E7-19128. Fresh Garlic From the People's Republic of China: Final Results of the Eleventh New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

DATES:

Effective Date: September 27, 2007.

SUMMARY:

On April 30, 2007, the Department of Commerce (“the Department”) published the Preliminary Results of the new shipper reviews of the antidumping duty order on fresh garlic from the People's Republic of China (“PRC”), covering the period November 1, 2005, through April 30, 2006. See Fresh Garlic from the People's Republic of China: Preliminary Results of New Shipper Reviews, 72 FR 21219 (April 30, 2007) (“Preliminary Results”). The period of review (“POR”) is November 1, 2005, through April 30, 2006. ^[1] Based on our analysis of the comments received, we have made certain changes to our calculations. The final dumping margins for these reviews are listed in the “Final Results of the Reviews” section below.

FOR FURTHER INFORMATION CONTACT:

Javier Barrientos, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

The Department received timely case briefs from Weifang Hongqiao International Logistics Co., Ltd. (“Hongqiao”) on May 22, 2007, and from Petitioners ^[2] on June 15, 2007. The Department received timely rebuttal briefs from Shandong Wonderland Organic Food Co., Ltd. (“Wonderland”) and Shenzhen Xinboda Industrial Co., Ltd. (“Xinboda”) on June 22, 2007. On June 27, 2006, the Department issued a questionnaire to the foreign market researcher (“FMR”) responsible for providing the garlic bulb prices as submitted by Petitioners in their April 3, 2007, surrogate value submission.

On June 28, 2007, we extended the time limit for the completion of the final results of these reviews. See Fresh Garlic from the People's Republic of China: Extension of Time Limits for Final Results of New Shipper Reviews, 72 FR 37195 (July 9, 2007). On July 11, 2007, we received the response to the Department's June 27, 2006, FMR questionnaire.

On August 10, 2007, we reopened the record and provided parties an opportunity to comment on the FMR's July 11, 2007, response. On August 15, 2007, we received a supplemental brief from Petitioners with regard to the FMR's July 11, 2007, response. No other party submitted comments.

Analysis of Comments Received

All issues raised in the case, rebuttal, and supplemental briefs by parties to these reviews are addressed in the “Antidumping Duty Order on Fresh Garlic from the People's Republic of China: Issues and Decision Memorandum for the Eleventh New Shipper Reviews,” dated September 20, 2007, which is hereby adopted by this notice (“Issues and Decision Memo”). A list of the issues which parties raised and to which we respond in the Issues and Decision Memo is attached to this notice as an Appendix. The Issues and Decision Memo is a public document and is on file in the Central Records Unit (“CRU”), Main Commerce Building, Room B-099, and is accessible on the Web at http://www.trade.gov/​ia. The paper copy and electronic version of the memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of information on the record of these reviews, and comments received from the interested parties, we have made changes to the margin calculations for all respondents. We have revalued one of the surrogate values (garlic bulb prices) used in the Preliminary Results. For further details see Issues and Decision Memo at Comment 1.

In addition, we have made a company-specific change since the Preliminary Results. Specifically, we have incorporated a post-preliminary results clarification/correction to Hongqiao's margin calculation with respect to mesh bags. For further details on this company-specific change, see Issues and Decision Memo at Comment 3.^[3]

Scope of the Order

The products covered by 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 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 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 CBP to that effect.

Normal Value Methodology

The Department's general policy, consistent with section 773(c)(1) of the Tariff Act of 1930, as amended (the “Act”), is to calculate normal value (“NV”) for non-market economy companies using the factors of production (“FOP”) that a respondent consumes in order to produce a unit of the subject merchandise. There are circumstances, however, in which the Department will modify its standard FOP methodology, choosing to apply a surrogate value to an intermediate input instead of the individual FOPs used to produce that intermediate input. First, in some cases, a respondent may report factors used to produce an intermediate input that accounts for an insignificant share of total output. When the potential increase in accuracy to the overall calculation that results from valuing each of the FOPs is outweighed by the resources, time, and burden such an analysis would place on all parties to the proceeding, the Department will value the intermediate input directly using a surrogate value. See, e.g., Notice of Final Antidumping Duty Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 37116 (June 23, 2003) (“Fish Fillets”) and accompanying Issues and Decision Memorandum at Comment 3.

Also, there are circumstances in which valuing the FOPs used to yield an intermediate product would lead to an inaccurate result because the Department would not be able to account for a significant element of cost adequately in the overall factors buildup. In this situation, the Department would also value the intermediate input directly. See, e.g., Fresh Garlic from the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review and Final Results of New Shipper Reviews, 71 FR 26329 (May 4, 2006) and accompanying Issues and Decision Memorandum at Comment 1.

In the Preliminary Results, we found that respondents in these proceedings were unable to accurately record and substantiate the complete costs of growing garlic based on our analysis of the information on the record. See Preliminary Results, 71 FR at 71520; see also Memorandum to the File through James C. Doyle, Director, Office 9 and Alex Villanueva, Program Manager, Office 9 from Irene Gorelik, Analyst, Office 9: New Shipper Review of the Antidumping Duty Order on Fresh Garlic From the People's Republic of China: Intermediate Input Methodology, dated April 23, 2007 (“Intermediate Product Memo”). In order to eliminate the distortions in our calculation of NV for all of the reasons identified in the Intermediate Product Memo, we have applied an intermediate-product valuation methodology to all companies for these final results of review. Using this methodology, we calculated NV by starting with a surrogate value for the garlic bulb (i.e., the “intermediate product”), adjusted for yield losses during the processing stages, and adding the respondents' processing costs, which were calculated using their reported usage rates for processing fresh garlic. In future reviews, should a respondent be able to provide sufficient factual evidence that it maintains the necessary information in its internal books and records that would allow us to establish the completeness and accuracy of the reported FOPs, we will revisit this issue and consider whether to use its reported FOPs in the calculation of NV. For further details, see Intermediate Product Memo.

In addition, we have revised the calculation of the garlic bulb surrogate value. In the Preliminary Results we used prices for Super-A garlic to value the respondents' garlic bulb input using Azadpur Agricultural Produce Marketing Committee's (“APMC”) “Market Information Bulletin” (the “Bulletin”). The Bulletin is published by Azadpur APMC on each trading day and contains, among other things, a list of all fruits and vegetables sold on the previous trading day, the amount (by weight) of each fruit or vegetable sold on that day and a low, high and modal price for each commodity sold. For these final results, however, using respondents' size data on the record, and a clarification to the definition of grades A and Super A, the Department calculated a surrogate value based on the most appropriate Bulletin data, i.e., the average of grades A and Super-A garlic bulb prices, as opposed to only utilizing the Super A prices (as was done in the Preliminary Results). Specifically, we averaged data points for A and Super A grade garlic values (from which we deducted a market fee and deflated to the POR) to capture respondents' inputs of garlic which was greater than 40mm in diameter. See Issues and Decision Memo at Comment 1.

For a complete explanation of the Department's analysis, and for a more detailed analysis of these issues with respect to each respondent, see Intermediate Product Memo and Issues and Decision Memo at Comments 1 and 3.

Final Results of the Reviews

The Department has determined that the following final dumping margins exist for the period November 1, 2005, through April 30, 2006: ^[4]

Fresh Garlic From the PRC

Manufacturer/exporter	Weighted-average margin (percent)
Produced by Jinxiang Dingtai Garlic Product Co., Ltd. and Exported by Weifang Hongqiao International Logistics Co., Ltd	18.56.
Produced and Exported by Jinxiang Tianma Freezing Storage Co., Ltd	21.79.
Produced and Exported by Shandong Wonderland Organic Food Co., Ltd	17.31.
Produced by Zhengzhou Dadi Garlic Industry Co., Ltd. and Exported by Shenzhen Xinboda Industrial Co., Ltd	0.00 (de minimis).

The Department will disclose calculations performed for these final results to the parties within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

Assessment Rates

Pursuant to 19 CFR 351.212(b), the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of these final results of review. For assessment purposes, where possible, we calculated importer-specific assessment rates for garlic from the PRC via ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of the final results of these new shipper reviews for all shipments of subject merchandise from Hongqiao, Wonderland, Tianma, and Xinboda entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) For subject merchandise produced and exported by Tianma, produced and exported by Wonderland, produced by Dadi and exported by Xinboda, or produced by Dingtai and exported by Hongqiao, the cash-deposit rate will be that established in the final results of these reviews; (2) for subject merchandise exported by Hongqiao but not manufactured by Dingtai and for subject merchandise exported by Xinboda but not manufactured by Dadi, the cash deposit rate will continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for subject merchandise exported by Wonderland or Tianma, but manufactured by any other party, the cash deposit rate will be the PRC-wide rate (i.e., 376.67 percent).

If the cash deposit rate calculated in the final results is zero or de minimis, no cash deposit will be required for those specific producer-exporter combinations. These cash deposit requirements, when imposed, shall remain in effect until further notice.

Notification of Interested Parties

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 the review period. Pursuant to 19 CFR 351.402(f)(3), failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO as explained in the administrative protective order itself. 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 notice of final results of this administrative review and new shipper reviews are issued and published in accordance with sections 751(a)(2)(C) and 777(i) of the Act and 19 CFR 351.221(b)(5).

Dated: September 20, 2007.

Joseph A. Spetrini,

Deputy Assistant Secretary for Import Administration.

Appendix I

Comment 1: Garlic Bulb Surrogate Value

A. Product Specificity

B. Broad Market Average

C. Public Availability

D. Contemporaneity

E. Tax and Duty Exclusivity

Comment 2: Surrogate Financial Ratios

Comment 3: Hongqiao Margin Calculation

Footnotes

1.  On April 23, 2007, we issued a memorandum extending the end of the POR from April 30, 2006, to May 4, 2006, to capture entries of two of the new shippers' merchandise into the United States market which happened after April 30, 2006. See Memorandum to the File from Javier Barrientos, Senior Analyst, through Alex Villanueva, Program Manager, Office 9: Expansion of the Period of Review in the New Shipper Reviews of Fresh Garlic from the People's Republic of China, dated April 23, 2007 (“POR Expansion Memo”).

2.  Petitioners are the Fresh Garlic Producers Association (“FGPA”) and its individual members. The individual members of the FGPA are Christopher Ranch LLC, The Garlic Company, Valley Garlic, and Vessey and Company, Inc.

3.  The specific calculation changes can be found in: “Analysis for the Final Results of the 11th Antidumping Duty New Shipper Review of Fresh Garlic from the People's Republic of China: Weifang Hongqiao International Logistics Co., Ltd. (“Hongqiao”) dated September 20, 2007.

4.  For liquidation purposes the Department will instruct Customs and Border Protection (“CBP”) to use the period November 1, 2005, through May 4, 2006, for two of the new shippers for whom we extended the POR. See POR Expansion Memo.