03-3995. Notice of Preliminary Results of Antidumping Duty New Shipper Review: Freshwater Crawfish Tail Meat From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting a new shipper review of the antidumping duty order on freshwater crawfish tail meat from the People's Republic of China (PRC) in response to a request from Weishan Zhenyu Foodstuff Co., Ltd. (Weishan Zhenyu). The period of review (POR) is September 1, 2001, through February 28, 2002.

The preliminary results are listed below in the section titled “Preliminary Results of Review.” Interested parties are invited to comment on these preliminary results. (See the “Preliminary Results of Reviews” section of this notice.)

EFFECTIVE DATE:

February 19, 2003.

FOR FURTHER INFORMATION CONTACT:

Douglas Kirby or Thomas Gilgunn, Office of AD/CVD Enforcement VII, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

Background

The Department published in the Federal Register an antidumping duty order on freshwater crawfish tail meat from the People's Republic of China on September 15, 1997. (See Notice of Amendment to Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Freshwater Crawfish Tail Meat from the People's Republic of China, 62 FR 48218.) On March 29, 2002 the Department received a properly filed request for a new shipper review, in accordance with section 751(a)(2)(B) of the Act and section 351.214(c) of the Department's regulations, from Weishan Zhenyu under the antidumping duty order on freshwater crawfish tail meat from the People's Republic of China.

The new shipper request was made pursuant to section 751(a)(2)(B) of the Act and section 351.214(b) of the Department's regulations. Under these provisions, an exporter or producer of the subject merchandise may request a new shipper review stating that it did not export the merchandise to the United States during the period of investigation (POI) and that such exporter or producer has never been affiliated with any exporter or producer who exported the subject merchandise during that period, including those not individually examined during the investigation. If the exporter or producer makes the statements required by the regulations, the Department shall conduct a new shipper review to establish an individual weighted-average dumping margin for such exporter or producer, if the Department has not previously established such a margin for the exporter or producer.

The regulations require that the exporter or producer shall include in its request, with appropriate certifications: (i) The date on which the merchandise was first entered, or withdrawn from warehouse, for consumption, or, if it cannot certify as to the date of first entry, the date on which it first shipped the merchandise for export to the United States, or if the merchandise has not yet been shipped or entered, the date of sale; (ii) a list of the firms with which it is affiliated; (iii) a statement from such exporter or producer, and from each affiliated firm, that it did not, under its current or a former name, export the merchandise during the POI; (iv) a certification that since the investigation was initiated, such exporter or producer has never been affiliated with any exporter or producer who exported the subject merchandise to the United States during the POI and; (v) in an antidumping proceeding involving inputs from a non-market-economy (NME) country, a certification that the export activities of such exporter or producer are not controlled by the central government. (See generally section 351.214(b)(2) of the Department's regulations.)

The request received from Weishan Zhenyu was accompanied by information and certifications establishing that it did not export the subject merchandise to the United States during the POI, and that it was not affiliated with any company which exported subject merchandise to the United States during the POI. Weishan Zhenyu provided information and certifications that demonstrated the date on which this company first shipped and entered freshwater crawfish tail meat for consumption in the United States, the volume of that and each subsequent shipment, and the date of first sale to an unaffiliated customer in the United States. In addition, Weishan Zhenyu certified that its export activities are not controlled by the central government.

The Department determined that the request met the requirements stipulated in section 351.214 of the regulations. On April 30, 2002, the Department published its initiation of this new shipper review for the period September 1, 2001, through February 28, 2002. (See Freshwater Crawfish Tail Meat From the People's Republic of China: Initiation of New Shipper Antidumping Administrative Review, 67 FR 21218 (April 30, 2002).)

On May 8, 2002 we issued a questionnaire to Weishan Zhenyu. On June 7, 2002, we received their section A questionnaire response. On June 24, 2002 we received their sections C and D questionnaire responses. On September 23, 2002, we issued a supplemental questionnaire to Weishan Zhenyu. We received the response to this questionnaire on October 7, 2002. On October 25, 2002, we issued a second supplemental questionnaire to Weishan Zhenyu. We received their response to the second supplemental on November 12, 2002. We issued a third supplemental questionnaire to Weishan Zhenyu on November 12, 2002. We received their response to the third supplemental questionnaire on November 18, 2002. On January 28, 2003, we requested information from the U.S. importer of Weishan Zhenyu's new shipper shipment. To date, we have not received a response to this request. Any information provided by the importer will be analyzed for purposes of the final results of this new shipper review.

On September 26, 2002, the Department extended the preliminary results of this new shipper review by 33 days until November 22, 2002. (See Freshwater Crawfish Tail Meat from the People's Republic of China: Notice of Extension of Time Limit of Preliminary Results of New Shipper Review, 67 FR 60640 (September 26, 2002).) On November 1, 2002, the Department extended the deadline for completion of the preliminary results of this new shipper review for an additional 83 days until February 13, 2003. (See Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty New Shipper Reviews: Freshwater Crawfish Tail Meat from the People's Republic of China, 67 FR 66613 (November 1, 2002).)

Scope of the Antidumping Duty Order

The product covered by this review is freshwater crawfish tail meat, in all its forms (whether washed or with fat on, whether purged or unpurged), grades, and sizes; whether frozen, fresh, or chilled; and regardless of how it is packed, preserved, or prepared. Excluded from the scope of the order are live crawfish and other whole crawfish, whether boiled, frozen, fresh, or chilled. Also excluded are saltwater crawfish of any type, and parts thereof. Freshwater crawfish tail meat is currently classifiable in the Harmonized Tariff Schedule of the United States (HTS) under item numbers 1605.40.10.10 and 1605.40.10.90, which are the new HTS numbers for prepared foodstuffs, indicating peeled crawfish tail meat and other, as introduced by the U.S. Customs Service in 2000, and HTS items 0306.19.00.10 and 0306.29.00, which are reserved for fish and crustaceans in general. The HTS subheadings are provided for convenience and Customs purposes only. The written description of the scope of this order is dispositive.

Verification

As provided in section 782(i) of the Act, we conducted verification of the questionnaire responses of Weishan Zhenyu. We used standard verification procedures, including on-site inspection of the manufacturers' facilities and the examination of relevant sales and financial records. Our verification results are outlined in the New Shipper Review of Freshwater Crawfish Tail Meat (tail meat) from the People's Republic of China (PRC) (A-570-848): Sales and Factors Verification Report for Weishan Zhenyu Foodstuff Co., Ltd., dated January 30, 2003. (Weishan Zhenyu Verification Report). A public version of this report is on file in the Central Records Unit (CRU) located in room B-099 of the Main Commerce Building.

Separate Rates

Weishan Zhenyu requested a separate, company-specific rate. In its questionnaire response, the company stated that it is an independent legal entity.

To establish whether a company operating in an NME country is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified 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 this policy, exporters in NMEs are entitled to separate, company-specific margins when they can demonstrate an absence of government control, in law and in fact, with respect to export activities. Evidence supporting, though not requiring, a finding of de jure absence of government control over export activities includes: (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) any other formal measures by the government decentralizing control of companies. De facto absence of government control over exports is based on four factors: (1) Whether each exporter sets its own export prices independently of the government and without the approval of a government authority; (2) whether each exporter retains the proceeds from its sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) whether each exporter has the authority to negotiate and sign contracts and other agreements; and (4) whether each exporter has autonomy from the government regarding the selection of management.

De Jure Control

With respect to the absence of de jure government control over the export activities of the company reviewed, evidence on the record supports the claim made by Weishan Zhenyu that its export activities are not controlled by the government. Weishan Zhenyu submitted evidence of its legal right to set prices independently of all government oversight. The business license of Weishan Zhenyu indicates that the company is permitted to engage in the exportation of crawfish. We found no evidence of de jure government control restricting this company's exportation of crawfish.

In general, no export quotas apply to crawfish. Prior verifications have confirmed that there are no commodity-specific export licenses required and no quotas for the seafood category “Other,” which includes crawfish, in China's Tariff and Non-Tariff Handbook for 1996. In addition, we have previously confirmed that crawfish is not on the list of commodities with planned quotas in the 1992 PRC Ministry of Foreign Trade and Economic Cooperation document entitled Temporary Provisions for Administration of Export Commodities. (See Freshwater Crawfish Tail Meat From The People's Republic of China; Preliminary Results of New Shipper Review, 64 FR 8543 (February 22, 1999) and Freshwater Crawfish Tail Meat From the People's Republic of China; Final Results of New Shipper Review, 64 FR 27961 (May 24, 1999) (Ningbo New Shipper Review).)

The Administrative Regulations of the People's Republic of China for Controlling the Registration of Enterprises as Legal Persons (Legal Persons Law), issued on June 13, 1988 by the State Administration for Industry and Commerce of the PRC and provided for the record of this review, indicates a lack of de jure government control over privately-owned companies, such as Weishan Zhenyu, and that control over this enterprise rests with the enterprise itself. The Legal Persons Law provides that, to qualify as legal persons, companies must have the “ability to bear civil liability independently” and the right to control and manage their businesses. These regulations also state that, as an independent legal entity, a company is responsible for its own profits and losses. (See Notice of Final Determination of Sales at Less Than Fair Value; Manganese Metal from the People's Republic of China, 60 FR 56045 (November 6, 1995) (Manganese Metal).) At verification, we saw that the business license for Weishan Zhenyu was granted in accordance with this law. The results of verification support the information provided regarding the Legal Persons Law. (See Weishan Zhenyu Verification Report, at 6.) Therefore, we preliminarily determine that there is an absence of de jure control over export activity with respect to Weishan Zhenyu.

De Facto Control

With respect to the absence of de facto control over export activities, the information submitted on the record and reviewed at verification, indicates that the management of Weishan Zhenyu is responsible for the determination of export prices, profit distribution, marketing strategy, and contract negotiations. Our analysis indicates that there is no government involvement in the daily operations or the selection of management for this company. In addition, we have found that the respondent's pricing and export strategy decisions are not subject to the review or approval of any outside entity, and that there are no governmental policy directives that affect these decisions.

There are no restrictions on the use of export earnings. The company general manager of Weishan Zhenyu has the right to negotiate and enter into contracts, and may delegate this authority to employees within the company. There is no evidence that this authority is subject to any level of governmental approval. Weishan Zhenyu stated that its management is selected by a board of directors and there is no government involvement in the selection process. Finally, decisions made by the respondent concerning purchases of subject merchandise from suppliers are not subject to government approval. Consequently, because evidence on the record indicates an absence of government control, both in law and in fact, over the company's export activities, we preliminarily determine that a separate rate should be applied to Weishan Zhenyu. For further discussion of the Department's preliminary determination regarding the issuance of separate rates, see Separate Rates Decision Memorandum to Dana Mermelstein, Program Manager, Office of AD/CVD Enforcement VII, dated February 12, 2003. A public version of this memorandum is on file in the Department's Central Record Unit (CRU).

Normal Value Comparisons

To determine whether the respondent's sale of the subject merchandise to the United States was made at a price below normal value, we compared its United States price to normal value, as described in the “United States Price” and “Normal Value” sections of this notice.

United States Price

For Weishan Zhenyu, we based the United States price on export price (EP) in accordance with section 772(a) of the Act, because the first sale to an unaffiliated purchaser was made prior to importation, and constructed export price (CEP) was not otherwise warranted by the facts on the record. We calculated EP based on the packed price from the exporter to the first unaffiliated purchaser in the United States. We deducted foreign inland freight and brokerage and handling expenses from the starting price (gross unit price) in accordance with section 772(c) of the Act.

Normal Value

Section 773(c)(1) of the Act provides that the Department shall determine normal value (NV) using a factors-of-production methodology if (1) the merchandise is exported from an NME country, and (2) available 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.

In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country. Pursuant to section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. Weishan Zhenyu did not contest such treatment in this review. Accordingly, we have applied surrogate values to the factors of production to determine NV. See Factor Values Memo for the Preliminary Results of the Antidumping Duty New Shipper Reviews of Freshwater Crawfish Tail Meat from the People's Republic of China, dated February 12, 2003 (Factor Values Memo).

We calculated NV based on factors of production in accordance with section 773(c)(4) of the Act and section 351.408(c) of our regulations. Consistent with the original investigation and the subsequent administrative reviews of this order, we determined that India (1) is comparable to the PRC in level of economic development, and (2) is a significant producer of comparable merchandise. With the exceptions of the whole live crawfish input and the crawfish scrap by-product, we valued the factors of production using publicly available information from India. We adjusted the Indian import prices by adding foreign inland freight expenses to make them delivered prices.

We valued the factors of production as follows:

To value the input of whole crawfish we used publicly available data showing Spanish imports of whole live crawfish from Portugal. We adjusted the values of whole live crawfish to include freight costs incurred between the supplier and the factory. For transportation distances used in the calculation of freight expenses on whole live crawfish, we added, to surrogate values from India, a surrogate freight cost using the shorter of (a) the distances between the closest PRC port and the factory, or (b) the distance between the domestic supplier and the factory. (See Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails From the People's Republic of China, 62 FR 51410 (October 1, 1997) (Roofing Nails).)

To value the by-product of wet crawfish scrap, we used a price quote from Indonesia for wet crab and shrimp shells. (See Surrogate Valuation of Shell Scrap: Freshwater Crawfish Tail Meat from the People's Republic of China (PRC), Administrative Review 9/1/00-8/31/01 and New Shipper Reviews 9/1/00-8/31/01 and 9/1/00-10/15/01, dated August 5, 2002.)

To value coal, we used the average 1996 total price of “steam coal for industry” as published in the International Energy Agency's publication, Energy Prices and Taxes, First Quarter, 2000. We adjusted the cost of coal to include an amount for transportation. To value electricity, we used the average of the 1997 total cost per kilowatt hour (KWH) for “Electricity for Industry” as reported in the International Energy Agency's publication, Energy Prices and Taxes, First Quarter, 2000. For water, we relied upon public information from the October 1997 Second Water Utilities Data Book: Asian and Pacific Region, published by the Asian Development Bank.

To achieve comparability of energy and water prices to the factors reported for the crawfish tail meat processing period applicable to the company under review, we adjusted these factor values to reflect inflation to the applicable crawfish processing season during the POR using the Wholesale Price Index (WPI) for India, as published in the 2002 International Financial Statistics (IFS) by the International Monetary Fund (IMF).

To value packing materials (plastic bags, cardboard boxes and adhesive tape), we relied upon Indian import data for the period April 2000 through January 2001 as reported in the Monthly Statistics of the Foreign Trade of India (Monthly Statistics). We adjusted these prices to reflect inflation to the crawfish processing season during the POR. We adjusted the values of packing materials to include freight costs incurred between the supplier and the factory. For transportation distances used in the calculation of freight expenses on packing materials, we added, to surrogate values from India, a surrogate freight cost using the shorter of (a) the distances between the closest PRC port and the factory, or (b) the distance between the domestic supplier and the factory. (See Roofing Nails.)

To value factory overhead, selling, general, and administrative expenses (SG&A), and profit, we continued to use simple average derived from the publicly available 1996-97 financial statements of four Indian seafood processing companies. We applied these rates to the calculated cost of manufacture. (See Factor Values Memo, at 6.)

For labor, we used the PRC regression-based wage rate at Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in September 2002, and corrected in February 2003. Because of the variability of wage rates in countries with similar per capita gross domestic products, section 351.408(c)(3) of the Department's regulations requires the use of a regression-based wage rate. The source of these wage rate data on the Import Administration's web site is the Year Book of Labour Statistics 2000, International Labour Office (Geneva: 1998), Chapter 5: Wages in Manufacturing.

We valued movement expenses as follows: To value truck freight expenses we used seventeen price quotes from six different Indian trucking companies which were used in the antidumping investigation of Bulk Aspirin from the People's Republic of China, 65 FR 33805 (May 25, 2000). We adjusted the rates to reflect inflation to the month of sale of the finished product using the WPI for India from the International Financial Statistics (IFS) by the International Monetary Fund (IMF).

Currency Conversion

We made currency conversions pursuant to section 351.415 of the Department's regulations at the rates certified by the Federal Reserve Bank.

Preliminary Results of Review

We preliminarily determine that the following dumping margin exists:

Manufacturer and exporter	Time period	Margin (percent)
Weishan Zhenyu Foodstuff Co., Ltd.	9/1/01-2/28/02	0.00

Cash-Deposit Requirements

If these preliminary results are not modified in the final results of this review, a cash deposit rate of zero will be effective upon publication of the final results of this new shipper review for all shipments of freshwater crawfish tail meat from the PRC produced and exported by Weishan Zhenyu and entered, or withdrawn from warehouse, for consumption on or after publication date, as provided for by section 751(a)(2)(C) of the Act. The cash deposit rate for shipments produced and exported by Weishan Zhenyu will be the total amount of antidumping duties divided by the total quantity exported during the POR. This per kilogram cash deposit rate will be equivalent to the company-specific dumping margin rate established in this review. For crawfish tail meat exported, but not produced, by Weishan Zhenyu, we will apply as the cash deposit rate the PRC-wide rate, which is currently 223.01 percent. (See memorandum to file dated August 5, 2002, which places on the record of this review the “Memorandum to Barbara E. Tillman through Maureen Flannery, from Mark Hoadley: Collection of Cash Deposits and Assessment of Duties on Freshwater Crawfish from the PRC, dated August 27, 2001”.)

Assessment Rates

Upon completion of this new shipper review, the Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to the U.S. Customs Service upon completion of this review. For assessment purposes, we calculated importer-specific assessment rates for freshwater crawfish tail meat from the PRC. We divided the total dumping margins (calculated as the difference between NV and EP) for the importer by the total quantity of subject merchandise sold to that importer during the POR. Upon the completion of this review, we will direct Customs to assess the resulting quantity-based rates against the weight in kilograms of each entry of the subject merchandise by the importer during the POR. For crawfish tail meat produced and exported by Weishan Zhenyu, we will assess antidumping duties on a per kilogram basis equivalent to the company-specific cash deposit rate established in this review.

Schedule for Final Results of Review

The Department will disclose calculations performed in connection with the preliminary results of this review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Any interested party may request a hearing within 30 days of publication of this notice in accordance with § 351.310(c) of the Department's regulations. Any hearing would normally be held 37 days after the publication of this notice, or the first workday thereafter, at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Individuals who wish to request a hearing must submit a written request within 30 days of the publication of this notice in the Federal Register to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Requests for a public hearing should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and, (3) to the extent practicable, an identification of the arguments to be raised at the hearing.

Unless otherwise notified by the Department, interested parties may submit case briefs within 30 days of the date of publication of this notice in accordance with 351.309(c)(ii) of the Department's regulations. As part of the case brief, parties are encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Rebuttal briefs, which must be limited to issues raised in the case briefs, must be filed within five days after the case brief is filed. If a hearing is held, an interested party may make an affirmative presentation only on arguments included in that party's case brief and may make a rebuttal presentation only on arguments included in that party's rebuttal brief. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

The Department will issue the final results of this new shipper review, which will include the results of its analysis of issues raised in the briefs, within 90 days from the date of the preliminary results, unless the time limit is extended.

Notification to Importers

This notice also serves as a preliminary reminder to importers of their responsibility under 351.402(f) of the Department's regulations to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during these review periods. 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.

This new shipper review and this notice are published in accordance with sections 751(a)(2)(B) and 777 (i)(1) of the Act.

Dated: February 12, 2003.

Faryar Shirzad,

Assistant Secretary for Import Administration.