[Federal Register Volume 69, Number 174 (Thursday, September 9, 2004)]
[Notices]
[Pages 54635-54642]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-20463]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-851]


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

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

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

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SUMMARY: On March 5, 2004, the Department of Commerce published the 
preliminary results of the sixth new shipper review and the fourth 
administrative review of the antidumping duty order on certain 
preserved mushrooms from the People's Republic of China (``PRC''). The 
new shipper review covers one exporter, Primera Harvest (Xiangfan) Co., 
Ltd. (``Primera Harvest''), and the administrative review covers six 
exporters (see ``Background'' section below for further discussion). 
The period of review is February 1, 2002, through January 31, 2003.\1\ 
We gave interested parties an opportunity to comment on our preliminary 
results.
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    \1\ The period of review (``POR'') for both the new shipper 
review and administrative review is the same.
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    Based on the additional publicly available information used in 
these final results and the comments received from the interested 
parties, we have made changes in the margin calculations for certain 
respondents in these reviews. The final weighted-average dumping 
margins for the reviewed firms in these reviews are listed below in the 
section entitled ``Final Results of Reviews.''

EFFECTIVE DATE: September 9, 2004.

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

SUPPLEMENTARY INFORMATION:

Background

    While the Department initiated an administrative review of 11 
companies,\2\ based on a request by the petitioner \3\ and certain 
exporters, this administrative review now covers only the following six 
exporters: (1) COFCO; (2) Gerber; (3) Green Fresh; (4) Guangxi Yulin; 
(5) Shantou Hongda; and (6) Shenxian Dongxing (see ``Partial Rescission 
of Administrative Review'' section of this notice for further 
discussion).
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    \2\ The petitioner's request for review included the following 
companies: (1) China Processed Food Import & Export Company 
(``COFCO''); (2) Gerber Food Yunnan Co., Ltd. (``Gerber''); (3) 
Green Fresh Foods (Zhangzhou) Co., Ltd. (``Green Fresh''); (4) 
Guangxi Yulin Oriental Food Co., Ltd. (``Guangxi Yulin''); (5) 
Raoping Xingyu Foods Co., Ltd. (``Raoping Xingyu''); (6) Shantou 
Hongda Industrial General Corporation (``Shantou Hongda''); (7) 
Shenxian Dongxing Foods Co., Ltd. (``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'').
    \3\ 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.
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    On March 5, 2002, the Department published in the Federal Register 
the preliminary results of the sixth new shipper review and the fourth 
administrative review of the antidumping duty order on certain 
preserved mushrooms from the People's Republic of China (``PRC'') (see 
Certain Preserved Mushrooms from the People's Republic of China: 
Preliminary Results of Sixth Shipper Review and Preliminary Results and 
Partial Rescission of Fourth Antidumping Duty Administrative Review, 69 
FR 10410 (March 5, 2004) (``Preliminary Results''). Also on March 5, 
2004, we issued COFCO another supplemental questionnaire to which it 
responded on March 31, 2004.
    On March 10, 2004, COFCO requested an extension of the deadline to 
submit publicly available information in the administrative review 
until April 30, 2004, which we granted to all interested parties in 
both reviews on March 12, 2004.

[[Page 54636]]

    On March 18, 2004, we issued Guangxi Yulin a supplemental 
questionnaire to clarify certain issues raised by the petitioner in its 
February 12, 2004, submission.
    On March 22, 2004, the petitioner requested a hearing in these 
reviews.
    On March 25, 2004, in accordance with 19 CFR 351.301(c)(3), we 
received additional publicly available information for soil and rice 
hulls from Primera Harvest.
    On April 12, 2004, Guangxi Yulin submitted its response to the 
Department's March 18, 2004, request for additional clarification.
    On April 15, 2004, COFCO requested an additional extension of the 
deadline to submit publicly available information in the administrative 
review until May 31, 2004, which we granted to all interested parties 
in both reviews on April 16, 2004.
    On May 3, 2004, the Department published in the Federal Register a 
notice of postponement of the final results until no later than 
September 1, 2004 (69 FR 24132).
    On May 12, 2004, we issued COFCO a supplemental questionnaire which 
requested information to determine whether its affiliates China 
National Cereals, Oils, & Foodstuffs Import & Export Corporation 
(``China National''), COFCO (Zhangzhou) Food Industrial Co., Ltd. 
(``COFCO Zhangzhou''), Fujian Zishan Group Co. (``Fujian Zishan''), 
Xiamen Jiahua Import & Export Trading Co., Ltd. (``Xiamen Jiahua''), 
and Fujian Yu Xing Fruit & Vegetable Foodstuff Development Co. (``Yu 
Xing'') (hereafter referred to as ``affiliates'') were entitled to a 
separate rate. On May 26, 2004, COFCO and its affiliates submitted 
their response to the Department's May 12, 2004, supplemental 
questionnaire.
    On May 20, 2004, the Department issued verification outlines to 
COFCO and its affiliates. The Department conducted verification of the 
responses of COFCO and its affiliates during the period May 31, through 
June 16, 2004. On June 30 and July 6, 2004, the Department issued the 
verification reports for COFCO and its affiliates.
    On June 1, 2004, we received additional publicly available 
information from COFCO. On June 14, 2004, the petitioner submitted 
rebuttal comments.
    On June 17, 2004, Gerber and Green Fresh submitted unsolicited new 
factual information with respect to their relationship during the 
period of this review.
    On June 24, 2004, COFCO and Guangxi Yulin requested that the 
Department return the additional publicly available information 
submitted in the petitioner's June 14, 2004, submission. On July 1, 
2004, the petitioner responded to COFCO and Guangxi Yulin's June 24, 
2004, letter.
    On June 30, 2004, we provided the petitioner with an opportunity to 
comment on the information contained in Gerber and Green Fresh's June 
17, 2004, letter, to which the petitioner responded on July 12, 2004.
    On July 6, 2004, we issued Guangxi Yulin a supplemental 
questionnaire to address certain comments submitted by the petitioner 
on May 11, 2004. Guangxi Yulin submitted its response to that 
supplemental questionnaire on July 12, 2004.
    The petitioner and three respondents, COFCO, Guangxi Yulin, and 
Primera Harvest, submitted their case briefs on July 21, 2004. On July 
29, 2004, the petitioner and five respondents, COFCO, Gerber, Green 
Fresh, Guangxi Yulin, and Primera Harvest, submitted rebuttal briefs. 
The other respondents participating in these reviews did not submit 
case or rebuttal briefs.
    On July 29, 2004, we placed on the record publicly available 
information on land lease costs for consideration in the final results 
and provided all interested parties until August 5, 2004, to submit 
comments on this data.
    On August 3, 2004, the petitioner withdrew its request for a 
hearing in these reviews. No other party requested a hearing, as 
specified under 19 CFR 351.310(c).
    On August 4, 2004, we determined that Gerber and Green Fresh had 
submitted new arguments in their rebuttal brief in violation of 19 CFR 
351.309(d)(2), and requested these parties to remove this information 
and resubmit their rebuttal brief. On August 6, 2004, Gerber and Green 
Fresh resubmitted their rebuttal brief accordingly.
    On August 5, 2004, COFCO, Gerber, and Green Fresh submitted 
comments on the publicly available information we had placed on the 
record on July 29, 2004. On August 16, 2004, the petitioner submitted 
rebuttal publicly available information and comments on the land lease 
value comments submitted by certain respondents on August 5, 2004.
    The Department has conducted these reviews in accordance with 
section 751 of the Tariff Act of 1930, as amended (``the Act'').

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.\4\
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    \4\ 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 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 COFCO and its affiliates. 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 
June 30, 2004, verification report for COFCO

[[Page 54637]]

Zhangzhou in the fourth antidumping duty administrative review (``COFCO 
Zhangzhou verification report''); June 30, 2004, verification report 
for Fujian Zishan in the fourth antidumping duty administrative review 
(``Fujian Zishan verification report''); June 30, 2004, verification 
report for Xiamen Jiahua in the fourth antidumping duty administrative 
review (``Xiamen Jiahua verification report''); June 30, 2004, 
verification report for Yu Xing in the fourth antidumping duty 
administrative review (``Yu Xing verification report''); and July 6, 
2004, verification report for China National and COFCO in the fourth 
antidumping duty administrative review (``China National/COFCO 
verification report'').)

Duty Absorption

    On March 5, 2004, the petitioner reiterated its request that the 
Department determine whether antidumping duties had been absorbed 
during the POR. Section 751(a)(4) of the Act provides for the 
Department, if requested, to determine during an administrative review 
initiated two or four years after the publication of the order, whether 
antidumping duties have been absorbed by a foreign producer or 
exporter, if the subject merchandise is sold in the United States 
through an affiliated importer. None of the respondents in the 
administrative review reported that they sold subject merchandise 
through an affiliated importer during the POR, and only one respondent 
(i.e., Gerber) reported that it acted as importer of record for all its 
U.S. sales during the POR. Because the administrative review was 
initiated four years after the publication of the order, and Gerber 
acted as importer of record for all of its U.S. sales, we must make a 
duty absorption determination in this segment of the proceeding within 
the meaning of section 751(a)(4) of the Act.
    On March 8, 2004, the Department requested evidence from the 
respondents that unaffiliated purchasers will ultimately pay the 
antidumping duties to be assessed on entries during the review period. 
In determining whether the antidumping duties have been absorbed by the 
respondents during the POR on sales for which they were the importer of 
record, we presume that the duties will be absorbed for those sales 
that have been made at less than normal value (NV). This presumption 
can be rebutted with evidence (e.g., an agreement between the 
respondent/importer and unaffiliated purchaser) that the unaffiliated 
purchaser will pay the full duty ultimately assessed on the subject 
merchandise. Although Shenxian Dongxing responded to the Department's 
request for information, the data it provided indicates that Shenxian 
Dongxing was not the importer of record for its U.S. sales of subject 
merchandise during the POR. None of the other respondents in the 
administrative review, including Gerber, responded to the Department's 
request for information. Accordingly, based on the record, we cannot 
conclude that the unaffiliated purchaser in the United States will pay 
the full duty ultimately assessed. Therefore, we find that antidumping 
duties have been absorbed by the foreign producer or exporter during 
the POR on those sales for which Gerber was the importer of record.

Partial Rescission of Administrative Review

    We rescinded this review with respect to Minhui and Zhongjia 
pursuant to 19 CFR 351.213(d)(1), because the petitioner withdrew its 
request for review and these companies did not request a review of 
these companies in a timely manner in accordance with section 751(a)(1) 
of the Act. See Certain Preserved Mushrooms from the People's Republic 
of China: Notice of Partial Rescission of Fourth Antidumping Duty 
Administrative Review, 68 FR 63065 (November 7, 2003) (``Rescission 
Notice''). We also rescinded this review with respect to Raoping Xingyu 
and Shenzhen Qunmingyuan pursuant to 19 CFR 351.213(d)(3), because the 
shipment data we examined did not show U.S. entries of the subject 
merchandise during the POR from these companies (see also Rescission 
Notice, 68 FR at 63065).
    We are also rescinding this review with respect to Zhangzhou 
Jingxiang pursuant to 19 CFR 351.213(d)(3), because the shipment data 
we examined did not show U.S. entries of the subject merchandise during 
the POR from this company (see Preliminary Results, 69 FR at 10412).

Facts Available--Shantou Hongda

    In the Preliminary Results, 69 FR at 10417, the Department 
determined that the use of adverse facts available (``AFA'') was 
warranted in accordance with sections 776(a) and 776(b) of the Act, 
with respect to Shantou Hongda. Section 776(a)(2) of the Act states 
that the Department may use ``facts available'' if an interested party 
(A) withholds information that has been requested by the Department, 
(B) fails to provide information in the time and manner requested, (C) 
significantly impedes a proceeding under this title or (D) provides 
such information but the information cannot be verified. 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 in the conduct of the administrative review. Because 
Shantou Hongda refused to allow the Department to conduct verification 
of its submitted information, we determined that Shantou Hongda did not 
cooperate to the best of its ability. Since the preliminary results, 
nothing has changed to reverse our preliminary decision regarding 
Shantou Hongda and Shantou Hongda has filed no comments on the record 
addressing the Department's preliminary results. Therefore, pursuant to 
sections 776(a) and 776(b) of the Act, we have continued to make an 
adverse inference with respect to Shantou Hongda by assigning to its 
exports of the subject merchandise a rate of 198.63 percent, which is 
the PRC-wide rate.

Facts Available--Gerber

    In the Preliminary Results, 69 FR at 10415-10416, the Department 
determined that the use of AFA was also warranted in accordance with 
sections 776(a) and 776(b) of the Act with respect to Gerber. This 
determination was based on the Department's finding that Gerber 
participated in an agreement/scheme with another respondent Green Fresh 
during the prior POR which extended into the current POR, and which 
resulted in the circumvention of the antidumping duty order and the 
evasion of payment of the appropriate level of cash deposits. 
Specifically, the Department found that Gerber used the invoices of 
Green Fresh (which had a substantially lower cash deposit rate), rather 
than its own invoices, for numerous transactions during this POR. As a 
result, Gerber did not submit to U.S. Customs and Border Protection 
(``CBP'') the appropriate cash deposits for these transactions. 
Furthermore, the Department also found that Gerber did not act to the 
best of its ability in its reporting of information to the U.S. 
government, both at the time of entry of the merchandise and in its 
previous submissions to the Department, relating to the agreement 
between Gerber and Green Fresh which directly pertained to the 
transactions under review in this POR.
    As explained in Certain Preserved Mushrooms in the People's 
Republic of China: Final Results and Partial Rescission of New Shipper 
Review and Final Results and Partial Rescission of the Third 
Antidumping Duty Administrative Review, 68 FR 41304 (July 11, 2003), 
and accompanying Issues and Decision Memorandum at

[[Page 54638]]

Comment 1 (``Third Administrative Review''), the Department has 
discretion to administer the law in a manner that prevents evasion of 
the order. (See Tung Mung Development v. United States, 219 F. Supp. 2d 
1333, 1343 (CIT 2002), appeal entered (``Tung Mung v. United 
States'')). Moreover, as the Court noted in Tung Mung v. United States, 
citing Mitsubishi Electric, the Department has a responsibility to 
apply its law in a manner that prevents the evasion of antidumping 
duties: ``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, 
12 C.I.T. 1025, 1046, 700 F. Supp. 538, 555 (1988), aff'd 898 F.2d 1577 
(Fed. Cir. 1990).'' Id. See also 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''); and 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 non-market economy 
(``NME'') exporters was reasonable in light of its ``responsibility to 
prevent circumvention of the antidumping law'').
    Accordingly, in the Preliminary Results, the Department exercised 
its discretion to administer the law in a manner that prevents evasion 
of the order by assigning Gerber the PRC-wide rate of 198.63 percent as 
total AFA. Since the preliminary results, nothing has changed to 
reverse our preliminary decision regarding Gerber. Therefore, pursuant 
to section 776(b) of the Act, we have continued to make an adverse 
inference with respect to Gerber by assigning to its exports of the 
subject merchandise a rate of 198.63 percent, which is the PRC-wide 
rate.

Facts Available--Green Fresh

    In the Preliminary Results, 69 FR at 10416-10417, the Department 
determined that the use of partial AFA was warranted, in accordance 
with sections 776(a) and 776(b) of the Act, with respect to Green Fresh 
because the Department held that Green Fresh did not act to the best of 
its ability in proving to the Department that it did not assist Gerber 
in the continuation of the scheme to circumvent the antidumping duty 
order during the POR. As explained in the Third Administrative Review 
(69 FR at 41306), Green Fresh's business relationship with Gerber, 
which began in the prior POR, allowed Gerber to circumvent the 
antidumping duty order and to evade the proper payment of cash 
deposits. Although Green Fresh claimed in its questionnaire responses 
that it did not provide Gerber with any of its sales invoices during 
this POR and that it believed that its business relationship with 
Gerber was terminated during the prior POR, the terms of the agreement 
between Green Fresh and Gerber stated that the relationship ran through 
this POR, and the general manager of Green Fresh indicated that he was 
aware Gerber disputed that the agreement was no longer in place (see 
page 7 of the February 12, 2003, Green Fresh verification report from 
the prior administrative review which was placed on the record of this 
review on February 13, 2004). Furthermore, Green Fresh provided no 
evidence on the record that it took measures to prevent Gerber from 
continuing to use its invoices in this POR and from actively 
circumventing the antidumping duty order and evading the payment of 
cash deposits during the POR. Accordingly, because (1) Green Fresh's 
arrangement with Gerber allowed Gerber to circumvent the antidumping 
duty order and payment of cash deposits; (2) Green Fresh was aware that 
Gerber believed the agreement still permitted use of Green Fresh's 
invoices; and (3) Green Fresh provided no evidence on the record that 
it attempted 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, in 
overcoming a presumption that Green Fresh aided in the circumvention of 
the antidumping duty order during the POR.
    Accordingly, in order to protect the integrity of its 
administrative proceeding, the Department found that the application of 
partial AFA pursuant to sections 776(a) and 776(b) of the Act was 
warranted for Green Fresh with respect to the Gerber-Green Fresh 
transactions. As facts available, we 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. 
The Department determined it was appropriate to use those transactions 
in Green Fresh's calculation for two reasons: (1) Because those 
transactions were reported to the U.S. government as Green Fresh's 
sales upon importation; and (2) even if Gerber's claims were truthful 
about not affirmatively knowing that its invoices continued to be used 
by Gerber in this POR, its silent allowance of Gerber to use its 
invoices in circumventing the antidumping duty law, and failure to 
demand return of all unused invoices, was no different in its effect 
than its active assistance to further the contractual scheme in the 
previous POR. Thus, as partial AFA, the Department applied the PRC-wide 
rate of 198.63 percent to those sales made by Gerber using Green 
Fresh's invoices.
    Since the preliminary results, Gerber and Green Fresh submitted 
email correspondence between them and their counsel which stated that 
Gerber continued to use Green Fresh's invoices during this POR without 
Green Fresh's prior knowledge (see June 17, 2004, submission from 
Gerber and Green Fresh). We do not consider the undated email 
correspondence submitted by Gerber and Green Fresh on this matter after 
the Preliminary Results to constitute evidence that Green Fresh 
attempted to stop Gerber from using its invoices to actively circumvent 
the antidumping duty order during the POR. Therefore, pursuant to 
section 776(b) of the Act, we have continued to make an adverse 
inference with respect to Green Fresh by applying the PRC-wide rate of 
198.63 percent to those sales made by Gerber using Green Fresh's 
invoices.

Corroboration of Facts Available

    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, a figure based on secondary information 
which it applies as AFA. To be considered corroborated, the information 
must be found to be both reliable and relevant, and thus determined to 
have probative value. For the reasons explained above, we are applying 
as AFA the highest rate from any segment of this proceeding, 198.63 
percent, which is the current PRC-wide rate originally calculated in 
the less-than-fair-value (``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).) For the 
reasons stated in the Preliminary Results, 69 FR at 10417, the 
Department finds this rate to be both reliable and relevant, and, 
therefore, to have probative value in accordance with the Statement of 
Administrative Action,

[[Page 54639]]

H.R. Doc. 103-316 (``SAA''). See SAA at 870. No party has challenged 
the Department's preliminary corroboration analysis for purposes of the 
final results. Therefore, we have continued to assign to exports of the 
subject merchandise by both Gerber and Shantou Hongda, and for certain 
sales made with Green Fresh's invoices which Green Fresh did not report 
in its questionnaire response, the rate of 198.63 percent.

Collapsing--COFCO and Affiliates

    In the Preliminary Results, 69 FR at 10413, we collapsed the 
respondent exporter COFCO with three affiliated producers of subject 
merchandise (only one of which provided COFCO with preserved mushrooms 
for export to the United States during the POR). We emphasized in the 
Preliminary Results that we would consider collapsing affiliated 
producers in the NME context on a case-by-case basis as long as it did 
not conflict with our NME methodology or separate rates test. While we 
also determined that COFCO was affiliated with two other exporters 
(neither of which exported preserved mushrooms to the United States 
during the POR), we did not include these companies in our collapsing 
decision. Moreover, we assigned the resulting margin only to COFCO, not 
the collapsed entity, in accordance with our normal NME practice to 
assign separate rates only to respondent exporters. We did not 
specifically address the issue of whether COFCO's rate should be 
applied to its affiliates because we needed to obtain information from 
its affiliates in order to make a separate rates determination in 
relation to the entity as a whole. Since the Preliminary Results, we 
issued all of COFCO's affiliates a separate rate questionnaire and 
verified the data reported.
    After reconsideration of the record facts and based on our 
verification findings, we determined it appropriate to collapse COFCO 
with five of its affiliates-three producers (i.e., Yu Xing, COFCO 
Zhangzhou and Fujian Zishan) and two exporters (i.e., China National 
and Xiamen Jiahua)--in accordance with section 771(33) of the Act and 
the criteria enumerated in 19 CFR 351.401(f), for purposes of the final 
results. We note that our rationale for collapsing, i.e., to prevent 
manipulation of price and/or production, applies to both producers and 
exporters, if the facts indicate that producers of like merchandise are 
affiliated as a result of their mutual relationship with an exporter. 
Furthermore, we applied the ``collapsed'' rate to COFCO and all of the 
above-mentioned affiliates comprising the collapsed entity because we 
determined that the entity as a whole is entitled to a separate rate 
(see ``Separate Rates'' section below). This determination is specific 
to the facts presented in this review and based on several 
considerations, including the structure of the collapsed entity, the 
level of control between/among affiliates and the level of 
participation by each affiliate in the proceeding. For further 
discussion, see Decision Memo at Comment 1.

Separate Rates

    In the Preliminary Results, 69 FR at 10418, we considered only 
respondent exporters in our separate rates analysis and granted a 
separate rate to COFCO, Primera Harvest, Guangxi Yulin, Shenxian 
Dongxing and Green Fresh. For purposes of the final results, this 
analysis has not changed for any respondent exporter except COFCO. For 
COFCO, we have revisited our separate rates analysis as a result of our 
collapsing decision discussed above, and have now considered COFCO and 
the five affiliates mentioned above as a collapsed entity for purposes 
of determining whether or not the collapsed entity as a whole is 
entitled to a separate rate.
    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). COFCO is owned 
by its affiliate China National, an exporter, which is owned by ``all 
of the people.'' COFCO also owns in part two preserved mushroom 
producers, COFCO Zhangzhou and Yu Xing. (Yu Xing has export rights but 
has never directly exported.) In addition to COFCO, China National owns 
in part Xiamen Jiahua (i.e., a preserved mushroom exporter) and Xiamen 
Jiahua owns in part Fujian Zishan (i.e., another preserved mushroom 
producer which also has export rights). Thus, a separate-rates analysis 
is necessary to determine whether the export activities of the 
collapsed entity as a whole 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 (``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 government 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 and its affiliates 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 placed 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

[[Page 54640]]

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 government 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 government control of 
its export functions: (1) Whether the export prices are set by, or 
subject to the approval of, a government 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.)
    COFCO and its collapsed affiliates each have asserted the 
following, where applicable: (1) It establishes its own export prices; 
(2) it negotiates contracts without guidance from any government 
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. Additionally, this collapsed entity's 
questionnaire responses indicate that its pricing during the POR does 
not suggest coordination among exporters. Furthermore, we examined 
documentation at verification which substantiated its claims as noted 
above (see China National/COFCO verification report at 3-12; COFCO 
Zhangzhou verification report at 3-6; Fujian Zishan verification report 
at 4-8; Xiamen Jiahua verification report at 3-7; and Yu Xing 
verification report at 3-7). As a result, there is a sufficient basis 
to determine that COFCO and its affiliates listed above have 
demonstrated as a whole a de facto absence of government control of 
their export functions and are entitled to a separate rate. 
Consequently, we have determined that the ``collapsed'' entity has met 
the criteria for the application of a separate rate.

Analysis of Comments Received

    All issues raised in the case briefs are addressed in the Decision 
Memo, which is hereby adopted by this notice. A list of the issues 
raised, all of which are in the Decision Memo, is attached to this 
notice as an Appendix. Parties can find a complete discussion of all 
issues raised in the briefs and the corresponding recommendations in 
this public memorandum which is on file in the Central Records Unit, 
room B-099 of the main Department building. In addition, a complete 
version of the Decision Memo can be accessed directly on the Web at 
http://ia.ita.doc.gov/frn. The paper copy and electronic version of the 
Decision Memo are identical in content.

Changes Since the Preliminary Results

    Based on the use of additional publicly available information 
submitted since the preliminary results, the comments received from the 
interested parties and verification findings, where applicable, we have 
made changes in the margin calculation for each respondent as noted 
below. For a discussion of these changes, see the ``Margin 
Calculations'' section of the Decision Memo.
    As discussed above, we collapsed COFCO with its three affiliated 
producers and two affiliated exporters in accordance with section 
771(33) of the Act and the criteria enumerated in 19 CFR 351.401(f). We 
also assigned the ``collapsed'' rate to COFCO and all of the affiliates 
which comprise the collapsed entity. See also Decision Memo at Comment 
1.
    For COFCO, we revised (1) the invoice numbers for five sales 
transactions reported in its November 10, 2003, U.S. sales listing; and 
(2) the amount reported in the field QTY2U for one U.S. sales 
transaction (see China National/COFCO Verification Report at page 3).
    For Fujian Zishan, we revised (1) its reported consumption ratios 
for salt, disodium starrous citrate, sodium metabisulfite, rongalite, 
water, electricity, coal, heavy diesel oil; and (2) its reported usage 
ratios for direct, indirect and packing labor (see Fujian Zishan 
Verification Report at pages 3 and 19).
    For Yu Xing, we revised (1) its reported consumption ratio for 
coal; and relied on (2) its labor usage ratios for canned brined 
mushroom production (i.e., growing, collecting, and harvesting) and 
canned fresh mushroom production (i.e., growing) as reported in exhibit 
15 of its September 9, 2003, supplemental questionnaire response 
(``SQR'') rather than in its February 9, 2004, SQR (see Yu Xing 
Verification Report at pages 3 and 16).
    For each of COFCO's collapsed producers, where applicable, we 
weight-averaged the normal values on a control number-specific basis 
rather than weight-averaging the factors reported for each control 
number. See Decision Memo at Comment 2.
    We corrected a calculation error by comparing COFCO's reported U.S. 
prices per can, instead of its U.S. prices per kilogram drained weight, 
to NV (the factors of which were reported on a per-can basis). See 
Decision Memo at Comment 11.
    For Green Fresh, we used the reported date of the sales invoice as 
the basis for determining which sales Green Fresh was required to 
report in the administrative review. See Decision Memo at Comment 6.
    For Guangxi Yulin, we revised its per-unit direct labor calculation 
based on information submitted in its July 12, 2004, SQR.
    For Primera Harvest, we corrected the per-unit consumption factor 
amounts for cotton seed meal and fertilizer noted in the Department's 
verification report and used in our preliminary margin calculation by 
multiplying the factor amounts for these inputs by the correct fresh 
mushrooms-to-canned mushrooms conversion ratio (``conversion ratio''). 
We corrected another error in our calculation by not applying the 
conversion ratio a second time to the factor amounts for these inputs 
in the margin program. For mother spawn, we also corrected the per-unit 
consumption factor amount noted in the verification report and used in 
our preliminary margin calculation by multiplying the factor amount for 
this input by the correct conversion ratio. See Decision Memo at 
Comment 15.
    We calculated average surrogate percentages for factory overhead, 
and selling, general and administrative (``SG&A'') expenses using the 
2002-2003 financial reports of Agro Dutch Foods Ltd. (``Agro Dutch'') 
and Flex Foods Ltd. (``Flex Foods''). We calculated a surrogate 
percentage for profit using only the 2002-2003 financial report of Flex 
Foods. See Decision Memo at Comment 8.
    We corrected our SG&A calculation ratio for Agro Dutch by removing 
customs duties and freight from Agro Dutch's total SG&A expenses. See 
Decision Memo at Comment 9.
    To value fresh mushrooms, we used purchase data contained in the 
2002-2003 financial report of Premier

[[Page 54641]]

Explosives Ltd. (``Premier''). See Decision Memo at Comment 12.
    To value chicken manure and spawn, we used data contained in the 
2002-2003 financial reports of Agro Dutch, Flex Foods, and Premier.
    To value cow manure and general straw, we used data contained in 
the 2002-2003 financial report of Agro Dutch and Flex Foods.
    To value rice husks, we used May 2003 Indian price data from Hindu 
Business Line. See Decision Memo at Comment 14.
    To value rice straw, we used data contained in Premier's 2002-2003 
financial report.
    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' 2002-2003 financial report.
    To value wheat grain and super phosphate, we used price data 
contained in Flex Foods' 2002-2003 financial report.
    To value urea, we used an average price based on February 2002-
January 2003 data contained in Chemical Weekly and World Trade Atlas, 
as well as data contained in Flex Foods' 2002-2003 financial report.
    To reflect the correction of a conversion error, we revised the 
surrogate value used for tin plate in the Preliminary Results based on 
price data available in the 2002-2003 financial report of Agro Dutch 
and February 2002-January 2003 data from World Trade Atlas.

Final Results of Reviews

    We determine that the following weighted-average margin percentages 
exist for the period February 1, 2002, through January 31, 2003:

------------------------------------------------------------------------
                                                              Margin
                        Exporter                             (percent)
------------------------------------------------------------------------
China Processed Food Import & Export Company (``COFCO'')            3.92
 (which includes its affiliates China National Cereals,
 Oils, & Foodstuffs Import & Export Corporation, COFCO
 (Zhangzhou) Food Industrial Co., Ltd., Fujian Zishan
 Group Co., Xiamen Jiahua Import & Export Trading Co.,
 Ltd., and Fujian Yu Xing Fruit & Vegetable Foodstuff
 Development Co.).......................................
Gerber Food (Yunnan) Co., Ltd...........................          198.63
Green Fresh Foods (Zhangzhou) Co., Ltd..................           42.90
Guangxi Yulin Oriental Food Co., Ltd....................            0.00
Primera Harvest (Xiangfan) Co., Ltd.....................           82.22
Shantou Hongda Industrial General Corporation...........          198.63
Shenxian Dongxing Foods Co., Ltd........................           66.50
PRC-Wide Rate...........................................          198.63
------------------------------------------------------------------------

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 
these reviews directly to CBP within 15 days of publication of the 
final results of these reviews. For assessment purposes, we do not have 
the actual entered value for any of the respondents for which we 
calculated a margin because they are not the importers of record for 
the subject merchandise. Therefore, we have calculated individual 
importer- or 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 have calculated importer- or customer-specific ad 
valorem ratios based on export prices. We will instruct CBP to assess 
antidumping duties on all appropriate entries covered by these reviews 
if any importer or customer-specific assessment rate calculated in the 
final results of these reviews 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 in 
effect at the time of entry.

Cash Deposit Requirements

    Bonding will no longer be permitted to fulfill security 
requirements for shipments from Primera Harvest of certain preserved 
mushrooms from the PRC entered, or withdrawn from warehouse, for 
consumption on or after the publication date of these final results.
    The following deposit rates shall be required for merchandise 
subject to the order entered or withdrawn from warehouse, for 
consumption on or after the publication date of these final results, as 
provided by section 751(a)(1) and 751(a)(2)(B) of the Act: (1) The cash 
deposit rates for COFCO and its five affiliates (i.e., China National, 
COFCO Zhangzhou, Fujian Zishan, Yu Xing, and Xiamen Jiahua), Gerber, 
Green Fresh, Guangxi Yulin, Primera Harvest (i.e., for subject 
merchandise both manufactured and exported by Primera Harvest), Shantou 
Hongda, and Shenxian Dongxing will be the rates indicated above; (2) 
the cash deposit rate for PRC exporters for whom the Department has 
rescinded the review or for whom a review was not requested (e.g., 
Zhangzhou Jingxiang, Minhui, Zhongjia, Raoping Xingyu, and Shenzhen 
Qunmingyuan) will continue to be the rate assigned in an earlier 
segment of the proceeding or the PRC-wide rate of 198.63 percent, 
whichever applicable; (3) the cash deposit rate for the PRC NME entity 
(including Gerber and Shantou Hongda) and for subject merchandise 
exported but not manufactured by Primera Harvest will continue to be 
the PRC-wide rate of 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 supplier of that exporter. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.
    This notice also 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 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 doubled antidumping duties.
    This notice also serves as the only reminder to parties subject to 
administrative protective orders (APO) of their responsibility 
concerning the return or destruction of proprietary information 
disclosed under APO in accordance with 19 CFR 351.305(a). Timely 
written notification of the return/destruction of APO materials or 
conversion to judicial protective order is

[[Page 54642]]

hereby requested. Failure to comply with the regulations and terms of 
an APO is a violation which is subject to sanction.
    We are issuing and publishing these determinations and notice in 
accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act 
and 19 CFR 351.213 and 351.214.

    Dated: September 1, 2004.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.

Appendix--Issues in Decision Memo

Comments

Issue 1: Collapsing of COFCO's Affiliates and Rate Assignment
Issue 2: Calculating a Weighted-Average Normal Value for Unique 
Products Which Were Produced by More Than One of COFCO's Affiliated 
Producers
Issue 3: Valuing the Intermediate Input for Producers Which Leased 
Farm Land to Produce the Intermediate Input
Issue 4: Shenxian Dongxing's Reported Mushroom Growing Inputs
Issue 5: Application of Facts Available to Gerber and Green Fresh
Issue 6: Inclusion of Green Fresh's U.S. Affiliate's Sales in the 
Margin Analysis and the Department's Affiliation Decision with 
Respect to Two of Green Fresh's U.S. Customers
Issue 7: Use of Publicly Available Information Contained in the 
Petitioner's June 14, 2004, Submission
Issue 8: Use of Flex Foods' Financial Data to Derive Surrogate 
Financial Percentages
Issue 9: Inclusion of Certain Expense Line Items to Derive an SG&A 
Surrogate Percentage Based on Agro Dutch's Financial Data
Issue 10: Deducting Foreign Inland Freight, Brokerage, and Handling 
Expenses from U.S. Price
Issue 11: U.S. Price to Normal Value Comparisons to Determine 
COFCO's Margin
Issue 12: Surrogate Value for Fresh Mushrooms
Issue 13: Surrogate Value for Soil
Issue 14: Surrogate Value for Rice Husks
Issue 15: Miscellaneous Corrections

[FR Doc. 04-20463 Filed 9-8-04; 8:45 am]
BILLING CODE 3510-DS-P