[Federal Register Volume 70, Number 222 (Friday, November 18, 2005)]
[Notices]
[Pages 69942-69952]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-6391]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic from the People's Republic of China: Preliminary 
Results and Partial Rescission of Antidumping Duty Administrative 
Review and Preliminary Results of New Shipper Reviews

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 
(``POR'') for this administrative review is November 1, 2003, through 
October 31, 2004. The Department is also conducting new shipper reviews 
for two exporters/producers. The POR for the new shipper reviews is 
also November 1, 2003, through October 31, 2004.
    One company named in the initiation of this review made no exports 
or sales of the subject merchandise during the POR and, consequently, 
we are preliminarily rescinding the review for this company. In 
addition, we are preliminarily rescinding the review for four companies 
because the requesting party withdrew its request for reviews of those 
companies. Therefore, this review covers nineteen producers/exporters 
of the subject merchandise.
    We preliminarily determine that thirteen of these companies have 
made sales in the United States at prices below normal value. Further, 
we preliminarily determine that the remaining six companies are not 
entitled to separate rates and have assigned them the rate for the PRC-
wide entity. If these preliminary results are adopted in our final 
results of this review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the POR for which the importer-specific assessment 
rates are above de minimis.
    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. 
We will issue the final results no later than 120 days from the date of 
publication of this notice.

EFFECTIVE DATE:  November 18, 2005.

FOR FURTHER INFORMATION CONTACT: Blanche Ziv or Steve Williams, AD/CVD 
Operations, Office 8, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
4207 and (202) 482-4619, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On November 16, 1994, the Department published in the Federal 
Register the antidumping duty order on fresh garlic from the PRC. See 
Antidumping Duty Order: Fresh Garlic From the People's Republic of 
China, 59 FR 59209 (November 16, 1994). On November 1, 2004, the 
Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on fresh garlic 
from the PRC for the period November 1, 2003, through October 31, 2004. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity To Request Administrative Review, 69 FR 
63359 (November 1, 2004). In November 2004, the petitioners \1\ 
requested an

[[Page 69943]]

administrative review of 21 companies pursuant to section 751(a) of the 
Tariff Act of 1930, as amended (``the Act'').\2\ In November 2004, 
Weifang Shennong Foodstuff Co., Ltd. (``WSFC''), Shanghai LJ 
International Trading Co., Ltd. (``Shanghai LJ''), Hongda, Dong Yun, 
Harmoni, Linshu Dading, Sunny, Shanyang, and Ziyang, requested 
administrative reviews of their sale(s) to the United States during the 
POR.
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    \1\ The petitioners are the members of the Fresh Garlic 
Producers Association: Christopher Ranch L.L.C.; The Garlic Company; 
Valley Garlic; and Vessey and Company, Inc.
    \2\ The names of these companies are as follows: (1) Clipper 
Manufacturing Ltd. (``Clipper''); (2) Fook Huat Tong Kee Pte., Ltd. 
(``FHTK''); (3) H&T Trading Company (``H&T''); (4) Heze Ever-Best 
International Trade Co., Ltd. (``Ever-Best''); (5) Huaiyang Hongda 
Dehydrated Vegetable Company (``Hongda''); (6) Jinan Yipin 
Corporation, Ltd. (``Jinan Yipin''); (7) Jining Trans-High Trading 
Co., Ltd. (``Trans-High''); (8) Jining Yun Feng Agriculture Products 
Co., Ltd. (``Yun Feng''); (9) Jinxiang Dong Yun Freezing Storage 
Co., Ltd. (``Dong Yun''); (10) Jinxiang Hongyu Freezing and Storing 
Co., Ltd. (``Hongyu''); (11) Jinxiang Shanyang Freezing and Storage 
Co., Ltd. (``Shanyang''); (12) Linshu Dading Private Agricultural 
Products Co., Ltd. (``Linshu Dading''); (13) Linyi Sanshan Import & 
Export Trading Co., Ltd. (``Linyi''); (14) Pizhou Guangda Import and 
Export Co., Ltd. (``Guangda''); (15) Shandong Jining Jishan Textile 
Co., Ltd. (``Shandong Jining''); (16) Shanghai Ever Rich Trade 
Company (``Ever Rich''); (17) Sunny Import & Export Limited 
(``Sunny''); (18) Taian Ziyang Food Co., Ltd. (``Ziyang''); (19) 
Tancheng Country Dexing Foods Co., Ltd. (``Tancheng''); (20) 
Xiangcheng Yisheng Foodstuffs Co., Ltd. (``Yisheng''); and (21) 
Zhengzhou Harmoni Spice Co., Ltd. (``Harmoni'').
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    On November 22, 2004, we received a request for a new shipper 
review from Zhangqui Quingyuan Vegetable Co., Ltd. (``Qingyuan''). On 
November 30, 2004, we received requests for new shipper reviews from 
Shanghai LJ and Huaiyang Huamei Foodstuff Co., Ltd. (``Huamei'').\3\ 
Pursuant to section 751(a)(2)(B) of the Act, and 19 CFR 351.214(d)(1), 
we initiated the following three new shipper reviews for shipments of 
fresh garlic from the PRC:
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    \3\ Shanghai LJ requested an administrative and a new shipper 
review for its sales made during the POR. Because its request 
satisfied the requirements pursuant to section 751(a)(2)(B) of the 
Act, and 19 CFR 351.214(d)(1), we initiated a new shipper review for 
Shanghai LJ rather than an administrative review.
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    (1) grown and exported by Qingyuan
    (2) grown and exported by Huamei, and
    (3) grown by San Li and exported by Shanghai LJ.
    On December 27, 2004, the Department published in the Federal 
Register a notice of the initiation of the antidumping duty 
administrative review of fresh garlic from the PRC in which it 
initiated an administrative review of this order for the period 
November 1, 2003, through October 31, 2004. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Request 
for Revocation in Part, 69 FR 77181 (December 27, 2005). On January 5, 
2005, the Department published a notice of the initiation of the new 
shipper reviews of Qingyuan, Shanghai LJ, and Huamei. See Notice of 
Initiation of New Shipper Antidumping Duty Reviews: Fresh Garlic from 
the People's Republic of China, 70 FR 779 (January 5, 2005).
    In January 2005, we issued antidumping duty questionnaires to all 
companies noted above. On February 9, 2005, we received a timely filed 
submission from the petitioners withdrawing their request for review of 
Linyi, Shandong Jining, Tancheng, and Yisheng. On February 11, 2005, 
Ever Rich submitted a statement to the Department that it made no sales 
of subject merchandise during the POR.
    In February and March 2005, we received questionnaire responses 
from WSFC, Dong Yun, Hongda, Harmoni, Jinan Yipin, Linshu Dading, 
Shanyang, Sunny, Trans-High, FHTK, Ziyang, Qingyuan, and Shanghai LJ. 
The Department issued supplemental questionnaires to and received 
responses from the above-mentioned companies from April through 
September 2005. Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-Best 
did not respond to the Department's questionnaire. For the reasons 
discussed in the section below entitled ``The PRC-Wide Rate and Use of 
Facts Otherwise Available,'' we have determined that Guangda, H&T, 
Hongyu, Yun Feng, Clipper, and Ever-Best do not qualify for a separate 
rate and are instead part of the PRC entity.
    On May 25, 2005, due to lack of participation, the Department 
rescinded the new shipper review with respect to Huamei. See Fresh 
Garlic From the People's Republic of China; Notice of Rescission of 
Antidumping Duty New Shipper Review, 70 FR 30081 (May 25, 2005).
    In May and June 2005, the Department conducted harvest 
verifications for the following six companies: FHTK, Hongda, Shanghai 
LJ, Sunny, Trans-High, and Ziyang. On July 5, 2005, the Department 
published a notice in the Federal Register extending the time limit for 
the preliminary results of the new shipper reviews until October 25, 
2005. See Fresh Garlic From the People's Republic of China: Notice of 
Extension of Time Limit for the Preliminary Results of New Shipper 
Reviews, 70 FR 38656 (July 5, 2005). On August 3, 2005, we extended the 
deadline for the issuance of the preliminary results of the 
administrative review by 100 days, until November 10, 2005. See Fresh 
Garlic From the People's Republic of China: Extension of Time Limit for 
the Preliminary Results of Antidumping Duty Administrative Review, 70 
FR 44563 (August 3, 2005).
    In September 2005, pursuant to 19 CFR 351.214(j)(3), the two new 
shipper respondents (i.e., Shanghai LJ and Qingyuan) and the 
petitioners agreed to waive the time limits applicable to the new 
shipper reviews and to permit the Department to conduct the new shipper 
reviews concurrently with the administrative review. See Memorandum to 
the file, ``Fresh Garlic from the People's Republic of China - Request 
for Alignment of the 11/01/03-10/31/04 Annual Administrative and New 
Shipper Reviews'' dated September 16, 2005. We are conducting these 
reviews in accordance with section 751(a)(1) of the Act.

Period of Review

    The POR is November 1, 2003, through October 31, 2004.

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 order 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

[[Page 69944]]

be accompanied by declarations to CBP to that effect.

Preliminary Partial Rescissions of Administrative Reviews

    Ever Rich claimed that it did not make shipments of subject 
merchandise to the United States during the POR. We conducted a data 
query of CBP entry information on subject merchandise and found no 
information indicating that there were U.S. entries during the POR of 
subject merchandise exported by Ever Rich. Therefore, for the reasons 
mentioned above and based on the results of our CBP query, we are 
preliminarily rescinding the administrative review with respect to Ever 
Rich because we found no evidence that it made shipments of the subject 
merchandise during the POR in accordance with 19 CFR 351.213(d)(3).
    As noted above, the petitioners were the only parties to request an 
administrative review of Linyi, Shandong Jining, Tancheng, and Yisheng. 
Thus, because no other parties requested a review of these companies 
and the petitioners have withdrawn their request, we are also 
preliminarily rescinding the administrative review with respect to 
these companies in accordance with 19 CFR 351.213(d)(1).

Non-market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME'') country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. See Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From the People's Republic of 
China: Preliminary Results 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003). None of the 
parties to this proceeding has contested such treatment. Accordingly, 
we calculated normal value (``NV'') in accordance with section 773(c) 
of the Act, which applies to NME countries.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production (``FOPs''), 
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 
utilize, to the extent possible, the prices or costs of FOPs in one or 
more market economy countries that are: (1) at a level of economic 
development comparable to that of the NME country; and (2) significant 
producers of comparable merchandise. The sources of the surrogate 
factor values are discussed under the ``Normal Value'' section below 
and in the ``Factors Valuations for the Preliminary Results of the 
Administrative Review and New Shipper Reviews'' memorandum, dated 
November 10, 2005 (``Factor Valuation Memo''), which is on file in the 
Central Records Unit (``CRU''), Room B-099 of the main Department 
building.
    The Department has determined that India, Indonesia, Sri Lanka, the 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See the ``Antidumping Duty Administrative Review 
of Fresh Garlic from the People's Republic of China (PRC): Request for 
a List of Surrogate Countries'' memorandum, dated January 24, 2005, 
which is on file in the CRU.
    In addition to being among the countries comparable to the PRC in 
economic development, India is a significant producer of the subject 
merchandise. Therefore, we have used India as the surrogate country 
and, accordingly, have calculated NV using Indian prices to value the 
PRC producers' FOPs, when available and appropriate. See the 
``Administrative Review of the Antidumping Duty Order of Fresh Garlic 
from the People's Republic of China: Selection of a Surrogate Country'' 
memorandum, dated October 20, 2005 (``Surrogate Country Memo''), which 
is on file in the CRU. We also invited parties to submit comments on 
the surrogate country selection for water valuation. For a detailed 
discussion of these comments, see Factor Valuation Memo. We have 
obtained and relied upon publicly available information wherever 
possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping administrative review and a new shipper review, 
interested parties may submit publicly available information to value 
FOPs within 20 days after the date of publication of these preliminary 
results.

Separate Rates

    The Department has treated the PRC as an 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). 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 Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-Best do not 
qualify for a separate rate and are instead part of the PRC entity.
    Dong Yun, FHTK, Hongda, Harmoni, Linshu Dading, Sunny, Ziyang, 
Jinan Yipin, Trans-High, WSFC, Shanyang, Shanghai LJ, and Qingyuan all 
provided the requested separate-rate information in their responses to 
our original and supplemental questionnaires. Accordingly, consistent 
with 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), we performed separate-rates analyses to determine whether each 
producer/exporter is independent from government control.
A. 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; and (2) any 
legislative enactments decentralizing control of companies.

[[Page 69945]]

    With the exception of Guangda, H&T, Hongyu, Yun Feng, Clipper, and 
Ever-Best, 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. Thus, we believe that 
the evidence on the record supports a preliminary finding of an absence 
of de jure government control based on: (1) an absence of restrictive 
stipulations associated with the exporter's business license; and (2) 
the legal authority on the record decentralizing control over the 
respondent.
B. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998). 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 government control which would preclude 
the Department from assigning separate rates. The Department typically 
considers four factors in evaluating whether each respondent is subject 
to de facto government control of its export functions: (1) whether the 
exporter sets its own export prices independent of the government and 
without the approval of a government authority; (2) whether the 
respondent has the 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.
    FHTK and Harmoni reported that they are wholly owned by foreign 
entities. Sunny, Ziyang, WSFC, Qingyuan, and Shanyang reported that 
they are limited-liability companies owned by private investors. 
Hongda, Dong Yun, Jinan Yipin, Linshu Dading, Trans-High, and Shanghai 
LJ 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, 
Harmoni, WSFC, Shanghai LJ, Shanyang, and Qingyuan 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, Harmoni, WSFC, Shanghai LJ, Shanyang, and 
Qingyuan have met the criteria for the application of a separate rate.

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, Harmoni, WSFC, Shanghai LJ, 
Shanyang, and Qingyuan. We have calculated a separate rate for each of 
these respondents. The PRC-wide rate applies to all other 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., Sunny).
    Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-Best, on the 
other hand, did not respond to the Department's questionnaire. On 
January 4, 2005, the Department issued its antidumping duty 
questionnaire to Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-
Best. We have confirmed that the questionnaires we sent to these 
companies were each delivered and accepted. See Memorandum to the file, 
``2003/2004 Administrative Review and New Shipper Reviews of the 
Antidumping Duty Order on Fresh Garlic From the People's Republic of 
China: Responses to Questionnaire,'' dated November 7, 2005 
(``Questionnaire Response Memo''). 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.'' However, these respondents did neither. Because 
Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-Best did not respond 
to the questionnaire, we preliminarily 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, 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.
    As noted above, Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-
Best did not respond to the Department's questionnaire. Because they 
did not provide responses to the Department's questionnaire, the 
Department is unable to determine whether Guangda, H&T, Hongyu, Yun 
Feng, Clipper, and Ever-Best are eligible for separate rates. Thus, 
Guangda, H&T, Hongyu, Yun Feng, Clipper, and Ever-Best have not 
rebutted the presumption

[[Page 69946]]

of government control and are presumed to be part of the PRC entity.
    The PRC entity (including Guangda, H&T, Hongyu, Yun Feng, Clipper, 
and Ever-Best) 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 from the LTFV investigation, the 
highest rate determined in the current or any previous segment of this 
proceeding.

Corroboration of Secondary Information

    Section 776(c) of the Act requires that the Department corroborate, 
to the extent practicable, a figure which it applies as facts available 
that is based on secondary information. To corroborate information, the 
Department examines whether it is both reliable and relevant. 
Throughout the history of this proceeding, the highest rate ever 
determined has been 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).
    To assess the relevancy of the rate used, the Department compared 
the margin calculations of all respondents in these reviews with the 
current PRC-wide rate (i.e., 376.67 percent). The Department found that 
the margin of 376.67 percent was within the range of the highest 
margins calculated on the record of these reviews. See memorandum to 
the file, ``2003-2004 Antidumping Duty Administrative Review of Fresh 
Garlic from the People's Republic of China: Corroboration of the PRC-
Wide Adverse Facts-Available Rate,'' dated November 10, 2005. Because 
the record of this administrative review contains margins within the 
range of 376.67 percent, we determine that the rate from the 
investigation continues to be relevant for use in these reviews.
    The rate we are using for this review is the rate currently 
applicable to 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 Guangda, H&T, Hongyu, Yun 
Feng, Clipper, Ever-Best and all other non-reviewed PRC exporters, we 
have applied as adverse facts available, the 376.67 percent margin from 
the LTFV investigation 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, Trans-High, Dong Yun, Linshu Dading, Sunny, Shanghai LJ, 
Qingyuan, WSFC, Shanyang, Hongda, 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 to 
importation and 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 Sunny, we deducted 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 Dongyun, we deducted foreign inland freight, foreign brokerage 
and handling, international ocean freight, and marine insurance from 
the gross unit price, in accordance with section 772(c) of the Act.
    For Trans-High, FHTK, WSFC, Hongda, and Ziyang, we deducted foreign 
inland freight and foreign brokerage and handling from the gross unit 
price, in accordance with section 772(c) of the Act.
    For Linshu Dading, we deducted foreign inland freight, 
international ocean freight, foreign brokerage and handling, marine 
insurance, U.S. brokerage and handling, and U.S. import duties from the 
gross unit price, in accordance with section 772(c) of the Act.
    For Shanghai LJ, we deducted foreign inland freight, and foreign 
brokerage and handling from the gross unit price, in accordance with 
section 772(c) of the Act.
    For Shanyang, we only deducted foreign inland freight expenses from 
the gross unit price, in accordance with section 772(c) of the Act, 
because Shanyang reported that all shipments were FOB Qingdao and all 
other shipping and handling expenses were paid by the U.S. customer.
    For Qingyuan, we deducted foreign inland freight, U.S. brokerage 
and handling, and international freight expenses from the gross unit 
price, in accordance with section 772(c) of the Act.

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

[[Page 69947]]

the merchandise into the United States. We calculated the CEP for Jinan 
Yipin and Harmoni based on the sales made by their U.S. affiliates to 
unaffiliated U.S. customers. We based CEP on delivered 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, 
demurrage charges, U.S. brokerage and handling expenses, U.S. 
inspection charges, 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 credit expenses, billing adjustments 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 adjustments to the gross unit price for 
foreign inland freight, international ocean freight, U.S. FDA 
inspection charges, U.S. brokerage and handling 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 credit expenses and indirect 
selling expenses. We also made an adjustment for profit in accordance 
with section 772(d)(3) of the Act.
    As all foreign inland freight, foreign warehouse expenses, 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 
``Factor Valuations'' 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 Factor Valuation Memo. 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 10, 2005, on file in the CRU.\4\
---------------------------------------------------------------------------

    \4\ See Memorandum to the file entitled, ``Analysis for the 
Preliminary Results of the Administrative Review of the Antidumping 
Duty Order on Fresh Garlic from the People's Republic of China: 
Sunny Import & Export Co. Ltd.,'' dated November 10, 2005, 
Memorandum to the file entitled, ``Analysis for the Preliminary 
Results of the Administrative Review of the Antidumping Duty Order 
on Fresh Garlic from the People's Republic of China: Fook Huat Tong 
Kee Pte., Ltd.,'' dated November 10, 2005, Memorandum to the file 
entitled, ``Analysis for the Preliminary Results of the 
Administrative Review of the Antidumping Duty Order on Fresh Garlic 
from the People's Republic of China: Huaiyang Hongda Dehydrated 
Vegetable Company,'' dated November 10, 2005, Memorandum to the file 
entitled, ``Analysis for the Preliminary Results of the 
Administrative Review of the Antidumping Duty Order on Fresh Garlic 
from the People's Republic of China: Jinan Yipin Corporation, 
Ltd.,'' dated November 10, 2005, Memorandum to the file entitled, 
``Analysis for the Preliminary Results of the Administrative Review 
of the Antidumping Duty Order on Fresh Garlic from the People's 
Republic of China: Jining Trans-High Trading Co., Ltd.,'' dated 
November 10, 2005, Memorandum to the file entitled, ``Analysis for 
the Preliminary Results of the Administrative Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China: Jinxiang Dong Yun Freezing Storage Co., Ltd.,'' dated 
November 10, 2005, Memorandum to the file entitled, ``Analysis for 
the Preliminary Results of the Administrative Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China: Jinxiang Shanyang Freezing and Storage Co., Ltd.,'' dated 
November 10, 2005, Memorandum to the file entitled, ``Analysis for 
the Preliminary Results of the Administrative Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China: Linshu Dading Private Agricultural Products Co., Ltd.,'' 
dated November 10, 2005, Memorandum to the file entitled, ``Analysis 
for the Preliminary Results of the Administrative Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China: Taian Ziyang Food Co., Ltd.,'' dated November 10, 2005, 
Memorandum to the file entitled, ``Analysis for the Preliminary 
Results of the Administrative Review of the Antidumping Duty Order 
on Fresh Garlic from the People's Republic of China: Zhengzhou 
Harmoni Spice Co., Limited,'' dated November 10, 2005, Memorandum to 
the file entitled, ``Analysis for the Preliminary Results of the New 
Shipper Review of Fresh Garlic from the People's Republic of China: 
Zhangqui Quingyuan Vegetable Co., Ltd.,'' dated November 10, 2005, 
Memorandum to the file entitled, ``Analysis for the Preliminary 
Results of the New Shipper Review of Fresh Garlic from the People's 
Republic of China: Shanghai LJ International Trading Co., Ltd.,'' 
dated November 10, 2005, and Memorandum to the file entitled, 
``Analysis for the Preliminary Results of the Administrative Review 
of the Antidumping Duty Order on Fresh Garlic from the People's 
Republic of China: Weifang Shennong Foodstuff Co., Ltd,'' dated 
November 10, 2005.
---------------------------------------------------------------------------

Normal Value

1. Methodology
    The Department's general policy, consistent with section 
773(c)(1)(B) of the Act, is to calculate NV using each of the 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 FOPs is outweighed by the resources, time, and burden 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., Notice of Final Determination of Sales at Less Than Fair 
Value: Polyvinyl Alcohol from the People's Republic of China, 68 FR 
4753 (August 11, 2003), and accompanying Issues and Decision Memorandum 
at Comment 1 (``PVA'') (which cites to Certain Preserved Mushrooms from 
the People's Republic of China: Final Results of First New Shipper 
Review and First Antidumping Duty Administrative Review, 66 FR 31204 
(June 11, 2001), and accompanying Issues and Decision Memorandum at 
Comment 2 (``Mushrooms'')).
    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 a 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). See also Mushrooms 
at Comment 2.
    In other cases, after careful consideration of the record, the 
Department has determined that valuing the intermediate input for the 
production of subject merchandise leads to a more accurate result than 
valuing the individual FOPs. See Notice of Preliminary Determination of 
Sales at Less Than Fair Value, Affirmative Preliminary Determination of 
Critical Circumstances and Postponement of Final Determination: Certain 
Frozen Fish Fillets From the Socialist Republic of Vietnam, 68 FR 498, 
449 (January 31, 2003), and Notice of Final Antidumping Duty 
Determination of Sales at Less Than Fair Value and Affirmative Critical 
Circumstances: Certain Frozen Fish Fillets from the Socialist Republic

[[Page 69948]]

of Vietnam, 68 FR 37116 (June 23, 2003).
    For the final results of the previous administrative review,\5\ the 
Department expressed its concern that based on the information on the 
record, we might not be accurately capturing the complete costs of 
producing fresh garlic. We concluded that many questions remained 
unanswered pertaining to the adequacy of the methodology applied 
therein, and its ability to accurately record and substantiate the 
complete costs of growing garlic. We further identified concerns 
regarding the potential limitations in confirming reported FOP usage 
rates through verification in cases in which the respondents' books and 
records do not track this data. Thus, in light of these concerns and 
the numerous unresolved issues pertaining to the production of fresh 
garlic, the Department stated that it would fully examine all of these 
issues, and consider the appropriateness of alternative calculation 
methodologies in subsequent administrative reviews of this antidumping 
duty order.
---------------------------------------------------------------------------

    \5\ See Fresh Garlic from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 70 FR 34082 (June 
13, 2005) and accompanying Issues and Decisions Memorandum at 
Comment 1.
---------------------------------------------------------------------------

    In the course of this review proceeding, the Department has 
requested and obtained a vast amount of detailed information from the 
respondents with respect to each company's garlic production practices. 
Based on our analysis of the information on the record and for the 
reasons outlined in the memorandum to the file titled, ``2003-2004 
Administrative and New Shipper Reviews of the Antidumping Duty Order on 
Fresh Garlic From the People's Republic of China: Intermediate Input 
Methodology,'' dated November 10, 2005 (``Intermediate Product Memo''), 
we believe that the respondents are unable to accurately record and 
substantiate the complete costs of growing garlic.
    Specifically, evidence on the record indicates that the 
respondents' records are deficient in recording reported labor usage. 
The processes required for growing, harvesting, and processing fresh 
garlic in the PRC are very labor-intensive. From planting, tending 
(e.g., taking care of plants), maintenance, harvesting, transporting 
from one area to another, to processing into subject merchandise, PRC 
garlic producers rely on a sizeable workforce, which incurs many man-
hours to carry out these activities. In May and June 2005, the 
Department conducted a harvest verification of six companies (i.e., 
Sunny, FHTK, Hongda, Shanghai LJ, Trans High, and Ziyang).\6\ Our 
verification findings included major discrepancies between the 
harvesting labor reported and that observed during verification for all 
six verified companies.\7\ The Department's harvest verification 
demonstrated that five of the six companies significantly under-
reported harvesting labor while the remaining company over-reported 
harvesting labor. The Department issued a series of supplemental 
questionnaires to all respondents in the instant segments of this 
proceeding, both to those companies that were verified and those that 
were not, in order to address several concerns which were raised during 
the course of the previous administrative review with respect to the 
companies' reported growing- and harvesting-related labor FOPs. Based 
on the responses to these questionnaires, and on the information 
gathered during verification, we conclude that, in general, the 
respondents in this industry do not track actual labor hours incurred 
for these activities and, thus, do not maintain appropriate records 
which would allow them to quantify, report and substantiate this 
information. For further discussion, see Intermediate Product Memo and 
Harvest Verification Reports.
---------------------------------------------------------------------------

    \6\ See ``Harvest Verification of Taiyan Ziyang Food Company, 
Ltd. in the 2003/2004 Administrative Review of Fresh Garlic from the 
People's Republic of China,'' dated November 9, 2005, ``Harvest 
Verification of Taian Fook Huat Tong Kee Foodstuffs Co., Ltd. in the 
2003/2004 Administrative Review of Fresh Garlic from the People's 
Republic of China,'' dated November 9, 2005, ``Harvest Verification 
of Jining Trans-High Trading Company, Ltd. in the 2003/2004 
Administrative Review of Fresh Garlic from the People's Republic of 
China,'' dated November 9, 2005, ``Harvest Verification of Huaiyang 
Hongda Dehydrated Vegetable Co., Ltd. in the 2003/2004 
Administrative Review of Fresh Garlic from the People's Republic of 
China,'' dated November 10, 2005, ``Harvest Verification of Sunny 
Import and Export Co., Ltd. in the 2003/2004 Administrative Review 
of Fresh Garlic from the People's Republic of China,'' dated 
November 10, 2005, and ``Harvest Verification of Henan Xiang Cheng 
Sunny (San Li) Foodstuff Factory, the Supplier of Shanghai LJ 
Internaitonal Trading Co., Ltd Co., Ltd. in the 2003/2004 New 
Shipper Review of Fresh Garlic from the People's Republic of 
China,'' dated November 10, 2005 (collectively, ``Harvest 
Verification Reports''), on file in the CRU.
    \7\ See Harvest Verification Reports.
---------------------------------------------------------------------------

    Further, we found significant problems with respondents' ability to 
report yield loss that results from the shrinkage that occurs during 
the production of garlic due to the loss of water weight and the 
discarding of roots, stems, and skins during processing. In the 
Department's margin calculations, a yield loss adjustment factor (i.e., 
yield loss ratio) must be applied to the respondents' reported direct 
materials, labor, energy, and by-product FOPs to reflect the yield loss 
that occurs from the time the garlic is harvested through the 
production and sale of the final product because, as discussed above, 
significant yield loss or shrinkage occurs during the production of the 
subject merchandise. In order to derive a complete and accurate yield 
loss ratio, the respondents' books and records must record the 
products' weight at a series of specific points in the production 
cycle.
    Based on our analysis of the information provided by the 
respondents, and gathered at verification, we found that each of the 
garlic producers in the PRC record garlic production quantities at 
different points during the harvesting and processing of garlic. We 
found that the respondents calculated these ratios on partial values, 
or at inconsistent and incomplete points in the production cycle. Thus, 
we found that the reported yield loss figures varied significantly 
among respondents, are not an accurate reflection of the losses 
incurred by the PRC garlic producers, and that the NVs calculated using 
these yield loss figures are understated. For further discussion, see 
Intermediate Product Memo.
    We also noted that there are many unknown variables that may affect 
or influence reported FOPs which are not accounted for in the 
respondents' books and records. The respondents' ability to measure and 
report accurate FOPs to the Department is greatly diminished by the 
fact that they lease the land on which the garlic is grown. Respondents 
in these reviews typically lease the land used for growing garlic for a 
period of nine months (i.e., the garlic growing season). The remaining 
three months are referred to as the ``off-season.'' Most respondents 
report no specific or detailed knowledge of either the off-season crops 
produced on such leased land, crops produced on this leased land 
concurrently with the garlic, or the impact that residual inputs (e.g., 
nutrients, pesticide, herbicide, water) may have on their garlic crops. 
For further discussion, see Intermediate Product Memo.
    We found that the respondents also differed significantly in how 
each reported its garlic seed usage. For example, some respondents 
purchased all of the seed required for planting, others used seed 
exclusively reserved from the previous harvest, while the remaining 
companies used both purchased and reserved seed. Among the respondents 
that used reserved seed, some reported the amount of seed actually 
planted (i.e., the ``net'' amount

[[Page 69949]]

exclusive of skins, bulb plates, etc.) while others reported the total 
amount of seed reserved from the previous harvest (i.e., the ``gross'' 
amount with the skins, bulb plates, etc. still intact). In addition, we 
note that there appear to be varying levels of ``gross'' and ``net'' 
quantities that have a specific and different meaning for each 
respondent. ``Net'' for some respondents means the quantity of cloves 
planted in the ground while for others, ``net'' means the quantity of 
garlic, saved from the previous harvest, that is pulled from inventory 
for planting. In those instances where a respondent reported the net 
amount of seed used, we have determined that NV is understated because 
the respondent incurred a cost for the gross amount of seed either 
reserved or purchased for planting that is not accounted for in the FOP 
reported for seed consumption. For further discussion, see Intermediate 
Product Memo.
    Finally, the Department conducts verification in administrative and 
new shipper reviews to confirm the accuracy of the data reported by the 
respondents to the Department in a proceeding. As part of verification 
in cases involving NMEs, the Department must be able to reconcile the 
data submitted in the questionnaire responses to the respondent's books 
and records, and, observe on-site production activities during 
verification. When the respondent's books and records do not contain a 
level of detail sufficient to substantiate the information required to 
report accurate FOP data, there is, in essence, no document trail 
through which the Department can conduct such a verification. We find 
that the PRC garlic industry has adopted and accepted a practice of 
maintaining either very basic records of its farms' growing and 
harvesting activities or, as detailed in the Intermediate Product Memo, 
no records at all. This record-keeping is sufficient for farmers in the 
PRC garlic industry to successfully grow and harvest garlic. However, 
the combination of lack of detailed records, unclear schedules, and the 
multi-staged production process occurring over several months as it 
relates to planting, tending, and harvesting activities significantly 
inhibits the Department's ability to conduct a meaningful verification 
of reported information.
    In the previous administrative review, several concerns were raised 
with respect to the companies' reported growing and harvesting-related 
FOPs. To address these concerns, the Department issued a series of 
supplemental questionnaires to all respondents in the instant segments 
of this proceeding, both to those companies that were verified and 
those that were not. In response to those questionnaires, and based on 
information gathered at verification, the Department has determined 
that the books and records maintained by the respondents do not report 
or account for all of the relevant information and do not allow the 
respondents to identify all of the FOPs necessary to grow and harvest 
garlic. See Intermediate Product Memo. Further, the respondents' books 
and records (e.g., inventory ledgers) do not allow us or the 
respondents themselves to derive accurate factor usage rates, which are 
necessary to the NME calculation methodology for NV. In addition, 
actual farms operated by each respondent are difficult to identify and 
locate as the respondents cannot provide detailed maps clearly marking 
the territories of their farms. Thus, the only way to derive complete 
and precise FOP data, without sufficiently detailed records, is for the 
Department to physically measure and observe each of these various 
production activities as they occur, as part of verification. As this 
would require the Department to be present throughout every day of 
planting, tending, and harvesting for each respondent, the calculation 
(and verification) of accurate and complete FOPs is a virtual 
impossibility. Given that garlic is grown and harvested in one 
production cycle over a nine-month period, the Department can only 
verify the one growing/harvesting activity that is occurring at a 
particular point in the growing season.
    Thus, in these reviews, in order to eliminate the distortions in 
our calculation of NV for all of the reasons identified above and 
described in the Intermediate Product Memo, we applied an 
``intermediate-product valuation methodology'' to all companies for 
these preliminary results of review. Using this methodology, we 
calculated NV by starting with a surrogate value for the garlic bulb 
(i.e., the ``intermediate product''), adjusted for yield losses during 
the processing stages, and adding the respondents' processing costs, 
which were calculated using their reported usage rates for processing 
fresh garlic. For a complete explanation of the Department's analysis, 
and for a more detailed analysis of these issues with respect to each 
respondent, see Intermediate Product Memo.
    In future reviews, should a respondent be able provide sufficient 
factual evidence that it maintains the necessary information in its 
internal books and records that would allow us to establish the 
completeness and accuracy of the reported FOPs, we will revisit this 
issue and consider whether to use its reported FOPs in the calculation 
of NV. For further details, see Intermediate Product Memo.
2. Factor Valuations
    In accordance with section 773(c) of the Act, we calculated NV 
based on the intermediate product value and processing FOPs reported by 
the respondents for the POR. To calculate NV, 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 shorter of the reported 
distance from the domestic supplier to the factory or the distance from 
the port in accordance with the decision in Sigma Corporation v. United 
States, 117 F. 3d 1401, 1407-08 (Fed. Cir. 1997). We made currency 
conversions into U.S. dollars, in accordance with section 773A(a) of 
the Act, based on the exchange rates in effect on the dates of the U.S. 
sale(s) as certified by the U.S. Federal Reserve Bank. For a detailed 
description of all the surrogate values we used, see the Factor 
Valuation Memo.
    For those Indian rupee values not contemporaneous with the POR, we 
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 the intermediate and 
processing 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.
    Garlic Bulb: We reviewed several data sources submitted to the 
record of these reviews by respondents and the petitioners. Although 
the data sources were submitted by interested parties for consideration 
as the surrogate value for garlic seed, we reviewed the sources to 
evaluate their use to value the intermediate bulb (i.e., the 
intermediate product) as well as for seed. Our review of information on 
the administrative

[[Page 69950]]

record for this proceeding indicates that garlic values sourced from 
the National Horticultural Research and Development Foundation 2003 
(``NHRDF'') in India are specific to seed and are not appropriate for 
valuation of the intermediate bulb. Research conducted by the 
Department revealed that the garlic sold by NHRDF is intended only for 
use as seed for planting rather than for processing. See ``Memorandum 
to the File from Steve Williams,'' dated October 21, 2005, available in 
the CRU. We continue to believe that the pricing information of the 
NHRDF represents the most appropriate surrogate seed values for the 
type of high-quality garlic produced by the respondents in these 
reviews. However, because we are not using the respondents' reported 
growing FOPs (e.g., seed, herbicide, pesticide, fertilizer, etc.) used 
to produce the intermediate bulb, we find that the NHRDF values are not 
the most appropriate data for use as a value for the intermediate bulb.
    While we believe that the import values for garlic derived from the 
World Trade Atlas do not allow us to ascertain the quality or nature of 
the garlic products (i.e., bulbs, loose cloves, etc.) entered under the 
applicable Indian Harmonized Tariff Schedule (``HTS'') category, we 
find that they are the best publicly available data on the record of 
this proceeding to value the intermediate bulb. Thus, we used the POR 
weighted-average unit import values for garlic derived from the World 
Trade Atlas to value the intermediate bulb for these preliminary 
results. We invite interested parties to submit publicly available 
information to value the garlic bulb for consideration for the final 
results of this proceeding. This information and other surrogate value 
submissions are due within 20 days after the date of publication of 
these preliminary results.
    In addition, if a respondent reported that it purchased its garlic 
from an unaffiliated supplier prior to processing, we included a 
freight cost from the garlic bulb supplier to the company's processing 
facility. We did not include a freight cost for the garlic bulb if the 
respondent grew and processed its own garlic. For further details, see 
Factor Valuation Memo.
    Energy and Water: To value electricity and diesel, we used values 
from the International Energy Agency to calculate a surrogate value for 
each in India for 2000, and adjusted for inflation. To value water, we 
used the rates from the website maintained by the Maharastra Industrial 
Development Corporation (http://www.midcindia.org/), which shows 
industrial water rates from various areas within the Maharastra 
Province, India (``Maharastra Data''). The Maharastra data is publicly 
available and contemporaneous with the POR.
    Packing: 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, plastic jar inserts, plastic tubes, 
nitrogen gas, antiseptic, metal clips, labels, glue, and cardboard. All 
of these inputs were valued using import data from the World Trade 
Atlas that covered the POR.
    Labor: We valued labor, consistent with 19 CFR 351.408(c)(3), using 
the PRC regression-based wage rate as reported on Import 
Administration's home page, Import Library, Expected Wages of Selected 
NME Countries, revised in November 2005, and posted to Import 
Administration's website at http://ia.ita.doc.gov/wages. The source of 
this wage rate data on Import Administration's web site is the Yearbook 
of Labour Statistics 2003, International Labor Office, (Geneva: 2003), 
Chapter 5B: Wages in Manufacturing (http://laborsta.ilo.org). The years 
of the reported wage rates range from 1998 to 2003. Because this 
regression-based wage rate does not separate the labor rates into 
different skill levels or types of labor, we have applied the same wage 
rate to all skill levels and types of labor reported by the respondent. 
See id.
    Land Value and Cold Storage: We find that, based on the use of 
intermediate product, the market value of the intermediate product 
(i.e., the garlic bulb) already accounts for the cost of leasing the 
land used to grow garlic as well as any cold storage costs incurred 
prior to processing. Therefore, we did not value land or cold storage 
for these preliminary results of review because doing so might result 
in double counting of these costs.
    By-product: The respondents claimed an adjustment for revenue 
earned on the sale of garlic sprouts. We find that because the market 
value of the intermediate product (i.e., the garlic bulb) already 
accounts for the experience of the grower's sale of any by-product 
produced while growing garlic, we have not made a by-product offset 
amount from NV.
    Movement Expenses: 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 an average value calculated in Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat 
Products From India, 66 FR 50406 (October 3, 2001), and Notice of Final 
Determination of Sales at Less than Fair Value: Carbazole Violet 
Pigment 23 from India, 69 FR 67306 (November 17, 2004). We adjusted 
data not contemporaneous with the POR when appropriate. For ocean 
freight, we used the rate quotes from the website maintained by Maersk 
Sealand (www.maersksealand.com) for the movement of refrigerator 
containers from the PRC to the east and west coasts of the United 
States because it is publicly available and contemporaneous with the 
POR. 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. We used this data because it is publicly 
available and contemporaneous with the POR.
    Financial Expenses: As discussed in the Factor Valuation Memo, the 
respondents submitted the publicly available financial information of 
four companies. The petitioners did not submit any financial statements 
for these preliminary results. Because we are using an intermediate 
methodology for all respondents in these reviews, it is important to 
use financial ratios derived from a surrogate company whose financial 
expenses do not include upstream costs (i.e., growing costs) to avoid 
double-counting factory overhead, selling, general and administrative 
expenses, and profit. We preliminarily conclude that the financial 
information of Preethi Tea Industry Private Limited (``Preethi'') and 
Limtex India Limited (``Limtex''), tea producers in India, are most 
representative of the financial experiences of the respondent companies 
because they process an intermediate product prior to its sale. We are 
not using the financial information of The Moran Tea Co. (India) Ltd. 
because this company appears to grow the majority of its raw materials, 
and thus, the information reflects the financial experience of a fully-
integrated company. We also are not using the financial information of 
Dakash Foods because its does not contain enough information from which 
to ascertain whether the company is comparable to the PRC respondents.
    Thus, to value factory overhead, and selling, general and 
administrative expenses, we used rates based on data

[[Page 69951]]

taken from the 2002/2003 and 2003/2004 financial statements of Preethi 
and Limtex for these preliminary results. Preethi's 2002/2003 financial 
statement did not report a profit. Therefore, for purposes of these 
preliminary results we excluded the profit ratio that was reported on 
its 2002/2003 financial statement. See Factor Valuation Memo for a more 
complete discussion of the Department's analysis.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value FOPs, but when a 
producer sources an input from a market economy and pays for it in 
market economy currency, the Department will normally value the factor 
using the actual price paid for the input. See 19 CFR 351.408(c)(1). 
See also Lasko Metal Products v. United States, 43 F.3d 1442, 1445-46 
(Fed. Cir. 1994). However, when the Department has reason to believe or 
suspect that such prices may be distorted by subsidies, the Department 
will disregard the market economy purchase prices and use surrogate 
values to determine the NV. See Notice of Amended Final Determination 
of Sales at Less than Fair Value: Automotive Replacement Glass 
Windshields from the People's Republic of China (``PRC''), 67 FR 11670 
(March 15, 2002).

Preliminary Results of the Administrative and New Shipper Reviews

    We preliminarily find that the following weighted-average dumping 
margins exist for the period November 1, 2003, through October 31, 
2004:

------------------------------------------------------------------------
                                                            Weighted-
             Producer/Manufacturer/Exporter              Average Percent
--------------------------------------------------------------Margin----
Jinan Yipin Corporation, Ltd...........................          13.86
Jinxiang Dong Yun Freezing Storage Co., Ltd............       0.04 (de
                                                              minimis)
Fook Huat Tong Kee Pte., Ltd...........................           0.64
Huaiyang Hongda Dehydrated Vegetable Company...........           0.00
Linshu Dading Private Agricultural Products Co., Ltd...          23.17
Sunny Import & Export Limited..........................           3.96
Taian Ziyang Food Co., Ltd.............................       0.45 (de
                                                              minimis)
Jining Trans-High Trading Co., Ltd.....................           0.00
Zhengzhou Harmoni Spice Co., Ltd.......................           0.00
Weifang Shennong Foodstuff Co., Ltd....................           0.00
Jinxiang Shanyang Freezing and Storage Co., Ltd........          27.82
Shanghai LJ International Trading Co., Ltd.............           0.00
Zhangqiu Qingyuan Vegetable Co., Ltd...................          11.48
PRC-Wide Entity\8\.....................................         376.67
------------------------------------------------------------------------
\8\ The PRC-wide entity includes: Guangda, H&T, Hongyu, and Yun Feng.

    The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b).
    Interested parties may submit case briefs and/or written comments 
no later than 30 days after the date of publication of these 
preliminary results of review. See 19 CFR 351.309(c)(ii). Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 37 days after the 
date of publication of these preliminary results of review. See 19 CFR 
351.309(d).
    Any interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
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 seven 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.
    The Department will issue the final results of this administrative 
review and new shipper reviews, which will include the results of its 
analysis of issues raised in any such comments, within 120 days of 
publication of these preliminary results, pursuant to section 
751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department will issue appropriate assessment instructions directly 
to CBP within 15 days of publication of the final results of this 
administrative review. If these preliminary results are adopted in our 
final results of 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 an exporter/importer (or 
customer)-specific assessment rate or value for merchandise subject to 
this review. 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. In these reviews, we will 
direct CBP to assess importer (or customer)-specific assessment rates 
based on the resulting per-unit (i.e., per kilogram) amount on each 
entry of the subject merchandise during the POR.

Cash Deposit Requirements

    Bonding will no longer be permitted to fulfill security 
requirements for shipments of fresh garlic from the PRC produced by San 
Li and exported by Shanghai LJ, and produced and exported by Qingyuan 
that are entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of these new shipper 
reviews. The following cash deposit requirements will be effective upon 
publication of the final results of these new shipper reviews for all 
shipments of subject merchandise from Shanghai LJ and Qingyuan entered, 
or withdrawn from warehouse, for consumption on or after the 
publication date, as provided by section 751(a)(2)(C) of the Act: (1) 
For subject merchandise produced by San Li and exported by Shanghai LJ, 
and produced and exported by Qingyuan, the cash deposit rate will be 
that stipulated in the final results of review, except, no cash deposit 
will be required if the cash deposit rate calculated in the final 
results is zero or de minimis; (2) for subject merchandise exported by 
Shanghai LJ but not manufactured by San Li, the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for 
subject merchandise exported by Qingyuan, but manufactured by any other 
party, the cash deposit rate will be the PRC-wide rate.
    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 of the 
final results, also as provided by section 751(a)(2)(C) of the Act: (1) 
for subject merchandise exported by Dong Yun, FHTK, Hongda, Jinan 
Yipin, Linshu Dading, Sunny, Ziyang, Trans-High, Harmoni, WSFC, and 
Shanyang, the cash-deposit rate will be that established in these final 
results of review (except where the rate is de minimis, i.e., less than 
0.5 percent, no cash deposit will be required); (2) for anyone that is 
not reviewed here but has a separate rate from a prior segment, the

[[Page 69952]]

rate will be from that segment; (3) for all other PRC exporters of 
subject merchandise which have not been found to be entitled to a 
separate rate, the cash deposit rate will be the PRC-wide rate of 
376.67 percent; (4) for all non-PRC exporters of subject merchandise, 
the cash deposit rate will be the rate applicable to the PRC supplier 
of that exporter. These deposit requirements 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 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative and these new shipper reviews and this notice 
are in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of 
the Act, and 19 CFR 351.213(g), 351.214(h) and 352.221(b)(4).

    Dated: November 10, 2005.
Stephen J. Claeys,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. E5-6391 Filed 11-17-05; 8:45 am]
BILLING CODE 3510-DS-S