E7-13552. Fresh Garlic from the People's Republic of China: Initiation of Antidumping Duty New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

July 12, 2007.

SUMMARY:

The Department of Commerce (“Department”) has determined that five requests for new shipper reviews (“NSRs”) of the antidumping duty order on fresh garlic from the People's Republic of China (“PRC”), received on May 17, May 21, and May 28, 2007, respectively, meet the statutory and regulatory requirements for initiation. The period of review (“POR”) for the five NSRs which the Department is initiating is November 1, 2006, through April 30, 2007.

Additionally, the Department has extended the deadline for initiating the new shipper review (“NSR”) requested submitted by Henan Weite Industrial (“Weite”) on April 30, 2007, by thirty days to July 30, 2007.

FOR FURTHER INFORMATION CONTACT:

Julia Hancock, Michael Holton, and Paul Walker, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, D.C. 20230; telephone: [phone], and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

The notice announcing the antidumping duty order on fresh garlic from the PRC was published in the Federal Register on November 16, 1994. See Notice of Antidumping Duty Order: Fresh Garlic from the People's Republic of China, 59 FR 59209 (November 16, 1994) (“Order”).^[1] On April 30, May 17, May 21, and May 28, 2007, pursuant to section 751(a)(2)(B)(i) of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.214(c), the Department received six new shipper review (“NSR”) requests from Henan Weite Industrial (“Weite”), Shandong Chenhe International Trading Co., Ltd. (“Chenhe”), Qingdao Tiantaixing Foods Co., Ltd. (“QTF”), Hebei Golden Bird Trading Co., Ltd. (“Golden Bird”), Jining Yongjia Trade Co., Ltd. (“Yongjia”), and Shenzhen Greening Trading Co., Ltd. (“Greening”), respectively. Weite, Chenhe, and Greening certified that they are both the producer and exporter of the subject merchandise upon which the requests for NSRs were based. QTF, Golden Bird, and Jining certified that they were the exporters of the subject merchandise upon which the requests for a NSR were based.

On June 11, 2007, the Fresh Garlic Producers Association and its individual members, Christopher Ranch L.L.C., the Garlic Company, Valley Garlic, and Vessey and Company, Inc., (collectively, “Petitioners”) submitted comments requesting that the Department reject the NSR requests from Weite and QTF. Specifically, Petitioners state that both Weite and QTF, which requested NSR reviews, are respondents in the twelfth administrative review (“12^th AR”) of this Order. Accordingly, Petitioners request that the Department reject Weite's and QTF's respective NSR request because: (1) Each exporter's sale is already covered by the 12^th AR; (2) neither exporter made a U.S. sale during the POR for this NSR; (3) neither exporter has provided justification for expanding the POR for this NSR to cover its respective sale; (4) Weite's claim that it did not expect, in November 2006, to be treated as a section A respondent in the 12^th AR is not credible; (5) each exporter's decision in November 2006 to request a regular administrative review versus a NSR was likely based on the expectation that (a) it would participate in the 12^th AR as a section A respondent, and (b) it would receive a low dumping margin in the 12^th AR based on the relatively low dumping rates it expected to be issued for the few 12^th AR mandatory respondents; (6) the Department has already stated that it does not have the resources to review every exporter; and (7) allowing these exporters the opportunity request both a NSR and administrative review allows respondents to manipulate the system.

On June 12, 2007, the Department issued letters to Golden Bird, QTF, and Yongjia requesting further information that was not contained within their NSR requests. Additionally, on June 13, 2007, Petitioners submitted comments requesting that the Department reject the NSR requests of Chenhe, QTF, Golden Bird, and Yongjia. Specifically, Petitioners note that each requestor, Chenhe, QTF, Golden Bird and Yongjia, did not serve their respective NSR request on Petitioners, pursuant to 19 CFR 351.303(f)(1)(ii). Additionally, Petitioners argue that the Department should reject the new shipper requests because: (1) Chenhe's request does not contain a certification of counsel, pursuant to 19 CFR 351.303(g)(2); and (2) Golden Bird's, QTF's, and Yongjia's respective requests contain certifications that incorrectly state that their consultant is employed by the respective company.

On June 14, 2007, Golden Bird, QTF, and Yongjia submitted certifications, pursuant to 19 CFR 351.214(b)(2)(ii)(B), from each of their respective producers, that their respective producers had never been affiliated with any exporter or producer who exported subject merchandise to the United States. Additionally, on June 14, 2007, QTF and Yongjia submitted revised public versions of their respective May 21, 2007, NSR requests.

On June 14, 2007, QTF submitted rebuttal comments in response to Petitioners' June 11, 2007, letter, requesting that the Department reject QTF's and Weite's respective NSR requests. Specifically, QTF argues that Petitioners' argument for rejecting its NSR request is without merit because the entry date of its sale is within the POR for this NSR. Additionally, QTF states that, pursuant to 19 CFR 351.214(j), QTF has the option to participate in this NSR since QTF still has the option to withdraw its request for a review in the 12^th AR. Accordingly, QTF argues that there is no basis for the Department to not initiate a NSR of its sale.

On June 19, 2007, QTF, Golden Bird, and Jining submitted letters notifying the Department that they had served public versions of their respective NSR requests on Petitioners.

On June 21, 2007, Chenhe submitted rebuttal comments in response to Petitioners' June 13, 2007, letter, requesting that the Department reject Chenhe's NSR request. Specifically, Chenhe argues that it served Petitioners with a public version of its NSR request when it was notified of this oversight by the Department. Additionally, Chenhe states that the Department has never terminated a review where the service to an interested party was later remedied. See Notice of Final Results of Antidumping Duty Administrative Reviews and Final Rescission and Partial Rescission of Antidumping Duty Administrative Reviews: Heavy Forged Hand Tools, Finished and Unfinished, With or Without Handles from the People's Republic of China, 71 FR 54269 (September 14, 2006) and accompanying Issues and Decision Memorandum at Comment 4. Moreover, Chenhe contends that the U.S. Court of Appeals for the Federal Circuit (“CAFC”), in PAM, found that “the failure of a party to provide notice as required by such a regulation does not prejudice the non-notified party.” See PAM S.p.A. v. United States, 463 F. 3d 1345, 1348 (CAFC 2006) (“PAM”). Accordingly, Chenhe argues that Petitioners' request to not initiate Chenhe's NSR request because Petitioners were not served is without merit. Furthermore, Chenhe contends that Petitioners' argument that Chenhe's NSR request did not contain a certification of counsel is incorrect because page 3 of Chenhe's request does contain a certification of counsel, pursuant to 19 CFR 351.303(g)(2).

On June 26, 2007, the Department issued memoranda documenting its telephone requests to representatives of Chenhe, QTF, Golden Bird, and Jining that they serve Petitioners a public version of their respective NSR requests. See Memorandum to the File, from Julia Hancock, Senior Case Analyst, RE: Fresh Garlic from the People's Republic of China, Subject: Phone Call with Mark Pardo, (June 26, 2007); Memorandum to the File, from Julia Hancock, Senior Case Analyst, RE: Fresh Garlic from the People's Republic of China, Subject: Phone Call with Jasmine Zhao, (June 26, 2007).

On June 29, 2007, the Department issued a memorandum stating that the Department had received a database query from U.S. Customs and Border Protection (“CBP”) that showed inconsistencies in Weite's entry date. See Memorandum to the File, through Alex Villanueva, Program Manager, from Julia Hancock, Senior Case Analyst, RE: Fresh Garlic from the People's Republic of China, Subject: U.S. Customs and Border Protection Module Run for New Shipper Reviews, (June 29, 2007) (“CBP Memo”).

Pursuant to section 751(a)(2)(B)(i)(I) of the Act, 19 CFR 351.214(b)(2)(i) and 351.214(b)(2)(ii)(A) (for Golden Bird, QTF, and Jining), Weite, Chenhe, QTF, Golden Bird, Jining, and Greening certified that they did not export fresh garlic to the United States during the period of investigation (“POI”). In addition, pursuant to section 751(a)(2)(B)(i)(II) of the Act and 19 CFR 351.214(b)(2)(iii)(A), Weite, Chenhe, QTF, Golden Bird, Jining, and Greening certified that, since the initiation of the investigation, they have never been affiliated with any PRC exporter or producer who exported fresh garlic to the United States during the POI, including those not individually examined during the investigation. As required by 19 CFR 351.214(b)(2)(iii)(B), Weite, Chenhe, QTF, Golden Bird, Jining, and Greening also certified that their export activities were not controlled by the central government of the PRC.

In addition to the certifications described above, pursuant to 19 CFR 351.214(b)(2)(iv), Weite, Chenhe, QTF, Golden Bird, Jining, and Greening submitted documentation establishing the following: (1) The date on which Weite, Chenhe, QTF, Golden Bird, Jining, and Greening first shipped fresh garlic for export to the United States and the date on which the fresh garlic was first entered, or withdrawn from warehouse, for consumption; (2) the volume of their first shipment;^[2] and (3) the date of their first sale to an unaffiliated customer in the United States.

The Department conducted CBP database queries in an attempt to confirm that Weite, Chenhe, QTF, Golden Bird, Jining, and Greening's shipments of subject merchandise had entered the United States for consumption and that liquidation of such entries had been properly suspended for antidumping duties. The Department also examined whether the CBP data confirmed that such entries were made during the NSR POR.

Analysis of Comment Received

A. Weite and QTF Entries During NSR

We disagree with Petitioners that because Weite and QTF are currently participating as separate rate respondents in the 12^th AR, their respective NSR requests should be rejected. While the Department recognizes that both Weite and QTF are currently participating as separate rate respondents in the twelfth administrative review, the evidence submitted by Weite shows that Weite exported merchandise to the United States that entered during the POR of the NSR. However, the Department recognizes that other record evidence does not confirm that the entry date provided by Weite is within the POR of NSR. See CBP Memo, at 1. In Honey from the PRC, the Department extended the time limit to initiate the NSR in order for Shanghai Bloom International Trading Co., Ltd. (“Shanghai Bloom”) to explain or resolve inconsistencies in Shanghai Bloom's entry documentation. See Notice of Initiation of New Shipper Antidumping Duty Review: Honey from the People's Republic of China, 71 FR 52764, 52765 (September 7, 2006) (“Honey from the PRC”). As in Honey from the PRC, because there are certain discrepancies between the documentation provided by Weite and other record evidence obtained from the CBP database, the Department has determined to provide Weite an opportunity to explain or resolve these inconsistencies. Accordingly, pursuant to 19 CFR 351.302(b), the Department is extending the deadline to initiate Weite's NSR until July 30, 2007.

With respect to QTF, the Department finds that the record evidence shows that QTF exported merchandise to the United States that entered during the POR of the NSR. Therefore, on the basis of this evidence, the Department determines to initiate this NSR requested by QTF, pursuant to 19 CFR 351.214(g)(1)(i). However, the Department notes that the record evidence also shows that QTF did not export merchandise to the United States that entered during the period of the 12^th AR, which is November 1, 2005, to October 31, 2006. Accordingly, the Department intends to examine this issue in the context of the 12^th AR and determine whether to rescind that review of QTF in light of the evidence showing that QTF did not have an entry during the period of the 12^th AR.

We also disagree with Petitioners that a NSR request from Weite and QTF should be rejected because neither exporter made a U.S. sale during the NSR period. The Department finds that there is record evidence indicating that Weite and QTF exported subject merchandise to the United States during the POR of the NSR.

Petitioners also argue that the Department should reject Weite and QTF's NSR requests because neither exporter has provided justification for expanding the NSR period to cover its respective sales. In this case, as discussed above, it appears that the merchandise exported by QTF entered the United States during the NSR period. Therefore, an expansion of the NSR period would not be necessary given that the normal suspension of liquidation instruction for this NSR period would include QTF's entry. Furthermore, with respect to Weite, because the Department has extended the deadline to initiate Weite's NSR, Petitioners' argument regarding the timing of Weite's sale will continue to be considered by the Department.

B. Chenhe, QTF, Golden Bird, and Yongjia Service of NSR Requests

Petitioners argue that the Department should reject the NSR requests from Chenhe, QTF, Golden Bird and Yongjia because they did not serve their respective new shipper requests on Petitioners, pursuant to 19 CFR 351.303(f)(1)(ii). Although we agree with Petitioners that Chenhe, QTF, Golden Bird and Yongjia did not originally serve Petitioners with their respective NSR requests, we disagree that the NSR requests should be rejected on this basis. The Department finds that the initial failure to serve Petitioners did not result in substantial prejudice, such that initiation of the NSRs should be denied. On June 6, 2007, the Department faxed copies of all four NSR requests to Petitioners since all four NSR requests were submitted prior to the last day of the anniversary month. Accordingly, the Department finds that Petitioners had sufficient time to review each of these four NSR requests and provide comments for the Department to consider before the initiation deadline of June 30, 2007. On June 20, 2007, the Department notified Chenhe, QTF, Golden Bird, and Yongjia that each were required to serve their individual request on Petitioners. The respective counsel/representative for Chenhe, QTF, Golden Bird, and Yongjia submitted letters notifying the Department that they had served those companies' respective request on Petitioners. See Chenhe's Response to Petitioners' Claims to Reject Chenhe's New Shipper Review Request, (June 21, 2007) at 2; Letter from Trade Bridge Consulting Services, (June 19, 2007). Thus, the Department finds that Petitioners did not suffer substantial prejudice due to these companies' initial failure to serve their individual requests upon Petitioners and that the lack of service was rectified in a timely fashion for these companies. See PAM, 463 F. 3d 1345, 1348 (CAFC 2006).

C. Chenhe, Golden Bird, QTF and Yongjia Certifications

Petitioners argue that the Department should reject the NSR request from Chenhe because it does not contain a certification of counsel, pursuant to 19 CFR 351.303(g)(2). However, the Department finds that on page 3 of Chenhe's NSR request, Chenhe did include the certification of counsel, pursuant to 19 CFR 351.303(g)(2). Therefore, the Department is not rejecting Chenhe's NSR on the basis that it lacks a certification.

Finally, Petitioners argue that the Department should reject the NSR requests from Golden Bird, QTF, and Yongjia because they did not submit certifications from each of their respective producers that their respective producers had never been affiliated with any exporter or producer who exported subject merchandise to the United States. On June 14, 2007, Golden Bird, QTF, and Yongjia submitted certifications from each of their respective producers that they had never been affiliated with any exporters or producers who exported the subject merchandise. Therefore, the Department is not rejecting the NSR requests of Golden Bird, QTF, and Yongjia on the basis that they lack certifications.

Initiation of New Shipper Reviews

A. Chenhe, QTF, Golden Bird, Jining, and Greening

Pursuant to section 751(a)(2)(B) of the Act and 19 CFR 351.214(d)(1), the Department finds that Chenhe and Greening meet the threshold requirements for initiation of a NSR for the shipment of fresh garlic from the PRC they produced and exported. See Memorandum to File from Julia Hancock, Senior Analyst, through Alex Villanueva, Program Manager, Office 9, Initiation of AD New Shipper Review: Fresh Garlic from the People's Republic of China (A-570-831), (June 29, 2007) (“Garlic Memo”). Additionally, pursuant to section 751(a)(2)(B) of the Act and 19 CFR 351.214(d)(1), the Department finds that QTF, Golden Bird, and Jining meet the threshold requirements for initiation of a NSR for the shipment of fresh garlic from the PRC they exported for their respective garlic producer. See Garlic Memo.

B. Weite

Pursuant to 19 CFR 351.302(b), the Department finds that further time is needed to determine whether or not to initiate Weite's NSR request because of certain discrepancies between Weite's NSR request and other record evidence. Accordingly, in accordance with 19 CFR 351.302(b), the Department has extended the deadline to initiate Weite's NSR by thirty days to July 30, 2007.

The POR for the five NSRs is November 1, 2006, through April 30, 2007. See 19 CFR 351.214(g)(1)(ii)(A). The Department intends to issue the preliminary results of these reviews no later than 180 days from the date of initiation, and final results of these reviews no later than 270 days from the date of initiation. See section 751(a)(2)(B)(iv) of the Act. Interested parties requiring access to proprietary information in this NSR should submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305 and 351.306. This initiation and notice are published in accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214 and 351.221(c)(1)(i).

Dated: June 29, 2007.

Stephen J. Claeys,

Deputy Assistant Secretary for Import Administration.

Footnotes

1.  Therefore, a request for a NSR based on the semi-annual anniversary month, May, was due to the Department by the final day of May 2007. See 19 CFR 351.214(d)(1).

2.  Weite, Chenhe, QTF, Golden Bird, Jining, and Greening made no subsequent shipments to the United States.