[Federal Register Volume 64, Number 225 (Tuesday, November 23, 1999)]
[Notices]
[Pages 65675-65681]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-30551]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-855]
Notice of Preliminary Determination of Sales at Less Than Fair
Value: Certain Non-Frozen Apple Juice Concentrate From the People's
Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: November 23, 1999.
FOR FURTHER INFORMATION CONTACT: Sally Hastings, Craig Matney, Annika
O'Hara or Vincent Kane, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202)
482-3454, (202) 482-1778, (202) 482-3798, or (202) 482-2815,
respectively.
The Applicable Statute
Unless otherwise indicated, all citations to the Tariff Act of
1930, as amended (``the Act''), are references to the provisions
effective January 1, 1995, the effective date of the amendments made to
the Act by the Uruguay Round Agreements Act (``URAA''). In addition,
unless otherwise indicated, all citations to the Department of Commerce
(``Department'') regulations are to the regulations at 19 CFR part 351
(April 1, 1998).
Preliminary Determination
We preliminarily determine that certain non-frozen apple juice
concentrate (``NFAJC'') from the People's Republic of China (``PRC'')
is being, or is likely to be, sold in the United States at less than
fair value
[[Page 65676]]
(``LTFV''), as provided in section 733 of the Act. The estimated
margins of sales at LTFV are shown in the ``Suspension of Liquidation''
section of this notice.
Case History
Since the initiation of this investigation on July 6, 1999 (64 FR
36330), the following events have occurred:
On July 22, 1999, the United States International Trade Commission
(``ITC'') notified the Department of its affirmative preliminary injury
determination in this case.
On June 11, and July 14, 1999, we received entries of appearance by
counsel on behalf of 12 producers/exporters of the subject merchandise:
Yantai North Andre Juice Co., Ltd. (North Andre); Shaanxi Haisheng
Fresh Fruit Juice Co., Ltd. (Haisheng); Sanmenxia Lakeside Fruit Juice
Co., Ltd. (Lakeside); Shandong Zhonglu Juice Group Co., Ltd. (Zhonglu);
Yantai Oriental Juice Co., Ltd. (Oriental); Qingdao Nannan Foods Co.,
Ltd. (Nannan); Xianyang Fuan Juice Co., Ltd. (Fuan); Xian Asia Qin
Fruit Co., Ltd. (Asia Fruit); Shaanxi Machinery & Equipment Import &
Export Corporation (SAAME); Shaanxi Foreign Economic & Trade
Development Corporation (SFETDC); Changsha Industrial Products &
Minerals Import & Export Corporation (Changsha); and Shandong
Foodstuffs Imports & Export Corporation (Shandong Foodstuffs).
In response to a request from the Department, on July 22, 1999, the
12 producers/exporters listed above provided company-specific volumes
of exports of the subject merchandise to the United States for the
period October 1, 1998 through March 31, 1999. On July 27 and 29, 1999,
the Department sent letters to the Chinese Chamber of Commerce for the
Import and Export of Foodstsuffs, Native produce and Animal By-Products
(``China Chamber''), with copies to the Ministry of Foreign Trade and
Economic Cooperation (``MOFTEC'') and the Embassy of the PRC in
Washington, DC, requesting: (1) the total quantity of NFAJC exported to
the United States by the PRC during the POI; (2) the names of all
companies (other than the 12 already identified) that exported NFAJC to
the United States during the POI and the quantity that each exported;
and (3) for those exporters which are not also the producers, the names
of the producers that supply them. On August 11, 1999, the China
Chamber provided total PRC NFAJC exports to the United States for the
October 1998 through March 1999 period and the requested company-
specific export and contact information for 18 additional exporters.
Given the large number of exporters involved, we determined it
necessary to limit the number of respondents in this investigation to
the five largest producers/exporters based on their volumes of exports
to the United States (see August 17, 1998, Decision Memorandum to the
Acting Deputy Assistant Secretary, Import Administration). We selected
the following five companies as mandatory respondents: North Andre;
Haisheng; Oriental; Nannan; and SAAME. On August 17, 1999, the
Department issued the full antidumping questionnaire to these five
producers/exporters. On August 18, 1999, we issued a questionnaire
concerning quantity and value of sales of NFAJC, and company structure,
ownership, and affiliations (``separate rates questionnaire'') to the
remaining identified producers/exporters through their counsel or
through the China Chamber (with copies to MOFTEC and the Embassy of the
PRC), and requested that they assist in distributing it to all
exporters who might request separate rates (see PRC-Wide Rate section
below). On August 18, 1999, Lakeside and Zhonglu requested that they be
allowed to participate as voluntary respondents in this investigation.
On September 9, 1999, we accepted Lakeside and Zhonglu as voluntary
respondents because both companies were suppliers of a mandatory
respondent and were, therefore, already required to participate in this
investigation. Counsel withdrew its appearance on behalf of SFETDC on
August 23, 1999.
On September 15, 1999, the Department invited interested parties to
comment on surrogate country selection and to provide publicly
available information for valuing the factors of production. We
received responses from both the petitioners and the respondents on
September 27, 1999. Respondents and petitioners filed rebuttal comments
on surrogate values on October 4 and 6, 1999, respectively.
On September 21 and October 5, 1999, the Department received
sections A, C, and D questionnaire responses from the five mandatory
and the two voluntary respondents: North Andre; Haisheng; Oriental;
Nannan; SAAME; Lakeside; and Zhonglu. Fuan, Asia Fruit, Changsha, and
Shandong Foodstuffs provided responses to the separate rates
questionnaire on September 21, 1999. We issued supplemental
questionnaires to respondents in October and received supplemental
responses in October and November 1999. Between October 14 and 20,
1999, we received comments on the responses from the petitioners.
Critical Circumstances
On September 7, 1999, pursuant to the allegation of critical
circumstances contained in the petition, the Department requested
information regarding shipments of NFAJC from the seven respondents
participating in this investigation. Each respondent provided the
requested information on October 5, 1999. On November 3, 1999, the
Department issued its preliminary determination that critical
circumstances exist with respect to SAAME, Lakeside, Haisheng, North
Andre, Nannan, and for all other exporters covered by this
investigation. We found that critical circumstances do not exist with
respect to Oriental and Zhonglu. For a complete discussion of our
analysis, see Memorandum to Deputy Assistant Secretary Richard W.
Moreland, dated November 3, 1999, on file in Room B-099 of the
Department's headquarters and the Preliminary Determination of Critical
Circumstances: Certain Non-Frozen Apple Juice Concentrate from the
People's Republic of China, 64 FR 61835 (November 15, 1999).
Scope of Investigation
For purposes of this investigation, the product covered by the
scope is all non-frozen concentrated apple juice with a Brix scale of
40 or greater, whether or not containing added sugar or other
sweetening matter, and whether or not fortified with vitamins or
minerals. Excluded from the scope of this investigation are: frozen
concentrated apple juice; non-frozen concentrated apple juice that has
been fermented; and non-frozen concentrated apple juice to which
spirits have been added.
The petitioners originally excluded from the scope of this
investigation NFAJC fortified with vitamins or minerals. However, on
September 24, 1999, the petitioners requested that the Department
expand the scope to include NFAJC fortified with vitamins or minerals.
The petitioners made this request based on their concern that
circumvention might occur if NFAJC with vitamins and minerals were
excluded from the scope of the investigation. To substantiate this
claim, they provided an affidavit attesting to the fact that a buyer/
seller of Chinese NFAJC had been told that Chinese exporters were
considering the possibility of fortifying NFAJC with vitamins or
minerals as one way to avoid the payment of antidumping duties.
[[Page 65677]]
On September 28, 1999, the respondents objected to the inclusion of
NFAJC with vitamins and minerals stating that the ITC's preliminary
determination was made with respect to NFAJC that did not include added
vitamins and minerals. The respondents also cited to the antidumping
and countervailing duty investigations of pasta from Turkey and Italy
(``Pasta''), where the Department chose to retain the original scope
rather than expand it at the request of the petitioners to include
pasta in packages of more than five pounds. (See, Memorandum to Susan
G. Esserman, Assistant Secretary for Import Administration from Barbara
Stafford, Deputy Assistant Secretary for Investigations, dated October
10, 1995, entitled ``Antidumping and Countervailing Duty Investigations
of Pasta from Italy and Turkey--Scope Issue'')
In this case, we have preliminarily determined to include NFAJC
with vitamins and minerals for the following reasons. First, the
petitioners have provided evidence that circumvention may occur unless
the scope is expanded. Second, the ITC will have the opportunity to
examine this issue in its final determination (if necessary). Finally,
the courts have given the Department discretion in defining the scope.
``* * * the Department may fashion the scope of an order so as to
prevent circumvention by parties in the future ``employing inventive
import strategies.''' (NTN Bearing Corp. of America v. United States,
747 F. Supp. 726, 731 (CIT 1990). Although we have preliminarily
included NFAJC with vitamins and minerals in the scope of this
investigation, we will continue to investigate this matter for our
final determination.
The merchandise subject to this investigation is classified in the
Harmonized Tariff Schedule of the United States (``HTSUS'') at
subheading 2009.70.20. Although the HTSUS subheading is provided for
convenience and customs purposes, the written description of the
merchandise under investigation is dispositive.
Period of Investigation
The period of this investigation (``POI'') corresponds to the
exporters' two most recent fiscal quarters prior to the filing of the
petition, i.e., October 1, 1998 through March 31, 1999.
Nonmarket Economy Country and Market Oriented Industry Status
The Department has treated the PRC as a nonmarket economy (``NME'')
country in all past antidumping investigations (see, e.g., Final
Determination of Sales at Less Than Fair Value: Certain Preserved
Mushrooms from the People's Republic of China, 63 FR 72255 (December
31, 1998) (``Mushrooms'')). A designation as an NME remains in effect
until it is revoked by the Department (see section 771(18)(C) of the
Act).
The respondents in this investigation have not requested a
revocation of the PRC's NME status. We have, therefore, preliminarily
determined to continue to treat the PRC as an NME.
Separate Rates
All of the respondents have provided the requested company-specific
separate rates information and have stated that for each company, there
is no element of government ownership or control.
The Department's separate rate test is not concerned, in general,
with 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. See Certain Cut-to-Length Carbon Steel Plate
from Ukraine: Final Determination of Sales at Less than Fair Value, 62
FR 61754, 61757 (November 19, 1997); 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); and Honey from the People's Republic of
China: Preliminary Determination of Sales at Less than Fair Value, 60
FR 14725, 14726 (March 20, 1995) (``Honey'').
To establish whether a firm is sufficiently independent from
government control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by
Final Determination of Sales at Less Than Fair Value: Silicon Carbide
from the People's Republic of China (59 FR 22585, May 2, 1994). Under
the separate rates criteria, the Department assigns separate rates in
NME cases only if the respondents can demonstrate the absence of both
de jure and de facto governmental control over export activities.
1. Absence of De Jure Control
The respondents have placed on the record a number of documents to
demonstrate absence of de jure government control, including the
``Foreign Trade Law of the People's Republic of China'' (``Foreign
Trade Law''), the ``Law of the People's Republic of China on Industrial
Enterprises Owned by the Whole People'' (``Industrial Enterprises
Law''), the ``Law of the People's Republic of China on Chinese-Foreign
Cooperative Joint Ventures' (``Joint Ventures Law''), and the
``Administrative Regulations of the People's Republic of China
Governing the Registration of Legal Corporations.''
In prior cases, the Department has analyzed the Foreign Trade Law
and found that it establishes an absence of de jure control. (See,
e.g., Final Determination of Sales at Less Than Fair Value: Certain
Partial-Extension Steel Drawer Slides with Rollers from the People's
Republic of China, 60 FR 54472 (October 24, 1995); see also Mushrooms.)
We have no new information in this proceeding which would cause us to
reconsider this determination. For the purposes of this investigation
and in prior cases, the Department has also analyzed the Industrial
Enterprises Law and found that this law establishes mechanisms for
private control of companies which indicate an absence of de jure
control. See Pure Magnesium from the People's Republic off China: Final
Results of New Shipper Review, 63 FR 3085, 3086 (January 21, 1998).
According to the respondents, NFAJC exports are not affected by
quota allocations or export license requirements. The producers/
exporters claim to have the autonomy to set the price at whatever level
they wish through independent price negotiations with their foreign
customers without government interference.
Accordingly, we preliminarily determine that there is an absence of
de jure government control over export pricing and marketing decisions
of the respondents.
2. Absence of De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. (See
Mushrooms.) Therefore, the Department has determined that an analysis
of de facto control is critical in determining whether respondents are,
in fact, subject to a degree of governmental control which would
preclude the Department from assigning separate rates.
The Department typically considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export
[[Page 65678]]
functions: (1) Whether the export prices are set by, or subject to the
approval of, a governmental authority; (2) whether the respondent has
authority to negotiate and sign contracts and other agreements; (3)
whether the respondent has autonomy from the government in making
decisions regarding the selection of its management; and (4) whether
the respondent retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of
losses (see Mushrooms).
Each of the 11 respondents in this investigation has asserted the
following: (1) It establishes its own export prices; (2) it negotiates
contracts without guidance from any governmental entities or
organizations; (3) it makes its own personnel decisions; and (4) it
retains the proceeds from export sales and uses profits according to
its business needs without any restrictions. Additionally, these 11
respondents have stated that they do not coordinate or consult with
other exporters regarding their pricing. This information supports a
preliminary finding that there is an absence of de facto governmental
control of the export functions of these companies. Consequently, we
preliminarily determine that all responding exporters have met the
criteria for the application of separate rates.
Antidumping Deposit Rate for Those Producers/Exporters That Responded
Only to the Separate Rates Questionnaire
For those PRC producers/exporters that responded to our separate
rates questionnaire but did not respond to the full antidumping
questionnaire (because they were not selected to respond or because
they did not submit a voluntary response), we have calculated a
weighted-average margin based on the rates calculated for those
producers/exporters that were selected to respond, except that we did
not include the rate for North Andre which was zero. (See, e.g., Notice
of Final Determination of Sales at Less Than Fair Value: Bicycles from
the People's Republic of China, 61 FR 19026 (April 30, 1996)
(``Bicycles from the PRC'')).
PRC-Wide Rate
Information on the record of this investigation indicates that
there are numerous producers/exporters of the subject merchandise in
the PRC. As noted in the case history section above, all exporters were
given the opportunity to respond to the separate rates questionnaire.
Based upon our knowledge of PRC exporters and the fact that U.S. import
statistics show that responding companies did not account for all
imports into the United States from the PRC, we have preliminarily
determined that PRC exporters of NFAJC failed to respond to our
questionnaire.
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person--(A) withholds information that has been requested
by the administering authority or the Commission under this title, (B)
fails to provide such information by the deadlines for submission of
the information or in the form and manner requested, subject to
subsections (c)(1) and (e) of section 782, (C) significantly impedes a
proceeding under this title, or (D) provides such information but the
information cannot be verified as provided in section 782(i), the
administering authority and the Commission shall, subject to section
782(d), use the facts otherwise available in reaching the applicable
determination under this title.''
Section 776(b) of the Act further provides that adverse inferences
may be used when a party has failed to cooperate by not acting to the
best of its ability to comply with a request for information. The
producers/exporters that decided not to respond to the separate rates
questionnaire failed to act to the best of their ability in this
investigation. Absent a response, we must presume government control of
these companies (see, e.g., Bicycles from the PRC). Moreover, the
Department has determined that, in selecting from among the facts
otherwise available, an adverse inference is warranted.
In accordance with our standard practice, as adverse facts
available, we are assigning to those companies that did not respond to
the Department's separate rates questionnaire the higher of: (1) The
highest margin stated in the notice of initiation; or (2) the highest
margin calculated for any respondent in this investigation (see, e.g.,
Notice of Final Determination of Sales at Less Than Fair Value:
Stainless Steel Wire Rod from Japan, 63 FR 40434 (July 29, 1998)). In
this case, the adverse facts available margin is 54.55 percent, which
is the highest margin calculated for a respondent in this investigation
(Lakeside).
Section 776(c) of the Act provides that where the Department
selects from among the facts otherwise available and relies on
``secondary information,'' such as the petition, the Department shall,
to the extent practicable, corroborate that information from
independent sources reasonably at the Department's disposal. The
Statement of Administrative Action accompanying the URAA, H.R. Doc. No.
103-316 (1994) (SAA), states that ``corroborate'' means to determine
that the information used has probative value. See SAA at 870.
To corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information to be used. In an investigation, if the Department chooses
as facts available a calculated dumping margin of another respondent,
it is not necessary to question the reliability of that calculated
margin. With respect to relevance, however, the Department will
consider information reasonably at its disposal as to whether there are
circumstances that would render a margin not relevant. Where
circumstances indicate that the selected margin may not be appropriate,
the Department will attempt to find a more appropriate basis for facts
available (see, e.g., Fresh Cut Flowers from Mexico; Final Results of
Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22,
1996) (where the Department disregarded the highest margin as adverse
best information available because the margin was based on another
company's uncharacteristic business expense resulting in an unusually
high margin)). In this investigation, there is no indication that the
highest calculated margin is unreliable or irrelevant and, hence,
inappropriate to use as adverse facts available. Thus, the Department
has preliminarily determined the PRC-wide rate to be 54.55 percent.
Fair Value Comparisons
To determine whether sales of the subject merchandise by North
Andre, Haisheng, Lakeside, Zhonglu, Oriental, Nannan and SAAME for
export to or within the United States were made at LTFV, we compared
the EP or the CEP, as appropriate, to the NV, as described in the
``Export Price,'' ``Constructed Export Price'' and ``Normal Value''
sections of this notice, below. In accordance with section
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs
and CEPs to the NVs.
Export Price
For North Andre, Haisheng, Lakeside, Zhonglu, Nannan and SAAME, we
used EP methodology in accordance with section 772(a) of the Act
because the subject merchandise was sold directly to unaffiliated
customers in the United States prior to importation and CEP methodology
was not otherwise appropriate. We calculated EP based on packed CIF,
C&F, FOB or delivered prices to the first unaffiliated purchaser in the
United States. Where appropriate,
[[Page 65679]]
we made deductions from the starting price (gross unit price) for
billing adjustments, inland freight from the plant/warehouse to the
port of export, marine insurance, ocean freight, U.S. duty, U.S.
brokerage and handling, and U.S. inland freight. Because certain
domestic inland freight expenses, ocean freight and marine insurance
were paid in RMB, we based these charges on surrogate rates from India.
(See ``Normal Value'' section for further discussion.)
Constructed Export Price
For certain sales by Haisheng and all sales by Oriental, we used
CEP methodology in accordance with sections 772(b), (c) and (d) of the
Act, because sales to the first unaffiliated purchaser in the United
States took place after importation. For these companies, we calculated
CEP based on ex-dock, ex-warehouse, CIF or delivered prices to
unaffiliated purchasers in the United States. Where appropriate, we
made deductions for billing adjustments, inland freight in the PRC,
ocean freight, marine insurance, U.S. duty, U.S. inland freight, and
U.S. warehousing. Also, where appropriate, we deducted direct and
indirect selling expenses related to commercial activity in the United
States. Pursuant to section 772(d)(3) of the Act, where applicable, we
made an adjustment for CEP profit. We did not adjust for CEP profit for
Oriental because Oriental's U.S. sales were consignment sales made
through unaffiliated consignment agents. For these sales, we deducted
the commission paid to the consignee.
Normal Value
Surrogate Country
Section 773(c)(4) of the Act requires the Department to value the
NME producer's factors of production, to the extent possible, in one or
more market economy countries that: (1) Are at a level of economic
development comparable to that of the NME, and (2) are significant
producers of comparable merchandise. Regarding the first criterion, the
Department has determined that India, Pakistan, Sri Lanka, Egypt,
Indonesia, and the Philippines are countries comparable to the PRC in
terms of overall economic development (see memorandum from Jeff May,
Director, Office of Policy, to Susan Kuhbach, Senior Director, AD/CVD
Enforcement, Office 1, September 15, 1999) (``Surrogate Memorandum'')).
Regarding the second criterion (related to significant production
of comparable merchandise), the petitioners have alleged that India is
a significant producer of apples, at least among the countries at a
comparable level of economic development to the PRC. Moreover, the
petitioners claim, since there is little use for low quality apples
except to make NFAJC, most countries that produce apples also produce
NFAJC.
The respondents have argued that none of the countries found by the
Department to be economically comparable to the PRC is a significant
producer of NFAJC. Therefore, instead of relying on one of those
countries, the respondents urge the Department to use Turkey, a country
which they claim is a major producer of NFAJC, as the surrogate. Of the
countries that are significant producers of NFAJC, according to the
respondents, Turkey is closest to the PRC in terms of economic
development. In addition to the fact that Turkey is a significant
producer of comparable merchandise, the respondents also argue that the
Department has publicly available information on many key factor values
in Turkey. This is in contrast to India, where much of the factor value
data submitted by the petitioners is proprietary.
Regarding the petitioners' argument that India should be used as
the surrogate country, the respondents disagree, claiming that the
major input into NFAJC (juice apples) is subsidized. The respondents
point to the Department's Surrogate Memorandum which, in naming the
economically comparable countries that could be used as surrogates,
states ``we know of no direct subsidies on the production or sale of
any input used in the production of the subject merchandise * * *'' To
the contrary, the respondents claim, India subsidizes its apple
producers through a price support scheme known as the Market
Intervention Scheme (``MIS''). Thus, even if India's level of apple
production led the Department to view India as a significant producer
of comparable merchandise, India should not be used because the key
input into NFAJC in India is subsidized.
For purposes of the preliminary determination, we have used India
as our surrogate. First, we note that India is economically comparable
to the PRC, while Turkey is not. Second, we have been able to develop
publicly available factor values in India without relying on
proprietary information submitted by the petitioners.
The surrogate country memorandum language to which the respondents
cite concerns the Department's reluctance to use factor prices that may
not, in some sense, reflect ``fair market value.'' The meaning of
``fair market value'' in this context is necessarily broad, and
certainly not limited to the price prevailing in a perfectly
competitive, distortion-free market, since markets the world over,
particularly agricultural markets, are distorted by any number of
government measures and policies such as taxes, tariffs and price/
income support schemes. The concept of ``fair market value'' in this
context is not so broad, however, that it covers all government market
interventions, and the Department therefore ``draws a line'' with
government subsidies that tend to enable producers to lower their price
to the point where they (the prices) may not reflect fair market value.
In such cases, the Department considers alternative factor price data.
There is, however, no need to do so in this case for two reasons: (1)
The MIS is a price support scheme, similar to those employed in many
agricultural product markets around the world; and (2) as such, the MIS
does not raise the fair market value concerns discussed above.
Although we have used India as the surrogate for this preliminary
determination, we are considering this matter further for the final
determination. First, we note the respondents' claim that juice apples
are not internationally traded inputs. According to the respondents,
the freight costs of transporting juice apples would be greater than
the value of the apples themselves. Such a situation may lead the
Department to place greater emphasis on the significant producer
criterion that on the economically comparable criterion in making its
surrogate selection. (See, Preamble to Sec. 351.408 of the Department's
Proposed Rule, 61 FR 7308, 7344, February 27, 1996) Second, although
the respondents have claimed that Turkey should be considered a
significant producer of NFAJC, the information they have submitted in
support of this claim is limited. The petitioners' information
regarding production of NFAJC is also lacking. We acknowledge that the
Department, itself, has had difficulty in developing this information.
However, better information on NFAJC production would be useful. Third,
key factor values from India are lacking in several respects. As
discussed further below, we have used a juice apple price taken from
the annual report of a single apple juice producer. However, we prefer
to use input prices that reflect the actions of many buyers and
sellers. (See, Preamble to Sec. 351.408 of the Department's
Regulations, 62 FR 27296, 27366) Finally, we have relied on broadly
aggregated data for factory overhead, SG&A, and profit. We would
prefer, instead, to use data from producers of
[[Page 65680]]
identical or comparable merchandise in the surrogate country. (See,
Sec. 351.408(c)(4)) While the petitioners have placed information on
the record regarding an Indian producer of apple juice, that
information is proprietary and, hence, its use would be contrary to our
policy of relying on publicly available data, where possible. (See,
Sec. 351.408(c)(1)).
We invite parties to address these issues for the final
determination.
2. Factors of Production
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by the companies in the PRC
which either produced and exported NFAJC to the United States or
produced NFAJC for exporters that exported NFAJC to the United States
during the POI. To calculate NV, the reported unit factor quantities
were multiplied by publicly available Indian values, except as noted
below.
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. For those values not
contemporaneous with the POI and quoted in a foreign currency, we
adjusted for inflation using wholesale price indices published in the
International Monetary Fund's International Financial Statistics.
As appropriate, we adjusted input prices to make them delivered
prices. Where a producer did not report the distance between the
material supplier and the factory, we used, as facts available, either
the distance to the nearest seaport (if an import value was used as the
surrogate value for the factor) or the farthest distance reported for a
supplier. Where distances were reported and the surrogate value was
based on Indian import statistics, we added to the surrogate value a
surrogate freight cost using the shorter of the reported distances from
either the closest PRC port to the PRC factory, or from the domestic
supplier to the factory. This adjustment is in accordance with the
CAFC's decision in Sigma Corp. v. United States, 117 F. 3d 1401
(Fed.Cir. 1997).
For a detailed analysis of surrogate values, see the ``Factors of
Production'' Memorandum from the Team to the file (FOP memo) dated
November 8, 1999.
Juice Apples: We valued apples using the price paid by Himachal
Pradesh Horticultural Produce Marketing and Processing Corporation, as
reported in the introduction to that company's 1998-99 financial
statement. Because that value is contemporaneous with the POI, no
adjustment was necessary.
Processing Agents: We valued all of the processing agents, except
for one (PVPP), using Indian import statistics for the period April
1997 through March 1998. PVPP was not reported in the Indian import
statistics. For that processing agent, we used an October 1999 price
quote from a U.S. chemical company.
Labor: We valued labor using the method described in 19 CFR
351.408(c)(3).
Electricity and Coal: To value electricity, we used the 1995
electricity rates reported in the publication Energy Prices and Taxes,
4th quarter 1998. We based the value of coal on Indian import
statistics.
Factory Overhead, SG&A, and Profit: We derived ratios for factory
overhead, SGA, and profit, using 1992-93 data from the ``Expenditures
and Appropriations'' category of the accounts of ``Processing and
Manufacture--Foodstuffs, Textiles, Tobacco, Leather and Products
Thereof'' from the Reserve Bank of India Bulletin, January 1997.
Packing Materials: We calculated values for plastic bags, plastic
liners , and labels using Indian import statistics from the period
April 1997-March 1998. We converted values from a per kilogram to a per
piece basis where necessary. For steel drums, we could not find a
reliable Indian value. Therefore, we used a 1994 Indonesian price.
Inland Freight Rates: To value truck freight rates, we used a 1994
rate from The Times of India inflated to be contemporaneous with the
POI. With regard to rail freight, we based our calculation on
information from the Indian Railway Conference Association. We
calculated an average per kilometer per metric ton rate.
International Freight: We used a 1996 price quote from a U.S.
shipping company. Where the PRC producer/exporter used a market economy
shipper and paid for the shipping in a market economy currency, we
calculated an average price for shipping paid by that producer/
exporter.
Marine Insurance: We used a June 1998 prices quote from a U.S.
insurance provider.
By-products: Certain respondents reported by-products resulting
from production of the subject merchandise. For those respondents that
reported their production of apple essence/aroma, we have offset the
cost of materials with a by-product credit. The value for apple
essence/aroma was calculated as a simple average of the various prices
reported at the July 1999 ITC hearing and November 1999 price quotes
provided to the Department by two U.S. brokers of food products.
Certain respondents claimed proprietary treatment for other by-
products. Since we lacked surrogate values for these other by-products,
we have not adjusted for them in this preliminary determination.
Verification
As provided in section 782(i) of the Act, we will verify all
information relied upon in making our final determination.
Suspension of Liquidation
In accordance with section 733(d)(2) of the Act, we are directing
the Customs Service to suspend liquidation of all imports of subject
merchandise from the PRC entered, or withdrawn from warehouse, for
consumption on or after the date of publication of this notice in the
Federal Register, except for imports from North Andre whose antidumping
margin is zero. In addition, for all exporters except Oriental and
Zhonglu, we are directing Customs to suspend liquidation of any
unliquidated entries of subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the date, which is 90 days prior
to the date on which this notice is published in the Federal Register.
We will instruct the Customs Service to require a cash deposit or the
posting of a bond equal to the weighted-average amount by which the NV
exceeds the EP or CEP, as appropriate, as indicated in the chart below.
These suspension of liquidation instructions will remain in effect
until further notice.
------------------------------------------------------------------------
Weighted-
Exporter/manufacturer average margin Critical
percentage circumstances
------------------------------------------------------------------------
Yantai North Andre Juice Co., Ltd 0.00 Yes.
Shaanxi Haisheng Fresh Fruit 18.58 Yes.
Juice Co., Ltd.
Sanmenxia Lakeside Fruit Juice 54.55 Yes.
Co., Ltd.
[[Page 65681]]
Shandong Zhonglu Co., Ltd........ 9.85 No.
Yantai Oriental Juice Co., Ltd... 14.97 No.
Qingdao Nannan Foods Co., Ltd.... 44.24 Yes.
Shaanxi Machinery & Equipment 35.29 Yes.
Import & Export Corp.
Xian Asia Qin Fruit Co., Ltd..... 28.71 Yes.
Xian Yang Fuan Juice Co., Ltd.... 28.71 Yes.
Changsa Industrial Products & 28.71 Yes.
Minerals Import and Export Co.,
Ltd.
Shandong Foodstuffs Import and 28.71 Yes.
Export Corporation.
PRC-wide rate.................... 54.55 Yes.
------------------------------------------------------------------------
The PRC-wide rate applies to all entries of the subject merchandise
except for entries from exporters/factories that are identified
individually above.
ITC Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our determination. If our final determination is affirmative,
the ITC will determine before the later of 120 days after the date of
this preliminary determination or 45 days after our final determination
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry.
Public Comment
Case briefs or other written comments in six copies must be
submitted to the Assistant Secretary for Import Administration no later
than January 6, 2000, and rebuttal briefs no later than January 11,
2000. A list of authorities used and an executive summary of issues
should accompany any briefs submitted to the Department. Such summary
should be limited to five pages total, including footnotes. In
accordance with section 774 of the Act, we will hold a public hearing,
if requested, to afford interested parties an opportunity to comment on
arguments raised in case or rebuttal briefs. Tentatively, the hearing
will be held on January 13, 2000, at the U.S. Department of Commerce,
14th Street and Constitution Avenue, NW, Washington, DC 20230. Parties
should confirm by telephone the time, date, and place of the hearing 48
hours before the scheduled time.
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, U.S. Department of Commerce, Room
1870, within 30 days of the 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 the issues to be discussed.
Oral presentations will be limited to issues raised in the briefs. If
this investigation proceeds normally, we will make our final
determination not later than 75 days after the date of the preliminary
determination.
This determination is issued and published in accordance with
sections 733(d) and 777(i)(1) of the Act.
Dated: November 15, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-30551 Filed 11-22-99; 8:45 am]
BILLING CODE 3510-DS-P
