Administrative Review of Certain Frozen Warmwater Shrimp From the People's Republic of China: Final Results and Partial Rescission of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On February 14, 2011, the Department of Commerce (“Department”) published in the Federal Register the Preliminary Results of the fifth administrative review of the antidumping duty order on certain frozen warmwater shrimp from the People's Republic of China (“PRC”). We gave interested parties an opportunity to comment on the Preliminary Results. Based upon our analysis of the comments and information received, we continue to find that Hilltop has not sold subject merchandise at less than normal value (“NV”) during the period of review (“POR”), February 1, 2009, through January 31, 2010.

DATES:

Effective Date: August 19, 2011.

FOR FURTHER INFORMATION CONTACT:

Bob Palmer and Kabir Archuletta, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-9068 and (202) 482-2593, respectively.

SUPPLEMENTARY INFORMATION:

Background

On April 9, 2010, the Department initiated an administrative review of 92 producers/exporters of subject merchandise from the PRC. Subsequently, pursuant to 19 CFR 351.213(d)(1), the Department rescinded the administrative review with respect to Allied Pacific Aquatic Products Zhanjiang Co., Ltd. and Allied Pacific Food (Dalian) Co., Ltd. based on upon Petitioner's timely withdrawal of its review request. As noted above, on February 14, 2011, the Department published the Preliminary Results of this administrative review. In those Preliminary Results, the Department preliminarily rescinded the review with respect to several companies that submitted no shipment certifications and for which we have not found any information to contradict these claims. These companies are Yangjiang City Yelin Hoitat Quick Frozen Seafood Co., Ltd., Fuqing Yihua Aquatic Food Co., Ltd., Fuqing Minhua Trade Co., Ltd., and Shantou Yelin Frozen Seafood Co., Ltd. (d.b.a. Shantou Yelin Quick-Freeze Marine Products Co., Ltd.).

On March 3, 2011, we extended the deadline for parties to submit the case briefs and rebuttal briefs to March 21, 2011, and March 28, 2011, respectively. On March 7, 2011, the Petitioner, Domestic Processors, and Hilltop submitted additional surrogate value information. On March 17, 2011, Domestic Processors submitted rebuttal surrogate value information.

On March 21, 2010, Domestic Processors and Hilltop filed case briefs. On March 21, 2010, we received new factual information contained within Petitioner's case brief. On March 24, 2011, we rejected Petitioner's new factual information as being untimely filed, removed the new factual information from the record of this review and provided Petitioner until March 28, 2011 to re-file its case brief. Additionally, we extended the deadline for rebuttal briefs until March 30, 2011. On March 28, 2011, Petitioner resubmitted its case brief. On March 30, 2010, Petitioner, Domestic Processors, and Hilltop filed rebuttal briefs. On May 24, 2011, the Department extended the deadline for the completion of the final results of this review until August 13, 2011. On June 21 and July 11, 2011, the Department place on the record, information pertaining to the Department's recently revised labor rate methodology. Between July 7 and July 14, 2011, interested parties submitted comments regarding the Department's recently revised surrogate labor methodology.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this review are addressed in the “Fifth Administrative Review of Frozen Warmwater Shrimp from the People's Republic of China: Issues and Decision Memorandum for the Final Results,” which is dated concurrently with this notice (“I&D Memo”). A list of the issues that parties raised and to which we respond in the I&D Memo is attached to this notice as an Appendix. The I&D Memo is a public document and is on file in the Central Records Unit (“CRU”), Main Commerce Building, Room 7046, and is accessible on the Department's website 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 a review of the record as well as comments received from parties regarding our Preliminary Results, we made two revisions to Hilltop's margin calculation for the final results. First, we have revised the surrogate value source for shrimp larvae. For the Preliminary Results, we used Sharat Industries Limited (“Sharat”) 2008-2009 financial statements to value shrimp larvae. For the final results, the Department has determined to use Sharat's 2009-2010 financial statements as a surrogate value source for shrimp larvae. For further information see I&D Memo at Comment 3.

Additionally, we have revised the surrogate labor calculation methodology. For further information see I&D Memo at Comment 5; see also, “Memorandum to the File through Catherine Bertrand, Program Manager, Office 9 from Kabir Archuletta, Case Analyst, Office 9; Fifth Administrative Review of Certain Frozen Warmwater Shrimp from the People's Republic of China: Surrogate Factor Valuations for the Final Results,” (“Final SV Memo”) dated concurrently with this notice. Because of the change in the surrogate labor calculation methodology noted above, the antidumping duty margin calculation for Hilltop has changed since the Preliminary Results. For further details on Hilltop's changes, see the company specific analysis memorandum.

Labor Cost Methodology

Pursuant to the Department's recent decision regarding it final labor methodology, we have calculated a revised hourly labor rate to use in valuing Hilltop's reported labor. The revised surrogate value for labor is calculated by using India's, the primary surrogate country, labor cost data from “Chapter 6A: Labor Cost in Manufacturing” from the International Labor Organization (“ILO”) Yearbook of Labor Statistics. Additionally, because the Department is now using Chapter 6A to calculate labor costs, the Department made certain adjustments in the surrogate financial ratio calculations regarding labor. See I&D Memo at Comment 5; see also, Labor Memo and Revised Labor Memo, for the details of the calculation and supporting data.

Scope of the Order

The scope of this order includes certain frozen warmwater shrimp and prawns, whether wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off, deveined or not deveined, cooked or raw, or otherwise processed in frozen form.

The frozen warmwater shrimp and prawn products included in the scope of this Order, regardless of definitions in the Harmonized Tariff Schedule of the United States (“HTS”), are products which are processed from warmwater shrimp and prawns through freezing and which are sold in any count size.

The products described above may be processed from any species of warmwater shrimp and prawns. Warmwater shrimp and prawns are generally classified in, but are not limited to, the Penaeidae family. Some examples of the farmed and wild-caught warmwater species include, but are not limited to, white-leg shrimp (Penaeus vannemei), banana prawn (Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), redspotted shrimp (Penaeus brasiliensis), southern brown shrimp (Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern rough shrimp (Trachypenaeus curvirostris), southern white shrimp (Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus indicus).

Frozen shrimp and prawns that are packed with marinade, spices or sauce are included in the scope of this order. In addition, food preparations, which are not “prepared meals,” that contain more than 20 percent by weight of shrimp or prawn are also included in the scope of this order.

Excluded from the scope are: (1) Breaded shrimp and prawns (HTS subheading 1605.20.1020); (2) shrimp and prawns generally classified in the Pandalidae family and commonly referred to as coldwater shrimp, in any state of processing; (3) fresh shrimp and prawns whether shell-on or peeled (HTS subheadings 0306.23.0020 and 0306.23.0040); (4) shrimp and prawns in prepared meals (HTS subheading 1605.20.0510); (5) dried shrimp and prawns; (6) Lee Kum Kee's shrimp sauce; (7) canned warmwater shrimp and prawns (HTS subheading 1605.20.1040); (8) certain dusted shrimp; and (9) certain battered shrimp. Dusted shrimp is a shrimp-based product: (1) That is produced from fresh (or thawed-from-frozen) and peeled shrimp; (2) to which a “dusting” layer of rice or wheat flour of at least 95 percent purity has been applied; (3) with the entire surface of the shrimp flesh thoroughly and evenly coated with the flour; (4) with the non-shrimp content of the end product constituting between four and 10 percent of the product's total weight after being dusted, but prior to being frozen; and (5) that is subjected to individually quick frozen (“IQF”) freezing immediately after application of the dusting layer. Battered shrimp is a shrimp-based product that, when dusted in accordance with the definition of dusting above, is coated with a wet viscous layer containing egg and/or milk, and par-fried.

The products covered by this Order are currently classified under the following HTS subheadings: 0306.13.0003, 0306.13.0006, 0306.13.0009, 0306.13.0012, 0306.13.0015, 0306.13.0018, 0306.13.0021, 0306.13.0024, 0306.13.0027, 0306.13.0040, 1605.20.1010 and 1605.20.1030. These HTS subheadings are provided for convenience and for customs purposes only and are not dispositive, but rather the written description of the scope of this order is dispositive.

Final Partial Rescission

In the Preliminary Results, the Department preliminarily rescinded this review with respect to the following companies: Shantou Yelin Frozen Seafood Co., Ltd. (d.b.a. Shantou Yelin Quick-Freeze Marine Products Co., Ltd.); Yangjiang City Yelin Hoitat Quick Frozen Seafood Co., Ltd., Fuqing Yihua Aquatic Food Co., Ltd., and Fuqing Minhua Trading Co., Ltd. The Department determined that they had no shipments of subject merchandise to the United States during the POR.

Subsequent to the Preliminary Results, no information was submitted on the record indicating that the above companies made sales to the United States of subject merchandise during the POR and no party provided written arguments regarding this issue. Thus, in accordance with 19 CFR 351.213(d)(3), and consistent with our practice, we are rescinding this review with respect to the above-named companies.

Affiliation/Single Entity

In the Preliminary Results, we found Hilltop, Yelin Enterprise Co., Ltd., Ocean Beauty Corporation, and Ever Hope International Co., Ltd. to be a single entity for purposes of this administrative review. Because we have not received any information on the record that contradicts our preliminary finding, we continue to find Hilltop, Yelin Enterprise Co., Ltd. Ocean Beauty Corporation, and Ever Hope International Co., Ltd. to be a single entity for these final results.

Separate Rates

In our Preliminary Results, we preliminarily determined that Hilltop and Zhanjiang Regal Integrated Marine Resources Co., Ltd. (“Regal”) met the criteria for the application of a separate rate. We have not received any information since the issuance of the Preliminary Results that provides a basis for the reconsideration of these determinations. Therefore, the Department continues to find that Hilltop and Regal meet the criteria for a separate rate.

Rate for Non-Selected Companies

In the Preliminary Results, we stated that the Department employed a limited examination methodology, as it did not have the resources to examine all companies for which a review request was made, and selected Hilltop as a mandatory respondent in this review. Additionally, Regal submitted timely information as requested by the Department and remained subject to review as a cooperative separate rate respondent. In the Preliminary Results, the Department assigned Regal its rate calculated in the previous administrative review. As we stated in the Preliminary Results, the rate for the individually examined respondent, Hilltop, continues to be de minimis and accordingly, the Department will determine a reasonable method for assigning a rate to Regal.

The statute and the Department's regulations do not address the establishment of a rate to be applied to individual companies not selected for examination when the Department limited its examination in an administrative review pursuant to section 777A(c)(2) of the Act. Generally we have looked to section 735(c)(5) of the Act, which provides instructions for calculating the all-others rate in an investigation, for guidance when calculating the rate for respondents we did not examine in an administrative review. Section 735(c)(5)(A) of the Act articulates a preference that we are not to calculate an all-others rate using any zero or de minimis margins or any margins based entirely on facts available. Accordingly, the Department's usual practice has been to average the rates for the selected companies, excluding zero, de minimis and rates based entirely on facts available. See Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews and Rescission of Review in Part, 73 FR 52823, 52824 (September 11, 2008) and accompanying Issues and Decision Memorandum at Comment 16. Section 735(c)(5)(B) of the Act also provides that, where all margins are zero, de minimis, or based entirely on facts available, we may use “any reasonable method” for assigning the rate to non-selected respondents, including “averaging the estimated weighted-average dumping margins determined for the exporters and producers individually investigated.”

In previous cases, the Department has determined that a “reasonable method” to use when, as here, the rates of the mandatory respondents are zero and de minimis, is to apply to those companies not selected for individual review (but eligible for a separate rate in NME cases) the average of the most recently determined rates that are not zero, de minimis or based entirely on facts available (which may be from a prior administrative review or a new shipper review). However, if any such nonselected company had its own calculated rate that is contemporaneous with or more recent than such prior determined rates, the Department has applied such individual rate to the nonselected company in the review in question, including when that rate is zero or de minimis. In this case, there is only one nonselected company under review that is eligible for a separate rate, and this company received its own calculated rate that is contemporaneous with or more recent than the most recent rates determined for other companies that are not zero, de minimis or based entirely on facts available. Accordingly, the Department has concluded that in this case a reasonable method for determining the rate for the non-selected company, Regal, is to apply its most recent individually calculated rate.

PRC-Wide Entity

In the Preliminary Results, the Department determined that those companies, which did not demonstrate eligibility for a separate rate, are properly considered part of the PRC-wide entity. Since the Preliminary Results, no interested parties submitted comments regarding these findings. Therefore, we continue to treat such entities as part of the PRC-wide entity.

Final Results of Review

The weighted-average dumping margins for the POR are as follows:

Assessment

Pursuant to section 751(a)(2)(A) of the Act and 19 CFR 351.212(b), the Department will determine, and U.S. Customs and Border Protection shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. For assessment purpose, we calculated importer (or customer)-specific assessment rates for merchandise subject to this review. Where appropriate, we calculated an ad valorem rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total entered values associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting ad valorem rate against the entered customs values for the subject merchandise. Where appropriate, we calculated a per-unit rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total sales quantity associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting per-unit rate against the entered quantity of the subject merchandise. Where an importer (or customer)-specific assessment rate is de minimis (i.e., less than 0.50 percent), the Department will instruct CBP to assess that importer (or customer's) entries of subject merchandise without regard to antidumping duties, in accordance with 19 CFR 351.106(c)(2). The Department intends to issue assessment instructions to CBP 15 days after the date of publication of these final results of review.

Cash Deposit Requirements

The following cash-deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) For the exporters listed above, the cash deposit rate will be established in the final results of this review (except, if the rate is zero or de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for previously investigated or reviewed PRC and non-PRC exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recent period; (3) for all PRC exporters of subject merchandise which have not been found to be entitled to a separate rate, the cash deposit rate will be the PRC-wide rate of 112.81 percent; and (4) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporters that supplied that non-PRC exporter. These deposit requirements, when imposed, shall 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.

Administrative Protective Orders

This notice also serves as a reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. 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 terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this administrative review and notice in accordance with sections 751(a)(1) and 777(i) of the Act.

Appendix I—Issues & Decision Memorandum

Comment 1: Respondent Selection Methodology

Comment 2: Surrogate Country

Comment 3: Shrimp Larvae

Comment 4: Shrimp Feed

Comment 5: Labor Surrogate Value

Comment 6: North Korean Import Data

Comment 7: Surrogate Financial Ratio Adjustments

Comment 8: Identify Taiwanese Resellers on Custom's Instructions