[Federal Register Volume 69, Number 44 (Friday, March 5, 2004)]
[Notices]
[Pages 10410-10423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5007]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-851]


Certain Preserved Mushrooms From the People's Republic of China: 
Preliminary Results of Sixth New Shipper Review and Preliminary Results 
and Partial Rescission of Fourth Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of sixth new shipper review and 
preliminary results and partial rescission of fourth antidumping duty 
administrative review.

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SUMMARY: The Department of Commerce (``the Department'') is 
concurrently conducting the sixth new shipper review and fourth 
administrative review of the antidumping duty order on certain 
preserved mushrooms from the People's Republic of China (``PRC'') 
covering the period February 1, 2002, through January 31, 2003. The new 
shipper review covers one exporter. We have preliminarily determined 
that this exporter has made sales at less than normal value and that 
its reported sale appears to be a bona fide sale. The administrative 
review covers six exporters. We have preliminarily determined that 
sales have been made below normal value with respect to one of these 
exporters. If these preliminary results are adopted in our final 
results of these reviews, we will instruct Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the period of review (``POR''), for which the 
importer-specific assessment rates are above de minimis.
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: March 5, 2004.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Jim Mathews, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-1766, or (202) 482-2778, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On February 19, 1999, the Department published in the Federal 
Register an amended final determination and antidumping duty order on 
certain preserved mushrooms from the PRC (64 FR 8308).
    On February 3, 2003, the Department published a notice advising of 
the opportunity to request an administrative review of the antidumping 
duty order on certain preserved mushrooms from the PRC (68 FR 5272). On 
February 25 and 28, 2003, the Department received timely requests from 
Gerber Food (Yunnan) Co., Ltd., (``Gerber''), Green Fresh Foods 
(Zhangzhou) Co., Ltd. (``Green Fresh''), Guangxi Yulin Oriental Food 
Co., Ltd. (``Guangxi Yulin''), Shantou Hongda Industrial General 
Corporation, (``Shantou Hongda''), and Shenxian Dongxing Foods Co., 
Ltd. (``Shenxian Dongxing'') for an administrative review pursuant to 
19 CFR 351.213(b).
    On February 28, 2003, the Department received timely requests from 
Primera Harvest (Xiangfan) Co., Ltd. (``Primera Harvest'') and Xiamen 
International Trade & Industrial Co., Ltd. (``XITIC'') for a new 
shipper review in accordance with 19 CFR 351.214(c).
    On February 28, 2003, the petitioner \1\ requested an 
administrative review pursuant to 19 CFR 351.213(b) of 11 companies \2\ 
which it claimed were producers and/or exporters of the subject 
merchandise. Five of these 11 companies also requested a review.
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    \1\ The petitioner is the Coalition for Fair Preserved Mushroom 
Trade which includes the American Mushroom Institute and the 
following domestic companies: L.K. Bowman, Inc., Modern Mushroom 
Farms, Inc., Monterey Mushrooms, Inc., Mount Laurel Canning Corp., 
Mushrooms Canning Company, Southwood Farms, Sunny Dell Foods, Inc., 
and United Canning Corp.
    \2\ The petitioner's request included the following companies: 
(1) China Processed Food Import & Export Company (``COFCO''); (2) 
Gerber; (3) Green Fresh; (4) Guangxi Yulin; (5) Raoping Xingyu Foods 
Co., Ltd. (``Raoping Xingyu''); (6) Shantou Hongda; (7) Shenxian 
Dongxing; (8); Shenzhen Qunxingyuan Trading Co., Ltd. (``Shenzhen 
Qunxingyuan''), (9) Xiamen Zhongjia Imp. & Exp. Co., Ltd. 
(``Zhongjia''); (10) Zhangzhou Jingxiang Foods Co., Ltd. 
(``Zhangzhou Jingxiang''); and (11) Zhangzhou Longhai Minhui 
Industry and Trade Co., Ltd. (``Minhui'').
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    On March 12, 2003, Primera Harvest and XITIC both agreed to waive 
the time limits applicable to the new shipper review and to permit the 
Department to conduct the new shipper review concurrently with the 
administrative review.
    On March 20, 2002, the Department initiated an administrative 
review covering the companies listed in the petitioner's February 28, 
2003, request. (See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 68 FR 14394, 14399 (March 25, 2003)).

[[Page 10411]]

    On March 29, 2002, the Department initiated a new shipper review of 
Primera Harvest and XITIC. (See Certain Preserved Mushrooms from the 
People's Republic of China: Initiation of New Shipper Antidumping Duty 
Review, 68 FR 15152 (March 28, 2003)).
    On April 1, 2003, we issued a questionnaire to each PRC company 
listed in the above-referenced initiation notices.
    On May 1, 2003, the Department provided the parties an opportunity 
to submit publicly available information (``PAI'') for consideration in 
these preliminary results.
    On May 7, 2003, the respondents Raoping Xingyu and Shenzhen 
Qunxingyuan each indicated that neither company had shipments of the 
subject merchandise to the United States during the POR.
    On May 13, 2003, Minhui and Zhongjia each filed submissions with 
the Department certifying that neither company had any shipments of the 
subject merchandise to the United States during the POR other than the 
sale each reported in a prior new shipper review (the POR of which 
overlapped with the POR of this administrative review).
    From May 12 through June 13, 2003, COFCO, Gerber, Green Fresh, 
Guangxi Yulin, Primera Harvest, Shantou Hongda, and Shenxian Dongxing 
submitted their responses to the Department's antidumping duty 
questionnaire.
    As a result of not receiving its response to the antidumping duty 
questionnaire, the Department issued a letter to Zhangzhou Jingxiang on 
May 29, 2003, which provided this company with an additional two weeks 
of time to respond to the Department's questionnaire. We received no 
reply to this letter or response to the questionnaire from this 
company.
    On June 12, 2003, the petitioner requested an extension until July 
10, 2003, to withdraw any request for review of companies listed in its 
February 28, 2003, communication, which the Department granted on June 
16, 2003.
    From June 25 through July 18, 2003, the petitioner submitted 
comments on the questionnaire responses provided by COFCO, Gerber, 
Green Fresh, Guangxi Yulin, Primera Harvest, Shantou Hongda, and 
Shenxian Dongxing.
    On July 10, 2003, the petitioner requested an extension of time 
until August 18, 2003, to submit factual information in this case, 
which the Department granted on July 22, 2003.
    From July 28 through August 15, 2003, the Department issued COFCO, 
Gerber, Green Fresh, Guangxi Yulin, Primera Harvest, Shantou Hongda, 
and Shenxian Dongxing a supplemental questionnaire.
    On August 7, 2003, the Department issued a memorandum which 
notified the interested parties of its intent to rescind the new 
shipper review with respect to XITIC because it failed to provide 
proper certifications in accordance with 19 CFR 351.214(b)(ii)(B) based 
on data contained in its questionnaire response. We provided parties 
until August 21, 2003, to comment on the Department's intent to rescind 
the review with respect to XITIC. No parties submitted comments.
    Also on August 7, 2003, the petitioner withdrew its request for an 
administrative review of Minhui and Zhongjia.
    On August 15, 2003, the petitioner, COFCO, and Guangxi Yulin 
submitted PAI for use in valuing the factors of production. On 
September 2, 2003, COFCO and Guangxi Yulin submitted additional PAI.
    On August 20, 2003, Minhui and Zhongjia requested that the 
Department conduct a review of their sales and factors of production 
data in the context of the administrative review and on September 15, 
2003, they requested that the Department place their data on the record 
of the administrative review. On September 2, and 23, 2003, the 
petitioner objected to both above-noted requests made by Minhui and 
Zhongjia.
    From August 28 through September 15, 2003, the respondents 
submitted their responses to the Department's supplemental 
questionnaire.
    On September 24, 2003, Shantou Hongda indicated that it would not 
participate in verification.
    On October 3, 2003, the Department published in the Federal 
Register a notice of postponement of the preliminary results until no 
later than March 1, 2004 (68 FR 57424).
    On October 9, 2003, the Department rescinded the new shipper review 
with respect to XITIC. (See Certain Preserved Mushrooms From the 
People's Republic of China: Notice of Partial Rescission of Sixth New 
Shipper Review, 68 FR 59586 (October 16, 2003).)
    From September through November 2003, the petitioner submitted 
additional comments on the questionnaire responses provided by COFCO, 
Gerber, Green Fresh, Guangxi Yulin, Primera Harvest, and Shenxian 
Dongxing.
    In October 2003, the Department issued Primera Harvest and Shenxian 
Dongxing second supplemental questionnaires and also received these 
companies' responses to those supplemental questionnaires. Also in 
October 2003, the Department issued verification outlines to Primera 
Harvest and Shenxian Dongxing.
    The Department conducted verification of the responses of Primera 
Harvest and Shenxian Dongxing during the period October 28 through 
November 21, 2003. On December 12, 2003, the Department issued the 
verification report for Shenxian Dongxing. On January 30, 2004, the 
Department issued the verification report for Primera Harvest.
    On November 3, 2003, the Department rescinded the administrative 
review with respect to Minhui and Zhongjia. (See Certain Preserved 
Mushrooms From the People's Republic of China: Notice of Partial 
Rescission of Fourth New Shipper Review, 68 FR 63065 (November 3, 
2003).)
    From October to December 2003, the Department issued COFCO two 
supplemental questionnaires and Gerber and Green Fresh a second 
supplemental questionnaire, and received responses from these companies 
during the period November 2003 to January 2004.
    From December 10, 2003, to January 6, 2004, Department officials 
met with counsel for the petitioner and COFCO to discuss whether or not 
COFCO's affiliated preserved mushroom producers should also be required 
to report their factors of production (see ex parte memoranda to the 
file dated December 22, 2003, and January 7, 2004).
    In January 2004, the Department issued COFCO a fourth supplemental 
questionnaire which addressed its affiliations with other companies 
that sold and/or produced preserved mushrooms during the POR and 
requested COFCO to provide factors of production data for those 
companies. In January and February 2004, COFCO submitted its responses.
    In February 2004, the petitioner submitted pre-preliminary results 
comments on the data provided by all respondents in these reviews. (See 
company-specific calculation memoranda dated March 1, 2004, for further 
discussion.)

Scope of Order

    The products covered by this order are certain preserved mushrooms 
whether imported whole, sliced, diced, or as stems and pieces. The 
preserved mushrooms covered under this order are the species Agaricus 
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to 
mushrooms that have been prepared or preserved by cleaning, blanching, 
and sometimes

[[Page 10412]]

slicing or cutting. These mushrooms are then packed and heated in 
containers including, but not limited to, cans or glass jars in a 
suitable liquid medium, including, but not limited to, water, brine, 
butter or butter sauce. Preserved mushrooms may be imported whole, 
sliced, diced, or as stems and pieces. Included within the scope of 
this order are ``brined'' mushrooms, which are presalted and packed in 
a heavy salt solution to provisionally preserve them for further 
processing.
    Excluded from the scope of this order are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.\3\
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    \3\ On June 19, 2000, the Department affirmed that 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms containing 
less than 0.5 percent acetic acid are within the scope of the 
antidumping duty order. See ``Recommendation Memorandum--Final 
Ruling of Request by Tak Fat, et al. for Exclusion of Certain 
Marinated, Acidified Mushrooms from the Scope of the Antidumping 
Duty Order on Certain Preserved Mushrooms from the People's Republic 
of China,'' dated June 19, 2000. This decision is currently on 
appeal.
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    The merchandise subject to this order is classifiable under 
subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143, 
2003.10.0147, 2003.10.0153 and 0711.51.0000 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 order is dispositive.

Period of Reviews

    The POR is February 1, 2002, through January 31, 2003.

Verification

    As provided in section 782(i)(2) of the Act, we verified 
information provided by Primera Harvest and Shenxian Dongxing. We used 
standard verification procedures, including on-site inspection of the 
manufacturers' and exporters' facilities, and examination of relevant 
sales and financial records. Our verification results are outlined in 
the verification report for each company. (For further discussion, see 
December 12, 2003, verification report for Shenxian Dongxing in the 
Fourth Antidumping Duty Administrative Review (``Shenxian Dongxing 
verification report''); and January 30, 2004, verification report for 
Primera Harvest in the Sixth Antidumping Duty New Shipper Review 
(``Primera Harvest verification report'').)

Partial Rescission of Administrative Review

    We are preliminarily rescinding this review with respect to 
Zhangzhou Jingxiang because the shipment data we examined did not show 
U.S. entries of the subject merchandise during the POR from this 
company.

Bona Fide Sale Analysis--Primera Harvest

    The petitioner contends that Primera Harvest is not a bona fide new 
shipper and therefore, the Department should rescind its new shipper 
review. Among other things, the petitioner claims that the respondent 
is affiliated with other companies which produced and exported 
preserved mushrooms from Chile and which are subject to an antidumping 
duty order. Morever, the petitioner argues that through its past and 
present affiliations, Primera Harvest's overseer and part owner has 
been involved in selling practices in the past, and during the POR, 
which circumvented the antidumping duty orders on certain preserved 
mushrooms from both Chile and the PRC, a fact which alone calls into 
question the reliability of the data provided by Primera Harvest in 
this new shipper review. In addition, the petitioner claims that 
Primera Harvest's reported price for its sole U.S. sale during the POR 
was aberrationally high when compared to the average unit value of U.S. 
imports of comparable goods during the POR and during the month of the 
sale, and that the quantity of the sale was aberrationally low when 
compared to the average shipment size of comparable goods during the 
POR and during the month of the sale. Finally, the petitioner claims 
that Primera Harvest offers no plausible reason for why its U.S. 
customer would pay such a high price for a common commodity product, 
shipped by an unknown company that previously did not participate in 
the U.S. market, and with no special considerations that would justify 
the reported price level.
    For the reasons stated below, we preliminarily find that Primera 
Harvest's reported U.S. sale during the POR appears to be a bona fide 
sale, as required by 19 CFR 351.214(b)(2)(iv)(C), based on the totality 
of the facts on the record. Specifically, we find that (1) the net 
price of its single reported sale (i.e., gross unit price net of 
international freight and U.S. brokerage and handling, and movement 
expenses) was similar to the average unit value of U.S. imports of 
comparable canned mushrooms from the PRC during the POR; (2) the price 
of the sale was within the range of prices of comparable goods imported 
from the PRC during the POR; and (3) the price charged by Primera 
Harvest to its U.S. customer was similar to the prices which Primera 
Harvest charged to the same U.S. customer during the POR for sales of 
mushrooms produced in the PRC by other manufacturers. We also find that 
the quantity of the sale was within the range of shipment sizes of 
comparable goods imported from the PRC during the POR. (See March 1, 
2004, memorandum to the file for further discussion of our price and 
quantity analysis.)
    Although the petitioner states that the person who oversees Primera 
Harvest's operations was involved in selling practices in the past 
which allegedly circumvented the antidumping duty order on certain 
preserved mushrooms from Chile, this allegation does not serve as a 
sufficient basis to call into question the reliability of data provided 
by Primera Harvest in this new shipper review for a different country 
(see data contained in attachment 1 of the petitioner's February 18, 
2004, submission, and Certain Preserved Mushrooms from Chile: Final 
Results of Administrative Review, 67 FR 31769 (May 10, 2002) and 
accompanying decision memorandum at Comment 2). Furthermore, the 
petitioner's allegations as to other questionable sales involving this 
individual outside of this new shipper proceeding do not pertain to the 
bona fides of the transaction under review (see pages 27-28 of the 
Primera Harvest verification report). While the Department has 
scrutinized the circumstances of the transaction carefully, we have not 
identified information on the record that establishes that the 
transaction was not bona fide.
    Moreover, although Primera Harvest had no other arm's-length sales 
of any merchandise, subject or non-subject, during or after the POR (up 
until the time of verification) and therefore, apparently, had no 
commercial income during this period, we do not find that this factor 
in and of itself, in light of all of the other information of record 
provided above, is sufficient for calling into question the bona fides 
of its reported U.S. sale. In addition, the Department verified that 
Primera Harvest was undergoing significant construction of production 
facilities for certain preserved mushrooms during the POR and 
afterward. This fact provides further evidence that this company was,

[[Page 10413]]

and continues to be, legitimately engaged in the production and export 
of subject merchandise (see pages 23-24 of the Primera Harvest 
verification report). Therefore, for the reasons mentioned above, the 
Department preliminarily finds that Primera Harvest's sole U.S. sale 
during the POR was a bona fide commercial transaction.

Affiliation--COFCO

    COFCO purchased preserved mushrooms from its producer, Fujian Yu 
Xing Fruit & Vegetable Foodstuff Development Co. (``Yu Xing''), which 
it then sold to the United States during the POR. COFCO is also linked 
through its parent company, China National Cereals, Oils, & Foodstuffs 
Import & Export Corporation (``China National''), to two other 
preserved mushroom producers, COFCO (Zhangzhou) Food Industrial Co., 
Ltd. (``COFCO Zhangzhou'') and Fujian Zishan Group Co. (``Fujian 
Zishan''), from which it did not purchase subject merchandise during 
the POR. The petitioner maintains that the Department should collapse 
these entities for margin calculation purposes because a significant 
potential for manipulation of price or production between these 
entities otherwise exists.
    Section 771(33)(E) of the Act provides that the Department will 
find parties to be affiliated if any person directly or indirectly 
owns, controls, or holds with power to vote, five percent or more of 
the outstanding voting stock or shares of any organization and such 
organization; section 771(33)(F) of the Act provides that parties are 
affiliated if two or more persons directly or indirectly control, or 
are controlled by, or under common control with any other person; and 
section 771(33)(G) of the Act provides that parties are affiliated if 
any person controls any other person. To the extent that section 
771(33) of the Act does not conflict with the Department's application 
of separate rates and enforcement of the non-market economy (``NME'') 
provision, section 773(c) of the Act, the Department will determine 
that exporters and/or producers are affiliated if the facts of the case 
support such a finding.
    In this case, COFCO holds a significant ownership share in Yu Xing 
(see exhibit 2 of COFCO's November 10, 2003, submission). Moreover, 
COFCO and Yu Xing share a company official who is on the board of 
directors at both companies and whose responsibilities include (1) 
examining and executing the implementation of resolutions passed by the 
board members; (2) convening shareholder meetings; and (3) providing 
financial reports of each company's business performance to each 
company's board of directors (see exhibit 4 of COFCO's September 9, 
2003, submission; and pages 2-4 and exhibit 7 of COFCO's January 23, 
2004, submission). Therefore, the Department has determined in this 
case that COFCO and Yu Xing are affiliated in accordance with sections 
771(33)(E), (F), and (G) of the Act for the reasons stated above.
    In addition, COFCO Zhangzhou (which also produced preserved 
mushrooms during the POR) appears to be affiliated with both COFCO and 
Yu Xing based on section 771(33) of the Act for the reasons stated 
below. Specifically, both COFCO and Yu Xing hold significant ownership 
shares in COFCO Zhangzhou (see also exhibit 2 of COFCO's November 10, 
2003, submission). Moreover, COFCO Zhangzhou shares with COFCO and Yu 
Xing the same company official who is also on the board of directors at 
COFCO Zhangzhou and who also performs the same responsibilities at 
COFCO Zhangzhou which he performs at COFCO and Yu Xing as described 
above (see also pages 2-4 and exhibit 7 of COFCO's January 23, 2004, 
submission). COFCO Zhangzhou and Yu Xing also have the same general 
manager (see exhibit 5 of COFCO's January 23, 2004, submission). 
Therefore, the Department has determined in this case that COFCO, Yu 
Xing, and COFCO Zhangzhou are also affiliated in accordance with 
section 771(33)(E), (F), and (G) of the Act.
    Furthermore, based on data contained in COFCO's questionnaire 
responses, COFCO, COFCO Zhangzhou, and Yu Xing are also affiliated, 
pursuant to section 771(33) of the Act, either directly or indirectly, 
with two other companies (i.e., Xiamen Jiahua Import & Export Trading 
Co., Ltd. (``Xiamen Jiahua'') and Fujian Zishan) which sold and/or 
produced preserved mushrooms for markets other than the U.S. market 
during the POR. Specifically, COFCO's parent company, China National, 
holds a significant ownership share in Xiamen Jiahua (see also exhibit 
2 of COFCO's November 10, 2003, submission). Moreover, the same company 
official who is on the board of directors at COFCO, COFCO Zhangzhou, 
and Yu Xing is also on the board of directors at Xiamen Jiahua. In 
addition, this company official performs the same responsibilities at 
COFCO, COFCO Zhangzhou, and Yu Xing as described above, which he 
performs at Xiamen Jiahua (see also pages 2-4 and exhibit 7 of COFCO's 
January 23, 2004, submission).
    With respect to Fujian Zishan (i.e., another producer of preserved 
mushrooms during the POR), we note that Xiamen Jiahua holds a 
significant ownership share in Fujian Zishan and that COFCO's parent 
company, China National, holds a significant ownership share in Xiamen 
Jiahua (see also exhibit 2 of COFCO's November 10, 2003, submission). 
Furthermore, we note that one of Fujian Zishan's board members also 
serves as the general manager at Xiamen Jiahua. In addition, we note 
that the same individual who certified the accuracy of COFCO's sales 
and factors of production data also certified to the accuracy of Fujian 
Zishan's factors of production. Accordingly, we find that COFCO, COFCO 
Zhangzhou, Yu Xing, Fujian Zishan, and Xiamen Jiahua are affiliated 
through the common control of COFCO's parent company pursuant to 
section 771(33)(F) of the Act. Furthermore, given that there are shared 
individuals in positions of control and/or influence between and among 
these companies as discussed above, we also find sufficient control 
exists between these entities to believe that Fujian Zishan is 
affiliated with COFCO, COFCO Zhangzhou, Yu Xing, and Xiamen Jiahua in 
accordance with section 771(33)(G) of the Act.

Collapsing--COFCO

    Based on the ownership ties described above, the Department 
requested COFCO to (1) report the factors of production data from each 
company listed above if it produced preserved mushrooms during the POR; 
and (2) provide information on the relationship between and among these 
companies for purposes of determining whether the Department should 
collapse any or all of them in the preliminary results (see January 8, 
2004, supplemental questionnaire for details).
    Pursuant to 19 CFR 351.401(f), the Department will collapse 
producers and treat them as a single entity where (1) those producers 
are affiliated, (2) the producers have production facilities for 
producing similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities, and (3) there is a significant potential for 
manipulation of price or production. In determining whether a 
significant potential for manipulation exists, the regulations provide 
that the Department may consider various factors, including (1) the 
level of common ownership, (2) the extent to which managerial employees 
or board members of one firm sit on the board of directors of an 
affiliated firm, and (3) whether the operations of the affiliated firms 
are intertwined. (See Gray Portland Cement and Clinker From Mexico: 
Final Results

[[Page 10414]]

of Antidumping Duty Administrative Review, 63 FR 12764, 12774 (March 
16, 1998) and Final Determination of Sales at Less Than Fair Value: 
Collated Roofing Nails from Taiwan, 62 FR 51427, 51436 (October 1, 
1997).) To the extent that this provision does not conflict with the 
Department's application of separate rates and enforcement of the NME 
provision, section 773(c) of the Act, the Department will collapse two 
or more affiliated entities in a case involving an NME country if the 
facts of the case warrant such treatment. Furthermore, we note that the 
factors listed in 19 CFR 351.401(f)(2) are not exhaustive, and in the 
context of an NME investigation or administrative review, other factors 
unique to the relationship of business entities within the NME may lead 
the Department to determine that collapsing is either warranted or 
unwarranted, depending on the facts of the case. See Hontex 
Enterprises, Inc. v. United States, Slip Op. 03-17, 36 (February 13, 
2003) (noting that the application of collapsing in the NME context may 
differ from the standard factors listed in the regulation).
    In summary, depending upon the facts of each investigation or 
administrative review, if there is evidence of significant ownership 
ties or control between or among producers which produce similar and/or 
identical merchandise but may not all produce their product for sale to 
the United States, the Department may find such evidence sufficient to 
apply the collapsing criteria in an NME context in order to determine 
whether all or some of those affiliated producers should be treated as 
one entity (see Certain Hot-Rolled Carbon Steel Flat Products from the 
People's Republic of China, Preliminary Determination of Sales at Less 
Than Fair Value 66 FR 22183 (May 3, 2001)).
    Based on data contained in its supplemental questionnaire 
responses, COFCO indicated that only COFCO Zhangzhou, Fujian Zishan, 
and Yu Xing produced preserved mushrooms during the POR. Therefore, we 
find that the first and second collapsing criteria are met here because 
these companies are affiliated as explained above and all have 
production facilities for producing similar or identical products that 
would not require substantial retooling in order to restructure 
manufacturing priorities (see factors of production data submitted by 
each company in COFCO's February 9, 2004, submission).
    Finally, we find that the third collapsing criterion is met in this 
case because a significant potential for manipulation of price or 
production exists among COFCO Zhangzhou, Yu Xing, and Fujian Zishan for 
the following reasons. As explained above, there is a level of common 
ownership between and among these companies. Second, also as discussed 
above, a significant level of common control exists among these 
companies. Third, we find that the operations of COFCO, COFCO 
Zhangzhou, Yu Xing, and Fujian Zishan are sufficiently intertwined. 
Specifically, since the less-than-fair-value (``LTFV'') investigation, 
COFCO has shifted its source of supply among these affiliates. Fujian 
Zishan's factors data was initially used for purposes of determining 
COFCO's dumping margin in the LTFV investigation of this proceeding 
(see Notice of Final Determination of Sales at Less Than Fair Market 
Value: Certain Preserved Mushrooms from the People's Republic of China, 
63 FR 72255, 72258 (December 31, 1998)). Moreover, we note that during 
the POR Fujian Zishan supplied preserved mushrooms to Xiamen Jiahua, 
and Yu Xing supplied preserved mushrooms to COFCO (see page exhibit 1 
of COFCO's February 9, 2004, submission and page 4 of COFCO's November 
10, 2003, submission).
    Therefore, based on the above-mentioned findings and following the 
guidance of 19 CFR 351.401(f), we have preliminarily collapsed the 
three producers noted above because there is a significant potential 
for manipulation between these parties. (See March 1, 2004, memorandum 
from Office Director to the Deputy Assistant Secretary for further 
discussion.)

Affiliation--Green Fresh

    In its questionnaire response, Green Fresh stated that when its 
general manager is not present in the United States, the daily 
operations of its U.S. subsidiary, Green Mega, are managed by an 
individual who owns a U.S. company which purchased the subject 
merchandise directly from Green Fresh during the POR. This individual 
is also an employee at another U.S. company which also purchased the 
subject merchandise directly from Green Fresh during the POR.
    Section 771(33)(G) of the Act states that ``any person who controls 
any other person and such other person'' shall be considered to be 
``affiliated.'' Further, ``a person shall be considered to control 
another person if the person is legally or operationally in a position 
to exercise restraint or direction over the other person.''
    Therefore, because Green Fresh, Green Mega, and two of its U.S. 
customers during the POR appeared to be affiliated in accordance with 
section 771(33)(G) of the Act, we issued Green Fresh a supplemental 
questionnaire which requested Green Fresh to provide the data for its 
sales to its two U.S. customers (for which the unnamed individual 
mentioned above was either the owner of or an employee in those 
companies), as well as Green Mega's sales to its U.S. customers.
    Even though it appears that Green Mega and two of Green Fresh's 
U.S. customers may be affiliated under section 771(33)(G) of the Act, 
data contained in Green Fresh's responses indicated that Green Mega did 
not make any sales of subject merchandise during the POR. Specifically, 
a further examination of the data contained in Green Fresh's 
questionnaire responses indicates that although Green Mega was set up 
in March 2002, it did not make any sales of the subject merchandise 
until February 2003 (which is outside the POR of this administrative 
review). Therefore, for these preliminary results, we have not used the 
U.S. sales reported by Green Mega in our analysis. In addition, data 
contained in Green Fresh's U.S. sales listing indicates that Green 
Fresh sold the subject merchandise to the two U.S. customers in 
question prior to the period during which its affiliate Green Mega 
claims it began its sales operations in the United States (i.e., 
February 2003). Therefore, based on the facts described above, we 
preliminarily find an insufficient basis to further consider Green 
Fresh and two of its U.S. customers affiliated parties within the 
meaning of section 771(33) of the Act during this POR. However, we 
intend to re-examine this affiliation issue in the next administrative 
review, should a review be requested.

Facts Available--Gerber/Green Fresh

Background

    In the final results of the prior administrative review, the 
Department determined that the application of adverse facts available 
was warranted for both Gerber and Green Fresh, pursuant to sections 
776(a) and (b) of the Act. The Department found that during that period 
of review, Gerber and Green Fresh had entered into an arrangement 
through which Gerber exported its own subject merchandise to the United 
States, but reported Green Fresh as the exporter (see Certain Preserved 
Mushrooms from the People's Republic of China: Final Results and 
Partial Rescission of the New Shipper Review and Final Results and 
Partial Rescission of the Third Antidumping Duty Administrative Review, 
68 FR 41304, 41306 (July 11, 2003) (and

[[Page 10415]]

accompanying decision memorandum at Comment 1) (``PRC Mushrooms Third 
Administrative Review''). For a limited number of transactions, Green 
Fresh processed some initial paperwork, but for the vast majority of 
sales, did nothing but sell Gerber its invoices for a commission. The 
result of this arrangement was that for numerous transactions during 
that period of review, Gerber made cash deposits of estimated 
antidumping duties not at its own rate, but at the much lower 
calculated cash deposit rate assigned to Green Fresh. Thus, Gerber, 
with Green Fresh's assistance, was able to circumvent the collection of 
substantial cash deposits during that period of review.
    The Department determined in the final results of the last review 
that neither Gerber, nor Green Fresh, had acted to the best of its 
ability. The Department explained that both Gerber and Green Fresh 
continually misrepresented in their questionnaire responses to the 
Department the specifics of their true relationship during the POR (see 
also PRC Mushrooms Third Administrative Review at Comment 1). Thus, it 
was not until verification of these companies that the Department 
became fully aware of many of the details recounted above. Id at 
Comment 1. The Department further explained that it could not rely upon 
the information which Gerber and Green Fresh supplied to the Department 
because through their misrepresentations in numerous questionnaire 
responses, the veracity and credibility of all the companies' responses 
were called into question by the Department. Id at Comment 1. Finally, 
the Department explained that, no matter the motivations of the parties 
to the Gerber/Green Fresh arrangement, Gerber evaded payment of cash 
deposits which it was required to pay pursuant to section 751(a)(2)(C) 
of the Act, and Green Fresh provided the means by which Gerber was able 
to evade such collection. Thus, pursuant to its discretion to prevent 
the evasion or circumvention of the antidumping law, the Department 
determined that the application of total adverse facts available was 
appropriate for both Gerber and Green Fresh. Id at Comment 1 (citing 
Mitsubishi Elec. Corp. v. United States, 700 F. Supp. 538, 555 (1988), 
aff'd 898 F. 2d 1577 (Fed. Cir. 1990).)

The Current POR--Gerber

    Gerber continued to use Green Fresh's invoices during the POR 
covered by this administrative review. See Gerber's Supplemental 
Questionnaire Response, dated September 3, 2003 at 4-14. Gerber's 
estimated cash deposit rate, derived from its first administrative 
review, was 121.33 percent during the POR. (See Amended Final Results 
of First New Shipper Review and First Antidumping Duty Administrative 
Review: Certain Preserved Mushrooms from the People's Republic of 
China, 66 FR 35595, 35596 (July 6, 2001).) On the other hand, Green 
Fresh's estimated cash deposit rate was 29.87 percent, derived from its 
own new shipper review. (See Final Results of New Shipper Review: 
Certain Preserved Mushrooms from the People's Republic of China, 66 FR 
45006 (August 27, 2001).) Thus, Gerber continued to circumvent the 
collection of substantial cash deposits during this POR. Furthermore, 
just as in the last review, such circumvention could not have occurred 
but for Green Fresh's arrangement with Gerber. In addition, Gerber 
placed a copy of the alleged contractual agreement between itself and 
Green Fresh during the last administrative review on the record of that 
review, and the terms of the alleged agreement itself purport to last 
through May 2002--during the POR covered by this administrative review. 
This submission, as well as all relevant documentation pertaining to 
Gerber and Green Fresh's relationship from the previous administrative 
review record were placed on the record of this proceeding on February 
13, 2004. See Memorandum to File Re: Gerber and Green Fresh Documents, 
February 13, 2004.
    The Department has preliminarily determined that the application of 
total adverse facts available for Gerber is warranted for this 
administrative review. Gerber did not submit to CBP the appropriate 
cash deposit rates assigned to it by the Department for numerous 
transactions during the POR, as directed by the Act. See section 
751(a)(2)(C) of the Act. There is an ``inherent power of an 
administrative agency to protect the integrity of its own 
proceedings.'' See Alberta Gas Chemicals Ltd. v. United States, 650 F. 
2d 9 (2nd Cir. 1981). As the Department provided in its PRC Mushrooms 
Third Administrative Review, ``the Department has discretion to 
administer the law in a manner that prevents evasion of the order.'' 
See PRC Mushrooms Third Administrative Review at Comment 1. Indeed, as 
the Court of International Trade (``CIT'') provided in Tung Mung 
Development v. United States, 219 F. Supp. 2d 1333, 1343 (CIT 2002), 
aff'd, Tung Mung, et. al., 03-1073, 03-1095 (January 15, 2004), ``the 
ITA has been vested with authority to administer the antidumping laws 
in accordance with the legislative intent. To this end, the ITA has (a) 
certain amount of discretion (to act) * * * with the purpose in mind of 
preventing the intentional evasion or circumvention of the antidumping 
duty law. Mitsubishi Elec. Corp. v. United States, 700 F. Supp. 538, 
555 (1988), aff'd 898 F. 2d 1577 (Fed. Cir. 1990).'' Without such 
authority, the Department, despite being the administrative agency 
designated with the responsibility of enforcing the antidumping law, 
would be forced to accept and review sales that were the result of 
potentially illegal or inappropriate arrangements. See Elkem Metals Co. 
v. United States, 276 F. Supp. 2d. 1296 (CIT 2003)(determining that the 
ITC correctly applied ``best information available,'' the precursor to 
adverse facts available, when the existence of a price fixing scheme 
came to light following an investigation). Such abuse of the 
antidumping review process is unacceptable and certainly not a 
situation Congress anticipated or believed acceptable when it drafted 
the antidumping statutory provisions. See Queen's Flowers De Colombia 
v. United States, 981 F. Supp. 617, 621 (CIT 1997) (determining that 
the Department's decision to define the term ``company'' to include 
several closely related companies was a permissible application of the 
statute, given its ``responsibility to prevent circumvention of the 
antidumping law''); Hontex Enterprises, Inc., et. al. v. United States, 
248 F. Supp. 1323, 1343 (CIT 2003) (finding that the Department's 
decision to increase the scope of its analysis to include NME exporters 
was reasonable in light of its ``responsibility to prevent 
circumvention of the antidumping law''). This inherent authority to 
protect the integrity of the antidumping review process and prevent 
circumvention of the law is essential to the Department in both its 
practice and its regulations. See, e.g., 19 CFR 351.401(f)(2003) (the 
Department's ``collapsing'' regulation. Pursuant to this regulation, 
the Department will treat two or more affiliated producers as a single 
entity if it determines that there is a ``significant potential for the 
manipulation of price or production''). Thus, because Gerber 
circumvented the antidumping duty law and evaded the collection of the 
appropriate cash deposits during the POR, the Department, pursuant to 
this inherent authority, has determined that the application of total 
facts available is warranted.
    Gerber and Green Fresh have indicated on the record that during 
this POR Gerber used Green Fresh's invoices

[[Page 10416]]

when exporting some of its merchandise to the United States, although 
Gerber was providing Green Fresh with apparently no compensation for 
such usage and Gerber was aware that Green Fresh believed that their 
business relationship had allegedly ended (see pages 4-8 of Gerber's 
September 3, 2003, supplemental questionnaire response). Gerber has 
also indicated on the record that the reason for its arrangement with 
Green Fresh was allegedly to report information to the PRC government 
using Green Fresh's name and not its own (see pages 6-7 of the Gerber 
verification report in the PRC Mushrooms Third Administrative Review). 
In addition, the Department found at verification during the last POR 
that Gerber mis-characterized its contract disputes with Green Fresh 
during that POR, disputes that allegedly continued through to the 
current POR. Id. All of this, taken with the fact that Gerber 
circumvented the collection of the appropriate cash deposits during the 
POR, leads the Department to determine that it cannot find Gerber's 
submissions to the Department to be reliable for purposes of this 
administrative review. The entire antidumping duty review process is 
inherently dependent upon a respondent being forthright, honest, and 
participating to the best of its ability, not just in the current 
review period, but in previous administrative periods when actions 
taken during those periods directly affect the outcome of a subsequent 
review or reviews. Gerber has not acted to the best of its ability and 
its actions with respect to the Gerber/Green Fresh sales have 
undermined the credibility of all other information it has provided to 
the Department. Accordingly, the application of facts available is 
warranted, pursuant to section 776(a) of the Act.
    In selecting from among facts available, pursuant to section 776(b) 
of the Act, an adverse inference is warranted when the Department has 
determined that a respondent has ``failed to cooperate by not acting to 
the best of its ability to comply with a request for information.'' The 
Court of Appeals for the Federal Circuit (``CAFC''), in Nippon Steel 
Corporation v. United States, 337 F. 3d 1373, 1380 (Fed. Cir. 2003), 
provided an explanation of this standard, holding that the Department 
need not show intentional conduct existed on the part of the 
respondent, but merely that a ``failure to cooperate to the best of a 
respondent's ability'' existed, ie., information was not provided 
``under circumstances in which it is reasonable to conclude that less 
than full cooperation has been shown.'' Id. The CAFC did acknowledge, 
however, that ``deliberate concealment or inaccurate reporting'' would 
certainly be a reason to apply adverse facts available (``AFA''), 
although it indicated that inadequate responses to Department inquiries 
``would suffice'' as well. Id. Further, 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'' accompanying the URAA, H.R. Rep. 
No. 103-316, 870 (1994) (``SAA'') at 870; Borden, Inc. v. United 
States, 4 F. Supp. 2d 1221 (CIT 1998); and Mannesmannrohren-Werke AG v. 
United States, 77 F. Supp. 2d 1302 (CIT 1999). Such adverse inferences 
may include reliance on information derived from (1) the petition; (2) 
a final determination in the investigation under this title; (3) any 
previous review under section 751 or determination under section 753, 
or (4) any other information on the record.
    In this case, an adverse inference is warranted because (1) Gerber 
participated in a scheme which resulted in the circumvention of the 
antidumping duty order and the evasion of the appropriate level of cash 
deposits, and (2) Gerber has not acted to the best of its ability in 
its reporting of information to the United States government, both at 
the time of entry of the merchandise and in previous submissions to the 
Department relating to the agreement between Gerber and Green Fresh 
which directly pertained to the transactions now under review in this 
POR. Accordingly, the Department is assigning Gerber the PRC-wide rate 
of 198.63 as total adverse facts available. We have also referred the 
matter to CBP so that the activities engaged in by this company can be 
properly addressed under U.S. customs law.

The Current POR--Green Fresh

    With respect to Green Fresh, Green Fresh claims in its 
questionnaire responses that it did not provide Gerber with any of its 
sales invoices during the POR and that its business relationship with 
Gerber was terminated during the period of the prior administrative 
review (see pages 6-7 of the Green Fresh verification report issued in 
the PRC Mushrooms Third Administrative Review). However, whether Green 
Fresh supplied Gerber with sales invoices before the POR began, or 
during the POR, is less important than the fact that Gerber used Green 
Fresh's invoices during the POR. An administrative review POR is an 
artificial structure, set up for the Department to review particular 
entries exported to the United States at a particular time period. The 
underlying motivations of the parties to the transactions have little 
relevance to our analysis outside of a ``best of its ability'' 
determination for adverse facts available purposes under section 776(b) 
of the Act. The entry documents reflect the transaction information 
necessary for the Department to conduct its standard analysis. In this 
case, the entry documents show that Green Fresh's invoices were used by 
Gerber and resulted in the evasion of payment of cash deposits during 
the POR. Accordingly, to protect the integrity of our administrative 
proceedings, the Department has preliminarily determined that the 
application of facts available, pursuant to section 776(a) of the Act, 
is warranted with respect to Green Fresh.
    Green Fresh argues that it did not consent to Gerber's use of its 
invoices during the POR, and Gerber has stated that it believes Green 
Fresh had no knowledge of its Green Fresh-invoice sales during the POR 
(see page 7 of the Green Fresh verification report issued in the PRC 
Mushrooms Third Administrative Review and pages 4-8 of Gerber's 
September 3, 2003, supplemental questionnaire response). This fact is 
further supported by the statement of both parties that Green Fresh 
received no compensation from Gerber during the POR. Thus, the 
Department has preliminarily determined that application of total facts 
available would be inappropriate for Green Fresh, as nothing on the 
record calls into question Green Fresh's other reported information 
during this administrative review. Rather, we believe that the use of 
partial facts available is appropriate, limited only to the Gerber/
Green Fresh transactions.
    Furthermore, section 776(b) of the Act provides that the Department 
may apply an adverse inference to facts available when it determines 
that a respondent has not acted to the best of its ability. Green Fresh 
has provided no proof on the record that it took measures to prevent 
Gerber from continuing to use its invoices in this POR: Green Fresh has 
supplied no documentation, legal or otherwise, to show that, in 
accordance with its own commercial well-being, it attempted in good 
faith to stop Gerber from actively circumventing the antidumping duty 
order and evading the payment of cash deposits during the POR. In 
addition, Green Fresh has provided the Department with no evidence that 
the terms of its ``Agreement'' with Gerber were terminated prior to May 
2002 (i.e., were

[[Page 10417]]

not in effect during the POR covered by this administrative review). 
All Green Fresh has provided on the record is claims which comply with 
claims made by Green Fresh officials to Department representatives at 
verification during the last POR. (See pages 7 of Green Fresh's 
September 15, 2003, submission; pages 5-7 of the Green Fresh 
verification report, and pages 6-7 of the Gerber verification report 
issued in the PRC Mushrooms Third Administrative Review.) It stands to 
reason that if a competitor producer/exporter of subject merchandise 
uses a company's invoices to export to the United States, in direct 
competition with that company's business, company officials would take 
several measures to prevent such misuse of its paperwork. Green Fresh 
has supplied no documentation on the record of taking any measures 
whatsoever against Gerber to prevent use of its invoices.
    Accordingly, because Green Fresh assisted Gerber in the 
circumvention of the antidumping duty order and because it has provided 
no documentary evidence on the record that its relationship ended with 
Gerber in the prior POR, or that it attempted to the best of its 
ability to prevent the use of its invoices by Gerber during this POR, 
the Department has determined that Green Fresh did not act to the best 
of its ability, pursuant to section 776(b) of the Act. More 
specifically, as facts available, we have determined that because 
certain Gerber transactions identified Green Fresh as the exporter and 
because those transactions used Green Fresh's invoices, these specific 
transactions should be attributed to Green Fresh in our calculations. 
Thus, as partial adverse facts available, the Department has applied 
the PRC-wide rate of 198.63 percent to those sales made by Gerber using 
Green Fresh's invoices.

Facts Available--Shantou Hongda

    For the reasons stated below, we have applied total adverse facts 
available to Shantou Hongda.
    Shantou Hongda refused to allow the Department to conduct 
verification of its submitted information (see September 24, 2003, 
memorandum from case analyst to the file). Section 776(a)(2)(D) of the 
Act provides that if an interested party provides information that 
cannot be verified, the use of facts available is warranted. 
Furthermore, pursuant to section 776(b) of the Act, the Department may 
apply an adverse inference if it finds a respondent has not acted to 
the best of its ability.
    The Department was unable to ascertain the accuracy of Shantou 
Hongda's submitted data or determine whether Shantou Hongda was 
entitled to a separate rate because Shantou Hongda refused to allow the 
Department to conduct verification of its submitted data. Shantou 
Hongda, accordingly, failed to act to the best of its ability in 
cooperating with the Department in this segment of the proceeding. As a 
result, pursuant to section 776(b) of the Act, we have made an adverse 
inference with respect to Shantou Hongda. Consequently, Shantou Hongda 
is not eligible to receive a separate rate and will be part of the PRC 
NME entity, subject to the PRC-wide rate.
    In this segment of the proceeding, in accordance with Department 
practice (see, e.g., Brake Rotors from the People's Republic of China: 
Preliminary Results and Preliminary Partial Rescission of the Fifth 
Antidumping Duty Administrative Review and Preliminary Results of the 
Seventh New Shipper Review, 68 FR 1031, 1033 (January 8, 2003)), as 
adverse facts available, we have assigned to exports of the subject 
merchandise by Shantou Hongda a rate of 198.63 percent, which is the 
PRC-wide rate. The Department's practice when selecting an adverse rate 
from among the possible sources of information is to ensure that the 
margin is sufficiently adverse ``as to effectuate the purpose of the 
facts available rule to induce a respondent 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 believe that the rate assigned is appropriate in this 
regard.

Corroboration of Facts Available

    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. We are applying as AFA the highest rate 
from any segment of this administrative proceeding, which is a rate 
calculated in the LTFV investigation. (See Notice of Amendment of Final 
Determination of Sales at Less Than Fair Value and Antidumping Duty 
Order: Certain Preserved Mushrooms from the People's Republic of China, 
64 FR 8308, 8310 (February 19, 1999).) Unlike other types of 
information, such as input costs or selling expenses, there are no 
independent sources for calculated dumping margins. The only sources 
for calculated margins are administrative determinations.
    The information upon which the AFA rate is based in the current 
review (i.e., the PRC-wide rate of 198.63 percent) being assigned to 
both Gerber and Shantou Hongda was calculated during the LTFV 
investigation. This AFA rate is the same rate which the Department 
assigned to Gerber in the previous review and the rate itself has not 
changed since the LTFV. When using a previously calculated margin as 
facts available, for purposes of corroboration the Department will 
consider, in the context of the current review, whether that margin is 
both reliable and relevant. Furthermore, the AFA rate we are applying 
for the current review was corroborated in reviews subsequent to the 
LTFV investigation 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 e.g., Certain 
Preserved Mushrooms from the People's Republic of China: Final Results 
and Partial Rescission of the New Shipper Review and Final Results and 
Partial Rescission of the Third Antidumping Duty Administrative Review, 
68 FR 41304, 41307 (July 11, 2003)). 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 will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). The information used in calculating this 
margin was based on sales and production data submitted by the 
respondents in the LTFV investigation, together with the most 
appropriate surrogate value information available to the Department, 
chosen from

[[Page 10418]]

submissions by the parties in the LTFV investigation, as well as 
gathered by the Department itself. Furthermore, the calculation of this 
margin was subject to comment from interested parties in the 
proceeding. Moreover, as there is no information on the record of this 
review that demonstrates that this rate is not appropriately used as 
AFA, we determine that this rate has relevance. As the rate is both 
reliable and relevant, we determine that it has probative value. 
Accordingly, we determine that the calculated rate of 198.63 percent, 
which is the current PRC-wide rate, is in accord with the requirement 
of section 776(c) that secondary information be corroborated (i.e., 
that it have probative value). We have assigned this AFA rate to 
exports of the subject merchandise by Gerber and Shantou Hongda, and 
certain sales made with Green Fresh's invoices but which Green Fresh 
did not report in its questionnaire response.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate (i.e., a PRC-wide rate). One respondent 
in these reviews, Primera Harvest, is wholly owned by persons located 
outside the PRC. Thus, for Primera Harvest, because we have no evidence 
indicating that it is under the control of the PRC government, a 
separate rates analysis is not necessary to determine whether it is 
independent from government control. (See Brake Rotors from the 
People's Republic of China: Final Results and Partial Rescission of 
Fifth New Shipper Review, 66 FR 44331 (August 23, 2001), which cites to 
Brake Rotors from the People's Republic of China: Preliminary Results 
and Partial Rescission of the Fifth New Shipper Review and Rescission 
of the Third Antidumping Duty Administrative Review, 66 FR 29080 (May 
29, 2001) (where the respondent was wholly owned by a U.S. registered 
company); Brake Rotors from the People's Republic of China: Final 
Results and Partial Rescission of Fourth New Shipper Review and 
Rescission of Third Antidumping Duty Administrative Review, 66 FR 27063 
(May 16, 2001), which cites Brake Rotors from the People's Republic of 
China: Preliminary Results and Partial Rescission of the Fourth New 
Shipper Review and Rescission of the Third Antidumping Duty 
Administrative Review, 66 FR 1303, 1306 (January 8, 2001) (where the 
respondent was wholly owned by a company located in Hong Kong); and 
Notice of Final Determination of Sales at Less Than Fair Value: 
Creatine Monohydrate from the People's Republic of China, 64 FR 71104, 
71105 (December 20, 1999) (where the respondent was wholly owned by 
persons located in Hong Kong).)
    Three respondents, Green Fresh, Guangxi Yulin, and Shenxian 
Dongxing, are joint ventures of PRC entities. The other respondent, 
COFCO, is owned by ``all of the people.'' Thus, a separate-rates 
analysis is necessary to determine whether the export activities of 
each of these four exporters 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 (``Bicycles''), 61 FR 
56570 (April 30, 1996).) To establish whether a firm is sufficiently 
independent in its export activities from government control to be 
entitled to a separate rate, the Department utilizes a test arising 
from 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''), and amplified in the 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''). 
Under the separate-rates criteria, the Department assigns separate 
rates in NME cases only if the respondent can demonstrate the absence 
of both de jure and de facto governmental control over export 
activities.

1. De Jure Control

    Evidence supporting, though not requiring, a finding of de jure 
absence of government control over exporter activities includes: (1) An 
absence of restrictive stipulations associated with the 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.
    COFCO, Green Fresh, Guangxi Yulin, and Shenxian Dongxing have 
placed on the administrative record the following documents to 
demonstrate absence of de jure control: the 1994 ``Foreign Trade Law of 
the People's Republic of China;'' and the ``Company Law of the PRC,'' 
effective as of July 1, 1994. In other cases involving products from 
the PRC, respondents have submitted the following additional documents 
to demonstrate absence of de jure control, and the Department has 
placed these additional documents on the record as well: the ``Law of 
the People's Republic of China on Industrial Enterprises Owned by the 
Whole People,'' adopted on April 13, 1988 (``the Industrial Enterprises 
Law''); ``The Enterprise Legal Person Registration Administrative 
Regulations,'' promulgated on June 13, 1988; the 1990 ``Regulation 
Governing Rural Collectively-Owned Enterprises of PRC;'' and the 1992 
``Regulations for Transformation of Operational Mechanisms of State-
Owned Industrial Enterprises'' (``Business Operation Provisions''). 
(See March 1, 2004, memorandum to the file which places the above-
referenced laws on the record of this proceeding segment.)
    As in prior cases, we have analyzed these laws and have found them 
to establish sufficiently an absence of de jure control of joint 
ventures and companies owned by ``all of the people'' absent proof on 
the record to the contrary. (See, e.g., Final Determination of Sales at 
Less than Fair Value: Furfuryl Alcohol from the People's Republic of 
China, 60 FR 22544 (May 8, 1995) (``Furfuryl Alcohol''), and 
Preliminary Determination of Sales at Less Than Fair Value: Certain 
Partial-Extension Steel Drawer Slides with Rollers from the People's 
Republic of China, 60 FR 29571 (June 5, 1995).)

2. De Facto Control

    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, 59 FR at 22587, and Furfuryl Alcohol, 60 FR at 22544.) 
Therefore, the Department has determined that an analysis of de facto 
control is critical in determining whether the respondents are, in 
fact, subject to a degree of governmental control which would preclude 
the Department from assigning separate rates.
    The Department typically considers four factors in evaluating 
whether each 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 management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding the disposition of profits or 
financing of losses. (See Silicon Carbide, 59 at 22587 and Furfuryl 
Alcohol, 60 FR at 22545.)

[[Page 10419]]

    COFCO, Green Fresh, Guangxi Yulin, and Shenxian Dongxing each has 
asserted the following: (1) Each establishes its own export prices; (2) 
each negotiates contracts without guidance from any governmental 
entities or organizations; (3) each makes its own personnel decisions; 
and (4) each retains the proceeds of its export sales, uses profits 
according to its business needs, and has the authority to sell its 
assets and to obtain loans. Additionally, each respondent's 
questionnaire responses indicate that its pricing during the POR does 
not suggest coordination among exporters. Furthermore, with respect to 
Shenxian Dongxing, we examined documentation at verification which 
substantiated its claims as noted above (see pages 3-7 of the Shenxian 
Dongxing verification report). As a result, there is a sufficient basis 
to preliminarily determine that each respondent listed above has 
demonstrated a de facto absence of government control of its export 
functions and is entitled to a separate rate. Consequently, we have 
preliminarily determined that each of these respondents has met the 
criteria for the application of separate rates.

Normal Value Comparisons

    To determine whether sales of the subject merchandise by COFCO, 
Green Fresh, Guangxi Yulin, Primera Harvest, and Shenxian Dongxing to 
the United States were made at prices below normal value (``NV''), we 
compared each company's export prices (``EPs'') or constructed export 
prices (``CEP'') to NV, as described in the ``Export Price,'' 
``Constructed Export Price,'' and ``Normal Value'' sections of this 
notice, below.

Export Price

    For COFCO, Green Fresh, Guangxi Yulin, and Shenxian Dongxing, we 
used EP methodology in accordance with section 772(a) of the Act for 
sales in which the subject merchandise was first sold prior to 
importation by the exporter outside the United States directly to an 
unaffiliated purchaser in the United States, and CEP was not otherwise 
indicated. We made the following company-specific adjustments:

A. Green Fresh

    We calculated EP based on packed, FOB foreign port and/or CNF U.S. 
port prices to the first unaffiliated purchaser in the United States. 
Where appropriate, we made deductions from the starting price (gross 
unit price) for foreign inland freight, foreign brokerage and handling 
charges in the PRC, and international freight in accordance with 
section 772(C) of the Act. Because foreign inland freight and foreign 
brokerage and handling fees were provided by PRC service providers or 
paid for in renminbi, we based those charges on surrogate rates from 
India (see ``Surrogate Country'' section below for further discussion 
of our surrogate-country selection). To value foreign inland trucking 
charges, we used Indian truck freight rates published in Chemical 
Weekly and distance information obtained from the following Web sites: 
http://www.infreight.com, and http://www.sitaindia.com/Packages/CityDistance.php. To value foreign brokerage and handling expenses, we 
relied on 1999-2000 public information reported in the LTFV 
investigation on certain hot-rolled carbon steel flat products from 
India (see Final Determination of Sales at Less Than Fair Value: 
Certain Hot-Rolled Carbon Steel Flat Products from India, 67 FR 50406 
(October 3, 2001)). For international freight (i.e., ocean freight), we 
used the reported expenses because Green Fresh reportedly used only a 
market-economy freight carrier and paid for those expenses in a market-
economy currency (see, e.g., Brake Rotors from the People's Republic of 
China: Final Results of Antidumping Duty New Shipper Review, 64 FR 
9972, 9974 (March 1, 1999)). We also revised the Green Fresh's and 
Guangxi Yulin's reported per-unit packed weights used to derive PRC 
movement expenses (see Green Fresh and Guangxi Yulin calculation 
memoranda).

B. COFCO and Guangxi Yulin

    We calculated export price based on packed, FOB foreign port prices 
to the first unaffiliated purchaser in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for foreign inland freight, brokerage, and handling expenses in 
accordance with section 772(C) of the Act. Because foreign inland 
freight, brokerage, and handling expenses were provided by PRC service 
providers or paid for in renminbi, we based these charges on surrogate 
rates from India. (See discussion above for further details.) We 
revised COFCO's and Guangxi Yulin's reported per-unit packed weights 
used to derive PRC movement expenses (see COFCO and Guangxi Yulin 
calculation memoranda).

C. Shenxian Dongxing

    We calculated export price based on packed, CIF foreign port prices 
to the first unaffiliated purchaser in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for foreign inland freight, brokerage, and handling expenses in 
accordance with section 772(C) of the Act. Because foreign inland 
freight, brokerage, and handling expenses were provided by PRC service 
providers or paid for in renminbi, we based these charges on surrogate 
rates from India. (See discussion above for further details.) Based on 
our verification findings, Shenxian Dongxing reported its U.S. prices 
inclusive of international freight and separately reported an amount 
for this expense on a transaction-specific basis. Because Shenxian 
Dongxing was paid in full for this expense by its U.S. customers, we 
deducted this amount from the starting price. We also revised (1) the 
gross unit price and quantity data reported for one U.S. sales 
transaction; (2) the reported distance from the factory to the port of 
exportation; and (3) the per-unit packed weights used to derive PRC 
movement expenses. (See Shenxian Dongxing verification report at 11-13 
and 21-22, and Shenxian Dongxing calculation memorandum.)

Constructed Export Price

    For Primera Harvest we calculated CEP in accordance with section 
772(b) of the Act because the U.S. sale was made for the account of 
Primera Harvest by its subsidiary in the United States, Primera 
Harvest, Inc. (``PHI''), to an unaffiliated purchaser in the United 
States.
    We based CEP on a packed, ex-U.S. warehouse price to the first 
unaffiliated purchaser in the United States. Where appropriate, we made 
deductions from the starting price (gross unit price) for movement 
expenses in accordance with section 772(c)(2)(A) of the Act; these 
included foreign inland freight and foreign brokerage and handling 
charges in the PRC, international freight (i.e., ocean freight), U.S. 
import duties and fees (including harbor maintenance fees, merchandise 
processing fees), U.S. inland freight expenses (i.e., freight from the 
U.S. port to the U.S. warehouse), and U.S. warehousing expenses. As all 
foreign inland freight and foreign brokerage and handling expenses were 
provided by PRC service providers or paid for in renminbi, we valued 
these services using the Indian surrogate values discussed above. 
However, unlike the other respondents, one of Primera Harvest's freight 
service providers also used a barge to transport the subject 
merchandise to the last delivery location prior to exportation. 
Therefore, to value foreign inland shipping charges, we used a July 
1997 Indian domestic ship rate. For international freight, we used the 
reported expenses because the

[[Page 10420]]

respondent used a market-economy freight carrier and paid for the 
expenses in a market-economy currency. Based on our verification 
findings, we revised the reported distance from the factory to the port 
in the PRC. (See Primera Harvest verification report at 30.) We also 
revised the Primera Harvest's reported per-unit packed weights used to 
derive PRC movement expenses (see Primera Harvest calculation 
memorandum).
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (credit expenses) 
and indirect selling expenses incurred in the United States. Based on 
our verification findings, we revised this company's reported credit 
expenses. (See also Primera Harvest verification report at 30.) We also 
made an adjustment for profit in accordance with section 772(d)(3) of 
the Act.

Normal Value

A. Non-Market Economy Status

    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. (See Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From the People's Republic of China: 
Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003)). None of the 
parties to this proceeding has contested such treatment. Accordingly, 
we calculated NV in accordance with section 773(C) of the Act, which 
applies to NME countries.

B. Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production, to the extent possible, in one or 
more market economy countries that (1) are at a level of economic 
development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. India is among the 
countries comparable to the PRC in terms of overall economic 
development. (See April 23, 2003, Memorandum from the Office of Policy 
to the Team Leader.) In addition, based on publicly available 
information placed on the record, India is a significant producer of 
the subject merchandise. Accordingly, we selected India as the 
surrogate country for purposes of valuing the factors of production 
because it meets the Department's criteria for surrogate country 
selection.

C. Factors of Production

    In accordance with section 773(c) of the Act, we calculated normal 
value based on the factors of production which included, but were not 
limited to: (1) Hours of labor required; (2) quantities of raw 
materials employed; (3) amounts of energy and other utilities consumed; 
and (4) representative capital costs, including depreciation. We used 
the factors reported by the five respondents, except as noted below. To 
calculate NV, we multiplied the reported unit factor quantities by 
publicly available Indian values.
    Based on our verification findings, both Primera Harvest and 
Shenxian Dongxing failed to provide supporting documentation at 
verification for certain material factors reported in each company's 
questionnaire responses. Thus, pursuant to section 776(a)(2)(D) of the 
Act, the Department was forced to use facts otherwise available to 
value these factors of production.
    Specifically, Primera Harvest did not report the electricity amount 
used in the fresh mushroom growing stage of production even though it 
claimed otherwise prior to verification. This information is necessary 
for determining the normal value of its reported U.S. sale. Therefore, 
absent verifiable data for this energy input, the Department, as facts 
available, calculated an average electricity amount for the fresh 
mushroom growing stage based on the verified electricity amounts 
contained in its response for its other stages of production (e.g., 
brining and canning).
    As for Shenxian Dongxing, this respondent was unable to support at 
verification its reported water usage figures for four-ounce can sizes. 
This information is necessary for determining the normal value of 
Shenxian Dongxing's reported U.S. sales. For the only other can size 
for which Shenxian Dongxing reported water factors (i.e., 68-ounce can 
size), the Department was able to verify that data. Therefore, as facts 
available, the Department used the verified per-unit water factors for 
Shenxian Dongxing's 68-ounce can sizes of preserved mushrooms for 
purposes of valuing the costs associated with water used for its 4-
ounce can sizes.
    Based on our verification findings at Primera Harvest, we also 
revised the following data in Primera Harvest's response: (1) The 
reported per-unit consumption factors for citric acid, cottonseed meal, 
fertilizer, label, tape, carton, electricity used for brining, 
electricity used for canning, and the water used for growing, brining, 
and canning; and (2) the distances from Primera Harvest to its spawn 
and can suppliers. (See Primera Harvest verification report at 39 
through 46, and Primera Harvest calculation memorandum.)
    Based on our verification findings at Shenxian Dongxing, we also 
revised the following data in Shenxian Dongxing's response: (1) The 
reported per-unit consumption amounts for tin plate, tin plate scrap, 
labor and electricity for can-making, water and labor for mushroom-
growing, label, carton, and glue used for preserved mushrooms contained 
in 68-ounce can sizes; (2) the reported per-unit consumption amounts 
for potassium super, calcium carbonate, and cartons used for preserved 
mushrooms contained in 4-ounce cans; and (3) the distances reported 
from certain material suppliers. We also disallowed an offset for 
copper scrap reported by this company because we verified that it 
simply returned the used copper wire to its vendor for reprocessing 
rather than sold the copper wire scrap (See Shenxian Dongxing 
verification report at 19-21, and March 1, 2004, Shenxian Dongxing 
calculation memorandum.)
    With respect to the factors data submitted by COFCO's affiliated 
producer, Fujian Zishan, we made numerous adjustments to its submitted 
data which were necessary for purposes of collapsing identical products 
which both it and another COFCO affiliated producer, Yu Xing, produced 
during the POR (see COFCO calculation memorandum for further 
discussion).
    The Department's selection of the surrogate values applied in this 
determination was based on the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
to make them delivered prices. For those values not contemporaneous 
with the POR and quoted in a foreign currency or in U.S. dollars, we 
adjusted for inflation using wholesale price indices (``WPIs'') 
published in the International Monetary Fund's International Financial 
Statistics.
    To value fresh mushrooms and rice straw, we used an average price 
based on data contained in the 2001-2002 financial report of Premier 
Explosives Ltd. (``Premier'').
    To value cow manure and general and/or wheat straw, we used an 
average price based on data contained in the 2001-2002 financial report 
of Flex Foods Ltd. (``Flex Foods'') and the 2002-2003 financial report 
of Agro Dutch Foods, Ltd. (``Agro Dutch'') (i.e.,

[[Page 10421]]

two Indian producers of the subject merchandise).
    To value chicken manure and spawn, we used an average price based 
on data contained in the 2001-2002 financial reports of Flex Foods and 
Premier and the 2002-2003 financial report of Agro Dutch. For those 
respondents which used mother spawn, we also used the average spawn 
price to value mother spawn because we were unable to obtain publicly 
available information which contained a price for mother spawn.
    To value soil, we used July 2003 price data from two U.S. 
periodicals: Mt. Scott Fuel and Interval Compost because we could not 
obtain an Indian surrogate value for this input.
    To value wheat and super phosphate, we used price data contained in 
Flex Foods' 2001-2002 financial report because no such data was 
available from the other financial reports on the record.
    For those respondents which only purchased tin cans used in the 
production of preserved mushrooms during the POR, we valued tin cans 
using the can-purchase-specific price data from the May 21, 2001, 
public version response submitted by Agro Dutch in the 2nd antidumping 
duty administrative review of certain preserved mushrooms from India, 
and derived per-unit, can-size-specific prices using the petitioner's 
methodology contained in its August 15, 2003, PAI submission.
    To value fertilizer, salt, lime, cotton, tin plate scrap, copper 
conducting wire, and copper wire scrap, can and lid scrap, lacquer, 
nitrogen, steam coal, sodium hydrosulphite, sodium metabisulphite, and 
vitamin C, we used February 2002-January 2003 average Indian import 
values downloaded from the World Trade Atlas Trade Information System 
(Internet Version 4.3e) (``World Trade Atlas''). We also added an 
amount for loading and additional transportation charges associated 
with delivering coal to the factory based on June 1999 Indian price 
data contained in the periodical Business Line.
    For those respondents which used cotton seed meal, we also used the 
average cotton price to value cotton seed meal because we were unable 
to obtain publicly available information which contained a price for 
cotton seed meal.
    To value rye, we used a February 2002-January 2003 average import 
value for cereal grain from the World Trade Atlas because we were 
unable to obtain a more specific value for this input.
    For rice husks, we used a January-March 2000 average import value 
from the World Trade Atlas because we were unable to obtain price data 
more contemporaneous with the POR.
    For disodium stannous citrate, we used a February 2002-January 2003 
average import value for sodium citrate from the World Trade Atlas 
because we were unable to obtain a more specific value for this input.
    To value tin plate, we used an average price based on February 
2002-January 2003 data contained in World Trade Atlas and data 
contained in Agro Dutch's 2002-2003 financial report.
    To value citric acid, calcium carbonate, and urea (i.e., 
carbamide), we used an average import price based on February 2002-
January 2003 data contained in the World Trade Atlas and February 2002-
January 2003 Indian domestic price data contained in Chemical Weekly, 
consistent with our past practice (see Certain Preserved Mushrooms from 
the People's Republic of China: Final Results of Third New Shipper 
Review and Final Results and Partial Rescission of Second Antidumping 
Duty Administrative Review, 67 FR 46173 (July 12, 2002) and 
accompanying decision memorandum at Comment 7)). For those prices 
obtained from Chemical Weekly, where appropriate, we also deducted an 
amount for excise taxes based on the methodology applied to values from 
the same source in a prior review involving the subject merchandise 
from the PRC. (See page 4 of the May 31, 2001, Preliminary Results 
Valuation Memorandum for the Preliminary Results of New Shipper Review: 
Certain Preserved Mushrooms from the People's Republic of China, 66 FR 
30695 (June 7, 2001) (``Preliminary Results Valuation Memorandum'') 
which has been placed on the record of this proceeding.)
    To value calcium phosphate, we used a December 1999 U.S. value from 
Chemical Market Reporter because we could not obtain an Indian 
surrogate value for this input. Although the value from Chemical Market 
Reporter was in U.S. dollars, it was not contemporaneous with the POR. 
Therefore, we inflated this value to the POR using WPIs.
    To value gypsum, we used an average price based on February 2002-
January 2003 data contained in World Trade Atlas and data contained in 
Flex Foods' 2001-2002 financial report.
    To value potassium super, we used an average price based on 
February 2002-January 2003 Indian price data contained in Chemical 
Weekly.
    To value water, we used 1995-1996 and 1996-1997 Indian price data 
from the Second Water Utilities Data Book. Since this value was not 
contemporaneous with the POR, we adjusted this value for inflation 
based on wholesale price indices published in the International 
Monetary Fund's IFS.
    To value electricity, we used 2001 Indian price data from the 
International Energy Agency's (``IEA'') report, ``Electricity Prices 
for Industry,'' contained in the 2002 Key World Energy Statistics from 
the IEA.
    To value diesel oil, we used data contained in the 1999-2000 
financial report of Hindustan Lever Ltd.
    We valued labor based on a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3).
    To value factory overhead and selling, general, and administrative 
(``SG&A'') expenses, we used the 2002-2003 financial data of Agro Dutch 
and the 2001-2002 financial data of Flex Foods, both Indian producers 
of the subject merchandise. To value profit, we only used the 2001-2002 
financial data of Flex Foods because Agro Dutch experienced a loss 
during the above-mentioned period. Therefore, in accordance with the 
Department's practice, we have excluded the financial data of Agro 
Dutch from the surrogate profit calculation. (See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Ball Bearings 
and Parts Thereof from the People's Republic of China, 68 FR 10685 
(March 6, 2003) and accompanying decision memorandum at Comment 1)).
    We did not use the following two other Indian sources of data to 
value factory overhead, SG&A or profit: the 2001-2002 fiscal data 
obtained for Premier and the 2002-2003 fiscal data obtained for Himalya 
International Ltd. (``Himalya''), because although each company 
produces the subject merchandise, the subject merchandise is but one of 
several products produced. Moreover, in accordance with the 
Department's practice in the prior administrative review, we also do 
not find it appropriate to use Himalya's financial data because, unlike 
Himalya, none of the PRC respondents (including Green Fresh and Primera 
Harvest) have operations overseas which sell non-subject merchandise 
and which would necessitate incurring additional costs not associated 
with the sale of mushrooms (see also Certain Preserved Mushrooms from 
the People's Republic of China: Final Results and Partial Rescission of 
the New Shipper Review and Final Results and Partial Rescission of the 
Third Antidumping Duty Administrative Review, 68 FR 41304 (July 11, 
2003) and accompanying decision memorandum at Comment 4).
    Where appropriate, we did not include in the surrogate overhead and 
SG&A calculations the excise duty

[[Page 10422]]

amount listed in the financial reports. We made certain adjustments to 
the ratios calculated as a result of reclassifying certain expenses 
contained in the financial reports. For a further discussion of the 
adjustments made, see the Preliminary Results Valuation Memorandum.
    To value PRC inland freight for inputs shipped by truck, we used 
Indian freight rates published in the February 2002-June 2002 issues of 
Chemical Weekly and obtained distances between cities from the 
following Web sites: http://www.infreight.com and http://www.sitaindia.com/Packages/CityDistance.php.
    To value PRC inland freight for inputs shipped by train (e.g., 
mother spawn), we used price quotes published in the July 2001 Reserve 
Bank of India Bulletin.
    To value corrugated cartons, labels, tape, and glue we used 
February 2002-January 2003 average import values from the World Trade 
Atlas.
    In accordance with the decision of the Court of Appeals for the 
Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. 
Cir. 1997), we revised our methodology for calculating source-to-
factory surrogate freight for those material inputs that are valued 
based, all or in part, on CIF import values in the surrogate country. 
Therefore, we have added to CIF surrogate values from India a surrogate 
freight cost using the shorter of the reported distances from either 
the closest PRC port of importation to the factory, or from the 
domestic supplier to the factory on an input-specific basis.

Preliminary Results of the Review

    We preliminarily determine that the following margins exist for the 
following exporters under review during the period February 1, 2002, 
through January 31, 2003:

------------------------------------------------------------------------
                                                                 Margin
                Manufacturer/producer/exporter                 (percent)
------------------------------------------------------------------------
China Processed Food Import & Export Company.................      87.47
Gerber Food (Yunnan) Co., Ltd................................     198.63
Green Fresh Foods (Zhangzhou) Co., Ltd.......................      31.38
Guangxi Yulin Oriental Food Co., Ltd.........................       0.00
Primera Harvest (Xiangfan) Co., Ltd..........................      46.90
Shenxian Dongxing Foods Co., Ltd.............................      17.65
PRC-Wide Rate (including Shantou Hongda Industrial General        198.63
 Corp.)......................................................
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the date of publication of this 
notice. Any interested party may request a hearing within 30 days of 
publication of this notice. If requested, a hearing will be held on 
June 8, 2004.
    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, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) The 
party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c).
    Issues raised in the hearing will be limited to those raised in 
case briefs and rebuttal briefs. Case briefs from interested parties 
may be submitted not later than May 28, 2004, pursuant to 19 CFR 
351.309(c). Rebuttal briefs, limited to issues raised in the case 
briefs, will be due not later than June 4, 2004, pursuant to 19 CFR 
351.309(d). Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations, and cases cited.
    The Department will issue the final results of these administrative 
and new shipper reviews, including the results of its analysis of 
issues raised in any such written briefs or at the hearing, if held, 
not later than 120 days after the date of publication of this notice.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate appraisement instructions for the companies subject to this 
review directly to CBP within 15 days of publication of the final 
results of this review. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer- or customer-specific ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. For certain respondents for which we calculated a margin, 
we do not have the actual entered value because they are not the 
importers of record for the subject merchandise. For these respondents, 
we intend to calculate individual customer-specific assessment rates by 
aggregating the dumping margins calculated for all of the U.S. sales 
examined and dividing that amount by the total quantity of the sales 
examined. To determine whether the duty assessment rates are de minimis 
(i.e., less than 0.50 percent), in accordance with the requirement set 
forth in 19 CFR 351.106(c)(2), we will calculate customer-specific ad 
valorem ratios based on export prices.
    We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer or customer-
specific assessment rate calculated in the final results of this review 
is above de minimis.
    For entries of the subject merchandise during the POR from 
companies not subject to these reviews, we will instruct CBP to 
liquidate them at the cash deposit rate in effect at the time of entry. 
The final results of this review shall be the basis for the assessment 
of antidumping duties on entries of merchandise covered by the final 
results of these reviews and for future deposits of estimated duties, 
where applicable.

Cash Deposit Requirements

    Upon completion of these reviews, for entries from COFCO, Gerber, 
Green Fresh, Guangxi Yulin, Primera Harvest, and Shenxian Dongxing, we 
will require cash deposits at the rate established in the final results 
as further described below.
    Bonding will no longer be permitted to fulfill security 
requirements for shipments of brake rotors from the PRC produced and 
exported by Primera Harvest that are entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of the new shipper review. The following cash deposit 
requirements will be effective upon publication of the final results of 
the new shipper review for all shipments of subject merchandise from 
Primera Harvest entered, or withdrawn from warehouse, for consumption 
on or after the publication date: (1) For subject merchandise 
manufactured and exported by Primera Harvest, a cash deposit will be 
required if the cash deposit rate calculated in the final results is 
not zero or de minimis; and (2) for subject merchandise exported by 
Primera Harvest but not manufactured by Primera Harvest, the cash 
deposit rate will continue to be the PRC countrywide rate (i.e., 198.63 
percent).
    The following deposit requirements will be effective upon 
publication of the final results of the administrative review for all 
shipments of certain preserved mushrooms from the PRC entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided by section 751(a)(1) of the Act: (1) The cash deposit 
rates for

[[Page 10423]]

COFCO, Gerber, Green Fresh, Guangxi Yulin, and Shenxian Dongxing will 
be the rates determined in the final results of review (except that if 
a rate is de minimis, i.e., less than 0.50 percent, no cash deposit 
will be required); (2) the cash deposit rate for PRC exporters who 
received a separate rate in a prior segment of the proceeding (which 
were not reviewed in this segment of the proceeding) will continue to 
be the rate assigned in that segment of the proceeding (i.e., Raoping 
Xingyu); (3) the cash deposit rate for the PRC NME entity (including 
Shantou Hongda, Shenzhen Qunxingyuan, and Zhangzhou Jingxiang) will 
continue to be 198.63 percent; and (4) the cash deposit rate for non-
PRC exporters of subject merchandise from the PRC will be the rate 
applicable to the PRC exporter that supplied that exporter.
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These administrative and new shipper reviews and notice are in 
accordance with sections 751(a)(1), 751(a)(2)(B), and 777(I)(1) of the 
Act and 19 CFR 351.221(b).

    Dated: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5007 Filed 3-4-04; 8:45 am]
BILLING CODE 3510-DS-P