[Federal Register Volume 69, Number 115 (Wednesday, June 16, 2004)]
[Notices]
[Pages 33626-33630]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-13494]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic From the People's Republic of China: Final Results 
of Antidumping Duty Administrative Review and New Shipper Reviews

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

SUMMARY: On December 10, 2003, the Department of Commerce published the 
preliminary results of the administrative review and new shipper 
reviews of the antidumping duty order on fresh garlic from the People's 
Republic of China. The period of review is November 1, 2001, through 
October 31, 2002. The reviews cover six manufacturers/exporters.
    We invited interested parties to comment on our preliminary 
results. Based on our analysis of the comments received, we have made 
certain changes to our calculations. The final dumping margins for 
these reviews are listed in the ``Final Results of the Reviews'' 
section below.

EFFECTIVE DATE: June 16, 2004.

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

SUPPLEMENTARY INFORMATION:

Background

    On December 10, 2003, the Department published the preliminary 
results of the administrative review and new shipper reviews of the 
antidumping duty order on fresh garlic from the People's Republic of 
China. See Fresh Garlic from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review and New 
Shipper Reviews, 68 FR 68868 (December 10, 2003) (Preliminary Results). 
We invited parties to comment on our preliminary results.

[[Page 33627]]

With respect to the preliminary results of the administrative review, 
we received comments from the petitioners and one respondent, Jinan 
Yipin Corporation, Ltd. (Jinan Yipin), and rebuttal comments from the 
petitioners, Jinan Yipin, and Shandong Heze International Trade and 
Developing Company (Shangdong Heze). With respect to the preliminary 
results of the new shipper reviews, we received comments from the 
petitioners and the respondent Zhengzhou Harmoni Spice Co., Ltd. 
(Harmoni), and rebuttal comments from the petitioners, Harmoni, and 
Jining Trans-High Trading Co., Ltd. (Trans-High).
    On February 3, 2004, we published a notice extending the time limit 
for the final results to May 17, 2004. See Fresh Garlic From the 
People's Republic of China: Notice of Extension of Time Limit for the 
Final Results of Antidumping Duty Administrative and New Shipper 
Reviews, 69 FR 5132 (February 3, 2004). On April 23, 2004, the 
petitioners submitted new factual information concerning one of the 
respondents. While normally we would not consider accepting new factual 
information at such a late stage in the review, in this situation, 
given the nature of the allegations within the submission, we 
considered it appropriate to accept the information. See April 30, 
2004, memorandum from Mark Ross, Program Manager, to Laurie Parkhill, 
Office Director. Because we required additional time to evaluate this 
new information and a number of other complex factual and legal 
questions that related directly to the assignment of antidumping duty 
margins in this case, on May 13, 2004, we published a notice extending 
the time limit for the final results to June 7, 2004. See Fresh Garlic 
From the People's Republic of China: Notice of Extension of Time Limit 
for the Final Results of Antidumping Duty Administrative and New 
Shipper Reviews, 69 FR 26548 (May 13, 2004).
    We have conducted these reviews in accordance with section 751 of 
the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213 and 19 
CFR 351.214 (2001).

Scope of the Order

    The products covered by this antidumping duty order are all grades 
of garlic, whole or separated into constituent cloves, whether or not 
peeled, fresh, chilled, frozen, provisionally preserved, or packed in 
water or other neutral substance, but not prepared or preserved by the 
addition of other ingredients or heat processing. The differences 
between grades are based on color, size, sheathing, and level of decay.
    The scope of this order does not include the following: (a) Garlic 
that has been mechanically harvested and that is primarily, but not 
exclusively, destined for non-fresh use; or (b) garlic that has been 
specially prepared and cultivated prior to planting and then harvested 
and otherwise prepared for use as seed.
    The subject merchandise is used principally as a food product and 
for seasoning. The subject garlic is currently classifiable under 
subheadings 0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060, 
0710.80.9750, 0711.90.6000, and 2005.90.9700 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and customs purposes, our written 
description of the scope of this order is dispositive. In order to be 
excluded from the antidumping duty order, garlic entered under the 
HTSUS subheadings listed above that is (1) Mechanically harvested and 
primarily, but not exclusively, destined for non-fresh use or (2) 
specially prepared and cultivated prior to planting and then harvested 
and otherwise prepared for use as seed must be accompanied by 
declarations to the U.S. Customs and Border Protection (CBP) to that 
effect.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties in 
these reviews are addressed in the Issues and Decision Memorandum, 
dated June 7, 2004, which is hereby adopted by this notice (Decision 
Memo). A list of the issues which parties raised and to which we 
respond in the Decision Memo is attached to this notice as an Appendix. 
The Decision Memo is a public document and is on file in the Central 
Records Unit (CRU), Main Commerce Building, Room B-099, and is 
accessible on the Web at www.ia.ita.doc.gov. The paper copy and 
electronic version of the memorandum are identical in content.

Separate Rates

    In our preliminary results, we determined that Jinan Yipin, 
Shandong Heze, Trans-High, and Harmoni met the criteria for the 
application of a separate rate. We determined that Top Pearl Ltd. (Top 
Pearl) and Wo Hing (H.K.) Trading Co. (Wo Hing) did not qualify for a 
separate rate and, therefore, are deemed to be covered by the PRC-
entity rate. See Preliminary Results, 68 FR at 68869. We have not 
received any information since the issuance of the Preliminary Results 
that provides a basis for reconsideration of these determinations.

The PRC-Wide Rate and Use of Adverse Facts Available

Top Pearl and Wo Hing

    In the Preliminary Results, we determined that the PRC entity 
(including Top Pearl and Wo Hing) did not respond to the questionnaire 
and, therefore, failed to cooperate to the best of its ability in the 
administrative review. Accordingly, we determined that the use of an 
adverse inference is appropriate pursuant to sections 776(a)(2)(A) and 
(B) and 776(b) of the Act. In accordance with the Department's 
practice, as adverse facts available, we assigned to the PRC entity 
(including Top Pearl and Wo Hing) the PRC-wide rate of 376.67 percent. 
For detailed information on the Department's corroboration of this rate 
see the Preliminary Results at 68870.

Jinan Yipin

    With respect to Jinan Yipin, in the Preliminary Results, we 
determined that the use of partial adverse facts available was 
warranted in accordance with sections 776(a)(2)(A) and (C) and 776(b) 
of the Act to calculate the dumping margin because the respondent did 
not provide information critical to the calculation of an antidumping 
duty margin and impeded the conduct of the administrative review by not 
providing correct and thorough responses to our questions, before, 
during, and following verification. See Preliminary Results, 68 FR at 
68871. These inadequacies related to two issues: (1) Whether Jinan 
Yipin reported some sales to an affiliated party as unaffiliated-party 
sales and (2) whether Jinan Yipin captured all of its indirect selling 
expenses on U.S. sales in its response. Jinan Yipin and its U.S. 
affiliate, American Yipin, did not act to the best of their abilities 
in providing the information necessary to conduct this administrative 
review with respect to these issues. To address the first inadequacy, 
we selected a rate of 376.67 percent to apply as adverse facts 
available to Jinan Yipin's sales to an affiliated customer that it 
reported as unaffiliated-party sales transactions. With respect to 
Jinan Yipin's failure to provide critical information for the 
calculation of U.S. indirect selling expenses, as partial adverse facts 
available we relied on a primary source of information. For a detailed 
discussion of the application of partial adverse facts available, 
please see the memorandum from Laurie Parkhill, Office Director, AD/CVD 
Enforcement 3, to Jeffrey May, Deputy Assistant

[[Page 33628]]

Secretary, Import Administration, dated December 1, 2003 (Jinan Yipin 
Facts-Available Memorandum).
    We have considered the argument raised by Jinan Yipin and the 
petitioners in response to our preliminary determination and have 
addressed them in the Decision Memo. Based on our analysis of the 
parties' comments and for the reasons outlined in the Preliminary 
Results, we have not changed our determination with respect to the use 
of partial adverse facts available. In summary, the Department has 
applied adverse facts available to the sales to Jinan Yipin's 
affiliated customer and to the indirect selling expenses because Jinan 
Yipin failed to identify affiliated parties and, in particular, its 
affiliations to Houston Seafood and Bayou Dock in its questionnaire 
responses. Pursuant to sections 776(a)(2)(A) and (C) and 776(b) of the 
Act, the decision to apply partial adverse fact available is in 
response to all of Jinan Yipin's failures to cooperate to the best of 
its ability in providing accurate, responsive information on the record 
with respect to the issue of affiliated parties. For detailed 
information about the Department's corroboration of the information 
used as adverse facts available see the Preliminary Results at 68871-2.

Changes Since the Preliminary Results

    Based on our analysis of information on the record, we have made 
certain changes to the margin calculations for all respondents. In 
addition, based on the comments received from the interested parties 
and changes due to verification, we have made additional revisions to 
the margin calculations for Harmoni, Shandong Heze, and Jinan Yipin for 
the final results. Company-specific changes are discussed below.

Valuation of Garlic Seed

    As we discuss in response to Comment 1 of the Decision Memorandum, 
for the final results of these reviews we have narrowed the pricing 
information upon which we have relied for valuation of garlic seed to 
the National Horticultural Research and Development Foundation prices 
for the Agrifound Parvati and Yamuna Safed-3 varieties. We selected the 
pricing information for these varieties because, of all the varieties 
for which information was submitted, these two varieties match most 
closely the subject merchandise in terms of bulb diameter and number of 
cloves per bulb. This narrowing of price selection did not change the 
surrogate value of seed for the final results, since all of the 
selected prices for the Preliminary Results were identical.

Valuation of Insecticide

    For insecticide, we were able to calculate a surrogate value more 
specific to Phoxim, the type of insecticide used by the respondents. 
For a detailed discussion see Decision Memorandum at Comment 4 and the 
memorandum from Katja Kravetsky to The File titled ``Factors Valuations 
for the Final Results of the Administrative Review and New Shipper 
Reviews'' dated June 7, 2004 (Final Results FOP Memorandum).

Valuation of Labor

    For the final results, consistent with 19 CFR 351.408(c)(3), we 
used the PRC regression-based wage rate for 2001 that appears on the 
Import Administration Web site (http://www.ia.ita.doc.gov/wages/01wages/01wages.html). The source of the wage-rate data is the 
International Labor Organization's Yearbook of Labour Statistics 2002 
(Geneva, 2002), chapter 5B: Wages in Manufacturing. For the Preliminary 
Results the source of the wage-rate data was the International Labor 
Organization's Yearbook of Labour Statistics 2001 (Geneva, 2001), 
chapter 5B: Wages in Manufacturing. The revised rate is slightly higher 
that the rate used for the Preliminary Results.

Ocean Freight

    For ocean freight, we used a ranged public rate reported by a 
respondent in the 11/01/02-04/30/03 new shipper review and used in 
Fresh Garlic from the People's Republic of China: Preliminary Results 
of Antidumping New Shipper Reviews, 69 FR 24123 (May 3, 2004). Because 
this is a rate actually incurred and paid for in a market-economy 
currency by a respondent in a review of fresh garlic from the PRC, we 
have determined that it is the most accurate rate available and we 
selected the public ranged figure as the surrogate value for shipments 
to the west coast. We adjusted this rate to arrive at a surrogate value 
for shipments to the east coast. For a detailed discussion, see 
Decision Memo at Comment 5 and Final Results.

FOP Memorandum

Application of Surrogate Financial Ratios

    Based on comments received from respondents, we re-examined the 
annual report of Parry Agro Industries, Ltd. (Parry Agro) (the Indian 
tea producer we selected for surrogate financial information), and the 
costs that we obtained from this company's income statement and 
included in the numerator and denominator of the surrogate financial 
ratio calculations. We were not able to determine whether Parry Agro 
performed packing activities associated with the tea it produced as its 
financial information does not indicate that it incurred any packing 
expenses. Furthermore, in the event Parry Agro did incur packing 
expenses, we do not know the extent to which such expenses are included 
in the values we obtained from its income statement for purposes of 
calculating the surrogate financial ratios because packing expenses are 
not included as a line item or distinguished or described in the income 
statement in any way. Accordingly, for the final results of these 
reviews, in calculating the amount of overhead, selling, general and 
administrative expenses (SG&A), and profit included in the cost of 
production, we have determined not to apply the surrogate financial 
ratios to production costs that include packing expenses. As in the 
Preliminary Results, however, we have calculated separate surrogate 
values for materials and labor associated directly with packing fresh 
garlic from the PRC and added these packing expenses to the calculation 
of normal value. For a more detailed discussion of this issue see 
Decision Memo at Comment 6.

Valuation of Electricity

    For the final results of these reviews, we valued electricity 
consumption based on the respondents' reported use of electricity 
unrelated to obtaining water (e.g., for cold storage located at the 
production/processing facility). We applied the usage figures reported 
by the respondents to a surrogate value for electricity that we 
obtained from the International Energy Agency's Energy Prices & Taxes: 
Quarterly Statistics (Third Quarter, 2003). We used this same 
methodology in the most recently completed preliminary results of the 
antidumping duty new shipper reviews covering the period November 1, 
2002, through April 30, 2003. See memorandum from Katja Kravetsky to 
The File titled ``Factors Valuations for the Preliminary Results of the 
New Shipper Reviews,'' dated April 26, 2004 at pages 5, 6, and 9.
    We decided that this approach to the valuation of electricity is 
appropriate because it helps ensure that we capture the significant 
electricity costs incurred by placing the subject merchandise in cold 
storage and other activities that consume electricity that are specific 
to the production of subject merchandise (e.g., fans used for drying 
and the strapping machine used for packing). Specifically, based on our 
experience in analyzing producers and exporters of

[[Page 33629]]

fresh garlic from the PRC, we know that placing the subject merchandise 
in cold storage for long periods of time is not uncommon. Moreover, 
this activity consumes a significant amount of electricity.
    Because we are valuing electricity consumption in this manner, to 
avoid double-counting electricity costs, we removed the line item for 
``Power and Fuel'' costs from the numerator of the surrogate financial 
ratio for SG&A. Further, because we removed the electricity costs from 
the calculation of the surrogate financial ratios, in calculating the 
amount of overhead, SG&A, and profit included in the cost of 
production, we have determined not to apply the surrogate financial 
ratios to production costs that include electricity costs. Our revised 
calculation of the surrogate financial ratio for SG&A appears in 
attachment 5 of the Final Results FOP Memorandum.

Cold Storage

    As discussed above, significant electricity costs can be attributed 
to the placement of the subject merchandise in cold storage. We 
examined the respondents' cold-storage activities during the 
verifications we conducted for these reviews. See, e.g., page 18 of the 
January 5, 2004, memorandum to the file titled ``Verification of the 
Response of Shandong Heze International Trade and Developing Company in 
the Antidumping Duty Administrative Review of Fresh Garlic From the 
People's Republic of China''. For the final results of these reviews, 
we valued cold storage at the production facility using an electricity 
surrogate value and added it to the normal value. When the subject 
merchandise was put in cold storage before it was processed (or when it 
was semi-processed) at a facility away from the production/processing 
facility prior to shipment, we valued cold storage using a surrogate 
value for cold storage, which includes electricity expenses and added 
it to the normal value. When the garlic was fully processed and packed, 
and placed into a cold-storage facility not located at the production/
processing facility prior to the date of shipment from PRC, we valued 
it using a cold-storage surrogate value and treated it as a movement 
expense which we deducted from the U.S. price.

Harmoni

    As a result of clerical-error comments submitted by the petitioners 
regarding the preliminary margin calculation for Harmoni, we made 
certain changes to our final margin calculation. For a detailed 
discussion, see the final analysis memorandum for Harmoni dated June 7, 
2004.

Shandong Heze

    We made changes to our margin calculations for Shandong Heze to 
account for pre-verification corrections and verification findings. For 
a detailed discussion, see the final analysis memorandum for Shandong 
Heze dated June 7, 2004.

Jinan Yipin

    We made changes to our margin calculations for Jinan Yipin to 
account for pre-verification corrections and verification findings. For 
a detailed discussion, see the final analysis memorandum for Jinan 
Yipin dated June 7, 2004.

Final Results of the Reviews

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

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                          Exporter                            percentage
                                                                margin
------------------------------------------------------------------------
Jinan Yipin Corporation, Ltd...............................       115.81
Shandong Heze International Trade and Developing Company...        43.30
PRC-wide rate (including Top Pearl and Wo Hing)............       376.67
------------------------------------------------------------------------

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

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

Duty Assessment and Cash-Deposit Requirements

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of these reviews. Further, the 
following cash-deposit requirements will be effective upon publication 
of the final results of the administrative and new shipper reviews for 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results, as provided by section 751(a)(2)(C) of the Act: (1) For 
subject merchandise exported by Jinan Yipin or Shangdong Heze, grown by 
Jining Yun Feng Agriculture Products Co., Ltd., and exported by Trans-
High, or grown and exported by Zhengzhou Harmoni Spice Co., Ltd., the 
cash-deposit rate will be that established in these final results of 
reviews; (2) for all other subject merchandise exported by Trans-High 
or Harmoni but not grown by Jining Yun Feng Agriculture Products Co., 
Ltd., or Zhengzhou Harmoni Spice Co., Ltd., respectively, the cash-
deposit rate will be the PRC-countrywide rate, which is 376.67 percent; 
(3) for all other PRC exporters of subject merchandise which have not 
been found to be entitled to a separate rate, the cash-deposit rate 
will be the PRC-wide rate of 376.67 percent; (4) for all non-PRC 
exporters of subject merchandise, the cash-deposit rate will be the 
rate applicable to the PRC supplier of that exporter. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.

Notification of Interested Parties

    This notice serves as a final 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 the review period. Pursuant to 19 CFR 
351.402(f)(3) failure to comply with this requirement could result in 
the Department's presumption that reimbursement of antidumping duties 
occurred and the subsequent assessment of doubled antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO as explained in the administrative protective order itself. Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is hereby requested. Failure to 
comply with the regulations and the terms of an APO is a sanctionable 
violation.
    These final results of administrative and new shipper reviews and 
notice are issued and published in accordance with sections 
751(a)(2)(B)(iv), 751(a)(3), and 777(i) of the Act.


[[Page 33630]]


    Dated: June 7, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.

Appendix

Decision Memorandum

1. Valuation of Garlic Seed
2. Valuation of Water
3. Valuation of Cartons
4. Valuation of Insecticide
5. Valuation of Ocean Freight
6. Application of Surrogate Financial Ratios
7. Selection of Surrogate Financial Information
8. Factor Usage Rates for Production of Subject Merchandise
9. Comments With Respect to Shandong Heze
10. Comments With Respect to Harmoni
11. Comments With Respect to Jinan Yipin
[FR Doc. 04-13494 Filed 6-15-04; 8:45 am]
BILLING CODE 3510-DS-P