[Federal Register Volume 74, Number 84 (Monday, May 4, 2009)]
[Notices]
[Pages 20452-20459]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-10184]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic From the People's Republic of China: Preliminary 
Results of New Shipper Reviews

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

SUMMARY: The Department of Commerce (Department) is conducting six new 
shipper reviews (NSRs) of the antidumping duty order on fresh garlic 
from the People's Republic of China (PRC) covering the periods of 
review (PORs) of November 1, 2007 through April 30, 2008 and November 
1, 2007 through June 9, 2008. As discussed below, we preliminarily 
determine that sales have been made in the United States at prices 
below normal value (NV) with respect to certain exporters who 
participated fully and have demonstrated their eligibility for a 
separate rate in the NSRs. The NSRs for Jinxiang Tianheng Trade Co., 
Ltd. and Shandong Jinxiang Zhengyang Import & Export Co., Ltd. continue 
to be preliminarily rescinded. The dumping margins are set forth in the 
``Preliminary Results of the Reviews'' section below. 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. We invite 
interested parties to comment on these preliminary results. See 
``Comments'' section below.

DATES: Effective Date: May 4, 2009.

FOR FURTHER INFORMATION CONTACT: Toni Page, Elfi Blum, or Jun Jack 
Zhao, AD/CVD Operations, Office 6, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1398, (202) 482-0197, or (202) 482-1396, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 21, 22, 27, and 30, 2008, pursuant to section 
751(a)(2)(B)(i) of the Tariff Act of 1930, as amended (the Act), and 19 
CFR 351.214(c), the Department received NSR requests from Jinxiang 
Hejia Co., Ltd (Hejia), Weifang Chenglong Import & Export Co., Ltd. 
(Chenglong), Jinxiang Tianheng Trade Co., Ltd (Tianheng), Juye 
Homestead Fruits and Vegetables Co. Ltd. (Juye Homestead), Chengwu 
County Yuanxing Industry & Commerce Co., Ltd. (Chengwu), and Shandong 
Jinxiang Zhengyang Import & Export Co., Ltd. (Zhengyang). On June 30, 
2008, the Department initiated NSRs for all six companies. See Fresh 
Garlic From the People's Republic of China: Initiation of Antidumping 
Duty New Shipper Reviews, 73 FR 38979 (published July 8, 2008).
    On June 30, 2008 and January 2, 2009, the Department placed copies 
of CBP documents on the record of the NSRs pertaining to each shipment 
of garlic from the PRC exported to the United States by these six 
companies during the POR.\1\ On July 29, 2008, we issued a memorandum 
extending the end of the POR from April 30, 2008 to June 9, 2008, so as 
to capture entries that entered the U.S. market after April 30, 2008. 
See Memorandum to the File from Martha Douthit Re: Expansion of the 
Period of Review in the New Shipper Review of Fresh Garlic from the 
People's Republic of China (July 29, 2008), on file in the Central 
Records Unit (CRU), room 1117 of the main Commerce building.
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    \1\ See the Memorandum from Jun Jack Zhao Re: New Shipper Review 
of Fresh Garlic from the People's Republic of China: Customs Data 
(June 30, 2008) and the Memorandum from Toni Page Re: New Shipper 
Review of Fresh Garlic from the People's Republic of China: Entry 
Documents (January 2, 2009).
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    Since the initiation of these reviews, the Department issued 
original and supplemental questionnaires to Hejia, Chenglong, Tianheng, 
Juye Homestead, Chengwu, and Zhengyang. All six companies responded to 
the Department's questionnaires in a timely manner. On August 20, 2008, 
the Department sent interested parties a letter requesting comments on 
the surrogate country selection and information pertaining to valuing 
factors of production. See Letter to Interested Parties from the 
Department Re: New Shipper Reviews of Fresh Garlic from the People's 
Republic of China (``PRC'') (August 20, 2008). On November 12, 2008, 
Zhengyang submitted comments on the surrogate country selection and 
information pertaining to valuing factors of production. See Letter to 
the Department from Zhengyang Re: Surrogate Value Submission: Fresh 
Garlic from the People's Republic of China: New Shipper Review for 11/
01/07-04/30/08 (November 12, 2008) (Zhengyang's Surrogate Value Data). 
The Fresh Garlic Producers Association (FGPA) and its individual 
members (Christopher Ranch LLC, the Garlic Company, Valley Garlic, and 
Vessey and Company, Inc.) (collectively, petitioners) also submitted 
comments regarding surrogate values for these NSRs. See Letter to the 
Department from Petitioners Re: 14th New Shipper Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China (November 26, 2008) (Petitioners' Surrogate Value Data). In 
addition, Zhengyang submitted comments rebutting Petitioners' Surrogate 
Value Data submission. See Letter to the Department from Zhengyang Re: 
Rebuttal Documents on Surrogate Value Submission: Fresh Garlic from the 
People's Republic of China: New Shipper Review for 11/01/07-04/30/08 
(December 8, 2008) (Zhengyang's Rebuttal Surrogate Value Data). All 
submitted comments are on file in the CRU. No other party has submitted 
surrogate values or surrogate country comments on the record of this 
proceeding.
    On December 3, 2008, the Department extended the preliminary 
results of these NSRs to no later than April 27, 2009. See Fresh Garlic 
from the People's Republic of China: Extension of Time Limits for the 
Preliminary Results of the New Shipper Reviews, 73 FR 73638 (December 
3, 2008). On March 18, 2009, the Department notified all interested 
parties of its intent to preliminarily rescind the NSRs for Tianheng 
and Zhengyang. See Memorandum from Barbara E. Tillman Re: Bona Fide 
Nature of the Sale in the Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China (``PRC''): Jinxiang Tianheng 
Trade Co. and Intent to Preliminarily Rescind Jinxiang Tianheng Trade 
Co.'s New Shipper Review (March 18, 2009) and Memorandum from Barbara 
E. Tillman Re: Bona Fide Nature of the Sale in the Antidumping Duty New 
Shipper Review of Fresh Garlic from the People's Republic of China 
(``PRC''): Shandong Jinxiang Zhengyang Import & Export Co., Ltd., and 
Intent to Preliminarily Rescind Shandong

[[Page 20453]]

Jinxiang Zhengyang Import & Export Co., Ltd.'s New Shipper Review 
(March 18, 2009). On April 1, 2009, we received comments from Tianheng 
and Zhengyang. See Letter to the Department from Tianheng Re: Response 
to Bona Fides Memorandum of March 18, 2009; Jinxiang Tianheng Trade 
Co., Ltd.; Fresh Garlic from the People's Republic of China: New 
Shipper Review for 11/01/07-04/30/08; and Letter to the Department from 
Zhengyang Re: Response to Bona Fides Memorandum of March 18, 2009; 
Shandong Jinxiang Zhengyang Import and Export Co., Ltd.; Fresh Garlic 
from the People's Republic of China: New Shipper Review for 11/01/07-
04/30/08. The Department is reviewing the comments and timely 
information submitted by all interested parties on this issue. The 
Department intends to address these comments and factual information in 
a subsequent memorandum that will be issued prior to the final results 
of these NSRs.

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.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (NME) country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. See Brake Rotors From the 
People's Republic of China: Final Results and Partial Rescission of the 
2004/2005 Administrative Review and Notice of 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 Rates

    A designation of a country as an NME remains in effect until it is 
revoked by the Department. See section 771(18)(C) of the Act. 
Accordingly, there is a rebuttable presumption that all companies 
within the PRC are subject to government control and, thus, should be 
assessed a single antidumping duty rate.
    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in NME countries a single rate unless 
an exporter can affirmatively demonstrate an absence of government 
control, both in law (de jure) and in fact (de facto), with respect to 
exports. To establish whether a company is sufficiently independent to 
be entitled to a separate, company-specific rate, the Department 
analyzes each exporting entity in an NME country under the test 
established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China (Sparklers), 56 FR 
20588 (May 6, 1991), as amplified by the Notice of Final Determination 
of Sales at Less Than Fair Value: Silicon Carbide from the People's 
Republic of China, 59 FR 22585 (May 2, 1994) (Silicon Carbide).
    The Department's separate-rate status test to determine whether the 
exporter is independent from government control does not consider, in 
general, macroeconomic/border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level.\2\
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    \2\ See Certain Cut-to-Length Carbon Steel Plate from Ukraine: 
Final Determination of Sales at Less than Fair Value, 62 FR 61754, 
61758 (November 19, 1997), and Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 62 
FR 61276, 61279 (November 17, 1997).
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A. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; and (2) any 
legislative enactments decentralizing control of companies.
    Throughout the course of this proceeding, Hejia, Juye Homestead, 
Chenglong, and Chengwu have each placed a number of documents on the 
record to demonstrate absence of de jure control including business 
licenses, financial statements, and narrative information regarding 
government laws and regulations on corporate ownership, and the 
companies' operations and selection of management.\3\ In addition, 
Hejia, Juye Homestead, Chenglong, and Chengwu have each placed on the 
record the ``Foreign Trade Law of the People's Republic of China'', the 
``Company Law of the People's Republic of China'', and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations.'' The Department has 
analyzed such PRC laws and found that they establish an absence of de 
jure control. See, e.g., Honey from the People's Republic of China: 
Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review, 72 FR 102, 105 (January 3, 2006), unchanged in 
Honey from the People's Republic of China: Final Results and Final 
Rescission, In Part, of Antidumping Duty Administrative Review, 72 FR 
37715, 37716 (July 11, 2007). 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 of Hejia, Juye Homestead, 
Chenglong, and Chengwu based on: (1) an absence of restrictive 
stipulations associated with the exporter's business license; and (2) 
the legal authority on the record

[[Page 20454]]

decentralizing control over the respondent.
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    \3\ On March 18, 2009, the Department preliminarily rescinded 
the NSRs of Tianheng and Zhengyang. As such, we have not conducted a 
separate rate analysis of either company.
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B. Absence of De Facto Control

    As stated in previous cases, there is evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Silicon Carbide, 59 FR at 22586-87. Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether the respondents are, in fact, subject to a degree 
of government control which would preclude the Department from 
assigning separate rates.
    The absence of de facto governmental control over exports is based 
on whether a company: (1) Sets its own export prices independent of the 
government and other exporters; (2) retains the proceeds from its 
export sales and makes independent decisions regarding the disposition 
of profits or financing of losses; (3) has the authority to negotiate 
and sign contracts and other agreements; and (4) has autonomy from the 
government regarding the selection of management. See Silicon Carbide, 
59 FR at 22587 and Sparklers, 56 FR at 20589; see also Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From 
the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).
    The Department conducted a separate-rates analysis for each new 
shipper. In Hejia's, Juye Homestead's, Chenglong's, and Chengwu's 
questionnaire responses, each new shipper submitted evidence indicating 
an absence of de facto governmental control over its export activities. 
Specifically, this evidence indicates that: (1) Each new shipper sets 
its own export prices independent of the government and without the 
approval of a government authority; (2) each new shipper retains the 
proceeds from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) each new shipper has 
a general manager, branch manager or division manager with the 
authority to negotiate and bind the company in an agreement; (4) the 
general manager is selected by the board of directors or company 
employees, and the general manager appoints the deputy managers and the 
manager of each department; and (5) there is no restriction on each new 
shipper's use of export revenues. The questionnaire responses of the 
new shippers 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. 
Therefore, the Department preliminarily finds that Hejia, Juye 
Homestead, Chenglong, and Chengwu have each established, prima facie, 
that they qualify for separate rates status under the criteria 
established by Silicon Carbide and Sparklers.

Bona Fide Analysis

    Consistent with Department practice, we examined the bona fide 
nature of the new shipper sales at issue. In evaluating whether or not 
a 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 
arm's-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. 
v.United States, 366 F. Supp. 2d 1246, 1250 (CIT 2005) (TTPC). 
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) (citing Fresh Garlic From the People's Republic of 
China: Final Results of Antidumping Administrative Review and 
Rescission of New Shipper Review, 67 FR 11283 (March 13, 2002) and 
accompanying Issues and Decision Memorandum: New Shipper Review of 
Clipper Manufacturing Ltd.). Also, in TTPC, the court affirmed the 
Department's practice of considering that ``any factor which indicates 
that the sale under consideration is not likely to be typical of those 
which the producer will make in the future is relevant,'' (TTPC, 366 F. 
Supp. 2d at 1250), and found that ``the weight given to each factor 
investigated will depend on the circumstances surrounding the sale.'' 
TTPC, 366 F. Supp. 2d at 1263. Finally, in New Donghua, the CIT 
affirmed the Department's practice of evaluating the circumstances 
surrounding a NSR sale so that a respondent does not unfairly benefit 
from an atypical sale, and obtain a lower dumping margin than the 
producer's usual commercial practice would dictate.
    Tianheng: On March 18, 2009, we preliminarily concluded that the 
sale made by Tianheng during the POR was not a bona fide commercial 
transaction and thus notified parties of our intent to rescind the NSR 
for this company. The Department came to this conclusion based on the 
totality of circumstances, namely: (a) the atypical nature of 
Tianheng's POR sale; and (b) other evidence of a non-bona fide 
transaction. Since much of our analysis regarding the evidence of the 
bona fides of the transaction involves business proprietary 
information, a full discussion of the bases for our decision to rescind 
was set forth in the Memorandum from Barbara E. Tillman Re: Bona Fide 
Nature of the Sale in the Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China (``PRC''): Jinxiang Tianheng 
Trade Co. and Intent to Preliminarily Rescind Jinxiang Tianheng Trade 
Co.'s New Shipper Review (March 18, 2009) (Tianheng Bona Fides 
Memorandum).
    On April 1, 2009, Tianheng submitted comments and factual 
information addressing the Department's bona fides analysis. The 
Department intends to address these comments and factual information in 
a subsequent memorandum that will be issued prior to the final results.
    Zhengyang: On March 18, 2009, we preliminarily concluded that the 
sale made by Zhengyang during the POR was not a bona fide commercial 
transaction and thus preliminarily rescinded the NSR for this company. 
The Department came to this conclusion based on the totality of 
circumstances, namely: (a) the atypical nature of Zhengyang's POR sale; 
and (b) other evidence of a non-bona fide transaction. Since much of 
our analysis regarding the evidence of the bona fides of the 
transaction involves business proprietary information, a full 
discussion of the bases for our decision to rescind is set forth in the 
Memorandum from Barbara E. Tillman Re: Bona Fide Nature of the Sale in 
the Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China (``PRC''): Shandong Jinxiang Zhengyang 
Import & Export Co., Ltd., and Intent to Preliminarily Rescind Shandong 
Jinxiang Zhengyang Import & Export Co., Ltd.'s New Shipper Review 
(March 18, 2009) (Zhengyang Bona Fides Memorandum). On April 1, 2009, 
Zhengyang submitted comments and factual information addressing the 
Department's bona fides analysis. The Department intends to address 
these comments and factual information in a subsequent memorandum 
issued prior to the final results.
    Hejia: We preliminarily find that the sale made by Hejia during the 
POR was a bona fide commercial transaction based on the totality of 
circumstances, namely: (1) Neither Hejia nor its customer incurred any 
extraordinary expenses arising from the transaction; (2) the sale was 
made between

[[Page 20455]]

unaffiliated parties at arm's length; and (3) the timing of the sale 
does not indicate that this sale was not bona fide. However, we note 
that the Department will continue to examine all aspects of Hejia's POR 
sale including whether it is atypical, and, as such, not indicative of 
what its future sales may be. Since much of our analysis regarding the 
evidence of the bona fides of the transaction involves business 
proprietary information, a full discussion of the bases for our 
preliminary decision is set forth in the Memorandum from Barbara E. 
Tillman Re: Bona Fide Nature of the Sale in the Antidumping Duty New 
Shipper Review of Fresh Garlic from the People's Republic of China 
(``PRC''): Shandong Jinxiang Hejia Co., Ltd. New Shipper Review (April 
27, 2009) (Hejia Bona Fides Memorandum). Accordingly, we will continue 
to examine the bona fides of Hejia's sale after the preliminary 
results.
    Based on our investigation into the bona fide nature of Hejia's 
reviewed sale, its questionnaire responses, as well as its eligibility 
for a separate rate (see the ``Separate Rates'' section above) and the 
Department's preliminary determination that Hejia was not affiliated 
with any exporter or producer that had previously shipped subject 
merchandise to the United States, we preliminarily determine that Hejia 
has met the requirements to qualify as a new shipper during the POR. 
Therefore, for purposes of these preliminary results, we are treating 
Hejia's new shipper sale of subject merchandise to the United States as 
an appropriate transaction for its review.
    Juye Homestead: We preliminarily find that the sale made by Juye 
Homestead was a bona fide commercial transaction. Specifically, we find 
that: (1) The price of the sale was within the range of the prices of 
other entries of subject merchandise from the PRC into the United 
States during the POR; (2) neither Juye Homestead nor its customer 
incurred any extraordinary expenses arising from the transaction; (3) 
the sale was made between unaffiliated parties at arm's length; and (4) 
the timing of the sale does not indicate that this sale was not bona 
fide. However, we note that there is certain evidence on the record 
that suggests that the bona fides of Juye Homestead's sale is not 
definitive. Since much of our analysis regarding the evidence of the 
bona fides of the transaction involves business proprietary 
information, a full discussion of the bases for our preliminary 
decision is set forth in the Memorandum from Jun Jack Zhao Re: Bona 
Fide Nature of the Sale in the Antidumping Duty New Shipper Review of 
Fresh Garlic from the People's Republic of China (``PRC''): Juye 
Homestead Fruits and Vegetables Co., Ltd. (April 27, 2009). 
Accordingly, we will continue to examine the bona fides of Juye 
Homestead's sale after the preliminary results.
    Based on our investigation into the bona fide nature of Juye 
Homestead's reviewed sale, its questionnaire responses, as well as its 
eligibility for a separate rate (see the ``Separate Rates'' section 
above) and the Department's determination that Juye Homestead was not 
affiliated with any exporter or producer that had previously shipped 
subject merchandise to the United States, we preliminarily determine 
that Juye Homestead has met the requirements to qualify as a new 
shipper during the POR. Therefore, for purposes of these preliminary 
results, we are treating Juye Homestead's new shipper sale of subject 
merchandise to the United States as an appropriate transaction for its 
review.
    Chenglong: We preliminarily find that the new shipper sale made by 
Chenglong was a bona fide commercial transaction. Specifically, we 
found that: (1) The price of the sale was within the range of the 
prices of other entries of subject merchandise from the PRC into the 
United States during the POR; (2) neither Chenglong nor its customer 
incurred any extraordinary expenses arising from the transaction; (3) 
the sale was made between unaffiliated parties at arm's length; and (4) 
the timing of the sale does not indicate that this sale was not bona 
fide. However, we note that certain evidence on the record suggests 
that the bona fides of Chenglong's sale is not definitive. Since much 
of our analysis regarding the evidence of the bona fides of the 
transaction involves business proprietary information, a full 
discussion of the bases for our preliminary decision is set forth in 
the Memorandum from Jun Jack Zhao Re: Bona Fide Nature of the Sale in 
the Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China (``PRC''): Weifang Chenglong Import & Export 
Co., Ltd. (April 27, 2009). Accordingly, we will continue to examine 
the bona fides of Chenglong's sale after the preliminary results.
    Based on our investigation into the bona fide nature of Chenglong's 
reviewed sale, its questionnaire responses, as well as its eligibility 
for a separate rate (see the ``Separate Rates'' section above) and the 
Department's determination that Chenglong was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that Chenglong has met 
the requirements to qualify as a new shipper during the POR. Therefore, 
for purposes of these preliminary results, we are treating Chenglong's 
new shipper sale of subject merchandise to the United States as an 
appropriate transaction for its review.
    Chengwu: We preliminarily find that the new shipper sale made by 
Chengwu was a bona fide commercial transaction. Specifically, we found 
that: (1) The price of the sale was within the range of the prices of 
other entries of subject merchandise from the PRC into the United 
States during the POR; (2) neither Chengwu nor its customer incurred 
any extraordinary expenses arising from the transaction; (3) the sale 
was made between unaffiliated parties at arm's length; and (4) the 
timing of the sale does not indicate that this sale was not bona fide. 
However, we note that there is certain evidence on the record that 
suggests the bona fides of Chenwu's sale is not definitive. Since much 
of our analysis regarding the evidence of the bona fides of the 
transaction involves business proprietary information, a full 
discussion of the bases for our preliminary decision is set forth in 
the Memorandum from Toni Page Re: Bona Fide Nature of the Sale in the 
Antidumping Duty New Shipper Review of Fresh Garlic from the People's 
Republic of China (``PRC''): Chengwu County Yuanxiang Industry & 
Commerce Co., Ltd. (April 27, 2009). Accordingly, we will continue to 
examine the bona fides of Chengwu's sale after the preliminary results.
    Based on our investigation into the bona fide nature of Chengwu's 
reviewed sale, its questionnaire responses, as well as its eligibility 
for a separate rate (see the ``Separate Rates'' section above) and the 
Department's determination that Chengwu was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that Chengwu has met the 
requirements to qualify as a new shipper during the POR. Therefore, for 
purposes of these preliminary results, we are treating Chengwu's new 
shipper sale of subject merchandise to the United States as an 
appropriate transaction for its review.

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 factors of production (FOPs), 
valued in a surrogate market economy country or countries considered to 
be

[[Page 20456]]

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. 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).
    As discussed in the ``Non-Market Economy Country Status'' section 
above, the Department considers the PRC to be an NME country. Pursuant 
to section 773(c)(4) of the Act, the Department determined that India, 
Colombia, Indonesia, the Philippines, and Thailand are countries 
comparable to the PRC in terms of economic development. See the 
Memorandum to All Interested Parties Re: New Shipper Reviews of Fresh 
Garlic from the People's Republic of China (``PRC'') (August 20, 2008) 
at Attachment 1. Also in accordance with section 773(c)(4) of the Act, 
the Department has found that India is a significant producer of 
comparable merchandise. Moreover, the Department finds India to be a 
reliable source for surrogate values because India is at a similar 
level of economic development pursuant to section 773(c)(4) of the Act, 
is a significant producer of comparable merchandise, and has publicly 
available and reliable data. Furthermore, the Department notes that 
India has been the primary surrogate country in past segments of this 
proceeding, and the only surrogate value data 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 
Letter to All Interested Parties Re: New Shipper Reviews of Fresh 
Garlic from the People's Republic of China (``PRC'') at Attachment 1 
(August 20, 2008). The sources of the surrogate factor values are 
discussed under the ``Normal Value'' section below and in the 
Memorandum from Toni Page Re: Preliminary Results of the 2007-2008 New 
Shipper Reviews of Fresh Garlic from the People's Republic of China: 
Surrogate Values (April 27, 2009) (Surrogate Values Memorandum).

U.S. Price

    In accordance with section 772(a) of the Act, we calculated the 
export price for sales to the United States for Hejia, Juye Homestead, 
Chenglong, and Chengwu because each company made its sale to an 
unaffiliated party before the date of importation and the use of 
constructed export prices was not otherwise warranted. We calculated 
each company's export price based on its price to unaffiliated 
purchasers in the United States. In accordance with section 772(c) of 
the Act, where appropriate, we deducted from the starting price to 
unaffiliated purchasers the expenses for foreign inland freight, 
international freight, brokerage and handling, marine insurance, 
warehousing, and U.S. customs duties. For the expenses that were either 
provided by an NME vendor or paid for using an NME currency, we used 
surrogate values as appropriate. See the ``Factor Valuations'' section 
below for details regarding the surrogate values for movement expenses.

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 country 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. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol from 
the People's Republic of China, 68 FR 47538 (August 11, 2003), and 
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)).
    For the final results of certain prior administrative reviews (ARs) 
and NSRs (i.e., 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 (December 
11, 2006) (unchanged in the final results) (11th AR and NSRs); Fresh 
Garlic from the People's Republic of China: Final Results and Partial 
Rescission of the 12th Administrative Review, 73 FR 34251 (June 17, 
2008) (12th AR), and Fresh Garlic from the People's Republic of China: 
Final Results and Rescission, In Part, of Twelfth New Shipper Reviews, 
73 FR 56550 (September 29, 2008) (12th NSR), the Department found that 
garlic industry producers in the PRC do not generally track actual 
labor hours incurred for growing, tending, and harvesting activities 
and, thus, do not maintain appropriate records which would allow most, 
if not all, respondents to quantify, report, and substantiate this 
information. See the Memorandum from Toni Page Re: New Shipper Reviews 
of Fresh Garlic from the People's Republic of China--Intermediate 
Methodology Source Documents (April 27, 2009) (Intermediate Input 
Methodology Source Documents). In the 11th AR and NSRs, 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.'' See 11th AR and NSRs at 71520. In the course of these reviews, 
one company, Tianheng, reported its growing FOPs.\4\ (Hejia, Juye 
Homestead, Chenglong, Zhengyang, and Chengwu did not report FOPs 
related to growing whole garlic bulbs.) As such, for the reasons 
outlined in Memorandum from Toni Page Re: 2007-2008 New Shipper Review 
of Fresh Garlic from the People's Republic of China: Intermediate Input 
Methodology (April 27, 2009) (Intermediate Input Methodology 
Memorandum), the Department is applying an ``intermediate-product 
valuation methodology'' to the NSR respondents 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''), adjusting for yield losses during the processing stages, 
and adding the respondents' processing costs,

[[Page 20457]]

which were calculated using their reported usage rates for processing 
fresh garlic. See Intermediate Input Methodology Memorandum.
---------------------------------------------------------------------------

    \4\ On March 18, 2009, the Department preliminarily rescinded 
the NSR of Tianheng. As such, we have not conducted an analysis of 
the growing FOPs that Tianheng reported.
---------------------------------------------------------------------------

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. 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). For more information regarding the Department's valuation for 
the various FOPs, see Surrogate Values Memorandum.
Garlic Bulb Valuation
    The Department's practice when selecting the ``best available 
information'' for valuing FOPs, in accordance with section 773(c)(1) of 
the Act, is to select, to the extent practicable, surrogate values 
which are publicly available, product-specific, representative of a 
broad market average, tax-exclusive and contemporaneous with the POR. 
See Final Determination of Sales at Less Than Fair Value: Certain 
Artist Canvas from the People's Republic of China, 71 FR 16116 (March 
30, 2006) and accompanying Issues and Decision Memorandum at Comment 2.
    The Department has applied an intermediate input methodology for 
respondents. Therefore, we sought to identify the best available 
surrogate value for the garlic bulb input to production, as opposed to 
finding surrogate values for the steps involved in planting, growing, 
and harvesting raw garlic (such as seeds, water, fertilizer, etc.). See 
Petitioners' Surrogate Value Data at 2; see also Surrogate Values 
Memorandum. For the preliminary results of these reviews, we find that 
data from the Azadpur APMC's ``Market Information Bulletin'' is the 
most appropriate information available to value the respondents' garlic 
bulb input.
    In their FOP databases, respondents reported garlic bulb input size 
ranges for each type of garlic produced and sold to the U.S. during the 
POR. Respondents, with the exception of Hejia, reported garlic bulb 
input sizes ranging between 45 mm and 65 mm. Consistent with the final 
results of the 12th administrative review, the Department continues to 
find that garlic bulb sizes that range from 55 mm and above are Grade 
Super-A and garlic bulb sizes that range between 40 mm and 55 mm are 
Grade A and Grade Super-A. See Surrogate Values Memorandum. Therefore, 
for these preliminary results, for respondents other than Hejia, we 
have used Grade Super-A values when respondents have reported bulb 
input sizes that range from 55 mm and above, and an average of Grade A 
and Super-A values when they have reported bulb input sizes that are in 
ranges from 40 mm to 55 mm. To calculate the surrogate value for garlic 
bulbs, we first averaged all data points from November 1, 2007 to April 
30, 2008 for: (1) Grade Super-A; and (2) Grade A. We then subtracted a 
7 percent fee (6 percent commission fee plus 1 percent market fee) 
charged on transactions at the Azadpur APMC from the Grade A and Grade 
Super-A averages. See Surrogate Values Memorandum.
Garlic Bulb Valuation for Hejia
    Hejia has submitted information on the record indicating that the 
garlic it sold, and the garlic bulb input thereof, possessed physical 
characteristics which significantly distinguish it from the Grade A and 
Super Grade A garlic on which we rely to value garlic bulb inputs. As 
such, neither Grade A nor Super Grade A garlic appears to be an 
appropriate basis from which to derive a surrogate value for the bulb 
input used by Hejia. Moreover, there is no other appropriate bulb 
surrogate value information on the record of this review. Thus, for 
these preliminary results, we have determined to use an FOB sales offer 
from Sundaram Overseas Operations (SOO), an Indian trading company, as 
the basis for deriving NV. SOO's sales offer appears to be an Indian 
export price for a whole garlic product that is physically similar to 
the product sold by Hejia. However, we have incomplete information 
regarding the FOB sales offer made by SOO. As such, for the purposes of 
these preliminary results, we are making the following assumptions: (1) 
SOO acted only as a trading company and did not further process the 
garlic at issue; and (2) the processing FOPs for the garlic at issue 
are similar to the processing FOPs of other whole garlic subject to 
these NSRs. Therefore, we adjusted SOO's price by removing the profit, 
SG&A, and overhead expenses associated with the activities of an Indian 
trading company. As such, the resulting NV will only reflect the costs 
and profit associated with processing whole garlic. See Surrogate 
Values Memorandum.
    The Department is requesting comments and factual information 
regarding the appropriate surrogate value to use in calculating NV for 
Hejia for purposes of the final results of review. Due to the unusual 
nature of this valuation and calculation, regardless of whether there 
is new factual information on the record after issuance of these 
preliminary results, the Department will continue to consider the 
appropriateness of this calculation for purposes of the final results 
of review. Since much of our analysis regarding Hejia's garlic and the 
garlic bulb input thereof has been treated as business proprietary 
information, a full discussion of the bases for calculating an 
appropriate surrogate value for Hejia's garlic bulb input is set forth 
in the Surrogate Values Memorandum.
Financial Ratios
    Petitioners and Zhengyang submitted comments and factual 
information regarding surrogate financial ratios. See Petitioners' 
Surrogate Value Data, Zhengyang's Surrogate Value Data, and Zhengyang's 
Rebuttal Surrogate Value Data submissions. After analyzing these 
comments and factual information, the Department has determined that it 
is appropriate to include the financial statements of additional Indian 
companies in the calculation of the financial ratios used to value 
overhead expenses, selling expenses, general expenses, and profits for 
the respondents. Specifically, the Department will calculate financial 
ratios using a simple average of financial data from three Indian 
processors of tea and/or other agricultural products. Using an average 
of these three companies' data will allow us to calculate financial 
ratios that better reflect the broader experience of the surrogate 
industry. See Surrogate Values Memorandum.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales, as certified by the Federal Reserve Bank. 
See <http://www.ia.ita.doc.gov/exchange/index.html>.

Verification

    Following the publication of these preliminary results, we intend 
to verify,

[[Page 20458]]

as provided in section 782(i)(3) of the Act, the questionnaire 
responses of these new shippers. At verification, we will use standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities, the examination of relevant sales and 
financial records, and the selection of original source documentation 
containing relevant information. We will prepare verification reports 
outlining our verification results and place these reports on file in 
the CRU.

Preliminary Results of the Reviews

    As a result of our reviews, we preliminarily find that the 
following margins exist for the period November 1, 2007 through June 9, 
2008:

                        Fresh Garlic From the PRC
------------------------------------------------------------------------
                                                      Weighted-average
               Exporter/manufacturer                  margin  (percent)
------------------------------------------------------------------------
Exported by Weifang Chenglong Import & Export Co.,                 39.85
 Ltd. and Produced by Jinxiang County Jichao Farm
 Business Co., Ltd................................
Exported and Produced by Juye Homestead Fruits and                 99.78
 Vegetables Co., Ltd..............................
Exported and Produced Chengwu County Yuanxiang                    134.90
 Industry & Commerce, Ltd.........................
Exported and Produced by Jinxiang Hejia Co., Ltd..                 70.38
------------------------------------------------------------------------

Assessment Rates

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Consistent with the final results of 
the 12th NSR, we will direct CBP to assess importer-specific assessment 
rates based on the resulting per-unit (i.e., per kilogram) amount on 
each entry of the subject merchandise during the POR. See 12th NSR at 
56552. Specifically, we will divide the total dumping margins for each 
importer by the total quantity of subject merchandise sold to that 
importer during the POR to calculate a per-unit assessment amount. We 
will direct CBP to assess importer-specific assessment rates based on 
the resulting per-unit (i.e., per kilogram) amount on each entry of the 
subject merchandise during the POR if any importer-specific assessment 
rate calculated in the final results of this review is above de 
minimis. The Department will issue appropriate assessment instructions 
directly to CBP 15 days after publication of the final results of these 
reviews.

Cash Deposit Requirements

    Consistent with the final results of the 12th NSR, we will 
establish and collect a per-kilogram cash-deposit amount which will be 
equivalent to the company-specific dumping margin published in the 
final results of these reviews. Specifically, the following cash 
deposit requirements will be effective upon publication of the final 
results of these reviews for all 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)(1) 
of the Act: (1) For subject merchandise produced and exported by Juye 
Homestead, Hejia or Chengwu, the cash deposit rates will be the rates 
determined in the final results of the new shipper reviews; (2) for 
subject merchandise exported by but not produced by Juye Homestead, 
exported but not produced by Hejia, or exported by but not produced by 
Chengwu, the cash deposit rate will be the PRC-wide rate; (3) for 
subject merchandise produced by Jinxiang County Jichao Farm Business 
Co., Ltd. (Jichao) and exported by Chenglong, the cash deposit rates 
will be the rates determined in the final results of the new shipper 
reviews; (4) for subject merchandise exported by Chenglong but not 
produced by Jichao, the cash deposit rates will be the PRC-wide rate; 
and (5) for subject merchandise produced or exported by Tianheng or 
Zhengyang, the cash deposit rate will be the PRC-wide rate. These 
requirements, when imposed, shall remain in effect until further 
notice.

Disclosure

    We will disclose the calculations used in our analysis to parties 
to these proceedings not later than ten days after the date of public 
announcement, or if there is no public announcement within five days of 
the date of publication of this notice. See 19 CFR 351.224(b).

Comments

    Interested parties are invited to comment on the preliminary 
results and may submit case briefs and/or written comments within 30 
days of the date of publication of this notice, unless otherwise 
notified by the Department. See 19 CFR 351.309(c)(ii). Rebuttal briefs, 
limited to issues raised in the case briefs, will be due five days 
later, pursuant to 19 CFR 351.309(d). Parties who submit case or 
rebuttal briefs in these proceedings are requested to submit with each 
argument: (1) a statement of the issue, and (2) a brief summary of the 
argument. Parties are requested to provide a summary of the arguments 
not to exceed five pages and a table of statutes, regulations, and 
cases cited. Additionally, parties are requested to provide their case 
brief and rebuttal briefs in electronic format (e.g., WordPerfect, 
Microsoft Word, Adobe Acrobat, etc.). Interested parties who wish to 
request a hearing, or to participate if one is requested, must submit a 
written request to the Assistant Secretary for Import Administration 
within 30 days of the date of publication of this notice. Requests 
should contain: (1) the party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of issues to be 
discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be 
limited to those raised in case and rebuttal briefs. The Department 
will issue the final results of these reviews, including the results of 
its analysis of issues raised in any such written briefs or at the 
hearing, if held, not later than 90 days after these preliminary 
results are issued, unless the final results are extended. See 19 CFR 
351.214(i).

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 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 antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these preliminary results in 
accordance with sections 751(a)(2)(B) and 777(i) of the Act, and 19 CFR 
351.214(h).


[[Page 20459]]


    Dated: April 27, 2009.
Ronald M. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-10184 Filed 5-1-09; 8:45 am]
BILLING CODE 3510-DS-P