E8-22885. Fresh Garlic from the People's Republic of China: Final Results and Rescission, In Part, of Twelfth New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

September 29, 2008.

SUMMARY:

On May 1, 2008, the Department of Commerce (the “Department”) published the preliminary results of these new shipper reviews, covering the period November 1, 2006, through April 30, 2007.¹ See Fresh Garlic from the People's Republic of China: Preliminary Results of the 12th New Shipper Reviews, 73 FR 24042 (May 1, 2008) (“Preliminary Results”). 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. Finally, after reexamining the bona fides of Shandong Chenhe International Trading Co., Ltd.'s (“Chenhe”) single sale, the Department finds that that sale is not a bona fide transaction; therefore, for these final results, the Department has rescinded the review with respect to Chenhe.

FOR FURTHER INFORMATION CONTACT:

Paul Walker and Blaine Wiltse, Import Administration, International Trade Administration, U.S. Department of Commerce, 14^th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] or [phone], respectively.

Case History

Background

The Department conducted a verification of Chenhe from May 12-14, 2008. The Department conducted a verification of Jining Yongjia Trade Co., Ltd. (“Yongjia”) and its supplier Jinxiang County Shanfu Frozen Co. Ltd. (“Shanfu”) from May 15-18, 2008.

On July 7, 2008, 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: Notice of Extension of Time Limits for the Final Results of the Twelfth New Shipper Reviews, 73 FR 38396 (July 7, 2008).

On July 8, 2008, we received case briefs from Yongjia, Chenhe, Hebei Golden Bird Trading Co., Ltd. (“Golden Bird”), Qingdao Tiantaixing Foods Co., Ltd. (“QTF”) and the Petitioners.² On July 16, 2008 we received timely rebuttal briefs from Chenhe. On August 29, 2008, we reopened the record and provided parties an opportunity to comment on certain U.S. Customs and Border Protection (“CBP”) data. On September 3, 2008, we received a supplemental brief from Chenhe with regard to the CBP data, in which Chenhe corrected the entered value of its single POR sale. On September 4, 2008, we received a supplemental brief from the Petitioners with regard to the CBP data. On September 8, 2008, we received rebuttals to the supplemental briefs from Chenhe and the Petitioners with regard to the CBP data.

Analysis of Comments Received

All issues raised in the case, rebuttal, and supplemental briefs by parties to these reviews are addressed in the “New Shipper Reviews of Fresh Garlic from the People's Republic of China: Issues and Decision Memorandum,” dated September 19, 2008, 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 1117, 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.³ For the final results, we will continue to use regression-based wage data, but will use US $1.04 as the revised wage for the PRC in the final results, which continues to be based on the reported experience of several countries, but applies the more recent 2007 calculations, which are based on 2005 wage rate data.⁴ The Department published the 2007 Wage Rates, notifying parties of the finalized NME wage rates and informing parties that those wage rates would be “in effect for all antidumping proceedings for which the Department's final decision is due after the publication of this notice.”⁵

In addition, we have incorporated a post-preliminary results clarification/correction to the margin calculations, with respect to mesh bags, for Yongjia, Golden Bird, QTF and Greening. For further details on this company-specific change, see Issues and Decision Memo at Comment 5 and the company-specific analysis memoranda.

Partial Rescission of Administrative Review

In the Preliminary Results, the Department found that Chenhe's single POR sale was made on a bona fide basis. However, in light of the correction to Chenhe's entered value and the resulting reanalysis of Chenhe's third-country sales, the additional CBP data placed on the record of this review, and the comments from the Petitioners and Chenhe, the Department has reevaluated the circumstances surrounding Chenhe's POR transaction and finds that the sale in question is not a bona fide transaction. In the Preliminary Results, the Department relied on an inappropriate HTSUS subcategory, 0703.20.0020: FRESH PEELED GARLIC, to perform its analysis of Chenhe's single POR sale. For the final results, the Department finds that the CBP quantity and value data for imports of garlic under the HTSUS subcategory 0703.20.0010, “GARLIC, FRESH WHOLE BULBS” provides an appropriate comparison to Chenhe's sale because the data is more specific to the subject merchandise sold by Chenhe, and thus, the Department has analyzed the CBP data accordingly. As a result of our analysis of the additional CBP data and third-country sales in comparison to Chenhe's corrected entered value, we have concluded that the single sale made by Chenhe during the POR is not a bona fide commercial transaction based on the totality of circumstances: (a) the high price and low quantity of Chenhe's single POR sale; and, (b) other indicia of a non-bona fide transaction. In sum, the totality of circumstances leads the Department to find that Chenhe's single POR sale is a non-bona fide commercial transaction. Therefore, this sale does not provide a reasonable or reliable basis for calculating a dumping margin. As Chenhe had no other sales of subject merchandise during the instant POR, the Department is rescinding the new shipper review with respect to Chenhe. For further discussion of this issue, see Comment 1 of the Issues and Decision Memorandum; see also Memorandum to James Doyle, Director, Office 9, through Catherine Bertrand, Program Manager, Office 9, from Blaine Wiltse, Analyst, Regarding; Final BPI Evidence of Shandong Chenhe International Trading Co., Ltd.: New Shipper Review of Fresh Garlic from the People's Republic of China, dated September 19, 2008.

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 account 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 Yongjia was 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; see also Memorandum to James C. Doyle, Director, Office 9, through Catherine Bertrand, Program Manager, Office 9 from Paul Walker, Analyst, “12^th New Shipper Review of Fresh Garlic from the People's Republic of China: Intermediate Input Methodology,” dated April 22, 2008 (“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 Yongjia 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 added Yongjia's 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.

We note that for the other respondents (Golden Bird, Greening, and QTF) the Department did not apply the intermediate product methodology because these respondents only processed purchased garlic and did not grow their own garlic. For a complete explanation of the Department's analysis, and for a more detailed analysis of these issues with respect to Yongjia, see Intermediate Product Memo and Issues and Decision Memo at Comment 2.

Final Results of the New Shipper Reviews

The Department has determined that the following final dumping margins exist for the period November 1, 2006, through April 30, 2007:

Fresh Garlic from the PRC

Exporter/Manufacturer	Weighted-Average Margin (Percent)
Exported and Produced by Shenzhen Greening Trading Co., Ltd.	2.12
Exported and Produced by Qingdao Tiantaixing Foods Co., Ltd.	32.78
Exported by Hebei Golden Bird Trading Co., Ltd. and Produced by Cangshan County Hongyang Vegetables & Foods Co., Ltd.	13.83
Exported by Jining Yongjia Trade Co., Ltd. and Produced by Jinxiang County Shanfu Frozen Co., Ltd.	18.88

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

Consistent with the final results of review on the antidumping duty order of fresh garlic from the PRC for the period November 1, 2002, through October 31, 2003, 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 of Antidumping Duty Administrative Review, 70 FR 34082 (June 13, 2005) (“Garlic 10^th AR Final”). Therefore, the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. 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.

Cash Deposit Requirements

Consistent with Garlic 10^th AR Final we will establish and collect a per-kilogram cash- deposit amount which will be equivalent to the company-specific dumping margin published in those future reviews. Specifically, the following deposit requirement will be effective upon completion of subsequent review segments of this proceeding 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)(2)(C) of the Act: (1) for subject merchandise produced and exported by QTF, produced and exported by Greening, produced by Hongyang and exported by Golden Bird, or produced by Shanfu and exported by Yongjia, the cash deposit rate will be the company-specific rate shown above (except that if the rate for a particular company is de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for subject merchandise exported by QTF or Greening but not manufactured by QTF or Greening, respectively, for subject merchandise exported by Golden Bird but not manufactured by Hongyang, and for subject merchandise exported by Yongjia but not manufactured by Shanfu, the cash deposit rate will continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for subject merchandise manufactured by QTF or Greening, but exported by any other party, the cash deposit rate will be the rate applicable to the exporter. These cash deposit requirements will remain in effect until further notice.

Reimbursement of Duties

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of doubled antidumping duties.

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 and rescission, in part, of these 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 19, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

Appendix I

Comment 1: Bona Fide Analysis of Chenhe's Sale

Comment 2: Intermediate Input Methodology

Comment 3: Surrogate Financial Ratios

Comment 4: Garlic Bulb Surrogate Value

Comment 5: Mesh Bags

Comment 6: Containerization

Footnotes

1.  We extended the end of the period of review (“POR”) from April 30, 2007 to May 17, 2007, to capture entries for two respondents. See the “Expansion of the POR” section in the Preliminary Results.

2.  The Fresh Garlic Producers Association and its individual members: Christopher Ranch LLC, the Garlic Company, Valley Garlic and Vessey and Company, (collectively known as the “Petitioners”).

3.  Yongjia, Chenhe, Golden Bird, QTF and Shenzhen Greening Trading Co., Ltd.

4.  See http://ia.ita.doc.gov/​wages/​05wages/​05wages-051608.html; see also Corrected 2007 Calculation of Expected Non-Market Economy Wages, 73 FR 27795 (May 14, 2008) (“Corrected 2007 Wages”).

5.  Corrected 2007 Wages, 73 FR at 27795 (correcting a ministerial error in the wage rate calculation).