[Federal Register Volume 69, Number 148 (Tuesday, August 3, 2004)]
[Notices]
[Pages 46498-46501]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17566]


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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 New Shipper Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On May 3, 2004, the Department of Commerce published the 
preliminary results of 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, 2002, through April 30, 2003. The reviews 
cover five 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.

DATES: Effective August 3, 2004.

FOR FURTHER INFORMATION CONTACT: Minoo Hatten or Mark Ross, Office of 
Antidumping/Countervailing Duty Enforcement 5, 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 July 7, 2003, we published in the Federal Register the Notice of 
Initiation of New Shipper Antidumping Duty Reviews (68 FR 40242) in 
which we initiated new shipper reviews of the antidumping duty order on 
fresh garlic from the People's Republic of China (PRC) for Jinxiang 
Dong Yun Freezing Storage Co., Ltd. (Dong Yun), Shanghai Ever Rich 
Trade Company (Ever Rich), Linshu Dading Private Agricultural Products 
Co., Ltd. (Linshu Dading), Linyi Sanshan Import & Export Trading Co., 
Ltd. (Linyi Sanshan), Sunny Import & Export Limited (Sunny), Tancheng 
County Dexing Foods Co., Ltd. (Tancheng), and Taian Ziyang Food Co., 
Ltd. (Ziyang).
    On April 28, 2004, we published a notice rescinding Tancheng's new 
shipper review of the antidumping duty order on fresh garlic from the 
PRC. See Notice of Rescission of Antidumping New Shipper Review of 
Fresh Garlic from the People's Republic of China, 69 FR 23171 (April 
28, 2004).
    On May 3, 2004, the Department of Commerce (the Department) 
published the preliminary results of the new shipper reviews of the 
antidumping duty order on fresh garlic from the PRC. See Fresh Garlic 
from the People's Republic of China: Preliminary Results of Antidumping 
Duty New Shipper Reviews, 69 FR 24123 (May 3, 2004) (Preliminary 
Results). We invited parties to comment on our preliminary results. We 
received comments from three respondents, Sunny, Linshu Dading, and 
Dong Yun. We did not receive comments from the petitioners (the Fresh 
Garlic Producers Association and its individual members).
    On June 28, 2004, we published the final results of the antidumping 
new shipper review for Linyi Sanshan. See Fresh Garlic from the 
People's Republic of China: Final Results of Antidumping Duty New 
Shipper Review for Linyi Sanshan Import Export Trading Co., Ltd., 69 FR 
36059 (June 28, 2004).
    We have conducted these reviews in accordance with section 751 of 
the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.214 (2003).

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

[[Page 46499]]

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 U.S. Customs and 
Border Protection (CBP) to that effect.

Analysis of Comments Received

    All issues raised in the case briefs by parties in these reviews 
are addressed in the Issues and Decision Memorandum, dated July 26, 
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 on file in the Central Records Unit (CRU), Main 
Commerce Building, Room B-099, and is accessible on the Web at http://www.ia.ita.doc.gov/frn. The paper copy and electronic version of the 
memorandum are identical in content.

Separate Rates

    In our preliminary results, we determined that Sunny, Linshu 
Dading, Dong Yun, Ever Rich, and Ziyang met the criteria for the 
application of a separate rate. See Preliminary Results, 69 FR at 
24124. We have not received any information since the issuance of the 
Preliminary Results that provides a basis for reconsideration of these 
determinations.

Changes Since the Preliminary Results

    Based on comments certain respondents submitted on the Preliminary 
Results and our analysis of information on the record, we have made 
certain changes to the margin calculations for all respondents. In 
addition, based on changes due to verification, we have made additional 
revisions to the margin calculations for Sunny for the final results. 
These changes are discussed below.

A. Application of Surrogate Financial Ratios

    For the final results of these reviews, in calculating the amount 
of overhead, selling, general and administrative expenses (SG&A), and 
profit included in normal value, 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 1.

B. Valuation of Garlic Seed

    As we discuss in response to Comment 2 of the Decision Memo, for 
the final results of these reviews we have limited 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 match most closely the 
subject merchandise in terms of bulb diameter and number of cloves per 
bulb. This limiting 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.

C. Valuation of Leased Land

    The respondents in these reviews leased the farmland on which the 
subject merchandise was grown. The need to capture the cost of leasing 
land in the calculation of normal value for the subject merchandise was 
brought to our attention by the petitioners in their June 4, 2004, 
submission in another segment of this proceeding. Consistent with 
recent PRC case practice, we determined that the cost of leasing land 
in this proceeding is an important component in the cost build-up of 
normal value. The cost of leasing land was not included in our 
calculation of normal value for the Preliminary Results and is not 
reflected in the financial ratios calculated from Parry Agro's income 
statements (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 (July 16, 2004)). Accordingly, for purposes of the final 
results of these reviews, we applied a land-lease cost to our 
calculation of normal value using a methodology similar to that applied 
in the recently-completed preliminary results of a new shipper review 
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) 
(July New Shipper Review Prelim).
    In the July New Shipper Review Prelim, the Department applied a 
surrogate value for land based on a 1996 policy notification issued by 
the State of Rajasthan, in which the state government set an annual 
lease rent for cultivable wasteland. In exploring additional publicly-
available information concerning the cost of leasing land in India, we 
located the 2001 Punjab State Development Report administered by the 
Planning Commission of the government of India (``Punjab Report''). See 
Memorandum from Susan Lehman to The File titled ``Factors Valuations 
for the Final Results of the New Shipper Reviews,'' dated July 26, 
2004. We find that the ``Punjab Report'' contains more relevant and 
contemporaneous information pertaining to the Indian land-lease market 
for farmland. The subject of the ``Punjab Report'' is clearly more 
similar to the type of land leased by the respondents during the period 
of review (POR). Further, the data contained within the ``Punjab 
Report'' is based on actual experience, whereas that contained within 
the 1996 policy notification we used in the July New Shipper Review 
Prelim was based on parameters that may not have been implemented or 
that may have since been amended.
    Upon review of the record of these new shipper reviews, we find no 
information undermining the figure contained within the ``Punjab 
Report.'' As such, based on all available information, we have 
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.
    According to the ``Punjab Report,'' the most frequent annual rent 
for farmland in the State of Punjab was found to be 17,500 rupees per 
hectare. As this rate was based on information gathered in 2001, we 
have inflated the annual cost of land and have converted the values to 
calculate an annual land-lease cost of $25.75/mu (15 mu = 1 hectare).
    In order to determine a per-kilogram cost of land, we first 
determined each companies' production quantity in kilograms per mu by 
dividing the verified total production quantity by the total amount of 
farmland leased by each company during the POR, as provided in the land 
leases. The information used in our calculation was extracted directly 
from the company-specific responses to our questionnaires. We then 
divided the annual land-lease cost of $25.75/mu by the company-specific 
per-mu production quantity, and derived a per-kilogram cost of land. 
The result of this calculation was applied to the build-up of normal 
value as an addition to fixed overhead. For the company-specific

[[Page 46500]]

calculations, see the July 26, 2004, Final Results Analysis Memorandum 
for each company.

D. Sunny

    For the preliminary results of these reviews, we valued cold 
storage at the production facility using an electricity surrogate value 
and added it to 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 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 the 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.
    At verification, we examined Sunny's cold-storage activities and 
found that it rented a cold storage facility away from the production/
processing facility for its semi-processed garlic. See Memorandum from 
Brian Ellman to The File titled ``Verification of the Responses of 
Sunny Import and Export Limited in the Antidumping Duty New Shipper 
Review of Fresh Garlic from the People's Republic of China,'' dated May 
17, 2004, at pages 10 and 20.
    For the Preliminary Results, we incorrectly valued the cold storage 
expenses incurred by Sunny using a surrogate value for electricity. 
Because Sunny used a rented cold storage facility located away from the 
production/processing facility to store its semi-processed garlic prior 
to shipment, we should have valued its cold storage expenses using a 
surrogate value for cold storage. For the final results, we have 
corrected this error and have valued Sunny's reported cold storage 
using a surrogate value for cold storage, which includes electricity 
expenses, and added it to normal value.

E. Dong Yun

    While reviewing Dong Yun's margin-calculation program for the 
preliminary results, we found that we used the incorrect consumption 
amounts for direct labor and packing labor. We have corrected this 
error for these final results. See the Final Results Analysis 
Memorandum for Dong Yun, dated July 26, 2004, at page 3.

Final Results of the Reviews

    We determine that the following dumping margins exist for the 
period November 1, 2002, through April 30, 2003:

------------------------------------------------------------------------
                                                        Weighted-average
                       Exporter                        percentage margin
------------------------------------------------------------------------
Grown by Pizhou Guangda Import and Export Co., Ltd.                 0.00
 and Exported by Shanghai Ever Rich Trade Company....
Grown by Jinxing Jinda Agriculture Industrial &                     0.00
 Trading Company Ltd. and Exported by Linshu Dading
 Private Agricultural Products Co., Ltd..............
Grown and Exported by Sunny Import and Export Ltd....              33.66
Grown and Exported by Taian Ziyang Food Company, Ltd.               0.00
Grown and Exported by Jinxiang Dong Yun Freezing                   19.18
 Storage Co., Ltd....................................
------------------------------------------------------------------------

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 these 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 grown by Pizhou Guangda Import and Export Co., Ltd., and 
exported by Shanghai Ever Rich Trade Company; grown by Jinxing Jinda 
Agriculture Industrial & Trading Company Ltd., and exported by Linshu 
Dading Private Agricultural Products Co., Ltd.; or grown and exported 
by Sunny Import and Export, Ltd., Taian Ziyang Food Company, Ltd., or 
Jinxiang Dong Yun Freezing Storage Co., Ltd., the cash-deposit rate 
will be the rate listed above; (2) for all other subject merchandise 
exported by Shanghai Ever Rich Trade Company, Linshu Dading Private 
Agricultural Products Co., Ltd., Sunny Import and Export, Ltd., Taian 
Ziyang Food Company, Ltd., and Jinxiang Dong Yun Freezing Storage Co., 
Ltd., the cash-deposit rate will be the PRC-wide 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 exporter that supplied that exporter. These 
deposit requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.

Notification to 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.
    Bonding is no longer permitted to fulfill security requirements for 
shipments from Ever Rich, Linshu Dading, Sunny, Ziyang, and Dong Yun of 
fresh garlic from the PRC entered, or withdrawn from warehouse, for 
consumption in the United States on or after the publication of this 
notice in the Federal Register.
    These final results of new shipper reviews and notice are issued 
and published in accordance with sections 751(a)(2)(B) and 777(i) of 
the Act.


[[Page 46501]]


    Dated: July 26, 2004.
Jeffrey A. May,
Acting Assistant Secretary for Import Administration.

Appendix

Decision Memo

    1. Application of Surrogate Financial Ratios
    2. Valuation of Garlic Seed
    3. Valuation of Ocean Freight
    4. Fixed Overhead Calculation
    5. Selling, General and Administrative Expenses and Profit 
Calculation

[FR Doc. 04-17566 Filed 8-2-04; 8:45 am]
BILLING CODE 3510-DS-P