E9-14358. Fresh Garlic From the People's Republic of China: Final Results and Partial Rescission of the 13th Antidumping Duty Administrative Review and New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (Department) is conducting the administrative review (AR) and new shipper reviews (NSRs) of the antidumping duty order on fresh garlic from the People's Republic of China (PRC) covering the period of review (POR) of November 1, 2006 through October 31, 2007. As discussed below, we determine that sales have been made in the United States at prices below normal value (NV) with respect to certain exporters who participated fully and are entitled to a separate rate in the AR or NSRs. In addition, we are rescinding the NSRs for two companies. Finally, the Department is rescinding the antidumping duty AR of companies that timely certified that they had no shipments of subject merchandise to the United States during the POR. We intend to instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties on entries of subject merchandise during the POR for which importer-specific assessment rates are above de minimis.

DATES:

Effective Date: June 19, 2009.

FOR FURTHER INFORMATION CONTACT:

Scott Lindsay, Nicholas Czajkowski, or Summer Avery, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington DC 20230; telephone: [phone], and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On December 8, 2008, the Department published in the Federal Register the preliminary results of the AR and NSRs of the antidumping duty order on fresh garlic from the PRC. See Fresh Garlic from the People's Republic of China: Preliminary Results of the Antidumping Duty Administrative and New Shipper Reviews and Intent to Rescind, in Part, the Antidumping Duty Administrative and New Shipper Reviews, 73 FR 74462 (December 8, 2008) (Preliminary Results). Since the Preliminary Results, the following events have occurred.

Shandong Chenhe International Trading Co., Ltd. (Chenhe) filed letters on December 12 and December 31, requesting that the Department rescind this AR with respect to Chenhe and remove it from the list of companies subject to the PRC-wide rate, as determined in the Preliminary Results. On December 15, Shenzhen Greening Trading Co., Ltd. (Greening) also filed a letter seeking removal from the list of companies subject to the PRC-wide rate and revised publication of the Preliminary Results. On December 18, the Department notified parties that case briefs would be due seven days after the last verification report was issued. On December 19 and 23, the Fresh Garlic Producers Association (FGPA) and its individual members (Christopher Ranch LLC, the Garlic Company, Valley Garlic, and Vessey and Company, Inc.) (collectively, Petitioners), filed letters in response to those filed by Chenhe and Greening. On January 14, 2009, Petitioners filed additional surrogate value information.

On February 26, the Department extended the time limit for completion of the final results of this administrative review by 60 days. See Fresh Garlic from the People's Republic of China: Extension of Time Limits for Final Results of the Antidumping Duty Administrative Review and New Shipper Reviews, 74 FR 8774 (February 26, 2009).

On March 18, the Department issued a memorandum proposing, and inviting interested parties to comment in their case briefs on, revised assessment and cash deposit methodologies with respect to the separate rate companies and PRC-wide entity in these reviews. See Letter to All Interested Parties Re: The 2006/2007 Administrative Review of Garlic from the People's Republic of China (March 18, 2009) (Per Unit Memorandum).

The Department conducted verification of the AR and NSR respondents from March 2 through March 14. On April 20 and 21, the Department issued its verification reports. On April 21, the Department notified parties that case briefs were due April 28. In response to requests filed by the AR and NSR respondents and Petitioners on April 23 and 24, respectively, the Department extended the deadlines for case briefs to May 1.

On April 29, Chenhe submitted a case brief. On May 1, 2009, Petitioners, Zhengzhou Yuanli Trading Co. Ltd. (Yuanli), Ningjin Ruifeng Foodstuff Co., Ltd. (Ningjin Ruifeng), as well as Weifang Shennong Foodstuff Co., Ltd. (Weifang Shennong), Anqiu Friend Food Co. Ltd. (Anqiu Friend), and Anqiu Haoshun Trade Co., Ltd. (Haoshun) (collectively, WAA), submitted case briefs. After reviewing the case briefs, the Department instructed WAA to re-file their case briefs because they contained untimely new factual information. WAA filed the final versions of their redacted case briefs on May 7. On May 6 and May 8, Yuanli, Petitioners, and WAA submitted rebuttal briefs. On May 28, the Department instructed Yuanli to re-file its case brief and Petitioners to re-file their rebuttal brief because they contained untimely new factual information. Yuanli and Petitioners re-filed their case and rebuttal briefs, respectively, on May 29.

Scope of the Order

The products covered by this 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 the following: (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 0703.20.0010, 0703.20.0020, 0703.20.0090, 0710.80.7060, 0710.80.9750, 0711.90.6000, and 2005.90.9700 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 order is dispositive. In order to be excluded from the 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 CBP to that effect.

Analysis of Comments Received

Issues raised in the case and rebuttal briefs by parties to this proceeding and to which we have responded are listed in Appendix 1 to this notice and addressed in the Issues and Decision Memorandum (Issues and Decision Memorandum), which is hereby adopted by this notice.^[1] Parties can find a complete discussion of the issues raised in these AR and NSRs and the corresponding recommendations in this public memorandum, which is on file in the Central Records Unit (CRU), Room 1117 of the main Department building. In addition, a copy of the Issues and Decision Memorandum can be accessed directly on our Web site at http://ia.ita.doc.gov/​. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Final Partial Rescission of Administrative Review

In the Preliminary Results, the Department preliminarily rescinded the administrative review with respect to the following three companies: Jinan Farmlady Trading Co., Ltd. (Jinan Farmlady), Qingdao Tiantaixing Foods Co., Ltd. (Qingdao Tiantaixing), and Qingdao Xintianfeng Foods Co., Ltd. (Qingdao Xintianfeng). Jinan Farmlady, Qingdao Tiantaixing, and Qingdao Xintianfeng reported that they had no shipments of subject merchandise to the United States during the POR. See Preliminary Results, 73 FR at 74465. As we stated in the Preliminary Results, our examination of shipment data from CBP for the three no-shipment companies confirmed that there were no entries of subject merchandise which they exported during the POR. Id. We also received no comments or information to change our preliminary rescission. Therefore, we are rescinding this administrative review with respect to all three aforementioned companies.

Final Rescission of New Shipper Review With Respect to Anqiu Haoshun

In the Preliminary Results, the Department preliminarily rescinded Haoshun's new shipper review. See Preliminary Results, 73 FR at 74465. Based on our analysis of arguments made by the parties, the Department will not change its preliminary rescission. Therefore, we are rescinding this new shipper review with respect to Haoshun. (See “Bona Fides Analysis” section below; Comment 10 of the accompanying Issues and Decision Memorandum; and the memorandum from Scott Lindsay to Barbara Tillman, Final Results of Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China: Bona Fide Analysis of Anqiu Haoshun Trade Co., Ltd.'s Sale (June 8, 2009) (Haoshun Final Bona Fide Memorandum), and Haoshun Comments Memorandum.)

Bona Fides Analysis

As noted in the Preliminary Results, while conducting a review, particularly a review where a company's margin would be based on a single sale, the Department examines price, quantity, and other circumstances associated with the sale under review, and must determine if the sale was based on normal commercial considerations and presents an accurate representation of the company's normal business practices. If the Department determines that the price was not based on normal commercial considerations or is atypical of the respondent's normal business practices, including other sales of comparable merchandise, the sale may be considered non-bona fide.

In the Preliminary Results, the Department preliminarily concluded that the single sale made by Haoshun during the POR was a not a bona fide commercial transaction and preliminarily rescinded the NSR with respect to Haoshun. In addition, the Department preliminarily found the sales made by Yuanli and Ningjin Ruifeng to be bona fide commercial transactions. Petitioners, Respondents, Yuanli, and Ningjin Ruifeng have submitted extensive arguments regarding the Department's preliminary bona fides analyses of Haoshun's, Yuanli's and Ningjin Ruifeng's new shipper sales. In addition, these parties have submitted arguments as to whether the Department should rescind each company's NSR in these final results. Most of the parties' arguments are based on information which is business proprietary. Thus, the parties' comments are fully discussed in the Haoshun Comments Memorandum, Ningjin Ruifeng Comments Memorandum, and Final Results of Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China: Bona Fide Analysis of Zhengzhou Yuanli Trading Co. Ltd's Sale (June 8, 2009) (Yuanli Final Bona Fide Memorandum).

Based on the totality of the circumstances as discussed in the memoranda addressing bona fides issues, for these final results, the Department continues to find the price and quantity of Haoshun's single POR sale to be unreasonable and atypical, and therefore find the sale to be not bona fide. Thus, the Department has rescinded the NSR with respect to Haoshun. In addition, we determine that the new shipper sale made by Ningjin was not a bona fide commercial transaction because Ningjin failed to establish payment terms while negotiating its U.S. sale, the quantity of garlic sold was unreasonably low, and there is other evidence that this transaction may not have been made on an arm's-length basis. Thus, the Department has also rescinded the NSR with respect to Ningjin. Finally, we continue to find that Yuanli's sales was bona fide. Given the proprietary nature of the underlying data used to formulate the Department's analysis and determinations, see the Issues and Decision Memorandum at Comment 10, Haoshun Final Bona Fide Memorandum, Haoshun Comments Memorandum, Final Results of Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China: Bona Fide Analysis of Ningjin Ruifeng Foodstuff Co., Ltd.'s Sale (June 8, 2009), Ningjin Ruifeng Comments Memorandum, and Yuanli Final Bona Fide Memorandum, for details of the proprietary data that support the decisions contained herein.

Changes Since the Preliminary Results

Based on a review of the record as well as comments received from parties regarding our Preliminary Results, we have made revisions to the margin calculations for Anqiu Friend, Weifang Shennong, and Yuanli. Specifically, the Department will use an average of the financial ratios of ADF Foods Ltd. (ADF); Tata Tea Ltd. (Tata Tea); and Limtex to value the factory overhead (FOH), selling, general & administrative (SG&A) expenses, and profit used to calculate NV. (See 19 CFR 351.408(c)(4).) We note that using an average of three Indian processors' data will allow us to calculate financial ratios that better reflect the broader experience of the surrogate industry. Moreover, as ADF's and Tata Tea's production processes are more comparable to that of peeled garlic, which comprises an increasing share of all PRC garlic imports, and Limtex's production process is comparable to that of non-processed whole garlic bulbs, which continue to comprise a large share of PRC garlic imports nonetheless, the resulting financial ratios will be a better surrogate for the garlic industry in the PRC as a whole. See Issues and Decision Memorandum at Comment 3. See also Administrative Review and New Shipper Review of Fresh Garlic from the People's Republic of China: Surrogate Values for the Final Results (Final Surrogate Values Memorandum).

As a result of the revisions made to Anqiu Friend's and Weifang Shennong's company-specific margins, the margin calculated for the four separate rate companies, Jinxiang Dongyun Freezing Storage Co., Ltd. (Jinxiang Dongyun), Qingdao Saturn International Trade Co., Ltd. (Qingdao Saturn), Qufu Dongbao Import & Export Trade Co., Ltd. (Qufu Dongbao), and Shanghai LJ International Trading Co., Ltd. (Shanghai LJ), has also changed. For all changes to the calculations for Anqiu Friend, Weifang Shennong, and Yuanli, see the Issues and Decision Memorandum and the company-specific analysis memoranda.

With respect to the surrogate value for paper labels, information on the record indicates that the paper labels used by respondents appear to be a self-adhesive rectangular sheet, similar to the description of the Indian HTS #4811.41.00. Thus, in accordance with our surrogate value selection criteria, the Department finds that in this case the Indian HTS #4811.41.00 represents the best surrogate value based on the available information on the record and we have changed our surrogate value calculations accordingly. See Issues and Decision Memorandum at Comment 6. See also Final Surrogate Values Memorandum.

Lastly, following the methodologies established in the aforementioned Per-Unit Memorandum and consistent with the Department's practice, we are calculating per-unit cash deposit and assessment rates for the separate rate companies and companies that are part of the PRC-wide entity. See Per-Unit Memorandum, Final Results of the Administrative Review of Fresh Garlic from the People's Republic of China: Separate Rate Companies and PRC-Wide Entity—Per-Unit Assessment Rates (June 8, 2009), and Issues and Decision Memorandum at Comment 8. See also Honey from the People's Republic of China: Final Results and Rescission, In Part, of Aligned Antidumping Duty Administrative Review and New Shipper Review, 73 FR 42321 (July 21, 2008).

Final Results of Reviews

As a result of our reviews, we determine that the following margins exist for the period November 1, 2006 through October 31, 2007:

Manufacturer/Exporter	Weight- Averaged margin (percent)
Fresh Garlic from the PRC 2006-2007 Administrative Review
Anqiu Friend Food Co., Ltd.	64.78
Weifang Shennong Foodstuff Co., Ltd	80.69
Jinxiang Dongyun Freezing Storage Co., Ltd	72.74
Qingdao Saturn International Trade Co., Ltd	72.74
Qufu Dongbao Import & Export Trade Co., Ltd	72.74
Shanghai LJ International Trading Co., Ltd	72.74
PRC-wide Rate (see Appendix 2)	376.67
Fresh Garlic from the PRC 2006-2007 New Shipper Review
Exported and Produced by Zhengzhou Yuanli Trading Co., Ltd	120.18

Disclosure

We will disclose the calculations used in our analysis to parties to these proceedings within five days of the date of publication of this notice. See 19 CFR 351.224(b).

Assessment Rates

Consistent with the final results of the 12th NSR review of Fresh Garlic from the PRC, we will direct CBP to assess importer-specific assessment rates based on the resulting per-unit (i.e., per kilogram) amount on each entry of the subject merchandise during the POR. See Fresh Garlic from the People's Republic of China: Final Results and Rescission, in Part, of Twelfth New Shipper Reviews, 73 FR 56550, 56552 (September 29, 2008) (12th NSR of Fresh Garlic from the PRC). Therefore, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries pursuant to section 751(a)(2)(A) of the Act and 19 CFR 351.212(b)(1). The Department will issue appropriate assessment instructions directly to CBP 15 days after publication of the final results of this review. For assessment purposes, we calculated importer-specific assessment rates for fresh garlic from the PRC. Specifically, we divided the total dumping margins for each importer by the total quantity of subject merchandise sold to that importer during the POR to calculate a per-unit assessment amount. We will direct CBP to assess importer-specific assessment rates based on the resulting per-unit (i.e., per kilogram) amount on each entry of the subject merchandise during the POR if any importer-specific assessment rate calculated in the final results of this review is above de minimis.

Moreover, as noted above, the Department is calculating per-unit cash deposit and assessment rates for separate rate companies and companies that are part of the PRC-wide entity. Using CBP data, we totaled the quantity and value of the entries made by the four separate rate companies to derive a weighted average unit value (AUV), which we then multiplied by the separate rate to calculate a per-unit assessment amount. For companies determined to be part of the PRC-wide entity, the Department employed the methodology discussed above, except we calculated an AUV exclusive of entries from the two mandatory respondents and the four separate rate companies, and then multiplied the AUV by the PRC-wide rate.

Cash Deposit Requirements

Consistent with the final results of the 12th NSR of Fresh Garlic from the PRC, we have established and will collect a per kilogram cash-deposit amount which will be the per-unit equivalent of the company-specific dumping margin published in the final results of these reviews. The following cash deposit requirements will be effective upon publication of the final results of these reviews for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided by section 751(a)(1) of the Act: (1) For subject merchandise exported by Anqiu Friend and exported by Weifang Shennong the cash deposit rates will be the per unit rates determined in the final results of the administrative review; (2) for subject merchandise produced and exported by Yuanli, the cash deposit rates will be the per unit rate determined in the final results of the new shipper review; (3) for subject merchandise exported by but not produced by Yuanli, the cash deposit rate will be the PRC-wide rate; (4) for subject merchandise exported by Jinxiang Dongyun, Qingdao Saturn, Qufu Dongbao, and Shanghai LJ, the cash deposit rates will be the per unit rates determined in the final results of the administrative review; (5) for previously-investigated or previously-reviewed PRC and non-PRC exporters who received a separate rate in a prior segment of the proceeding (which were not reviewed in this segment of the proceeding), the cash deposit rate will continue to be the rate assigned in that segment of the proceeding; (6) for subject merchandise exported by Haoshun, Ningjin, Chenhe, Greening and all other PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, the cash deposit rate will be the per-unit PRC-wide rate; and (7) the cash deposit rate for non-PRC exporters of subject merchandise which have not received their own rate will be the rate applicable to the PRC exporter that supplied that non-PRC exporter. These requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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.

Administrative Protective Orders

This notice also serves as a reminder to parties subject to administrative protective orders (APO) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. 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 terms of an APO is a violation which is subject to sanction.

These administrative and new shipper reviews and notice are issued and published in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act and 19 CFR 351.213 and 351.214.

Dated: June 8, 2009.

Carole Showers,

Acting Deputy Assistant Secretary for Policy and Negotiations.

Appendix 1

Comment 1: Intermediate Input Methodology.

Comment 2: Garlic Bulb Surrogate Value.

Comment 3: Surrogate Financial Ratios.

Comment 4: Timing of Petitioners' Surrogate Value Submission.

Comment 5: Water Valuation.

Comment 6: Paper Label Valuation.

Comment 7: Yield Factor Valuation.

Comment 8: Per Unit Assessment.

Comment 9: Anqiu Friend's Affiliations.

Comment 10: Bona Fides of New Shipper Companies.

Comment 11: Rescission of Chenhe and Greening.

Appendix 2

The following companies subject to this antidumping duty administrative review did not apply for a separate rate and thus have been assigned the PRC-wide rate for their imports of subject merchandise during the POR.

1. APS Qingdao.

2. American Pioneer Shipping.

3. Beijing Jim International Food Co., Ltd.

4. Burgeon International Inc.

5. Fujian Meitan Import & Export Xiamen Corporation.

6. Jining Meiya Foods Co., Ltd.

7. Jining Trans-High Trading Co., Ltd.

8. Jinxian County Huaguang Food Import & Export Co., Ltd.

9. Junan Auto Imp and Exp Co., Ltd.

10. Linyi Futai Foodstuff Co., Ltd.

11. Marnex (HongKong) Company.

12. New Future International Trading Co.

13. Omni Decor China Ltd.

14. Qingdao Rock-It Sports Inc.

15. Sea Trade International Incorporated.

16. Shandong Chengshun Farm Produce Trading Co., Ltd.

17. Shandong Chenhe Int'l Trading Co., Ltd.

18. Shandong Dongsheng Eastsun Foods Co., Ltd.

19. Shandong Garlic Company.

20. Shanghai New Long March International Trade Co., Ltd.

21. Shenzhen Greening Trading Co., Ltd.

22. Shenzhen Imp & Exp. Ltd.

23. T&S International, LLC.

24. Taiwan Wachine Co., Ltd.

25. Taizhou Overseas Int'l Ltd.

Footnotes

1.  In addition, due to the proprietary nature of much of the information involved in company-specific discussions, the Department has found it necessary to address certain issues in separate memoranda. See Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China (PRC): Bona Fides Comments Memorandum for Ningjin Ruifeng Foodstuff Co., Ltd. (Ningjin Ruifeng Comments Memorandum), Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China (PRC): Bona Fides Comments Memorandum for Anqiu Haoshun Foodstuff Co., Ltd. (Haoshun Comments Memorandum), and the three company-specific memoranda referenced in the “Bona Fides Analysis” section below.