[Federal Register Volume 76, Number 85 (Tuesday, May 3, 2011)]
[Notices]
[Pages 24857-24860]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-10766]



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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]


Fresh Garlic From the People's Republic of China: Preliminary 
Intent To Rescind New Shipper Reviews

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

SUMMARY: The Department of Commerce (Department) is conducting three 
new shipper reviews (NSRs) under the antidumping duty order on fresh 
garlic from the People's Republic of China (PRC). The NSRs cover 
Shenzhen Bainong Co., Ltd. (Shenzhen Bainong) and Jining Yifa Garlic 
Produce Co., Ltd. (Jining Yifa) for the period of review (POR) November 
1, 2009, through April 30, 2010, and Yantai Jinyan Trading Inc. (Yantai 
Jinyan) for the POR November 1, 2009, through May 31, 2010. As 
discussed below, we preliminarily determine that Shenzhen Bainong's and 
Jining Yifa's sales are not bona fide. As such, we are preliminarily 
rescinding the NSR for Shenzhen Bainong and Jining Yifa. In addition, 
with respect to Yantai Jinyan, we preliminarily determine that there 
was no sale or entry during the original, unextended POR, and therefore 
we are preliminarily rescinding the new shipper review for Yantai 
Jinyan. We invite interested parties to comment on these preliminary 
results. see ``comments'' section below.

DATES: Effective Date: May 3, 2011.

FOR FURTHER INFORMATION CONTACT: Jacqueline Arrowsmith (Yantai Jinyan), 
Milton Koch (Jining Yifa), and Justin Neuman (Shenzhen Bainong), 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-
5255, (202) 482-2584, and (202) 482-0486, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On May 28, 2010, the Department received timely requests for an NSR 
from Jining Yifa, Shenzhen Bainong, and Yantai Jinyan in accordance 
with 19 CFR 351.214(c). On July 7, 2010, the Department determined that 
the requests submitted by Shenzhen Bainong, Jining Yifa, and Yantai 
Jinyan met the threshold requirements for initiation of an NSR and 
initiated the NSRs. See Fresh Garlic From the People's Republic of 
China: Initiation of New Shipper Reviews, 75 FR 38986 (July 7, 2010) 
(Initiation Notice). Since the initiation of these reviews, the 
Department has issued original and supplemental questionnaires to 
Shenzhen Bainong, Jining Yifa, and Yantai Jinyan, to which each has 
responded in a timely manner.
    On July 20, 2010, 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 All 
Interested Parties, from the Department, Re: New Shipper Review of 
Fresh Garlic from the People's Republic of China (``PRC'') (July 20, 
2010). On October 26, 2010, the respondents submitted comments on the 
surrogate country selection and information pertaining to valuing 
factors of production. See Letter to the Department, from Shenzhen 
Bainong, Yantai Jinyan, and Jining Yifa, Re: Fresh Garlic from the 
People's Republic of China--Surrogate Value Information (October 26, 
2010). 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: 17th New Shipper Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China--Petitioners' Rebuttal Submission Concerning Surrogate Values for 
Factors of Production (November 4, 2010). No other party has submitted 
surrogate values or surrogate country comments on the record of this 
proceeding.
    On November 23, 2010, the Department placed a copy of the U.S. 
Customs and Border Protection (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 PORs. 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, 2009 through May 31, 2010 (November 23, 2010). 
On November 30, 2010, the Department extended the deadline for the 
preliminary results of these NSRs to no later than April 26, 2011. See 
Fresh Garlic From the People's Republic of China: Extension of Time 
Limit for Preliminary Results of Antidumping Duty New Shipper Reviews, 
75 FR 74002 (November 30, 2010).
    On February 11, 2011, the Department placed on the record of this 
review, copies of CBP documents pertaining to Shenzhen Bainong's and 
Jining Yifa's shipments of garlic during the POR. On February 14, 2011, 
the Department placed on the record of this review, copies of CBP 
documents pertaining to Yantai Jinyan's shipment of garlic during the 
POR. See Memorandum to the File, from Justin M. Neuman, Analyst, Re: 
Antidumping Duty New Shipper Review of Fresh Garlic from the People's 
Republic of China (A-570-831): Customs Entry Packages (February 11, 
2011) and Memorandum to the File, from Jacqueline Arrowsmith, 
International Trade Analyst, Re: Antidumping Duty New Shipper Review of 
Fresh Garlic from the People's Republic of China (A-570-831): Customs 
Entry Documents (February 14, 2011).

Period of Review

    Pursuant to 19 CFR 351.214(g), the POR of the NSRs of Shenzhen 
Bainong and Jining Yifa is the semi-annual period November 1, 2009, 
through April 30, 2010. In its request for a new shipper review, Yantai 
Jinyan requested that we extend the POR for its NSR to capture the 
entry of its shipment in early May, after the six-month semi-annual NSR 
POR. When the sale of the subject merchandise occurs within the POR 
specified by the Department's regulations, but the entry occurs after 
the POR, the POR may be extended unless it would be likely to prevent 
the completion of the review within the time limits set by the 
Department's regulations. See 19 CFR 351.214(f)(2)(ii). Additionally, 
the preamble to the Department's regulations states that both the entry 
and the sale should occur during the POR, but that under 
``appropriate'' circumstances the Department has the flexibility to 
extend the POR. See Antidumping Duties; Countervailing Duties; Final 
Rule, 62 FR 27296, 27319-20 (May 19, 1997). Based on the information 
contained in Yantai Jinyan's request for an NSR, it appeared that the 
sale of subject merchandise was made during the POR specified by the 
Department's regulations and that the shipment entered in the 
subsequent month. Based on information provided by Yantai Jinyan, the 
Department found that extending the POR to capture this entry would not 
prevent the completion of the review within the time limits set by the 
Department's regulations. Therefore, the Department extended the POR 
for Yantai Jinyan's NSR by one month, i.e., through May 31, 2010. See 
Initiation Notice.

Scope of the Order

    The products covered by the order are all grades of garlic, whole 
or separated into constituent cloves, whether or not peeled, fresh, 
chilled, frozen,

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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 the 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 the 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.

Intent To Rescind the New Shipper Review of Yantai Jinyan

    The NSR provisions of the Department's regulations require that the 
entity making a request for an NSR must document and certify, among 
other things: (i) The date on which the merchandise was first entered, 
or withdrawn from warehouse, for consumption, or, if it cannot 
establish the date of first entry, the date on which it first shipped 
the merchandise for export to the United States; (ii) the volume of 
that and subsequent shipments; and (iii) the date of the first sale to 
an unaffiliated customer in the United States. See 19 CFR 
351.214(b)(2)(iv). If these provisions are met, the Department will 
conduct an NSR to establish an individual weighted-average dumping 
margin for such new shipper, if the Department has not previously 
established such a margin for the exporter or producer. See generally 
19 CFR 351.214(b)(2).
    In its request for an NSR, Yantai Jinyan made a representation and 
certified that it made a sale on April 19, 2010, to an unaffiliated 
customer, and that the sale entered the United States on May 25, 2010. 
See Letter from Yantai Jinyan to the Secretary of Commerce, dated May 
28, 2010. At the time of Yantai Jinyan's request, the Department 
determined that the request met the requirements of 19 CFR 351.214 and 
the Department published its Initiation Notice. In the Initiation 
Notice, the Department extended the POR for Yantai Jinyan because the 
Department considered that extending the POR to capture this entry 
would not prevent the completion of the review within the time limits 
set by the Department's regulations. See Initiation Notice. The 
Department's determination to initiate the NSR and decision to extend 
the POR was based on the information provided by Yantai Jinyan in its 
request for an NSR.
    In its Section A response, dated August 18, 2010, however, and its 
subsequent responses, Yantai Jinyan identified the customer to which 
its April 19, 2010 sale was made as an affiliated company. Further, the 
Section A response showed that the sale to the first unaffiliated 
customer occurred on May 25, 2010, a date outside the original semi-
annual POR.
    Based on information that Yantai Jinyan submitted after the 
initiation of the NSR, the Department has now determined that Yantai 
Jinyan did not meet the minimum requirements in its request for an NSR 
under 19 CFR 351.214(b)(2)(iv)(C). The sale that Yantai Jinyan 
certified in its request as its first sale to an unaffiliated customer 
in the United States was later identified by Yantai Jinyan as a sale to 
an affiliated customer. Consequently, the Department has now determined 
that the initiation and expansion of the POR to capture the entry was 
based on inaccurate information and that there was neither a sale nor 
an entry during the original POR. See 19 CFR 351.214(b)(2)(iv)(C). In 
order to qualify for an NSR under 19 CFR 351.214, a company must 
certify and document, among other things, the date of the first sale to 
an unaffiliated customer in the United States. Id. Because information 
provided by Yantai Jinyan after the initiation shows that Yantai 
Jinyan's request for review did not meet this key requirement, Yantai 
Jinyan is not entitled to an NSR. Further, the preamble to the 
Department's regulations also explains that ``we do not believe it 
appropriate to base a new shipper review on anything short of a sale.'' 
Because there was neither a sale to an unaffiliated customer in the 
United States nor an entry during the original POR, there was no basis 
to initiate the NSR. Therefore, the Department preliminarily determines 
that it is appropriate to rescind the NSR for Yantai Jinyan.
    The Department is currently conducting an antidumping duty 
administrative review for the POR November 1, 2009, through October 31, 
2010, which includes Yantai Jinyan and its entries. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews and Request 
for Revocation in Part, 75 FR 81565 (December 28, 2010). Therefore, the 
Department intends to move Yantai Jinyan's separate rate application 
from the record of this NSR to the record of the administrative review, 
and consider it in the context of the administrative review.

Bona Fides Analysis

    Consistent with Department practice, we examined the bona fides of 
the sales of Jining Yifa and Shenzhen Bainong.\1\ In evaluating whether 
a sale in an 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 (Ct. Int'l Trade 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 (Ct. Int'l Trade 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,

[[Page 24859]]

in New Donghua, the Court of International Trade affirmed the 
Department's practice of evaluating the circumstances surrounding an 
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.
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    \1\ Because we intend to rescind the NSR of Yantai Jinyan based 
on the lack of a sale and entry during the POR, there is no basis to 
evaluate the bona fides of Yantai Jinyan's sale. Our analysis of the 
bona fides of the sale is limited to the sales of Shenzhen Bainong 
and Jining Yifa.
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Shenzhen Bainong

    Based on the totality of circumstances, we preliminarily find that 
the sale made by Shenzhen Bainong during the POR was not a bona fide 
commercial transaction. Shenzhen Bainong's POR sales price and quantity 
were both atypical and aberrational. In addition, we sought information 
from the importer in order to evaluate the commercial reasonableness of 
the sale and to consider whether this sale is predictive of future 
commercial activity. The importer has not substantiated its claims that 
it is trying to establish a garlic business; the importer has also said 
that it has no immediate plans to import garlic. Because much of the 
factual information used in our analysis of the bona fides of the 
transactions involves business proprietary information, a full 
discussion of the basis for our preliminary finding that the sale is 
not bona fide is set forth in the Memorandum to: Barbara E. Tillman, 
Director, AD/CVD Operations, Office 6, From: Dana S. Mermelstein, 
Program Manager, AD/CVD Operations, Office 6, Import Administration: 
Bona Fides Analysis of Shenzhen Bainong Co., Ltd.'s New Shipper Sale in 
the Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China (PRC) (Shenzhen Bainong Bona Fides 
Memorandum). Because we have found Shenzhen Bainong's sale to not be 
bona fide, we cannot rely on it to calculate a dumping margin and we 
are, therefore, preliminarily rescinding Shenzhen Bainong's NSR. See 
Shenzhen Bainong Bona Fides Memorandum; TTPC; and New Donghua.

Jining Yifa

    Based on the totality of circumstances, we preliminarily find that 
the sales made by Jining Yifa during the POR are not bona fide 
commercial transactions. Jining Yifa's POR sales price and quantity 
were both atypical and aberrational. In addition, the affiliated 
importer was not forthcoming with information that would have permitted 
a full analysis of the commercial reasonableness of the sales. Because 
much of the factual information used in our analysis of the bona fides 
of the transactions involves business proprietary information, a full 
discussion of the bases for our preliminary finding that the sales are 
not bona fide is set forth in the Memorandum to: Barbara E. Tillman, 
Director, AD/CVD Operations, Office 6, From: Dana S. Mermelstein, 
Program Manager, AD/CVD Operations, Office 6, Import Administration: 
Bona Fides Analysis of Jining Yifa Garlic Produce Co., Ltd.'s New 
Shipper Sales in the Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China (PRC) (Jining Yifa Bona 
Fides Memorandum). Because we have found Jining Yifa's sales to not be 
bona fide, we cannot rely on them to calculate a dumping margin and we 
are, therefore, preliminarily rescinding Jining Yifa's NSR. See Jining 
Yifa Bona Fides Memorandum; TTPC; and New Donghua.

Preliminary Rescission of Shenzhen Bainong and Jining Yifa

    For the foregoing reasons, the Department finds that the sales of 
Shenzhen Bainong and Jining Yifa are not bona fide and that these sales 
do not provide a reasonable or reliable basis for calculating a dumping 
margin. Because these non-bona fide sales were the only sales of 
subject merchandise during the POR, the Department is preliminarily 
rescinding the NSRs of Shenzhen Bainong and Jining Yifa.

Assessment Rates

    If we proceed to a final rescission of Jining Yifa's and Shenzhen 
Bainong's NSRs, Jining Yifa's and Shenzhen Bainong's entries will be 
subject to the PRC-wide rate. The Department is currently conducting an 
administrative review for the POR November 1, 2009, through October 31, 
31, 2010, which includes the entries subject to these NSRs. Thus the 
PRC-wide rate is under review. Upon completion of the administrative 
review, we will instruct CBP to assess antidumping duties on entries 
for Jining Yifa and Shenzhen Bainong at the appropriate PRC-wide rate.
    If we proceed to a final rescission of the NSR of Yantai Jinyan, we 
will determine, during the course of the ongoing administrative review, 
if Yantai Jinyan is entitled to a separate rate. We will instruct CBP 
to assess antidumping duties on entries by Yantai Jinyan in accordance 
with the final results of the administrative review.

Cash Deposit Requirements

    Effective upon publication of the final rescission of these NSRs or 
the final results of these NSRs, we will instruct CBP to discontinue 
the option of posting a bond or security in lieu of a cash deposit for 
entries of subject merchandise by Jining Yifa, Shenzhen Bainong, and 
Yantai Jinyan. If we proceed to a final rescission of these NSRs, the 
cash deposit rate will continue to be for the per-unit PRC wide rate 
for Jining Yifa, Shenzhen Bainong, and Yantai Jinyan. If we issue a 
final results of NSR for any of these respondents, we will instruct CBP 
to collect cash deposits, effective upon the publication of the final 
results, at the rates established therein.

Disclosure

    We will disclose our analysis to parties to this proceeding not 
later than five 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 
NSR, 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).

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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) and 351.221(b)(4).

    Dated: April 26, 2011.
Paul Piquado,
Acting Deputy Assistant Secretary, for Import Administration.
[FR Doc. 2011-10766 Filed 5-2-11; 8:45 am]
BILLING CODE 3510-DS-P