[Federal Register Volume 72, Number 236 (Monday, December 10, 2007)]
[Notices]
[Pages 69652-69662]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-23891]


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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic from the People's Republic of China: Notice of 
Preliminary Results and Preliminary Partial Rescission of the Twelfth 
Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``Department'') is conducting an 
administrative review of the antidumping duty order on fresh garlic 
from the People's Republic of China (``PRC'') covering the period of 
review (``POR'') of November 1, 2005, through October 31, 2006. As 
discussed below, we preliminarily determine that certain respondents in 
this review made sales in the United States at prices below

[[Page 69653]]

normal value (``NV''). If these preliminary results are adopted in our 
final results of 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 importer-specific assessment rates 
are above de minimis.

EFFECTIVE DATE: December 10, 2007.

FOR FURTHER INFORMATION CONTACT: Julia Hancock, Michael Holton, or 
Matthew Renkey, AD/CVD Operations, Office 9, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington DC 20230; telephone: 
(202) 482-1394, (202) 482-1324, and (202) 482-2312, respectively.

SUPPLEMENTARY INFORMATION:

General 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) (``Order''). On November 1, 
2006, 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, 2005, through October 31, 2006. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation: Opportunity to Request Administrative Review, 71 FR 
64240 (November 1, 2006).
    On November 30, 2006, we received requests from both Petitioners 
\1\ and certain PRC companies to conduct administrative reviews for a 
total of 52 companies. On December 27, 2006, the Department initiated 
an administrative review of 52 \2\ producers/exporters of subject 
merchandise from the PRC. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 71 FR 77720 (December 27, 
2006) (``Initiation Notice'').
---------------------------------------------------------------------------

    \1\ 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. (hereinafter referred to as 
``Petitioners'').
    \2\ Anqiu Friend Food Co., Ltd. (``Anqiu''); APS Qingdao; Fujian 
Meitan Import & Export Xiamen Corporation (``Fujian Meitan''); 
Golden Bridge International, Inc. (``Golden Bridge''); Henan Weite 
Industrial Co., Ltd. (``Henan Weite''); Heze Ever-Best International 
Trade Co., Ltd. (``Heze Ever-Best''); Hongchang Fruits & Vegetable 
Products (``Hongchang''); Huaiyang Hongda Dehydrated Vegetable 
Company (``Huaiyang Hongda''); Jinan Farmlady Trading Co., Ltd. 
(``Jinan Farmlady''); Jinan Yipin Corporation, Ltd. (``Jinan 
Yipin''); Jining Haijiang Trading Co., Ltd. (``Jining Haijiang''); 
Jining Solar Summit Trade Co., Ltd. (``Jining Solar''); Jining 
Trans-High Trading Co., Ltd. (``Jining Trans-High''); Jinxian County 
Huaguang Food Import & Export Co., Ltd. (``Jinxian County 
Huaguang''); Jinxiang Dong Yun Freezing Storage Co., Ltd. (aka 
Jinxiang Eastward Shipping Import and Export Limited Company) 
(``Jinxiang Dong Yun''); Jinxiang Shanyang Freezing Storage Co., 
Ltd. (``Jinxiang Shanyang''); Laiwu Hongyang Trading Company Ltd. 
(``Laiwu Hongyang''); Linshu Dading Private Agricultural Products 
Co., Ltd. (``Linshu Dading''); Omni D[eacute]cor China Ltd. 
(``Omni''); Pizhou Guangda Import and Export Co., Ltd. (``Pizhou 
Guangda''); Qingdao Bedow Foodstuffs Co., Ltd. (``Qingdao Bedow''); 
Qingdao Camel Trading Co., Ltd.; (``Qingdao Camel''); Qingdao H&T 
Food Co., Ltd. (``Qingdao H&T''); Qingdao Potenza Imp & Exp Co., 
Ltd. (``Qingdao Potenza''); Qingdao Saturn International Trade Co., 
Ltd. (``Qingdao Saturn''); Qingdao Shiboliang Food Co., Ltd. 
(``Qingdao Shiboliang''); Qingdao Tiantaixing Foods Co., Ltd. 
(``Qingdao Tiantaixing''); Qingdao Titan Shipping LLC (``Qingdao 
Titan''); Qingdao Xintianfeng Foods (``Qingdao Xintianfeng''); Qufu 
Dongbao Import & Export Trade Co., Ltd. (``Qufu Dongbao''); Rizhao 
Xingda Foodstuffs Co., Ltd. (``Rizhao Xingda''); Shandong Chengshun 
Farm Produce Trading Co., Ltd. (``Shandong Chengshun''); Shandong 
Dongsheng Eastsun Foods Co., Ltd. (``Shandong Dongsheng''); Shandong 
Garlic Company (``Shandong Garlic); Shandong Longtai 
Fruits and Vegetables Co., Ltd. (``Shandong Longtai''); Shandong 
Wonderland Organic Food Co., Ltd. (``Shandong Wonderland''); 
Shanghai Ba-Shi Yuexin Logistics Development (``Shanghai Ba-Shi''); 
Shanghai Ever Rich Trade Company (``Shanghai Ever Rich''); Shanghai 
LJ International Trading Co., Ltd. (``Shanghai LJ''); Shanghai 
McCormick Foods Co., Ltd. (``Shanghai McCormick''); Shenzhen Fanhui 
Import & Export Co., Ltd. (``Shenzhen Fanhui''); Shenzhen Xinboda 
Industrial Co., Ltd. (``Shenzhen Xinboda''); Sunny Import & Export 
Co., Ltd. (``Sunny''); T&S International, LLC (``T&S''); Taian Fook 
Huat Tong Kee Pte Ltd. (``Taian Fook Huat''); Taian Ziyang Food Co., 
Ltd. (``Taian Ziyang''); Weifang Hongqiao International Logistic 
Co., Ltd. (``Weifang Hongqiao''); Weifang Shennong Foodstuff Co., 
Ltd. (``Weifang Shennong''); Xiang Cheng Sunny Foodstuff Factory 
(``Xiang Cheng''); XuZhou Simple Garlic Industry Co., Ltd (``XuZhou 
Simple''); Zhangqiu Qingyuan Vegetable Co., Ltd. (``Zhangqiu 
Qingyuan''); and Zhengzhou Harmoni Spice Co., Ltd. (``Zhengzhou 
Harmoni'').
---------------------------------------------------------------------------

    On March 8, 2007, in accordance with section 351.213(d)(1) of the 
Department's regulations, we rescinded the administrative review with 
respect to nine companies. See Fresh Garlic from the People's Republic 
of China: Notice of Partial Rescission of the Twelfth Administrative 
Review, 72 FR 10491 (March 8, 2007) (``Rescission Notice''). Therefore, 
this review covers 43\3\ producers/exporters of the subject merchandise 
and the PRC-wide entity.
---------------------------------------------------------------------------

    \3\ Anqiu; APS Qingdao; Fujian Meitan; Golden Bridge; Henan 
Weite; Heze Ever-Best; Hongchang; Huaiyang Hongda; Jinan Farmlady; 
Jining Haijiang; Jining Solar; Jining Trans-High; Jinxian County 
Huaguang; Jinxiang Dong Yun; Jinxiang Shanyang; Laiwu Hongyang; 
Pizhou Guangda; Qingdao Bedow; Qingdao Camel; Qingdao H&T Qingdao 
Potenza; Qingdao Saturn; Qingdao Shiboliang; Qingdao Tiantaixing; 
Qingdao Xintianfeng; Qufu Dongbao; Rizhao Xingda; Shandong 
Chengshun; Shandong Dongsheng; Shandong Garlic; Shandong Longtai; 
Shanghai Ba-Shi; Shanghai Ever Rich; Shanghai LJ; Shanghai 
McCormick; Shenzhen Fanhui; Sunny; T&S Taian Ziyang; Weifang 
Shennong; Xiang Cheng; Zhangqiu Qingyuan; and Zhengzhou Harmoni.
---------------------------------------------------------------------------

    On August 2, 2007, the Department extended the preliminary results 
of this administrative review until November 30, 2007. See Fresh Garlic 
from the People's Republic of China: Extension of Time Limit for the 
Preliminary Results of the Twelfth Administrative Review, 72 FR 42390 
(August 2, 2007).

Respondent Selection

    On January 23, 2007, the Department issued a quantity and value 
(``Q&V'') questionnaire to the 43 named firms that still had an active 
request for review. See Letter with Attachments from Alex Villanueva, 
Program Manager, to All Interested Parties, RE: Quantity and Value 
Questionnaire for Fresh Garlic from the People's Republic of China, 
(January 23, 2007) (``Q&V questionnaire''). Additionally, on January 
23, 2007, Petitioners withdrew their request for review for nine named 
firms.\4\ See Rescission Notice. Between February 2, 2007, and March 2, 
2007, the Department received responses to the Q&V questionnaire from 
23 firms.\5\
---------------------------------------------------------------------------

    \4\ Jinan Yipin; Lindshu Dading; Omni; Qingdao Titan; Shandong 
Wonderland; Shenzhen Xinboda; Taian Fook; Weifang Hongqiao; and 
Xuzhou Simple.
    \5\ Jinxiang Dong Yun; Huaiyang Hongda; Shanghai LJ; Qufu Dong 
Bao; Weifang Shennong; Zhengzhou Harmoni; Sunny; Jinxiang Shanyang; 
Qingdao Xintianfeng; Shandong Longtai; Jining Trans-High; Shenzhen 
Fanhui; Taian Ziyang; Anqiu; Heze Ever-Best; Qingdao Saturn; Henan 
Weite; Qingdao Tiantaixing; Xiang Cheng (producer for Shanghai LJ); 
Shanghai Ever Rich; Xuzhou Simple; Shanghai McCormick; and Jinan 
Farmlady. In their responses, both Xuzhou Simple and Shanghai 
McCormick responses stated that they had no shipments of subject 
merchandise to the United States during the POR. Moreover, between 
March 13-14, 2007, the Department received revised Q&V questionnaire 
responses from the following 10 firms: Anqiu; Henan Weite; Jinan 
Farmlady; Jinxiang Dong Yun; Qingdao Tiantaixing; Qingdao 
Xintianfeng; Qufu Dongbao; Shanghai LJ; Taiyan Ziyang; and Weifang 
Shennong.
---------------------------------------------------------------------------

    On February 13, 2007, Qingdao Camel withdrew its request for an 
administrative review.\6\ On February 14, 2007, the Department received 
a letter from Qingdao Camel stating that it would not be responding to 
the Q&V questionnaire.
---------------------------------------------------------------------------

    \6\ However, Petitioners did not withdraw their request for a 
review of Qingdao Camel.
---------------------------------------------------------------------------

    On February 15, 2007, the Department issued a second Q&V 
questionnaire to the 20 firms \7\ that did not respond to the 
Department's original Q&V questionnaire. See Letter with Attachments 
from Alex Villanueva, Program Manager, to All Interested

[[Page 69654]]

Parties, RE: Second Quantity and Value Questionnaire for Fresh Garlic 
from the People's Republic of China, (February 15, 2007) (``Second Q&V 
Questionnaire'').
---------------------------------------------------------------------------

    \7\ APS Qingdao; Fujian Meitan; Hongchang Fruits; Jining 
Haijiang; Jining Solar; Jinxian County Huaguang; Laiwu Hongyang; 
Pizhou Guangda; Qingdao Bedow; Qingdao H&T Qingdao Potenza; Qingdao 
Shiboliang; Rizhao Xingda; Shandong Chengshun; Shandong Dongsheng; 
Shandong Garlic; Shanghai Ba-Shi; T&S Golden Bridge; and Zhangqiu 
Qingyuan.
---------------------------------------------------------------------------

    Between February 16, 2007, and February 27, 2007, the Department 
received separate rate certifications from 18 firms \8\ and between 
March 23 and 26, 2007, the Department received separate rate 
applications from 2 firms.\9\ Additionally, between February 27, 2007, 
and March 2, 2007, the Department received responses from Zhangqiu 
Qingyuan and Golden Bridge that each company did not have shipments of 
subject merchandise to the United States during the POR.
---------------------------------------------------------------------------

    \8\ Jinxiang Dong Yun; Huaiyang Hongda; Shanghai LJ; Qufu Dong 
Bao; Weifang Shennong; Zhengzhou Harmoni; Sunny; Jinxiang Shanyang; 
Qingdao Xintianfeng; Shandong Longtai; Jining Trans-High; Shenzhen 
Fanhui; Taian Ziyang; Anqiu; Shanghai Ever Rich; Heze Ever-Best; 
Qingdao Saturn; and Henan Weite.
    \9\ Qingdao Tiantaixing and Jinan Farmlady.
---------------------------------------------------------------------------

    As discussed below in ``Preliminary Partial Rescission of the 
Administrative Review,'' on March 16, 2007, the Department received 
letters from Petitioners and Zhengzhou Harmoni withdrawing their 
requests for review of Zhengzhou Harmoni and thus, the Department did 
not consider Zhengzhou Harmoni in the selection of respondents.
    On April 11, 2007, after receiving comments from interested 
parties, the Department selected Jinxiang Dong Yun, Huaiyang Hongda, 
and Shanghai LJ as the three mandatory respondents since they were the 
three largest exporters, by volume, of the remaining companies. See 
Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration, from James C. Doyle, Office Director, Office 9, re: 
Antidumping Duty Administrative Review of Fresh Garlic from the 
People's Republic of China: Selection of Respondents, (April 11, 2007) 
(``Respondent Selection Memo''). There are 15 companies, based on 
withdrawals and appropriately submitted Q&V questionnaire responses, 
that were not selected as mandatory respondents, but which qualified 
for separate rates: Sunny; Qufu Dong Bao; Weifang Shennong; Jinxiang 
Shanyang; Qingdao Xintianfeng; Shandong Longtai; Jining Trans-High; 
Shenzhen Fanhui; Taian Ziyang; Anqiu; Shanghai Ever Rich; Heze Ever-
Best; Qingdao Saturn; Henan Weite; and Jinan Farmlady (collectively 
known as the ``separate rate companies'').

Questionnaires

    There are 37\10\ companies that remain in the administrative 
review, after the rescission of the reviews for Qingdao Tiantaixing, 
Zhengzhou Harmoni, Golden Bridge, Shanghai McCormick, and Zhangqiu 
Qingyuan, for these preliminary results, as discussed below in 
``Preliminary Partial Rescission of the Administrative Reviews.''
---------------------------------------------------------------------------

    \10\ Anqiu; APS Qingdao; Fujian Meitan; Henan Weite; Hongchang; 
Huaiyang Hongda; Jinan Farmlady; Jining Haijiang; Jining Solar; 
Jining Trans-High; Jinxian County Huaguang; Jinxiang Dong Yun; 
Jinxiang Shanyang; Laiwu Hongyang; Pizhou Guangda; Qingdao Bedow; 
Qingdao Camel; Qingdao H&T Qingdao Potenza; Qingdao Saturn; Qingdao 
Shiboliang; Qingdao Xintianfeng; Qufu Dongbao; Rizhao Xingda; 
Shandong Chengshun; Shandong Dongsheng; Shandong Garlic; Shandong 
Longtai; Shanghai Ba-Shi; Shanghai Ever Rich; Shanghai LJ; Shenzhen 
Fanhui; Sunny; T&S Taian Ziyang; Weifang Shennong; and Xiang Cheng.
---------------------------------------------------------------------------

    On April 16, 2007, the Department issued antidumping duty 
questionnaires to Jinxiang Dong Yun, Huaiyang Hongda, and Shanghai LJ. 
Between May 14, 2007, and June 4, 2007, Huaiyang Hongda responded to 
the Department's non-market economy (``NME'') questionnaire but did not 
respond to the Department's subsequent supplemental questionnaires. 
Between May 21, 2007, and November 15, 2007, Shanghai LJ responded to 
the Department's NME questionnaire and subsequent supplemental 
questionnaires. Between May 21, 2007, and November 13, 2007, Jinxiang 
Dong Yun responded to the Department's NME questionnaire and subsequent 
supplemental questionnaires. Between May 7, 2007, and May 23, 2007, 
Qingdao Saturn submitted voluntary responses to the Department's NME 
questionnaire.

Preliminary Partial Rescission of the Administrative Review

    On March 22, 2007, Petitioners requested that the Department extend 
the deadline for the withdrawal of review requests. On March 27, 2007, 
the Department extended the deadline to withdraw a request for review 
to July 11, 2007.

Qingdao Tiantaixing

    On July 9, 2007, Qingdao Tiantaixing withdrew its request for an 
administrative review. No other party requested a review of Qingdao 
Tiantaixing. Therefore, because Qingdao Tiantaixing's request was 
timely, in accordance with 19 CFR 351.213(d)(1), we have rescinded this 
review with respect to Qingdao Tiantaixing.

Qingdao Xintianfeng

    On February 6, 2007, Qingdao Xintianfeng withdrew its request for 
an administrative review. Nonetheless, as previously noted, on February 
22, 2007, Qingdao Xintianfeng submitted both a Q&V questionnaire 
response and a separate rate certification. On July 25, 2007, which was 
14 days after the withdrawal deadline, Petitioners submitted a letter 
withdrawing their request for an administrative review of Qingdao 
Xintianfeng. On July 31, 2007, Qingdao Xintianfeng submitted a letter 
stating that due to its cooperative efforts it wished to remain an 
active respondent in this administrative review. On August 22, 2007, 
the Department issued a letter stating that it extended the time limit 
for withdrawing a request for review by 20 days to July 31, 2007. 
However, the Department also requested that Qingdao Xintianfeng submit 
a letter clarifying whether its July 31, 2007, letter, was in fact a 
retraction of its February 6, 2007, withdrawal of its review request. 
On August 24, 2007, Qingdao Xintianfeng submitted a letter stating that 
it was retracting its February 6, 2007, withdrawal request and wished 
to remain an active respondent in this administrative review. 
Therefore, because Qingdao Xintianfeng still has an active request for 
a review, we have not rescinded this review with respect to Qingdao 
Xintianfeng.

Zhengzhou Harmoni

    On March 16, 2007, the Department received letters from Petitioners 
and Zhengzhou Harmoni withdrawing their requests for review of 
Zhengzhou Harmoni. Therefore, because Petitioners' and Zhenghzhou 
Harmoni's requests were timely, in accordance with 19 CFR 
351.213(d)(1), we have rescinded this review with respect to Zhengzhou 
Harmoni.

No-Shipment Companies

    Three companies, Golden Bridge, Shanghai McCormick, and Zhangqiu 
Qingyuan, reported in their Q&V questionnaire responses that they made 
no shipments of subject merchandise to the United States during the 
POR. Additionally, the Department's examination of shipment data from 
CBP for these 3 companies confirmed that there were no entries of 
subject merchandise from them during the POR. Consequently, because 
there is no evidence on the record to indicate that these three 
companies had sales of subject merchandise under this Order during the 
POR, pursuant to 19 CFR 351.213(d)(3), the Department is preliminarily 
rescinding the review with respect to these three respondents: Golden 
Bridge, Shanghai McCormick, and Zhangqiu Qingyuan.

[[Page 69655]]

Surrogate Country and Surrogate Values

    On June 7, 2007, the Department sent interested parties a letter 
requesting comments on the surrogate country and information pertaining 
to valuing factors of production. On August 2, 2007, September 20, 
2007, and October 31, 2007, Petitioners submitted surrogate value 
comments from various Indian sources. No other interested party 
submitted comments on the surrogate country and information pertaining 
to valuing factors of production.

Scope of the Order

    The products covered by this 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, our written description of the scope 
of this order is dispositive. In order to be excluded from the Order, 
garlic entered under the HTSUS subheadings listed above that is (1) 
mechanically harvested and primarily, but not exclusively, destined for 
non-fresh use or (2) specially prepared and cultivated prior to 
planting and then harvested and otherwise prepared for use as seed must 
be accompanied by declarations to CBP to that effect.

Adverse Facts Available (``AFA'')

    Section 776(a)(2) of the Tariff Act of 1930, as amended (the 
``Act''), provides that, if an interested party: (A) withholds 
information that has been requested by the Department; (B) fails to 
provide such information in a timely manner or in the form or manner 
requested subject to sections 782(c)(1) and (e) of the Act; (C) 
significantly impedes a proceeding under the antidumping statute; or 
(D) provides such information but the information cannot be verified, 
the Department shall, subject to subsection 782(d) of the Act, use 
facts otherwise available in reaching the applicable determination.
    Section 782(c)(1) of the Act provides that if an interested party 
``promptly after receiving a request from {the Department{time}  for 
information, notifies {the Department{time}  that such party is unable 
to submit the information requested in the requested form and manner, 
together with a full explanation and suggested alternative forms in 
which such party is able to submit the information,'' the Department 
may modify the requirements to avoid imposing an unreasonable burden on 
that party.
    Section 782(d) of the Act provides that, if the Department 
determines that a response to a request for information does not comply 
with the request, the Department will inform the person submitting the 
response of the nature of the deficiency and shall, to the extent 
practicable, provide that person the opportunity to remedy or explain 
the deficiency. If that person submits further information that 
continues to be unsatisfactory, or this information is not submitted 
within the applicable time limits, the Department may, subject to 
section 782(e) of the Act, disregard all or part of the original and 
subsequent responses, as appropriate.
    Section 782(e) of the Act states that the Department shall not 
decline to consider information deemed ``deficient'' under section 
782(d) if: (1) the information is submitted by the established 
deadline; (2) the information can be verified; (3) the information is 
not so incomplete that it cannot serve as a reliable basis for reaching 
the applicable determination; (4) the interested party has demonstrated 
that it acted to the best of its ability in providing the information 
and meeting the requirements established by the Department; and (5) the 
information can be used without undue difficulties.
    Furthermore, section 776(b) of the Act states 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 from the administering authority or the Commission, the 
administering authority or the Commission ..., in reaching the 
applicable determination under this title, may use an inference that is 
adverse to the interests of that party in selecting from among the 
facts otherwise available.'' See also Statement of Administrative 
Action (``SAA'') accompanying the Uruguay Round Agreements Act 
(``URAA''), H.R. Rep. No. 103-316 at 870 (1994). 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 
id. An adverse inference may include reliance on information derived 
from the petition, the final determination in the investigation, any 
previous review, or any other information placed on the record. See 
section 776(b) of the Act.

Huaiyang Hongda

    As discussed in the ``General Background'' section above, Huaiyang 
Hongda did not respond to the supplemental questionnaires issued by the 
Department on August 10, 2007, and August 22, 2007. The deadline for 
Huaiyang Hongda to file a response to the supplemental Section A 
questionnaire and the supplemental Sections C and D questionnaire were 
August 24, 2007, and September 4, 2007, respectively. Huaiyang Hongda 
failed to respond to either of these supplemental questionnaires. 
Additionally, the Department issued letters to Huaiyang Hongda on 
August 24, 2007, and September 13, 2007, and confirmed delivery for 
both letters. In both letters, the Department noted that responses to 
its supplemental questionnaires were past due and requested that 
Huaiyang Hongda notify the Department whether it intended to 
participate further in this administrative review. Huaiyang Hongda did 
not respond to either of these letters. Therefore, the Department finds 
that Huaiyang Hongda's non-responsiveness necessitates the use of facts 
available, pursuant to sections 776(a)(2)(A), (B) and (C) of the Act.
    Based upon Huaiyang Hongda's failure to submit responses to the 
Department's supplemental questionnaires and follow-up letters, the 
Department finds that Huaiyang Hongda withheld requested information, 
failed to provide the information in a timely manner and in the form 
requested, and significantly impeded this proceeding, pursuant to 
sections 776(a)(2)(A), (B) and (C) of the Act. Because Huaiyang Hongda 
failed to provide a response to the Department's supplemental 
questionnaires, critical data relevant to its separate rate 
determination remains outstanding. Therefore, the Department was 
prevented from conducting a complete separate rate analysis. 
Additionally, Huaiyang Hongda's failure to provide a response to the 
Department's supplemental questionnaires means that

[[Page 69656]]

critical information necessary to calculate an antidumping margin for 
Huaiyang Hongda is absent from the record. Therefore, Huaiyang Hongda 
withheld requested information, failed to provide the information in a 
timely manner and in the form requested, and has significantly impeded 
this proceeding. Thus, the Department has no choice but to rely on the 
facts otherwise available in order to determine a margin for Huaiyang 
Hongda, pursuant to section 776(a)(2)(A), (B) and (C) of the Act. See 
Non-Malleable Cast Iron Pipe Fittings from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 71 FR 
69546 (December 1, 2006) and accompanying Issues and Decision 
Memorandum at Comment 1.
    For these preliminary results, the Department finds that Huaiyang 
Hongda has failed to cooperate to the best of its ability. 
Specifically, the Department finds that Huaiyang Hongda did not respond 
to the Department's request for clarification on certain issues, 
including its separate rate information and reported sales and cost 
information, as requested in the Department's supplemental 
questionnaires. See Nippon Steel Corp. v. United States, 337 F. 3d 
1373, 1384 (Fed. Cir. 2003) (``Nippon Steel''). Because Huaiyang Hongda 
refused to answer the Department's supplemental questionnaires and 
letters, the Department finds that Huaiyang Hongda has failed to 
cooperate to the best of its ability, pursuant to section 776(b) of the 
Act.
    Because of Huaiyang Hongda's refusal to cooperate in the instant 
proceeding, the Department was unable to calculate a company-specific 
margin or even to determine Huaiyang Hongda's separate rate status. 
Thus, the Department could not determine whether Huaiyang Hongda is 
eligible for a separate rate. Accordingly, we are not granting Huaiyang 
Hongda a separate rate and consider Hongda to be part of the PRC-wide 
entity, subject to the PRC-wide rate.

19 Companies

    As mentioned in the ``General Background'' section above, the 
Department initiated this administrative review with respect to 52 
companies, including among them APS Qingdao, Fujian Meitan, Hongchang, 
Jining Haijiang, Jining Solar, Jinxian County Huaguang, Laiwu Hongyang, 
Pizhou Guangda, Qingdao Bedow, Qingdao Camel, Qingdao H&T, Qingdao 
Potenza, Qingdao Shiboliang, Rizhao Xingda, Shandong Chengshun, 
Shandong Dongsheng, Shandong Garlic, Shanghai Ba-Shi, and T&S 
(collectively referred to as the ``19 Companies''). See Initiation 
Notice. On January 23, 2007, the Department rescinded, in part, the 
review on nine of the 52 companies, but noted that 43 companies, 
including the 19 Companies, were still subject to review. See 
Rescission Notice. Additionally, on January 23, 2007, and on February 
15, 2007, the Department issued a Q&V questionnaire and a Second Q&V 
questionnaire to the 19 companies. None of the 19 Companies responded 
to the Department's Q&V questionnaire, nor did these 19 Companies 
respond to the Department's Second Q&V questionnaire.
    Because these 19 Companies were non-responsive to the Department's 
two requests for Q&V information, the Department finds that they are 
not entitled to a separate rate. Additionally, by not responding to the 
Department's first or second Q&V questionnaire, each company failed to 
provide critical information to be used for the Department's respondent 
selection process. Therefore, pursuant to sections 776(a)(2)(A), (B) 
and (C) of the Act, the Department finds that the application of facts 
available is appropriate. In addition, pursuant to section 776(b) of 
the Act, the Department may apply adverse facts available if it finds a 
respondent has failed to cooperate by not acting to the best of its 
ability to comply with a request for information from the Department. 
By failing to respond to the Department's first and second Q&V 
questionnaire, these 19 Companies have failed to act to the best of 
their ability in this segment of the proceeding. Moreover, because 
these 19 Companies did not participate in the respondent selection 
exercise, the Department did not send them a questionnaire and was 
unable to determine whether or not they qualified for a separate rate. 
Therefore, these 19 Companies are not eligible to receive a separate 
rate and will be part of the PRC-wide entity, subject to the PRC-wide 
rate.

PRC-wide Entity

    Because Huaiyang Hongda and the 19 Companies, which are part of the 
PRC-wide entity, failed to cooperate to the best of their ability in 
providing the requested information, as discussed above, we find it 
appropriate, in accordance with sections 776(a)(2)(A), (B) and (C), as 
well as section 776(b), of the Act, to assign total AFA to the PRC-wide 
entity. See Certain Frozen Warmwater Shrimp from the Socialist Republic 
of Vietnam: Preliminary Results of the First Administrative Review and 
New Shipper Review, 72 FR 10689, 10692 (March 9, 2007) (decision to 
apply total AFA to the NME-wide entity was unchanged for the final 
results). By doing so, we ensure that the companies that are part of 
the PRC-wide entity will not obtain a more favorable result by failing 
to cooperate than had they cooperated fully in this review.
    As discussed above, section 776(b) of the Act authorizes the 
Department to use, as AFA, information derived from the petition, the 
final determination in the LTFV investigation, any previous 
administrative review, or any other information placed on the record. 
Section 776(b)(4) of the Act permits the Department to use as AFA 
information derived in the LTFV investigation or any prior review. In 
selecting an AFA rate, the Department's practice has been to assign 
non-cooperative Respondents the highest margin determined for any party 
in the less-than-fair-value (``LTFV'') investigation or in any 
administrative review. See Stainless Steel Plate in Coils from Taiwan: 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review, 67 FR 5789 (February 7, 2002). As AFA, we are 
assigning the PRC-wide entity, which includes Huaiyang Hongda and the 
19 Companies, the highest rate from any segment of this proceeding, 
which in this case is 376.67 percent assigned to the PRC-wide entity in 
the LTFV investigation. See Notice of Final Determination of Sales at 
Less Than Fair Value: Fresh Garlic from the People's Republic of China, 
59 FR 49058, 49060 (September 26, 1994) (``Garlic LTFV Final 
Determination'').
    Section 776(c) of the Act requires the Department to corroborate, 
to the extent practicable, secondary information used as facts 
available. Secondary information is defined as ``information derived 
from the petition that gave rise to the investigation or review, the 
final determination concerning the subject merchandise, or any previous 
review under section 751 concerning the subject merchandise.'' See SAA 
accompanying the URAA, H.R. Doc. No. 103-316 at 870 (1994); see also 19 
CFR 351.308(d).
    The SAA further provides that the term ``corroborate'' means that 
the Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. Thus, to corroborate 
secondary information, the Department will, to the extent practicable, 
examine the reliability and relevance of the information used. The AFA 
rate we are applying for the current review of fresh garlic was 
corroborated

[[Page 69657]]

in the LTFV investigation. See Garlic LTFV Final Determination, 59 FR 
at 49060. No information has been presented in the current review that 
calls into question the reliability of the information used for this 
AFA rate. Thus, the Department finds that the information is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Flowers from Mexico, the Department 
did not use the highest margin in the proceeding as best information 
available (the predecessor to facts available) because that margin was 
based on another company's aberrational business expenses and was 
unusually high. See Fresh Cut Flowers From Mexico; Final Results of 
Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 
1996) (``Flowers from Mexico''). In other cases, the Department has not 
used the highest rate in any segment of the proceeding as the AFA rate 
because the highest rate was subsequently discredited, or the facts did 
not support its use. See D&L Supply Co. v. United States, 113 F.3d 
1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that 
has been judicially invalidated). None of these unusual circumstances 
are present with respect to the rate being used here. Moreover, the 
rate selected, (i.e., 376.67 percent), is the rate currently applicable 
to the PRC-wide entity. The Department assumes that if an uncooperative 
respondent could have obtained a lower rate, it would have cooperated. 
See Rhone Poulenc, Inc. V. United States, 899 F. 2d 1185, 1190-91 (Fed. 
Cir. 1990); Ta Chen Stainless Steel Pipe, Inc. V. United States, 24 CIT 
841, 848 (2000) (respondents should not benefit from failure to 
cooperate). As there is no information on the record of this review 
that demonstrates that this rate is not appropriate to use as AFA in 
the current review, we determine that this rate has relevance.
    As this rate is both reliable and relevant, we determine that it 
has probative value, and is thus in accordance with section 776(c)'s 
requirement that secondary information be corroborated to the extent 
practicable (i.e., that it has probative value).

Voluntary Respondents

    Section 782(a) of the Act provides that the Department, in any 
investigation under subtitle A or B or a review under section 751(a) in 
which the administering authority has, under section 777A(c)(2), 
limited the number of exporters or producers examined, or determined a 
single country-wide rate, the administering authority shall establish 
an individual weighted- average dumping margin for any exporter or 
producer not initially selected for individual examination under such 
sections who submits to the administering authority the information 
requested from exporters or producers selected for examination, if (1) 
such information is so submitted by the date specified for exporters 
and producers that were initially selected for examination; and (2) the 
number of exporters or producers who have submitted such information is 
not so large that individual examination of such exporters or producers 
would be unduly burdensome and inhibit the timely completion of the 
investigation.

Qingdao Saturn

    As discussed in the ``General Background'' section above, between 
May 7 and 23, 2007, Qingdao Saturn submitted voluntary responses to the 
Department's NME questionnaire. In Qingdao Saturn's questionnaire 
responses, Qingdao Saturn requested that the Department calculate an 
individual weighted-average dumping margin for Qingdao Saturn, pursuant 
to section 782(a) of the Act. Additionally, between October 2 and 15, 
2007, Qingdao Saturn requested that the Department calculate an 
individual weighted-average dumping margin for Qingdao Saturn, pursuant 
to section 782(a) of the Act, arguing that the Department has the 
resources and time to review Qingdao Saturn as a voluntary respondent 
due to Huaiyang Hongda's lack of participation in this proceeding. 
Moreover, on October 9, 2007, Petitioners submitted comments requesting 
that the Department not review Qingdao Saturn as a voluntary 
respondent, pursuant to section 782(a) of the Act, because Department 
does not have the additional resources to consider Qingdao Saturn's 
data so late in the proceeding. Furthermore, in their comments, 
Petitioners stated that the Department has not yet determined how it 
will treat Huaiyang Hongda in the preliminary results.
    For these preliminary results, the Department has not examined any 
of the submissions by Qingdao Saturn because of the Department's 
resource constraints and the Department's decision to only review three 
exporters. Although Qingdao Saturn is correct that Huaiyang Hongda has 
not responded to the Department's supplemental questionnaires, as 
discussed above in the ``Huaiyang Hongda'' section, the Department has 
not received communication from Huaiyang Hongda that it is not going to 
participate as an active respondent in this proceeding. In certain 
circumstances, the Department has determined to review a voluntary 
respondent because (1) another respondent notified the Department that 
it was not going to participate; and (2) reviewing this voluntary 
respondent would not be unduly burdensome, given time and resource 
constraints. See Certain Frozen Warmwater Shrimp from the People's 
Republic of China: Notice of Final Results and Rescission, in Part, 
2004/2006 Antidumping Duty Administrative Review and New Shipper 
Reviews, 72 FR 52049 (September 12, 2007) and accompany Issues and 
Decision Memorandum at Comment 15; see also Certain Frozen Warmwater 
Shrimp from the People's Republic of China: Preliminary Results and 
Partial Rescission of the 2004/2006 Administrative Review and 
Preliminary Intent to Rescind 2004/2006 New Shipper Review, 72 FR 
10645, 10647, and 10655 (March 9, 2007). However, in this proceeding, 
although Huaiyang Hongda has chosen to not respond to the Department's 
supplemental questionnaires, Huaiyang Hongda is still under review. 
Thus, the Department has devoted time and resources to the 
consideration of Huaiyang Hongda for these preliminary results.
    Additionally, the Department finds that, while Qingdao Saturn is 
correct that the Department can choose to review a voluntary 
respondent, section 782(a)(2) of the Act provides that the Department 
may do so if reviewing such an exporter or producer is not ``unduly 
burdensome and inhibit the timely completion of the investigation.'' 
However, the Department finds that, given the limited amount of time 
remaining after Huaiyang Hongda stopped responding to the Department's 
questionnaires, the Department did not have an adequate amount of time 
to examine Qingdao Saturn's responses for these preliminary results.
    The Department notes that the analysis of initial questionnaire 
responses makes up only a limited portion of the work performed with 
respect to any given respondent. The Department frequently issues 
supplemental questionnaires, collects surrogate value data for the 
factors of production (``FOPs'') used by each individual respondent, 
identifies and resolves any issues with respect to such data, and 
calculates a separate margin for each company. See Notice of Final

[[Page 69658]]

Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances: Certain Color Television 
Receivers from the People's Republic of China, 69 FR 20594 (April 16, 
2004) and accompanying Issues and Decision Memorandum at Comment 2. 
Each of these activities requires the expenditure of significant 
resources. Given the limited amount of time available, the Department 
lacks the resources to analyze Qingdao Saturn as a voluntary respondent 
for these preliminary results, pursuant to section 782(a) of the Act. 
Moreover, in addition to the caseload identified in the Respondent 
Selection Memo as a factor to limit the number of respondents, the 
office responsible for this proceeding, AD/CVD Operations Office 9, is 
responsible for conducting five new antidumping investigations 
initiated subsequent to the selection of respondents in this review. 
Thus, it does not have significant additional resources to apply to 
Qingdao Saturn.

NME Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an 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 Brake Rotors From the People's Republic of 
China: Final Results and Partial Rescission of the 2004/2005 
Administrative Review and Rescission of 2004/2005 New Shipper Review, 
71 FR 66304 (November 14, 2006). None of the parties to this proceeding 
has contested such treatment. Accordingly, we calculated NV in 
accordance with section 773(c) of the Act, which applies to NME 
countries.

Separate Rate Determinations

    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. See Notice of Final Determination of Sales at 
Less Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products From the People's Republic of China, 71 FR 
53079 (September 8, 2006); Final Determination of Sales at Less Than 
Fair Value and Final Partial Affirmative Determination of Critical 
Circumstances: Diamond Sawblades and Parts Thereof from the People's 
Republic of China, 71 FR 29303 (May 22, 2006).
    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 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) (``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 (May 2, 1994) (``Silicon Carbide'').
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; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies. 
See Sparklers, 56 FR at 20589.
    Throughout the course of this administrative review, only two of 
the mandatory respondents, Jinxiang Dong Yun and Shanghai LJ, have 
placed sufficient evidence on the record that demonstrate absence of de 
jure control. Additionally, all of the separate rate companies have 
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 has found that they 
establish an absence of de jure control. See Preliminary Results of New 
Shipper Review: Certain Preserved Mushrooms From the People's Republic 
of China, 66 FR 30695, 30696 (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; (2) the legal authority on the record decentralizing 
control over the respondent, as demonstrated by the PRC laws placed on 
the record of this review; and (3) other formal measures by the 
government decentralizing control of companies.\11\
---------------------------------------------------------------------------

    \11\ This preliminary finding applies to (1) two of the selected 
respondents of this administrative review: Jinxiang Dong Yun and 
Shanghai LJ; and (2) the separate rate companies of this 
administrative review: Sunny; Qufu Dong Bao; Weifang Shennong; 
Jinxiang Shanyang; Qingdao Xintianfeng; Shandong Longtai; Jining 
Trans-High; Shenzhen Fanhui; Taian Ziyang; Anqiu; Shanghai Ever 
Rich; Heze Ever-Best; Qingdao Saturn; Henan Weite; and Jinan 
Farmlady.
---------------------------------------------------------------------------

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. See Silicon Carbide, 59 FR at 22587; Sparklers, 56 
FR at 20589.
    The Department conducted a separate rates analysis for (1) two of 
the mandatory respondents chosen for an administrative review: Jinxiang 
Dong Yun and Shanghai LJ; and (2) the separate rate companies upon 
which an administrative review was requested but which were not chosen 
as mandatory respondents.
    These companies have all asserted the following: (1) there is no 
government participation in setting export prices; (2) sales managers 
and authorized employees have the authority to create binding sales 
contracts; (3) they do not

[[Page 69659]]

have to notify any government authorities of management selections; (4) 
there are no restrictions on the use of export revenue; and (5) each is 
responsible for financing its own losses. The questionnaire responses 
of two of the mandatory respondents, Jinxiang Dong Yun and Shanghai LJ, 
and the separate rate companies 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 of export activities. Consequently, we preliminarily 
determine that Jinxiang Dong Yun, Shanghai LJ, and the separate rate 
companies have met the criteria for the application of a separate rate.
    However, as discussed previously, the Department is not granting 
one of the mandatory respondents, Huaiyang Hongda, a separate rate 
because Huaiyang Hongda failed to respond to the supplemental 
questionnaire issued by the Department that contained several questions 
regarding Huaiyang Hongda's eligibility for a separate rate. As a 
result, we cannot confirm or verify the separate rate information that 
Huaiyang Hongda submitted in its questionnaire responses.

Surrogate Country

    When the Department investigates 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 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 FOPs, 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 Memorandum to the File 
through James C. Doyle, Director, Office 9 and Alex Villanueva, Program 
Manager, Office 9 from Julia Hancock, Senior Case Analyst, Office 9: 
Surrogate Factor Valuations for the Preliminary Results of the 12th 
Administrative Review (November 30, 2007) (``Surrogate Values Memo'').
    As discussed in the ``NME Country Status'' section, the Department 
considers the PRC to be an NME country. The Department determined that 
India, Sri Lanka, Indonesia, Philippines, and Egypt are countries 
comparable to the PRC in terms of economic development. See Memorandum 
from Ron Lorentzen, Director, Office of Policy, to Alex Villanueva, 
Program Manager, China/NME Group, Office 9: Antidumping Administrative 
Review of Fresh Garlic from the People's Republic of China: Request for 
a List of Surrogate Countries (June 1, 2007) (``Surrogate Country 
List''). Moreover, it is the Department's practice to select an 
appropriate surrogate country based on the availability and reliability 
of data from the countries. See Department Policy Bulletin No. 04.1: 
Non-Market Economy Surrogate Country Selection Process (March 1, 2004) 
(``Policy Bulletin''). In this case, the Department has found that 
India and Egypt are both significant producers of comparable 
merchandise. The Department finds India to be a reliable source for 
surrogate values because India is at a similar level of economic 
development pursuant to 773(c)(4) of the Act, is a significant producer 
of comparable merchandise, and has publically available and reliable 
data. Furthermore, the Department notes that India has been the primary 
surrogate country in past segments, and the only surrogate value data 
based submitted on the record are from Indian sources. Given the above 
facts, the Department has selected India as the primary surrogate 
country for this review. See Memorandum to the File, through James C. 
Doyle, Office Director, Office 9, Import Administration, and Alex 
Villanueva, Program Manager, Office 9, from Julia Hancock, Senior Case 
Analyst, Subject: 12th Administrative Review of Fresh Garlic from the 
People's Republic of China: Selection of a Surrogate Country (November 
30, 2007) (``Surrogate Country Memo'').

U.S. Price

    In accordance with section 772(a) of the Act, we calculated the 
export price (``EP'') for sales to the United States for Jinxiang Dong 
Yun and Shanghai LJ because the first sale to an unaffiliated party was 
made before the date of importation and the use of constructed EP 
(``CEP'') was not otherwise warranted. We calculated EP based on the 
price to unaffiliated purchasers in the United States. In accordance 
with section 772(c) of the Act, as appropriate, we deducted from the 
starting price to unaffiliated purchasers foreign inland freight, 
brokerage and handling, and marine insurance. For Jinxiang Dong Yun and 
Shanghai LJ, each of these services was either provided by an NME 
vendor or paid for using an NME currency. Thus, we based the deduction 
of these movement charges on surrogate values. See Surrogate Values 
Memo for details regarding the surrogate values for movement expenses. 
Additionally, Jinxiang Dong Yun reported that its international freight 
was provided by a market economy carrier and paid in U.S. dollars, so 
we used the actual cost per kilogram of the freight. Moreover, Jinxiang 
Dong Yun reported certain U.S. Customs and other expenses that must be 
deducted from the starting price to unaffiliated purchasers. 
Accordingly, we will deduct these expenses from the starting price to 
unaffiliated purchasers, as reported by Jinxiang Dong Yun. See 
Memorandum to the File, through Alex Villanueva, Program Manager, 
Office 9, from Michael Holton, Senior Analyst, Office 9; Company 
Analysis Memorandum in the Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China (``PRC''): Jinxiang Dong Yun 
(November 30, 2007).

Normal Value

1. Methodology
    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME and the information does not permit the calculation of NV 
using home-market prices, third-country prices, or constructed value 
under section 773(a) of the Act. The Department calculates NV using 
each of the FOPs that a respondent consumes in the production of a unit 
of the subject merchandise because the presence of government controls 
on various aspects of NMEs renders price comparisons and the 
calculation of production costs invalid under the Department's normal 
methodologies. However, there are circumstances 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 
Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from the People's Republic of China, 68 FR 47538 
(August 11, 2003), and

[[Page 69660]]

accompanying Issues and Decision Memorandum at Comment 1 (``PVA'') 
(citing to 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)).
    In the 9th Review Final Results, the Department recognized that 
there were serious discrepancies between the reported FOPs of the 
different respondents and that the standard FOP methodology might not 
be adequate to apply in future reviews.\12\ In the 10th administrative 
review, the Department conducted a ``harvest verification'' of several 
garlic producers in the PRC, interviewing farmers, studying farming 
techniques, and reviewing standard PRC garlic production record-
keeping.\13\ In analyzing the questionnaire responses and ``harvest 
verification'' reports in the 10th administrative review, the 
Department determined that, to capture the complete costs of producing 
fresh garlic, the methodology of valuing the intermediate product, the 
fresh garlic bulb, would more accurately capture the complete costs of 
producing subject merchandise.\14\ In the two previous administrative 
reviews, the Department also stated that ``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 FOPs in the 
calculation of NV.'' 10th Review Final Results, 71 FR at 26331; Fresh 
Garlic from the People's Republic of China: Partial Rescission and 
Preliminary Results of the Eleventh Administrative Review and New 
Shipper Reviews, 71 FR 71510, 71520 (December 11, 2006).
---------------------------------------------------------------------------

    \12\ See Fresh Garlic from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 70 FR 34082 (June 
13, 2005) (``9th Review Final Results'').
    \13\ See Memorandum to the File from Matthew Renkey, Senior Case 
Analyst; 12th Administrative Review of Fresh Garlic from the 
People's Republic of China: Intermediate Input Methodology Memoranda 
from the 10th Administrative Review Final Results and 11th 
Administrative Review Preliminary Results, (November 30, 2007), in 
which the Department placed the Intermediate Input Methodology memos 
from the tenth and eleventh Administrative Reviews on the record of 
this proceeding, inclusive of the verification reports resulting 
from the ``harvest verification.''
    \14\ 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) (``10th Review Final Results''), and accompanying Issues and 
Decision Memorandum at Comment 1.
---------------------------------------------------------------------------

    In the course of this review, the Department has requested and 
obtained a vast amount of detailed information from the respondents 
with respect to each company's garlic production practices. However, 
based on our analysis of the information on the record and for the 
reasons outlined in the Memorandum to the File through James C. Doyle, 
Director, Office 9 and Alex Villanueva, Program Manager, Office 9 from 
Matthew Renkey, Senior Case Analyst, and Michael Holton, Senior Case 
Analyst, Office 9: 12th Administrative Review of the Antidumping Duty 
Order on Fresh Garlic From the People's Republic of China: Intermediate 
Input Methodology (November 30, 2007) (``Intermediate Product Memo''), 
we continue to believe that the respondents were unable to accurately 
record and substantiate the complete costs of growing garlic during the 
POR.
    Thus, in the preliminary results for this administrative review, 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, the Department applied an ``intermediate-product valuation 
methodology'' to the 2 mandatory companies, Jinxiang Dong Yun and 
Shanghai LJ, for which we are calculating an antidumping duty margin in 
these preliminary results. Using this methodology, the Department 
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 the Intermediate Product Memo.
2. Factor Valuations
    In accordance with section 773(c) of the Act, the Department 
calculated NV based on the intermediate product value and processing 
FOPs reported by the respondents for the POR. To calculate NV, the 
Department 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, the 
Department considered the quality, specificity, and contemporaneity of 
the data. As appropriate, the Department adjusted input prices by 
including freight costs to make them delivered prices. The Department 
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 (Fed. Cir. 1997) (``Sigma''). The Department 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.

Garlic Bulb Value

    In applying the intermediate input methodology, the Department 
sought foremost to identify the best available surrogate value for the 
fresh garlic bulb input to production, as opposed to identifying a 
surrogate value for garlic seed. Therefore, the Department has valued 
the fresh garlic bulb using prices for the size ranges of ``A'' and 
``super-A'' grade garlic bulb in India, as published by Azadpur 
Agriculture Produce Marketing Committee (``APMC'') in its ``Market 
Information Bulletin'' (the ``Bulletin''). Azadpur APMC is the largest 
fruit and vegetable market in Asia and has become a ``National 
Distribution Centre'' for important Indian agricultural products such 
as garlic. The Bulletin is published by the Azadpur APMC on each 
trading day and contains, among other things, a list of all fruits and 
vegetables sold on the previous trading day, the amount (by weight) of 
each fruit or vegetable sold on that day, and a low, high and modal 
price for each commodity sold. The Department notes that the ``A'' 
grade garlic typically ranges from 40 - 55 millimeters (``mm'') in 
diameter, and the ``super-A'' grade garlic ranges 40 mm and above in 
diameter. See Petitioners' Second Surrogate Value Submission, 
(September 20, 2007) at Attachment 1; Petitioners' First Surrogate 
Value Submission, (August 2, 2007) at Exhibits 4-5.
    As the Department determined in past reviews, the price at which 
garlic is sold is heavily dependent upon physical characteristics, such 
as bulb size and number of cloves. See 9th Review Final Results, 70 FR 
34082 at Comment 2; 10th Review Final Results, 71 FR 26329 at Comment 
2. Accordingly, the Department finds that it is important to use 
surrogate Indian garlic values reflecting sales of garlic bulbs of 
similar diameter to that of Jinxiang Dong Yun's and Shanghai LJ's 
merchandise during the POR. Therefore, for these preliminary results, 
the Department finds that the ``A'' grade and ``super-A'' grade garlic 
data from Azadpur APMC

[[Page 69661]]

are the best available and most appropriate information on the record 
to value the garlic bulb input, pursuant to section 773(c) of the Act, 
for the reasons stated below. The Department has found that the data 
from Azadpur APMC satisfy the Department's surrogate value selection 
criteria. See Fresh Garlic from the People's Republic of China: Final 
Results and Partial Rescission of the Eleventh Administrative Review 
and New Shipper Reviews, 72 FR 34438, 34440 (June 22, 2007), and 
accompanying Issues and Decision Memorandum at Comment 2.
    Because the Department is able to determine the size of ``A'' and 
``super-A'' grade garlic and Jinxiang Dong Yun and Shanghai LJ provided 
the size of the garlic bulb, the Department is calculating the 
surrogate value for the garlic bulb using a simple average of the 
Azadpur data for ``A'' and ``super-A'' grade garlic for Jinxiang Dong 
Yun and Shanghai LJ. For further discussion of the Department's 
calculation for the surrogate value for the garlic bulb, as well as 
other surrogate values used, see the Surrogate Values Memo.

Preliminary Results of the Reviews

    The Department has determined that the following preliminary 
dumping margins exist for the period November 1, 2005, through October 
31, 2006:

                        Fresh Garlic from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
Shanghai LJ International Trading Co., Ltd..........               35.05
Jinxiang Dong Yun Freezing Storage Co., Ltd.........               23.21
Qufu Dongbao Import & Export Trade Co., Ltd.........               27.49
Weifang Shennong Foodstuff Co., Ltd.................               27.49
Jinxiang Shanyang Freezing Storage Co., Ltd.........               27.49
Qingdao Xintianfeng Foods...........................               27.49
Shandong Longtai Fruits and Vegetables Co., Ltd.....               27.49
Jining Trans-High Trading Co., Ltd..................               27.49
Shenzhen Fanhui Import & Export Co., Ltd............               27.49
Taian Ziyang Food Co., Ltd..........................               27.49
Anqiu Friend Food Co., Ltd..........................               27.49
Shanghai Ever Rich Trade Company....................               27.49
Heze Ever-Best International Trade Co., Ltd.........               27.49
Qingdao Saturn International Trade Co., Ltd.........               27.49
Sunny Import & Export Co., Ltd......................               27.49
Henan Weite Industrial Co., Ltd.....................               27.49
Jinan Farmlady Trading Co., Ltd.....................               27.49
PRC-wide Rate\15\...................................              376.67
------------------------------------------------------------------------
\15\ The PRC-Wide entity includes Huaiyang Hongda, APS Qingdao, Fujian
  Meitan, Hongchang, Jining Haijiang, Jining Solar, Jinxian County
  Huaguang, Laiwu Hongyang, Pizhou Guangda, Qingdao Bedow, Qingdao
  Camel, Qingdao H&T, Qingdao Potenza, Qingdao Shiboliang, Rizhao
  Xingda, Shandong Chengshun, Shandong Dongsheng, Shandong Garlic,
  Shanghai Ba-Shi, and T&S.

    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).
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
of this administrative review, interested parties may submit publicly 
available information to value FOPs within 20 days after the date of 
publication of these preliminary results. Interested parties must 
provide the Department with supporting documentation for the publicly 
available information to value each FOP. Additionally, in accordance 
with 19 CFR 351.301(c)(1), for the final results of this administrative 
review, interested parties may submit factual information to rebut, 
clarify, or correct factual information submitted by an interested 
party less than ten days before, on, or after, the applicable deadline 
for submission of such factual information. However, the Department 
notes that 19 CFR 351.301(c)(1) permits new information only insofar as 
it rebuts, clarifies, or corrects information recently placed on the 
record. The Department generally cannot accept the submission of 
additional, previously absent-from-the-record alternative surrogate 
value information pursuant to 19 CFR 351.301(c)(1). See Glycine from 
the People's Republic of China: Final Results of Antidumping Duty 
Administrative Review and Final Rescission, in Part, 72 FR 58809 
(October 17, 2007) and accompanying Issues and Decision Memorandum at 
Comment 2.
    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). The Department urges interested parties to provide an 
executive summary of each argument contained within the case briefs and 
rebuttal briefs.
    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, 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 completion of this administrative review, the Department will 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. The Department intends to issue assessment instructions to CBP 
15 days after the date of publication of the final results of 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. Pursuant to 19 CFR 
351.212(b)(1), we will calculate importer-specific (or customer) ad 
valorem duty assessment rates based on the ratio of the total amount of 
the dumping margins calculated for the examined sales to the total 
entered value of those same sales. We will instruct CBP to assess 
antidumping duties on all appropriate entries covered by this review if 
any importer-specific assessment rate calculated in the final results 
of this review is above de minimis.
    For Qingdao Tiantaixing, Zhengzhou Harmoni, Golden Bridge, Shanghai

[[Page 69662]]

McCormick, and Zhangqiu Qingyuan, companies for which this review is 
preliminarily rescinded, antidumping duties shall be assessed at rates 
equal to the cash deposit of estimated antidumping duties required at 
the time of entry, or withdrawal from warehouse, for consumption, in 
accordance with 19 CFR 351.212(c)(2).

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of the administrative review for 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results, as provided by section 751(a)(2)(C) of the Act: (1) for 
the exporters listed above, the cash-deposit rate will be that 
established in these final results of review (except, if the rate is 
zero or de minimis, no cash deposit will be required); (2) for 
previously reviewed or investigated companies not listed above that 
have separate rates, the cash-deposit rate will continue to be the 
exporter-specific rate published for the most recent period; (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; and (4) for all non-PRC exporters 
of subject merchandise which have not received their own rate, the 
cash-deposit rate will be the rate applicable to the PRC exporter that 
supplied that exporter. These deposit requirements, when imposed, shall 
remain in effect until further notice.

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 review, and this notice are in accordance with 
sections 751(a)(1) and 777(i) of the Act, and 19 CFR 351.213 and 
351.221(b)(4).

    Dated: November 30, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-23891 Filed 12-7-07; 8:45 am]
BILLING CODE 3510-DS-S