[Federal Register Volume 72, Number 1 (Wednesday, January 3, 2007)]
[Notices]
[Pages 111-119]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22497]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-863


Honey from the People's Republic of China: Intent to Rescind, In 
Part, and Preliminary Results of Antidumping Duty New Shipper Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (``the Department'') is 
conducting new shipper reviews of the antidumping duty order on honey 
from

[[Page 112]]

the People's Republic of China (``PRC'') in response to requests from 
Inner Mongolia Altin Bee-Keeping Co., Ltd. (``Inner Mongolia''), 
Qinhuangdao Municipal Dafeng Industrial Co., Ltd. (``QMD''), and 
Dongtai Peak Honey Industry Co., Ltd. (``Dongtai Peak''), 
(collectively, ``respondents''). The period of review (``POR'') is from 
December 1, 2004, through November 30, 2005. With regard to Inner 
Mongolia and Dongtai Peak, we have preliminarily determined that their 
sales have been made below normal value during the POR. In addition, we 
have preliminarily determined that Inner Mongolia's, and Dongtai Peak's 
sales are bona fide transactions. However, with regard to QMD, we have 
preliminarily determined its POR sale was not a bona fide transaction 
and are rescinding its review, as further explained in the bona fide 
analysis and preliminary intent to rescind sections of this notice. 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 appropriate entries of subject 
merchandise during the POR. Interested parties are invited to comment 
on these preliminary results.

EFFECTIVE DATE: January 3, 2007.

FOR FURTHER INFORMATION CONTACT: Helen Kramer, Patrick Edwards, or Judy 
Lao AD/CVD Operations, Office 7, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0405, (202) 482-8029 or (202) 482-7924, respectively.

SUPPLEMENTARY INFORMATION:

Background

    The Department published in the Federal Register the antidumping 
duty order on honey from the People's Republic of China (``PRC'') on 
December 10, 2001. See Notice of Amended Final Determination of Sales 
at Less Than Fair Value and Antidumping Duty Order; Honey from the 
People's Republic of China, 66 FR 63670 (December 10, 2001). On 
December 19, 2005, the Department received properly filed requests for 
the three new shipper reviews, in accordance with section 751(a)(2)(B) 
of the Tariff Act of 1930, as amended (``the Act'') and 19 CFR Sec.  
351.214(b) and (c), from Inner Mongolia, QMD, and Dongtai Peak. The 
Department determined that the requests met the requirements stipulated 
in 19 CFR 351.214, and on January 31, 2006, published its initiation of 
these new shipper reviews. Honey from the People's Republic of China: 
Initiation of New Shipper Antidumping Duty Reviews, 71 FR 5051 (January 
31, 2006).\1\ On February 6, 2006, the Department issued antidumping 
duty new shipper questionnaires to Inner Mongolia, QMD, and Dongtai 
Peak. Between February 2006 and June 2006, the Department received 
timely filed original and supplemental questionnaire responses from all 
three respondents. On July 3, 2006, the Department extended the 
deadline for the preliminary results to November 21, 2006. See Honey 
from the People's Republic of China: Notice of Time Limit for 
Preliminary Results of New Shipper Review, 71 FR 37904 (July 3, 2006).
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    \1\ On December 29, 2006, the Department also received a request 
on behalf of Tianjin Eulia Honey Co., Ltd. (``Eulia'') to initiate a 
new shipper review. The Department initiated a new shipper review on 
Eulia on January 31, 2006. Eulia officially withdrew from the review 
on July 12, 2006. The Department rescinded the review on July 31, 
2006. See Honey from the People's Republic of China: Notice of 
Rescission of Antidumping Duty Review, 71 FR 43110, (July 31, 2006).
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    On September 8, 2006, we invited interested parties to provide 
information on surrogate market economy values for the factors of 
production reported by respondents. On September 20, 2006, and 
September 22, 2006, both respondents and petitioners submitted publicly 
available surrogate value information. On October 10, 2006, petitioners 
submitted comments on respondents' surrogate value submission. On 
October 12, 2006, respondents and QMD submitted comments on petitioners 
surrogate value submission. On October 25, 2006, the Department 
received a letter from Inner Mongolia Altin Bee-Keeping Co., Ltd., 
Dongtai Peak Honey Industry Co., Ltd, and Qinhuangdao Municipal Dafeng 
Industrial Co., Ltd. agreeing to waive the new shipper time limits in 
accordance with 19 CFR Sec.  351.214(j)(3). Therefore, in accordance 
with 19 CFR Sec.  351.214(j)(3), on October 25, 2006, the Department 
acknowledged respondents' waiver of the new shipper review time limits 
and aligned the new shipper reviews with the administrative review. See 
Department's Memo to All Interested Parties, dated October 25, 2006, in 
which the Department acknowledged that all three remaining new shipper 
companies waived the new shipper time limits, and the Department 
aligned the current new shipper reviews with the current administrative 
review.
    On November 13, 2006, the Department further extended the deadline 
for the preliminary results to December 21, 2006. See Honey from the 
People's Republic of China: Extension of Time Limit for Preliminary 
Results of the Antidumping Duty Administrative Review and New Shipper 
Review, 71 FR 66165 (November 13, 2006).
    The Department conducted verification of Inner Mongolia's 
questionnaire responses at the company's facilities in Hohhot, Inner 
Mongolia, Autonomous Region, PRC from July 10-11, 2006. The Department 
conducted verification of QMD's questionnaire responses at the 
company's facilities in Qinhuangdao, Heibei, PRC, from July 13-14, 
2006. The Department conducted verification of Dongtai Peak's 
questionnaire responses at the company's facility in Dongtai, Jiangsu 
Province, PRC, from July 17-18, 2006.

Scope of the Antidumping Duty Order

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

Bona Fide Sale Analysis

    In evaluating whether or not a single sale in a new shipper review 
is commercially reasonable, and therefore bona fide, the Department 
considers, inter alia, such factors as: (1) The timing of the sale; (2) 
the price and quantity; (3) the expenses arising from the transaction; 
(4) whether the goods were resold at a profit; and (5) whether the 
transaction was made on an arms-length basis. See Tianjin Tiancheng 
Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246, 1250 
(TTPC) (CIT 2005), citing Am. Silicon Techs. v. United States, 110 F. 
Supp. 2d 992, 995 (CIT 2000). Accordingly, the Department considers a 
number of factors in its bona fides analysis, ``all of which may speak 
to the commercial realities surrounding an alleged sale of subject 
merchandise.'' See Hebei New Donghua Amino Acid Co., Ltd. v. United 
States, 374 F. Supp. 2d 1333, 1342 (CIT 2005) (New Donghua), citing 
Fresh Garlic from the PRC: Final Results of

[[Page 113]]

Administrative Review and Rescission of New Shipper Review, 67 FR 11283 
(March 13, 2002), and accompanying Issues and Decision Memorandum 
(Clipper NSR).
    We preliminarily find that Inner Mongolia's and Dongtai Peak's 
reported U.S. sales during the POR appear to be bona fide based on the 
totality of the circumstances on the record. Specifically, we find 
that: (1) The price of Inner Mongolia's and Dongtai Peak's sales were 
within the range of the prices of other entries of subject merchandise 
from the PRC into the United States during the POR; (2) Inner 
Mongolia's and Dongtai Peak's sales were made between unaffiliated 
parties at arm's length; and (3) there is no record evidence that 
indicates that Inner Mongolia's and Dongtai Peak's sales were not made 
based on commercial principles. See ``Memorandum to Richard Weible, 
Office Director: Eighth Antidumping Duty New Shipper Review of the 
Antidumping Duty Order on Honey from the People's Republic of China: 
Bona Fide Analysis of Inner Mongolia Altin Bee Keeping Co., Ltd.,'' 
dated December 21, 2006; see also, ``Memorandum to Richard Weible, 
Office Director: Eighth Antidumping Duty New Shipper Review of the 
Antidumping Duty Order on Honey from the People's Republic of China: 
Bona Fide Analysis of Dongtai Peak Honey Industry Co., Ltd.,'' dated 
December 21, 2006.
    However, for QMD, we found evidence that the POR sale in question 
is not a bona fide transaction. Based on our investigation of the sale, 
the questionnaire responses submitted by QMD, information from the 
Department's verification of QMD, and the lack of subsequent POR sales 
demonstrating that retail sales are within QMD's normal course of 
business, we preliminarily determine that QMD has not met the 
requirements to qualify for a new shipper review during the POR. See 
``Memorandum to Richard Weible, Office Director: Eighth Antidumping 
Duty New Shipper Review of the Antidumping Duty Order on Honey from the 
People's Republic of China: Bona Fide Analysis of Qinhuangdao Municipal 
Dafeng Industrial Co., Ltd.,'' dated December 21, 2006, and further 
discussion below.

Preliminary Intent to Rescind

    Concurrent with this notice, we are issuing a memorandum detailing 
our analysis of the bona fides of QMD's U.S. sale and our preliminary 
decision to rescind the new shipper review with respect to QMD. 
Although much of the information relied upon by the Department to 
analyze the issues is business proprietary, the Department based its 
determination that the new shipper sale made by QMD was not bona fide 
on the totality of the circumstances surrounding the sale. An analysis 
of QMD's sales indicates that its POR sale is not within its normal 
business practices. See ``Memorandum to Richard Weible, Office 
Director: Eighth Antidumping Duty New Shipper Review of the Antidumping 
Duty Order on Honey from the People's Republic of China: Bona Fide 
Analysis of Qinhuangdao Municipal Dafeng Industrial Co., Ltd.,'' dated 
December 21, 2006. Also, compared to the average unit values of all 
imports of retail honey shipments from the PRC during the POR, QMD's 
price and quantity are significantly different from other shipments 
from the PRC. See Id.
    Because the Department has found QMD's single POR sale to be non-
bona fide, it is not subject to review. See TTPC, 366 F. Supp. 2d at 
1249 (``Pursuant to the rulings of the Court, Commerce may exclude 
sales from the export price calculation where it finds that they are 
not bona fide''). For additional information in our determination of 
QMD's non \ sale determination, see id; see also, ``Memorandum to the 
File: Verification of the Sales and Factors Response of Qinhuangdao 
Municipal Dafeng Industrial Co., Ltd. in the Antidumping Duty New 
Shipper Review on Honey from the People's Republic of China,'' dated 
August 29, 2006 (``QMD Verification Report''). Public versions of these 
memos are on file in the Central Records Unit (``CRU'') located in room 
B-099 of the Main Commerce Building.

Verification

    As provided in section 782(i)(3) of the Act and 19 CFR Sec.  
351.307(b)(iv), we conducted verification of the questionnaire 
responses of Inner Mongolia, QMD, and Dongtai Peak in July 2006. We 
used standard verification procedures, including on-site inspections of 
the production facilities and examination of relevant sales and 
financial records. Our verification results are outlined in the 
verification reports, public versions of which are on file in the CRU 
located in room B-099 of the Main Commerce Building. See ``Memorandum 
to the File: Verification of the Sales and Factors Response of Inner 
Mongolia Altin Bee-Keeping Co., Ltd. in the Antidumping Duty New 
Shipper Review on Honey from the People's Republic of China,'' dated 
August 17, 2006 (``Inner Mongolia Verification Report''); see also, QMD 
Verification Report; see also, ``Memorandum to the File: Verification 
of the Sales and Factors Response of Dongtai Peak Honey Industry Co., 
Ltd. in the Antidumping Duty New Shipper Review on Honey from the 
People's Republic of China,'' dated August 16, 2006 (``Dongtai Peak 
Verification Report'').

New Shipper Status

    As discussed above, we found no evidence that the sale in question 
for Inner Mongolia, and the sale in question for Dongtai Peak were not 
bona fide sales. See ``Memorandum to Richard Weible, Office Director: 
Eighth Antidumping Duty New Shipper Review of the Antidumping Duty 
Order on Honey from the People's Republic of China: Bona Fide Analysis 
of Inner Mongolia Altin Bee Keeping Co., Ltd.,'' dated December 21, 
2006; see also, ``Memorandum to Richard Weible, Office Director: Eighth 
Antidumping Duty New Shipper Review of the Antidumping Duty Order on 
Honey from the People's Republic of China: Bona Fide Analysis of 
Dongtai Peak Honey Industry Co., Ltd.,'' dated December 21, 2006. Based 
on our investigation into the bona fide nature of the sale, for each 
respondent, the questionnaire responses submitted by each respondent, 
and our verifications thereof, we preliminarily determine that Inner 
Mongolia, and Dongtai Peak have met the requirements to qualify as new 
shippers during the POR. We have determined that Inner Mongolia and 
Dongtai Peak made their first sale and/or shipment of subject 
merchandise to the United States during the POR, and that they were not 
affiliated with any exporter or producer that had previously shipped 
subject merchandise to the United States during the POR. Therefore, for 
purposes of these preliminary results of review, pursuant to 19 CFR 
351.214(b)(2), we are treating Inner Mongolia's, and Dongtai Peak's 
sales of honey to the United States as appropriate transactions for a 
new shipper review. See ``Separate Rates'' section below.

Separate Rates

    In proceedings involving non-market economy (``NME'') countries 
(see section 771(18) of the Act), the Department begins with a 
rebuttable presumption that all companies within the country are 
subject to government control and, thus, should be assigned a single 
antidumping duty rate unless an exporter can affirmatively demonstrate 
an absence of government control, both in law (``de jure'') and in fact 
(``de facto''), with respect to its export activities. For the new 
shipper reviews,

[[Page 114]]

each respondent submitted information in support of its claim for a 
company-specific rate. Moreover, we examined each respondent's claims 
for a separate rate at verification.
    Accordingly, we have considered whether respondents are independent 
from government control, and therefore eligible for a separate rate. To 
establish whether a firm is sufficiently independent from government 
control of its export activities to be entitled to a separate rate, the 
Department analyzes each entity exporting the subject merchandise under 
a test arising from the Notice of Final Determination of Sales at Less 
Than Fair Value: Sparklers from the People's Republic of China, 56 FR 
20588 (May 6, 1991), and accompanying Issue and Decision memorandum at 
Comment 1 (``Sparklers''), as amplified by Notice of Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585, at 22586-7 (May 2, 1994) 
(``Silicon Carbide''). In accordance with the separate-rates criteria, 
the Department assigns separate rates in NME cases only if respondents 
can demonstrate the absence of both de jure and de facto government 
control over export activities. Respondents provided complete separate-
rate information in their respective responses to our original and 
supplemental questionnaires.

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; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR 20588, and accompanying Issue and Decision memorandum 
at Comment 1. As discussed below, our analysis shows that the evidence 
on the record supports a preliminary finding of de jure absence of 
government control for each respondent based on each of these factors.
    Both Inner Mongolia and Dongtai Peak placed on the record a number 
of documents to demonstrate absence of de jure control, including the 
``Company Law of the People's Republic of China'' (December 29, 1993) 
and the ``Foreign Trade Law of the People's Republic of China'' (May 
12, 1994). See Exhibit A-2 of Inner Mongolia's and Dongtai Peak's, 
respective Section A submissions, both dated March 11, 2006, 
(collectively, ``Section A responses''). Respondents also submitted 
copies of their business licenses in Exhibit A-3 of their respective 
Section A responses. The Inner Mongolia Autonomous Region Tumd Left 
Banner Industry Commerce Administration Bureau issued Inner Mongolia's 
business license. The Dongtai Industry & Commerce Administration Bureau 
issued Dongtai Peak's business license. Each respondent stated the 
following in regard to their business license: the business license 
defines the scope of the company's business activities and ensures the 
company has sufficient capital to continue its business operations; the 
business license is issued solely and directly to the company, and no 
other company can use the business license that they use. Respondents 
add that their license defines the business activities that they engage 
in and entitles them to produce and sell honey and honey products. 
There are no other limitations or entitlements posed by the business 
license, according to respondents. Furthermore, respondents state that 
a business entity must obtain a license before it legally operates.
    Respondents state that the Foreign Trade Law governs the 
establishment of limited liability companies, and provides that such a 
company shall operate independently and be responsible for its own 
profits and losses. Respondents also placed on the record the Company 
Law of the People's Republic of China, stating that this law allows 
them full autonomy from the central authority in governing its business 
operations. We have reviewed Article 11 of Chapter II of the Foreign 
Trade Law, which states, ``foreign trade dealers shall enjoy full 
autonomy in their business operation and be responsible for their own 
profits and losses in accordance with the law.'' As in prior cases, we 
have analyzed such PRC laws and found that they establish an absence of 
de jure control. See, e.g., Pure Magnesium from the People's Republic 
of China: Final Results of Antidumping Duty New Shipper Review, 63 FR 
3085 at 3086 (January 21, 1998) and Preliminary Results of Antidumping 
Duty New Shipper Review: Certain Preserved Mushrooms From the People's 
Republic of China, 66 FR 30695 at 30696 (June 7, 2001), as affirmed in 
Final Results of New Shipper Review: Certain Preserved Mushrooms From 
the People's Republic of China, 66 FR 45006 (August 27, 2001). 
Therefore, we preliminarily determine that there is an absence of de 
jure control over the export activities of Dongtai Peak, and Inner 
Mongolia.

Absence of De Facto Control

    Typically, the Department considers four factors in evaluating 
whether a respondent is subject to de facto government control of its 
export functions: (1) Whether the export prices are set by, or subject 
to, the approval of a government authority; (2) whether the respondent 
has authority to negotiate and sign contracts, and other agreements; 
(3) whether the respondent has autonomy from the government in making 
decisions regarding the selection of its management; and (4) whether 
the respondent retains the proceeds of its export sales and makes 
independent decisions regarding disposition of profits or financing of 
losses. See Silicon Carbide at 22587. 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 that would preclude the Department from assigning 
separate rates.
    Each respondent has asserted the following: (1) It is a privately 
owned company; (2) there is no government participation in its setting 
of export prices; (3) its general manager has the authority to sign 
export contracts; (4) the shareholders appointed the general manager, 
who selected the other managers, and it does not have to notify 
government authorities of its management selection; (5) there are no 
restrictions on the use of its export revenue; and (6) the shareholders 
decide how profits will be used, see Section A responses. We have 
examined the documentation provided and note that it does not 
demonstrate that pricing is coordinated among exporters of PRC honey.
    Consequently, because evidence on the record indicates an absence 
of government control, both in law and in fact, over respondents' 
export activities, we preliminarily determine that Inner Mongolia, and 
Dongtai Peak have met the criteria for the application of a separate 
rate.

Normal Value Comparisons

    To determine whether each respondent's sale of honey to the United 
States was made at prices below normal value (``NV''), we compared 
their United States prices to NV, as described in the ``U.S. Price'' 
and ``Normal Value'' sections of this notice.

[[Page 115]]

U.S. Price

Export Price

    For both respondents, we based U.S. price on export price (``EP'') 
in accordance with section 772(a) of the Act, because the first sale to 
an unaffiliated purchaser was made prior to importation, and 
constructed export price (``CEP'') was not otherwise warranted by the 
facts on the record. We calculated EP based on the packed price from 
the exporter to the first unaffiliated customer in the United States. 
We deducted foreign inland freight and foreign brokerage and handling 
expenses from the starting price (``gross unit price''), in accordance 
with section 772(c) of the Act.
    Where foreign inland freight and foreign brokerage and handling 
expenses were provided by PRC service providers or paid for in 
renminbi, we valued these services using Indian surrogate values (see 
``Factors of Production'' section below for further discussion). For 
expenses provided by a market-economy provider and paid for in market-
economy currency, we used the reported expense, pursuant to 19 CFR 
Sec.  351.408(c)(1).

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 factors 
of production (``FOP'') 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. First, 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 Fresh Garlic from the People's Republic of China: 
Final Results and Partial Rescission of Antidumping Duty Administrative 
Review and Final Results of New Shipper Reviews, 71 FR 26329 (May 4, 
2006) (``Garlic''), and accompanying Issues and Decision Memorandum at 
Comment 1; 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. Second, as 
the Department explained in Garlic, attempting to value the factors 
used in a production process yielding an intermediate product may lead 
to an inaccurate result because a significant element of cost would not 
be adequately accounted for in the overall factors buildup. See Garlic, 
71 FR 26329, and accompanying Issues and Decision Memorandum at Comment 
2.
    We note that Inner Mongolia owns bee hives and contends that their 
own bee farms supplied all of the raw honey they processed during the 
POR. Inner Mongolia argues that its processed honey should be valued by 
using surrogate values for the beekeeping factors used to produce raw 
honey. In the course of this proceeding, the Department has requested 
and obtained detailed information from Inner Mongolia with respect to 
its raw honey production practices.
    In order to ascertain whether Inner Mongolia's books and records 
are able to substantiate accurately the complete costs of producing 
honey, we have considered and analyzed the factors associated with 
production, including labor costs, pesticides, overhead expenses, and 
raw honey supply produced. For labor costs, the Department found that 
Inner Mongolia did not track the actual labor hours on its bee farms, 
or maintained records that would allow them to substantiate this 
information. For pesticides, the Department found that Inner Mongolia 
could not identify the chemical composition of the pesticides used on 
the bee farms. Therefore, the Department could not determine the 
appropriate surrogate value for pesticides. For overhead expenses, 
Inner Mongolia did not submit public financial statements for a 
surrogate honey processor that owns bee farms. Also, the available 
surrogate financial ratios do not capture the overhead costs for 
beekeeping operations. Therefore, it is impossible to determine an 
appropriate surrogate value for overhead expenses.
    For raw honey supply, the Department verified the quantity of raw 
honey delivered to Inner Mongolia's processing plant during the POR, 
and found that the average yield of raw honey per beehive based on the 
numbers of hives the company reported as having used during the POR is 
far in excess of maximum yields reported worldwide. See the 
Department's letter to the interested parties dated Nov. 14, 2006, 
attaching articles showing yields per hive in various countries ranging 
from 20 to 100 kg, and the petitioners' letters dated November 22 and 
28, 2006. The Department gave the parties an opportunity to comment on 
the raw honey yields. Based upon the information and comments provided 
by the parties, the Department has preliminarily determined that Inner 
Mongolia has not substantiated its aberrationally high yields.
    Based on our analysis of the information on the record, we find 
that Inner Mongolia is unable to record accurately and substantiate the 
complete costs of producing raw honey. Therefore, we have preliminarily 
determined that the use of intermediate input methodology is more 
accurate, and have used raw honey as the direct raw material input. For 
a complete explanation of the Department's analysis, see the 
Department's Factor of Production Valuation memo, dated December 21, 
2006; Inner Mongolia Altin Bee-Keeping Co., Ltd. Program Analysis for 
the Preliminary Results of Review, dated December 21, 2006.
    In future reviews, should a respondent be able to 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 beekeeping FOPs in the 
calculation of NV.

Non-Market-Economy Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. Pursuant to section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an NME country shall remain in effect until revoked by the 
administering authority. See Tapered Roller Bearings and Parts Thereof, 
Finished and Unfinished, from the People's Republic of China: 
Preliminary Results of 2001-2002 Administrative Review and Partial 
Rescission of Review, 68 FR 7500 (February 14, 2003), as affirmed in 
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, 
from the People's Republic of China: Final Results of 2001-2002 
Administrative Review and Partial Rescission of Review, 68 FR 70488 
(December 18, 2003). None of the parties to these reviews has contested 
such treatment. Accordingly, we calculated NV in accordance with 
section 773(c) of the Act, which applies to NME countries.

[[Page 116]]

Surrogate Country

    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production, to the extent possible, in one or 
more market-economy countries that: (1) Are at a level of economic 
development comparable to that of the NME country, and (2) are 
significant producers of comparable merchandise. India is among the 
countries comparable to the PRC in terms of overall economic 
development, as identified in the ``Memorandum from the Office of 
Policy to Abdelali Elouaradia, Program Manager Office 7'' dated April 
20, 2006. In addition, based on publicly available information placed 
on the record (e.g., world production data), India is a significant 
producer of honey. Accordingly, we considered India the surrogate 
country for purposes of valuing the factors of production because it 
meets the Department's criteria for surrogate-country selection. See 
``Memorandum to the File: Selection of a Surrogate Country,'' dated 
November 30, 2006.

Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on the factors of production which included, but were not limited 
to: (A) Hours of labor required; (B) quantities of raw materials 
employed; (C) amounts of energy and other utilities consumed; and (D) 
representative capital costs. We used factors of production reported by 
the producer for materials, energy, labor, and packing. To calculate 
NV, we multiplied the reported unit factor quantities by publicly 
available Indian values.
    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data, in accordance with our 
practice. See, e.g., Fresh Garlic from the People's Republic of China: 
Final Results of Antidumping Duty New Shipper Review, 67 FR 72139 
(December 4, 2002), and accompanying Issues and Decision Memorandum at 
Comment 6; and Certain Preserved Mushrooms from China Final Results of 
First New Shipper Review and First Antidumping Duty Administrative 
Review: Certain Preserved Mushrooms From the People's Republic of 
China, 66 FR 31204 (June 11, 2001), and accompanying Issues and 
Decision Memorandum at Comment 5.
    When we used publicly available import data from the Ministry of 
Commerce of India (Indian Import Statistics) for December 2004 through 
November 2005 to value inputs sourced domestically by PRC suppliers, we 
added to the Indian surrogate values a surrogate freight cost 
calculated using the shorter of the reported distance from the domestic 
supplier to the factory or the distance from the nearest port of export 
to the factory. See, Sigma Corp. v. United States, 117 F. 3d 1401, 1408 
(Fed. Cir. 1997). When we used non-import surrogate values for factors 
sourced domestically by PRC suppliers, we based freight for inputs on 
the actual distance from the input supplier to the site at which the 
input was used. In instances where we relied on Indian import data to 
value inputs, in accordance with the Department's practice, we excluded 
imports from both NME countries and countries deemed to maintain 
broadly available, non-industry-specific subsidies which may benefit 
all exporters to all export markets (i.e., Indonesia, South Korea, and 
Thailand) from our surrogate value calculations. See, e.g., Final 
Determination of Sales at Less Than Fair Value: Certain Automotive 
Replacement Glass Windshields from the People's Republic of China, 67 
FR 6482 (February 12, 2002), and accompanying Issues and Decision 
Memorandum at Comment 1; see also, Notice of Preliminary Determination 
of Sales at Less Than Fair Value, Postponement of Final Determination, 
and Affirmative Preliminary Determination of Critical Circumstances: 
Certain Color Television Receivers From the People's Republic of China, 
68 FR 66800 at 66808 (November 28, 2003), unchanged in the Department's 
final results at Notice of Final Determination of Sales at Less Than 
Fair Value, Postponement of Final Determination, and Affirmative 
Preliminary Determination of Critical Circumstances: Certain Color 
Television Receivers From the People's Republic of China, 69 FR 20594 
(April 16, 2004).
    For a complete discussion of the import data that we excluded from 
our calculation of surrogate values, see ``Memorandum to the File: 
Factors of Production Valuation Memorandum for the Preliminary Results 
and Partial Rescission of Antidumping Duty Administrative Review of 
Honey from the People's Republic of China,'' dated December 21, 2006 
(Factor Valuation Memo). This memorandum is on file in the CRU, located 
in room B099 of the main Commerce building.
    Where we could not obtain publicly available information 
contemporaneous with the POR to value factors, we adjusted the 
surrogate values using the Indian Wholesale Price Index (WPI) as 
published in the International Financial Statistics of the 
International Monetary Fund, for those surrogate values in Indian 
rupees. We made currency conversions, where necessary, pursuant to 19 
CFR Sec.  351.415, to U.S. dollars using the daily exchange rate 
corresponding to the reported date of each sale. We relied on the daily 
exchanges rates posted on the Import Administration Web site (http://ia.ita.doc.gov). See Factor Valuation Memo.
    We valued the factors of production as follows:
    To value raw honey, we took a weighted average of the raw honey 
prices for each month from December 2002 through June 2003, based on 
the percentage of each type of honey produced and sold, as derived from 
EDA Rural Systems Pvt Ltd. Web site, http://www.litchihoney.com (EDA 
data), and as placed by the Department on the record of this 
administrative review on December 4, 2006, and used in the prior 
administrative review of honey from the PRC. See AR3 Final Results and 
accompanying Issues and Decision Memorandum at Comment 1. We inflated 
the value for raw honey using the POR average WPI rate.
    The respondents in this review submitted news articles to be used 
as potential sources for the surrogate value data for raw honey, 
including an article entitled ``Monograph on Traditional Sciences and 
Technologies of India Honey Industry'' from the Web site http://www.mandafamily.com/indhonindresources.htm dated December 2, 2005, an 
article entitled ``Honey prices nosedive as supply exceeds demand'' 
from http://www.financialexpress.com dated July 11, 2006, and an 
article entitled ``Honey, the sure way to make money'' from the http://www.thehindu.com dated September 11, 2005. In addition, the Department 
conducted extensive research on potential raw honey surrogate values 
for this administrative review. The Department found the sources 
submitted by respondents and our own research of new sources not to be 
as reliable as EDA data because of the lack of information detailing 
how the conclusions stated in the sources were determined, researched, 
and collected. The EDA data are supported with information detailing 
how its figures are determined, researched, and collected. 
Additionally, the EDA data provide multiple price points over the 
course of an extended period of time, whereas alternative data report 
very few or just a single weighted-average price for a year or 
succession of years. Therefore, because we find EDA data to be the best 
available data on the record, we have not used any of these alternate 
sources proposed by respondents in the

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preliminary results. For a complete discussion of the Department's 
analysis of honey, see Factor Valuation Memo at 3-5.
    To value coal, the Department derived the weighted-average of the 
import volume and value from the Indian Import Statistics, Harmonized 
Commodity Description and Coding System (HS), for HS 27011920. In 
calculating the surrogate values, the Department eliminated the data of 
the countries identified as being non-market economy countries (i.e., 
the PRC and Vietnam), and those deemed to maintain broadly available, 
non-industry specific subsidies that may benefit all exporters to all 
export markets (i.e., Indonesia, South Korea, and Thailand), as 
identified above in the ``Valuation of Factors'' section of Factor 
Valuation Memo, from the dataset. See Id. at 2 and 7.
    To value water, we calculated the average price of water rates 
within and outside of industrial zones from various regions as reported 
by the Maharashtra Industrial Development Corporation, http://midcindia.org, dated June 1, 2003. We inflated the value for water 
using the POR average WPI rate. See Id. at 8.
    We valued electricity using the 2000 electricity price in India 
reported by the International Energy Agency statistics for Energy 
Prices & Taxes, Third Quarter 2003. We inflated the value for 
electricity using the POR average WPI rate. See Id. at 8.
    To value paint, we used Indian Import Statistics, contemporaneous 
with the POR. In calculating the surrogate values, the Department 
eliminated the data of the countries identified as being non-market 
economy countries (i.e., the PRC and Vietnam), and those deemed to 
maintain broadly available, non-industry specific subsidies that may 
benefit all exporters to all export markets (i.e., Indonesia, South 
Korea, and Thailand), as identified above in the ``Valuation of 
Factors'' section of Factor Valuation Memo, from the dataset. See Id. 
at 2 and 7. The Department calculated a POR contemporaneous paint 
surrogate value by deriving the weighted-average of the import volume 
and value from the Indian Import Statistics, as identified by the 
designated Indian Trade Classification, based on the HS 3208 and HS 
3209. After deriving the weighted average of each HS category of paint, 
the Department calculated the simple average of the two categories. See 
Id. at 2 and 5.
    To value drums, we relied upon a price quote from an Indian steel 
drum manufacturer from September 2000, which was used in the AR3 Final 
Results, and as placed by the Department on the record of this 
administrative review on December 4, 2006. We inflated the value for 
drums using the POR average WPI rate. See Id. at 5.
    To value factory overhead, selling, general, and administrative 
expenses (SG&A), and profit, we relied upon publicly available 
information in the 2004-2005 annual report of Mahabaleshwar Honey 
Production Cooperative Society Ltd. (MHPC), a producer of the subject 
merchandise in India, and placed by the Department on the record of 
this administrative review on December 4, 2006. Respondents maintain in 
their September 20, 2006, surrogate values submission that Department 
should rely on information available in an alternate Indian producer's 
financial statements, that of Apis India Natural Products Ltd. (Apis), 
2003 2004. However, we preliminarily find that MHPC data are more 
appropriate than Apis data because the Apis data are not as reliable or 
detailed as that of MHPC. In addition, MHPC materials include a 
complete annual report, auditor's report, and complete profit and loss 
business statements that segregate MHPC's honey and fruit canning 
businesses. We note that MHPC is a honey processing business and its 
financial statements include details on the costs and revenues related 
to its honey processing business. Therefore, for these preliminary 
results we are calculating SG&A based on the MHPC data, which were used 
in the AR3 Final Results. For a further discussion of this issue, see 
Id. at 9.
    To value truck freight, we calculated a weighted-average freight 
cost based on publicly available data from www.infreight.com, an Indian 
inland freight logistics resource Web site. The Department valued 
international freight, where necessary, based on publicly available 
price quotes from a Danish international shipping and logistics 
provider, Maersk Line (formerly Maersk Sealand), a division of the A.P. 
Moller - Maersk Group, at http://www.maerskline.com. See Id. at 8.
    We valued marine insurance, where necessary, based on publicly 
available price quotes from a marine insurance provider at http://www.rjgconsultants.com/insurance.html, which are applicable for all 
destinations from the Far East. Marine insurance is based on a flat 
insurance rate, plus an additional ``War Risk'' fee. We valued 
international freight expenses, where necessary, using contemporaneous 
freight quotes that the Department obtained from Maersk Line. See Id. 
at 9.
    To value brokerage and handling, we used a simple average of the 
publicly summarized versions of the average value for brokerage and 
handling expenses reported in the U.S. sales listings in Essar Steel 
Ltd.'s (Essar Steel) February 28, 2005, submission in the antidumping 
duty review of Certain Hot-Rolled Carbon Steel Flat Products from 
India, and the March 9, 2004, submission from Pidilite Industries Ltd. 
(Pidilite) in the antidumping duty investigation of Carbazole Violet 
Pigment 23 from India, both of which have been placed on the record of 
this review. See Factor Valuation Memo at Exhibit 20. Since both the 
reported rate in Essar Steel and the Pidilite rate are not 
contemporaneous, we adjusted these rates for inflation using the POR 
wholesale WPI for India to be current with the POR of this 
administrative review. See Id. at 9.
    To value labels, the Department calculated a POR-contemporaneous 
label surrogate value by deriving the weighted average value per 
kilogram of the import volume and value from the Indian Import 
Statistics for HS 482190. In calculating the surrogate values, the 
Department eliminated the data of the countries identified as being 
non-market economy countries (i.e., the PRC and Vietnam), and those 
deemed to maintain broadly available, non-industry specific subsidies 
that may benefit all exporters to all export markets (i.e., Indonesia, 
South Korea, and Thailand), as identified above in the ``Valuation of 
Factors'' section of Factor Valuation Memo, from the dataset. See Id. 
at 5.
    To value bottles and caps, the Department calculated a POR-
contemporaneous bottles and caps surrogate value by deriving the 
weighted average of the import volume and value from the Indian Import 
Statistics for HS 39233090 and HS 39235010. In calculating the 
surrogate values, the Department eliminated the data of the countries 
identified as being non-market economy countries (i.e., the PRC and 
Vietnam), and those deemed to maintain broadly available, non-industry 
specific subsidies that may benefit all exporters to all export markets 
(i.e., Indonesia, South Korea, and Thailand). After deriving the 
weighted average value per kilogram of the HS categories for bottles 
and caps, the Department calculated the simple average of the two 
categories. See Id. at 6.
    To value cartons, the Department calculated a POR-contemporaneous 
carton surrogate value by deriving the

[[Page 118]]

weighted average of the import volume and value from the Indian Import 
Statistics for HS 48191000. In calculating the surrogate values, the 
Department eliminated the data of the countries identified as being 
non-market economy countries (i.e., the PRC and Vietnam), and those 
deemed to maintain broadly available, non-industry specific subsidies 
that may benefit all exporters to all export markets (i.e., Indonesia, 
South Korea, and Thailand). See Id. at 6.
    To value tape, the Department calculated a POR-contemporaneous tape 
surrogate value by deriving the weighted average of the import volume 
and value from the Indian Import Statistics for HS 391910. In 
calculating the surrogate values, the Department eliminated the data of 
the countries identified as being non-market economy countries (i.e., 
the PRC and Vietnam), and those deemed to maintain broadly available, 
non-industry specific subsidies that may benefit all exporters to all 
export markets (i.e., Indonesia, South Korea, and Thailand). See Id., 
at 6.
    To value plastic pallets, the Department relied upon a price quote 
from Pilco Storage System Private Limited, an Indian manufacturer of 
pallets (made predominantly of plastic) from January 2006. The price 
quotation lists prices for various grades of plastic pallets 
manufactured by the company. The Department considers this quote to be 
contemporaneous with the POR. For the surrogate price of pallets, the 
Department is using the quoted price for C-Type pallets of a size of 
1000mm x 1000mm x 120 mm, which the Department determines to be 
conservative. See Id., at 6.
    The Department calculated a POR-contemporaneous plastic film 
surrogate value by deriving the weighted average of the import volume 
and value from the Indian Import Statistics for HS 39201012. In 
calculating the surrogate values, the Department eliminated the data of 
the countries identified as being non-market economy countries (i.e., 
the PRC and Vietnam), and those deemed to maintain broadly available, 
non-industry specific subsidies that may benefit all exporters to all 
export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 
6.
    The Department calculated a POR-contemporaneous beeswax surrogate 
value by deriving the weighted average of the import volume and value 
from the Indian Import Statistics for HS 15219010. In calculating the 
surrogate values, the Department eliminated the data of the countries 
identified as being non-market economy countries (i.e., the PRC and 
Vietnam), and those deemed to maintain broadly available, non-industry 
specific subsidies that may benefit all exporters to all export markets 
(i.e., Indonesia, South Korea, and Thailand). See Id. at 7.
    To value pollen, the Department calculated a POR-contemporaneous 
value of inedible molasses (which is the same HS used to value scrap 
honey) by deriving the weighted average of the import volume and value 
from the Indian Import Statistics for HS 170390. In calculating the 
surrogate values, the Department eliminated the data of the countries 
identified as being non-market economy countries (i.e., the PRC and 
Vietnam), and those deemed to maintain broadly available, non-industry 
specific subsidies that may benefit all exporters to all export markets 
(i.e., Indonesia, South Korea, and Thailand). See Id. at 7.
    The Department calculated a POR-contemporaneous propolis surrogate 
value by deriving the weighted average of the import volume and value 
from the Indian Import Statistics for HS 15219090, ``Other Insect 
Wax''. In calculating the surrogate values, the Department eliminated 
the data of the countries identified as being non-market economy 
countries (i.e., the PRC and Vietnam), and those deemed to maintain 
broadly available, non-industry specific subsidies that may benefit all 
exporters to all export markets (i.e., Indonesia, South Korea, and 
Thailand). See Id. at 7.
    To value the labor input, we used the PRC's regression-based wage 
rate published by Import Administration on its Web site. See the Import 
Administration Web site: http://www.ia.ita.doc.gov/wages. Because of 
the variability of wage rates in countries with similar levels of per 
capita gross domestic product, section 351.408(c)(3) of the 
Department's regulations requires the use of a regression-based wage 
rate. See Id. at 8.
    In calculating the freight rate for truck shipments, we used the 
shorter of the reported distance from the domestic supplier to the 
factory or the distance from the nearest seaport to the factory, in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997) (Sigma 
Freight). To derive the freight cost for each material input, the 
Department multiplied the surrogate freight value per kilogram per 
kilometer by the Sigma Freight. The Department added the freight 
expense to the cost of the material input to determine gross material 
costs. Where there were multiple suppliers of an input, we calculated a 
weighted-average distance. See Id. at 8.
    The Department valued international freight, where applicable, 
based on publicly available price quotes from a Danish international 
shipping and logistics provider, Maersk Line (formerly Maersk Sealand), 
a division of the A.P. Moller - Maersk Group, at http://www.maerskline.com. The Department calculated a contemporaneous 
weighted-average shipping cost based on rate quotes for shipping a 
18,500 kilogram maximum-load container from China to both the east and 
west coasts of the United States, and then adjusting the two rates by 
the WPI for the current POR. See Id. at 9.
    In accordance with 19 CFR Sec.  351.301(c)(3)(ii) of the 
Department's regulations, for the final results of these new shipper 
reviews, interested parties may submit publicly available information 
to value the factors of production until 20 days following the date of 
publication of these preliminary results.
    Preliminary Results of Review
    We preliminarily determine that the following antidumping duty 
margins exists:

------------------------------------------------------------------------
                      Exporter                              Margin
------------------------------------------------------------------------
Inner Mongolia Altin Bee Keeping Co., Ltd...........             145.98%
Dongtai Peak Honey Industry.........................              33.08%
------------------------------------------------------------------------

    For details on the calculation of the antidumping duty weighted-
average margin for Inner Mongolia and Dongtai Peak, see Inner 
Mongolia's and Dongtai Peak's respective analysis memorandums for the 
preliminary results of the eighth new shipper reviews of the 
antidumping duty order on honey from the PRC, dated December 21, 2006. 
Public versions of this memorandum are on file in the CRU.

Assessment Rates

    Pursuant to 19 CFR Sec.  351.212(b), the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department intends to issue assessment instructions directly to CBP 
within 15 days of publication of the final results of these new shipper 
reviews. For assessment purposes, where possible, we calculated 
importer-specific assessment rates for honey from the PRC on a per-unit 
basis. Specifically, we divided the total dumping margins (calculated 
as the difference between normal value and export price or constructed 
export price) for each importer by the total quantity

[[Page 119]]

of subject merchandise sold to that importer during the POR to 
calculate a per-unit assessment amount. If these preliminary results 
are adopted in our final results of review, we will direct CBP to levy 
importer-specific assessment rates based on the resulting per-unit 
(i.e., per-kilogram) rates by the weight in kilograms of each entry of 
the subject merchandise during the POR.

Cash Deposit

    The following cash-deposit requirements will be effective upon 
publication of these final results for shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results, as provided by section 
751(a)(2)(C) of the Act: (1) For subject merchandise produced and 
exported by Inner Mongolia, and subject merchandise produced and 
exported by Dongtai Peak we will establish a per-kilogram cash deposit 
rate which will be equivalent to the company-specific cash deposit 
established in this review; (2) the cash deposit rate for PRC exporters 
who received a separate rate in a prior segment of the proceeding will 
continue to be the rate assigned in that segment of the proceeding; (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 212.39 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.

Schedule for Final Results of Review

    Unless otherwise notified by the Department, interested parties may 
submit case briefs within 30 days of the date of publication of this 
notice in accordance with 19 CFR Sec.  351.309(c)(ii). As part of the 
case brief, parties are encouraged to provide a summary of the 
arguments not to exceed five pages and a table of statutes, 
regulations, and cases cited. Rebuttal briefs, which must be limited to 
issues raised in the case briefs, must be filed within five days after 
the case brief is filed. See 19 CFR Sec.  351.309(d).
    Any interested party may request a hearing within 30 days of 
publication of this notice in accordance with 19 CFR Sec.  351.310(c). 
Any hearing would normally be held 37 days after the publication of 
this notice, or the first workday thereafter, at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230. 
Individuals who wish to request a hearing must submit a written request 
within 30 days of the publication of this notice in the Federal 
Register to the Assistant Secretary for Import Administration, U.S. 
Department of Commerce, Room 1870, 14th Street and Constitution Avenue, 
NW., Washington, DC 20230. Requests for a public hearing should 
contain: (1) The party's name, address, and telephone number; (2) the 
number of participants; and, (3) to the extent practicable, an 
identification of the arguments to be raised at the hearing. If a 
hearing is held, an interested party must limit its presentation only 
to arguments raised in its briefs. Parties should confirm by telephone 
the time, date, and place of the hearing 48 hours before the scheduled 
time.
    The Department will issue the final results or final rescissions of 
these new shipper reviews, which will include the results of its 
analysis of issues raised in the briefs, within 90 days from the date 
of the preliminary results, unless the time limit is extended.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR Sec.  351.402(f)(2) to file a 
certificate regarding the reimbursement of antidumping duties prior to 
liquidation of the relevant entries during this review period. Failure 
to comply with this requirement could result in the Secretary's 
presumption that reimbursement of the antidumping duties occurred and 
the subsequent assessment of double antidumping duties.
    These new shipper reviews and this notice are published in 
accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: December 20, 2006.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E6-22497 Filed 12-29-06; 8:45 am]
BILLING CODE 3510-DS-S