[Federal Register Volume 62, Number 84 (Thursday, May 1, 1997)]
[Notices]
[Pages 23758-23760]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-11383]
[[Page 23758]]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-831]
Fresh Garlic From the People's Republic of China; Final Results
of Antidumping Duty Administrative Review and Partial Termination of
Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of Final Results of Antidumping Duty Administrative
Review and Partial Termination of Administrative Review.
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SUMMARY: On December 27, 1996, the Department of Commerce published the
preliminary results and partial termination of administrative review of
the antidumping order on fresh garlic from the People's Republic of
China. The review covers 159 producers/exporters of subject
merchandise. The period of review is July 11, 1994, through October 31,
1995.
We gave interested parties an opportunity to comment on the
preliminary results. Our analysis of the comments we received resulted
in no change in our preliminary results for these final results. The
final dumping margin is listed below the section entitled ``Final
Results of the Review.''
EFFECTIVE DATE: May 1, 1997.
FOR FURTHER INFORMATION CONTACT: Andrea Chu or Thomas O. Barlow, Office
of AD/CVD Enforcement, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4733.
SUPPLEMENTAL INFORMATION:
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's regulations are
to the current regulations, as amended by the interim regulations
published in the Federal Register on May 11, 1995 (60 FR 25130).
Background
On December 27, 1996, we published the preliminary results and
partial termination of administrative review (61 FR 68229) of the
antidumping duty order on fresh garlic from the PRC (November 16, 1994,
59 FR 59209). Because we determined that (1) The review of Top Pearl
should be terminated, and (2) the other PRC producers/exporters failed
to submit responses to our questionnaires, we preliminarily determined
to use facts otherwise available for cash deposit and assessment
purposes for all PRC producers/exporters of the subject merchandise. We
invited parties to comment on our Preliminary Results. We received
comments from Top Pearl and a rebuttal brief on behalf of petitioners.
A hearing was requested by Top Pearl but was subsequently canceled at
its request. We have conducted this administrative review in accordance
with section 751 of the Act.
Scope of the Review
The products subject to this antidumping duty order are all grades
of garlic, whole or separated into constituent cloves, whether or not
peeled, fresh, chilled, frozen, provisionally preserved, or packed in
water or other neutral substance, but not prepared or preserved by the
addition of other ingredients or heat processing. The differences
between grades are based on color, size, sheathing and level of decay.
The scope of this order does not include: (a) garlic that has been
mechanically harvested and that is primarily, but not exclusively,
destined for non-fresh use; or (b) garlic that has been specially
prepared and cultivated prior to planting and then harvested and
otherwise prepared for use as seed.
The subject merchandise is used principally as a food product and
for seasoning. The subject garlic is currently classifiable under
subheadings 0703.20.0000, 0710.80.7060, 0710.80.9750, 0711.90.6000, and
2005.90.9500 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheadings are provided for convenience
and customs purposes, our written description of the scope of this
proceeding is dispositive.
In order to be excluded from the antidumping duty order, garlic
entered under the HTSUS subheadings listed above that is (1)
Mechanically harvested and primarily, but not exclusively, destined for
non-fresh use or (2) specially prepared and cultivated prior to
planting and then harvested and otherwise prepared for use as seed must
be accompanied by declarations to the Customs Service to that effect.
Analysis of Comments Received
Comment 1: Top Pearl disagrees with the Department's preliminary
determination that Top Pearl is not the appropriate respondent for this
review. It asserts that the issue before the Department is whether
Shandong Wallong Import & Export Co. (Wallong) knew the destination of
the merchandise at the time of the sale between Wallong and Top Pearl
and argues that the sales process and evidence on record demonstrate
that Wallong did not know the destination at the time of sale.
Top Pearl presents a chronology of the sales process to support its
position that Wallong did not know the destination of the merchandise
at the time of sale and argues that it is the Department's practice to
give the original exporter a margin only if the exporter knew or had
reason to know at the time of sale the destination of the shipment
(citing Final Determination of Sales at Less Than Fair Value: Manganese
Sulfate From the People's Republic of China, 60 FR 52155 (October 5,
1995) (Manganese), and Notice of Final Determination of Sales at Less
Than Fair Value; Polyvinyl Alcohol From the People's Republic of China,
62 FR 14063 (March 29, 1996) (PVA). Top Pearl asserts that, although
certain documents in Manganese indicated the United States as the
destination of the shipment, that was not sufficient to demonstrate
that respondent had knowledge of the ultimate destination at the time
of sale. Top Pearl further asserts that in PVA the Department excluded
sales to a Hong Kong trading company where none of the sales documents
showed information to identify the United States as the ultimate
destination at the time of sale and prior to shipment.
Top Pearl claims that none of the sales contracts between Top Pearl
and Wallong make any reference to the destination of the sale and that,
at the time Top Pearl made the sale to the U.S. customer, Wallong did
not know of the sale. Top Pearl further claims that when it contracted
with Shangdong Huangpu Group Corporation (Huangpu), a Chinese garlic
producer, neither Huangpu nor Wallong knew the destination of the
merchandise. Top Pearl notes that only after the sale was made did Top
Pearl instruct Wallong to change the terms of sale to indicate a U.S.
port. Top Pearl argues that, like Manganese, the invoice made by
Wallong to Top Pearl does not prove Wallong knew the destination
because it was issued after Top Pearl's sale to the U.S. customer and
after Top Pearl's purchase from Wallong. Top Pearl further argues that,
like PVA, none of the sales documents on record show information
identifying the United States as the ultimate destination of the
[[Page 23759]]
merchandise. Top Pearl concludes, therefore, that the Department should
calculate an individual margin for Top Pearl since Wallong did not know
the destination of the shipment at the time of sale.
Petitioners assert that it is clear that Wallong sold the garlic to
Top Pearl and that this sale meets the requirements of section 772(a)
of the Act. Petitioners maintain that it was appropriate to treat
Wallong's sale to Top Pearl as a U.S. sale, given that the Department
must examine the sale from the non-market economy (NME) exporter to the
intermediate-country reseller (citing the Department's November 22,
1996, memorandum, Partial Termination of 1994-95 Administrative Review
of Fresh Garlic from the PRC, (termination memo). Petitioners claim
that the date of sale is the date upon which the essential terms of
price and quantity become fixed by agreement of the parties and remain
unchanged (citing PVA from Taiwan, 61 FR 14064, 14067-68 and Stainless
Steel Bar from India, 62 FR 4029 (1997) (Stainless Bar)).
Petitioners maintain that the record evidence establishes that the
date Wallong invoiced Top Pearl, and thereby confirmed the revised
terms of sale, is the actual date of sale between Wallong and Top
Pearl. Petitioners claim, therefore, Top Pearl's statement that the
invoice was issued after the date of sale is incorrect, given that the
invoice established the date of sale.
Petitioners also maintain that additional record evidence
demonstrates that Wallong knew the destination of the merchandise at
the time of sale. Petitioners note that correspondence between Top
Pearl and Wallong and the invoice issued by Wallong indicate the United
States as the destination, contrary to Top Pearl's assertion that none
of the contracts with Wallong make reference to the destination of the
sale. Petitioners also note that Top Pearl's questionnaire and
supplemental responses indicate that, as exporter of the merchandise,
Wallong supplied destination-specific export documents which alone show
it had knowledge of the destination prior to sale (also citing Certain
Headwear from the People's Republic of China, 54 FR 11983, 11987-88
(1989)).
Department's Position: We fully addressed the issue of the proper
respondent in reseller or ``middleman'' sales situations in our
termination memo. As we stated in the memo, section 772(a) of the Act
permits us to use the price from a producer to a middleman if the
producer knew the merchandise was intended for sale to the United
States under terms of sale fixed on or before the date of importation
(see termination memo at 2-3). We further stated that we have
interpreted the relevant price in such a sales situation to be the
price at which the first party in the chain of distribution who has
knowledge of the U.S. destination sells the merchandise. However, we
explained that this practice is restricted with regard to NME cases,
since we will not base export price on internal transactions between
two companies located in the NME country.
Applying these principles to the facts of this case, we determined
that, although Huangpu had knowledge of the U.S. destination of the
merchandise and is the first party in the distribution chain, its
transaction with Wallong was an internal transaction between two
companies located in an NME country and inappropriate for review. We
further determined that the party after Huangpu in the distribution
chain is Wallong and that there was ample evidence to indicate that
Wallong had knowledge of the U.S. destination of the merchandise when
it sold the merchandise to Top Pearl. Therefore, our determinations
remain unchanged for these final results.
As indicated above, the appropriate starting point for application
of our knowledge test is the transaction between Wallong and Top Pearl
because the sale from Wallong to Top Pearl is the first market-based
sale in the chain of distribution for export to the United States.
Based on the evidence of record, the essential terms of the transaction
between Top Pearl and Wallong were established no earlier than June 30,
1994, when Top Pearl advised Wallong of new delivery terms and price
which subsequently did not change. It is also clear from the record
that by this date Wallong had knowledge that the destination of the
merchandise was the United States (see June 30, 1994 letter from Top
Pearl to Wallong). In this case it is irrelevant that the invoice from
Wallong was issued after the date of sale because Wallong had knowledge
of the destination when the parties finally agreed on the essential
terms, as evidenced by the fact that the transaction was ultimately
consummated according to those terms. Top Pearl erroneously argues that
the few documents to which it refers in Manganese were determinative of
the Department's decision not to treat the sale in question as a U.S.
sale; all of the relevant sales documents in that case failed to
disclose the United States as the ultimate destination. In addition,
the record in this case indicates that Wallong knew the destination
prior to invoicing Top Pearl and shipping the merchandise. Our decision
in PVA is in accord with our actions here, given that in this case the
documents indicate the United States as the destination of the
merchandise. Because the sale from Wallong to Top Pearl is the first
market-based sale in the chain of distribution for export to the United
States, we have maintained our position that the export transaction by
Wallong to Top Pearl, not by Top Pearl to the unaffiliated U.S.
customer, is the appropriate basis for determining the export price and
that, accordingly, Top Pearl is not an appropriate respondent in this
review.
Finally, we disagree with Top Pearl that we should assign it a
separate rate. Because Top Pearl is not a proper respondent in this
review, the issue is moot.
Comment 2: Top Pearl claims that if the Department had questions
concerning the sales process it could have sent a supplemental
questionnaire and conducted a verification to resolve such matters.
Petitioners assert that there is no basis for verification because
the documents that form the basis for the Department's preliminary
results are clear on their face and conclusively establish that,
because Wallong sold the garlic to Top Pearl knowing it was destined
for the United States, Top Pearl is not the appropriate respondent in
this review.
Department's Position: Our decision to terminate the review with
regard to Top Pearl was based on record evidence supplied by Top Pearl.
We have no reason to dispute the veracity or reliability of the
information and find it sufficient to support our position that it is
inappropriate to review Top Pearl's transaction with the U.S. customer.
In addition, contrary to respondent's claim, on March 29, 1996, we
sent a supplemental questionnaire to Top Pearl. In the supplemental
questionnaire, we inquired about Top Pearl's organizational structure
and export licenses, as well as sales process, specifically with
respect to Huangpu's and Wallong's knowledge of the destination of the
subject merchandise. We did not send additional questionnaires to Top
Pearl as we determined that Top Pearl is not the appropriate respondent
in this review.
Final Results of the Review
As a result of our review, we determine that a margin of 376.67
percent exists for all producers/exporters of the subject merchandise
from the PRC for the period July 11, 1994 through October 31, 1995.
The Department shall determine, and the Customs Service shall
assess,
[[Page 23760]]
antidumping duties on all appropriate entries. The Department will
issue appraisement instructions directly to the Customs Service.
Furthermore, the following cash deposit requirements will be
effective upon publication of these final results for all shipments of
the subject merchandise entered, or withdrawn from warehouse, for
consumption on or after the publication date, as provided for by
section 751(a)(1) of the Act: (1) for all PRC exporters, all of which
were found not to be entitled to separate rates, the cash deposit will
be 376.67 percent; and (2) for other 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. These deposit
requirements shall remain in effect until publication of the final
results of the next administrative review.
This notice serves as a reminder to importers of their
responsibility under 19 CFR 353.26 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 notice also serves as a reminder to parties subject to
administrative protective orders (APO) of their responsibility
concerning disposition of proprietary information disclosed under APO
in accordance with 19 CFR 353.34(d). Timely written notification of the
return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: April 25, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-11383 Filed 4-30-97; 8:45 am]
BILLING CODE 3510-DS-P
