Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) is currently conducting a new shipper review of the antidumping duty order on certain frozen warmwater shrimp from the People's Republic of China (“PRC”) covering the period July 16, 2004, through July 31, 2005. The Department preliminarily determines that sales have not been made below normal value (“NV”) with respect to Zhanjiang Regal Integrated Marine Resources Co., Ltd. (“Zhanjiang Regal”), which participated fully and is entitled to a separate rate in this review. If these preliminary results are adopted in its final results of this review, the Department will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on entries of subject merchandise during the period of review (“POR”) for which the importer-specific assessment rates are above de minimis.
July 6, 2006.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Javier Barrientos, 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) 482-2243.End Further Info End Preamble Start Supplemental Information
On February 1, 2005, the Department published in the Federal Register an amended final determination and antidumping duty order on certain frozen warmwater shrimp from the PRC. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Frozen Warmwater Shrimp From the People's Republic of China, 70 FR 05149 (February 1, 2005). On August 26, 2005, the Department received a new shipper review request from Zhanjiang Regal. On September 16, 2005, the Department requested that Zhanjiang Regal correct certain filing deficiencies. See the Department's letter dated September 16, 2005. On September 20, 2005, Zhanjiang Regal resubmitted their new shipper review request in accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as amended (the Act), and section 351.214(c) of the Department's regulations. On September 30, 2005, the Department initiated a new shipper review with respect to Zhanjiang Regal. See Certain Frozen Warmwater Shrimp From the People's Republic of China: Initiation of New Shipper Review, 70 FR 58679 (October 7, 2005) (“Initiation Notice”).
On February 16, 2006, the Department placed the entry package it received from CBP for Zhanjiang Regal's new shipper sale on the record of this review. See Memorandum from Javier Barrientos, AD/CVD Financial Analyst, Office 9, through Alex Villanueva, Program Manager, Office 9, to the File: Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the People's Republic of China: Placing Entry Packages on the Record, dated February 9, 2006.
Questionnaires and Responses
On October 21, 2005, the Department issued sections A, C, and D of the general antidumping duty questionnaire to Zhanjiang Regal, along with the standard importer questionnaire for new shipper reviews. Zhanjiang Regal submitted its response to section A of the questionnaire on November 21, 2005, and subsequently submitted its response to sections C and D, and the importer questionnaire, on December 9, 2005. On December 22, 2005, the Department issued its first supplemental questionnaire for sections A, C and D. Zhanjiang Regal filed its response to this supplemental questionnaire on January 17, 2006. On March 13, 2006, the Department issued its second supplemental questionnaire for sections A, C, and D to Zhanjiang Regal and its importer. Zhanjiang Regal filed its response to the Department's second sections A, C, and D supplemental questionnaires on April 3, 2006, and to the importer's questionnaire on April 7, 2006.
Surrogate Country and Values
On November 2, 2005, the team requested from the Office of Policy a memorandum listing surrogate countries. The Department received a list of surrogate countries on November 7, 2005. On March 2, 2006, the Department notified parties of the opportunity to submit comments on surrogate country selection and surrogate values. No party submitted surrogate country selection comments, although Zhanjiang Regal submitted Start Printed Page 38369surrogate value comments. On May 22, 2006, the Department issued its surrogate country selection memorandum. See Memorandum from Javier Barrientos, AD/CVD Financial Analyst, Office 9, through Alex Villanueva, Program Manager, Office 9, and Jim Doyle, Director, Office 9, to the File: Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the People's Republic of China: Selection of a Surrogate Country, dated May 22, 2006 (“Surrogate Country Memo”).
Period of Review
The POR covers July 16, 2004, through July 31, 2005.
Scope of the Order
The scope of this order includes certain warmwater shrimp and prawns, whether frozen, wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off (including the telson and the uropods), 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 (HTSUS), 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, whiteleg 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 (HTSUS subheading 1605.20.10.20); (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 (HTSUS subheadings 0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in prepared meals (HTSUS subheading 1605.20.05.10); (5) dried shrimp and prawns; 6) Lee Kum Kee's shrimp sauce; (7) canned warmwater shrimp and prawns (HTSUS subheading 1605.20.10.40); (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 ten percent of the product's total weight after being dusted, but prior to being frozen; (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 HTSUS subheadings: 0306.13.00.03, 0306.13.00.06, 0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 1605.20.10.10, and 1605.20.10.30. These HTSUS 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.
On March 30, 2006, the Department issued the verification outline to Zhanjiang Regal. The Department conducted verification of the questionnaire responses submitted by Zhanjiang Regal at its office in Zhanjiang, PRC from April 10 -14, 2006. The Department used standard verification procedures, including on-site inspection of the facilities, and examination of relevant sales and financial records. The Department's verification results are outlined in the verification report, which is being issued concurrently with this notice. For further discussion, see Memorandum from Javier Barrientos, AD/CVD Financial Analyst, Office 9, through Alex Villanueva, Program Manager, Office 9, to the File: Verification of the Sales and Factors Response of Zhanjiang Regal Trading Co., Ltd. (“Zhanjiang Regal”) in the Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the People's Republic of China, dated June 27, 2006, (“Zhanjiang Regal Verification Report”).
New Shipper Status
Consistent with the Department's practice, the Department investigated the bona fide bona fide nature of the sale made by Zhanjiang Regal for this new shipper review. The Department found the sale in question was made on a bona fide basis. Based on the Department's investigation into the bona fide nature of the sale, the questionnaire responses submitted by Zhanjiang Regal, and the Department's verification thereof, as well as Zhanjiang Regal's eligibility for a separate rate (see below), and the Department's preliminarily determination that Zhanjiang Regal was not affiliated with any exporter or producer that had previously shipped subject merchandise to the United States, we preliminarily determine that the respondent has met the requirements to qualify as a new shipper during the POR. Therefore, for purposes of these preliminary results of the review, the Department is treating Zhanjiang Regal's sale of subject merchandise to the United States as an appropriate transaction for this new shipper review. See Memorandum from Javier Barrientos, AD/CVD Financial Analyst, Office 9, through Alex Villanueva, Program Manager, Office 9, to James C. Doyle, Office Director, Office 9: Bona Fide Nature of the Sale in the Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp: Zhanjiang Regal Trading Co., Ltd., dated June 27, 2006.
The Department has treated the PRC as a non-market economy (“NME”) country in all previous antidumping cases. See, e.g., Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof from the People's Republic of China, 71 FR 29303 (May 22, 2006).In accordance with section 771(18)(C)(i) of the Act, any determination that a foreign country is Start Printed Page 38370an NME country shall remain in effect until revoked by the administering authority. The Department has no evidence suggesting that this determination should be changed. Therefore, the Department treated the PRC as an NME country for purposes of this review and calculated NV by valuing the factors of production (“FOP”) in a surrogate country. It is the Department's policy to assign all exporters of the merchandise subject to review that are located in NME countries a single antidumping duty rate unless an exporter can demonstrate an absence of governmental control, both in law (de jure) de facto and in fact (de facto), with respect to its export activities. To establish whether an exporter is sufficiently independent of governmental control to be entitled to a separate rate, the Department analyzes the exporter using the criteria established in 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”), as adopted 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, 22586-87 (May 2, 1994) (“Silicon Carbide”). Under the separate rates criteria established in these cases, the Department assigns separate rates to NME exporters only if they can demonstrate the absence of both de jure and de facto governmental control over their export activities.
Absence of De Jure Control
Evidence supporting, though not requiring, a finding of de jure absence of government control over export 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. See Sparklers at 20589.
In the instant review, Zhanjiang Regal submitted a complete response to the separate rates section of the Department's questionnaire. The evidence submitted in the instant review by Zhanjiang Regal includes government laws and regulations on corporate ownership and control, business licences, and narrative information regarding the company's operations and selection of management. See Zhanjiang Regal Verification Report at Exhibits 2 and 6. The evidence provided by Zhanjiang Regal supports a finding of an absence of de jure governmental control over its export activities because it indicates that: (1) there are no controls on exports of subject merchandise, such as quotas applied to, or licenses required for, exports of the subject merchandise to the United States; and (2) the subject merchandise does not appear on any government list regarding export provisions or export licensing.
Absence of De Facto Control
The absence of de facto governmental control over exports is based on whether the respondent: (1) sets its own export prices independent of the government and other exporters; (2) retains the proceeds from its export sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) has the authority to negotiate and sign contracts and other agreements; and (4) has autonomy from the government regarding the selection of management. See Silicon Carbide at 22587; Sparklers at 20589; see also Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995).
In its questionnaire responses, Zhanjiang Regal submitted evidence demonstrating an absence of de facto governmental control over its export activities. Specifically, this evidence indicates that: (1) The company sets its own export prices independent of the government and without the approval of a government authority; (2) the company retains the proceeds from its sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) the company has a general manager with the authority to negotiate and bind the company in an agreement; (4) the general manager is selected by the board of directors, and the general manager appoints the deputy managers and the manager of each department; and (5) there is no restriction on the company's use of export revenues. Therefore, the Department has preliminarily found that Zhanjiang Regal qualifies for a separate rate under the criteria established by Silicon Carbide and Sparklers.
Use of Facts Available
Section 776(a)(2) of the Act, provides that, if 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, subject to sections 782(c)(1) and (e) of the Act; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified, the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination.
In the instant review, the Department discovered that Zhanjiang Regal included part of its factory electricity usage under selling, general, and administrative (SG&A) electricity usage. Specifically, the company included the electricity used to run the chill compressors in the processing plant under the meter used for SG&A. See Zhanjiang Regal Verification Report at 2. Furthermore, the company could not determine how much of the SG&A electricity reading was from the chill compressors, thus preventing the Department from verifying this information. Id. at 31. However, the plant engineer estimated (based on his experience) the percentage of the SG&A meter reading that was attributable to the compressors. Id. Therefore, as facts otherwise available, pursuant to section 776(a)(2)(D) of the Act, the Department is assigning this estimate of the SG&A electricity meter readings to factory electricity. See Memorandum from Javier Barrientos, AD/CVD Financial Analyst, Office 9, through Alex Villanueva, Program Manager, Office 9, to the File: Analysis of Zhanjiang Regal Trading Co., Ltd. for the Preliminary Results in the Antidumping Duty New Shipper Review of Certain Frozen Warmwater Shrimp from the PRC, dated June 27, 2006.
When the Department is investigating imports from an NME country, section 773(c)(1) of the Act directs it to base normal value (“NV”), in most circumstances, on the NME producer's factors of production, valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the factors of production, the Department shall utilize, to the extent possible, the prices or costs of factors of production in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and are significant producers of comparable merchandise. The sources of the surrogate values the Department used in this review are discussed under the “Normal Value” section below.
The Department determined that India, Sri Lanka, Indonesia, the Philippines, and Egypt are countries comparable to the PRC in terms of economic development. See Memorandum from Ron Lorentzen, Director, Office of Policy, to Alex Start Printed Page 38371Villanueva, Program Manager, Office 9; New Shipper Review of Certain Frozen Warmwater Shrimp from the People's Republic of China (PRC): Request for a List of Surrogate Countries, dated November, 2005. Because of India's and Indonesia's relative levels of shrimp production, which is consistent with worldwide characteristics of frozen shrimp production, these two countries were selected as significant producers of comparable merchandise. See Surrogate Country Memo at 4. The Department select an appropriate surrogate country based on the availability and reliability of data from the countries. See Department Policy Bulletin No. 04.1: Non-Market Economy Surrogate Country Selection Process (“Policy Bulletin”), dated March 1, 2004. In this case, the Department found that India is a significant producer of comparable merchandise, is at a similar level of economic development pursuant to section 773(c)(4) of the Act, and has publicly available and reliable data. See Surrogate Country Memo.
In accordance with section 772(a) of the Act, the Department calculated the export price (“EP”) for sales to the United States for Zhanjiang Regal because the first sale to an unaffiliated party was made before the date of importation and the use of constructed EP was not otherwise warranted. The Department calculated EP based on the price to unaffiliated purchasers in the United States. Consistent with section 772(c) of the Act, as appropriate, the Department deducted from the starting price to the unaffiliated purchaser: foreign inland freight; brokerage and handling; and international freight. For Zhanjiang Regal, foreign inland freight and brokerage and handling were provided by an NME vendor or paid for using an NME currency. Thus, the Department based the deduction of these movement charges on surrogate values. See Memorandum from Javier Barrientos, AD/CVD Financial Analyst, through Alex Villanueva, Program Manager, Office 9, to the File; New Shipper Review of Certain Frozen Warmwater Shrimp from the People's Republic of China: Surrogate Values for the Preliminary Results, dated June 27, 2006 (“Surrogate Values Memo”) for details regarding the surrogate values for movement expenses. For international freight, provided by a non-market economy provider, but paid for in U.S. dollars, the Department based the deduction on a surrogate value.
In accordance with section 773(c) of the Act, the Department calculated NV based on factors of production (“FOP”) reported by the respondents for the POR. To calculate NV, the Department valued the reported FOP by multiplying the per-unit factor quantities by publicly available Indian surrogate values. In selecting surrogate values, the Department considered the quality, specificity, and contemporaneity of the available values. As appropriate, the Department adjusted the value of material inputs to account for delivery costs. Where appropriate, the Department increased Indian surrogate values by surrogate inland freight costs. The Department calculated these inland freight costs using the shorter of the reported distances from the PRC port to the PRC factory, or from the domestic supplier to the factory. This adjustment is in accordance with the United States Court of Appeals for the Federal Circuit's (“CAFC”) decision in Sigma Corp. v. United States, 117 F. 3d 1401, 1407-1408 (Fed.Cir. 1997). For those values not contemporaneous with the POR, the Department adjusted for inflation or deflation using data published in the IMF's International Financial Statistics. The Department excluded from the surrogate country import data used in the Department's calculations imports from Korea, Thailand, and Indonesia due to generally available export subsidies. See China Nat'l Mach. Import & Export Corp. v. United States, 293 F. Supp. 2d 1334 (CIT 2003), aff'd 104 Fed. Appx. 183 (Fed. Cir. 2004) and Certain Cut-to-Length Carbon Steel Plate from Romania: Notice of Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 70 FR 12651 (March 15, 2005) and accompanying Issues and Decision Memorandum at Comment 4. Furthermore, the Department disregarded prices from NME countries. Finally, imports that were labeled as originating from an “unspecified” country were excluded from the average value, because the Department could not be certain that they were not from either an NME or a country with general export subsidies. Finally, the Department converted the surrogate values to U.S. dollars as appropriate, using the official exchange rate recorded on the date of sale of subject merchandise in this case, obtained from Import Administration's website at http://www.ia.ita.doc.gov/exchange/index.html. For further detail, see the Surrogate Values Memo.
Changes from Verification
For electricity, the Department is assigning the plant engineer's estimate of the SG&A electricity meter readings to factory electricity. See Facts Available section above.
For direct labor, the Department discovered at verification that Zhanjiang Regal made a clerical/transposing error in summing certain fields in their worksheets. See Zhanjiang Regal Verification Report at 32. This error affected the direct labor usage rate for both growing and processing direct labor. Therefore, the Department will use its verification findings for direct labor. See Zhanjiang Regal Analysis Memo.
For international freight, Zhanjiang Regal provided the actual cost it incurred in U.S. dollars in its sales database. However, at verification the Department found the freight carrier was based in an NME country. See Zhanjiang Regal Verification Report at 25. Therefore, the Department used a surrogate value for the international freight expense Zhanjiang Regal incurred on its sale of the subject merchandise.
Preliminary Results of Review
The Department preliminarily determines that the following weight average margin exist during the period July 16, 2004, through July 31, 2005:
|Exporter/Manufacturer||Weighted-Average Margin (Percent)|
|Zhanjiang Regal Integrated Marine Resources Co., Ltd.||0.00|
The Department will disclose to parties to this proceeding the calculations performed in reaching the preliminary results within ten days of the date of announcement of these preliminary results. An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Interested parties may submit written comments (case briefs) within 30 days of publication of the preliminary results and rebuttal comments (rebuttal briefs), which must be limited to issues raised in the case briefs, within five days after the time limit for filing case briefs. See 19 CFR 351.309(c)(1)(ii) and 19 CFR 351.309(d). Parties who submit arguments are requested to submit with the argument: (1) a statement of the issues; (2) a brief summary of the Start Printed Page 38372argument; and (3) a table of authorities. Further, the Department requests that parties submitting written comments provide the Department with a diskette containing the public version of those comments. Unless the deadline is extended pursuant to section 751(a)(3)(A) of the Act, the Department will issue the final results of this new shipper review, including the results of the Department's analysis of the issues raised by the parties in their comments, within 120 days of publication of these preliminary results. The assessment of antidumping duties on entries of merchandise covered by this review and future deposits of estimated duties shall be based on the final results of this review.
Upon issuing the final results of the review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department will issue appropriate appraisement instructions for the companies subject to this review directly to CBP within 15 days of publication of the final results of this review. Pursuant to 19 CFR 351.212(b)(1), the Department will calculate importer-specific 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. The Department will instruct CBP to assess antidumping duties on all appropriate entries covered by this review if any importer-specific assessment rate calculated in the final results of this review is above de minimis.
Cash Deposit Requirements
Upon completion of this review, the Department will require cash deposits at the rate established in the final results as further described below.
Bonding will no longer be permitted to fulfill security requirements for shipments of certain frozen warmwater shrimp from the PRC produced and exported by Zhanjiang Regal that are entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this new shipper review. See 19 CFR § 351.214(e). The following cash deposit requirements will be effective upon publication of the final results of this new shipper review for all shipments of subject merchandise from Zhanjiang Regal entered, or withdrawn from warehouse, for consumption on or after the publication date: (1) For subject merchandise manufactured and exported by Zhanjiang Regal, the cash deposit rate will be the rate established in the final results of this review, except that no cash deposit will be required if the cash deposit rate calculated in the final results is zero or de minimis; and (2) for subject merchandise exported by Zhanjiang Regal but not manufactured by itself, the cash deposit rate will continue to be the
PRC-wide rate (i.e., 112.81 percent); and (3) for subject merchandise produced by Zhanjiang Regal but not exported by itself, the cash deposit rate will be the rate applicable to the exporter. These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification to Importers
This notice serves as a preliminary 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 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.
This new shipper review and notice are in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act and 19 CFR 351.214(h)(i).Start Signature
Dated: June 27, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-10565 Filed 7-5-06; 8:45 am]
BILLING CODE 3510-DS-S