2010-1070. Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam: Preliminary Intent To Rescind New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On February 1, 2005, the Department of Commerce (“the Department”) published in the Federal Register the antidumping duty order on certain frozen warmwater shrimp from the Socialist Republic of Vietnam (“Vietnam”). See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam, 70 FR 5152 (February 1, 2005) (“VN Shrimp Order ”). The Department is conducting a new shipper review (“NSR”) of the VN Shrimp Order, covering the period of review (“POR”) of February 1, 2008, through January 31, 2009. Because the sale made by Nhat Duc was not bona fide, we have preliminarily determined to rescind this new shipper review.

DATES:

Effective Date: January 21, 2010.

FOR FURTHER INFORMATION CONTACT:

Paul Walker or Toni Dach, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

General Background

On February 26, 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 Nhat Duc Co., Ltd. (“Nhat Duc”). On March 20, 2009, the Department initiated a new shipper review of Nhat Duc. See Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Initiation of Antidumping Duty New Shipper Review, 74 FR 13416 (March 27, 2009).

On April 7, 2009, the Department issued its non-market economy (“NME”) questionnaire to Nhat Duc. Nhat Duc responded to the Department's NME questionnaire and subsequent supplemental questionnaires between May and October 2009.

Extension of Time Limits

On September 8, 2009, the Department extended the time limits for these preliminary results. See Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Extension of Preliminary Results of Antidumping Duty New Shipper Review, 74 FR 47190 (September 15, 2009).

Surrogate Country and Surrogate Values

On August 7, 2009, Nhat Duc submitted surrogate country comments, and on September 4, 2009, Nhat Duc submitted surrogate value data. No other party submitted surrogate country or surrogate value data.

Verification

Pursuant to 19 CFR 351.307(b)(iv), we conducted verification of the sales and factors of production (“FOP”) for Nhat Duc between November 16-18, 2009. See Memorandum to the File from Paul Walker, Senior Case Analyst and Toni Dach, Case Analyst through Scot T. Fullerton, Program Manager, Verification of the Sales and Factors of Production Response of Nhat Duc Co., Ltd. in the Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam, dated January 12, 2010.

Scope of the Order

The scope of this order includes certain frozen warmwater shrimp and prawns, whether wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off,^[1] deveined or not deveined, cooked or raw, or otherwise processed in frozen form.

The frozen warmwater shrimp and prawn products included in the scope of this order, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTSUS), are products which are processed from warmwater shrimp and prawns through freezing and which are sold in any count size.

The products described above may be processed from any species of warmwater shrimp and prawns. Warmwater shrimp and prawns are generally classified in, but are not limited to, the Penaeidae family. Some examples of the farmed and wild-caught warmwater species include, but are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn (Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), redspotted shrimp (Penaeus brasiliensis), southern brown shrimp (Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern rough shrimp (Trachypenaeus curvirostris), southern white shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus indicus).

Frozen shrimp and prawns that are packed with marinade, spices or sauce are included in the scope of this order. In addition, food preparations, which are not “prepared meals,” that contain more than 20 percent by weight of shrimp or prawn are also included in the scope of this order.

Excluded from the scope are: (1) Breaded shrimp and prawns (HTS subheading 1605.20.10.20); (2) shrimp and prawns generally classified in the Pandalidae family and commonly referred to as coldwater shrimp, in any state of processing; (3) fresh shrimp and prawns whether shell-on or peeled (HTS subheadings 0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in prepared meals (HTS subheading 1605.20.05.10); (5) dried shrimp and prawns; (6) canned warmwater shrimp and prawns (HTS subheading 1605.20.10.40); (7) certain dusted shrimp; and (8) certain battered shrimp. Dusted shrimp is a shrimp-based product: (1) That is produced from fresh (or thawed-from-frozen) and peeled shrimp; (2) to which a “dusting” layer of rice or wheat flour of at least 95 percent purity has been applied; (3) with the entire surface of the shrimp flesh thoroughly and evenly coated with the flour; (4) with the non-shrimp content of the end product constituting between four and 10 percent of the product's total weight after being dusted, but prior to being frozen; and (5) that is subjected to IQF freezing immediately after application of the dusting layer. Battered shrimp is a shrimp-based product that, when dusted in accordance with the definition of dusting above, is coated with a wet viscous layer containing egg and/or milk, and par-fried.

The products covered by this order are currently classified under the following HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 1605.20.10.10, and 1605.20.10.30. These HTSUS subheadings are provided for convenience and for customs purposes only and are not dispositive, but rather the written description of the scope of this order is dispositive.

Preliminary Intent To Rescind

Consistent with the Department's practice, we investigated the bona fide nature of the sale made by Nhat Duc for this new shipper review. In evaluating whether or not a sale in a new shipper review is commercially reasonable, and therefore bona fide, the Department considers, inter alia, such factors as: (1) The timing of the sale; (2) the price and quantity; (3) the expenses arising from the transaction; (4) whether the goods were resold at a profit; and (5) whether the transaction was made on an arms-length basis. See Tianjin Yiancheng Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246, 1250 (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 the 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.). Also, in TTPC, the court affirmed the Department's practice of considering 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,” (See 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.” See 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 producers usual commercial practice would dictate. Where a review is based on a single sale, exclusion of that sale as non-bona fide necessarily must end the review. See TTPC, 366 F. Supp. 2d at 1249.

In analyzing Nhat Duc's single POR sale to the United States, the Department preliminarily determines that this sale is not bona fide, as it is not typical of Nhat Duc's usual commercial practices or is it commercially reasonable. Further, the Department is unable to analyze whether the sale was conducted on an arm's-length basis. The Department reached this conclusion based on the totality of the circumstances, namely: (a) The atypical nature of Nhat Duc's POR pricing; (b) the timing and extent of payment receipt for Nhat Duc's single POR sale; (c) the existence of undisclosed sales subsequent to Nhat Duc's single POR sale; (d) the atypical nature of Nhat Duc's production timeline for its POR U.S. sale; (e) irregularities in Nhat Duc's sales negotiation correspondence and the unverifiable nature of this correspondence; and (f) the unverifiable nature of Nhat Duc's founding capital sources. Since much of our analysis regarding the evidence of the bona fide of the transaction involves business proprietary information, a full discussion of the bases for our decision to find Nhat Duc's single POR sale not bona fide is set forth in the Memorandum to the File from Toni Dach, Case Analyst, through Scot T. Fullerton, Program Manager, Regarding Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Bona Fide Nature of the Sale Under Review for Nhat Duc Co., Ltd.

Therefore, the Department is preliminarily rescinding the new shipper review for Nhat Duc, as Nhat Duc's single sale during the POR is not bona fide and, consequently, not subject to review.

Comments

In accordance with 19 CFR 351.301(c)(1), for the final results of this new shipper review, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after, the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(1) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record.^[2]

Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of this new shipper review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to written comments, limited to issues raised in such briefs or comments, may be filed no later than 5 days after the deadline for submitting the case briefs. See 19 CFR 351.309(d). The Department requests that interested parties provide an executive summary of each argument contained within the case briefs and rebuttal briefs.

Any interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Requests should contain the following information: (1) The party's name, address, and telephone number; (2) the number of participants; and (3) a list of the issues to be discussed. Oral presentations will be limited to issues raised in the briefs. If we receive a request for a hearing, we plan to hold the hearing seven days after the deadline for submission of the rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

The Department intends to issue the final results of this new shipper review, which will include the results of its analysis raised in any such comments, within 90 days of publication of these preliminary results, pursuant to section 751(a)(2)(B)(iv) of the Act.

Cash-Deposit Requirements

The following cash deposit requirements will be effective upon publication of the final results of this new shipper review for all shipments of subject merchandise from Nhat Duc entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For subject merchandise produced and exported by Nhat Duc, the cash deposit rate will continue to be the Vietnam-wide rate (i.e., 25.76 percent; (2) for subject merchandise exported by Nhat Duc but not manufactured by Nhat Duc, the cash deposit rate will continue to be the Vietnam-wide rate (i.e., 25.76 percent); and (3) for subject merchandise manufactured by Nhat Duc, but exported by any other party, the cash deposit rate will be the rate applicable to the exporter. These cash deposit requirements, when imposed, shall remain in effect until further notice.

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 POR. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

We are issuing and publishing this determination in accordance with sections 751(a)(2)(B) and 777(i) of the Act, and 19 CFR 351.214(h) and 351.221(b)(4).

Dated: January 12, 2010.

Ronald K. Lorentzen,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  “Tails” in this context means the tail fan, which includes the telson and the uropods.

2.  See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission in Part, 72 FR 58809 (October 17, 2007), and accompanying Issues and Decision Memorandum at Comment 2.