[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.
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\4\ See Surrogate Value Memorandum at Attachment 1.
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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.
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\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).
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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