[Federal Register Volume 75, Number 86 (Wednesday, May 5, 2010)]
[Notices]
[Pages 24578-24583]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10610]



[[Page 24578]]

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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 Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (Department) is conducting a new 
shipper review (NSR) of Qingdao Sea-line International Trade Co. Ltd. 
(Qingdao Sea-line) under the antidumping duty order on fresh garlic 
from the People's Republic of China (PRC) covering the period of review 
(POR) of November 1, 2008 through April 30, 2009. As discussed below, 
we preliminarily determine that Qingdao Sea-line has made sales in the 
United States at prices below normal value (NV). Qingdao Sea-line has 
participated fully in the review and has demonstrated its eligibility 
for a separate rate in this NSR. The dumping margin is set forth in the 
``Preliminary Results of the Review'' 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.

EFFECTIVE DATE: May 5, 2010.

FOR FURTHER INFORMATION CONTACT: Scott Lindsay, 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) 482-0780.

SUPPLEMENTARY INFORMATION:

Background

    On May 21, 2009, 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 a NSR request from Qingdao Sea-line. On June 24, 
2009, the Department determined that the request submitted by Qingdao 
Sea-line met the threshold requirements for initiation of a NSR and 
initiated Qingdao Sea-line's NSR. See Fresh Garlic From the People's 
Republic of China: Initiation of Antidumping Duty New Shipper Review, 
74 FR 31241 (June 30, 2009).
    On October 29, 2009, the Department placed a copy of the CBP data 
run on the record of this review, which contains all entries of subject 
merchandise exported from the PRC to the United States during the POR. 
See Memorandum to the File, from The Team, AD/CVD Operations, Office 6, 
Re: New Shipper Review of Fresh Garlic from the People's Republic of 
China: Customs Entries from November 1, 2008 through April 30, 2009 
(October 29, 2009). On April 20, 2010, the Department placed copies of 
CBP documents on the record of this review pertaining to Qingdao Sea-
line's shipment of garlic from the PRC exported to the United States 
during the POR. See Memorandum to the File, from Scott Lindsay, Senior 
Case Analyst, Re: New Shipper Review of Fresh Garlic from the People's 
Republic of China: Customs Entry Package (April 20, 2010).
    Since the initiation of this review, the Department has issued 
original and supplemental questionnaires to Qingdao Sea-line, which 
Qingdao Sea-line has responded to in a timely manner. On October 13, 
2009, 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 Review of Fresh Garlic from the 
People's Republic of China (``PRC'') (October 13, 2009). On November 
19, 2009, the Department extended the preliminary results of this NSR 
to no later than April 20, 2010. See Fresh Garlic from the People's 
Republic of China: Extension of Time Limit for the Preliminary Results 
of the New Shipper Review, 74 FR 59962 (November 19, 2009). As 
explained in the memorandum from the Deputy Assistant Secretary (DAS) 
for Import Administration, the Department exercised its discretion to 
toll deadlines for the duration of the closure of the Federal 
Government from February 5 through February 12, 2010. Thus, all 
deadlines in this segment of the proceeding were extended by seven 
days. See Memorandum to the Record from Ronald Lorentzen, DAS for 
Import Administration, Re: Tolling of Administrative Deadlines As a 
Result of the Government Closure During the Recent Snowstorm (February 
12, 2010). Therefore, the deadline for the preliminary results of this 
review was extended to April 27, 2010.
    On January 15, 2010, Qingdao Sea-line submitted comments on the 
surrogate country selection and information pertaining to valuing 
factors of production. See Letter to the Department, from Qingdao Sea-
line, Re: Fresh Garlic from the People's Republic of China Surrogate 
Value Information for 15th New Shipper Review (January 15, 2010) 
(Qingdao Sea-line's Surrogate Value Submission). The Fresh Garlic 
Producers Association (FGPA) and its individual members (Christopher 
Ranch L.L.C., the Garlic Company, Valley Garlic, and Vessey and 
Company, Inc.) (collectively, Petitioners) also submitted comments 
regarding surrogate values for this NSR. See Letter to the Department, 
from Petitioners, Re: 15th New Shipper Review of the Antidumping Duty 
Order on Fresh Garlic from the People's Republic of China (January 14, 
2010) (Petitioners' Surrogate Value Data). No other party has submitted 
surrogate values or surrogate country comments on the record of this 
proceeding.
    On March 26, 2010, Petitioners submitted on the record documents 
and data that, it maintains, call into question the U.S. price reported 
by Qingdao Sea-line for its garlic. On April 13, 2010, Qingdao Sea-line 
submitted a response to Petitioners' March 26, 2010, submission. In its 
response, Qingdao Sea-line argued that the U.S. sales information it 
placed on the record was complete, accurate, and supported by third 
party documentation. Therefore, Qingdao Sea-line argued, it is 
appropriate for the Department to utilize its reported U.S. sales 
information for these preliminary results. On April 16, 2010, the 
Department issued a supplemental questionnaire regarding the 
information contained in Petitioners' submission. A response to this 
questionnaire was received on April 22, 2010. The Department notes that 
this questionnaire response was received too late to be considered for 
this preliminary determination. The Department will therefore consider 
these submissions in its analysis for the final results.

Period of Review

    Pursuant to 19 CFR 351.214(g), the POR covered by this NSR is 
November 1, 2008 through April 30, 2009.

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

[[Page 24579]]

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, e.g., 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 have contested such treatment. Accordingly, 
we calculated NV in accordance with section 773(c) of the Act, which 
applies to NME countries.

Separate Rates

    As noted above, designation of a country as an NME remains in 
effect until it is revoked by the Department. See section 771(18)(C)(i) 
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 
its 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.\1\
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    \1\ 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, Qingdao Sea-line has 
placed documentation 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. In addition, Qingdao Sea-line has placed on the record 
copies of certain laws and regulations, including the ``Company Law of 
the People's Republic of China,'' the ``Foreign trade Law of the PRC,'' 
and ``Regulations of the PRC on the Administration of Company 
Registration.'' The Department has analyzed these 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, 2007), 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 determine that the evidence on the record 
supports a preliminary finding of an absence of de jure government 
control of Qingdao Sea-line based on: (1) an absence of restrictive 
stipulations associated with the exporter's business license; and (2) 
the legal authority on the record decentralizing control over the 
respondent.

B. Absence of De Facto Control

    As stated in previous cases, there is evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See, 
e.g., 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, e.g., 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).
    In Qingdao Sea-line's questionnaire responses, it submitted 
evidence indicating an absence of de facto governmental control over 
its export activities. Specifically, this evidence indicates that: (1) 
Qingdao Sea-line sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
Qingdao Sea-line retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) Qingdao Sea-line has an executive director and general 
manager with the authority to negotiate and bind the company in an 
agreement; (4) the general manager is selected by the owners of the 
company, and the

[[Page 24580]]

general manager appoints the manager of each department; and (5) there 
is no restriction on Qingdao Sea-line's use of export revenues. The 
questionnaire responses of Qingdao Sea-line do not suggest that pricing 
is coordinated among exporters. The Department conducted a separate 
rate analysis for Qingdao Sea-line. During our analysis of the 
information on the record, we found no information indicating the 
existence of de facto government control. Therefore, the Department 
preliminarily finds that Qingdao Sea-line has established, prima facie, 
that it qualifies for separate rate status under the criteria 
established by Silicon Carbide and Sparklers.

Bona Fides Analysis

    Consistent with Department practice, we examined the bona fides of 
the new shipper sale at issue. In evaluating whether or not a sale in a 
NSR 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 
(Court of International Trade (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) (New 
Donghua) (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.). In TTPC, the court also affirmed the Department's 
decision 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.
    We preliminarily find that the sale made by Qingdao Sea-line during 
the POR was a bona fide commercial transaction based on the totality of 
circumstances, namely: (1) the price reported by Qingdao Sea-line; (2) 
neither Qingdao Sea-line 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 the Department will continue to examine all aspects of Qingdao 
Sea-line'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 to Barbara E. 
Tillman, Director Office 6, Re: Bona Fides Analysis of the Sale in the 
Antidumping Duty New Shipper Review of Fresh Garlic from the People's 
Republic of China (``PRC''): Qingdao Sea-line International Trading 
Co., Ltd. New Shipper Review (April 27, 2010) (Qingdao Sea-line's 
Preliminary Bona Fides Memorandum). As discussed above, we will 
continue to examine the bona fides of Qingdao Sea-line's sale.
    Based on our preliminary findings that: 1) Qingdao Sea-line's sale 
is bona fide; 2) Qingdao Sea-line is eligible for a separate rate (see 
the ``Separate Rates'' section above); 3) Qingdao Sea-line is not 
affiliated with any exporter or producer that had previously shipped 
subject merchandise to the United States; and 4) Jinxiang County 
Juxinyuan Trading Co. Ltd. (Jinxiang Juxinyuan), the producer of the 
subject merchandise, did not export the subject merchandise to the 
United States during the POI, we preliminarily determine that Qingdao 
Sea-line has met the requirements to qualify as a new shipper during 
the POR. Therefore, for purposes of these preliminary results, we are 
treating the single sale of subject merchandise exported to the United 
States by Qingdao Sea-line and produced by Jinxiang Juxinyuan during 
the POR, to be an appropriate transaction for this review.

Surrogate Country

    When the Department investigates imports from an NME country, 
section 773(c)(1) of the Act directs it to base Normal Value (NV) on 
the NME producer's factors of production (FOPs), valued in a surrogate 
market economy country or countries considered to be appropriate by the 
Department. In accordance with section 773(c)(4) of the Act, in valuing 
the 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, Peru, and Thailand are countries 
comparable to the PRC in terms of economic development. See Memorandum 
to Thomas Gilgunn, Program Manager, from Kelly Parkhill, Acting 
Director Office of Policy, Subject: Request for a List of Surrogate 
Countries for a New Shipper Review of the Antidumping Duty Order on 
Fresh Garlic from the People's Republic of China (September 15, 2009). 
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. The 
sources of the surrogate factor values are discussed under the ``Normal 
Value'' section below and in the Memorandum from Scott Lindsay, Re: 
Preliminary Results of the 2008-2009 New Shipper Review of Fresh Garlic 
from the People's Republic of China: Surrogate Values (April 27, 2010) 
(Surrogate Values Memorandum).

[[Page 24581]]

U.S. Price

    In accordance with section 772(a) of the Act, we calculated the 
export price of Qingdao Sea-lines sale to the United States because it 
made its sale to an unaffiliated party before the date of importation 
and the use of constructed export price was not otherwise warranted. We 
calculated Qingdao Sea-line's export price based on its price to an 
unaffiliated purchaser in the United States. In accordance with section 
772(c) of the Act, where appropriate, we deducted from the starting 
price to the unaffiliated purchaser the expenses for foreign inland 
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,\2\ 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. 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 
this review, Jinxiang Juxinyuan, Qingdao Sea-line's garlic producer, 
did not report FOPs related to growing whole garlic bulbs. As such, for 
the reasons outlined in Memorandum from Scott Lindsay, Re: 2008-2009 
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 Qingdao Sea-line. 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 
Jinxiang County Juxinyuan Trading Co. Ltd.'s costs, which were 
calculated using its reported usage rates for processing fresh garlic. 
See Intermediate Input Methodology Memorandum.
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    \2\ See e.g., 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); 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) ; 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); and Fresh Garlic From the People's Republic of 
China: Final Results and Partial Rescission of the 13th Antidumping 
Duty Administrative and New Shipper Reviews, 74 FR 29174 (June 19, 
2009).
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2. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOP data reported by Jinxiang Juxinyuan for the POR. We 
relied on the factor-specific data submitted by Jinxiang Juxinyuan for 
the production inputs in its questionnaire responses, where applicable, 
for purposes of selecting SVs. To calculate NV, we multiplied the 
reported per-unit factor consumption rates by publicly-available Indian 
SVs.
    In selecting the SVs, consistent with our past practice, we 
considered the quality, specificity, and contemporaneity of the data. 
See, e.g., Folding Metal Tables and Chairs from the People's Republic 
of China; Final Results of Antidumping Duty Administrative Review, 71 
FR 71509 (December 11, 2006), and accompanying Issues and Decision 
Memorandum at Comment 9. As appropriate, we adjusted input prices by 
including freight costs to make them delivered prices. Specifically, we 
added to Indian import SVs a surrogate freight cost using the shorter 
of the reported distance from the domestic supplier to the factory or 
the distance from the nearest seaport to the factory, where 
appropriate. This adjustment is in accordance with the decision of the 
U.S. Court of Appeals for the Federal Circuit (Federal Circuit). See 
Sigma Corp. v. United States, 117 F. 3d 1401, 1408 (Fed. Cir. 1997). 
Where necessary, we adjusted the SVs for inflation/deflation using the 
Wholesale Price Index (WPI) as published in the International Monetary 
Fund's International Financial Statistics, available at http://ifs.apdi.net/imf.
    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,\3\ 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, e.g., 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.
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    \3\ Section 773(c)(1)(B) of the Act states that . . . the 
valuation of the factors of production shall be based on the best 
available information regarding the values of such factors in a 
market economy country or countries considered to be appropriate by 
the administering authority.
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    As discussed above, the Department is applying an intermediate 
input methodology for Qingdao Sea-line. Therefore, we sought to 
identify the best available surrogate value for the garlic bulb input 
for production, as opposed to finding surrogate values for the steps 
involved in planting, growing, and

[[Page 24582]]

harvesting raw garlic (such as seeds, water, fertilizer, etc.). See 
Petitioners' Surrogate Value Data; see also Surrogate Values 
Memorandum. For the preliminary results of this review, we find that 
data from the Azadpur APMC's ``Market Information Bulletin'' are the 
most appropriate information available to value Qingdao Sea-line's 
garlic bulb input.
    In its FOP database, Qingdao Sea-line reported garlic bulb input 
size for the garlic produced and sold to the U.S. during the POR. 
Consistent with our findings in 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) (Final Results 
Twelfth 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. Because there were 
no Grade Super-A prices reported by the APMC during the POR, we 
inflated the 2007-2008 APMC prices for ``Super A'' grade garlic to make 
them contemporaneous to our POR. See Surrogate Values Memorandum.

Financial Ratios

    Petitioners and Qingdao Sea-line submitted comments and factual 
information regarding surrogate financial ratios. See Petitioners' 
Surrogate Value Data and Qingdao Sea-line's Surrogate Value Submission. 
After analyzing these comments and factual information, the Department 
has determined that it is appropriate to use Tata Tea Ltd.'s (Tata Tea) 
and Limtex Tea Limited's (Limtex) financial data. We find that 
calculating an average of these two Indian tea processors provides 
financial ratios that best reflect the broader experience of the garlic 
industry and is consistent with our practices during the last three 
reviews. For these preliminary results, we are using Tata Tea's and 
Limtex's financial data, since tea is comparable to subject merchandise 
(i.e., whole and peeled garlic) and each company's non-integrated 
production process is similar to that of Jinxiang Juxinyan. We find 
that the resulting financial ratios from the average of Tata Tea's and 
Limtex's financial data provide the best surrogate for the garlic 
industry in the PRC as a whole, based on the information on the record 
of this review. See Surrogate Values Memorandum.

Other Factors of Production

    We valued the packing material inputs using weighted-average unit 
import values derived from the Monthly Statistics of the Foreign Trade 
of India (MSFTI), as published by the Directorate General of Commercial 
Intelligence and Statistics of the Ministry of Commerce and Industry, 
Government of India, and compiled by the World Trade Atlas (WTA), 
available at http://www.gtis.com/wta.htm. The Indian WTA import data 
are reported in dollars and are contemporaneous with the POR.\4\ Indian 
SVs denominated in Indian rupees were converted to U.S. dollars using 
the applicable daily exchange rate for India for the POR. See http://www.ia.ita.doc.gov/exchange/index.html. Where appropriate, we converted 
the units of measure to kilograms. See Surrogate Values Memorandum.
---------------------------------------------------------------------------

    \4\ See Surrogate Value Memorandum at Attachment 1.
---------------------------------------------------------------------------

    Furthermore, with regard to the WTA Indian import-based SVs, we 
disregarded prices from NME countries\5\ and those we have reason to 
believe or suspect may be subsidized, because we have found in other 
proceedings that these exporting countries maintain broadly available, 
non-industry-specific export subsidies and, therefore, there is reason 
to believe or suspect that all exports to all markets from such 
countries may be subsidized.\6\ We are also guided by the statute's 
legislative history that explains that it is not necessary to conduct a 
formal investigation to ensure that such prices are not subsidized. See 
H.R. Rep. No. 576 100th Cong., 2. Sess. 590-91 (1988). Rather, the 
Department was instructed by Congress to base its decision on 
information that is available to it at the time it is making its 
determination. Therefore, we excluded export prices from Indonesia, 
South Korea, Thailand, and India when calculating the Indian import-
based SVs. See Surrogate Value Memorandum. Finally, we excluded imports 
that were labeled as originating from an ``unspecified'' country from 
the average Indian import values, because we could not be certain that 
they were not from either an NME or a country with general export 
subsidies.
---------------------------------------------------------------------------

    \5\ The NME countries are Armenia, Azerbaijan, Belarus, Georgia, 
Kyrgyz Republic, Moldova, PRC, Tajikistan, Turkmenistan, Uzbekistan, 
and Vietnam.
    \6\ See Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China; Final Results of 
the 1998-1999 Administrative Review, Partial Rescission of Review, 
and Determination Not to Revoke Order in Part, 66 FR 1953 (January 
10, 2001), and accompanying Issues and Decision Memorandum at 
Comment 1; Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China; Final Results of 
1999-2000 Administrative Review, Partial Rescission of Review, and 
Determination Not To Revoke Order in Part, 66 FR 57420 (November 15, 
2001), and accompanying Issues and Decision Memorandum at Comment 1; 
and China National Machinery Imp. & Exp. Corp. v. United States, 293 
F. Supp. 2d 1334, 1339 (CIT 2003), as affirmed by the Federal 
Circuit, 104 Fed. Appx. 183 (Fed. Cir. 2004).
---------------------------------------------------------------------------

    As discussed above, the Department valued surrogate truck freight 
cost by using a per-unit average rate calculated from August 2008 data 
on the following Web site: http://www.infobanc.com/logistics/logtruck.htm. See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 52282, 52286 (September 9, 2008) (and 
unchanged in Polyethylene Retail Carrier Bags from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 74 FR 6857 (February 11, 2009)); and Surrogate Value Memorandum 
at Attachment 9.
    To value electricity, the Department used March 2008 electricity 
price rates from Electricity Tariff & Duty and Average Rates of 
Electricity Supply in India, published by the Central Electricity 
Authority of the Government of India. Because these data were 
contemporaneous with the POR, we did not adjust the average value. See 
Surrogate Value Memorandum at Attachment 4.
    For direct labor, indirect labor and packing labor, consistent with 
19 CFR 351.408(c)(3), we used the PRC regression-based wage rates 
reflective of the observed relationship between wages and national 
income in ME countries as reported on Import Administration's Web site. 
See ``Expected Wages of Selected NME Countries'' (revised December 
2009) (available at http://www.trade.gov/ia/). For further details on 
the labor calculation, see Surrogate Value Memorandum at Attachment 5. 
Because the regression-based wage rates do not separate the labor rates 
into different skill levels or types of labor, we applied the same wage 
rate to all skill levels and types of labor reported by Jinxiang 
Jininyuan.

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 date of the U.S. sale, as certified by the Federal Reserve Bank. 
See http://www.ia.ita.doc.gov/exchange/index.html.

Preliminary Results of the Review

    As a result of our review, we preliminarily find that the following

[[Page 24583]]

margin exists for Qingdao Sea-line during the period November 1, 2008 
through April 30, 2009:

                        Fresh Garlic from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                Exporter/Manufacturer                  Margin (Percent)
------------------------------------------------------------------------
Exported by Qingdao Sea-line International Trading                171.20
 Co., Ltd. and Produced by Jinxiang County Juxinyuan
 Trading Co. Ltd....................................
------------------------------------------------------------------------

Assessment Rates

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries. Consistent with the Fresh Garlic 
From the People's Republic of China: Final Results and Partial 
Rescission of the 13th Antidumping Duty Administrative Review and New 
Shipper Reviews, 74 FR 29174 (June 19, 2009) (Final Results Garlic 
Thirteenth Review), 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 
Final Results Garlic Thirteenth Review. 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 this review.

Cash Deposit Requirements

    Consistent with the final results of the Final Results Garlic 
Thirteenth Review, 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 this review. Specifically, the 
following cash deposit requirements will be effective upon publication 
of the final results of this review 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 by Jinxiang 
Juxinyuan and exported by Qingdao Sea-line, the cash deposit rate will 
be the per-unit rate determined in the final result of this new shipper 
review and; (2) for subject merchandise exported by Qingdao Sea-line 
but not produced by Jinxiang Juxinyuan, the cash deposit rate will be 
the per-unit 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 this proceeding 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 these 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 
and rebuttal briefs in electronic format (e.g., preferably in Microsoft 
Word). 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 this review, including the results of its analysis of issues 
raised in any such written briefs 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).

    Dated: April 27, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-10610 Filed 5-04-10; 8:45 am]
BILLING CODE 3510-DS-S