Certain Non-Frozen Apple Juice Concentrate From the People's Republic of China: Notice of Amended Final Determination and Amended Order Pursuant to Final Court Decision

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Amended Final Determination and Amended Order Pursuant to Final Court Decision.

SUMMARY:

On November 20, 2003, in Yantai Oriental Juice Co., et al. v. United States and Coloma Frozen Foods, Inc., et al., Court No. 00-00309, Slip Op. 03-150, the Court of International Trade (“CIT”) affirmed the Department of Commerce's (“the Department's”) remand determinations and entered a judgment order. This litigation related to the Department's Notice of Final Determination of Sales at Less Than Fair Value: Certain Non-Frozen Apple Juice Concentrate From the People's Republic of China, 65 FR 19873 (April 13, 2000) and accompanying Issues and Decision Memorandum (April 6, 2000) (“Issues and Decision Memorandum”), and Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China, 65 FR 35606 (June 5, 2000) (collectively, “Final Determination”).

In its remand determinations, the Department reviewed the record evidence regarding the selection of a surrogate country; the valuation of juice apples, steam coal, and ocean freight; and the calculation of selling, general and administrative (“SG&A”) expenses, overhead, and profit. The Department found that Turkey, rather than India, was the appropriate surrogate country. Juice apples, SG&A, overhead and profit were valued using surrogate value information from Turkey. Steam coal was valued using a domestic Indian price and the ocean freight rate was revised to include a rate for Detroit.

The remand determinations resulted in weighted average margins of zero percent for Yantai Oriental Juice Co. (“Oriental”), Qingdao Nannan Foods Co. (“Nannan”), Sanmenxia Lakeside Fruit Juice Co. Ltd. (“Lakeside”), Shaanxi Haisheng Fresh Fruit Juice Co. (“Haisheng”), and SDIC Zhonglu Juice Group Co. (“Zhonglu”). Therefore, these companies will be excluded from the antidumping duty order on certain non-frozen apple juice concentrate (“AJC”) from the People's Republic of China (“PRC”).

As the remand determinations resulted in changes to calculated company-specific margins, the Department also recalculated the separate rate margin it applied to producers/exporters that responded to the Department's separate rate (“Section A”) questionnaire but were not selected to respond to the full questionnaire (“separate-rate companies”). The calculated antidumping rate for Xian Yang Fuan Juice Co., Ltd. (“Xian Yang”), Xian Asia Qin Fruit Co., Ltd. (“Xian Asia”), Changsha Industrial Products & Minerals Import & Export Corporation (“Changsha Industrial”), and Shandong Foodstuffs Import & Export Corporation (“Shandong Foodstuffs”) (collectively “separate-rate companies”) is 3.83 percent.

The PRC-wide rate of 51.74 percent is unchanged from our Final Determination in the investigation.

As there is now a final and conclusive court decision in this action, we are amending our Final Determination.

EFFECTIVE DATE:

February 13, 2004.

FOR FURTHER INFORMATION CONTACT:

Audrey Twyman or John Brinkmann, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-3534, or (202) 482-4126, respectively.

SUPPLEMENTARY INFORMATION:

Period of Investigation

The period of this investigation (“POI”) is October 1, 1998, through March 31, 1999.

Background

Following publication of the Final Determination, Oriental, Nannan, Lakeside, Haisheng, Zhonglu, Xian Yang, Xian Asia, Changsha Industrial and Shandong Foodstuffs (collectively the “respondents”), filed lawsuits with the CIT challenging the Department's Final Determination.

In the underlying investigation, the Department was required to choose a surrogate country based on “significant production” of “comparable merchandise” and “economic comparability” to the PRC. The Department selected India because it is economically comparable to the PRC, and a significant producer of apples and single strength apple juice, products the Department found to be comparable to AJC. The Department then valued the juice apples, SG&A, overhead, profit, steam coal and other factors of production in India. In calculating ocean freight rates, the Department included freight rates to Detroit in its calculation of an East Coast freight rate.

The Court remanded five issues to the Department.

First, the Court questioned the Department's reliance on a market study included in the petition and an annual report for an Indian company as the basis for determining that India was a significant producer of comparable merchandise. In particular, the Court found the Department had not corroborated the market study, nor had it explained the connection between the market study and the annual report, and the Department's conclusion that India was a significant producer of AJC. The Court similarly rejected the Department's determination that India's status as a significant producer of apples was relevant to the Department's treatment of India as a significant producer of comparable merchandise.

The Court directed the Department to develop sufficient evidence from the record of India's suitability as the surrogate market economy country for AJC production, or, if it could not, to select another suitable country.

Second, the Court instructed the Department to provide an explanation of why the distortions caused by the Government of India's market intervention scheme did not disturb the fair market value of Indian apples. The Court also directed the Department to explain why it treated government subsidies that enabled producers to lower their prices as market distorting, but did not apply the same treatment to such subsidies that raise prices. Furthermore, the Court requested that the Department explain why the price paid by Himachal Pradesh Horticultural Produce Marketing & Processing Corp., a government-controlled entity, should be considered a market-derived price.

Third, for steam coal valuation, the Department used Indian import statistics data because it found that the value was contemporaneous with the period of investigation and because there was no evidence to suggest that the data was aberrational or unreliable. The Court instructed the Department either to recalculate normal value using Indian domestic prices for steam coal, or explain why the use of domestic prices for steam coal was not appropriate during the period of investigation.

Fourth, the Court concluded that the Department's use of data from the Reserve Bank of India Bulletin, rather than data from an Indian producer, to value SG&A and overhead was not supported by substantial evidence on the record and instructed the Department to either recalculate these values using the financial statement of an Indian producer, or fully explain why the Department felt that the Reserve Bank of India Bulletin gave better financial data.

Finally, the Court instructed the Department to explain its reasoning for not calculating a separate Detroit freight rate and to explain why the Department did not weight its calculation to reflect accurately the volume of merchandise actually shipped to each destination.

To assist it in complying with the Court's instructions, the Department opened the record and requested new information concerning possible surrogate countries. The petitioners submitted data supporting the use of Poland, while the respondents pointed to Turkish data that they had placed on the record in the investigation.

The “Draft Results Pursuant to Court Remand” (“First Draft Results”) were released to the parties on November 6, 2002. In its First Draft Results, pursuant to the analysis followed by the Court, the Department concluded that the record did not support its determination in the investigation that India was a significant producer of AJC. Instead, the Department determined that Turkey was a more appropriate surrogate country for the PRC because it was the country most economically comparable to the PRC that was also a significant producer of AJC.

Accordingly, the Department amended its calculations using Turkish data to value juice apples, SG&A expenses, overhead, and profit. The Department also changed its valuations of steam coal and East Coast freight. Because the Department's recalculated company-specific margins were all zero percent, the Department also recalculated the margin for the separate-rate companies by weighting the calculated margins of zero with the PRC-wide rate of 51.74%, resulting in a separate rates margin of 28.33%.

Comments on the First Draft Results were received from all parties on November 12, 2002. On November 15, 2002, the Department responded to the Court's Order by filing its “Redetermination Pursuant to Court Remand” (“First Redetermination”). The Department's First Redetermination was similar to the First Draft Results except for the inclusion of the Department's responses to comments submitted by the petitioners and respondents. The final margins in the First Redetermination were identical to the First Draft Results.

The CIT affirmed, in part, the Department's First Redetermination on March 21, 2003. See Yantai Oriental Juice Co., et al. v. United States and Coloma Frozen Foods, Inc., et al. Court No. 00-00309, Slip Op. 03-33 (March 21, 2003). The Court affirmed the Department's calculation of company-specific margins but remanded the calculation of the antidumping margin for the separate-rate companies because the Court found that the Department's methodology, weight-averaging the PRC-wide rate and the zero margins, was not supported by substantial evidence on the record.

Accordingly, the “Draft Redetermination Pursuant to Court Remand” (“Second Draft Results”) was released to the parties on April 18, 2003. In its Second Draft Results, the Department reviewed the record evidence and, based on information on the record, calculated a normal value and export price for the separate rate companies. Using this information, the Department calculated estimated margins for the separate rate companies and weight-averaged these margins with the zero margins for the fully-investigated companies and derived a separate rate of 4.91 percent.

Comments on the Second Draft Results were received on April 23, 2003. On May 5, 2003, the Department responded to the Court's Order of Remand by filing its “Redetermination Pursuant to Court Remand” (“Second Redetermination”). The Department's Second Redetermination differed from the Second Draft Results in that in calculating export price, we removed the fully-investigated companies' constructed export price sales, and adjusted our calculations to reflect the different terms of sale. These changes resulted in a weighted-average separate-rate margin of 3.83%.

The CIT affirmed the Department's Second Redetermination on November 20, 2003. See Yantai Oriental Juice Co., et al. v. United States and Coloma Frozen Foods, Inc., et al. Court No. 00-00309, Slip Op. 03-150 (November 20, 2003). On December 12, 2003, the Department published Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China: Notice of Court Decision and Suspension of Liquidation, (68 FR 69377), (“Timken Notice”). No party appealed the CIT's decision. Accordingly, we are now publishing the Amended Final Determination as provided in the Timken Notice.

Amended Final Determination

Because there is now a final and conclusive decision in the court proceeding, we are amending the Final Determination to reflect the revised weighted-average dumping margins:

The “PRC-wide Rate” was not affected by the Final Results of Redetermination and remains at 51.74 percent as determined in the Final Determination.

The Department will issue appraisement instructions directly to U.S. Customs and Border Protection (“CBP”).

As a result of an injunction issued by the CIT on August 15, 2000, entries of AJC manufactured or exported by Oriental, Nannan, Lakeside, Haisheng, Zhonglu, Xian Yang, Xian Asia, Changsha Industrial, and Shandong Foodstuffs that were entered on or after November 23, 1999, have not been liquidated. The injunction is now lifted and the Department will instruct CBP to liquidate all merchandise covered by the injunction consistent with the terms of the injunction and the Court-approved redeterminations. Consequently, for Oriental, Nannan, Lakeside, Haisheng, and Zhonglu, which are excluded from the antidumping duty order on AJC from the People's Republic of China, we are instructing CBP to liquidate all entries without regard to antidumping duties.

The Department notes that the redetermination rate of 3.83 percent calculated for the separate rate companies is merely a cash deposit rate that is subject to modification after the Department conducts reviews. In this proceeding, the Department has conducted two administrative reviews (see Certain Non-frozen Apple Juice Concentrate from the People's Republic of China: Final Results of the 1999-2001 Administrative Review and Partial Rescission of Review, 67 FR 68987 (November 14, 2002) (“First Review”), and Certain Non-frozen Apple Juice Concentrate from the People's Republic of China: Final Results and Partial Rescission of the 2001-2002 Administrative Review, and Final Results of the New Shipper Review, 68 FR 71062 (December 22, 2003) (“Second Review”)).

Changsha Industrial did not respond to the Department's questionnaire in either review. Therefore, Changsha Industrial received a 51.74 percent margin in the first and second reviews. Based on these results, entries for Changsha Industrial between November 23, 1999, and May 31, 2002, will be liquidated at 51.74 percent, subject to the provisions of 19 CFR 351.212(d). Moreover, we are not changing Changsha Industrial's cash deposit rate of 51.74 percent.

Xian Asia and Shandong Foodstuffs were both included in the First Review and both received a zero percent margin. Therefore, for the first review period, November 23, 1999, through May 31, 2001, Xian Asia's and Shandong Foodstuff's entries will be liquidated without regard to antidumping duties. Xian Asia and Shandong Foodstuffs were then both included in the Second Review but the review was rescinded for both because they had no shipments during the review period. When a review is rescinded or withdrawn, entries are liquidated at the rate at which they entered. Therefore, although we do not believe that there are any entries during the second review period for Xian Asia and Shandong Foodstuffs, we will instruct CBP to liquidate as entered entries from Xian Asia and Shandong Foodstuffs during the second review period. Moreover, we do not intend to change the cash deposit rates for these companies as a result of this amended final determination. Thus, the cash deposit rate for Xian Asia and Shandong Foodstuffs will remain at zero percent pursuant to the final results of the first review.

Finally, Xian Yang was included in both the first and second administrative reviews, but in both cases, the review was rescinded for Xian Yang because it had no shipments. When a review is rescinded or withdrawn, entries are liquidated at the rate at which they entered. Therefore, although we do not believe that there are any entries during the first or second review periods for Xian Yang, we will instruct CBP to liquidate as entered entries from Xian Yang during the first and second review periods. Because neither the first nor the second review resulted in the calculation of a margin for Xian Yang, we are setting the cash deposit rate at 3.83 percent, effective December 12, 2003, the date of the Timken Notice.

This notice is issued and published in accordance with section 751(a)(1) of the Act.