[Federal Register: May 1, 2008 (Volume 73, Number 85)]
[Notices]
[Page 24042-24048]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr01my08-29]
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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 the 12th New Shipper Reviews
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``Department'') is conducting new
shipper reviews (``NSRs'') of the antidumping duty order on fresh
garlic from the People's Republic of China (``PRC'') that cover the
period of review (``POR'') of November 1, 2006 through April 30, 2007.
See Antidumping Duty Order: Fresh Garlic From the People's Republic of
China, 59 FR 59209 (November 16, 1994) (``Order''). On June 29, 2007,
the Department initiated semi-annual new shipper reviews for Shandong
Chenhe International Trading Co., Ltd. (``Chenhe''), Qingdao
Tiantaixing Foods Co., Ltd. (``QTF''), Hebei Golden Bird Trading Co.,
Ltd. (``Golden Bird''), Jining Yongjia Trade Co., Ltd. (``Yongjia'')
and Shenzhen Greening Trading Co., Ltd. (``Greening''). See Fresh
Garlic from the People's Republic of China: Initiation of Antidumping
Duty New Shipper Reviews, 72 FR 38057 (July 12, 2007) (``Initiation of
NSRs'').
We preliminarily determine that Golden Bird, Greening, QTF and
Yongjia have made sales in the United States at less than normal value
(``NV''). We also preliminarily determine that Chenhe has not made
sales in the United States at less than NV. If these preliminary
results are adopted in our final results of review, we will instruct
U.S. Customs and Border Protection (``CBP'') to assess antidumping
duties on entries of subject merchandise during the POR for which the
importer-specific assessment rates are above de minimis.
EFFECTIVE DATE: May 1, 2008.
FOR FURTHER INFORMATION CONTACT: Julia Hancock and Paul Walker, AD/CVD
Operations, Office 9, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
1394 and (202) 482-0413, respectively.
SUPPLEMENTARY INFORMATION:
Case History
General Background
On May 17, May 21 and May 28, 2007, the Department received
requests for new shipper reviews from Chenhe, QTF, Golden Bird,
Yongjia, and Greening, respectively. On June 12, 2007, the Department
requested additional information from QTF, Golden Bird, and QTF,
respectively regarding their new shipper review submissions. On June
13, 2007, Petitioners\1\ submitted comments regarding Chenhe's, QTF's,
Golden Bird's, and Yongjia's new shipper submissions.
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\1\ The Fresh Garlic Producers Association and its individual
members: Christopher Ranch LLC, the Garlic Company, Valley Garlic
and Vessey and Company, (collectively known as ``Petitioners'').
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On June 14, 2007, QTF, Golden Bird, and Yongjia submitted
additional information regarding their new shipper review submissions.
Additionally, on June 19 and June 21, 2007, QTF, Golden Bird, Yongjia,
and Chenhe submitted letters regarding Petitioners' June 13, 2007
comments. On June 29, 2007, the Department initiated semi-annual new
shipper reviews of QTF, Golden Bird, Yongjia, Chenhe, and Greening. See
Initiation of NSRs, 72 FR 38057.
On July 2, 2007, after initiating the reviews, the Department
issued antidumping duty questionnaires to the five companies
participating in the new shipper reviews. The Department subsequently
issued supplemental questionnaires and received responses from all
companies under review between September 2007 and March 2008.
Extension of Preliminary Results
On November 16, 2007, the Department extended the preliminary
results of these new shipper reviews to March 25, 2008. See Fresh
Garlic from the People's Republic of China: Extension of Time Limits
for the Preliminary Results of the New Shipper Reviews, 72 FR 64579
(November 16, 2007). Additionally, on March 6, 2008, the Department
extended the preliminary results a second time to April 24, 2008. 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
12079 (March 6, 2008).
Expansion of the POR
On April 23, 2008, we issued a memorandum extending the end of the
POR from April 30, 2007 to May 17, 2007, to capture entries of two of
the new shippers' merchandise into the United States market. See
Memorandum to the File from Julia Hancock, Senior Analyst, through
Catherine Bertrand, Program Manager, Office 9: Expansion of the Period
of Review in the New Shipper Reviews of Fresh Garlic from the People's
Republic of China, (April 23, 2008).
Surrogate Country and Surrogate Values
On August 23, 2007, the Department sent interested parties a letter
requesting comments on the surrogate country and information pertaining
to valuing factors of production.
On October 31, 2007, QTF, Yongjia, and Golden Bird submitted
comments on the surrogate country and information pertaining to valuing
factors of production. Additionally, on November 26, 2007, the
Department extended the deadline to submit information pertaining to
valuing factors of production to December 17, 2007.
On December 17, 2007, Petitioners submitted information pertaining
to valuing factors of production. On December 17 and December 27, 2007,
Chenhe submitted information and rebuttal comments pertaining to
valuing factors of production. No other party has submitted surrogate
values or surrogate country comments on the record of this proceeding.
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
[[Page 24043]]
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.
Verification
Following the publication of these preliminary results, we intend
to verify, as provided in section 782(i)(3) of the Tariff Act of 1930,
as amended, (``the Act''), sales and cost information submitted by
respondents, as appropriate. 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 Central Records Unit, room 1117 of the main Commerce building.
Bona Fide Analysis
Consistent with the Department's practice, we investigated the bona
fide nature of the sale made by each new shipper, Chenhe, Greening,
Golden Bird, QTF, and Yongjia, respectively for these reviews. In
evaluating whether or not a single 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). 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).
We preliminarily find that the new shipper sales made by Chenhe,
Greening, Golden Bird, QTF, and Yongjia, respectively, were made on a
bona fide basis. Specifically, we found that: (1) the price and
quantity of each new shipper sale was within the range of the prices
and quantities of other entries of subject merchandise from the PRC
into the United States during the POR; (2) the new shipper and its
customer did not incur any extraordinary expenses arising from the
transaction; (3) each new shipper sale was made between unaffiliated
parties at arm's length; (4) there is no record evidence that indicates
that each new shipper sale was not made based on commercial principles;
(5) the sale was resold at a profit; and (6) the timing of each new
shipper sale is not an indicator of a sale made on a non-bona fide
basis.\2\ Based on our investigation into the bona fide nature of each
new shipper sale, the questionnaire responses submitted by each new
shipper, as well as each new shipper's eligibility for a separate rate
(see Separate Rates Determination section below) and the Department's
determination that each new shipper was not affiliated with any
exporter or producer that had previously shipped subject merchandise to
the United States, we preliminarily determine that each new shipper has
met the requirements to qualify as a new shipper during the POR.
Therefore, for purposes of these preliminary results, we are treating
each new shipper's sale of subject merchandise to the United States as
an appropriate transaction for these reviews.
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\2\ See Memorandum from Julia Hancock, Senior Case Analyst,
Office 9, to James C. Doyle, Director, Office 9, ``Antidumping Duty
New Shipper Review of Fresh Garlic from the People's Republic of
China: Bona Fide Nature of the Sale Under Review for Shandong Chenhe
International Trading Co., Ltd.,'' dated April 22, 2008; Memorandum
from Paul Walker, Senior Case Analyst, Office 9, to James C. Doyle,
Director, Office 9, ``Antidumping Duty New Shipper Review of Fresh
Garlic from the People's Republic of China: Bona Fide Nature of the
Sale Under Review for Qingdao Tiantaixing Foods Co., Ltd.,'' dated
April 22, 2008; Memorandum from Paul Walker, Senior Case Analyst,
Office 9, to James C. Doyle, Director, Office 9, ``Antidumping Duty
New Shipper Review of Fresh Garlic from the People's Republic of
China: Bona Fide Nature of the Sale Under Review for Hebei Golden
Bird Trading Co., Ltd.,'' dated April 22, 2008; Memorandum from Paul
Walker, Senior Case Analyst, Office 9, to James C. Doyle, Director,
Office 9, ``Antidumping Duty New Shipper Review of Fresh Garlic from
the People's Republic of China: Bona Fide Nature of the Sale Under
Review for Jining Yongjia Trade Co., Ltd.,'' dated April 22, 2008;
and, Memorandum from Paul Walker, Senior Case Analyst, Office 9, to
James C. Doyle, Director, Office 9, ``Antidumping Duty New Shipper
Review of Fresh Garlic from the People's Republic of China: Bona
Fide Nature of the Sale Under Review for Shenzhen Greening Trading
Co., Ltd.,'' dated April 22, 2008.
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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 Determination
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
[[Page 24044]]
Than Fair Value: Silicon Carbide from the People's Republic of China,
59 FR 22585 (May 2, 1994) (``Silicon Carbide'').
A. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) an absence of restrictive stipulations associated with an
individual exporter's business and export licenses; and (2) any
legislative enactments decentralizing control of companies.
Throughout the course of this proceeding, the new shippers have
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. Specifically, the new shippers have placed on the record
the ``Foreign Trade Law of the People's Republic of China'' and the
``Administrative Regulations of the People's Republic of China
Governing the Registration of Legal Corporations.'' The Department has
analyzed such PRC laws and 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 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
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 their 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 each new shipper 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
each new shipper has established, prima facie, that they qualify for
separate rates under the criteria established by Silicon Carbide and
Sparklers.
Surrogate Country
When the Department is investigating 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 appropriate by the Department. In accordance with section 773(c)(4)
of the Act, in valuing the FOPs, the Department shall utilize, to the
extent possible, the prices or costs of FOPs in one or more market
economy countries that are: (1) at a level of economic development
comparable to that of the NME country; and (2) significant producers of
comparable merchandise. The sources of the surrogate factor values are
discussed under the ``Normal Value'' section below and in the
Memorandum to the File from Paul Walker, Senior Analyst, Office 9,
``New Shipper Review of Fresh Garlic from the People's Republic of
China: Surrogate Values for the Preliminary Results,'' dated April 22,
2008 (``Factor Valuation Memo'').
As discussed in the ``Separate Rates'' section, above, the
Department considers the PRC to be an NME country. The Department has
treated the PRC as an NME country in all previous antidumping
proceedings. 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. None of the
parties to this proceeding contested such treatment. Accordingly, we
treated the PRC as an NME country for purposes of these reviews and
calculated NV, pursuant to section 773(c) of the Act, by valuing the
FOPs in a surrogate country.
The Department determined that India, Sri Lanka, Indonesia,
Philippines, and Egypt are countries comparable to the PRC in terms of
economic development. See Memorandum from Ron Lorentzen, Director,
Office of Policy, to Alex Villanueva, Program Manager, China/NME Group,
Office 9, ``Antidumping Administrative Review of Fresh Garlic from the
People's Republic of China: Request for a List of Surrogate
Countries,'' dated August 1, 2007. 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).
In this case, the Department has found that India and Egypt are
both significant producers of comparable merchandise. The Department
finds India to be a reliable source for surrogate values because India
is at a similar level of economic development pursuant to 773(c)(4) of
the Act, is a significant producer of comparable merchandise, and has
publicly available and reliable data. Furthermore, the Department notes
that India has been the primary surrogate country in past segments, and
the only surrogate value data submitted on the record are from Indian
sources. Given the above facts, the Department is preliminarily
selecting India as the surrogate country for the PRC on the basis that:
(1) it is at a similar level of economic development pursuant to
section 773(c)(4) of the Act; (2) it is a significant producer of
comparable merchandise; and (3) we have reliable data from India that
we can use to value the FOPs.
[[Page 24045]]
Fair Value Comparisons
To determine whether sales of the subject merchandise made by
Chenhe, Greening, Golden Bird, QTF, and Yongjia to the United States
were at prices below NV, we compared each company's export price
(``EP'') to NV, as described below.
U.S. Price
In accordance with section 772(a) of the Act, we calculated the EP
for sales to the United States for Chenhe, Greening, Golden Bird, QTF,
and Yongjia because the first sale to an unaffiliated party was made
before the date of importation and the use of constructed EP (``CEP'')
was not otherwise warranted. We calculated EP based on the price to
unaffiliated purchasers in the United States. In accordance with
section 772(c) of the Act, as appropriate, we deducted from the
starting price to unaffiliated purchasers foreign inland freight, and
brokerage and handling. For Chenhe, Greening, Golden Bird, QTF, and
Yongjia, each of these services was either provided by an NME vendor or
paid for using an NME currency. Thus, we based the deduction of these
movement charges on surrogate values. See Factor Valuation Memo for
details regarding the surrogate values for movement expenses.
Additionally, Chenhe reported certain U.S. Customs duties, U.S.
brokerage and handling, and other expenses that must be deducted from
the starting price to unaffiliated purchasers. Accordingly, we will
deduct these expenses from the starting price to unaffiliated
purchasers, as reported by Chenhe. See Memorandum to the File from
Julia Hancock, Senior Analyst, Office 9, ``Company Analysis Memorandum
in the Antidumping Duty New Shipper Review of Fresh Garlic from the
People's Republic of China (``PRC''): Shandong Chenhe,'' dated April
22, 2008.
Normal Value
A. Methodology
Section 773(c)(1) 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. In some cases, a respondent may report
factors used to produce an intermediate input that account for an
insignificant share of total output. When the potential increase in
accuracy to the overall calculation that results from valuing each of
the FOPs is outweighed by the resources, time, and burden such an
analysis would place on all parties to the proceeding, the Department
has valued the intermediate input directly using a surrogate value. See
Notice of Final Determination of Sales at Less Than Fair Value:
Polyvinyl Alcohol from the People's Republic of China, 68 FR 47538
(August 11, 2003), and accompanying Issues and Decision Memorandum at
Comment 1 (citing to Final Results of First New Shipper Review and
First Antidumping Duty Administrative Review: Certain Preserved
Mushrooms from the People's Republic of China, 66 FR 31204 (June 11,
2001)).
In the 9\th\ administrative review, the Department recognized that
there were serious discrepancies between the reported FOPs of the
different respondents and that the standard FOP methodology might not
be adequate to apply in future reviews. See Fresh Garlic from the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 70 FR 34082 (June 13, 2005). In the 10\th\
administrative review, the Department conducted a ``harvest
verification'' of several garlic producers in the PRC, interviewing
farmers, studying farming techniques, and reviewing standard PRC garlic
production record-keeping.\3\ In analyzing the questionnaire responses
and ``harvest verification'' reports in the 10\th\ administrative
review, the Department determined that, to capture the complete costs
of producing fresh garlic, the methodology of valuing the intermediate
product, the fresh garlic bulb, would more accurately capture the
complete costs of producing subject merchandise. See Fresh Garlic from
the People's Republic of China: Final Results and Partial Rescission of
Antidumping Duty Administrative Review and Final Results of New Shipper
Reviews, 71 FR 26329 (May 4, 2006) (``10\th\ Review Final Results''),
and accompanying Issues and Decision Memorandum at Comment 1. In the
two previous administrative reviews, the Department also stated that
``should a respondent be able to provide sufficient factual evidence
that it maintains the necessary information in its internal books and
records that would allow us to establish the completeness and accuracy
of the reported FOPs, we will revisit this issue and consider whether
to use its reported FOPs in the calculation of NV.'' See 10\th\ Review
Final Results, 71 FR at 26331; Fresh Garlic from the People's Republic
of China: Partial Rescission and Preliminary Results of the Eleventh
Administrative Review and New Shipper Reviews, 71 FR 71510, 71520
(December 11, 2006).
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\3\ See Memorandum to the File from Julia Hancock, Senior Case
Analyst; Intermediate Input Methodology Memoranda from the 10th
Administrative Review Final Results and 11th Administrative Review
Preliminary Results (April 22, 2008), in which the Department placed
the Intermediate Input Methodology memos from the tenth and eleventh
Administrative Reviews on the record of this proceeding, inclusive
of the verification reports resulting from the ``harvest
verification.''
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In the course of these reviews, the Department has requested and
obtained detailed information from the respondents with respect to each
company's garlic production practices. Questionnaire responses revealed
that only Yongjia had farming operations to grow fresh garlic.\4\
However, based on our analysis of the information on the record and for
the reasons outlined in the Memorandum to James C. Doyle, Director,
Office 9, from Paul Walker, Senior Case Analyst, Office 9, ``New
Shipper Reviews of the Antidumping Duty Order on Fresh Garlic From the
People's Republic of China: Intermediate Input Methodology,'' dated
April 22, 2008 (``Intermediate Product Memo''), we continue to believe
that the sole respondent that farmed garlic, Yongjia, was unable to
accurately record and substantiate the complete costs of growing garlic
during the POR.
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\4\ Specifically, Chenhe, Greening, QTF, and Golden Bird are all
processors and exporters of fresh garlic that purchased whole garlic
bulbs and processed it for export. Consequently, the FOPs provided
by each all begin with whole garlic bulbs and not the factors that
are used to grow whole garlic bulbs.
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Thus, in the preliminary results for these new shipper reviews, in
order to eliminate the distortions in our calculation of NV, for all of
the reasons identified above and described in the Intermediate Product
Memo, the Department applied an ``intermediate-product valuation
methodology'' to all companies. Using this methodology, the Department
calculated NV by starting with a surrogate value for the garlic bulb
[[Page 24046]]
(i.e., the ``intermediate product''), adjusted for yield losses during
the processing stages, and adding the respondents' processing costs,
which were calculated using their reported usage rates for processing
fresh garlic. For a complete explanation of the Department's analysis,
and for a more detailed analysis of these issues with respect to each
respondent, see the Intermediate Product Memo.
B. Factor Valuations
In accordance with section 773(c) of the Act, the Department
calculated NV based on the intermediate product value and processing
FOPs reported by the respondents for the POR. To calculate NV, the
Department multiplied the reported per-unit factor quantities by
publicly available surrogate values in India with the exception of the
surrogate value for ocean freight, which we obtained from an
international freight company. In selecting the surrogate values, the
Department considered the quality, specificity, and contemporaneity of
the data. As appropriate, the Department adjusted input prices by
including freight costs to make them delivered prices. The Department
calculated these freight costs based on the shorter of the reported
distance from the domestic supplier to the factory or the distance from
the port in accordance with the decision in Sigma Corporation v. United
States, 117 F.3d 1401 (Fed. Cir. 1997). The Department made currency
conversions into U.S. dollars, in accordance with section 773A(a) of
the Act, based on the exchange rates in effect on the dates of the U.S.
sale(s) as certified by the U.S. Federal Reserve Bank.
Additionally, during the POR, Greening purchased all of certain
inputs from a market economy supplier and paid for the inputs in a
market economy currency. The Department has instituted a rebuttable
presumption that market economy input prices are the best available
information for valuing an input when the total volume of the input
purchased from all market economy sources during the period of
investigation or review exceeds 33 percent of the total volume of the
input purchased from all sources during the period. In these cases,
unless case-specific facts provide adequate grounds to rebut the
Department's presumption, the Department will use the weighted-average
market economy purchase price to value the input. Alternatively, when
the volume of an NME firm's purchases of an input from market economy
suppliers during the period is below 33 percent of its total volume of
purchases of the input during the period, but where these purchases are
otherwise valid and there is no reason to disregard the prices, the
Department will weight-average the weighted-average market economy
purchase price with an appropriate surrogate value (``SV'') according
to their respective shares of the total volume of purchases, unless
case-specific facts provide adequate grounds to rebut the presumption.
When a firm has made market economy input purchases that may have been
dumped or subsidized, are not bona fide, or are otherwise not
acceptable for use in a dumping calculation, the Department will
exclude them from the numerator of the ratio to ensure a fair
determination of whether valid market economy purchases meet the 33-
percent threshold. See Antidumping Methodologies: Market Economy
Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request
for Comments, 71 FR 61716, 61717-18 (October 19, 2006).
Accordingly, we valued Greening's inputs using the market economy
prices paid for the inputs where the total volume of the input
purchased from all market economy sources during the POI exceeded 33
percent of the total volume of the input purchased from all sources
during that period. Where appropriate, we increased the market economy
prices of inputs by freight expenses. See Factor Valuation Memorandum.
For a detailed description of all actual values used for market-economy
inputs, see Memorandum to the File from Julia Hancock, Senior Analyst,
Office 9, ``Company Analysis Memorandum in the Antidumping Duty New
Shipper Review of Fresh Garlic from the People's Republic of China
(``PRC''): Shenzhen Greening,'' dated April 22, 2008.
Moreover, in applying the intermediate input methodology, the
Department sought foremost to identify the best available surrogate
value for the fresh garlic bulb input to production, as opposed to
identifying a surrogate value for garlic seed. Therefore, the
Department has valued the fresh garlic bulb using prices for the size
range ``super-A'' grade garlic bulb in India, as published by Azadpur
Agriculture Produce Marketing Committee (``APMC'') in its ``Market
Information Bulletin'' (the ``Bulletin''). Azadpur APMC is the largest
fruit and vegetable market in Asia and has become a ``National
Distribution Centre'' for important Indian agricultural products such
as garlic. The Bulletin is published by the Azadpur APMC on each
trading day and contains, among other things, a list of all fruits and
vegetables sold on the previous trading day, the amount (by weight) of
each fruit or vegetable sold on that day, and a low, high and modal
price for each commodity sold. The Department notes that the ``A''
grade garlic typically ranges from 40 - 55 millimeters (``mm'') in
diameter, and the ``super-A'' grade garlic ranges from 40 mm and above
in diameter. However, the Department also finds that garlic that ranges
from 55 mm in diameter and above is the ``super-A'' grade garlic. See
Memorandum to the File from Julia Hancock, ``Placing Market Research
Report on the Record,'' dated April 22, 2008.
As the Department determined in past reviews, the price at which
garlic is sold is heavily dependent upon physical characteristics such
as bulb size. See, e.g., 10\th\ Review Final Results, 71 FR 26329 at
Comment 2; Fresh Garlic from the People's Republic of China: Final
Results and Partial Rescission of the Eleventh Administrative Review
and New Shipper Reviews, 72 FR 34438, 34440 (June 22, 2007) (``11\th\
Review Final Results''), and accompanying Issues and Decision
Memorandum at Comment 2. Accordingly, the Department finds that it is
important to use surrogate Indian garlic values reflecting sales of
garlic bulbs of similar diameter to that of Chenhe, Greening, Golden
Bird, QTF, and Yongjia merchandise during the POR. Therefore, for these
preliminary results, the Department finds that the ``super-A'' grade
garlic data from Azadpur APMC are the best available and most
appropriate information on the record to value the garlic bulb input,
pursuant to section 773(c) of the Act, for the reasons stated below.
The Department has found that the data from Azadpur APMC satisfy the
Department's surrogate value selection criteria. See 11\th\ Review
Final Results at Comment 2.
Because the Department is able to identify the grades of Indian
garlic that correspond to various diameter ranges and because Chenhe,
Greening, Golden Bird, QTF, and Yongjia reported the size of the garlic
bulb they sold during the POR, the Department is calculating the
surrogate value for the garlic bulb input using a simple average of the
Azadpur APMC data for ``super-A'' grade garlic for Chenhe, Greening,
Golden Bird, QTF, and Yongjia. For further discussion of the
Department's calculation for the surrogate value for the garlic bulb,
as well as other surrogate values used, see the Factor Valuation Memo.
Preliminary Results of the Reviews
As a result of our review, we preliminarily find that the following
[[Page 24047]]
margins exist for the period November 1, 2006 through May 17, 2007\5\:
---------------------------------------------------------------------------
\5\ The POR has been extended until May 17, 2007, so as to
capture entries from Chenhe and Greening which, though shipped prior
to April 30, 2007 did not enter the U.S. market until after,
respectively. See Memorandum to the File from Julia Hancock, Senior
Case Analyst, Office 9, ``Expansion of the Period of Review in the
New Shipper Reviews of Fresh Garlic from the People's Republic of
China,'' dated April 23, 2008.
Fresh Garlic from the PRC
------------------------------------------------------------------------
Weighted-
Exporter/Manufacturer Average Margin
(Percent)
------------------------------------------------------------------------
Exported and Produced by Shandong Chenhe International 0.00
Trading Co., Ltd......................................
Exported and Produced by Qingdao Tiantaixing Foods Co., 32.85
Ltd...................................................
Exported by Hebei Golden Bird Trading Co., Ltd. and 13.89
Produced by Cangshan County Hongyang Vegetables &
Foods Co., Ltd........................................
Exported by Jining Yongjia Trade Co., Ltd. and Produced 18.94
by Jinxiang County Shanfu Frozen Co., Ltd.............
Exported and Produced by Shenzhen Greening Trading Co., 2.15
Ltd...................................................
------------------------------------------------------------------------
The Department will disclose to parties of this proceeding the
calculations performed in reaching the preliminary results within five
days of the date of publication of this notice in accordance with 19
CFR 351.224(b).
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
in an antidumping duty new shipper review, interested parties may
submit publicly available information to value FOPs within 20 days
after the date of publication of these preliminary results. Interested
parties must provide the Department with supporting documentation for
the publicly available information to value each FOP. Additionally, in
accordance with 19 CFR 351.301(c)(1), for the final results of this new
shipper review, interested parties may submit factual information to
rebut, clarify, or correct factual information submitted by an
interested party less than ten days before, on, or after, the
applicable deadline for submission of such factual information. The
Department notes that 19 CFR 351.301(c)(1) permits new information only
insofar as it rebuts, clarifies, or corrects information recently
placed on the record. Therefore, parties should take note that new
surrogate value data that are introduced following the 20-day deadline
generally will not fall within the meaning and applicability of 19 CFR
351.301(c)(1). See Glycine from the People's Republic of China: Final
Results of Antidumping Duty Administrative Review and Final Rescission,
in Part, 72 FR 58809 (October 17, 2007) and accompanying Issues and
Decision Memorandum at Comment 2.
Interested parties may submit case briefs and/or written comments
no later than 30 days after the date of publication of these
preliminary results of this new shipper review. See 19 CFR
351.309(c)(1)(ii). Rebuttal briefs and rebuttals to written comments,
limited to issues raised in such briefs or comments, may be filed no
later than 5 days after the deadline for submitting the case briefs.
See 19 CFR 351.309(d)(1). The Department requests that interested
parties provide an executive summary of each argument contained within
the case briefs and rebuttal briefs.
Any interested party may request a hearing within 30 days of
publication of these preliminary results. See 19 CFR 351.310(c).
Requests should contain the following information: (1) the party's
name, address, and telephone number; (2) the number of participants;
and (3) a list of the issues to be discussed. Oral presentations will
be limited to issues raised in the briefs. If we receive a request for
a hearing, we plan to hold the hearing seven days after the deadline
for submission of the rebuttal briefs at the U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230.
The Department intends to issue the final results of these new
shipper reviews, which will include the results of its analysis raised
in any such comments, within 90 days of publication of these
preliminary results, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
Upon completion of the final results, pursuant to 19 CFR
351.212(b), the Department will determine, and CBP shall assess,
antidumping duties on all appropriate entries. The Department intends
to issue assessment instructions to CBP 15 days after the date of
publication of the final results of review. If these preliminary
results are adopted in our final results of review, the Department
shall determine, and CBP shall assess, antidumping duties on all
appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we will
calculate importer-specific (or customer) ad valorem duty assessment
rates based on the ratio of the total amount of the dumping margins
calculated for the examined sales to the total entered value of those
same sales. We will instruct CBP to assess antidumping duties on all
appropriate entries covered by this review if any importer-specific
assessment rate calculated in the final results of this is above de
minimis.
Cash Deposit Requirements
The following cash deposit requirements, when imposed, will be
effective upon publication of the final results of these new shipper
reviews for all shipments of subject merchandise from Chenhe, Greening,
QTF, Golden Bird, and Yongjia entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided by section
751(a)(2)(C) of the Act: (1) for subject merchandise produced and
exported by Chenhe, produced and exported by Greening, produced and
exported by QTF, produced by Cangshan County Hongyang Vegetables &
Foods Co., Ltd. and exported by Golden Bird, or produced by Jinxiang
County Shanfu Frozen Co., Ltd. and exported by Yongjia, the cash-
deposit rate will be that established in the final results of these
reviews; (2) for subject merchandise exported by Golden Bird but not
manufactured by Cangshan County Hongyang Vegetables & Foods Co., Ltd.
and for subject merchandise exported by Yongjia but not manufactured by
Jinxiang County Shanfu Frozen Co., Ltd., the cash deposit rate will
continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for
subject merchandise exported by Chenhe, Greening, and QTF, but
manufactured by any other party, the cash deposit rate will be the PRC-
wide rate (i.e., 376.67 percent).
If the cash deposit rate calculated in the final results is zero or
de minimis, no cash deposit will be required for those specific
producer-exporter combinations. These cash deposit requirements, when
imposed, shall remain in effect until further notice.
Notification to Interested Parties
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 POR. 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 this determination in accordance with
[[Page 24048]]
sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act, and 19 CFR
351.214(h) and 351.221(b)(4).
Dated: April 22, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-9597 Filed 4-30-08; 8:45 am]
BILLING CODE 3510-DS-S