[Federal Register Volume 64, Number 34 (Monday, February 22, 1999)]
[Notices]
[Pages 8543-8547]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-4308]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-848]
Freshwater Crawfish Tail Meat From The People's Republic of
China; Preliminary Results of New Shipper Review
AGENCY: Import Administration, International Trade Administration, U.S.
Department of Commerce.
ACTION: Notice of preliminary results of new shipper review: freshwater
crawfish tail meat from the People's Republic of China.
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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 by a PRC exporter of subject merchandise, Ningbo Nanlian Frozen
Foods Company, Ltd. (NNL). This review covers shipments of this
merchandise to the United States during the period of September 1, 1997
through March 31, 1998.
We have preliminarily determined that sales have been made below
normal value (NV). If these preliminary results are adopted in our
final results, we will instruct the U.S. Customs Service to assess
antidumping duties based on the difference between the constructed
export price (CEP) and NV.
EFFECTIVE DATE: February 22, 1999.
FOR FURTHER INFORMATION CONTACT: Michael Strollo, Laurel LaCivita, or
Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import
Administration, International Trade Administration, U.S. Department of
Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C.
20230; telephone (202) 482-4733.
Applicable Statute
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (the Act) by the
Uruguay Round Agreements Act. In addition, unless otherwise indicated,
all citations to the Department's regulations are to the provisions
codified at 19 CFR part 351 (April 1998).
Background
The Department published in the Federal Register an antidumping
duty order on freshwater crawfish tail meat from the PRC on September
15, 1997 (62 FR 48218). On March 27, 1998, the Department received a
request from NNL for a new shipper review pursuant to section
751(a)(2)(B) of the Act and Sec. 351.214(b) of the Department's
regulations. These provisions state that, if the Department receives a
request for review from an exporter or producer of the subject
merchandise stating that it did not export the merchandise to the
United States during the period covered by the original less-than-fair-
value (LTFV) investigation (the POI) and that such exporter or producer
is not affiliated with any exporter or producer who exported the
subject merchandise during that period, 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, and (iv) in an antidumping
proceeding involving inputs from a nonmarket economy country, a
certification that the export activities of such exporter or producer
are not controlled by the central government. See 19 CFR 351.214(b)(ii)
and (iii). NNL's request was
[[Page 8544]]
accompanied by information and certifications establishing the
effective date on which it first shipped and entered freshwater
crawfish tail meat. NNL also claims it had no affiliated companies
which exported freshwater crawfish tail meat from the PRC during the
POI. In addition, NNL certified that its export activities are not
controlled by the central government. Based on the above information,
the Department initiated a new shipper review covering NNL (Freshwater
Crawfish Tail Meat from the People's Republic of China: Initiation of
New Shipper Antidumping Duty Administrative Review (63 FR 25449, May 8,
1998)).
Due to extraordinarily complicated issues in this case, the
Department extended the deadline for completion of the new shipper
review on August 18, 1998. See Freshwater Crawfish Tail Meat from the
People's Republic of China: Extension of Time Limits for Preliminary
Results of New Shipper Antidumping Administrative Review, 63 FR 45044
(August 24, 1998). The Department published a second extension on
January 6, 1999. See Freshwater Crawfish Tail Meat from the People's
Republic of China: Extension of Time Limits for Preliminary Results of
New Shipper Antidumping Administrative Review, 64 FR 851 (January 6,
1999).
Scope of Review
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 0306.19.00.10 and 0306.29.00.00.
The HTS subheadings are provided for convenience and Customs purposes
only. The written description of the scope of this order is
dispositive.
This review covers the period September 1, 1997 through March 31,
1998.
Verification
As provided in section 782(i) of the Act, we verified information
provided by NNL, its affiliated producer, Yinxian No. 2 Freezing
Factory (Y2FF), and its U.S. affiliate, Louisiana Packing (LP), using
standard verification procedures, including on-site inspection of the
manufacturer's facilities and the examination of relevant sales and
financial records. Our verification results are outlined in the public
version of the verification reports.
Separate Rates
To establish whether a company operating in a nonmarket economy
country is sufficiently independent to be entitled to a separate rate,
the Department analyzes each exporting entity 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), as amplified by the 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 non-market
economies (NMEs) are entitled to separate, company-specific margins
when they can demonstrate an absence of government control, both 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.
With respect to the absence of de jure government control over
export activities, evidence on the record indicates that NNL and its
PRC parent company, Y2FF, are not controlled by the government. NNL
submitted evidence of its legal right to set prices independent of all
government oversight. NNL's business license indicates that NNL is
permitted to engage in the exportation of crawfish. No export quotas
apply to crawfish and an export license is not required for exports of
the subject merchandise to the United States. At verification, we also
confirmed that for the seafood category ``Other'' in the China's Tariff
and Non-Tariff Handbook for 1996 and 1997 (exhibit 26A), which includes
crawfish, there are no import licenses required and no quotas. We
confirmed that crawfish was not on the list of commodities with planned
quotas in the 1992 MOFTEC document entitled Temporary Provisions for
Administration of Export Commodities.
The Administrative Regulations of the People's Republic of China
for Controlling the Registration of Enterprises as Legal Persons (Legal
Persons Regulations), issued on July 13, 1988 by the State
Administration for Industry and Commerce of the PRC, provide 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 56046
(November 6, 1995) (Manganese Metal). Article 203 of the Company Law of
the People's Republic of China (Company Law) states that a foreign
company (such as NNL) shall bear civil responsibility for the
operational activities of its branch organization in China. At
verification, we verified that NNL's business license was established
in accordance with the Company Law. Therefore, we determine that NNL is
an independent legal person.
With respect to the absence of de facto control over export
activities, Y2FF's and NNL's management is responsible for all
decisions such as the determination of its export prices, profit
distribution, marketing strategy, and contract negotiations. We found
no government involvement in the daily operations of NNL, in the
selection of management for NNL, or in the operations or management of
any of NNL's and Y2FF's affiliates. For more information, see Separate
Rate Analysis in the New Shipper Review of Freshwater Crawfish Tail
Meat from the People's Republic of China dated February 11, 1999
(Separate Rates Memorandum), which is on file in the Central Records
Unit (room B099 of the Main Commerce Building).
Because evidence on the record demonstrates an absence of
government control, both in law and in fact, over NNL's export
activities, the Department preliminarily determines that NNL is
entitled to a separate rate. For further discussion of the Department's
[[Page 8545]]
preliminary determination that NNL is entitled to a separate rate, see
Separate Rates Memorandum.
Fair Value Comparisons
To determine whether respondent's sales of the subject merchandise
to the United States were made at LTFV, we compared its United States
price to NV, as described in the ``United States Price'' and ``Normal
Value'' sections of this notice.
United States Price
For sales made by NNL, we based United States price on CEP in
accordance with section 772(b) of the Act, because the sales to
unaffiliated purchasers were made after importation. We calculated CEP
based on packed prices from the U.S. affiliate's warehouse to the first
unaffiliated purchaser in the United States. We made the following
deductions from the starting price (gross unit price): foreign inland
freight, international (ocean) freight, U.S. customs duty, brokerage
and handling expenses, the affiliated purchaser's U.S. credit expenses,
the affiliated purchaser's indirect selling expenses, and CEP profit.
See sections 772(c) and (d) of the Act. Because U.S. customs duty,
brokerage and handling expenses, credit expenses and indirect selling
expenses were incurred by a U.S. affiliate in a market-economy currency
(U.S. dollars), we used actual costs rather than surrogate values to
value these deductions to gross unit price. Consistent with the
original investigation, for all other expenses not incurred in U.S.
dollars, we used India as a surrogate country. We valued movement
expenses as follows:
To value truck freight, we used the rates reported in an
April 20, 1994 newspaper article in the ``Times of India'' and
submitted for the Final Determination of Sales at Less Than Fair Value:
Polyvinyl Alcohol From the People's Republic of China, 60 FR 52647
(October 10, 1995). We adjusted the rates to reflect inflation through
the period of review (POR) using wholesale price indices (WPI) for
India in the International Financial Statistics (IFS) published by the
International Monetary Fund (IMF).
To value brokerage and handling in the home market, we
used information reported in the antidumping administrative review of
Stainless Steel Wire Rod from India, 63 FR 48184 (September 9, 1998).
For further discussion see Memorandum to the File from Mike Strollo:
Valuation of Foreign Brokerage and Handling for the New Shipper Review
of Freshwater Crawfish Tail Meat from the People's Republic of China,
dated February 12, 1999. We used the average of the foreign brokerage
and handling expenses reported in the questionnaire response of the
U.S. sales listing submitted. This average value was used in the
antidumping review of Viraj Impoexpo for the period February 1997
through January 1998 and charges were reported on a per metric ton
basis.
To value ocean freight, we obtained publicly available
price quotes from Sea Land Services for shipping frozen crawfish tail
meat from the PRC to Long Beach, California in the United States. See
Memorandum to the File from Mike Strollo: Ocean Freight Rates for the
New Shipper Review of Freshwater Crawfish Tail Meat from the People's
Republic of China, dated February 9, 1999. To adjust this rate to the
POR, we used the closest corresponding monthly WPI and the WPI average
for the POR.
Normal Value
For companies located in NME countries, section 773(c)(1) of the
Act provides that the Department shall determine 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. NNL has not contested such treatment in this
review. Accordingly, we have applied surrogate values to the factors of
production to determine NV.
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, we determined that India
(1) is comparable to the PRC in terms of level of economic development,
and (2) is a significant producer of comparable merchandise. With the
exception of the crawfish input, we valued the factors of production
using publicly available information from India. See Memorandum to
Edward Yang through Maureen Flannery from the Crawfish Team,
Antidumping Investigation of Freshwater Crawfish Tail Meat from the
People's Republic of China: Factor Values and Preliminary Margin
Calculations, dated March 19, 1997 and placed on the record of this
review. For the crawfish input, we used Spanish import statistics for
crawfish imported from Portugal. See Memorandum to Joseph Spetrini from
Edward Yang, New Shipper Review of Freshwater Crawfish Tail Meat from
the People's Republic of China: Determination of Surrogate Country
Selection for Crawfish Input, dated February 16, 1999, and Memorandum
to Edward Yang through Maureen Flannery from Michael Strollo, New
Shipper Review of Freshwater Crawfish Tail Meat from the People's
Republic of China: Factor Values Memorandum (Factors Memorandum), dated
February 11, 1999. We used import prices to value many factors. As
appropriate, we adjusted import prices by adding freight expenses to
make them delivered prices. For a complete analysis of surrogate
values, see the Factors Memorandum.
We valued the factors of production as follows:
To value whole crawfish, we used the average Spanish
import price for fresh (not frozen) crawfish imported from Portugal. In
order to factor out seasonal fluctuations in price, we valued whole
crawfish using data from the calendar year 1997. Spanish import data
show insignificant amounts of crawfish from other countries at
aberrational prices and, therefore, it would not be appropriate to
include these data in the calculation of the crawfish cost. These data
are publicly available and are published by the Spanish Ministry of
Customs in Madrid. Since the factors of production were reported from
May through August 1997, we did not inflate this factor value. See the
Factors Memorandum for further discussion.
To value the by-product of shells and body parts unfit for
exportation (non-export quality crawfish), we used Indian import price
data for the HTS category ``shells of mollusks, crustaceans, and
echinoderms,'' from the March through August 1997 issues of Monthly
Statistics of the Foreign Trade of India (Monthly Statistics). Since
the factors were reported for the period May through August 1997, we
did not inflate this factor.
To value coal and electricity we used data reported as the
average Indian domestic prices within the categories of ``Steam Coal
for Industry'' and ``Electricity for Industry,'' published in the
International Energy Agency's publication, Energy Prices and Taxes,
First Quarter, 1998. We adjusted the cost of coal to include an amount
for transportation. For water, we relied upon public information from
the November 1993 Water Utilities Data Book: Asian and Pacific Region,
[[Page 8546]]
published by the Asian Development Bank. To achieve comparability of
the energy and water prices to the factors reported for the period May
through August 1997, we adjusted these factor values to reflect
inflation through this period.
To value plastic bags, cardboard boxes and adhesive tape,
we relied upon Indian import data from the March through August 1997
issues of Monthly Statistics. We adjusted the values of packing
materials to include freight costs incurred between the supplier and
NNL. For transportation distances used for the calculation of freight
expenses on raw 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 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). Since
the factors were reported for the period May through August 1997, we
did not inflate these factor values.
To value factory overhead, selling, general, and
administrative expenses (SG&A), and profit, we calculated simple
average rates using publicly available financial statements of three
Indian seafood processing companies submitted in the original
investigation for which there were more current data, and applied these
rates to the calculated cost of manufacture. See Factors Memorandum.
For labor, we used the PRC regression-based wage rate at
Import Administration's homepage, Import Library, Expected Wages of
Selected NME Countries, revised on June 2, 1997. See http://
www.ita.doc.gov/import__admin/records/wages. Because of the variability
of wage rates in countries with similar per capita GDPs, 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 webpage is found in the 1996 Year Book of
Labour Statistics, International Labour Office (Geneva: 1996), Chapter
5B: Wages in Manufacturing.
Request for Comment
In the course of this review, both petitioners and respondent have
made various arguments regarding the Department's valuation of whole,
live crawfish, the primary input in the production of freshwater
crawfish tail meat. Petitioners advocate the continued use of Spanish
import prices from Portugal. The Department determined that this was
the best publicly available information available during the
investigation. In this new shipper review, respondent has argued that
the Department should instead value whole, live crawfish using U.S.
price data it has placed on the record. The Department has
preliminarily determined that Spanish import prices from Portugal are
the most appropriate means of valuing live crawfish for these
preliminary results. However, due to the significance of this issue and
the conflicting arguments on the record, we will carefully consider any
new factual information regarding the valuation of whole, live crawfish
that parties may place on the record within twenty days of the date of
publication of these preliminary results. Moreover, we encourage
parties to make additional argument on this issue in their case briefs
so that this issue can be fully addressed in a public hearing, should
one be requested.
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:
------------------------------------------------------------------------
Margin
Manufacturer/exporter Time period (percent)
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Ningbo Nanlian Frozen Foods Co., Ltd. 09/01/97-03/31/98 4.70
------------------------------------------------------------------------
Parties to the proceeding may request disclosure within 5 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 in accordance with 19 CFR 351.310(c). Any hearing, if
requested, will be held 37 days after the publication of this notice,
or the first workday thereafter. Interested parties may submit case
briefs within 30 days of the date of publication of this notice in
accordance with 19 CFR 351.309(b)(2)(ii). Rebuttal briefs, which must
be limited to issues raised in the case briefs, may be filed not later
than 35 days after the date of publication. The Department will publish
a notice of final results of this new shipper review, which will
include the results of its analysis of issues raised in any such
comments.
The Department shall determine, and the U.S. Customs Service shall
assess, antidumping duties on all appropriate entries.
Furthermore, the following deposit rate 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 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 NNL,
which has a separate rate, the cash deposit rate will be 4.70 percent;
(2) for previously-reviewed PRC and non-PRC exporters with separate
rates, the cash deposit rate will be the company-specific rate
established for the most recent period; and (3) for all other PRC
exporters, the rate will be the PRC country-wide rate, 201.63 percent;
and (4) for non-PRC exporters of subject merchandise from the PRC, the
cash deposit rate will be the rate applicable to the PRC supplier of
that exporter. See the 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, dated September
15, 1997.
These deposit rates, when imposed, shall remain in effect until
publication of the final results of the next administrative review.
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) 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 occurred and the subsequent
assessment of double antidumping duties.
This determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
[[Page 8547]]
Dated: February 16, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-4308 Filed 2-19-99; 8:45 am]
BILLING CODE 3510-DS-P
