[Federal Register Volume 69, Number 144 (Wednesday, July 28, 2004)]
[Notices]
[Pages 45012-45017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17201]


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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 the Seventh New Shipper Review

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

ACTION: Notice of preliminary results of seventh new shipper review.

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SUMMARY: The Department of Commerce (``the Department'') is currently 
conducting the seventh new shipper review of the antidumping duty order 
on certain preserved mushrooms from the People's Republic of China 
(``PRC'') covering the period February 1, 2003, through July 31, 2003. 
This review covers one exporter.
    We have preliminarily determined that sales have not been made at 
less than normal value (``NV'') with respect to the exporter who 
participated fully in this review. If the preliminary results are 
adopted in our final results of this review, we will instruct U.S. 
Customs and Border Protection (``CBP'') to not assess antidumping 
duties on entries of merchandise subject to this review.
    Interested parties are invited to comment on the preliminary 
results. We will issue the final results no later than 90 days from the 
date of publication of this notice.

EFFECTIVE DATE: July 28, 2004.

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

SUPPLEMENTARY INFORMATION: 

Background

    On August 28 and 29, 2003, the Department received timely requests 
from (1) Guangxi Hengxian Pro-Light Foods, Inc. (``Guangxi Hengxian''); 
(2) Nanning Runchao Industrial Trade Company, Ltd. (``Nanning 
Runchao''); (3) Xiamen International Trade and Industry Company, Ltd. 
(``XITIC''); (4) Xiamen Zhongjia Import and Export Company, Ltd. 
(``Zhongjia''); (5) Zhangzhou Longhai Minhui Industry and Trade Co., 
Ltd., (``Minhui''); and (6) Shanghai Superlucky Import & Export 
Company, Ltd. (``Superlucky'') for a new shipper review in accordance 
with 19 CFR 351.214(c).
    On September 30, 2003, the Department initiated a new shipper 
review of Guangxi Hengxian and Nanning Runchao only. (See Certain 
Preserved Mushrooms from the People's Republic of China: Initiation of 
Seventh New Shipper Antidumping Duty Review, 68 FR 57877 (October 7, 
2003) for further discussion.)
    On October 15, 2003, we issued the antidumping duty questionnaire 
to Guangxi Hengxian and Nanning Runchao.
    On October 23, 2003, the Department provided the parties an 
opportunity to submit publicly available information for consideration 
in the preliminary results.
    On November 26, and December 5, 2003, Guangxi Hengxian and Nanning 
Runchao, respectively, submitted their questionnaire responses. On 
December

[[Page 45013]]

22, 2003, the petitioner \1\ submitted comments on these questionnaire 
responses.
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    \1\ The petitioner is the Coalition for Fair Preserved Mushroom 
Trade.
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    On January 7, 2004, the Department requested from CBP copies of all 
customs documents pertaining to the entry of certain preserved 
mushrooms from the PRC exported by each respondent during the period of 
February 1, 2003, through July 31, 2003 (see January 7, 2004, 
Memorandum from Louis Apple, Office Director, to Michael S. Craig of 
CBP). On January 22, 2004, we issued a supplemental questionnaire to 
both respondents.
    On February 5, 2004, the petitioner and Guangxi Hengxian submitted 
publicly available information (``PAI'') to be used in the calculation 
of normal value. On February 17, 2004, Guangxi Hengxian submitted 
additional PAI for consideration in the preliminary results.
    On February 13, 2004, the Department published in the Federal 
Register a notice of postponement of the preliminary results until no 
later than July 26, 2004 (69 FR 7200).
    On February 20, and 27, 2004, Nanning Runchao and Guangxi Hengxian, 
respectively, submitted their supplemental questionnaire responses.
    On March 3, 2004, the petitioner submitted PAI comments. We issued 
Nanning Runchao a second supplemental questionnaire on March 12, 2004, 
and received its response on March 24, 2004. We issued Guangxi Hengxian 
a second supplemental questionnaire on March 18, 2004, and received its 
response on April 1, 2004.
    On April 1 and 5, 2004, we notified both respondents of our intent 
to conduct verification of their responses and provided each company 
with a verification outline for purposes of familiarizing the companies 
with the verification process. On April 6, 2004, we received 
documentation from CBP regarding our January 7, 2004, request for 
information.
    On April 7, 2004, the petitioner submitted pre-verification 
comments on both companies. Also on April 7, 2004, Nanning Runchao's 
counsel notified the Department that its U.S. shipment of subject 
merchandise during the period of review (``POR'') (i.e., which is the 
basis for its new shipper review request) was being returned to the PRC 
because it did not comply with U.S. Food and Drug Administration 
regulations. As a result, the Department informed Nanning Runchao that 
it was cancelling the verification which was to occur in April 2004 
(see April 7, 2004, Memorandum from Team Leader to the File). On April 
9, 2004, Nanning Runchao withdrew its request for a new shipper review.
    On April 19, 2004, the Department rescinded the new shipper review 
with respect to Nanning Runchao. (See Certain Preserved Mushrooms from 
the People's Republic of China: Notice of Partial Rescission of Seventh 
New Shipper Review, 69 FR 22004 (April 23, 2004).)
    From April 21, through April 24, 2004, the Department conducted 
verification of the information submitted by Guangxi Hengxian in 
accordance with 19 CFR 351.307.
    On April 21, 2004, Guangxi Hengxian submitted minor corrections to 
its responses which it presented to the Department's verifiers at the 
start of verification. On May 18, 2004, Guangxi Hengxian submitted 
additional PAI comments. On May 19, 2004, we issued the verification 
report for Guangxi Hengxian (``Guangxi Hengxian verification report'').

Scope of the 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 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.\2\
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    \2\ 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 currently 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 Review

    The POR covers February 1, 2003, through July 31, 2003.

Verification

    As provided in section 782(i) of the Tariff Act of 1930 (``the 
Act''), as amended, we verified information provided by Guangxi 
Hengxian. We used standard verification procedures, including on-site 
inspection of Guangxi Hengxian's facility and examination of relevant 
sales and financial records. Our verification results are outlined in 
the Guangxi Hengxian verification report.

Separate Rates

    In proceedings involving non-market-economy (``NME'') countries, 
the Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and thus should be 
assessed a single antidumping duty rate (i.e., a PRC-wide rate).
    Guangxi Hengxian is a limited liability company registered in the 
PRC. Thus, a separate-rates analysis is necessary to determine whether 
the export activities of this respondent are independent from 
government control. (See Notice of Final Determination of Sales at Less 
Than Fair Value: Bicycles From the People's Republic of China, 61 FR 
56570 (April 30, 1996).) 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), 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

[[Page 45014]]

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.
    In prior cases involving products from the PRC, the Department has 
examined the following PRC laws for purposes of determining whether 
there is an absence of de jure control with respect to a respondent's 
export functions: the 1994 ``Foreign Trade Law of the People's Republic 
of China;'' the ``Company Law of the PRC,'' effective as of July 1, 
1994; and ``The Enterprise Legal Person Registration Administrative 
Regulations,'' promulgated on June 13, 1988. (See July 22, 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 limited 
liability companies 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 FR at 22587 and Furfuryl 
Alcohol, 60 FR at 22545.)
    Guangxi Hengxian has asserted the following: (1) It establishes its 
own export prices; (2) it negotiates contracts without guidance from 
any governmental entities or organizations; (3) it makes its own 
personnel decisions; and (4) it 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. We examined 
documentation at verification which substantiated Guangxi Hengxian's 
claims as noted above (see pages 4 through 12 of the Guangxi Hengxian 
verification report). As a result, there is a sufficient basis to 
determine preliminarily that this respondent 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 Guangxi Hengxian has met the criteria for the 
application of separate rates.
Normal Value Comparisons
    To determine whether the sale of the subject merchandise by Guangxi 
Hengxian to the United States was made at a price below NV, we compared 
the export price to NV, as described in the ``Export Price'' and 
``Normal Value'' sections of this notice, below.
Export Price
    We used export price (``EP'') methodology in accordance with 
section 772(a) of the Act because 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 
constructed export price was not otherwise indicated.
    We calculated EP based on the packed U.S. port price 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 and foreign brokerage and handling charges in the PRC, 
international freight, U.S. brokerage and handling charges, and U.S. 
customs duties (including merchandise processing and harbor maintenance 
fees) in accordance with section 772(c) of the Act. Based on our 
verification findings, we revised (1) the inland freight distance 
Guangxi Hengxian reported from its factory to the port of exportation; 
and (2) the reported per-unit packed weight used to derive PRC movement 
expenses (see pages 3 and 16 of the Guangxi Hengxian verification 
report).
    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 truck freight 
rates published in Indian Chemical Weekly (``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 
October 1999-September 2000 information reported in the public U.S. 
sales listing submitted by Essar Steel Ltd. in the antidumping 
investigation of Certain Hot-Rolled Carbon Steel Flat Products from 
India: Final Determination of Sales at Less Than Fair Value, 67 FR 
50406 (October 3, 2001). For international freight (i.e., ocean 
freight), we used the reported expenses because Guangxi Hengxian 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)).

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 review has contested such treatment. Accordingly, we 
calculated NV in

[[Page 45015]]

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 was among the 
countries comparable to the PRC in terms of overall economic 
development (see October 7, 2003, Memorandum from the Office of Policy 
to Irene Darzenta Tzafolias). In addition, based on publicly available 
information placed on the record (e.g., world production data), India 
is a significant producer of the subject merchandise. Accordingly, we 
considered India the surrogate country for purposes of valuing the 
factors of production because it meets the Department's criteria for 
surrogate-country selection (see Memorandum Re: 7th Antidumping Duty 
New Shipper Review on Certain Preserved Mushrooms from the People's 
Republic of China: Selection of a Surrogate Country, dated July 22, 
2004, for further discussion).

C. Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on the factors of production which included, but were not limited 
to: (A) Hours of labor required; (B) quantities of raw materials 
employed; (C) amounts of energy and other utilities consumed; and (D) 
representative capital costs, including depreciation. We used the 
factors reported by Guangxi Hengxian which produced the preserved 
mushrooms it exported to the United States during the POR. To calculate 
NV, we multiplied the reported unit factor quantities by publicly 
available Indian values.
    Based on our verification findings, we revised the following data 
in Guangxi Hengxian's response: (1) The per-unit factors reported for 
labels, tape, glue, and water (used in the mushroom growing stage); (2) 
the per-unit factors reported for unskilled growing, harvesting, 
processing, and packing labor; (3) the per-unit factor reported for 
electricity; and (4) the supplier distances reported for straw, citric 
acid, cans, cartons, tape, and labels (see pages 3, 4, 24, and 27 of 
the verification report).
    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 (``IFS''). (See July 22, 2004, Memorandum Re: Factors 
Valuation For the Preliminary Results, from the Team Leader to the 
File, for a detailed explanation of the methodology used to calculate 
surrogate values.)
    Guangxi Hengxian produced (rather than purchased) the fresh 
mushrooms which it used in the mushroom canning process during the POR. 
Therefore, we valued the inputs which this company used to produce the 
fresh mushrooms which were canned during the POR.
    To value spawn, cow manure, and straw, we used an average price 
based on data contained in the 2002-2003 financial report of Flex Foods 
Ltd. (``Flex Foods'') and the 2002-2003 financial report of Agro Dutch 
Foods, Ltd. (``Agro Dutch'') (i.e., two Indian producers of the subject 
merchandise).
    Guangxi Hengxian purchased all of the cans which it used to sell 
preserved mushrooms to the U.S. market during the POR. Therefore, for 
tin cans we used can-size-specific purchase 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 February 5, 2004 PAI 
submission.
    Guangxi Hengxian reported that it resold mushroom scrap during the 
POR (i.e., a by-product from its canned mushroom production). However, 
we did not make an offset deduction to the surrogate cost of production 
because we were unable to identify an appropriate surrogate value for 
this material (see Notice of Preliminary Determination of Sales at Less 
Than Fair Value and Postponement of Final Determination: Synthetic 
Indigo From the People's Republic of China, 64 FR 69723, 69728 
(December 14, 1999)).
    To value coal and tin plate scrap, we used February 2003-July 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.
    To value salt, we used an average import price based on February 
2002-January 2003 data contained in the World Trade Atlas because we 
were unable to obtain a more current value.
    To value citric acid and calcium carbonate, we used an average 
import price based on February 2003-July 2003 data contained in the 
World Trade Atlas and February 2003-July 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) which has been placed on 
the record of this proceeding.) To value urea (i.e., carbamide), we 
used an average price based on February 2003-July 2003 data contained 
in World Trade Atlas and Chemical Weekly, as well as data contained in 
Flex Foods' 2002-2003 financial report.
    To value water, we used 1995-1996 and 1996-1997 Indian price data 
from the Second Water Utilities Data Book. Because this value was not 
contemporaneous with the POR, we adjusted it for inflation based on 
Indian WPIs 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. Because this value was not contemporaneous with the POR, we 
adjusted it for inflation based on U.S. wholesale price indices 
published in the International Monetary Fund's IFS.
    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

[[Page 45016]]

2002-2003 financial data of Flex Foods, both Indian producers of the 
subject merchandise. To value profit, we used only the 2002-2003 
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).
    Guangxi Hengxian leased the farm land which it used to grow fresh 
mushrooms canned during the POR. Consistent with recent PRC case 
practice, we determined that the cost of land is an important component 
in the cost build-up of NV and is not specifically reflected in the 
surrogate financial ratios calculated from the financial statements of 
Agro Dutch and Flex Foods (see Notice of Preliminary Determination of 
Sales at Less Than Fair Value, Partial Affirmative Preliminary 
Determination of Critical Circumstances and Postponement of Final 
Determination: Certain Frozen and Canned Warmwater Shrimp from the 
People's Republic of China, 69 FR 42654, 42666 (July 16, 2004) 
(``Warmwater Shrimp'')). Accordingly, for purposes of the preliminary 
results of this review, we applied a land-lease cost to our calculation 
of NV using the methodology established in the recently-completed 
preliminary results of new shipper review of the order on fresh garlic 
from the PRC covering the period November 1, 2002, through October 31, 
2003 (see Fresh Garlic from the People's Republic of China: Preliminary 
Results of Antidumping Duty New Shipper Review, 69 FR 40607 (July 6, 
2004) (Fresh Garlic).
    Specifically, to value land, we used cost data contained in the 
2001 Punjab State Development Report administered by the Planning 
Commission of the Government of India (``Punjab Report''). We did not 
use the surrogate land value from a 1996 policy notification issued by 
the State of Rajasthan (in which the state government set an annual 
lease rent for cultivable wasteland) which was used in Warmwater Shrimp 
and Fresh Garlic because we found that the ``Punjab Report'' contains 
more relevant and contemporaneous information pertaining to the Indian 
land-lease market for agrarian farmland. Hence, the subject of the 
``Punjab Report'' is clearly more similar to the type of land leased by 
the respondent during the POR. Further, the data contained within the 
``Punjab Report'' is based on actual experience, whereas that contained 
within the 1996 policy notification was based on parameters that may 
not have been implemented or that may have since been amended.
    Upon review of the record of this new shipper review, we found no 
information undermining the figure contained within the ``Punjab 
Report.'' As such, based on all available information, we determined 
that the figure contained within the ``Punjab Report'' serves as the 
most reliable basis for determining a surrogate value for calculating a 
cost of the farmland used to grow the subject merchandise.
    Where appropriate, we did not include in the surrogate overhead and 
SG&A calculations the excise duty amount listed in the financial 
reports. We made certain adjustments to the ratios calculated by the 
petitioner and the respondent 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 April 2003-July 2003 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 corrugated cartons, labels, tape, and glue, we used 
February 2003-July 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 margin exists during 
the period February 1, 2003, through July 31, 2003:

------------------------------------------------------------------------
                                                                 Margin
                Manufacturer/producer/exporter                   percent
------------------------------------------------------------------------
Guangxi Hengxian Pro-Light Foods, Inc.........................      0.00
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to the 
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. Any hearing, if requested, will be 
held on September 28, 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 no later than September 1, 2004. Rebuttal briefs, 
limited to issues raised in the case briefs, will be due no later than 
September 8, 2004. 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 the review, 
including the results of its analysis of issues raised in any such 
written briefs or at the hearing, if held, not later than 90 days after 
the date of issuance of the preliminary results.

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 company 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-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. We will 
instruct CBP to assess antidumping duties on all appropriate entries 
covered by this review if any importer-specific assessment rate 
calculated in the final

[[Page 45017]]

results of this review is above de minimis.

Cash Deposit Requirements

    Upon completion of this review, 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 Guangxi Hengxian 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 
this review for all shipments of subject merchandise from Guangxi 
Hengxian entered, or withdrawn from warehouse, for consumption on or 
after the publication date: (1) For subject merchandise manufactured 
and exported by Guangxi Hengxian, no cash deposit will be required if 
the cash deposit rate calculated in the final results is zero or de 
minimis; (2) for subject merchandise exported by Guangxi Hengxian but 
not manufactured by Guangxi Hengxian, the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 198.63 percent); and (3) for 
subject merchandise produced by Guangxi Hengxian but not exported by 
Guangxi Hengxian, the cash deposit rate will be the rate applicable to 
the 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.
    This new shipper review and notice are in accordance with sections 
751(a)(1) of the Act and 19 CFR 351.214.

    Dated: July 22, 2004.
Holly A. Kuga,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-17201 Filed 7-27-04; 8:45 am]
BILLING CODE 3510-DS-P