[Federal Register Volume 69, Number 228 (Monday, November 29, 2004)]
[Notices]
[Pages 69350-69357]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3360]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-863]


Notice of Preliminary Results of Antidumping Duty New Shipper 
Reviews: Honey From the People's Republic of China

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

ACTION: Notice of Preliminary Results of Antidumping Duty New Shipper 
Review.

-----------------------------------------------------------------------

SUMMARY: In response to requests from Anhui Honghui Foodstuff (Group) 
Co., Ltd. (Anhui Honghui), Eurasia Bee's Products Co., Ltd. (Eurasia), 
Inner Mongolia Youth Trade Development Co., Ltd. (Inner Mongolia 
Youth), and Jiangsu Kanghong Natural Healthfoods Co., Ltd. (Jiangsu 
Kanghong), the U.S. Department of Commerce (the Department) is 
conducting new shipper reviews of the antidumping duty order on honey 
from the People's Republic of China (PRC). The period of review (POR) 
is December 1, 2002, through November 30, 2003. The preliminary results 
are listed below in the section titled ``Preliminary Results of 
Review.'' Interested parties are invited to comment on these 
preliminary results.

EFFECTIVE DATE: November 29, 2004.

FOR FURTHER INFORMATION CONTACT: Kristina Boughton (for Anhui Honghui 
and Eurasia) at (202) 482-8173 or Anya Naschak (for Inner Mongolia 
Youth and Jiangsu Kanghong) at (202) 482-6375; Office of Antidumping 
and Countervailing Operations, China/NME Group, Office Nine, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW., Washington, DC 
20230.

SUPPLEMENTARY INFORMATION: 

Background

    On December 10, 2001, the Department published in the Federal 
Register an antidumping duty order on honey from the PRC. See Notice of 
Amended Final Determination of Sales at Less Than Fair Value and 
Antidumping Duty Order; Honey from the People's Republic of China, 66 
FR

[[Page 69351]]

63670 (December 10, 2001). The Department received timely requests from 
Anhui Honghui, Eurasia, Foodworld International Club Limited 
(Foodworld), Inner Mongolia Youth, Jiangsu Kanghong, and Shanghai 
Shinomiel International Trade Corporation (Shanghai Shinomiel), in 
accordance with 19 CFR 351.214(c), for new shipper reviews of the 
antidumping duty order on honey from the PRC, which has a December 
annual anniversary month and a June semi-annual anniversary month. On 
January 30, 2004, the Department found that the requests for review 
with respect to Anhui Honghui, Eurasia, Inner Mongolia Youth, and 
Jiangsu Kanghong met all the regulatory requirements set forth in 19 
CFR 351.214(b) and initiated these new shipper antidumping duty 
reviews. The Department did not initiate a new shipper review for 
Foodworld because its shipment had not entered the United States by the 
date of initiation, nor for Shanghai Shinomiel because the Department 
determined that it was not a new shipper. See Honey From the People's 
Republic of China: Initiation of New Shipper Antidumping Duty Reviews, 
69 FR 5835 (February 6, 2004).
    On February 4, 2004, we issued antidumping duty questionnaires to 
Anhui Honghui, Eurasia, Inner Mongolia Youth, and Jiangsu Kanghong. On 
February 13, 2004, we issued supplemental questionnaires to Anhui 
Honghui and Jiangsu Kanghong. On February 27, 2004, we received 
information from Anhui Honghui and Jiangsu Kanghong regarding intra-
company sales. On March 16, 2004, we received a response to Section A 
of our antidumping duty questionnaire from Inner Mongolia Youth. On 
March 17, 2004, we received responses to Section A of our antidumping 
duty questionnaire from Anhui Honghui, Eurasia, and Jiangsu Kanghong.
    On March 25, 2004, we invited interested parties to comment on the 
Department's surrogate country selection and/or significant production 
in the potential countries and to submit publicly available information 
to value the factors of production.
    On March 30, 2004, we received a response to Sections C and D of 
our antidumping duty questionnaire from Inner Mongolia Youth. On March 
31, 2004, we received responses to Sections C and D of our antidumping 
duty questionnaire from Anhui Honghui, Eurasia, and Jiangsu Kanghong 
and, where applicable, from their U.S. affiliates and/or the respective 
importers.
    On March 30 and April 1 and 13, 2004, the American Honey Producers 
Association and the Sioux Honey Association (collectively, the 
petitioners) submitted comments on the respondents' questionnaire 
responses.
    On April 15, 2004, the petitioners submitted comments on the 
selection of the proper surrogate country.
    On April 16, 2004, we issued a supplemental questionnaire to Inner 
Mongolia Youth. On April 16 and 23, 2004, we issued supplemental 
questionnaires to Anhui Honghui and Jiangsu Kanghong. On April 19 and 
23, 2004, we issued supplemental questionnaires to Eurasia. We also 
issued questionnaires to the respondents' U.S. customers on April 28, 
2004. On April 30, 2004, we received a response to our supplemental 
questionnaire from Inner Mongolia Youth. On May 3, 2004, we received 
responses to our supplemental questionnaires from Anhui Honghui and 
Jiangsu Kanghong. On May 6 and 7, 2004, we received a response to our 
supplemental questionnaire from Eurasia. We received responses to our 
questionnaires to U.S. customers on May 7, 2004.
    On May 10, 2004, the petitioners and respondents submitted comments 
on surrogate information with which to value the factors of production 
in this proceeding.
    On May 12, 2004, the petitioners submitted comments on the 
respondents' supplemental questionnaire responses. On May 14, 2004, we 
issued a second supplemental questionnaire to Eurasia. On May 17, 2004, 
we issued a second supplemental questionnaire to Inner Mongolia Youth.
    On May 20, 2004, the respondents commented on the petitioners' 
surrogate value submission.
    On May 21, 2004, we issued a third supplemental questionnaire to 
Eurasia. On May 21, 2004, we issued a second supplemental questionnaire 
to Jiangsu Kanghong. On May 24, 2004, we received a second supplemental 
questionnaire response from Inner Mongolia Youth. On May 26, 2004, we 
issued a second supplemental questionnaire to Anhui Honghui.
    On May 28, 2004, the petitioners submitted rebuttal comments to the 
respondents' arguments on surrogate values. Also on May 28, 2004, we 
received a response to our supplemental questionnaire from Jiangsu 
Kanghong.
    On June 1, 2004, the Department published in the Federal Register a 
notice of extension of the preliminary results until no later than 
September 27, 2004. See Notice of Extension of Preliminary Results of 
New Shipper Antidumping Duty Reviews: Honey from the People's Republic 
of China, 69 FR 30881 (June 1, 2004).
    On June 2 through 15, 2004, we notified the 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 June 14 through 18, 2004, the Department conducted verification 
of the information submitted by Inner Mongolia Youth and its 
unaffiliated producer, Qinhuangdao Municipal Dafeng Industrial Co., 
Ltd. (QDI).
    On June 14, 2004, we issued a third supplemental questionnaire to 
Anhui Honghui and Jiangsu Kanghong. We received a response to these 
questionnaires on June 17, 2004.
    On June 21 through 25, 2004, the Department conducted verification 
of the information submitted by Jiangsu Kanghong and Anhui Honghui.
    On June 22, 2004, Jiangsu Kanghong submitted for the record minor 
corrections to its responses presented to the Department at the start 
of verification. On June 24, 2004, Anhui Honghui submitted minor 
corrections to its responses presented to the Department at the start 
of verification.
    On June 28, through July 2, 2004, the Department conducted 
verification of the information submitted by Eurasia and its 
unaffiliated producer, Chuzhou Huadi Foodstuffs Co., Ltd. (Chuzhou 
Huadi).
    On June 29, 2004, Eurasia submitted minor corrections to its 
responses which it presented to the Department's verifiers at the start 
of verification.
    On July 1 and 6, 2004, we notified the U.S. affiliates of Jiangsu 
Kanghong and Anhui Honghui, respectively, 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 July 8 and 9, 2004, the Department 
conducted verification of the information submitted by Jiangsu 
Kanghong's U.S. affiliate, B. Master, Inc. (B. Master). On July 14 
through 16, 2004, the Department conducted verification of the 
information submitted by Anhui Honghui's U.S. affiliate, Hong Hui Group 
(USA) Corp.
    On July 26, 2004, we issued the verification report for Inner 
Mongolia Youth and its unaffiliated producer. See Memorandum to the 
File from Anya Naschak and Rachel Kreissl, dated July 26, 2004, 
entitled ``Verification of Factors of Production for Qinhuangdao 
Municipal Dafeng Industrial Co., Ltd. (``QDI'') and Sales of Inner 
Mongolia

[[Page 69352]]

Youth Trade Development Co., Ltd. (``IMY'') in the New Shipper Review 
of Honey from the People's Republic of China (``PRC'')'' (Inner 
Mongolia Youth Verification Report).
    On August 12, 2004, we issued the verification report for Jiangsu 
Kanghong and its U.S. affiliate. See Memorandum to the File from Salim 
Bhabhrawala and Anya Naschak, dated August 12, 2004, entitled 
``Verification of Sales and Factors of Production Data Submitted by 
Jiangsu Kanghong Natural Healthfoods Co., Ltd. (Jiangsu) and its 
affiliate B. Master, Inc. (B. Master)'' (Jiangsu Kanghong Verification 
Report).
    On August 25, 2004, we issued the verification reports for Anhui 
Honghui and its U.S. affiliate. See Memoranda to the File from Jim 
Nunno and Kristina Boughton, dated August 25, 2004, entitled 
``Verification of U.S. Sales and Factors of Production for Respondent 
Anhui Honghui Foodstuff (Group) Co., Ltd. (Anhui Honghui)'' (Anhui 
Honghui Verification Report) and ``Sales Verification of Questionnaire 
Responses Submitted by Anhui Honghui Foodstuff (Group) Co., Ltd. (Anhui 
Honghui) on behalf of its U.S. affiliate, Hong Hui Group (USA) Corp. 
(Hong Hui USA)'' (Hong Hui USA Verification report).
    On August 26, 2004, we issued the verification reports for Eurasia 
and its unaffiliated producer. See Memoranda to the File from Jim Nunno 
and Kristina Boughton, dated August 26, 2004, entitled ``Verification 
of U.S. Sales and Factors of Production for Respondent Eurasia Bee's 
Products Co., Ltd. (Eurasia)'' (Eurasia Verification Report) and 
``Verification of Factors of Production for Respondent Chuzhou Huadi 
Foodstuffs Co., Ltd. (Chuzhou Huadi)'' (Chuzhou Huadi verification 
report).
    On September 24, 2004, the Department extended the time limits to 
complete the Preliminary Results of this new shipper review until 
November 19, 2004. See Notice of Extension of Preliminary Results of 
New Shipper Antidumping Duty Reviews: Honey from the People's Republic 
of China, 69 FR 58893 (October 1, 2004).

Scope of the Order

    The products covered by these reviews are natural honey, artificial 
honey containing more than 50 percent natural honey by weight, 
preparations of natural honey containing more than 50 percent natural 
honey by weight, and flavored honey. The subject merchandise includes 
all grades and colors of honey whether in liquid, creamed, comb, cut 
comb, or chunk form, and whether packaged for retail or in bulk form. 
The merchandise subject to these reviews are currently classifiable 
under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the 
Harmonized Tariff Schedule of the United States (HTSUS). Although the 
HTSUS subheadings are provided for convenience and the customs 
purposes, the Department's written description of the merchandise under 
order is dispositive.

Verification

    As provided in section 782(i)(3) of the Act and section 351.307 of 
the Department's regulations and as stated above, we conducted 
verification of the questionnaire responses of Anhui Honghui, Eurasia, 
Inner Mongolia Youth, and Jiangsu Kanghong during June and July 2004. 
We used standard verification procedures, including on-site inspections 
of the production facilities and examination of relevant sales and 
financial records. Our verification results are outlined in the 
verification reports, public versions of which are on file in the 
Central Records Unit (CRU) located in room B-099 of the Main Commerce 
Building.

New Shipper Status

    Consistent with our practice, we investigated the bona fide nature 
of the sales made by Anhui Honghui, Eurasia, Inner Mongolia Youth, and 
Jiangsu Kanghong for these new shipper reviews. We found no evidence 
that the sales in question are not bona fide sales. Based on our 
investigation into the bona fide nature of the sales, the questionnaire 
responses submitted by each company, and our verification thereof, we 
preliminarily determine that each of the respondents has met the 
requirements to qualify as a new shipper during the POR. We have 
determined that each respondent made its first sale and/or shipment of 
subject merchandise to the United States during the POR, and that it 
was not affiliated with any exporter or producer that had previously 
shipped subject merchandise to the United States. Therefore, for 
purposes of these preliminary results of review, we are treating the 
respondents' sales of honey to the United States as appropriate 
transactions for these new shipper reviews.

Separate Rates

    In proceedings involving nonmarket economy (NME) countries, the 
Department begins with a presumption that all companies within the 
country are subject to government control and, thus, should be assigned 
a single antidumping duty rate (i.e., a PRC-wide entity rate) unless an 
exporter can affirmatively demonstrate an absence of government 
control, both in law (de jure) and in fact (de facto), with respect to 
its export activities. To establish whether a company is sufficiently 
independent in its export activities from government control to be 
entitled to a separate, company-specific rate, the Department analyzes 
the exporting entity in an NME country under the test established in 
the Final Determination of Sales at Less Than Fair Value: Sparklers 
from the People's Republic of China, 56 FR 20588, 20589 (May 6, 1991) 
(Sparklers), and amplified by the Final Determination of Sales at Less 
Than Fair Value: Silicon Carbide from the People's Republic of China, 
59 FR 22585, 22586-22587 (May 2, 1994) (Silicon Carbide).
    In these reviews, Anhui Honghui, Eurasia, Inner Mongolia Youth, and 
Jiangsu Kanghong requested a separate company-specific rate, and 
provided separate-rate information in their responses to our original 
and supplemental questionnaires. Accordingly, we performed a separate-
rates analysis to determine whether each producer/exporter is 
independent from government control. See Notice of Final Determination 
of Sales at Less Than Fair Value: Bicycles from the People's Republic 
of China, 61 FR 56570 (April 30, 1996).

De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
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. 
See Sparklers, 56 FR 20588, 20589.
    Each respondent has placed on the record a number of documents to 
demonstrate absence of de jure control, including the ``Company Law of 
the People's Republic of China'' (December 29, 1993), the ``Foreign 
Trade Law of the People's Republic of China'' (May 12, 1994), and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations'' (June 3, 1988). The 
Department has analyzed such PRC laws and found that they establish an 
absence of de jure control. See, e.g., Preliminary Results of New 
Shipper Review: Certain Preserved Mushrooms from the People's Republic 
of China, 66 FR 30695, 30696 (June 7, 2001). At verification, we found 
that each respondent's business license and ``Certificate of Approval'' 
for enterprises with foreign trade rights in

[[Page 69353]]

the PRC were granted in accordance with these laws. Moreover, the 
results of verification support the information provided regarding 
these PRC laws. For further information, see the company-specific 
verification reports. Therefore, we preliminarily determine that there 
is an absence of de jure control over each respondent's export 
activities.

De Facto Control

    Typically, the Department considers four factors in evaluating 
whether a 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 its management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide at 22587.
    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 at 22586-22587. Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether respondents are, in fact, subject to a degree of 
governmental control which would preclude the Department from assigning 
separate rates.
    Anhui Honghui has asserted the following: (1) It is a privately 
owned company; (2) there is no government participation in its setting 
of export prices; (3) its chief executive officers and authorized 
employees have the authority to bind sales contracts; (4) it does not 
have to notify any government authorities of its management selection; 
(5) there are no restrictions on the use of its export revenue; and (6) 
it is responsible for financing its own losses. Anhui Honghui's 
questionnaire responses do not suggest that pricing is coordinated 
among exporters of PRC honey.
    Eurasia has asserted the following: (1) It is a privately owned 
limited liability company; (2) there is no government participation in 
its setting of export prices; (3) its general manager has the authority 
to bind sales contracts; (4) it does not have to notify any government 
authorities of its management selection; (5) there are no restrictions 
on the use of its export revenue; and (6) it is responsible for 
financing its own losses. Eurasia's questionnaire responses do not 
suggest that pricing is coordinated among exporters of PRC honey.
    Inner Mongolia Youth has asserted the following: (1) It is a 
privately owned company; (2) there is no government participation in 
its setting of export prices; (3) its chief executive officers and 
authorized employees have the authority to bind sales contracts; (4) it 
does not have to notify any government authorities of its management 
selection; (5) there are no restrictions on the use of its export 
revenue; and (6) it is responsible for financing its own losses. Inner 
Mongolia Youth's questionnaire responses do not suggest that pricing is 
coordinated among exporters of PRC honey.
    Jiangsu Kanghong has asserted the following: (1) It is a privately 
owned limited liability company (2) there is no government 
participation in its setting of export prices; (3) its general manager 
has the authority to bind sales contracts; (4) it does not have to 
notify any government authorities of its management selection; (5) 
there are no restrictions on the use of foreign currency earned; and 
(6) its executive director decides how profits will be used. Jiangsu 
Kanghong's questionnaire responses do not suggest that pricing is 
coordinated among exporters of PRC honey.
    Furthermore, our analysis of the responses during verification 
reveal no other information indicating the existence of government 
control. See the company-specific verification reports for further 
information. Consequently, because evidence on the record indicates an 
absence of government control, both in law and in fact, over each 
respondent's export activities, we preliminarily determine that each 
respondent has met the criteria for the application of a separate rate.

Normal Value Comparisons

    To determine whether the respondents' sales of the subject 
merchandise to the United States were made at prices below normal 
value, we compared their U.S. price to normal value, as described in 
the ``U.S. Price'' and ``Normal Value'' sections of this notice.

U.S. Price

Export Price

    For Eurasia, Inner Mongolia Youth, and certain sales made by 
Jiangsu Kanghong, we based the U.S. price on export price (EP), in 
accordance with section 772(a) of the Act, because the first sale to an 
unaffiliated purchaser was made prior to importation, and constructed 
export price (CEP) was not otherwise warranted by the facts on the 
record. We calculated EP based on the packed price from the exporter to 
the first unaffiliated customer in the United States.
    For Eurasia, we deducted foreign inland freight, foreign brokerage 
and handling expenses, international ocean freight, marine insurance, 
U.S. brokerage and handling, U.S. import duties, U.S. inland freight 
expenses, and commission expenses from the starting price (gross unit 
price), in accordance with section 772(c) of the Act. For Inner 
Mongolia Youth, we deducted foreign inland freight and foreign 
brokerage and handling expenses from the starting price (gross unit 
price), in accordance with section 772(c) of the Act. For Jiangsu 
Kanghong, where applicable, we deducted foreign inland freight, foreign 
brokerage and handling expenses, international ocean freight, U.S. 
brokerage and handling, and U.S. import duties from the starting price 
(gross unit price), in accordance with section 772(c) of the Act.
    As all foreign inland freight, foreign brokerage and handling, and 
marine insurance expenses (where applicable) were provided by PRC 
service providers or paid for in renminbi, we valued these services 
using Indian surrogate values (see ``Factors of Production'' section 
below for further discussion). For international freight (where 
applicable) we used the reported expense because the respondents used 
market-economy freight carriers and paid for those expenses in a 
market-economy currency.

Constructed Export Price

    For Anhui Honghui, we calculated CEP in accordance with section 
772(b) of the Act, because the sales were made on behalf of Anhui 
Honghui by its U.S. affiliate to unaffiliated purchasers. We based CEP 
on packed, delivered or ex-warehouse prices to the first unaffiliated 
purchaser in the United States. Where appropriate, we made deductions 
from the starting price (gross unit price) for movement expenses in 
accordance with section 772(c)(2)(A) of the Act; these included foreign 
inland freight, foreign brokerage and handling charges, international 
ocean freight, marine insurance, U.S. brokerage and handling, U.S. 
import duties, and U.S. inland freight expenses. As all foreign inland 
freight, foreign brokerage and handling, and marine insurance expenses 
were provided by PRC service providers and/or paid for in renminbi, we 
valued these services using Indian surrogate values. For international 
freight, we used the reported expense because the

[[Page 69354]]

respondent used market-economy freight carriers and paid for those 
expenses in a market-economy currency.
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (credit expenses) 
and indirect selling expenses. We also made an adjustment for profit in 
accordance with section 772(d)(3) of the Act.
    For Jiangsu Kanghong, we also calculated CEP in accordance with 
section 772(b) of the Act. We found that some of Jiangsu Kanghong's 
sales during the POR were CEP sales because the sales were made on 
behalf of Jiangsu Kanghong by its U.S. affiliate to unaffiliated 
purchasers. We based CEP on packed, delivered or ex-warehouse prices to 
the first unaffiliated purchaser in the United States. Where 
appropriate, we made deductions from the starting price (gross unit 
price) for movement expenses in accordance with section 772(c)(2)(A) of 
the Act; these included, where appropriate, foreign inland freight and 
foreign brokerage and handling charges, international ocean freight, 
U.S. brokerage and handling fees, U.S. import duties, and U.S. inland 
freight expenses. As all foreign inland freight and foreign brokerage 
and handling expenses were provided by PRC service providers or paid 
for in renminbi, we valued these services using Indian surrogate values 
(see ``Factors of Production'' section below for further discussion). 
For international freight, we used the reported expense because the 
respondent used market-economy freight carriers and paid for those 
expenses in a market-economy currency.
    In accordance with section 772(d)(1) of the Act, we also deducted 
those selling expenses associated with economic activities occurring in 
the United States, including direct selling expenses (credit expenses 
and lab test expenses) and indirect selling expenses. We also made an 
adjustment for profit in accordance with section 772(d)(3) of the Act.
    For a more detailed explanation of the company-specific adjustments 
that we made in the calculation of the dumping margins for these 
preliminary results, see the company-specific preliminary results 
analysis memoranda dated November 19, 2004. Public versions of these 
memoranda are on file in the CRU.

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 these reviews have contested such treatment. Accordingly, we 
calculated NV in accordance with section 773(c) of the Act, which 
applies to NME countries.

B. Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production, to the extent possible, in one or 
more market-economy countries that (1) are at a level of economic 
development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. India is among the 
countries comparable to the PRC in terms of overall economic 
development, as identified in the February 24, 2004, Memorandum from 
the Office of Policy to Abdelali Elouaradia.\1\ 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 
to the file from Anya Naschak through James Doyle entitled, ``Selection 
of a Surrogate Country,'' dated November 19, 2004.
---------------------------------------------------------------------------

    \1\ This memorandum is attached to the letters sent to 
interested parties to this proceeding requesting comments on 
surrogate country and surrogate value information, dated March 25, 
2004.
---------------------------------------------------------------------------

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 factors 
of production reported by the producer or exporter for materials, 
energy, labor, and packing. To calculate NV, we multiplied the reported 
unit factor quantities by publicly available Indian values.
    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data, in accordance with our 
practice. When we used publicly available import data from the Ministry 
of Commerce of India (Indian Import Statistics), for December 2002 
through November 2003 to value inputs sourced domestically by PRC 
suppliers, we added to the Indian surrogate values a surrogate freight 
cost calculated using the shorter of the reported distance from the 
domestic supplier to the factory or the distance from the nearest port 
of export to the factory. This adjustment is in accordance with the 
Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. 
United States, 117 F. 3d 1401, 1408 (Fed. Cir. 1997). When we used non-
import surrogate values for factors sourced domestically by PRC 
suppliers, we based freight for inputs on the actual distance from the 
input supplier to the site at which the input was used. In instances 
where we relied on Indian import data to value inputs, in accordance 
with the Department's practice, we excluded imports from both NME 
countries and countries deemed to maintain broadly available, non-
industry-specific subsidies which may benefit all exporters to all 
export markets (i.e., Indonesia, South Korea, and Thailand) from our 
surrogate value calculations. See, e.g., Final Determination of Sales 
at Less Than Fair Value: Certain Automotive Replacement Glass 
Windshields from the People's Republic of China, 67 FR 6482 (February 
12, 2002) and accompanying Issues and Decision Memorandum at Comment 1. 
See, also, Notice of Preliminary Determination of Sales at Less Than 
Fair Value, Postponement of Final Determination, and Affirmative 
Preliminary Determination of Critical Circumstances: Certain Color 
Television Receivers from the People's Republic of China, 68 FR 66800, 
66808 (November 28, 2003), unchanged in the Department's final results 
at 69 FR 20594 (April 16, 2004). Also consistent with our policy, we 
excluded, in a few instances, import data that appeared to be 
aberrational when compared to the average import value of all countries 
not excluded. See Notice of Final Determination of Sales at Less Than 
Fair Value: Certain Color Television Receivers from the People's 
Republic of China, 69 FR 20594, April 16, 2004, and accompanying Issues 
and Decision Memorandum at Comment 5. See

[[Page 69355]]

Memorandum to the File, through James Doyle, Office Director, entitled, 
``Factors of Production Valuation Memorandum for the Preliminary 
Results of the Antidumping Duty New Shipper Review of Honey from the 
People's Republic of China,'' dated November 19, 2004 (Factor Valuation 
Memo), for a complete discussion of the import data that we excluded 
from our calculation of surrogate values. This memorandum is on file in 
the CRU located in room B-099 of the Main Commerce Building.
    Where we could not obtain publicly available information 
contemporaneous with the POR to value factors, we adjusted the 
surrogate values using the Indian Wholesale Price Index (WPI) as 
published in the International Financial Statistics (IFS) of the 
International Monetary Fund (IMF), for those surrogate values in Indian 
rupees. We converted all surrogate values denominated in foreign 
currencies to U.S. dollars using the applicable average exchange rate 
for the POR. We based the average exchange rates on exchange rate data 
from the Import Administration Web site at http://ia.ita.doc.gov/exchange/index.html. See Factor Valuation Memo.
    We valued the factors of production as follows:
    To value raw honey, we used the average of two raw honey prices, 
provided in an article published in The Tribune (of India) on December 
15, 2003, entitled, ``Honey sweet despite price fall.'' A copy of the 
original article, which was submitted by the petitioners, is attached 
at Attachment 3 of the Factor Valuation Memo. The respondents in this 
review submitted other news articles to be used as potential sources 
for the surrogate value data for raw honey, including an article from 
the Hindu Business Line dated April 2003 and an article from 
IndiaInfoline.com dated September 2003. We have not used either of 
these alternate sources proposed by respondents in the preliminary 
results, as discussed in the Factor Valuation Memo.
    In selecting the raw honey values from The Tribune (of India) 
article as the best available information with which to value raw honey 
in this proceeding, we note that the Department has conducted extensive 
research on potential raw honey surrogate values for these new shipper 
reviews. The relevant research is included as Attachment 17 of the 
Factor Valuation Memo. Additionally, the Department contacted U.S. 
Foreign Agriculture Service (FAS) officers in India to conduct research 
on its behalf (see Memorandum to the File from Anya Naschak, dated 
November 19, 2004). The information obtained from these FAS officers 
included price quotes from the North India Beekeepers Society (NIBS). 
The Department also evaluated the reasonableness of using Mahabaleshwar 
Honey Producers Cooperative Society, Ltd.'s (MHPC) cost of raw honey 
from its financial statements. None of these other sources of 
information are as reliable as the raw honey values appearing in The 
Tribune (of India) article. Specifically, the Department cannot confirm 
the quality or reliability of the NIBS values, and the MHPC price is 
that of a single producer. In addition, we note that ``the Department's 
preference is to use industry-wide values, rather than the values of a 
single producer, wherever possible, because industry-wide values are 
more representative of prices/costs of all producers in the surrogate 
country.'' See Notice of Final Determination of Sales at Less Than Fair 
Value: Honey from the People's Republic of China, 66 FR 50608 (October 
4, 2001), and accompanying Issues and Decision Memorandum at Comment 2 
(Final Determination). See also Final Results of the First 
Administrative Review of the Antidumping Duty Order on Honey from the 
People's Republic of China, 69 FR 25060 (May 5, 2004), and accompanying 
Issues and Decision Memorandum at Comment 3.
    The use of The Tribune (of India) article is also consistent with 
the Department's recent decision in the third new shipper review of 
this order. See Honey from the People's Republic of China: Notice of 
Final Results of Antidumping Duty New Shipper Review and Final 
Rescission, In Part, of Antidumping Duty New Shipper Review, 69 FR 
64029 (November 3, 2004) (NSR Chengdu Final Results), and accompanying 
Issues and Decision Memorandum at Comment 4. For a further discussion 
of this issue, see Factor Valuation Memo.
    To value water, we used the water tariff rate, as reported on the 
Municipal Corporation of Greater Mumbai's website. See http://www.mcgm.gov.in/Stat%20&%20Fig/Revenue.htm. Because this data is not 
contemporaneous with the POR, an adjustment has been made for inflation 
using WPI data.
    To value diesel fuel for autos, we used the rate published in 
International Energy Agency, Energy Prices and Taxes--Quarterly 
Statistics (Fourth Quarter 2003), under ``Automotive Diesel for 
Commercial Use.'' We also adjusted the surrogate values to include 
freight costs incurred between the shorter of the two reported 
distances from either (1) the closest PRC seaport to the location 
producing the subject merchandise, or from (2) the PRC domestic 
materials supplier to the location producing the subject merchandise. 
See Factor Valuation Memo.
    To value beeswax, coal, paint, and labels we used Indian Import 
Statistics, contemporaneous with the POR, removing data from certain 
countries as discussed in the Factor Valuation Memo. We also adjusted 
the surrogate values to include freight costs incurred between the 
shorter of the two reported distances from either (1) the closest PRC 
seaport to the location producing the subject merchandise, or from (2) 
the PRC domestic materials supplier to the location producing the 
subject merchandise. See Factor Valuation Memo.
    We valued electricity using the Annual Report (2001-2002) on The 
Working of State Electricity Boards & Electricity Departments of the 
Planning Commission (Power and Energy Division) of the Government of 
India (May 2002), as submitted by respondents in their May 10, 2004, 
submission at Exhibit 5. We inflated the value for electricity using 
the POR average WPI rate. See Factor Valuation Memo.
    To value drums, we relied upon a price quote from an Indian steel 
drum manufacturer from September 2000, as provided by Petitioners in 
their May 10, 2004, submission at Exhibit 9. We inflated the value for 
drums using the POR average WPI rate, and adjusted the surrogate values 
to include freight costs incurred between the shorter of the two 
reported distances from either (1) the closest PRC seaport to the 
location producing the subject merchandise, or from (2) the PRC 
domestic materials supplier to the location producing the subject 
merchandise. See Factor Valuation Memo.
    To value factory overhead, selling, general, and administrative 
expenses (SG&A), and profit, we relied upon publicly available 
information in the 2002-2003 annual report of MHPC, a producer of the 
subject merchandise in India. We applied the resulting ratios to the 
calculated cost of manufacture and cost of production using the same 
methodology established in NSR Chengdu Final Results and accompanying 
Issues and Decision Memorandum at Comment 5.
    Because of the variability of wage rates in countries with similar 
levels of per capita gross domestic product, section 351.408(c)(3) of 
the Department's regulations requires the use of a regression-based 
wage rate.

[[Page 69356]]

Therefore, to value the labor input, we used the PRC's regression-based 
wage rate published by Import Administration on its Web site. The 
source of the wage rate data on the Import Administration Web site is 
the Yearbook of Labour Statistics 2002, International Labour 
Organization (ILO), (Geneva: 2002), and GNI data as reported in World 
Development Indicators, The World Bank, (Washington, DC: 2003 and 
2004). See Factor Valuation Memo.
    To value truck freight, we used an average truck freight cost based 
on Indian truck freight rates on a per metric ton basis published in 
the Iron and Steel Newsletter, April 2002, which we adjusted for 
inflation. See Factor Valuation Memo.
    We valued marine insurance, where necessary, based on publicly 
available price quotes from a marine insurance provider at http://www.rjgconsultants.com/insurance.html. We also valued brokerage and 
handling using the source, dated November 12, 1999, that petitioners 
provided in their May 10, 2004, submission. Since the brokerage rate 
was not contemporaneous with the POR, we adjusted the rate for 
inflation. See Factor Valuation Memo.
    In accordance with section 351.301(c)(3)(ii) of the Department's 
regulations, for the final results of these new shipper reviews, 
interested parties may submit publicly available information to value 
the factors of production until 20 days following the date of 
publication of these preliminary results.

Currency Conversion

    We made currency conversions, where necessary, pursuant to section 
351.415 of the Department's regulations to U.S. dollars using the 
applicable average exchange rate for the POR. We based the average 
exchange rates on exchange rate data from the Import Administration Web 
site at http://ia.ita.doc.gov/exchange/index.html.

Preliminary Results of Review

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

------------------------------------------------------------------------
                                                                Margin
             Exporter                     Producer(s)         (percent)
------------------------------------------------------------------------
Anhui Honghui Foodstuff (Group)    Anhui Honghui Foodstuff         10.73
 Co., Ltd.                          (Group) Co., Ltd.
Eurasia Bee's Products Co., Ltd..  Eurasia Bee's Products          31.47
                                    Co., Ltd. or Chuzhou
                                    Huadi Foodstuffs Co.,
                                    Ltd.
Inner Mongolia Youth Trade         Qinhuangdao Municipal           32.61
 Development Co., Ltd.              Dafeng Industrial Co.,
                                    Ltd.
Jiangsu Kanghong Natural           Jiangsu Kanghong Natural        29.91
 Healthfoods Co., Ltd.              Healthfoods Co., Ltd.
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with the preliminary results of these reviews within five days of the 
date of publication of this notice in accordance with section 
351.224(b). Any interested party may request a hearing within 30 days 
of publication of this notice in accordance with section 351.310(c) of 
the Department's regulations. A hearing would normally be held 37 days 
after the publication of this notice, or the first business day 
thereafter, at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230. Individuals who wish to 
request a hearing must submit a written request within 30 days of the 
publication of this notice in the Federal Register to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. 
Requests for a public hearing should contain: (1) The party's name, 
address, and telephone number; (2) the number of participants; and (3) 
to the extent practicable, an identification of the arguments to be 
raised at the hearing.
    Unless otherwise notified by the Department, interested parties may 
submit case briefs within 30 days of the date of publication of this 
notice in accordance with section 351.309(c)(ii) of the Department's 
regulations. As part of the case brief, parties are encouraged to 
provide a summary of the arguments not to exceed five pages and a table 
of statutes, regulations, and cases cited. Rebuttal briefs, which must 
be limited to issues raised in the case briefs, must be filed within 
five days after the case brief is filed. If a hearing is held, an 
interested party may make an affirmative presentation only on arguments 
included in that party's case brief and may make a rebuttal 
presentation only on arguments included in that party's rebuttal brief. 
Parties should confirm by telephone the time, date, and place of the 
hearing within 48 hours before the scheduled time. The Department will 
issue the final results of this new shipper review, which will include 
the results of its analysis of issues raised in the briefs, within 90 
days from the date of the preliminary results, unless the time limit is 
extended.

Assessment Rates

    The Department shall determine, and U.S. Customs and Border 
Protection (CBP) shall assess and liquidate, 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. 
Pursuant to section 351.212(b)(1) of the Department's regulations, 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 these reviews if any importer-specific assessment 
rate calculated in the final results of these reviews are above de 
minimis.

Cash-Deposit Requirements

    Anhui Honghui, Eurasia, Inner Mongolia Youth, or Jiangsu Kanghong 
may continue to post a bond or other security in lieu of cash deposits 
for certain entries of subject merchandise. As Anhui Honghui and 
Jiangsu Kanghong have certified that they both produced and exported 
the subject merchandise, their bonding option is limited to such 
merchandise for which they are both the producer and exporter. For 
Eurasia, which has identified itself and Chuzhou Huadi as the producers 
of subject merchandise for the sales under review, Eurasia's bonding 
option is limited only to entries of subject merchandise exported by 
Eurasia that were produced by itself or Chuzhou Huadi. For Inner 
Mongolia Youth, which has identified QDI as the producer of subject 
merchandise for the sale under review, Inner Mongolia Youth's bonding 
option is limited to entries of subject merchandise exported by Inner 
Mongolia Youth that were produced by QDI. Bonding will no longer be 
permitted to fulfill security

[[Page 69357]]

requirements for shipments of the subject merchandise from the PRC 
produced and exported by Anhui Honghui; produced by Eurasia or Chuzhou 
Huadi and exported by Eurasia; produced by QDI and exported by Inner 
Mongolia Youth; or produced and exported by Jiangsu Kanghong after 
publication of the final results of these new shipper reviews.
    The following cash-deposit rates will be effective upon publication 
of the final results of these new shipper reviews for all shipments of 
honey from the PRC entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(2)(C) of the Act: (1) For subject merchandise produced 
and exported by Anhui Honghui; produced by Eurasia or Chuzhou Huadi and 
exported by Eurasia; produced by QDI and exported by Inner Mongolia 
Youth; or produced and exported by Jiangsu Kanghong, the cash-deposit 
rate will be that established in the final results of this review; (2) 
for all other subject merchandise exported by Anhui Honghui, Eurasia, 
Inner Mongolia Youth, and Jiangsu Kanghong, the cash-deposit rate will 
be the PRC country-wide rate (i.e., 183.80 percent); (3) for subject 
merchandise produced by Anhui Honghui but not exported by Anhui 
Honghui; produced by Chuzhou Huadi or Eurasia but not exported by 
Eurasia; produced by QDI but not exported by Inner Mongolia Youth; or 
produced by Jiangsu Kanghong but not exported by Jiangsu Kanghong, the 
cash deposit rate will be the rate applicable to the exporter; and (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 Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under section 351.402(f) of the Department's 
regulations to file a certificate regarding the reimbursement of 
antidumping duties prior to liquidation of the relevant entries during 
these review periods. Failure to comply with this requirement could 
result in the Secretary's presumption that reimbursement of antidumping 
duties occurred and the subsequent assessment of double antidumping 
duties.
    These new shipper reviews and this notice are published in 
accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: November 19, 2004.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E4-3360 Filed 11-26-04; 8:45 am]
BILLING CODE 3510-DS-P