04-332. Fresh Garlic From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of initiation of new shipper antidumping duty review: Fresh garlic from the People's Republic of China.

EFFECTIVE DATE:

January 7, 2004.

SUMMARY:

In November 2003, the Department of Commerce received two requests to conduct new shipper reviews of the antidumping duty order on fresh garlic from the People's Republic of China. We have determined that one of these requests meets the statutory and regulatory requirements for the initiation of a new shipper review.

FOR FURTHER INFORMATION CONTACT:

Brian Ellman or Minoo Hatten at [phone] and [phone], respectively, AD/CVD Enforcement III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

The notice announcing the antidumping duty order on fresh garlic from the People's Republic of China (PRC) was published on November 16, 1994. In November 2003, we received two requests to conduct new shipper reviews of the antidumping duty order.

On November 25, 2003, we received a request for a new shipper review from H&T Trading Company of Hong Kong (H&T). On November 26, 2003, we also received a request for a new shipper review from Jinxiang Shanyang Freezing Storage Co., Ltd. (Shanyang).

H&T and Shanyang certified that they exported the subject merchandise on which they based their requests for a new shipper review, but that they did not grow the subject merchandise. Specifically, H&T certified that Shandong Jining Jinshan Textile Co., Ltd. (Jining Jinshan), grew the subject merchandise it exported, and Shanyang certified that Kaifeng Wangtun Fresh Vegetables Factory (Kaifeng) grew the subject merchandise it exported.

On December 16 and December 23, 2003, respectively, Shanyang and H&T resubmitted their requests for new shipper reviews to correct certain deficiencies (e.g., bracketing of public information) that we identified in their submissions and to provide additional documentation pertaining to the U.S. sales for which they requested new shipper reviews.

Initiation of New Shipper Review

H&T

The Department of Commerce (the Department) issued a letter to H&T on December 19, 2003, in which it requested additional documentation establishing H&T's entitlement to a new shipper review. In its December 23, 2003, response, H&T included the sales contract pertaining to its transaction with the grower, Jining Jinshan. The sales contract, which was generated prior to the date of H&T's U.S. sale, specifies the ultimate U.S. destination of the merchandise and stipulates that the transaction between Jining Jinshan and H&T will be conducted in U.S. dollars.

Section 772(a) of the Tariff Act of 1930, as amended (the Act) states in part:

The term “export price” means the price at which the subject merchandise is first sold (or agreed to be sold) before the date of importation by the producer or exporter of the subject merchandise outside of the United States to an unaffiliated purchaser in the United States or to an unaffiliated purchaser for exportation to the United States * * *

Accordingly, the Department has interpreted section 772(a) of the Act to mean that it is to use the price at which the first party in the chain of distribution who has knowledge of the U.S. destination of the merchandise sells the subject merchandise, either directly to a U.S. purchaser or to an intermediary such as a trading company. The party making such a sale, with knowledge of destination, is the appropriate party to be reviewed. Our focus is on the first party in the chain of distribution with knowledge of the U.S. destination rather than on the first chronological sale of the merchandise. See, e.g., Fresh Garlic From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, Partial Rescission of Administrative Review, and Intent To Rescind Administrative Review in Part, 68 FR 4758, 4759 (January 30, 2003). One exception to this rule is that, in non-market-economy (NME) cases, we do not base export price on internal transactions between two companies located in the NME. See Fresh Garlic From the People's Republic of China; Final Results of Antidumping Duty Administrative Review and Partial Termination of Administrative Review, 62 FR 23758, 23759 (May 1, 1997).

Hong Kong companies are treated as market-economy companies (see Application of U.S. Antidumping and Countervailing Duty Laws to Hong Kong, 62 FR 42965 (August 11, 1997)). H&T's request for a new shipper review indicates that the company is based in Hong Kong.

Applying these principles, we are not initiating a new shipper review of H&T's sale to its U.S. customer because evidence on the record supports a finding that Jining Jinshan had knowledge of the U.S. destination when it completed its transaction with H&T. Because of its knowledge and the fact that the sale between Jining Jinshan and H&T was the first non-intra-NME sale in the chain of distribution, this sale is the appropriate basis for determining the export price.

The Department did not receive a request for a new shipper review of Jining Jinshan at any point prior to or during the anniversary month of the publication of the antidumping duty order. See 19 CFR 351.214(d). Therefore, we find that it is not appropriate to conduct a review of the sale at issue at this time and have determined that H&T is ineligible for a new shipper review based on this transaction.

Shanyang

Pursuant to 19 CFR 351.214(b)(2)(i), Shanyang certified that it did not export subject merchandise to the United States during the period of investigation (POI). In addition, pursuant to 19 CFR 351.214(b)(2)(ii)(B), Kaifeng, the grower of the garlic exported by Shanyang, provided certifications that it did not export the subject merchandise to the United States during the POI.

Pursuant to 19 CFR 351.214(b)(2)(iii)(A), Shanyang certified that, since the initiation of the investigation, it has never been affiliated with any exporter or producer who exported the subject merchandise 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), Shanyang also certified that its export activities were not controlled by the central government.

In addition to the certifications described above, Shanyang submitted documentation establishing the following: (1) The date on which it first shipped the subject merchandise for export to the United States and the date on which the subject merchandise was first entered, or withdrawn from warehouse, for consumption; (2) the volume of its first shipment and the volume of subsequent shipments; (3) the date of its first sale to an unaffiliated customer in the United States.

Pursuant to section 751(a)(2)(B) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.214(d)(1), we are initiating a new shipper review for shipments of fresh garlic from the PRC grown by Kaifeng and exported by Shanyang.

The period of review is November 1, 2002, through October 31, 2003. See 19 CFR 351.214(g)(1)(i)(A). We intend to issue 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.

Shanyang has certified that it exported but did not grow the subject merchandise on which it based its request for a new shipper review (i.e., Kaifeng certified that it grew the subject merchandise exported by Shanyang). Therefore, until completion of the new shipper review, we will instruct U.S. Customs and Border Protection to allow, at the option of the importer, the posting of a bond or security in lieu of a cash deposit for entries of subject merchandise grown by Kaifeng and exported by Shanyang.

Interested parties that need access to proprietary information in this new shipper review should submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305 and 351.306.

This initiation and notice are in accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214 and 351.221(c)(1)(i).

Dated: December 31, 2003.

Louis Apple,

Acting Deputy Assistant Secretary for Import Administration.