[Federal Register Volume 75, Number 218 (Friday, November 12, 2010)]
[Notices]
[Pages 69415-69423]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-28571]
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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 Reviews and Preliminary Rescission, in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (Department) is conducting new
shipper reviews (NSRs) of Jinxiang Chengda Imp & Exp Co., Ltd.
(Chengda), Jinxiang Yuanxin Imp & Exp Co., Ltd. (Yuanxin), and
Zhengzhou Huachao Industrial Co., Ltd. (Huachao) under the antidumping
duty order on fresh garlic from the People's Republic of China (PRC)
covering the period of review (POR) of
[[Page 69416]]
November 1, 2008 through October 31, 2009. As discussed below, we
preliminarily determine that Yuanxin's and Huachao's sales are bona
fide and that these sales have been made in the United States at prices
below normal value (NV). Yuanxin and Huachao have also demonstrated
their eligibility for a separate rate in these NSRs. In addition, we
find Chengda's sales to be not bona fide. As such, we are preliminarily
rescinding the NSR for Chengda. The dumping margins are 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.
DATES: Effective Date: November 12, 2010.
FOR FURTHER INFORMATION CONTACT: Scott Lindsay, Toni Page, and Lingjun
Wang, 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, (202) 482-1398, and (202) 482-2316, respectively.
SUPPLEMENTARY INFORMATION:
Background
On November 27, 2009, the Department received timely requests for a
NSR from Chengda and Yuanxin, and on December 1, 2009, the Department
received a timely request from Huachao in accordance with 19 CFR
351.214(c). On December 29, 2009, the Department determined that the
requests submitted by Chengda, Yuanxin, and Huachao met the threshold
requirements for initiation of a NSR and initiated the NSRs. See Fresh
Garlic From the People's Republic of China: Initiation of New Shipper
Reviews, 75 FR 343 (January 5, 2010).
Since the initiation of these reviews, the Department has issued
original and supplemental questionnaires to Chengda, Yuanxin, and
Huachao, to which each has responded in a timely manner. 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).
On March 10, 2010, the Department placed copies of CBP documents on
the record of this review pertaining to Chengda's, Yuanxin's, and
Huachao's shipments 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 Packages (March 10, 2010).
On June 8, 2010, the Department extended the deadline for the
preliminary results of these NSRs to no later than November 1, 2010.
See Fresh Garlic from the People's Republic of China: Extension of Time
Limit for the Preliminary Results of the New Shipper Reviews, 75 FR
32362 (June 8, 2010). On July 20, 2010, the Department sent interested
parties a letter requesting comments on the surrogate country selection
and information pertaining to valuing factors of production. See Letter
to Interested Parties, from the Department, Re: New Shipper Review of
Fresh Garlic from the People's Republic of China (``PRC'') (July 20,
2010). On September 10, 2010, Huachao submitted comments on the
surrogate country selection and information pertaining to valuing
factors of production. See Letter to the Department, from Huachao, Re:
Fresh Garlic from the People's Republic of China--Surrogate Value
Information for 16th New Shipper Review (September 10, 2010) (Huachao'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: 16th New
Shipper Review of the Antidumping Duty Order on Fresh Garlic from the
People's Republic of China (September 10, 2010) (Petitioners' Surrogate
Value Data). No other party has submitted surrogate values or surrogate
country comments on the record of this proceeding.
On October 6, 2010, 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 October 31, 2009
(October 6, 2010). On October 18, 2010, Petitioners placed on the
record comments regarding the bona fides of sales made by Yuanxin,
Chengda, and Huachao. See Petitioners' October 18, 2010 Bona Fides
Comments.
Period of Review
Pursuant to 19 CFR 351.214(g), the POR covered by these NSRs is
November 1, 2008 through October 31, 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 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 Tariff Act of 1930, as
amended (the Act), any determination that a foreign country is
[[Page 69417]]
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.
Bona Fides Analysis
Consistent with Department practice, we examined the bona fides of
each 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 (Ct. Int'l Trade 2005) (TTPC). Accordingly, the Department
considers a number of factors in its bona fides analysis, ``all of
which may speak to the commercial realities surrounding an alleged sale
of subject merchandise.'' See Hebei New Donghua Amino Acid Co., Ltd. v.
United States, 374 F. Supp. 2d 1333, 1342 (Ct. Int'l Trade 2005) (New
Donghua) (citing Fresh Garlic From the People's Republic of China:
Final Results of Antidumping Administrative Review and Rescission of
New Shipper Review, 67 FR 11283 (March 13, 2002), and accompanying
Issues and Decision Memorandum: New Shipper Review of Clipper
Manufacturing Ltd.). In TTPC, the court also affirmed the Department's
decision that ``any factor which indicates that the sale under
consideration is not likely to be typical of those which the producer
will make in the future is relevant,'' (TTPC, 366 F. Supp. 2d at 1250),
and found that ``the weight given to each factor investigated will
depend on the circumstances surrounding the sale.'' TTPC, 366 F. Supp.
2d at 1263. Finally, in New Donghua, the Court of International Trade
affirmed the Department's practice of evaluating the circumstances
surrounding a NSR sale, so that a respondent does not unfairly benefit
from an a typical sale and obtain a lower dumping margin than the
producer's usual commercial practice would dictate.
Chengda: We preliminarily find that the sales made by Chengda
during the POR were not bona fide commercial transactions. Chengda's
POR sales' price and quantities were both atypical and aberrational.
Since much of the factual information used in our analysis of the bona
fides of the transactions involves business proprietary information, a
full discussion of the bases for our decision to rescind is set forth
in the Memorandum to: Barbara E. Tillman, Office Director, AD/CVD
Operations, Office 6, Import Administration, from Thomas Gilgunn,
Program Manager, AD/CVD Operations, Office 6, Import Administration:
Bona Fide Nature of the Sale in the Antidumping Duty New Shipper Review
of Fresh Garlic from the People's Republic of China (PRC): Jinxiang
Chengda Import & Export Co., Ltd. (November 1, 2010) (Chengda Bona
Fides Memorandum). Because we have found Chengda's sales to not be bona
fide, we cannot rely on them to calculate a dumping margin and are
therefore preliminarily rescinding Chengda's NSR. See TTPC and New
Donghua.
Yuanxin: Based on the totality of circumstances, we preliminarily
find that the sale made by Yuanxin during the POR was a bona fide
commercial transaction. The facts that led us to this preliminary
conclusion include the following: (1) Neither Yuanxin nor its customers
incurred any extraordinary expenses arising from this transaction; (2)
the sale was made between unaffiliated parties at arm's length; and (3)
the timing of the sale does not indicate that the sale was not bona
fide. Since much of the factual information used in our analysis of the
bona fides of the transaction involves business proprietary
information, a full discussion of the bases for our decision to rescind
is set forth in the Memorandum to: Barbara E. Tillman, Office Director,
AD/CVD Operations, Office 6, Import Administration, from Thomas
Gilgunn, Program Manager, AD/CVD Operations, Office 6, Import
Administration: Bona Fide Nature of the Sale in the Antidumping Duty
New Shipper Review of Fresh Garlic from the People's Republic of China
(PRC): Jinxiang Yuanxin Imp & Exp Co., Ltd. (November 1, 2010) (Yuanxin
Bona Fides Memorandum). We will continue to examine the bona fides of
Yuanxin's sale after the preliminary results.
Huachao: Based on the totality of circumstances, we preliminarily
find that the sale made by Huachao during the POR was a bona fide
commercial transaction. The facts that led us to this preliminary
conclusion include the following: (1) Neither Huachao nor its customer
incurred any extraordinary expenses arising from the transaction; (2)
the sale was made between unaffiliated parties at arm's length; and (3)
the timing of the sale does not indicate that this sale was not bona
fide. However, we note that certain evidence on the record suggests
that the bona fides of Huachao's sale is not definitive. 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, Office Director, AD/CVD
Operations, Office 6, Import Administration, from Thomas Gilgunn,
Program Manager, AD/CVD Operations, Office 6, Import Administration:
Bona Fide Nature of the Sale in the Antidumping Duty New Shipper Review
of Fresh Garlic from the People's Republic of China (PRC): Zhengzhou
Huachao Industrial Co., Ltd. (November 1, 2010) (Huachao's Bona Fides
Memorandum). Accordingly, we will continue to examine the bona fides of
Huachao's sale after the preliminary results.
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 eligible for 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, 56 FR 20588 (May
6, 1991) (Sparklers), 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
[[Page 69418]]
controls over the investment, pricing, and output decision-making
process at the individual firm level.\1\
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\1\ See Notice of Final Determination of Sales at Less than Fair
Value; Certain Cut-to-Length Carbon Steel Plate from Ukraine, 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 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; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies.
Throughout the course of this proceeding, Yuanxin and Huachao have
each 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.\2\ In addition, Yuanxin and Huachao have each 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 Yuanxin and Huachao based on: (1) An absence of restrictive
stipulations associated with the exporter's business license; (2) the
existence of legislative enactments legal authority on the record
decentralizing control over the respondent; and (3) other formal
measures by the government decentralizing control of companies.
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\2\ Since we have preliminarily determined that Chengda's NSR
sales are not bona fide, there is no reason to conduct an analysis
of whether Chengda has demonstrated an absence of government control
over its operations.
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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 Yuanxin and Huachao 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).
The Department conducted a separate-rates analysis for each new
shipper. In their questionnaire responses, Yuanxin and Huachao each
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 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 general manager appoints the manager of each
department; and (5) there is no restriction on each new shipper's use
of export revenues. The questionnaire responses of the new shippers 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 de facto government control. Therefore, the
Department preliminarily finds that Yuanxin and Huachao have
established, prima facie, that each qualifies for separate rate status
under the criteria established by Silicon Carbide and Sparklers.
Accordingly, the Department has preliminarily granted Yuanxin and
Huachao separate rate status.
Preliminary Determination of New Shipper Status
We preliminarily determine that Yuanxin and Huachao have met the
requirements to qualify as new shippers during the POR. Both companies
have preliminarily established that they have: (1) Not previously
shipped subject merchandise to the United States, (2) made sales to the
United States we have preliminarily found to be bona fide; (3)
demonstrated eligibility for a separate rate, and (4) provided adequate
questionnaire responses. Therefore, for purposes of these preliminary
results, we are treating Yuanxin's and Huachao's respective new shipper
sales of subject merchandise to the United States as appropriate
transactions for review.
Surrogate Country
When the Department investigates imports from an NME country,
section 773(c)(1) of the Act directs it to base 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).
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,
Indonesia, Peru, the Philippines, Thailand, and Ukraine are countries
comparable to the PRC in terms of economic development. See Memorandum
to Thomas Gilgunn, Program Manager, from Carole Showers,
[[Page 69419]]
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 (July 20, 2010). 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, pursuant to section 773(c)(4) of the Act, the Department
finds India to be a reliable source for surrogate values because India
is at a similar level of economic development, 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 Reviews of Fresh Garlic from the
People's Republic of China: Surrogate Values (November 1, 2010)
(Surrogate Values Memorandum).
U.S. Price
In accordance with section 772(a) of the Act, we calculated an
export price for sales to the Unites States for Yuanxin and Huachao
because each company made its sale to an unaffiliated party before the
date of importation and the use of constructed export prices was not
otherwise warranted. We calculated each company's export price based on
its price to unaffiliated purchasers in the United States. In
accordance with section 772(c) of the Act, where appropriate, we
deducted from the starting price to unaffiliated purchasers the
expenses for foreign inland freight, international 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. See also Memorandum To: The File, From:
Lingjun Wang, Case Analyst, Office 6, Import Administration:
Antidumping Duty New Shipper Review of Fresh Garlic from the People's
Republic of China: Calculation Memorandum for the Preliminary Results
of Jinxian Yuanxin Imp. & Exp. Co., Ltd.; and Memorandum To: The File,
From: Summer Avery, Case Analyst, Office 6, Import Administration:
Antidumping Duty New Shipper Review of Fresh Garlic from the People's
Republic of China: Calculation Memorandum for the Preliminary Results
of Zhengzhou Huachao Industrial Co., Ltd.
Normal Value
A. 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 several recent prior administrative
reviews (ARs) and NSRs,\3\ 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 preliminary results of 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.'' \4\ In the
course of this review, none of the garlic producers reported FOPs
related to growing whole garlic bulbs. As such, for the reasons
outlined in the Memorandum from Scott Lindsay, Re: 2008-2009 New
Shipper Review of Fresh Garlic from the People's Republic of China:
Intermediate Input Methodology (November 1, 2010) (Intermediate Input
Methodology Memorandum), the Department is applying an ``intermediate-
product valuation methodology'' to the NSR respondents for which we are
calculating an antidumping duty margin in these preliminary results.
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 the respondents' processing costs, which were calculated
using their reported usage rates for processing fresh garlic. See
Intermediate Input Methodology Memorandum.
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\3\ See, e.g., 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 (June 22, 2007) (11th AR
and NSRs); 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) (12th AR); 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).
\4\ 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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B. Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on the FOP data reported by Yuanxin and Huachao for the POR. We
relied on the factor-specific data submitted by Yuanxin and Huachao for
the production inputs in their questionnaire responses, where
applicable, for purposes of selecting surrogate values (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
[[Page 69420]]
(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 (CAFC). 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 for Huachao
The Department's practice when selecting the ``best available
information'' for valuing FOPs, in accordance with section 773(c)(1) of
the Act,\5\ 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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\5\ 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 Huachao. Therefore, we sought to identify the
best available SV for the garlic bulb input for production. See
Petitioners' Surrogate Value Data and Huachao's Surrogate Value
Submission; 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 Huachao's garlic bulb input.
In its FOP database, Huachao reported garlic bulb input size for
the garlic produced and sold to the United States during the POR.
Consistent with our findings in the 12th AR, 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
the Grade Super-A prices reported by the APMC which are on the record
of this review are from 2007-2008, we inflated them to make them
contemporaneous to our POR. See Surrogate Values Memorandum.
Garlic Bulb Valuation for Yuanxin
Yuanxin has submitted information on the record indicating that it
sold single clove garlic. When examining single clove garlic in a prior
segment of this proceeding, the Department determined that single clove
garlic possessed physical characteristics which significantly
distinguish it from the Grade A and Grade Super-A garlic on which we
normally rely to value garlic bulb inputs. See Fresh Garlic from the
People's Republic of China: Final Results and Final Rescission, In
Part, of New Shipper Reviews, 74 FR 50952 (October 2, 2009). As such,
neither Grade A nor Grade Super-A garlic is an appropriate basis from
which to derive a SV for the bulb input used by Yuanxin. Petitioners
have placed on the record an FOB sales offer, which is contemporaneous
with the POR, from Sundaram Overseas Operations (SOO), an Indian
trading company, as the basis for deriving NV. SOO's sales offer is an
Indian export price for a whole garlic product that is physically
similar to the product sold by Yuanxin. For these preliminary results,
the Department is using the SOO sales offer of single clove garlic as
the NV for Yuanxin. See Surrogate Values Memorandum. However, the
Department requests comments and factual information regarding the
appropriate SV to use in calculating the single clove garlic input for
Yuanxin for purposes of the final results of review. Since much of our
analysis regarding Yuanxin's garlic and the garlic bulb input thereof
has been treated as business proprietary information, a full discussion
of the basis for calculating an appropriate surrogate value for
Yuanxin's garlic bulb input is set forth in the Surrogate Values
Memorandum.
Other Factors of Production
In past cases, it has been the Department's practice to value
various FOPs using import statistics of the primary selected surrogate
country from World Trade Atlas (WTA), as published by Global Trade
Information Services (GTIS).\6\ However, in October 2009, the
Department learned that Indian import data obtained from the WTA, as
published by GTIS, began identifying the original reporting currency
for India as the U.S. Dollar. The Department then contacted GTIS about
the change in the original reporting currency for India from the Indian
Rupee to the U.S. Dollar. Officials at GTIS explained that while GTIS
obtains data on imports into India directly from the Ministry of
Commerce, Government of India, as denominated and published in Indian
Rupees, the WTA software is limited with regard to the number of
significant digits it can manage. Therefore, GTIS made a decision to
change the original reporting currency for Indian data from the Indian
Rupee to the U.S. Dollar in order to reduce the loss of significant
digits when obtaining data through the WTA software. GTIS explained
that it converts the Indian Rupee to the U.S. Dollar using the monthly
Federal Reserve exchange rate applicable to the relevant month of the
data being downloaded and converted.\7\
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\6\ See Certain Preserved Mushrooms from the People's Republic
of China: Preliminary Results of Antidumping Duty New Shipper
Review, 74 FR 50946, 50950 (October 2, 2009) (unchanged in Certain
Preserved Mushrooms From the People's Republic of China: Final
Results of Antidumping Duty New Shipper Review, 74 FR 65520
(December 10, 2009)).
\7\ See Certain Oil Country Tubular Goods from the People's
Republic of China: Final Determination of Sales at Less Than Fair
Value, Affirmative Final Determination of Critical Circumstances,
and Final Determination of Targeted Dumping, 75 FR 20335 (April 19,
2010), and accompanying Issues and Decision Memorandum at Comment 4.
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However, the data reported in the Global Trade Atlas (GTA) software
published by GTIS reports import statistics, such as from India, in the
original reporting currency and, thus, these data correspond to the
original currency value reported by each country. Additionally, the
data reported in the GTA software are reported to the nearest digit
and, thus, there is not a loss of data by rounding, as there is with
the data reported by the WTA software. Consequently, the Department
will now obtain import statistics from GTA for valuing various FOPs
because the GTA import statistics are in the original reporting
currency of the country from which the data are obtained, and have the
same level of accuracy as the original data released.
Furthermore, with regard to the GTA Indian import-based SVs, in
accordance with the Omnibus Trade and Competitiveness Act of 1988
legislative history, the Department continues to apply its long-
standing practice of disregarding SVs if it has a reason to
[[Page 69421]]
believe or suspect the source data may be subsidized.\8\ In this
regard, the Department has previously found that it is appropriate to
disregard such prices from India, Indonesia, South Korea and Thailand,
because we have determined that these countries maintain broadly
available, non-industry specific export subsidies.\9\ Based on the
existence of these subsidy programs that were generally available to
all exporters and producers in Indonesia, South Korea, and Thailand at
the time of the POR, the Department finds that it is reasonable to
infer that all exporters from these countries may have benefitted from
these subsidies. We also disregarded prices from NME countries \10\ and
those 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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\8\ Omnibus Trade and Competitiveness Act of 1988, Conf. Report
to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess.
(1988) at 590.
\9\ See, e.g., Expedited Sunset Review of the Countervailing
Duty Order on Carbazole Violet Pigment 23 from India, 75 FR 13257
(March 19, 2010), and accompanying Issues and Decision Memorandum at
pages 4-5; Expedited Sunset Review of the Countervailing Duty Order
on Certain Cut-to-Length Carbon Quality Steel Plate from Indonesia,
70 FR 45692 (August 8, 2005), and accompanying Issues and Decision
Memorandum at page 4; Corrosion-Resistant Carbon Steel Flat Products
from the Republic of Korea: Final Results of Countervailing Duty
Administrative Review, 74 FR 2512 (January 15, 2009), and
accompanying Issues and Decision Memorandum at pages 17, 19-20; and
Certain Hot-Rolled Carbon Steel Flat Products from Thailand: Final
Results of Countervailing Duty Determination, 66 FR 50410 (October
3, 2001), and accompanying Issues and Decision Memorandum at page
23.
\10\ The NME countries are Armenia, Azerbaijan, Belarus,
Georgia, Kyrgyz Republic, Moldova, North Korea, the People's
Republic of China, Tajikistan, Turkmenistan, Uzbekistan, and
Vietnam.
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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 GTA.
The Department valued surrogate truck freight cost by using a per-
unit average rate calculated from April 2009 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
Values 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 are not
contemporaneous with the POR, we inflated March 2008 prices to make
them contemporaneous to our POR. See Surrogate Values Memorandum at
Attachment 4.
We valued brokerage and handling expenses using a price list of
export procedures necessary to export a standardized cargo of goods in
India. The price list is compiled based on a survey case study of the
procedural requirements for trading a standard shipment of goods by
ocean transport in India that is published in Doing Business 2010:
India, published by the World Bank. See Surrogate Value Memorandum at
Attachment 4.
For direct, indirect, and packing labor, pursuant to a recent
decision by the Court CAFC, we are no longer using the regression-based
methodology to value labor. See Dorbest Ltd. v. United States, 604 F.3d
1363, 1372 (Fed. Cir. 2010). The Department is continuing to evaluate
options for determining labor values in light of the recent CAFC
decision. For these preliminary results, we have calculated an hourly
wage rate to use in valuing respondents' reported labor input by
averaging industry-specific earnings and/or wages in countries that are
economically comparable to the PRC and that are significant producers
of comparable merchandise.
For the preliminary results of this AR, the Department is valuing
labor using a simple average industry-specific wage rate using earnings
or wage data reported under Chapter 5B by the International Labor
Organization (ILO). To achieve an industry-specific labor value, we
relied on industry-specific labor data from the countries we determined
to be both economically comparable to the PRC, and significant
producers of comparable merchandise. A full description of the
industry-specific wage rate calculation methodology is provided in the
Surrogate Values Memorandum. The Department calculated a simple average
industry-specific wage rate of $1.20 for these preliminary results.
Specifically, for this review, the Department has calculated the wage
rate using a simple average of the data provided to the ILO under Sub-
Classification 15 of the ISIC-Revision 3 standard by countries
determined to be both economically comparable to the PRC and
significant producers of comparable merchandise. The Department finds
the two-digit description under ISIC-Revision 3 (``Manufacture of Food
Products and Beverages'') to be the best available wage rate SV on the
record because it is specific and derived from industries that produce
merchandise comparable to the subject merchandise. Consequently, we
averaged the ILO industry-specific wage rate data or earnings data
available from the following countries found to be economically
comparable to the PRC and to be significant producers of comparable
merchandise: Ecuador, Egypt, Indonesia, Jordan, Peru, Philippines,
Thailand, and Ukraine. Further information on the calculation of the
wage rate can be found in the Surrogate Values Memorandum.
Financial Ratios
Petitioners and Huachao submitted factual information regarding
surrogate financial ratios. See Petitioners' Surrogate Value Data and
Huachao's Surrogate Value Submission. After analyzing these comments
and factual information, the Department has determined that it is
appropriate to calculate a single set of surrogate financial ratios
applicable to the production and sales of all subject merchandise (both
whole and peeled garlic) for these preliminary results using both Tata
Tea's and Limtex's financial data. Since the 2002-2003 administrative
review, the Department has considered tea processing to be sufficiently
similar to garlic processing in that neither product is highly
processed or preserved prior to sale. See Fresh Garlic from the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 70 FR 34082 (June 13, 2005) (9th AR Final
Results), and accompanying Issues and Decision Memorandum at 34-35.
Moreover, we note that it is the Department's preference to use
financial data from more than one surrogate producer to reflect the
broader experience of the surrogate industry.\11\
[[Page 69422]]
We find that calculating an average of these two Indian tea processors'
data provides financial ratios that best reflect the broader experience
of the garlic industry and that are consistent with our practice during
previous reviews.\12\ The Department finds that both Tata Tea's and
Limtex's non-integrated production process is similar to that of the
garlic industry. 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.
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\11\ See, e.g., Brake Rotors From the People's Republic of
China: Final Results and Partial Rescission of the Sixth Antidumping
Duty Administrative Review and Final Results of the Ninth New
Shipper Review, 69 FR 42039 (July 13, 2004), and accompanying Issues
and Decision Memorandum at Comment 2; see also 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), and accompanying Issues and
Decisions Memorandum at Comment 3, and Certain Oil Country Tubular
Goods from the People's Republic of China: Final Determination of
Sales at Less Than Fair Value, Affirmative Final Determination of
Critical Circumstances and Final Determination of Targeted Dumping,
75 FR 20335 (April 19, 2010), and accompanying Issues and Decision
Memorandum at Comment 13.
\12\ See Fresh Garlic From the People's Republic of China: Final
Results of New Shipper Review, 75 FR 61130 (October 4, 2010), and
accompanying Issues and Decision Memorandum at Issue 4.
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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 Reviews
As a result of our review, we preliminarily find that the following
margins exist for Yuanxin and Huachao during the period November 1,
2008 through October 31, 2009:
Fresh Garlic From the PRC
------------------------------------------------------------------------
Weighted-
average
Exporter/manufacturer margin
(dollars per
kilogram)
------------------------------------------------------------------------
Manufactured and Exported by Jinxiang Yuanxin Imp & Exp $0.75
Co.....................................................
Manufactured and Exported by Zhengzhou Huachao 0.03
Industrial Co., Ltd....................................
------------------------------------------------------------------------
Assessment Rates
Upon issuance of the final results, 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. If
the Department issues a final rescission determination for Chengda, it
will be assessed at the PRC-entity rate of $4.71 per kilogram. 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 and exported
by Yuanxin or Huachao, the cash deposit rate will be the per-unit rate
determined in the final results of this new shipper review and; (2) for
subject merchandise exported by Yuanxin, but not produced by Yuanxin,
the cash deposit rate will be the per-unit PRC-wide rate (i.e., $4.71
per kilogram); (3) for subject merchandise exported by Huachao, but not
produced by Huachao, the cash deposit rate will be the per-unit PRC-
wide rate; (4) For subject merchandise produced and exported by
Chengda, the cash deposit rate will continue to be the PRC-wide rate;
(5) for subject merchandise exported Chengda but not manufactured by
Chengda, the cash deposit rate will continue to be the PRC-wide rate;
and (6) for subject merchandise manufactured by Chengda, but exported
by any other party, the cash deposit rate will be the rate applicable
to the exporter. 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
[[Page 69423]]
occurred and the subsequent assessment of double antidumping duties.
We are issuing and publishing these preliminary results in
accordance with sections 751(a)(2)(B) and 777(i) of the Act, and 19 CFR
351.214(h) and 351.221(b)(4).
Dated: November 1, 2010.
Paul Piquado,
Acting Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-28571 Filed 11-10-10; 8:45 am]
BILLING CODE 3510-DS-P