02-16742. Fresh Garlic from the People's Republic of China: Rescission of New Shipper Antidumping Duty Review and Initiation of New Shipper Antidumping Duty Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Rescission of New Shipper Antidumping Duty Review and Initiation of Antidumping Duty New Shipper Review.

EFFECTIVE DATE:

July 3, 2002.

SUMMARY:

At the request of Huaiyang Hongda Dehydrated Vegetable Company, the Department of Commerce initiated a new shipper review of its shipments of merchandise subject to the antidumping duty order on fresh garlic from the People's Republic of China. The period of review is November 1, 2000, through October 31, 2001. However, after review of the company's responses to our original and supplemental questionnaires, we found that the date of sale and entry of the company's U.S. sale fell outside the period of review. We are therefore rescinding this new shipper review.

Although the Department of Commerce is rescinding the November 1, 2000, through October 31, 2001, new shipper review for Huaiyang Hongda Dehydrated Vegetable Company, we still find that its request for review complies with the content requirements for a new shipper review. Further, we find that the date of sale and entry for the transaction covered by the company's request for review fall within the six-month period immediately preceding the May semiannual anniversary month of the antidumping duty order on fresh garlic from the People's Republic of China. Therefore, in accordance with 19 CFR 351.214(g)(1)(B), we are initiating a new shipper antidumping duty review for the period of November 1, 2001, through April 30, 2002.

FOR FURTHER INFORMATION CONTACT:

Edythe Artman or Mark Ross, Office of AD/CVD Enforcement III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

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. In addition, for purposes of the rescission, all references are made to the Department of Commerce's (the Department) regulations at 19 CFR Part 351 (2001), and, for purposes of the initiation, all references are made to the Department's regulations at 19 CFR Part 351 (2002).

Background

On November 30, 2001, we received a request for a new shipper review from Huaiyang Hongda Dehydrated Vegetable Company (Hongda). We reviewed this request, in addition to two other requests, and found that the requests complied with the content requirements for requests for new shipper reviews set forth under 19 CFR 351.214(b)(2). We therefore initiated three new shipper reviews on December 28, 2001. See Fresh Garlic from the People's Republic of China: Initiation of New Shipper Antidumping Duty Reviews, 67 FR 715 (Jan. 7, 2002) (Initiation Notice). On January 22, 2002, we issued Hongda a questionnaire. On March 7, 2002, we received a response from Hongda to the questionnaire. The company submitted a response to our May 15, 2002, supplemental questionnaire on June 5, 2002, and supplemented this response with additional information on June 17, 2002.

Rescission of New Shipper Review

In its request for a new shipper review, Hongda stated that its only sale of subject merchandise had occurred on October 29, 2001, and that it considered this date to be both the sales invoice date and the date of sale. It also stated that the merchandise was entered for consumption into the United States on November 28, 2001. In support of its statements, it submitted an invoice, dated October 29, 2001, and a U.S. Customs entry summary form showing an entry date of November 28, 2001. Based on this request and documentation, we concluded that a sale had taken place during the period of review as defined under 19 CFR 351.214(g) and that the request complied with the content requirements for requests set forth under 19 CFR 351.214(b)(2).

In its March 7, 2002, questionnaire response, Hongda confirmed that the invoice date for its U.S. sale was October 29, 2001. However, it claimed that the merchandise was shipped from the factory on November 7, 2001, and that, upon its arrival in the United States, the U.S. Customs Service refused entry of the merchandise unless the importer entered the merchandise at a higher price. In support of its claim, Hongda submitted an entry summary reject form from the U.S. Customs Service that showed that entry of the merchandise was rejected on the basis of value claimed. Hongda stated that, as a result, the price was increased and it issued a supplemental invoice to the customer on November 29, 2001, to reflect this price increase. It stated that, since the increased price was not the result of a negotiation between the buyer and the seller, the price increase did not affect the date of sale and should be treated as a billing adjustment.

The petitioner, the Fresh Garlic Producers Association, submitted comments on Hongda's response on April 5, 2002. It argued that the new shipper review should be rescinded on the basis that no sale or entry had occurred during the period of review (POR). The petitioner asserted that a key term of sale the price changed on November 29, 2001, and that, accordingly, the sale of the merchandise did not occur during the POR.

In its June 5, 2002, response to our supplemental questionnaire, Hongda claimed that the U.S. Customs Service had demanded that the U.S. customer import the merchandise at a specified higher price and that this was the price reflected in the price increase between Hongda and the customer. Hongda could not provide an explanation as to why the U.S. Customs Service demanded the higher price.

As set forth under 19 CFR 351.401(i), the Department will normally use the date of invoice, as recorded in the exporter's or producer's records kept in the ordinary course of business, in identifying the date of sale of the subject merchandise. However, the Department may use a date other than the date of invoice if it is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale. See 19 CFR 351.401(i). The Department cited and explained this regulatory provision in Appendix I of the January 22, 2002, questionnaire sent to Hongda. See Request for Information Regarding Exports of Fresh Garlic from the PRC, p. I-2 (Jan. 22, 2002). In addition, the Department stated that “if basic terms of sale have changed up to, or even subsequent to, the date of shipment, then the date of shipment is the date of sale.” Id.

We find, based on a review of the record, that the U.S. Customs Service did not reject entry of the fresh garlic on the basis of the negotiated price between Hongda and the U.S. customer but on the basis of the value of the merchandise. Thus, we find that Hongda's decision to increase the price of its merchandise on November 29, 2001, was a decision it voluntarily made to have the merchandise enter the United States. Therefore, the price increase was not a mere billing adjustment, but a change in the price a material adjustment in the transaction of the goods. Consequently, a material term of sale changed on November 29, 2001, and, because this date is subsequent to the date of shipment, we find that the date of sale is November 7, 2001.

This date is outside of the POR for the new shipper review. Under 19 CFR 351.214(g), a new shipper review will normally cover entries, exports, or sales during the twelve-month period preceding the anniversary month of the order if the new shipper review was initiated in the month immediately following the anniversary month. The anniversary month in this proceeding is November, since the antidumping duty order was published on November 16, 1994. We initiated the new shipper review on December 28, 2001. Consequently, the POR covers entries, exports, or sales of merchandise by Hongda from November 1, 2000, until October 31, 2001. Because no sales or entries of merchandise occurred during this period, we are rescinding this review in accordance with 19 CFR 351.214(f)(2), which permits the Department to rescind a new shipper review when we conclude that no entry and sale of subject merchandise to an unaffiliated customer in the United States took place during the period of review.

This notice serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under the APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of the return or 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 sanctionable violation.

Initiation of New Shipper Review

As indicated in the “background” section above, we found in our Initiation Notice that Hongda's November 30, 2001, request for a new shipper review complied with the content requirements set forth under 19 CFR 351.214(b)(2). Therefore, we are initiating a new shipper review for shipments of fresh garlic from the People's Republic of China produced and exported by Hongda. This review will cover entries, exports, and sales during the period of November 1, 2001, through April 30, 2002, as defined under 19 CFR 351.214(g). We intend to issue final results of this review no later than 270 days after the date on which the new shipper review was initiated. See 19 CFR 351.214(i).

We previously instructed the Customs Service to allow, at the option of the importer, the posting of a bond or security in lieu of a cash deposit for each entry of the merchandise exported by Hongda in accordance with 19 CFR 351.214(e). These instructions will remain in effect until the completion of the new shipper review.

The interested parties should submit applications for disclosure under APO in accordance with 19 CFR 351.305 and 351.306 of the Department's regulations.

This rescission, initiation, and notice are in accordance with section 751(a)(2)(B)(ii) of the Act and 19 CFR 351.214 and 351.221(c)(1)(i) of the Department's regulations.

Dated: June 26, 2002

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.