Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China: Final Results, Partial Rescission and Termination of a Partial Deferral of the 2002-2003 Administrative Review.

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Results, Partial Rescission and Termination of a Partial Deferral of the 2002-2003 Administrative Review.

SUMMARY:

We have determined that sales of certain non-frozen apple juice concentrate from the People's Republic of China were not made below normal value during the period June 1, 2002, through May 31, 2003, by Gansu Tongda Fruit Juice Beverage Company Ltd. We are also rescinding the review, in part, in accordance with 19 CFR 351.213(d)(3) and terminating an earlier deferral of the initiation of the administrative review for four respondents.

Based on our review of comments received and a reexamination of surrogate value data, we have made certain changes in the margin calculations for Gansu Tongda Fruit Juice Beverage Company Ltd. The final weighted-average dumping margin for Gansu Tongda Fruit Juice Beverage Company Ltd. is 0.03 percent, which is de minimis. Based on these final results of review, we will instruct U.S. Customs and Border Protection to liquidate all appropriate entries without regard to antidumping duties.

EFFECTIVE DATE:

November 10, 2004.

FOR FURTHER INFORMATION CONTACT:

Audrey Twyman, Stephen Cho, or John Brinkmann, AD/CVD Operations, Office I, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230; telephone (202) 482-3534, (202) 482-3798, and (202) 482-4126, respectively.

SUPPLEMENTARY INFORMATION:

Background

On July 6, 2004, the Department published the preliminary results of this review of certain non-frozen apple juice concentrate from the People's Republic of China (“PRC”). See Certain Non-Frozen Apple Juice Concentrate From the People's Republic of China: Preliminary Results, Partial Rescission, and Partial Deferral of 2002-2003 Administrative Review, 69 FR 40612 (July 6, 2004) (“Preliminary Results”). The period of review (“POR”) is June 1, 2002, through May 31, 2003. This review covers Gansu Tongda Fruit Juice Beverage Company Ltd. (referred to as “the respondent” or “Gansu Tongda”).

We sent a fourth supplemental questionnaire on July 1, 2004, and received a response on July 26, 2004.

We invited parties to comment on the Preliminary Results. On August 6, 2004, we received a case brief from Gansu Tongda. No rebuttal briefs were submitted. No hearing was held because none was requested.

The Department has conducted this administrative review in accordance with section 751 of the the Tariff Act of 1930, as amended (“the Act”).

Scope of Review

The product covered by this order is certain non-frozen apple juice concentrate (“AJC”). Certain AJC is defined as all non-frozen concentrated apple juice with a Brix scale of 40 or greater, whether or not containing added sugar or other sweetening matter, and whether or not fortified with vitamins or minerals. Excluded from the scope of this order are: frozen concentrated apple juice; non-frozen concentrated apple juice that has been fermented; and non-frozen concentrated apple juice to which spirits have been added.

The merchandise subject to this order is currently classifiable in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheadings 2106.90.52.00, and 2009.70.00.20 before January 1, 2002, and 2009.79.00.20 after January 1, 2002. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Rescission of Review in Part

As noted in the Preliminary Results, Xian Asia Qin Fruit Co., Ltd. (“Xian Asia”), Xian Yang Fuan Juice Co., Ltd. (“Xian Yang”), and Shaanxi Hengxing Fruit Juice Co., Ltd. (“Hengxing”) requested that the Department rescind their administrative reviews. Pursuant to 19 CFR 351.213(d)(1), because Xian Asia, Xian Yang, and Hengxing withdrew their requests for review within 90 days of the date of publication of the notice of initiation of this review and no other party requested a review of these companies, we are rescinding the administrative reviews of Xian Asia, Xian Yang, and Hengxing.

Termination of Deferral of Review

As noted in the Preliminary Results, based upon requests from Yantai Oriental Juice Co., Ltd. (“Oriental”), SDIC Zhonglu Fruit Juice Co., Ltd. (“Zhonglu”), Sanmenxia Lakeside Fruit Juice Co., Ltd. (“Lakeside”), and Shaanxi Haisheng Fresh Fruit Juice Co., Ltd. (“Haisheng”), pursuant to 19 CFR 351.213(c) we granted a one-year deferral of the administrative review for the period June 1, 2002, through May 31, 2003. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, Requests for Revocation, in Part, and Deferral of Administrative Reviews, 2003 68 FR 44524 (July 29, 2003). However, as Oriental, Zhonglu, Haisheng and Lakeside were subsequently excluded from the order pursuant to the February 13, 2004, Notice of Amended Final Determination and Amended Order Pursuant to Final Court Decision, (69 FR 7197), the Department did not initiate the administrative review for these companies in July 2004, the month following the next anniversary month. Accordingly, the deferral of the 2002-2003 administrative review is terminated for these companies.

Collapsing Gansu Tongda and Affiliates

In the Preliminary Results, we collapsed Gansu Tongda with its two affiliated producers/exporters of subject merchandise (i.e., Tongda Fruit Juice and Beverage Liquan Co., Ltd. (“Liquan”) and Tongda Fruit Juice & Beverage Binxian Co., Ltd. (“Binxian”)). We emphasized in the Preliminary Results that we would consider collapsing affiliated producers in the non-market economy (“NME”) context on a case-by-case basis as long as it did not conflict with our NME methodology or separate-rates test. We assigned the resulting margin only to Gansu Tongda, not the collapsed entity, in accordance with our normal NME practice to assign separate rates only to respondent exporters. We did not specifically address the issue of whether Gansu Tongda's rate should be applied to its affiliates because we needed to obtain information from its affiliates in order to make a separate-rates determination in relation to the entity as a whole. Since the Preliminary Results, we issued separate-rates questionnaires to Gansu Tongda's two affiliated producers of subject merchandise.

After reconsideration of the record facts, in accordance with section 771(33) of the Act and the criteria enumerated in 19 CFR 351.401(f), for purposes of the final results, we determined it appropriate to collapse Gansu Tongda with its affiliates, Liquan and Binxian. We note that our rationale for collapsing, i.e., to prevent manipulation of price and/or production (see 19 CFR 351.401(f)(2)), applies to both producers and exporters, if the facts indicate that producers of like merchandise are affiliated as a result of their relationship with an exporter. Furthermore, we applied the “collapsed” rate to Gansu Tongda and all of the above-mentioned affiliates comprising the collapsed entity because we determined that the entity as a whole is entitled to a separate rate (see “Separate Rates” section below). This determination is specific to the facts presented in this review and based on several considerations, including the structure of the collapsed entity, the level of control between/among affiliates and the level of participation by each affiliate in the proceeding.

Separate Rates

In the Preliminary Results we considered Gansu Tongda in our separate-rates analysis and granted a separate rate to Gansu Tongda. For purposes of the final results, we have revisited our separate-rates analysis as a result of our collapsing decision discussed above, and have now considered Gansu Tongda, Liquan, and Binxian as a collapsed entity for purposes of determining whether or not the collapsed entity as a whole is entitled to a separate rate.

In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty deposit rate (i.e., a PRC-wide rate). Thus, a separate-rates analysis is necessary to determine whether the export activities of the collapsed entity as a whole are independent from government control. (See Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China (“Bicycles”), 61 FR 56570 (April 30, 1996).) To establish whether a firm is sufficiently independent in its export activities from government control to be entitled to a separate rate, the Department utilizes a test arising from the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), and amplified in the Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (“Silicon Carbide”). Under the separate-rates criteria, the Department assigns separate rates in NME cases only if the respondent can demonstrate the absence of both de jure and de facto government control over export activities.

1. De Jure Control

Evidence supporting, though not requiring, a finding of de jure absence of government control over exporter activities includes: (1) an absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies.

Gansu Tongda and its affiliates have placed on the administrative record the following documents to demonstrate absence of de jure control: the “Foreign Trade Law of the People's Republic of China”, the “Company Law of the People's Republic of China”, and the “Administrative Regulations of the People's Republic of China Governing the Registration of Legal Corporations.”

As in prior cases, we have analyzed these laws and have found them to establish sufficiently an absence of de jure control absent proof on the record to the contrary. (See, e.g., Final Determination of Sales at Less than Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR 22544 (May 8, 1995) (“Furfuryl Alcohol”), and Preliminary Determination of Sales at Less Than Fair Value: Certain Partial-Extension Steel Drawer Slides with Rollers from the People's Republic of China, 60 FR 29571 (June 5, 1995).)

2. De Facto Control

As stated in previous cases, there is some evidence that certain enactments of the PRC central government have not been implemented uniformly among different sectors and/or jurisdictions in the PRC. (See Silicon Carbide, 59 FR at 22587, and Furfuryl Alcohol, 60 FR at 22544.) Therefore, the Department has determined that an analysis of de facto control is critical in determining whether the respondents are, in fact, subject to a degree of government control which would preclude the Department from assigning separate rates.

The Department typically considers four factors in evaluating whether each respondent is subject to de facto government control of its export functions: (1) whether the export prices are set by, or subject to the approval of, a governmental authority; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding the disposition of profits or financing of losses. (See Silicon Carbide, 59 FR at 22587 and Furfuryl Alcohol, 60 FR at 22545.)

Gansu Tongda and its collapsed affiliates each have asserted the following: (1) they establish their own export prices; (2) they negotiate contracts without guidance from any government entities or organizations; (3) they make their own personnel decisions; and (4) they retain the proceeds of their export sales, use profits according to their business needs, and have the authority to sell their assets and to obtain loans. Additionally, their questionnaire responses indicate that their pricing during the POR does not suggest coordination among unaffiliated exporters. As a result, there is a sufficient basis to determine that Gansu Tongda, Liquan and Binxian have demonstrated as a whole a de facto absence of government control of their export functions and are entitled to a separate rate. Consequently, we have determined that the “collapsed” entity has met the criteria for the application of a separate rate.

Analysis of Comments Received

All issues raised in the case brief are addressed in the “Issues and Decision Memorandum” from Jeffrey May, Deputy Assistant Secretary for Import Administration to James J. Jochum, Assistant Secretary for Import Administration, dated November 3, 2004, (“Decision Memorandum”), which is hereby adopted by this notice. Attached to this notice as an Appendix is a list of the issues that parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Internet at http://www.ia.ita.doc.gov/frn/ under the heading “China PRC.” The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our review of comments received, and a reexamination of surrogate value data, we have made one change to the calculations for the final results. This change is discussed in the following Comment in the Decision Memorandum:

Drum Label: We have revised the weight of a Drum label weight was revised from 0.28 kg per label to 0.00458 kg per label. See Comment 2 of the Decision Memorandum.

Pomace: We have inflated the value for pomace to the POR because we state in the June 29, 2004, “Factors of Production Values Used for the Preliminary Results,” that “{f}or all factors where we could not obtain publicly available prices contemporaneous with the POR, we adjusted FOP values to the POR using the...U.S. producer price index (“PPI”).” The resulting surrogate value for pomace is $26.23 US$/MT. See Comment 3 of the Decision Memorandum.

Final Results of Review

We determine that the following dumping margin exists for the following companies for the period June 1, 2002, through May 31, 2003:

The PRC-wide rate of 51.74 percent applies to all entries of the subject merchandise except for entries from exporters that are identified individually above.

Assessment Rates

The Department will issue appropriate assessment instructions directly to U.S. Customs and Border Protection (“CBP”) within 15 days of publication of the final results of this review.

In accordance with 19 CFR 351.212(b)(1), we have calculated importer (or customer)-specific assessment rates for the merchandise subject to this review. To determine whether the inporter-specific duty assessment rates were de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer (or customer)-specific ad valorem rates by aggregating the dumping margins calculated for all U.S. sales to that importer (or customer) and dividing this amount by the total value of the sales to that importer (or customer). Where an importer (or customer)-specific ad valorem rate was greater than de minimis, we will direct CBP to apply the ad valorem assessment rates against the entered value of each of the importer's/customer's entries during the review period. Where an importer (or customer )-specific ad valorem rate was de minimis, we will order CBP to liquidate without regard to antidumping duties. All other entries of the subject merchandise during the POR will be liquidated at the antidumping duty cash deposit rate in place at the time of entry.

Cash Deposit Requirements for Administrative Review

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)(1) of the Act: (1) the cash deposit rate for Gansu Tongda, Liquan and Binxian is de minimis, i.e., less than 0.5 percent. Therefore, a cash deposit of zero will be required for those firms; (2) for previously-reviewed PRC and non-PRC exporters with separate rates, the cash deposit rate will be the company-specific rate established for the most recent period during which they were reviewed; (3) for all other PRC exporters, the rate will be the PRC country-wide rate, which is 51.74 percent; and (4) for all other non-PRC exporters of subject merchandise from the PRC, the cash deposit rate will be the rate applicable to the PRC exporter that supplied that exporter. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

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 review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

Notification Regarding APOs

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 determination and notice in accordance with section 751(a)(1) and 777(i) of the Act.

APPENDIX

List of Comments and Issues in the Decision Memorandum

Comment 1: The Department's use of Poland as the primary surrogate country is contrary to law and unsupported by the administrative record.

Comment 2: The Department should correct the weight for drum labels.

Comment 3: The Department should revise its surrogate value for pomace by applying the “PPI” inflation factor.