co., Ltd. (Shanghai Xiuwei), 
(8) Sichuan-Dujiangyan Dubao Bee Industrial Co., Ltd. (Sichuan Dubao), 
(9) Wuhan Bee Healthy Co., Ltd. (Wuhan), and (10) Zhejiang Native 
Produce and Animal By-Products Import & Export Corp. On December 
31, 2002, we received a timely request from Zhejiang Native Produce and 
Animal By-Products Import & Export Corp. a.k.a. Zhejiang Native 
Produce and Animal By-Products Import and Export Group Corporation 
(Zhejiang) requesting that the Department conduct an administrative 
review of its honey shipments to the United States during the period 
May 11, 2001, through November 30, 2002. On January 22, 2003, the 
Department initiated an administrative review of the antidumping duty 
order on honey from the PRC, for the period of May 11, 2001, through 
November 30, 2002, in order to determine whether merchandise imported 
into the United States is being sold at less than fair value with 
respect to these ten companies. See Initiation of Antidumping and 
Countervailing Duty Administrative Review and Requests for Revocations 
in Part, 68 FR 3009 (January 22, 2003) (Administrative Review 
Initiation).\1\ On January 27, 2003, the Department clarified that the 
period of review (POR) for High Hope, Kunshan, Zhejiang, Wuhan, 
Shanghai Xiuwei, and Sichuan Dubao is February 10, 2001, through 
November 30, 2002. See Memorandum to the File through Donna L. 
Kinsella, Case Manager, Office 8; POR for Exporters of Honey from the 
People's Republic of China with Affirmative Critical Circumstances 
Findings (January 27, 2003).
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    \1\ In a separate proceeding, the Department also received 
timely requests from Shanghai Xiuwei and Sichuan Dubao, in 
accordance with 19 CFR 351.214(c), for new shipper reviews of the 
antidumping duty order on honey from the PRC, which has a December 
annual anniversary month. On February 5, 2003, we initiated new 
shipper reviews for Shanghai Xiuwei and Sichuan Dubao. See 
Initiation of New Shipper Antidumping Duty Reviews, 68 FR 5868 
(February 5, 2003) (New Shipper Initiation). The POR for the new 
shipper reviews of these two companies is identical to the POR for 
the administrative review.
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    On February 20, 2003, the Department issued antidumping duty 
questionnaires to the above-referenced ten PRC companies. On February 
28, 2003, Wuhan submitted a letter certifying that it did not have any 
other shipments during the first review period that are not already 
subject to an ongoing new shipper review.\2\ On February 28, 2003, 
Inner Mongolia and Anhui submitted separate letters each certifying 
that they did not have any shipments of subject merchandise during the 
period of May 11, 2001, through November 30, 2002.
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    \2\ The Department conducted a six-month new shipper review of 
Wuhan's sales during the period December 1, 2001, through May 31, 
2002. See, e.g., Preliminary Results of Antidumping Duty New Shipper 
Review: Honey from the People's Republic of China, 68 FR 33099 (June 
3, 2003); and Honey from the People's Republic of China: Final 
Results of Antidumping Duty New Shipper Review, 68 FR 62053 (October 
31, 2003) (Wuhan NSR Final Results). On March 18, 2003, Wuhan 
submitted an additional letter clarifying that although it did have 
additional exports and sales during the period February 10, 2001, 
through November 30, 2002, nevertheless the entries for consumption 
of this merchandise did not occur until after this POR.
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    On April 4, 2003, we received responses to Section A of our 
antidumping duty questionnaire from Zhejiang, Wuhan, and High Hope. In 
its reply to the antidumping duty questionnaire, High Hope stated that 
it is unwilling to make the expenditure of time and money required to 
participate in the review, and therefore, has concluded that it is not 
able to fully respond to the Department's questionnaire. On April 7, 
2003, the Department received notification from Kunshan that it will 
not be participating in this proceeding, and therefore, it is not 
responding to our questionnaire. See Memorandum to the File from 
Angelica L. Mendoza; Non-Responsive Company, dated April 7, 2003. On 
April 18, 2003,

[[Page 69989]]

the Department received responses to Sections C and D of the 
antidumping duty questionnaire from Zhejiang and Wuhan. Henan did not 
respond to its questionnaire.\3\
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    \3\ On March 31, 2003, the Department issued a letter to Henan 
informing the company that it had failed to respond to our 
antidumping duty questionnaire issued on February 20, 2003. 
Additionally, we confirmed Henan's address and receipt of our March 
31, 2003, letter. See Memorandum to The File from Angelica L. 
Mendoza, Case Analyst, First Administrative Review of the 
Antidumping Duty Order on Honey from the People's Republic of China: 
Correct Addresses, dated March 31, 2003.
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    On April 22, 2003, petitioners withdrew their request for review of 
Shanghai Eswell. On May 6, 2003, the Department rescinded, in part, the 
administrative review of the antidumping duty order on honey with 
respect to Shanghai Eswell. See Honey from the People's Republic of 
China: Notice of Partial Rescission of Antidumping Duty Administrative 
Review, 68 FR 23963 (May 6, 2003).
    On May 6, 2003, the Department preliminarily determined to rescind, 
in part, the administrative reviews with respect to Anhui, Inner 
Mongolia, Shanghai Xiuwei, Sichuan Dubao, and Wuhan. See Memorandum to 
Barbara Tillman, Acting Deputy Assistant Secretary, AD/CVD Enforcement 
Group III; Intent to Partially Rescind Administrative Reviews (May 6, 
2003) (Rescission Memo). As discussed in the Rescission Memo, Anhui and 
Inner Mongolia did not ship subject merchandise during the POR. As also 
discussed in the Rescission Memo, the Department determined that 
Shanghai Xiuwei, Sichuan Dubao, and Wuhan should not be subject to this 
proceeding because all of their POR sales were already subject to 
ongoing new shipper reviews.
    On May 16, 2003, we issued a supplemental questionnaire to 
Zhejiang. On June 10, 2003, we invited interested parties to comment on 
the Department's surrogate country selection and/or significant 
production in the potential countries, and to submit publicly-available 
information to value the factors of production. On June 20, 2003, we 
received Zhejiang's supplemental questionnaire response. On June 24, 
2003, we received petitioners' comments on the selection of a surrogate 
country in this proceeding. Zhejiang did not comment on the selection 
of a surrogate country in this proceeding. On June 30, 2003, 
petitioners submitted comments on Zhejiang's supplemental questionnaire 
response. On July 7, 2003, we issued a second supplemental 
questionnaire to Zhejiang. On July 7, 2003, Zhejiang and petitioners 
submitted surrogate information with which to value the factors of 
production. On July 17, 2003, we received Zhejiang's comments on 
petitioners' July 7, 2003, surrogate value submission. On July 18, 
2003, we received Zhejiang's second supplemental questionnaire 
response.
    On July 25, 2003, the Department issued a final determination to 
rescind, in part, the administrative reviews of Anhui, Inner Mongolia, 
Shanghai Xiuwei, Sichuan Dubao, and Wuhan. See Honey from the People's 
Republic of China: Final Rescission, in Part, of Antidumping Duty 
Administrative Review, 68 FR 44045 (July 25, 2003). On July 25, 2003, 
the Department also determined to extend the time limits for these 
preliminary results. See Honey from the People's Republic of China: 
Extension of Time Limit for Preliminary Results of First Antidumping 
Duty Administrative Review, 68 FR 44046 (July 25, 2003).

Scope of the Antidumping Duty Order

    The products covered by this order are natural honey, artificial 
honey containing more than 50 percent natural honey by weight, 
preparations of natural honey containing more than 50 percent natural 
honey by weight, and flavored honey. The subject merchandise includes 
all grades and colors of honey whether in liquid, creamed, comb, cut 
comb, or chunk form, and whether packaged for retail or in bulk form.
    The merchandise subject to this review is currently classifiable 
under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheadings are provided for convenience and U.S. Customs and 
Border Protection (CBP) purposes, the Department's written description 
of the merchandise under order is dispositive.

Verification

    As provided in section 782(i)(2) of the Tariff Act of 1930, as 
amended (the Act), and section 351.307 of the Department's regulations, 
we conducted verification of the questionnaire and supplemental 
responses of Zhejiang. We used standard verification procedures, 
including on-site inspection of the production facility of Zhejiang's 
unaffiliated supplier. Our verification results are outlined in the 
Memorandum to the File, through Abdelali Elouaradia, Program Manager, 
Verification of U.S. Sales Information Submitted by Zhejiang Native 
Produce & Animal By-Products Import & Export Group Corporation (a.k.a. 
Zhejiang Native Produce and Animal By-Products Import & Export Corp.) 
(Zhejiang) and Factors of Production Information Submitted by 
Zhejiang's Unaffiliated Supplier, dated September 26, 2003 (Zhejiang 
Verification Report). A public version of this report is on file in the 
Central Records Unit (CRU) located in room B-099 of the Main Commerce 
Building.

Separate Rates

    In proceedings involving non-market economy (NME) countries, the 
Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and, thus, should 
be assigned a single antidumping duty 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 its export 
activities. In this review, Zhejiang requested a separate company-
specific rate.
    To establish whether a company is sufficiently independent in its 
export activities from government control to be entitled to a separate, 
company-specific rate, the Department analyzes the 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, 20589 (May 6, 1991) (Sparklers), and amplified by 
the Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585, 22586-22587 
(May 2, 1994) (Silicon Carbide).
    The Department's separate-rate test is unconcerned, in general, 
with macroeconomic/ border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level. See, e.g., Certain Cut-to-Length Carbon Steel 
Plate from Ukraine: Final Determination of Sales at Less Than Fair 
Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished, from the People's Republic 
of China: Final Results of Antidumping Duty Administrative Review, 62 
FR 61276, 61279 (November 17, 1997); and Honey from the People's 
Republic of China: Preliminary Determination of Sales at Less Than Fair 
Value, 60 FR 14725, 14726 (March 20, 1995).
    Zhejiang provided separate-rate information in its responses to our 
original and supplemental questionnaires. Accordingly, we performed a 
separate-rates analysis to

[[Page 69990]]

determine whether this 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)).
    As stated-above in the ``Background'' section, Kunshan and High 
Hope did not respond to the Department's antidumping questionnaire. 
Rather, as noted-above, these companies informed the Department that 
they would not be participating in this proceeding. Moreover, the 
Department did not receive any type of response from Henan, although we 
issued it a supplemental request for information as noted in the 
``Background'' section above. Because none of these three companies 
responded to our request for information regarding separate rates, we 
preliminarily determine that these 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 part of the PRC-entity. See Administrative Review 
Initiation. See also ``The PRC-wide Rate and Use of Facts Otherwise 
Available'' section below.

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; and (3) any other 
formal measures by the government decentralizing control of companies. 
See Sparklers, 56 FR 20588, 20589.
    Zhejiang has placed on the record a number of documents to 
demonstrate absence of de jure control, including the ``Law of the 
People's Republic of China on Industrial Enterprises Owned by the Whole 
People'' (April 13, 1998) (Enterprises Owned by the Whole People), the 
``Company Law of the People's Republic of China'' (December 29, 1993) 
(Company Law), ``Foreign Trade Law of the People's Republic of China'' 
(May 12, 1994) (Foreign Trade Law), and the ``Administrative 
Regulations of the People's Republic of China Governing the 
Registration of Legal Corporations'' (June 3, 1998) (Legal Corporations 
Regulations). See Exhibit 2 of Zhejiang's April 4, 2003, submission. In 
particular, we found that the PRC law, Enterprises Owned by the Whole 
People, grants enterprises owned by all the people status of a legal 
person which allows for autonomy in management and provides full 
responsibility over their profits and losses. Chapter III of this law 
outlines the rights and responsibilities of business enterprises owned 
by the whole people. Under Article 27 of this chapter, enterprises are 
granted the right to negotiate and sign contracts with foreign parties, 
and allowed to withdraw and use their portion of foreign exchange 
earnings. Zhejiang states that the Company Law governs the 
establishment of limited liability companies, and provides that such a 
company shall operate independently and be responsible for its own 
profits and losses. See page 6 of Zhejiang's April 4, 2003, submission. 
We reviewed Article 11 of Chapter II of the Foreign Trade Law, which 
states that ``foreign trade dealers shall enjoy full autonomy in their 
business operation and be responsible for their own profits and losses 
in accordance with the law.'' Moreover, in other proceedings, the 
Department has analyzed such PRC laws and found that they establish an 
absence of de jure control. See, e.g., Pure Magnesium from the People's 
Republic of China: Final Results of New Shipper Review, 63 FR 3085, 
3086 (January 21, 1998) and Preliminary Results of New Shipper Review: 
Certain Preserved Mushrooms From the People's Republic of China, 66 FR 
30695, 30696 (June 7, 2001).
    Zhejiang submitted a copy of its business license in Exhibit 4 of 
its Section A questionnaire response, dated April 4, 2003. This license 
was issued by the Zhejiang Province Industrial and Commercial 
Administration Bureau. Zhejiang explains that its business license is 
necessary to register the company. Zhejiang affirms that its business 
operations are limited to the scope of the license, and that the 
license may be revoked if the company engages in illegal activities or 
if the company is found to have insufficient capital. At verification, 
we found that Zhejiang's business license and ``Certificate of 
Approval: For Enterprises with Foreign Trade Rights in the People's 
Republic of China'' were granted in accordance with the above-reference 
PRC laws. Moreover, the results of verification support the information 
provided regarding these PRC laws. See Zhejiang Verification Report at 
4-5.
    Therefore, consistent with our final determination in the less-
than-fair-value investigation (LTFV), we preliminarily determine that 
there is an absence of de jure control over Zhejiang's export 
activities.

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; and (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 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.
    Zhejiang has asserted the following: (1) it is a publicly-owned 
company that is independent from government control; (2) it sets prices 
through direct negotiations with U.S. customers, and such prices 
consider the company's total costs, including acquisition costs as well 
as movement expenses, overhead expenses and profit; (3) there is no 
government participation in its setting of export prices; (4) its 
Manager of the Bee Products Departments and authorized employees have 
the authority to bind sales contracts; (5) it does not have to notify 
any government authorities of its management selection; (6) there are 
no restrictions on the use of its export revenue and that its President 
decides how profits will be used; (7) it is responsible for financing 
its own losses; and (8) it is not required to sell any portion of 
foreign currency earned to the government.\4\ Our analysis of the 
responses during verification reveals no other information indicating 
the existence of government control. See Zhejiang Verification Report 
at 6. Consequently, because evidence on the

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record indicates an absence of government control, both in law and in 
fact, over the company's export activities, we preliminarily determine 
that Zhejiang has met the criteria for the application of a separate 
rate.
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    \4\ Zhejiang's questionnaire responses do not suggest that 
pricing is coordinated among exporters. Zhejiang states that its 
President is elected by the employees of the company, and in turn, 
the President selects the other management of the company. See 
Zhejiang's April 4, 2003, submission.
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The PRC-wide Rate and Use of Facts Otherwise Available

    Zhejiang, Kunshan, Henan, and High Hope were given the opportunity 
to respond to the Department's questionnaire. As explained above, we 
received questionnaire responses from Zhejiang, and we have calculated 
a separate rate for Zhejiang. The PRC-wide rate applies to all entries 
of subject merchandise except for entries from PRC producers/exporters 
that have their own calculated rate.
    As discussed above, Kunshan, Henan, and High Hope are appropriately 
considered to be part of the PRC-wide entity. Therefore, we determine 
it is necessary to review the PRC-wide entity because it did not 
provide information necessary to the instant proceeding. In doing so, 
we note that section 776(a)(1) of the Act mandates that the Department 
use the facts available if necessary information is not available on 
the record of an antidumping proceeding. In addition, 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.\5\
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    \5\ 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 shall promptly inform the party 
submitting the response of the nature of the deficiency and shall, 
to the extent practicable, provide that party with an opportunity to 
remedy or explain the deficiency. 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. Because the PRC-wide 
entity provided no information, we determine that sections 782(d) 
and (e) of the Act are not relevant to our analysis.
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    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).
    As above stated, the PRC-wide entity did not respond to our 
requests for information. Because the PRC-wide entity 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 the PRC-wide entity.
    In addition, pursuant to section 776(b) of the Act, we find that 
the PRC-wide entity failed to cooperate by not acting to the best of 
its ability to comply with a request for information. As noted above, 
the PRC-wide entity informed the Department that it would not 
participate in this review, or otherwise, did not provide any response 
to the Department's questionnaire, despite repeated requests that it do 
so. Thus, because the PRC-wide entity refused to participate fully in 
this proceeding, we find it appropriate to use an inference that is 
adverse to the interests of the PRC-wide entity in selecting from among 
the facts otherwise available. By doing so, we ensure that the 
companies that are part of the PRC-wide entity will not obtain a more 
favorable result by failing to cooperate than had they cooperated fully 
in this review.
    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. It is the Department's practice to assign 
the highest rate from any segment of a proceeding as total adverse 
facts available when a respondent fails to cooperate to the best of its 
ability. See, e.g., Stainless Steel Plate in Coils from Taiwan; 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review, 67 FR 5789 (February 7, 2002) (``Consistent with 
Department practice in cases where a respondent fails to cooperate to 
the best of its ability, and in keeping with section 776(b)(3) of the 
Act, as adverse facts available, we have applied a margin based on the 
highest margin from any prior segment of the proceeding.'').
    In accordance with the Department's practice, we have preliminarily 
assigned to the PRC-wide entity (including Kunshan, Henan, and High 
Hope) the rate of 183.80 percent as adverse facts available. See, e.g., 
Rescission of Second New Shipper Review and Final Results and Partial 
Rescission of First Antidumping Duty Administrative Review: Brake 
Rotors from the People's Republic of China, 64 FR 61581, 61584 
(November 12, 1999). This rate is the highest dumping margin from any 
segment of this proceeding and was established in the LTFV 
investigation based on information contained in the petition. See 
Notice of Final Determination of Sales at Less Than Fair Value; Honey 
from the PRC, 66 FR 50608 (October 4, 2001) and accompanying Issues and 
Decision Memorandum (Final Determination). In selecting a rate for 
adverse facts available, the Department selects a rate that is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available rule to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Final 
Determination of Sales at Less Than Fair Value: Static Random Access 
Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23, 
1998).
    We note that information from a prior segment of this proceeding 
constitutes ``secondary information,'' and section 776(c) of the Act 
provides that, when the Department relies on such 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.\6\ 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. The SAA also clarifies that ``corroborate'' 
means that the Department will satisfy itself that the secondary 
information to be used has probative value. See SAA at 870. As noted in 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,

[[Page 69992]]

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.
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    \6\ Secondary information is described in the SAA as 
``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning the 
subject merchandise, or any previous review under section 751 
concerning the subject merchandise.'' See SAA at 870.
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    We note that in the LTFV investigation, the Department corroborated 
the information in the petition that formed the basis of the 183.80 
percent PRC-wide entity rate. See Final Determination. Specifically, in 
the LTFV investigation, the Department compared the prices in the 
petition to the prices submitted by individual respondents for 
comparable merchandise. For normal value (NV), we compared petitioners' 
factor-consumption data to data reported by respondents. See Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Honey from 
the People's Republic of China, 66 FR 24101 (May 11, 2001).
    In order to satisfy the corroboration requirements under section 
776(c) of the Act, in the instant review, we reviewed the Department's 
corroboration of the petition rates from the LTFV investigation. See 
Memorandum to the File, dated December 10, 2003, placing the Memorandum 
to Richard O. Weible, Office Director, The Use of Facts Available for 
the PRC-wide entity; and Corroboration of Secondary Information, dated 
May 4, 2001 (AFA & Corroboration Memo) on the record of this 
administrative review. Following the methodology of our corroboration 
analysis from the LTFV investigation, we compared the petition 
information to information on the record of this proceeding. We find 
that the petition information is both reasonable and reliable when 
compared to the range of Zhejiang's reported gross unit prices for 
honey it sold to the United States during the current POR. See AFA & 
Corroboration Memo at 5 and Exhibit 7 of Zhejiang's July 18, 2003, 
submission. Moreover, following the methodology of our corroboration 
analysis from the LTFV investigation, the highest calculated NV for 
Zhejiang (calculated as a separate NV for each of its two processed 
honey suppliers) is comparable to the NV relied on by petitioners to 
calculate the petition rate. See AFA & Corroboration Memo at 6 and the 
Margin Calculation Output for Zhejiang, dated December 10, 2003.
    We further note that, 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). The rate used is the rate currently applicable to all 
exporters subject to the PRC-wide rate. Further, as noted above, there 
is no information on the record that the application of this rate would 
be inappropriate in this administrative review or that the margin is 
not relevant. Thus, we find that the information is relevant. 
Therefore, the Department preliminarily determines that the PRC-wide 
entity rate of 183.80 is still reliable, relevant, and has probative 
value within the meaning of section 776(c) of the Act.

Normal Value Comparisons

    To determine whether Zhejiang's sales of the subject merchandise to 
the United States were made at prices below normal value, we compared 
their United States prices to normal values, as described in the 
``United States Price'' and ``Normal Value'' sections of this notice.

United States Price

    For Zhejiang, we based United States price on export price (EP) in 
accordance with section 772(a) of the Act, because the first sale to an 
unaffiliated purchaser was made prior to importation, and constructed 
export price (CEP) was not otherwise warranted by the facts on the 
record. We calculated EP based on the packed price from the exporter to 
the first unaffiliated
    customer in the United States. Where applicable, we deducted 
foreign inland freight, international freight, marine insurance 
expenses, and bank charges from the starting price (gross unit price), 
in accordance with section 772(c) of the Act.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using a factors-of-production methodology if (1) the 
merchandise is exported from an NME country, and (2) available 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act.
    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. Pursuant to section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an NME country shall remain in effect until revoked by the 
administering authority. Zhejiang did not contest such treatment in 
this review. Accordingly, we have applied surrogate values to the 
factors of production to determine NV for each of Zhejiang's processed 
honey suppliers. See Factors of Production Valuation Memorandum for the 
Preliminary Results of the First Administrative Review of the 
Antidumping Duty Order on Honey from the People's Republic of China, 
dated December 10, 2003 (Factor Valuation Memo). A public version of 
this memorandum is on file in the CRU located in room B-099 of the Main 
Commerce Building.
    We calculated NV based on factors of production in accordance with 
section 773(c)(4) of the Act and section 351.408(c) of our regulations. 
Consistent with the LTFV investigation of this order and the final 
results of a recent new shipper review covering the subject 
merchandise, we determine that India (1) is comparable to the PRC in 
level of economic development, and (2) is a significant producer of 
comparable merchandise.\7\ Accordingly, we valued the factors of 
production using publicly-available information from India.
---------------------------------------------------------------------------

    \7\ See Final Determination and Wuhan NSR Final Results.
---------------------------------------------------------------------------

    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data, in accordance with our 
practice. Where appropriate, we adjusted Indian import prices by adding 
foreign inland freight expenses to make them delivered prices. When we 
used Indian import values to value inputs sourced domestically by PRC 
suppliers, we added to Indian surrogate values a surrogate freight cost 
calculated using the shorter of the reported distance from the domestic 
supplier to the factory or the distance from the nearest port of export 
to the factory. This adjustment is in accordance with the Court of 
Appeals for the Federal Circuit's decision in Sigma Corp. v. United 
States, 117 F. 3d 1401 (Fed. Cir. 1997). When we used non-import 
surrogate values for factors sourced domestically by PRC suppliers, we 
based freight for inputs on the actual distance from the input supplier 
to the

[[Page 69993]]

site at which the input was used. When we relied on Indian import 
values to value inputs, in accordance with the Department's practice, 
we excluded imports from both NMEs and countries deemed to have 
generally available export subsidies (i.e., Indonesia, Korea, and 
Thailand) from our surrogate value calculations. For those surrogate 
values not contemporaneous with the POR, we adjusted for inflation 
using the wholesale price indices for India, as published in the 
International Monetary Fund's publication, International Financial 
Statistics.
    We valued the factors of production as follows:
    To value raw honey, we continue to use the average of the highest 
and lowest price for one kilogram (kg.) of raw honey stated in an 
article published in The Tribune of India on March 1, 2000, entitled, 
``Apiculture, a major foreign exchange earner'' (later republished in 
The Agricultural Tribune on May 1, 2000). Consistent with the 
methodology established in the previous proceeding, to account for raw 
honey price increases in India, we have inflated the average raw honey 
price from the March 2000, Tribune of India article (i.e., Rs. 35 per 
kg.) to December 2001 by dividing the Indian WPI for December 2001 by 
the Indian WPI for March 2000. See Wuhan NSR Final Results and 
accompanying Issues and Decision Memorandum at Comment 2. We note that 
pricing data submitted by petitioners in Exhibit 1 of their July 7, 
2003, submission for Jallowal and Tiwana Bee Farms clearly indicate 
that inflating the March 2000, Tribune of India price data only by the 
WPI does not appropriately reflect the significant increase in Indian 
raw honey prices during the POR. Specifically, in reviewing the average 
raw honey purchase prices from Jallowal and Tiwana Bee Farms, we find 
that during the period December 2001, through May 2002, raw honey 
prices dramatically increased on a monthly basis in excess of the WPI. 
Therefore, to account for such increases in Indian raw honey prices 
from December 2001, through May 2002, in excess of inflation, we 
averaged raw honey purchase prices from the Tiwana and Jallowal Bee 
Farms submitted by petitioners in Exhibit 1 of their July 7, 2003, 
submission to calculate a total average raw honey price for each month 
from December 2001, through May 2002. Next, we calculated monthly price 
increases on a percentage-basis, and then applied these price increases 
(percentage) to our adjusted raw honey price from the March 2000, 
Tribune of India article. Then, we calculated a simple average of these 
adjusted monthly raw honey prices to derive our raw honey surrogate 
value for the period for which we had raw honey purchase pricing data 
(i.e., December 1, 2001, through May 31, 2002). In order to make this 
value fully-contemporaneous to the POR, we further adjusted the raw 
honey surrogate value for inflation during the period of June 2002, 
through November 2002 based on the Indian WPI. Finally, we converted 
the raw honey value from a per kg.-basis to a per metric ton-(MT) 
basis. See Attachments 2 and 3 of the Factor Valuation Memo for further 
details. The Department intends to continue to carefully examine this 
issue for the final results of this review and invites interested 
parties to submit comments on this issue for purposes of the final 
results.
    To value beeswax, a raw honey by-product, we used the average per 
kilogram import value of beeswax into India for the POR under the 
Indian Customs' heading of ``152190'' obtained from the World Trade 
Atlas, which notes that its data was obtained from the Ministry of 
Commerce of India (World Trade Atlas). To value scrap honey, a raw 
honey by-product, we used the average per kilogram import value of 
inedible molasses into India for the POR under the Indian Customs' 
heading of ``170390'' obtained from the World Trade Atlas. We converted 
the surrogate values for beeswax and scrap honey from a per kg.-basis 
to a per MT-basis.
    To value coal, we relied upon contemporaneous Indian import values 
of ``steam coal'' under the Indian Customs' heading of ``2701011902'' 
obtained from the World Trade Atlas. We also adjusted the surrogate 
value for coal to include freight costs incurred between the supplier 
and the factory. To value electricity, we used the 2000 total average 
price per kilowatt hour, adjusted for inflation, for ``Electricity for 
Industry'' as reported in the International Energy Agency's 
publication, Energy Prices and Taxes, Second Quarter, 2002. To value 
water, we used the water tariff rate, as reported on the Municipal 
Corporation of Greater Mumbai's website. See http://www.mcgm.gov.in/Stat%20&%20Fig/Revenue.htm and Attachment 6 of the Factor Valuation 
Memo for source documents.
    To value packing materials (i.e., paint and steel drums), we relied 
upon contemporaneous Indian import data reported by the World Trade 
Atlas under the Indian Customs' heading ``3209,'' and a price quote 
from an Indian steel drum manufacturer, respectively. We adjusted the 
surrogate value for steel drums to reflect inflation. We also adjusted 
the surrogate values of packing materials to include freight costs 
incurred between the supplier and the factory.
    To value factory overhead, selling, general, and administrative 
expenses (SG&A), and profit, we relied upon publicly-available 
information in the 2001-2002 annual report of the Mahabaleshwar Honey 
Producers Cooperative Society, Ltd. (MHPC), a producer of the subject 
merchandise in India. We applied these rates to the calculated cost of 
manufacture and cost of production using the same methodology 
established in Wuhan NSR Final Results.
    For labor, we used the PRC regression-based wage rate at Import 
Administration's home page, Import Library, Expected Wages of Selected 
NME Countries, revised in September 2002, and corrected in February 
2003. Because of the variability of wage rates in countries with 
similar per capita gross domestic products, section 351.408(c)(3) of 
the Department's regulations requires the use of a regression-based 
wage rate. The source of these wage rate data on the Import 
Administration's web site is the Year Book of Labour Statistics 2001, 
International Labour Office (Geneva: 2001), Chapter 5B: Wages in 
Manufacturing.
    To value truck freight, we used an average truck freight cost based 
on Indian market truck freight rates on a per MT basis published in the 
Iron and Steel Newsletter, April 2002. To value rail freight, we used 
an average rail freight cost based on rail freight costs of 
transporting molasses to various cities within India as stated on the 
Indian Railways' website (Indian Government Agency).
    To value marine insurance expenses, where necessary, we used 
publicly-available price quotes from a marine insurance provider at 
http://www.rigconsultants.com/insurance/html.
    For details on factor of production valuation calculations, see 
Factor Valuation Memo.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations at the rates certified by the Federal Reserve 
Bank.

Preliminary Results of Review

    We preliminarily determine that the following antidumping duty 
margins exist:

[[Page 69994]]



----------------------------------------------------------------------------------------------------------------
                      Exporter                                     POR                    Margin (percent)
----------------------------------------------------------------------------------------------------------------
Zhejiang Native Produce & Animal By-Products Import            02/10/01 - 11/30/02                         77.09
 & Export Corporation a.k.a. Zhejiang Native Produce
 & Animal By-Products Import & Export Group
 Corporation........................................
PRC-wide Entity (including Kunshan, Henan, and High            02/10/01 - 11/30/02                        183.80
 Hope)..............................................
----------------------------------------------------------------------------------------------------------------

    For details on the calculation of the antidumping duty weighted-
average margin for Zhejiang, see the Analysis Memorandum for the 
Preliminary Results of the First Administrative Review of the 
Antidumping Duty Order on Honey from the People's Republic of China, 
dated December 10, 2003. A public version of this memorandum is on file 
in the CRU.

Assessment Rates

    Pursuant to section 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this review, if any importer-specific 
assessment rates calculated in the final results are above de minimis 
(i.e., at or above 0.50 percent), the Department will issue 
appraisement instructions directly to CBP to assess antidumping duties 
on appropriate entries by applying the assessment rate to the entered 
value of the merchandise. For assessment purposes, we calculated 
importer-specific assessment rates for the subject merchandise by 
aggregating the dumping duties due for all U.S. sales to each importer 
and dividing the amount by the total quantity of the sales to that 
importer. If these preliminary results are adopted in our final results 
of review, we will direct CBP to assess the resulting rate against the 
total quantity for the subject merchandise on each of Zhejiang's 
importer's/customer's entries during the POR.

Cash-Deposit Requirements

    The following cash-deposit rates will be effective upon publication 
of the final results of this review for all shipments of honey from the 
PRC entered, or withdrawn from warehouse, for consumption on or after 
publication date, as provided for by section 751(a)(2)(C) of the Act: 
(1) for subject merchandise exported by Zhejiang, the cash-deposit rate 
will be that established in the final results of this review, except if 
the rate is less than 0.50 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 previously investigated or reviewed 
companies not listed above that have separate rates, the cash-deposit 
rate will continue to be the company-specific rate published for the 
most recent period (except for Kunshan, Henan, and High Hope, whose 
cash-deposit rates have changed in this review to the PRC-wide entity 
rate as noted below); (3) the cash-deposit rate for all other PRC 
exporters (including Kunshan, Henan, and High Hope) will be the ``PRC-
wide'' rate established in the final results of this review; and (4) 
the cash deposit rate for all other non-PRC exporters will be the rate 
applicable to the PRC exporter that supplied that exporter.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Schedule for Final Results of Review

    The Department will disclose calculations performed in connection 
with the preliminary results of this review within five days of the 
date of publication of this notice in accordance with section 
351.224(b) of the Department's regulations. Any interested party may 
request a hearing within 30 days of publication of this notice in 
accordance with section 351.310(c) of the Department's regulations. Any 
hearing would normally be held 37 days after the publication of this 
notice, or the first workday thereafter, at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230. Individuals who wish to request a hearing must submit a written 
request within 30 days of the publication of this notice in the Federal 
Register to the Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Room 1870, 14th Street and Constitution Avenue, 
NW, Washington, DC 20230. Requests for a public hearing should contain: 
(1) the party's name, address, and telephone number; (2) the number of 
participants; and (3) to the extent practicable, an identification of 
the arguments to be raised at the hearing.
    Unless otherwise notified by the Department, interested parties may 
submit case briefs within 30 days of the date of publication of this 
notice in accordance with section 351.309(c)(ii) of the Department's 
regulations. As part of the case brief, parties are encouraged to 
provide a summary of the arguments not to exceed five pages and a table 
of statutes, regulations, and cases cited. Rebuttal briefs, which must 
be limited to issues raised in the case briefs, must be filed within 
five days after the case brief is filed. If a hearing is held, an 
interested party may make an affirmative presentation only on arguments 
included in that party's case brief and may make a rebuttal 
presentation only on arguments included in that party's rebuttal brief. 
Parties should confirm by telephone the time, date, and place of the 
hearing within 48 hours before the scheduled time. The Department will 
issue the final results of this review, which will include the results 
of its analysis of issues raised in the briefs, not later than 120 days 
after the date of publication of this notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under section 351.402(f) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
these review periods. 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.This administrative review and this notice are published in 
accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: December 10, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-31017 Filed 12-15-03; 8:45 am]
BILLING CODE 3510-DS-S