[Federal Register Volume 69, Number 234 (Tuesday, December 7, 2004)]
[Notices]
[Pages 70638-70644]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E4-3477]
[[Page 70638]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-831]
Fresh Garlic from the People's Republic of China: Preliminary
Results of Antidumping Duty Administrative Review and Rescission in
Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to requests from interested parties, the
Department of Commerce (the Department) is conducting an administrative
review of the antidumping duty order on fresh garlic from the People's
Republic of China (PRC). The period of review for this administrative
review is November 1, 2002, through October 31, 2003.
Three companies named in the initiation of this review made no
exports or sales of the subject merchandise during the period of review
and, consequently, we are rescinding the review for these companies. In
addition, we are rescinding our review of a fourth company because the
petitioners withdrew their request for a review of that company. We are
also rescinding our review of a fifth company because its sale to the
United States is not eligible for review. Therefore, this review covers
twelve manufacturers/exporters of the subject merchandise.
We preliminarily determine that nine of these companies have made
sales in the United States at prices below normal value. Further, we
preliminarily determine that the remaining three companies are not
entitled to separate rates and have assigned them the rate for the PRC-
wide entity.
We invite interested parties to comment on these preliminary
results. Parties who submit comments are requested to submit with each
argument a statement of the issue and a brief summary of the argument.
EFFECTIVE DATE: December 7, 2004.
FOR FURTHER INFORMATION CONTACT: Coleen Schoch or Brian Ledgerwood,
China/NME Unit, Office of AD/CVD Operations, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230; telephone
(202) 482-4551 or (202) 482-3836, respectively.
SUPPLEMENTARY INFORMATION:
Background
On November 3, 2003, the Department published a notice of
opportunity to request an administrative review of the antidumping duty
order on fresh garlic from the PRC. See Antidumping or Countervailing
Duty Order, Finding, or Suspended Investigation; Opportunity to Request
Administrative Review, 68 FR 62279. On December 24, 2003, we published
the Notice of Initiation of Antidumping and Countervailing Duty
Administrative Reviews (68 FR 74550), in which we initiated the 2002-
2003 administrative review of the antidumping duty order on fresh
garlic from the PRC.
On July 15, 2004, we extended the deadline for the issuance of the
preliminary results of the administrative review by 120 days, until
November 29, 2004 (69 FR 42418). We are conducting this review in
accordance with section 751(a)(1) of the Tariff Act of 1930, as amended
(the Act).
Scope of the Order
The products subject to the antidumping duty order are all grades
of garlic, whole or separated into constituent cloves, whether or not
peeled, fresh, chilled, frozen, provisionally preserved, or packed in
water or other neutral substance, but not prepared or preserved by the
addition of other ingredients or heat processing. The differences
between grades are based on color, size, sheathing, and level of decay.
The scope of this order does not include the following: (a) garlic
that has been mechanically harvested and that is primarily, but not
exclusively, destined for non-fresh use; or (b) garlic that has been
specially prepared and cultivated prior to planting and then harvested
and otherwise prepared for use as seed.
The subject merchandise is used principally as a food product and
for seasoning. The subject garlic is currently classifiable under
subheadings 0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060,
0710.80.9750, 0711.90.6000, and 2005.90.9700 of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheadings
are provided for convenience and customs purposes, the written
description of the scope of this proceeding is dispositive. In order to
be excluded from the antidumping duty order, garlic entered under the
HTSUS subheadings listed above that is (1) mechanically harvested and
primarily, but not exclusively, destined for non-fresh use or (2)
specially prepared and cultivated prior to planting and then harvested
and otherwise prepared for use as seed must be accompanied by
declarations to U.S. Customs and Border Protection (CBP) to that
effect.
Separate Rates
The Department has treated the PRC as a non-market-economy (NME)
country in all past antidumping investigations (see, e.g., Notice of
Final Determination of Sales at Less Than Fair Value: Bulk Aspirin From
the People's Republic of China, 65 FR 33805 (May 25, 2000), and Notice
of Final Determination of Sales at Less Than Fair Value: Certain Non-
Frozen Apple Juice Concentrate from the People's Republic of China, 65
FR 19873 (April 13, 2000)) and in prior segments of this proceeding. A
designation as an NME remains in effect until it is revoked by the
Department. See section 771(18)(C) of the Act. Accordingly, there is a
rebuttable presumption that all companies within the PRC are subject to
government control and, thus, should be assessed a single antidumping
duty rate.
It is the Department's standard policy to assign all exporters of
the merchandise subject to review in NME countries a single 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
exports. To establish whether a company is sufficiently independent to
be entitled to a separate, company-specific rate, the Department
analyzes each 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 (May
6, 1991), as amplified by the Notice of 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).
For the reasons discussed in the section below entitled ``The PRC-
Wide Rate and Use of Facts Otherwise Available,'' we have determined
that Jinxiang Hongyu Freezing and Storing Co., Ltd. (Hongyu), Linyi
Sanshan Import and Export Trading Co., Ltd. (Linyi Sanshan), and
Tancheng County Dexing Foods Co., Ltd. (Dexing Foods) do not qualify
for a separate rate and are instead part of the PRC entity.
Jinxiang Dong Yun Freezing Storage Co., Ltd. (Dong Yun), Fook Huat
Tong Kee Pte., Ltd. (FHTK), Huaiyang Hongda Dehydrated Vegetable
Company (Hongda), Jinan Yipin Corporation, Ltd. (Jinan Yipin), Linshu
Dading Private Agricultural Products Co., Ltd. (Linshu Dading), Sunny
Import & Export Limited (Sunny), Taian Ziyang Food Co., Ltd (Ziyang),
Jining Trans-High Trading Co., Ltd. (Trans-High), and Zhengzhou Harmoni
Spice Co., Ltd. (Harmoni), all provided the requested
[[Page 70639]]
separate-rate information in their responses to our original and
supplemental questionnaires. Accordingly, consistent with &, 61 FR
56570 (April 30, 1996), we performed separate-rates analyses to
determine whether each producer/exporter is independent from government
control.
1. Absence of 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; (3) any other formal
measures by the government decentralizing control of companies.
With the exception of Hongyu, Lingi Sanshan, and Dexing Foods, each
respondent has placed on the record a number of documents to
demonstrate absence of de jure control including the ``Foreign Trade
Law of the People's Republic of China'' and the ``Administrative
Regulations of the People's Republic of China Governing the
Registration of Legal Corporations.'' 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 (June 7,
2001). We have no information in this proceeding that would cause us to
reconsider this determination.
2. Absence of 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; (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.
FHTK and Harmoni reported that they are wholly owned by foreign
entities; Sunny and Ziyang reported that they are limited-liability
companies owned by private investors. Hongda, Dong Yun, Jinan Yipin,
Linshu Dading, and Trans-High reported that they are limited-liability
companies. Each has asserted the following: (1) There is no government
participation in setting export prices; (2) sales managers and
authorized employees have the authority to bind sales contracts; (3)
they do not have to notify any government authorities of management
selections; (4) there are no restrictions on the use of export revenue;
(5) each is responsible for financing its own losses. The questionnaire
responses of FHTK, Hongda, Jinan Yipin, Trans-High, Dong Yun, Linshu
Dading, Sunny, Ziyang, and Harmoni do not suggest that pricing is
coordinated among exporters. During our analysis of the information on
the record, we found no information indicating the existence of
government control. Consequently, we preliminarily determine that FHTK,
Hongda, Jinan Yipin, Trans-High, Dong Yun, Linshu Dading, Sunny,
Ziyang, and Harmoni have met the criteria for the application of a
separate rate.
Partial Rescission of Administrative Review
In response to our December 30, 2003, letter requesting quantity
and value information, three companies responded that they had made no
exports of the subject merchandise during the period of review (POR).
These companies were Clipper Manufacturing Ltd. (Clipper), Shandong
Heze International Trade and Developing Co. (Shandong Heze), and
Shanghai Ever Rich Trade Company (Ever Rich). These individual
responses are discussed in and attached to the Questionnaire Response
Memorandum to Laurie Parkhill, dated November 29, 2004 (Questionnaire
Response Memo). Each of the companies responded that they were not
producers or exporters of the subject merchandise during the POR. We
examined CBP data to confirm that none of them was listed as a
manufacturer or exporter of the subject merchandise on entries during
the POR. In addition, there is no information on the record to indicate
that these companies had sales or exports of subject merchandise during
the POR. As a result, we find that Clipper, Shandong Heze, and Ever
Rich made no entries, exports, or sales of the subject merchandise
during the POR that are subject to the administrative review.
Therefore, in accordance with 19 CFR 351.213(d)(3), we are rescinding
our review with respect to these three companies.
On January 13, 2004, the petitioners withdrew their request for an
administrative review of Xiangcheng Yisheng Foodstuffs Co. (Yisheng).
Therefore, we are rescinding our review of Yisheng for this POR,
pursuant to 19 CFR 351.213(d)(1).
We are also rescinding our review of H&T Trading Company (H&T). H&T
requested a new shipper review and administrative review at the same
time. In the course of our initial examination of the new shipper
request, we discovered that H&T was a Hong Kong-based exporter that
purchased the subject merchandise from a Chinese supplier, Jining
Jinshan. Additional information demonstrated that Jining Jinshan had
knowledge H&T would export the subject merchandise it purchased to the
United States. Pursuant to section 772(a) of the Act, the first party
in the chain of distribution with knowledge of its U.S. destination is
the appropriate party to review. See Fresh Garlic from the People's
Republic of China: Preliminary Results of Antidumping Duty
Administrative Review, Partial Rescission of Administrative Review, and
Intent to Rescind Administrative Review in Part, 68 FR 4758, 4759
(January 30, 2003). Because of this knowledge and the fact that the
sale between Jining Jinshan and H&T was the first non-intra-NME sale in
the chain of distribution, the transaction between Jining Jinshan and
H&T is the appropriate basis for determining the export price.
Therefore, review of H&T is not appropriate and the Department is now
rescinding its initiation of the review of H&T. Further, the Department
did not receive a request for an administrative review of Jining
Jinshan prior to or during the anniversary month of the publication of
the antidumping duty order. See 19 CFR 351.214(d). See Memorandum from
Mark Ross to Laurie Parkhill Regarding Intent to Rescind the
Administrative Review with Respect to H&T Trading Company (January 29,
2004).
The PRC-Wide Rate and Use of Facts Otherwise Available
All respondents were given the opportunity to respond to the
Department's questionnaire. As explained above, we received
questionnaire responses from FHTK, Hongda, Jinan Yipin, Trans-High,
Dong Yun, Linshu Dading, Sunny, Ziyang,
[[Page 70640]]
and Harmoni and we have calculated a separate rate for each of these
companies. The PRC-wide rate applies to all entries of subject
merchandise except for entries from companies that have received their
own rate based on the final results of a prior segment of this
proceeding (e.g., Jinan Yipin). As discussed below, we have decided to
treat Hongyu, Linyi Sanshan, and Dexing Foods as part of the PRC-wide
entity.
Hongyu, Linyi Sanshan, and Dexing Foods did not respond to the
Department's questionnaire. Section 776(a)(2) of the Act provides that,
if an interested party or any other person (A) withholds information
that has been requested by the administering authority, or (B) fails to
provide such information by the deadlines for the submission of the
information or in the form and manner requested, subject to subsections
(c)(1) and (e) of section 782, the Department shall, subject to section
782(d), use the facts otherwise available in reaching the applicable
determination under this title. Furthermore, under section 782(c) of
the Act, a respondent has the responsibility not only to notify the
Department if it is unable to provide requested information but also to
provide a ``full explanation and suggested alternative forms.'' Because
Hongyu, Linyi Sanshan, and Dexing Foods did not respond to the
questionnaire, we find that, in accordance with sections 776(a)(2)(A)
and (B) of the Act, the use of total facts available is appropriate.
See, e.g., Final Results of Antidumping Duty Administrative Review for
Two Manufacturers/ Exporters: Certain Preserved Mushrooms from the
People's Republic of China, 65 FR 50183, 50184 (August 17, 2000).
Section 776(b) of the Act provides that, if the Department finds
that an interested party ``has failed to cooperate by not acting to the
best of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of the
party as facts otherwise available. Adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See Statement
of Administrative Action (SAA) accompanying the Uruguay Round
Agreements Act (URAA), H. Doc. No. 103-316, at 870 (1994). Section
776(b) of the Act authorizes the Department to use as adverse facts
available information derived from the petition, the final
determination from the less-than-fair-value (LTFV) investigation, a
previous administrative review, or any other information placed on the
record.
On December 30, 2003, the Department issued its antidumping duty
questionnaire to Hongyu, Linyi Sanshan, and Dexing Foods. We confirmed
that the questionnaires we sent to Hongyu and Linyi Sanshan were
delivered and accepted on January 6, 2004. We also confirmed that a
representative of Dexing Foods picked up its questionnaire from the
main Commerce building. See Questionnaire Response Memo. Because they
did not provide responses to the Department's questionnaire, the
Department is unable to determine whether Hongyu, Linyi Sanshan, and
Dexing Foods are eligible for a separate rate. Thus, Hongyu, Linyi
Sanshan, and Dexing Foods have not rebutted the presumption of
government control and are presumed to be part of the PRC entity.
The PRC entity (including Hongyu, Linyi Sanshan, and Dexing Foods)
failed to cooperate to the best of its ability in this administrative
review, thus making the use of an adverse inference appropriate.
Therefore, in accordance with the Department's practice, as adverse
facts available, we have preliminarily assigned to the PRC entity the
rate of 376.67 percent.
Section 776(c) of the Act requires that the Department corroborate,
to the extent practicable, a figure which it applies as facts
available. To corroborate information, the Department examines whether
it is both reliable and relevant. Throughout the history of this
proceeding, the highest rate ever determined is 376.67 percent; it is
currently the PRC-wide rate and was calculated based on information
contained in the petition. See Notice of Final Determination of Sales
at Less Than Fair Value: Fresh Garlic from the People's Republic of
China, 59 FR 49058, 49059 (September 26, 1994). The information
contained in the petition was corroborated, to the extent practicable,
for the preliminary results of the first administrative review. See
Fresh Garlic from the People's Republic of China; Preliminary Results
of Antidumping Duty Administrative Review and Partial Termination of
Administrative Review, 61 FR 68229, 68230 (December 27, 1996). Further,
it was corroborated in subsequent reviews to the extent that the
Department referred to the history of corroboration and found that the
Department received no information that warranted revisiting the issue.
See Fresh Garlic from the People's Republic of China: Final Results of
Antidumping Administrative Review and Rescission of New Shipper Review,
67 FR 11283 (March 13, 2002). Similarly, no information has been
presented in the current review that calls into question the
reliability of this information. Thus, the Department finds that the
information is reliable.
With respect to the relevance aspect of corroboration, the
Department stated in Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four
Inches or Less in Outside Diameter, and Components Thereof, from Japan;
Preliminary Results of Antidumping Duty Administrative Reviews and
Partial Termination of Administrative Reviews, 61 FR 57391, 57392
(November 6, 1996) (TRBs), that it will ``consider information
reasonably at its disposal as to whether there are circumstances that
would render a margin irrelevant. Where circumstances indicate that the
selected margin is not appropriate as adverse facts available, the
Department will disregard the margin and determine an appropriate
margin.'' See TRBs, 61 FR at 57392. See also Fresh Cut Flowers from
Mexico; Preliminary Results of Antidumping Duty Administrative Review,
61 FR 6812, 6814 (February 22, 1996) (disregarding the highest margin
in the case as best information available because the margin was based
on another company's uncharacteristic business expense resulting in an
extremely high margin). The rate we are using for this review is the
rate currently applicable to Hongyu, Linyi Sanshan, Dexing Foods, and
all exporters subject to the PRC-wide rate. Further, there is no
information on the administrative record of the current review that
indicates the application of this rate would be inappropriate or that
the margin is not relevant. Therefore, for all sales of subject
merchandise exported by Hongyu, Linyi Sanshan, and Dexing Foods we have
applied, as adverse facts available, the 376.67 percent margin from a
prior administrative review of this order and have satisfied the
corroboration requirements under section 776(c) of the Act. See
Persulfates from the People's Republic of China: Preliminary Results of
Antidumping Duty Administrative Review, 66 FR 18439, 18441 (April 9,
2001) (employing a petition rate used as adverse facts available in a
previous segment as adverse facts available in the current review).
Export Price
For FHTK, Hongda, Trans-High, Dong Yun, Linshu Dading, Sunny, and
Ziyang 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
[[Page 70641]]
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 FHTK, we made no adjustments to the gross unit price.
For Hongda, we deducted foreign inland freight, international
freight, and marine insurance from the gross unit price, in accordance
with section 772(c) of the Act.
For Trans-High, we deducted foreign inland freight and foreign
brokerage and handling expenses from the gross unit price, in
accordance with section 772(c) of the Act.
For Dong Yun, we deducted foreign inland freight from production
facility to port of exit, brokerage and handling expenses,
international freight, and marine insurance expenses.
For Linshu Dading, we deducted foreign inland freight, foreign
brokerage and handling expenses, international ocean freight, marine
insurance, U.S. brokerage and handling, U.S. import duties, and U.S.
inland freight expenses from the gross unit price, in accordance with
section 772(c) of the Act.
For Sunny, we made deductions, where appropriate, of foreign inland
freight, foreign brokerage and handling, international ocean freight,
U.S. brokerage and handling, import duties, U.S. warehousing expenses,
demurrage charges, and U.S. inland freight expenses from the gross unit
price, in accordance with section 772(c) of the Act.
For Ziyang, we deducted foreign inland freight and foreign
brokerage and handling expenses from the gross unit price, in
accordance with section 772(c) of the Act.
As all foreign inland freight, foreign warehousing, 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). Where
applicable, we used the reported expense for international freight
because the respondents used market-economy freight carriers and paid
in a market-economy currency. See ``Memorandum to the File'' regarding
the factors valuation for the preliminary results of the administrative
review (November 29, 2004) (FOP Memorandum).
Constructed Export Price
In accordance with section 772(b) of the Act, we used CEP
methodology when the first sale to an unaffiliated purchaser occurred
after importation of the merchandise into the United States. We
calculated the CEP for Jinan Yipin and Harmoni because the sales were
made by their U.S. affiliates to unaffiliated U.S. customers. We based
CEP on packed, delivered, or ex-warehouse prices to the first
unaffiliated purchaser in the United States.
For Jinan Yipin, we made adjustments to the gross unit price for
foreign inland freight from processing facility to port of exit,
international ocean freight, U.S. inland freight from port to customer,
other U.S. transportation expenses, U.S. brokerage and handling
expenses, U.S. warehousing expenses, and U.S. import duties.
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,
billing adjustments, inventory carrying costs and indirect selling
expenses. We also made an adjustment for profit in accordance with
section 772(d)(3) of the Act.
For Harmoni, we made deductions, where appropriate, from the gross
unit price to account for movement expenses, foreign inland freight
from plant to distribution warehouse, foreign brokerage and handling,
international ocean freight, and U.S. brokerage and handling expenses.
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 credit expenses, commissions, inventory
carrying costs, and indirect selling expenses. We also made an
adjustment for profit in accordance with section 772(d)(3) of the Act.
Because some movement expenses were provided by NME companies, we
valued those charges based on surrogate values in India. See FOP
Memorandum.
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 29, 2004, on file in the Central
Records Unit (CRU), Room B-099.
Normal Value
1. Surrogate Country
When investigating imports from an NME country, section 773(c)(1)
of the Act directs the Department to base normal value, in most
circumstances, on the NME producer's factors of production valued in a
surrogate market-economy country or countries considered to be
appropriate by the Department. In accordance with section 773(c)(4) of
the Act, in valuing the factors of production, the Department shall
use, to the extent practicable, the prices or costs of factors of
production in one or more market-economy countries that are at a level
of economic development comparable to the NME country and are
significant producers of comparable merchandise. The sources of the
surrogate factor values are discussed under the ``Factor Valuations''
section below.
The Department has determined that India, Indonesia, Sri Lanka, the
Philippines, Morocco, and Egypt are countries comparable to the PRC in
terms of economic development. See Memorandum to Laurie Parkhill from
Ron Lorentzen regarding the request for a list of surrogate countries
(June 18, 2004). In addition to being among the countries comparable to
the PRC in economic development, India is a significant producer of the
subject merchandise. We have used India as the surrogate country and,
accordingly, have calculated normal value using Indian prices to value
the PRC producers' factors of production, when available and
appropriate. We have obtained and relied upon publicly available
information. See Memorandum to Laurie Parkhill Re: Selection of
Surrogate Country (November 29, 2004).
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
of an administrative review and a new shipper review, 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.
2. Methodology
The Department's general policy, consistent with section
773(c)(1)(B) of the Act, is to calculate normal value using each of the
factors of production (FOPs) that a respondent consumes in the
production of a unit of the subject merchandise. There are
circumstances, however, in which the Department will modify its
standard FOP methodology, choosing to apply a surrogate value to an
intermediate input instead of the individual FOPs used to produce that
intermediate input. In some cases, a respondent may report factors used
to produce an intermediate input that accounts for an insignificant
share of total output. When the potential increase in accuracy to the
overall calculation that results from valuing each of the factors of
production is
[[Page 70642]]
outweighed by the resources, time, and effort such an analysis would
place on all parties to the proceeding, the Department has valued the
intermediate input directly using a surrogate value. See, e.g., Final
Determination of Sales at Less Than Fair Value: Coumarin From the
People's Republic of China, 59 FR 66895-01 (December 28, 1994).
Also, there are circumstances in which valuing the FOPs used to
yield an intermediate product would lead to an inaccurate result
because the Department would not be able to account for a significant
element of cost adequately in the overall factors buildup. In this
situation, the Department would also value the intermediate input
directly. For example, in a recent case, the Department determined
that, if it were to value the respondent's factors used in extracting
iron ore, an input to wire rod, it would not account sufficiently for
the associated capital costs, given that the surrogate company it used
for valuing overhead did not have mining operation. See Notice of Final
Determination of Sales at Less Than Fair Value: Carbon and Certain
Alloy Steel Wire Rod from Ukraine, 67 FR 55785 (August 30, 2002), and
Final Determination of Sales at Less Than Fair Value: Certain Hot-
Rolled Carbon Steel Flat Products from the People's Republic of China,
66 FR 49632 (September 28, 2001).
In other cases, after careful consideration of the record, the
Department has determined that valuing the intermediate input for the
production of subject merchandise will lead to a more accurate result
than valuing the individual FOPs. See Certain Frozen Fillets from the
Socialist Republic of Vietnam: Notice of Preliminary Determination of
Sales at Less Than Fair Value 68 FR 498, 449 (January 31, 2003), and
Certain Frozen Fillets from the Socialist Republic of Vietnam: Notice
of Final Determination of Sales at Less Than Fair Value, 68 FR 37116
(June 16, 2003).
In this review, we determine that it is appropriate to apply a
modified FOP methodology with respect to certain respondents. We
conducted a full analysis of the information put on the record by the
interested parties and conducted independent research into standard
garlic-growing procedures in the PRC. See Memorandum from Steve
Williams to the File Re: Research on Chinese Production and Costs
(November 29, 2004) (Research Memo). Based on the information discussed
in this memo, as well as all the information currently on the record,
the divergent usage rates provided by certain respondents do not appear
to be realistic or credible.
More specifically, the Department has determined that the FOPs
pertaining to the usage of pesticides, herbicides, and/or seed by
certain respondents were extremely questionable and, in some instances,
not credible. Two internet-published articles regarding garlic
production in the PRC, Garlic Production Technology Regulations,
produced by the Kuming Tong Safe Science and Technology Company, and
Environmentally Safe Garlic Production Technology Regulations, produced
by Hebei Standards, provided objective ranges for the common commercial
usage of these particular factors. See Research Memo at Attachments 1
and 2. In addition, the Department observed major discrepancies among
the FOPs reported by different respondents. The Department also found
large differences in the water-usage factors reported by certain
respondents located in the same area, but it could not find reliable
third-party data with which to compare the factors. It is the
Department's position that, if FOPs reported to the Department appear
highly improbable and lack credibility, it has an obligation to address
the resultant inadequacy in its calculations.
In light of the above, the Department finds that the FOP
methodology is insufficient to provide an accurate result for certain
respondents, based on the unreliability of their reported FOP usage
rates. In order to calculate a more accurate margin for these
companies, the Department has chosen to apply the intermediate-product
FOP methodology to those respondents with questionable FOPs. The
respondents affected are Trans-High, Ziyang, Dong Yun, FHTK, and
Hongda. For a complete explanation of the Department's analysis, see
Memorandum from Edward Yang to Barbara E. Tillman Re: Modification of
Factors-of-Production Methodology (November 29, 2004).
The Department is re-opening the record of this segment to the
interested parties for 21 days after the publication of these
preliminary results in order to obtain additional independent third-
party information regarding the disparate usage rates which these five
respondents have provided. The Department will fully consider any
additional information before completing the final results of this
administrative review.
With respect to the remaining respondents, we find that the
standard FOP analysis remains appropriate. See 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, 69 FR
54635 (September 9, 2004), and accompanying Issues and Decision
Memorandum at Comment 3 (concerning the application of a modified
analysis only to certain respondents, as appropriate).
3. Factors of Production
Section 773(c)(1) of the Act provides that the Department shall
determine the normal value using a FOP methodology if (1) the
merchandise is exported from an NME country and (2) the information
does not permit the calculation of normal value using home-market
prices, third-country prices, or constructed value under section 773(a)
of the Act. Factors of production include the following elements: (1)
hours of labor required, (2) quantities of raw materials employed, (3)
amounts of energy and other utilities consumed, and (4) representative
capital costs. Except as discussed above, we used FOPs reported by the
respondents for materials, energy, labor, and packing. We valued all
the input factors using publicly available, published information, as
discussed in the ``Surrogate Country'' and ``Factor Valuations''
sections of this notice.
4. Factor Valuations
In accordance with section 773(c) of the Act, we calculated normal
value based on FOPs reported by the respondents for the POR. To
calculate normal value, we multiplied the reported per-unit factor
quantities by publicly available surrogate values in India with the
exception of the surrogate value for ocean freight, which we obtained
from an international freight company. In selecting the surrogate
values, we considered the quality, specificity, and contemporaneity of
the data. As appropriate, we adjusted input prices by including freight
costs to make them delivered prices. We calculated these freight costs
based on the shortest reported distance from the domestic supplier to
the factory and Indian surrogate values. This adjustment is in
accordance with the decision in Sigma Corporation v. United States, 117
F. 3d 1401, 1407-08 (Fed. Cir. 1997). We converted prices reported in
Indian rupees (Rs) to US dollars (USDs) using the average exchange rate
obtained from the official Import Administration Web site (http://ia.ita.doc.gov/exchange/india.txt). For a detailed description of all
the surrogate values we used, see the FOP Memorandum.
For those Indian rupee values not contemporaneous with the POR, we
[[Page 70643]]
adjusted for inflation using wholesale price indices for India
published in the International Monetary Fund's International Financial
Statistics. Surrogate-value data or sources to obtain such data were
obtained from the petitioners, the respondents, and the Department's
research.
Except as specified below, we valued raw material inputs using the
weighted-average unit import values derived from the World Trade Atlas,
provided by the Global Trade Information Services, Inc. The source of
these values contemporaneous with the POR, was the Directorate General
of Commercial Intelligence and Statistics of the Indian Ministry of
Commerce and Industry. We valued garlic seed based on pricing data from
the NHRDF News Letter, published by India's National Horticultural
Research and Development Foundation. We valued diesel fuel based on
data from the International Energy Agency's Energy Prices & Taxes:
Quarterly Statistics (Third Quarter, 2003). We valued electricity based
on data from the International Energy Agency's Energy Prices & Taxes:
Quarterly Statistics (First Quarter, 2003). We valued water using the
water tariff rate reported on the Municipal Corporation of Greater
Mumbai's Web site. See http://www.mcgm.gov.in/Stat%20&%20Fig/Revenue.htm.
The respondents reported packing inputs consisting of plastic nets/
mesh bags, paper cartons, plastic packing bands, tape, wood used for
producing pallets, nails used for producing pallets, plastic jars,
plastic jar lids, nitrogen gas, antiseptic, metal clips, bubble wrap,
labels, glue, and cardboard. All of these inputs were valued using
import data from the World Trade Atlas that covered the POR.
For labor, consistent with 19 CFR 351.408(c)(3), we used the most
recent PRC regression-based wage rate that appears on the website for
Import Administration (http://ia.ita.doc.gov/wages/corrected00wages/corrected00wages.htm). The source of the wage-rate data for the Import
Administration's Web site is the International Labor Organization's
Yearbook of Labour Statistics 2002 (Geneva, 2002), chapter 5B: Wages in
Manufacturing.
For land, we used the value published in the Punjab State
Development Report. We valued cold storage using the surrogate
electricity value if the cold-storage facility was located at the
production facility. If the respondent's cold storage was located off-
site, we used a value based on a rate from ``Local traders to import
generator fitted containers,'' an article from Dawn Wire Service (May
19, 1995).
The respondents claimed an adjustment for revenue earned on the
sale of garlic sprouts. We find that sprouts are a by-product of garlic
and deducted an offset amount from normal value. As a surrogate value
for the sale of sprouts in the PRC, we used an average of Indian
wholesale prices for green onions published by the Azadpur Agricultural
Produce Marketing Committee in its February 17, 2003, March 21, 2003,
April 25, 2003, and May 30, 2003, Azadpur Agricultural Produce
Marketing Committee Bulletins.
We valued the truck rate based on an average of truck rates that
were published in the Indian publication Chemical Weekly during the
POR. We valued foreign brokerage and handling charges based on a value
calculated for the LTFV investigation of certain hot-rolled carbon
steel flat products from India. For ocean freight, we used the value
provided by Linshu Dading from Maersk Sealand (www.maersksealand.com)
in its November 1, 2002, through April 30, 2003, new shipper review and
this administrative review for the movement of containers from the PRC
to the east and west coasts of the United States. We used these quotes
to calculate a surrogate freight rate for each coast. For marine
insurance, we relied on rate quotes from RJG Consultants
(www.rjgconsultants.com) dating from the POR for the movement of
refrigerated containers from the PRC to the east and west coasts of the
United States.
As discussed in the FOP Memorandum, the respondents and the
petitioners submitted the publicly available financial information of
six companies. We concluded that the financial information of Parry
Agro Industries Limited (``Parry Agro''), a tea producer in India, was
most representative of the financial experiences of the respondent
companies for which we applied the FOP methodology because it produced
and processed a product that was not highly processed or preserved
prior to its sale. Thus, to value factory overhead, and selling,
general and administrative expenses we used rates based on data taken
from the 2003/2004 financial statements of Parry Agro. Parry Agro's
2002/2003 and 2003/2004 financial statements did not report a profit.
Thus, for purposes of these preliminary results we are applying the
profit ratio that was reported on its 2001/2002 financial statements.
We also concluded that the financial information of Mahabaleshwar Honey
Producers Co-Operative Society Ltd. (``MHPC''), a non-integrated Indian
honey processor, was most representative of the financial experiences
of the respondents for which we applied the intermediate-product FOP
methodology because it is the only company on record which we know with
certainty processes an intermediate product. Thus, to value factory
overhead, selling, general, and administrative expenses, and profit, we
used rates based on data taken from the 2003-2004 financial statements
of MHPC. See the FOP Memorandum for a more complete discussion of the
Department's analysis.
Preliminary Results of the Review
We preliminarily determine that the following dumping margins exist
for the period November 1, 2002, through October 31, 2003:
Fresh Garlic From the People's Republic of China
------------------------------------------------------------------------
Weighted-average
Manufacturer/Exporter percentage margin
------------------------------------------------------------------------
Jinan Yipin Corporation, Ltd.36.75..................
Jinxiang Dong Yun Freezing Storage Co., Ltd......... 101.51
Fook Huat Tong Kee Pte., Ltd........................ 90.27
Huaiyang Hongda Dehydrated Vegetable Company........ 33.52
Linshu Dading Private Agricultural Products Co., 58.26
Ltd................................................
Sunny Import & Export Limited....................... 27.24
Taian Ziyang Food Co., Ltd.......................... 61.43
Jining Trans-High Trading Co., Ltd.................. 26.18
Zhengzhou Harmoni Spice Co., Ltd.................... 41.28
PRC-wide rate*...................................... 376.67
------------------------------------------------------------------------
* Includes Jinxiang Hongyu Freezing and Storing Co., Ltd., Linyi Sanshan
Import and Export Trading Co., Ltd., and Tancheng County Dexing Foods
Co., Ltd.
Case briefs or other written comments in at least six copies must
be submitted to the Assistant Secretary for Import Administration no
later than 30 days after new factual information is submitted for the
record. Pursuant to 19 CFR 351.309(d)(2), rebuttal briefs are due no
later than five days after the submission of case briefs. A list of
authorities used, a table of contents, and an executive summary of
issues should accompany any briefs submitted to the Department.
Executive summaries should be limited to five pages total, including
footnotes. In accordance with 19 CFR 351.310, we will hold a public
[[Page 70644]]
hearing to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs, provided that such a
hearing is requested by an interested party. Interested parties who
wish to request a hearing, or to participate if one is requested, must
submit a written request to the Assistant Secretary for Import
Administration, U.S. Department of Commerce, Room 1870, within 30 days
after the date of publication of the preliminary results of this review
in the Federal Register. Requests should contain the following
information: (1) The party's name, address, and telephone number; (2)
the number of participants; and (3) a list of the issues to be
discussed. Oral presentations will be limited to issues raised in the
briefs. If we receive a request for a hearing, we plan to hold the
hearing three days after the deadline for submission of the rebuttal
briefs at the U.S. Department of Commerce, 14th Street and Constitution
Avenue, NW, Washington, DC 20230.
Extension of Time for the Final Results of Administrative Review
The issues in these preliminary results of review present a number
of complex factual and legal questions pertaining to the Department's
methods of calculating the antidumping duties in this case. Therefore,
it is not practicable to complete the review within the time limits
mandated by section 751(a)(3)(A) of the Act. Consequently, we are
extending the time limit for the completion of the final results of
this review, including our analysis of issues raised in any case or
rebuttal briefs, until May 30, 2005. See section 751(a)(3) of the Act
and 19 CFR 351.213(h)(1).
Assessment Rates
Upon completion of this administrative review, the Department shall
determine, and CBP shall assess, antidumping duties on all appropriate
entries. In accordance with 19 CFR 351.212(b)(1), we have calculated,
whenever possible, an exporter/importer (or customer)-specific
assessment rate or value for merchandise subject to this review. With
respect to CEP sales for which entered values were reported, for these
preliminary results we divided the total dumping margins for the
reviewed sales by the total entered value of those reviewed sales for
each applicable importer. For duty-assessment rates calculated on this
basis, we will direct the CBP to assess the resulting percentage margin
against the entered customs values for the subject merchandise on each
of the applicable importer's/customer's entries during the review
period.
With respect to sales for which entered values were not reported,
for these preliminary results, we divided the total dumping margins for
each exporter's importer/customer by the total number of units the
exporter sold to that importer/customer. For assessment amounts
calculated on this basis, we will direct CBP to assess the resulting
per-unit dollar amount against each unit of merchandise in each of that
importer's/customer's entries during the review period.
Cash-Deposit Requirements
The following cash-deposit requirements will be effective upon
publication of the final results of the administrative review for
shipments of the subject merchandise 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 exported by the respondents, the cash-deposit rate will be
that established in the final results of review; (2) for all other PRC
exporters of subject merchandise which have not been found to be
entitled to a separate rate, the cash-deposit rate will be the PRC-wide
rate of 376.67 percent; (3) for all non-PRC exporters of subject
merchandise, the cash-deposit rate will be the rate applicable to the
PRC exporter that supplied that exporter. These deposit requirements,
when imposed, shall remain in effect until publication of the final
results of the next administrative review.
Notification to Interested Parties
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during the POR. 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.
We are issuing and publishing these preliminary results of review
in accordance with sections 751(a)(3) and 777(i) of the Act and 19 CFR
351.213(d)(4).
Dated: November 29, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E4-3477 Filed 12-6-04; 8:45 am]
BILLING CODE 3510-DS-S