[Federal Register Volume 76, Number 239 (Tuesday, December 13, 2011)]
[Notices]
[Pages 77480-77483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-31937]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-863]


Honey From the People's Republic of China: Initiation of 
Anticircumvention Inquiry

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to a request from the American Honey Producers

[[Page 77481]]

Association and the Sioux Honey Association (collectively 
``Petitioners''), the Department of Commerce (``Department'') is 
initiating an anticircumvention inquiry to determine whether certain 
imports are circumventing the antidumping duty order on honey from the 
People's Republic of China (``PRC'').

DATES: Effective Date: December 13, 2011.

FOR FURTHER INFORMATION CONTACT: Catherine Bertrand, telephone: (202) 
482-3207, or Josh Startup, telephone: (202) 482-5260; AD/CVD 
Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

    On August 12, 2011, pursuant to sections 781(c) and 781(d) of the 
Tariff Act of 1930, as amended (``Act''), and 19 CFR 351.225(i) and 
(j), Petitioners submitted properly filed requests for the Department 
to initiate and conduct a minor alterations and a later-developed 
merchandise anticircumvention inquiry to determine whether honey-rice 
syrup blends are circumventing the antidumping duty order on honey from 
the PRC. See Notice of Amended Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order; Honey From the People's 
Republic of China, 66 FR 63670 (December 10, 2001) (``the Order'').
    In their request, Petitioners allege that honey blended with rice 
syrup (``honey-rice syrup blend'') from the PRC is circumventing the 
Order. Specifically, Petitioners allege that Anhui Hundred Health Foods 
Co., Ltd. (also known as Anhui Hengjide Healthy Food Co., Ltd.)'s 
(``Anhui Hundred'') honey-rice syrup blend represents a minor 
alteration from in-scope honey blends, because rice syrup is 
indistinguishable from honey, and therefore, in-scope honey-rice syrup 
blends (consisting of 50 percent or more pure honey) are 
indistinguishable from out-of-scope honey-rice syrup blends (consisting 
of less than 50 percent pure honey). Consequently, Petitioners allege 
that Anhui Hundred's honey-rice syrup blend ``differs minimally, if at 
all, from honey and/or covered honey blends that are within the scope 
of the order.'' \1\ Alternatively, Petitioners argue that the honey-
rice syrup blends are a later-developed product of the subject 
merchandise because there was no knowledge of blends of honey and rice 
syrup being commercially available in the U.S. market at the time of 
the investigation.\2\
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    \1\ See Petitioners' Request for Scope/Circumvention Inquiry on 
Honey Syrup from China and Opposition to Anhui Hundred Scope Request 
on Honey Syrup from China, filed August 12, 2011 (``Petitioners' 
Request'') at 33.
    \2\ See Petitioners' Request, at 40-1.
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    On September 15, 2011, the Department extended the deadline to 
initiate the anticircumvention inquiry by 45 days, pursuant to 19 CFR 
351.302(b),\3\ with the new deadline to initiate of November 10, 2011. 
On October 20, 2011, the Department extended the deadline to initiate 
by an additional 40 days, making the deadline December 20, 2011.\4\ On 
October 20, 2011, the Department also sent a supplemental questionnaire 
to Petitioners requesting additional information to support their 
anticircumvention initiation request. The supplemental questionnaire 
was due on November 3, 2011. On October 27, 2011, the Department 
received and granted a supplemental questionnaire extension request 
from Petitioners, making the supplemental questionnaire response due 
November 14, 2011. On November 14, 2011, the Department received an 
additional supplemental questionnaire extension request from 
Petitioners. On November 14, 2011, the Department granted Petitioners' 
supplemental questionnaire extension request, making it due November 
21, 2011. On November 1, 2011, Anhui Hundred submitted comments 
opposing the initiation of an anticircumvention inquiry.\5\ On November 
21, 2011, Petitioners submitted their response to the Department's 
supplemental questionnaire.\6\
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    \3\ See Letter to Petitioners dated February 24, 2011.
    \4\ See Letter to Petitioners dated October 11, 2011.
    \5\ See Opposition by Anhui Hundred to Petitioners' Request to 
Initiate an Anti-circumvention Inquiry on Honey Syrup from the 
People's Republic of China, dated November 1, 2011 (``Anhui Hundred 
Response'').
    \6\ See Petitioners' Supplemental Questionnaire Response, dated 
November 21, 2011 (``Petitioners' Questionnaire Response'').
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Scope of the Order

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

Merchandise Subject to the Anticircumvention Request

    The merchandise subject to the anticircumvention request is honey-
rice syrup blends from the PRC.

Minor Alterations Request

    The Department has decided not to initiate Petitioners' minor 
alterations anticircumvention request which was submitted under 781(c) 
of the Act. In the case of a ``minor alteration'' allegation under 
section 781(c) of the Act, it is the Department's practice to look at 
the five factors listed in the Senate Finance Committee report to 
determine if circumvention exists in a particular case.\7\ Petitioners 
have not provided evidence demonstrating that the cost of modification 
between Anhui Hundred's product, consisting of 90 percent rice syrup 
and ten percent honey, and an in-scope product consisting of 50 percent 
or more honey, could be considered minor. While Petitioners calculated 
a 2.2 percent difference between a product that is 51/49 percent honey 
compared to one that is 49/51 percent honey,\8\ the only such product 
for which the Department has evidence on the record is from Anhui 
Hundred, which is 90 percent rice syrup and 10 percent honey. 
Therefore, Petitioners' price comparison is not valid for the purposes 
of this inquiry, because it is not for a specific product. Petitioners 
argue an importer might be able to sell a blend of 90 percent rice 
syrup and ten percent honey for the same amount as one with 10 percent 
rice syrup and 90 percent honey because of difficulties in testing for 
the amount of honey in a honey-rice syrup blend.\9\ However, 
Petitioners have not provided any evidence that any party has engaged 
in this practice. Additionally, Petitioners have not provided evidence 
demonstrating that the amount of rice syrup required to

[[Page 77482]]

dilute a mixture of 51 percent honey down to one that is only 10 
percent honey is minor. For all these reasons, there is no basis for 
the Department to initiate a minor alterations anticircumvention 
inquiry.
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    \7\ See Omnibus Trade Act of 1987, Report of the Senate Finance 
Committee, S. Rep. No. 71, 100th Cong., 1st Sess., at 100 (1987), 
which explained that in circumvention inquiries regarding minor 
alterations, the Department should consider such criteria as the 
overall physical characteristics of the merchandise, the 
expectations of the ultimate users, the use of the merchandise, the 
channels of marketing and the cost of any modification relative to 
the total value of the imported products.
    \8\ See Petitioners' Request at 37.
    \9\ Id., at 37-8.
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Later-Developed Merchandise Anticircumvention Request

    Section 781(d)(1) of the Act provides that the Department may find 
circumvention of an antidumping or countervailing duty order when 
merchandise is developed after an investigation is initiated (``later-
developed merchandise''). In conducting later-developed merchandise 
anticircumvention inquiries, under section 781(d)(1) of the Act, the 
Department will also evaluate whether the general physical 
characteristics of the merchandise under consideration are the same as 
the subject merchandise covered by the Order,\10\ whether the 
expectations of the ultimate purchasers of the merchandise under 
consideration are no different than the expectations of the ultimate 
purchasers of subject merchandise,\11\ whether the ultimate use of the 
subject merchandise and the merchandise under consideration are the 
same,\12\ whether the channels of trade of both products are the 
same,\13\ whether there are any differences in the advertisement and 
display of both products,\14\ and if the merchandise under 
consideration was commercially available at the time of the 
investigation.\15\
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    \10\ See section 781(d)(1)(A) of the Act.
    \11\ See section 781(d)(1)(B) of the Act.
    \12\ See section 781(d)(1)(C) of the Act.
    \13\ See section 781(d)(1)(D) of the Act.
    \14\ See section 781(d)(1)(E) of the Act.
    \15\ See Later-Developed Merchandise Anti-circumvention Inquiry 
of the Antidumping Duty Order on Petroleum Wax Candles from the 
People's Republic of China: Affirmative Preliminary Determination of 
Circumvention of the Antidumping Duty Order, 71 FR 32033, 32035 
(June 2, 2006).
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A. General Physical Characteristics

    Petitioners contend that the subject merchandise and honey-rice 
syrup blends containing less than 50 percent honey have identical 
physical characteristics. Specifically, according to Petitioners, pure 
honey, and honey-rice syrup blends with both more and less 50 percent 
honey content have identical fructose/glucose contents of approximately 
70 percent and water contents of approximately 17 percent.\16\ 
Petitioners note that three different test results on the record 
demonstrate that honey-rice syrup blends, regardless of honey content, 
have similar or identical physical characteristics.\17\ Consequently, 
Petitioners allege that Anhui Hundred's honey blend of 90 percent rice 
syrup and 10 percent honey is indistinguishable and has the identical 
physical characteristics as both pure honey and honey blends containing 
both more and less than 50 percent honey.
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    \16\ See Petitioners' Request at 28, 43, Exhibit 2 at I-5, and 
Exhibit 3 at 2-3.
    \17\ See Petitioners' Questionnaire Response at 29-32. 
Specifically, Petitioners cite the test report provided by Anhui 
Hundred, the U.S. Customs and Border Protection (``CBP'') test 
report for JLS Trading, Inc. provided in Petitioners' Request, and 
the Eurofins Test Report in Anhui Hundred's Scope Request.
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B. Expectations of the Ultimate Purchasers

    Petitioners state that users have the same expectations for honey-
rice syrup blends and the subject merchandise. Petitioners support 
their claim by noting that Anhui Hundred describes its product as 
``honey syrup,'' demonstrating that the consumer wants something that 
looks like and tastes similar to honey.\18\ Petitioners also note that 
Anhui Hundred is a self-described producer of ``honey products'' on 
various Web sites.\19\ Petitioners argue that the National Honey 
Board's (``NHB'') 2006 and 2009 survey of honey blends indicate that 
that there is no evidence that consumers do, or are able to, 
distinguish between honey blends with more than 50 percent or less than 
50 percent honey.\20\ Additionally, Petitioners cite the affidavit of 
an industry expert which states that both industrial users and retail 
consumers' expectations for honey-rice syrup blends with more or less 
than 50 percent honey are identical.\21\
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    \18\ See Petitioners' Request at 30.
    \19\ Id., at 30, 44 and Exhibit 5. See also Petitioners' 
Questionnaire Response at 21-24, for additional examples of other 
PRC suppliers which emphasize honey in their advertising.
    \20\ See Petitioners' Questionnaire Response at 19.
    \21\ See id., at 19-20, and affidavit of David Allibone, 
President and CEO of the Sioux Honey Association, at Exhibit 4.
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C. Ultimate Use of Merchandise

    Petitioners allege that the expectations of ultimate purchasers are 
identical for honey-rice syrup blends regardless of whether they 
contain more or less than 50 percent honey. Petitioners cite to Anhui 
Hundred's scope ruling request letter and the U.S. International Trade 
Commission (``ITC'') Investigation Report to support their argument 
that both products will be used as honey-based sweeteners.\22\ 
Additionally, Petitioners cite as support for their argument an 
affidavit in which a honey industry expert states that honey-rice 
syrups composed of either more or less than 50 percent honey have 
identical ultimate uses.\23\
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    \22\ See Petitioners' Request at 29-30, and 43-4.
    \23\ Id., at 24 and Exhibit 4.
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D. Channels of Trade

    Petitioners maintain that honey-rice syrup blends and subject 
merchandise would both be sold to industrial users or health food 
stores for use as a honey-based sweetener in the same channels of 
trade.\24\ Petitioners note that both in-scope and out-of-scope honey-
rice syrup blends are sold in identical containers on Anhui Freedom 
Foods' Web site, a PRC seller of ``syrup honey.'' \25\ Petitioners also 
cite to an affidavit in which a honey industry expert states that 
regardless of honey content, honey blends are sold to industrial 
bakers, health food stores, grocery stores, and in traditional honey 
bear bottles.\26\
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    \24\ See id. at 31 and 44.
    \25\ See Petitioners' Questionnaire Response at 24-25.
    \26\ See id., at 24-25, and Exhibit 4.
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E. Advertisement and Display of Product

    Petitioners maintain that honey syrups of varying contents are 
advertised identically. Petitioners contend that any honey/syrup 
mixtures are sold primarily in barrels, and displayed with the honey 
content displayed on the packaging.\27\ Petitioners cite the Web site 
of Anhui Freedom Foods as evidence that honey blends ranging from 10 
percent honey to 70 percent honey are labeled and packaged in identical 
containers.\28\
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    \27\ See Petitioners' Request at 31 and 44.
    \28\ See Petitioners' Questionnaire Response at 25 and Exhibit 
17.
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F. Commercial Availability

    Petitioners state that, at the time of the investigation, honey-
rice syrup blends did not exist in commercial quantities. Petitioners 
cite the ITC Investigation Report which does not specifically mention 
honey-rice syrup blends in its discussion of artificial honey, while it 
did list refined sugar and high-fructose corn syrup, as evidence that 
honey-rice syrup blends were not contemplated at the time of the Order. 
\29\ Additionally, Petitioners note that the two previous 
investigations of honey imports from the PRC did (one of which 
specifically covered artificial honey and preparations of natural 
honey, and one which was limited to artificial honey containing more 
than 50 percent honey by weight) did not specifically mention the term 
``rice syrup.'' \30\ Petitioners allege that the ITC

[[Page 77483]]

did not include rice syrup as a non-honey sweetener in the 2000-2001 
investigation because only refined sugar and high fructose corn syrup 
were known to be mixed with honey, making them ``honey adulterants,'' 
and that the existence of these sweeteners is not evidence of a bona 
fide U.S. market for blends with rice syrup.\31\
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    \29\ See id., at 6.
    \30\ Specifically, Petitioners cite the ITC's 1993-94 
``safeguard'' investigation, Honey from China, Inv. No. TA-406-13, 
USITC Pub. 2715 (Jan. 1994), and the 1994-95 AD investigation, Honey 
from the People's Republic of China, Inv. No. 731-TA-722 
(Preliminary), USITC Pub. 2832 (Nov. 1994). See Petitioners' 
Questionnaire Response at 3-5.
    \31\ Id., at 6.
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    Petitioners also state that PIERS ship manifest summaries show that 
there were no imports of honey-rice syrup blends from the PRC until 
August 2004.\32\ Additionally, according to the affidavit of a honey 
industry expert, who is also CEO of petitioner Sioux Honey Association, 
there were no commercially available honey-rice syrup blends being 
marketed in the United States at the time of the investigation.\33\ 
Petitioners also note that several studies on honey adulteration 
published from 1991 through 2002 do not mention rice syrup as an 
adulterant, and argue that this is evidence that honey-rice syrup 
blends were not available at the time of the investigation.\34\ 
Finally, Petitioners state that the NHB's 2002 Honey Attitude and Usage 
Study, which was published ten months after the Order went into effect, 
does not refer to any blend of honey with any non-honey sweeteners, 
indicating that such blends were not commercially available at that 
time.\35\
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    \32\ Id., at 11.
    \33\ Id., at 13, and Exhibit 4 at paragraph 2.
    \34\ Id., at 14-16.
    \35\ Id., at 16-18.
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Comments by Anhui Hundred

    Anhui Hundred contends that honey-rice syrup blends are not newly 
developed products intended to circumvent the Order. Anhui Hundred 
argues that both artificial honey and food preparations existed before 
the initiation of the investigation, yet to its knowledge, neither 
Petitioners nor the Department attempted to include food preparations 
within the scope, and it is clear from the scope's language that a 
deliberate decision was made to include only food preparations of over 
50 percent honey in the scope.\36\ Additionally, Anhui Hundred argues 
that honey-rice syrup is not a substitute for pure honey, and to the 
best of its knowledge, honey-rice syrup is sold exclusively to 
commercial bakeries and process food manufacturers in large 
quantities.\37\
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    \36\ See Anhui Hundred Response at 3.
    \37\ Id ., at 5.
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Initiation of Later-Developed Merchandise Antidumping Duty 
Anticircumvention Inquiry

    Based on the information provided by Petitioners described above, 
the Department finds that there is sufficient basis to initiate an 
antidumping duty anticircumvention inquiry pursuant to section 781(d) 
of the Act to determine whether honey-rice syrup blends are later-
developed products that can be considered subject to the Order. While 
the Department notes that Anhui Hundred has raised legitimate questions 
with respect to whether rice-syrup is a later-developed product within 
the meaning of section 781(d) of the Act, these questions do not 
demonstrate that the Department should not initiate this 
anticircumvention inquiry. Instead, because the Petitioners have 
provided the Department with adequate evidence as outlined above, the 
Department is initiating a later-developed merchandise 
anticircumvention inquiry and the Department will provide interested 
parties, including Anhui Hundred, an opportunity to provide evidence 
and argument within the context of that inquiry.
    The Department will not order the suspension of liquidation of 
entries of any additional merchandise at this time. However, in 
accordance with 19 CFR 351.225(l)(2), if the Department issues an 
affirmative preliminary determination, we will instruct CBP to suspend 
liquidation and require a cash deposit of estimated duties, at the 
applicable rate, for each unliquidated entry of the merchandise at 
issue, entered or withdrawn from warehouse for consumption on or after 
the date of initiation of this inquiry.
    We intend to notify the ITC in the event of an affirmative 
preliminary determination of circumvention, in accordance with 
781(e)(1) of the Act and 19 CFR 351.225(f)(7)(i)(C), if applicable. The 
Department will, following consultation with interested parties, 
establish a schedule for questionnaires and comments on the issues. The 
Department intends to issue its final determination within 300 days of 
the date of publication of this initiation notice.
    This notice is published in accordance with section 781(d) of the 
Act and 19 CFR 351.225(i) and (j).

     Dated: December 7, 2011.
Christian Marsh,
Acting Assistant Secretary for Import Administration.
[FR Doc. 2011-31937 Filed 12-12-11; 8:45 am]
BILLING CODE 3510-DS-P