Import Administration, International Trade Administration, Department of Commerce.
Notice of Preliminary Results of Antidumping Duty New Shipper Review for Xiangcheng Yisheng Foodstuffs Co., Ltd.
In response to a request from Xiangcheng Yisheng Foodstuffs Co., Ltd. (“Yisheng”), the Department of Commerce is conducting a new shipper review of the antidumping duty order on fresh garlic from the People's Republic of China. The period of review is November 1, 2001, through October 31, 2002. We have preliminarily determined that, based on the use of adverse facts available, the respondent sold subject merchandise to the United States at prices below normal value.
We invite interested parties to comment on these preliminary results. Parties who submit comments are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument.
September 26, 2003.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Jeffrey Frank, Office of AD/CVD Enforcement 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C., 20230; telephone: (202) 482-0090.End Further Info End Preamble Start Supplemental Information
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 the Bureau of Customs and Border Protection (“Customs”) to that effect.
On December 31, 2002, the Department of Commerce (“the Department”) initiated a new shipper antidumping duty review of shipments of fresh garlic from the People's Republic of China (PRC) exported by Zhengzhou Harmoni Spice Co., Ltd., Jining Trans-High Trading Co., Ltd., and Yisheng. See Notice of Initiation of New Shipper Antidumping Duty Reviews: Fresh Garlic from the People's Republic of China, 68 FR 542 (January 6, 2003). The Department is still reviewing Zhengzhou Harmoni Spice Co., Ltd., and Jining Trans-High Trading Co., Ltd. The current deadline for preliminary results of review for these two firms is October 31, 2003. The Department is conducting this review of Yisheng in accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as amended (“the Act”).Start Printed Page 55584
In proceedings involving non-market-economy (NME) countries, the Department begins with a presumption that all companies within the country are subject to government control and thus should be assigned a single antidumping rate unless an exporter can affirmatively demonstrate an absence of government control, both in law (de jure) and in fact (de facto), with respect to its exports. In this review, Yisheng has requested a separate company-specific rate.
To establish whether a company is sufficiently independent in its export activities from government control to be entitled to a separate, company-specific rate, the Department analyzes the exporting entity in an NME country under the test established in the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588, 20589 (May 6, 1991) (Sparklers), and amplified by the Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585, 22586-22587 (May 2, 1994) (Silicon Carbide).
The Department's separate-rate test is unconcerned, in general, with macroeconomic/ border-type controls (e.g., export licenses, quotas, and minimum export prices), particularly if these controls are imposed to prevent dumping. The test focuses, rather, on controls over the investment, pricing, and output decision-making process at the individual firm level. See, e.g., Certain Cut-to-Length Carbon Steel Plate from Ukraine: Final Determination of Sales at Less Than Fair Value, 62 FR 61754, 61757 (November 19, 1997); Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 62 FR 61276, 61279 (November 17, 1997); and Honey from the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value, 60 FR 14725, 14726 (March 20, 1995).
Yisheng provided separate-rate information in its responses to our original and supplemental questionnaires. Accordingly, we performed a separate-rates analysis to determine whether this producer/exporter is independent from government control (see Notice of Final Determination of Sales at Less Than Fair Value: Bicycles From the People's Republic of China, 61 FR 56570 (April 30, 1996)).
1. -Absence of De Jure Control
The Department considers the following de jure criteria in determining whether an individual company may be granted a separate rate: (1) an absence of restrictive stipulations associated with an 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.
Yisheng has placed on the record a number of documents to demonstrate absence of de jure control, including the “Foreign Trade 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.” The Department has analyzed such PRC laws and found that they establish an absence of de jure control. See, e.g., Preliminary Results of New Shipper Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 30695, 30696 (June 7, 2001). We have no information on the record of this review that would cause us to reconsider this determination.
2. -Absence of De Facto Control
Typically, the Department considers four factors in evaluating whether a respondent is subject to de facto governmental 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 its management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. See Silicon Carbide, 59 FR at 22587.
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 22586-22587. Therefore,the Department has determined that an analysis of de facto control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates.
According to Yisheng, it is a privately owned company. It has asserted the following: (1) There is no government participation in setting export prices; (2) its sales manager and authorized employees have the authority to bind sales contracts; (3) it does not have to notify any government authorities of its management selection; (4) there are no restrictions on the use of its export revenue; and (5) it is responsible for financing its own losses. Yisheng's questionnaire responses do not suggest that pricing is coordinated among exporters. Furthermore, our analysis of the responses reveals no other information indicating the existence of government control. Consequently, we preliminarily determine that Yisheng has met the criteria for the application of a separate rate.
Use of Adverse Facts Available
The Department issued an antidumping duty questionnaire to Yisheng on December 31, 2002. The Department granted a number of extensions to Yisheng to file its response to the questionnaire and, in total, extended the deadline from February 7, 2003, to April 1, 2003. The Department received Yisheng's response to the Department's original questionnaire on April 1, 2003. The Department rejected Yisheng's factors-of-production response entirely because the Department found it to be inadequate and internally inconsistent. On June 2, 2003, the Department sent Yisheng a supplemental questionnaire requesting a new factors-of-production submission and clarification on other parts of its response. On June 20, 2003, the Department received Yisheng's response to the supplemental questionnaire but its submission did not include a factors-of-production response. Yisheng stated that it omitted factors-of-production information because it did not own a photocopying machine, its sole printer was a 20-year old dot-matrix printer, no one at the company spoke English, and the data had to be obtained from third parties.
On August 13, 2003, in response to a telephone call from Yisheng's counsel stating that Yisheng would file its factors-of-production response soon, the Department informed Yisheng's counsel that it would reject such a response because it would be untimely filed. On August 18, 2003, 59 days past the June 20, 2003, deadline, Yisheng submitted a factors-of-production response. The Department rejected this submission for the following reasons: (1) it was untimely filed, (2) Yisheng did not demonstrate that that it acted to the best of its ability in providing the requested information, and (3) the information could not be used without undue difficulties. See Letter from Laurie Parkhill to Yisheng, dated September 3, Start Printed Page 555852003. On August 19, 2003, Yisheng filed a submission requesting that the Department accept its August 18, 2003, submission and claimed for the first time that its supplier was not cooperating. Specifically, Yisheng claimed that, “Only after the Department's deadline for this supplemental response, did the grower, Yuyu, agree to allow Yisheng's outside accountants to visit it and collect data to answer the questions relevant to it.” Yisheng did not provide an explanation, however, as to why its supplier would not cooperate and did not provide an explanation as to why it had not identified this reason earlier.
In a review involving a non-market economy (“NME”), the factors of production are crucial to determining normal value. As the Department has stated clearly in its recent Policy Bulletin covering new shipper reviews in general (found on the Department's website at http://ia.ita.doc.gov), it is the responsibility of the party requesting a new shipper review to provide all of the information necessary to the Department for initiating the new shipper review. It is also the responsibility of the party requesting a new shipper review to provide the Department with the necessary information for it to calculate an accurate dumping margin. In other words, if a party desires to receive the benefits of a new shipper review, it has an affirmative obligation to provide the Department with the information necessary to calculate the new shipper dumping margin. Thus, in NME new shipper review cases, the respondent must provide complete factors-of-production information.
Section 776(a)(2) of the Act provides that, if, in the course of an antidumping review, an interested party (A) withholds information that has been requested by the Department, (B) fails to provide such information in a timely manner or in the form or manner requested, (C) significantly impedes a proceeding under the antidumping statute, or (D) provides such information but the information cannot be verified, then the Department shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable determination.
We find that, pursuant to section 776(a)(2)(A) of the Act, Yisheng withheld information we requested by not submitting an adequate factors-of-production response. We also find that, pursuant to section 776(a)(2)(B) of the Act, Yisheng did not provide an adequate factors-of-production response in a timely manner. Finally, we find that, pursuant to section 776(a)(2)(C) of the Act, Yisheng significantly impeded this proceeding by not providing an adequate factors-of-production response for the following reasons: (1) the factors-of-production information is necessary to calculate a margin, (2) as a self-requesting new shipper, Yisheng has an affirmative obligation to respond, (3) Yisheng's first factors-of-production response was grossly inadequate, and (4) Yisheng did not submit a subsequent response to the request for factors-of-production information until 59 days after the deadline. Therefore, pursuant to section 776(a)(2) of the Act, we preliminarily determine that the use of facts otherwise available is warranted to calculate a margin for Yisheng's sales of subject merchandise during the period of review.
Section 782(e) of the Act provides that the Department “shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority” if (1) the information is submitted by the deadline established for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the Department with respect to the information, and (5) the information can be used without undue difficulties.
The Department rejected Yisheng's August 18, 2003, factors-of-production response for the following reasons: (1) the information was not submitted by the deadline established for its submission, (2) Yisheng did not demonstrate that it acted to the best of its ability to provide the information, and (3) given the limited amount of time left under the statutory deadlines of the review to analyze its factors-of-production submission, issue supplemental questions, plan and conduct a verification, and prepare the preliminary results, the information could not be used without undue burden on the Department. Thus, for the various reasons under sections 782(e)(1), (4), and (5) of the Act, the Department has not used the factors-of-production information Yisheng reported.
Section 776(b) of the Act provides that, if the Department finds that an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information, the Department may use an inference that is adverse to the interests of that party in selecting from among the facts otherwise available. In addition, the Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H. Doc. 316, Vol. 1, 103d Cong. (1994) (SAA), establishes that the Department may employ an adverse inference “. . . to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See SAA at 870.
For the Department to calculate an accurate margin in an NME proceeding, it needs valid factors-of-production information. Yisheng had ample time to submit the requested production-process information and factors-of-production data for this new shipper review. In fact, Yisheng had more days to respond to the original and supplemental questionnaires than any other company in this new shipper review. Because Yisheng had an affirmative responsibility to provide the necessary factors-of-production information so that we may calculate a margin and because it did not provide this necessary information, we find that Yisheng did not act to the best of its ability.
Applying total adverse facts available to Yisheng is consistent with the Department's application of adverse facts available in past cases. See Fresh Garlic From the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 68 FR 36767 (June 19, 2003) (“Fresh Garlic: Final”). In Fresh Garlic: Final, we applied adverse facts available to the respondent, Hongda, when it failed to provide total production and factors of production for the period in a timely manner. See also Freshwater Crawfish Tail Meat from the People's Republic of China; Notice of Final Results of Antidumping Duty Administrative Review, 68 FR 19504 (April 21, 2003), and accompanying Issues and Decision Memorandum, Comment 7 (“Crawfish”).
In Fresh Garlic From the People's Republic of China: Preliminary Results of Antidumping Duty New Shipper Review (“Fresh Garlic: Preliminary”), we found that the “responsibility for submission of accurate factors of production lies with the respondent seeking a rate based on such information, and that failures, even if made by a supplier, may provide grounds for the application of adverse facts available.” Fresh Garlic: Preliminary, 68 FR 22676 (April 29, 2003) (citing Crawfish at Comment 7). Also, in the Fresh Garlic: Preliminary, the Department explained that the language of the statute and regulation Start Printed Page 55586allow for the application of an adverse inference when an “interested party” does not act to the best of its ability in responding to questionnaires. The Department explained that a supplier that refused to respond to requests for necessary information is an “interested party” to the review and therefore application of adverse facts available was warranted. Id. (citing Certain Cased Pencils from the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 67 FR 48612 (July 25, 2002), and accompanying Issues and Decision Memorandum, at Comment 10).
Furthermore, because Yisheng did not provide an acceptable explanation as to why its supplier would not cooperate, applying adverse facts available to Yisheng is consistent with our conclusion in Creatine Monohydrate From the PRC, where the Department stated, “ . . . [a]s there is no acceptable explanation on the record for the supplier's failure to provide factor of production information, an adverse inference in applying facts available is warranted due to the supplier's failure to act to the best of its ability.” Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate From the People's Republic of China, 64 FR 71104, 71108 (December 20, 1999) (emphasis in original) (“Creatine Monohydrate From the PRC”). See also Fresh Garlic: Preliminary 68 FR at 22679; Certain Cased Pencils from the People's Republic of China; Final Results and Partial Rescission of Antidumping Duty Administrative Review, 67 FR 48612 (July 25, 2002), and accompanying Issues and Decision Memorandum, Comment 10.
In Yisheng's August 19, 2003, submission, it claimed for the first time that its supplier was not cooperating and that this non-cooperation was the reason it was unable to submit a timely factors-of-production response. Given that Yisheng's claim was made after it was informed that its response would be rejected and 60 days after the deadline for its factors-of-production response, the Department questions the validity of this claim. Moreover, Yisheng's August 19, 2003, submission did not provide an explanation as to why its supplier would not cooperate and did not provide an explanation as to why it did not identify this reason earlier. Therefore, we find that Yisheng did not act to the best of its ability to comply with our request for information and, pursuant to section 776(b) of the Act, we have preliminarily determined to use adverse facts otherwise available in reaching the preliminary results of review.-
An adverse inference may include reliance on information derived from the petition, the final determination in the investigation, any previous review, or any other information placed on the record. See section 776(b) of the Act. Section 776(c) of the Act provides, however, that, when the Department relies on secondary information rather than on information obtained in the course of a review, the Department shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. The SAA states that the independent sources may include published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation or review. See SAA at 870. The SAA clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value. Id. As discussed in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, from Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996) (TRBs), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used. If there are no independent sources from which the Department can derive calculated dumping margins, however, unlike other types of information such as input costs or selling expenses, the only source for margins is previous administrative determinations, as is the case in this review.
Throughout the history of this proceeding, the highest rate ever calculated is 376.67 percent; it is currently the PRC-wide rate and was calculated based on information contained in the petition. See Notice of Final Determination of Sales at Less Than Fair Value: Fresh Garlic from the People's Republic of China, 59 FR 49058, 49059 (September 26, 1994). The information contained in the petition was corroborated for the preliminary results of the first administrative review. See Fresh Garlic from the People's Republic of China; Preliminary Results of Antidumping Duty Administrative Review and Partial Termination of Administrative Review, 61 FR 68229, 68230 (December 27, 1996). Further, it was corroborated in subsequent reviews to the extent that the Department referred to the history of corroboration and found that the Department received no information that warranted revisiting the issue. See Fresh Garlic from the People's Republic of China: Final Results of Antidumping Administrative Review and Rescission of New Shipper Review, 67 FR 11283 (March 13, 2002). Similarly, no information has been presented in the current review that calls into question the reliability of this information. Thus, the Department finds that the information is reliable.
With respect to the relevance aspect of corroboration, the Department stated in TRBs that it will “consider information reasonably at its disposal as to whether there are circumstances that would render a margin irrelevant. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin.” See TRBs, 61 FR at 57392. See also Fresh Cut Flowers from Mexico; Preliminary Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (disregarding the highest margin in the case as best information available because the margin was based on another company's uncharacteristic business expense resulting in an extremely high margin). The rate we have selected is the rate currently applicable to Yisheng and all exporters subject to the PRC-wide rate. Further, there is no information on the administrative record of the current review that indicates the application of this rate would be inappropriate or that the margin is not relevant. Therefore, for all sales of subject merchandise exported by Yisheng, we have applied, as adverse facts available, the 376.67 percent margin from a prior administrative review of this order and have satisfied the corroboration requirements under section 776(c) of the Act. See Persulfates from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 66 FR 18439, 18441 (April 9, 2001) (employing a petition rate used as adverse facts available in a previous segment as adverse facts available in the current review).
Preliminary Results of the Review
As a result of the application of adverse facts available, we preliminarily determine a dumping margin of 376.67 percent for Yisheng's exports of fresh garlic during the period November 1, 2001, through October 31, 2002.
An interested party may request a hearing within 30 days of publication of Start Printed Page 55587these preliminary results. Any hearing, if requested, will be held 37 days after the date of publication, or the first business day thereafter, unless the Department alters the date under 19 CFR 351.310(d). Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of these preliminary results of review. Rebuttal briefs and rebuttals to written comments, limited to issues raised in the case briefs and comments, may be filed no later than 35 days after the date of publication of this notice. Parties who make such a submission in this review are requested to submit (1) a statement of each issue, (2) a brief summary of the argument for each issue, and (3) a table of authorities.
The Department will publish the final results of this new shipper review, including the results of its analysis of issues raised in any case or rebuttal brief, within 90 days of publication of this notice. See 19 CFR 351.214(i)(1).
Upon completion of this new shipper review, the Department will determine, and Customs shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate assessment instructions directly to Customs upon completion of this review. If these preliminary results are adopted in our final results of review, we will direct Customs to assess the resulting rate against the entered customs value for the subject merchandise on each of the entries produced by Henan Yuyu Fruits & Vegetables Products Co., Ltd. and exported by Yisheng during the period of review.
The following cash-deposit requirements will be effective upon publication of the final results of this new shipper 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 subject merchandise grown by Henan Yuyu Fruit & Vegetables Products Co., Ltd., and exported by Yisheng, the cash-deposit rate will be that established in the final results of this review; (2) for all other subject merchandise exported by Yisheng, the cash-deposit rate will be the PRC countrywide rate, which is 376.67 percent; (3) for all other PRC exporters which have not been found to be entitled to a separate rate, the cash-deposit rate will be the PRC countrywide rate; and (4) for all non-PRC exporters of subject merchandise, 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 preliminary 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 double antidumping duties.
We are issuing and publishing these preliminary results of review in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.Start Signature
Dated: September 22, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-24398 Filed 9-25-03; 8:45 am]
BILLING CODE 3510-DS-S