E5-5570. Notice of Rescission of Antidumping Duty New Shipper Review: Honey from the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a request from Kunshan Xin'an Trade Co., Ltd., the Department of Commerce (“the Department”) initiated a new shipper review of the antidumping duty order on honey from the People's Republic of China. The period of review (“POR”) is December 1, 2003, through November 30, 2004. For the reasons discussed below, we are rescinding this new shipper review.

EFFECTIVE DATE:

October 11, 2005.

FOR FURTHER INFORMATION CONTACT:

Anya Naschak, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, D.C., 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Scope of the Order

The products covered by this order are natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight, and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb, or chunk form, and whether packaged for retail or in bulk form.

The merchandise subject to this order is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise under this order is dispositive.

Background

On December 22, 2004, the Department received a request for a new shipper review (“Xinan New Shipper Request”) from Kunshan Xin'an Trade Co., Ltd. (“Xinan PRC”). On January 31, 2005, the Department initiated this new shipper review for the period of review (“POR”) December 1, 2003, through November 30, 2004. See Honey from the People's Republic of China: Initiation of Antidumping New Shipper Review, 70 FR 6412 (February 7, 2005). On February 1, 2005, we issued the standard section A, C, and D questionnaire to Xinan PRC and its claimed U.S. affiliate, Xin'an USA, Inc. (“Xinan USA”) (collectively, “Xinan”). On March 10, 2005, and March 28, 2005, we received Xinan's response to sections A, C, and D of the Department's questionnaire.

On July 18, 2005, the Department extended the time limit for the completion of the preliminary results of this review by 45 days from the original July 30, 2005, deadline, in accordance with section 751(a)(2)(B)(iv) of the Tariff Act of 1930, as amended (“the Act”), and section 351.214(i)(2) of the Department's regulations. See Honey from the People's Republic of China: Extension of Time Limit for Preliminary Results of 2003/2004 New Shipper Review, 70 FR 42033 (July 26, 2005).

On August 10, 2005, the Department completed its preliminary bona fides analysis of Xinan's single sale to the United States and stated the Department's preliminary intention to rescind the new shipper review of Xinan, finding that Xinan's single sale to the United States was not a bona fide transaction. See Memorandum from James C. Doyle to Barbara E. Tillman: Bona Fide Analysis for Kunshan Xin'an Trade Co., Ltd.'s Sale in the New Shipper Review of Honey from the People's Republic of China, dated August 10, 2005 (“Bona Fides Memo”). The Department allowed interested parties an opportunity to provide comments on the Department's Bona Fides Memo, as well as the information placed on the record of review as attachments to the memo. Xinan provided comments on the Department's Bona Fides Analysis Memo on August 25, 2005, and the American Honey Producers and the Sioux Honey Association (collectively, “petitioners”) provided rebuttal comments on August 31, 2005.

On September 13, 2005, the Department extended the time limit for the completion of the preliminary results of this review by an additional 20 days, in accordance with section 751(a)(2)(B)(iv) of the Act, and section 351.214(i)(2) of the Department's regulations. See Honey from the People's Republic of China: Extension of Time Limit for Preliminary Results of 2003/2004 New Shipper Review, 70 FR 55109 (September 20, 2005).

Rescission of Review

Concurrent with this notice, we are issuing our memorandum detailing our analysis of the bona fides of Xinan's U.S. sale and our decision to rescind based on the totality of the circumstances. See Memorandum from James C. Doyle, Director, Office 9, to Barbara E. Tillman, Acting Deputy Assistant Secretary for Operations: Bona Fides Analysis and Rescission of New Shipper Review of Honey from the People's Republic of China for Kunshan Xin'an Trade Co., Ltd., dated October 3, 2005 (“Rescission Memo”).

In evaluating whether or not a single sale in a new shipper review is commercially reasonable, and therefore bona fide, the Department has considered, 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 at an arms-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246 (CIT 2005) (“TTPC”), citing Am. Silicon Techs. v. United States, 110 F. Supp. 2d 992, 995 (CIT 2000). However, the analysis is not limited to these factors alone. The Department examines a number of factors, all of which may speak to the commercial realities surrounding the sale of subject merchandise. Although some bona fides issues may share commonalities across various Department cases, the Department examines the bona fide nature of a sale on a case-by-case basis, and the analysis may vary with the facts surrounding each sale. See TTPC, 366 F. Supp. 2d at 1260, citing Certain Preserved Mushrooms From the People's Republic of China: Final Results and Partial Rescission of the New Shipper Review and Final Results and Partial Rescission of the Third Antidumping Duty Administrative Review, 68 FR 41304 (July 11, 2003), and accompanying Issues and Decision Memorandum. The weight given to each factor investigated will depend on the circumstances surrounding the sale. See TTPC, 366 F. Supp. 2d at 1263.

As discussed in detail in the Department's Rescission Memo, the Department has determined that the new shipper sale made by Xinan PRC was not bona fide because of: 1) inconsistencies between the prices charged and the quantities sold by Xinan USA for the single POR sale and all subsequent sales made by Xinan USA during the POR from the PRC; 2) the circumstances surrounding payment for the expenses associated with the single POR sale; and 3) inconsistencies regarding the sales process followed by Xinan USA for the POR sale. Since the Department is rescinding this new shipper review, we are not calculating a company-specific rate for Xinan, and Xinan will remain part of the PRC-wide entity.

Notification

The Department will notify U.S. Customs and Border Protection that bonding is no longer permitted to fulfill security requirements for shipments by Xinan PRC of honey from the PRC entered, or withdrawn from warehouse, for consumption in the United States on or after the publication of this rescission notice in the Federal Register, and that a cash deposit of 183.80 percent ad valorem should be collected for any entries exported by Xinan PRC.

This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return/destruction of APO material or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanctions.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(2)(B) and 777(i) of the Act.

Dated: October 3, 2005.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.