Fresh Garlic from the People's Republic of China: Final Results and Partial Rescission of the Eleventh Administrative Review and New Shipper Reviews

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

June 22, 2007.

SUMMARY:

On December 11, 2006, the Department of Commerce (“the Department”) published the Preliminary Results of the administrative review and new shipper review of fresh garlic from the People's Republic of China (“PRC”), covering the period November 1, 2004, through October 31, 2005. See Fresh Garlic from the People's Republic of China: Partial Rescission and Preliminary Results of the Eleventh Administrative Review and New Shipper Reviews, 71 FR 71510 (December 11, 2006) (“Preliminary Results”). The period of review (“POR”) is November 1, 2004, through October 31, 2005. 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.

FOR FURTHER INFORMATION CONTACT:

Paul Walker or Alex Villanueva, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0413 or (202) 482-3208, respectively.

SUPPLEMENTARY INFORMATION:

Background

On March 30, 2007, we extended the time limit for the completion of the final results of these reviews, including our analysis of issues raised in case or rebuttal briefs until June 9, 2007. See Fresh Garlic from the People's Republic of China: Extension of Time Limits for the Final Results of the 11^th Administrative Review and New Shipper Reviews, 72 FR 15105 (March 30, 2007).

We invited parties to comment on the Preliminary Results. On January 31, 2007, GDLSK Respondents,¹ Jinxiang Dongyun Freezing Storage Co., Ltd (“Dongyun”), and Petitioners² filed case briefs.³ On February 12, 2007, Dongyun, GDLSK Respondents, Qingdao Saturn and Petitioners filed rebuttal case briefs.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to these reviews are addressed in the “Antidumping Duty Order on Fresh Garlic from the People's Republic of China: Issues and Decision Memorandum for the Eleventh Administrative Review and New Shipper Reviews,” dated June 11, 2007, 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 B-099, 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 certain respondents.

We have revalued several of the surrogate values used in the Preliminary Results. The values that were modified for these final results are those for garlic bulbs, foreign brokerage and handling and labor wage rate. For further details see Issues and Decision Memo at Comments 2 through 6 and Intermediate Value Section below.

In addition, we have made some company-specific changes since the Preliminary Results. Specifically, we have incorporated, where applicable, post-preliminary clarifications, and performed clerical error corrections for Dongyun, Longtai, Qingdao Camel, Qingdao Saturn, Shanyang Freezing, Sunny, Trans-High and XuZhou Simple. For further details on these company-specific changes, see Issues and Decision Memo at Comments 7 and 11 through 13.⁴

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.

Partial Recession of Administrative Reviews

In the Preliminary Results, the Department issued a notice of intent to rescind the administrative review with respect to Jinan Yipin Corporation, Ltd. (“Jinan Yipin”), Shanghai Ever Rich Trade Company (“Ever Rich”) and its supplier Pizhou Guangda Import and Export Co., Ltd. (“Pizhou Guangda”), and Weifang Shennong Foodstuff Co., Ltd. (“Weifang Shennong”) because we found no evidence that Jinan Yipin, Ever Rich, Pizhou Guangda or Weifang Shennong made shipments of subject merchandise during the POR. See Preliminary Results at 71512. The Department received no comments on this issue, and we did not receive any further information since the issuance of the Preliminary Results that provides a basis for a reconsideration of this determination. Therefore, the Department is rescinding this administrative review with respect to Jinan Yipin, Ever Rich, Pizhou Guangda or Weifang Shennong.

Separate Rates

In our Preliminary Results, we determined that Dading, Dongyun, Fook Huat Tong Kee Foodstuffs Co., Ltd. (“FHTK”), Heze Ever-Best International Trade Co., Ltd. (“Ever-Best”), Huaiyang Hongda Dehydrated Vegetable Company (“Hongda”), Longtai, Qingdao Camel, Qingdao Saturn, QXF, Shanyang Freezing, Sunny, Taiyan Ziyang Food Co., Ltd. (“Ziyang”), Trans-High and XuZhou Simple met the criteria for the application of a separate rate. We have not received any information or comments since the issuance of the Preliminary Results that provides a basis for reconsideration of these determinations. Therefore, the Department continues to find each of these entities meet the criteria for a separate rate.

Qingdao Camel

In the Preliminary Results we found that Jinxiang County Lufeng Agriculture Product Material Co., Ltd. (“Lufeng”), Qingdao Camel's producer, failed to act to the best of its ability to comply with the Department's repeated requests for information. We therefore, applied partial adverse facts available, pursuant to section 776(a) and (b) of the Tariff Act of 1930 (“the Act”), to Lufeng for electricity, mesh bags, supplier distances and labor for the reasons set out in the Preliminary Results. See Preliminary Results, 71 FR at 71516. We did not receive any information or comments since the issuance of the Preliminary Results that provides a basis for reconsideration of these determinations. Accordingly, for the final results, we continue to apply partial adverse facts available to Qingdao Camel, as noted above.

QXF

Consistent with the Preliminary Results, we continue to find that QXF failed to cooperate with the Department in the context of the new shipper review by not acting to the best of its ability to comply with the Department's requests for information and that an adverse inference is warranted, pursuant to section 776(a) and (b) of the Act, for the reasons set out in the Preliminary Results. See Preliminary Results, 71 FR at 71517. We did not receive any information or comments since the issuance of the Preliminary Results that provides a basis for reconsideration of this determination. Accordingly, for the final results, we continue to assign QXF a margin of 376.67 percent.

Qingyuan

Consistent with the Preliminary Results, we continue to find that Zhangqui Qingyuan Vegetable Co., Ltd. (“Qingyuan”) failed to cooperate with the Department in the context of the review by not acting to the best of its ability to comply with the Department's requests for information and that an adverse inference is warranted, pursuant to section 776(a) and (b) of the Act, for the reasons set out in the Preliminary Results. See Preliminary Results, 71 FR at 71517. We did not receive any information or comments since the issuance of the Preliminary Results that provides a basis for reconsideration of this determination. Accordingly, for the final results, we continue to assign Qingyuan a margin of 376.67 percent, the PRC-wide rate.

Normal Value Methodology

The Department's general policy, consistent with section 773(c)(1)(B) of the Act, is to calculate normal value (“NV”) using the factors of production (“FOPs”) 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 accounts 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 has valued 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”) 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) at Comment 1.

In the Preliminary Results, we found that respondents in these proceedings were unable to accurately record and substantiate the complete costs of growing garlic based on our analysis of the information on the record and for the reasons outlined in the Memorandum to the File entitled, “11^th Administrative Review and New Shipper Reviews of Fresh Garlic from the People's Republic of China: Intermediate Input Methodology,” dated November 30, 2006 (“Intermediate Product Memo”). See Preliminary Results, 71 FR at 71520. 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 all companies 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 adding the respondents' processing costs, which were calculated using their reported usage rates for processing fresh garlic. In future reviews, should a respondent be able 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 and Issues and Decision Memo at Comment 1.

In addition, we have revised the calculation of the garlic bulb surrogate value. In the Preliminary Results we used prices for super-A garlic to value the respondents garlic bulb input using Azadpur Agricultural Produce Marketing Committee's (“APMC”) “Market Information Bulletin” (the “Bulletin”). The Bulletin is published by Azadpur APMC on each trading day and contains, among other things, a list of all fruits and vegetables sold on the previous trading day, the amount (by weight) of each fruit or vegetable sold on that day and a low, high and modal price for each commodity sold. For these final results, however, using respondents' size data on the record, the Department calculated a surrogate value based on the most appropriate Bulletin data. We have concluded that a more accurate analysis would be for the Department to use size A values averaged with deflated super-A values, for those respondents which have a garlic bulb input which overlaps the grade A and super-A sizes. Specifically, we used the data points for A grade garlic to capture respondents' inputs of garlic which ranged from 40 - 55mm and used super-A data points to capture the respondents' garlic input ranged greater than 55mm. For those respondents with a garlic bulb input which exceeds 55mm, we have used only super-A values. See Issues and Decision Memo at Comment 2.

For a complete explanation of the Department's analysis, and for a more detailed analysis of these issues with respect to each respondent, see Intermediate Product Memo and Issues and Decision Memo at Comments 1 and 2.

Final Results of the Reviews

The Department has determined that the following final dumping margins exist for the period November 1, 2004, through October 31, 2005:

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

Pursuant to 19 CFR 351.212(b), the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of these final results of review. For assessment purposes, where possible, we calculated importer-specific assessment rates for garlic from the PRC via ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review.

As discussed above, we are rescinding the administrative review with respect to Ever Rich and its supplier Pizhou Guangda because we found no evidence that it made shipments of the subject merchandise during the POR. Therefore, for entries of subject merchandise exported by Ever Rich, antidumping duties shall be assessed at the PRC-Wide rate required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with Department practice and 19 CFR 351.212(c)(2). See Notice of Final Results and Final Rescission, In Part of Antidumping Administrative Review: Honey from the People's Republic of China, 70 FR 38873, 38881 (July 6, 2005). Lastly, for all shipments of subject merchandise exported by Trans-High and imported by companies other than those identified by Trans-High as its customers/importers in this administrative review, antidumping duties shall be assessed at the PRC-Wide rate required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with Department practice and 19 CFR 351.212(c)(2). Id at 3888.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of these 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 these final results of 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 376.67 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.

The following cash deposit requirements will be effective upon publication of the final results of these new shipper reviews for all shipments of subject merchandise from Qingdao Camel, Qingdao Saturn, XuZhou and Longtai entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided by section 751(a)(2)(C) of the Act: (1) For subject merchandise exported by Qingdao Camel, Qingdao Saturn, XuZhou and Longtai and produced by their respective suppliers listed above, the cash-deposit rate will be that established in these final results of new shipper reviews; (2) for subject merchandise exported by Qingdao Camel, Qingdao Saturn, XuZhou and Longtai but not manufactured by their respective suppliers, the cash deposit rate will continue to be the PRC-wide rate (i.e., 376.67 percent); and (3) for subject merchandise exported by QXF, the cash deposit rate will be the PRC-wide rate (i.e., 376.67 percent).

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 of this administrative review and 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) and 351.214(j).

Appendix I

Comment 1: Intermediate Methodology

Comment 2: Garlic Bulb Surrogate Value

A. Product Specificity

B. Broad Market Average

C. Public Availability

D. Contemporaneity

E. Tax and Duty Exclusivity

Comment 3: Surrogate Financial Companies

Comment 4: Surrogate Value for Labor

Comment 5: Carton Surrogate Value

Comment 6: Inclusion of Packing Weight in Movement Expenses

Comment 7: Brokerage and Handling Surrogate Value

Comment 8: Water Surrogate Value

Comment 9: By-Product Offset

Comment 10: Application of Packaging Materials in the Calculation of Normal Value

Comment 11: Shangyang Freezing's Polyethylene and Polyester Surrogate Values

Comment 12: Dongyun's Section C Database

Comment 13: Dongyun's Yield Loss