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Notice

Honey from the People's Republic of China: Intent to Rescind, In Part, and Preliminary Results of Antidumping Duty New Shipper Reviews

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The U.S. Department of Commerce (“the Department”) is conducting new shipper reviews of the antidumping duty order on honey from Start Printed Page 112the People's Republic of China (“PRC”) in response to requests from Inner Mongolia Altin Bee-Keeping Co., Ltd. (“Inner Mongolia”), Qinhuangdao Municipal Dafeng Industrial Co., Ltd. (“QMD”), and Dongtai Peak Honey Industry Co., Ltd. (“Dongtai Peak”), (collectively, “respondents”). The period of review (“POR”) is from December 1, 2004, through November 30, 2005. With regard to Inner Mongolia and Dongtai Peak, we have preliminarily determined that their sales have been made below normal value during the POR. In addition, we have preliminarily determined that Inner Mongolia's, and Dongtai Peak's sales are bona fide transactions. However, with regard to QMD, we have preliminarily determined its POR sale was not a bona fide transaction and are rescinding its review, as further explained in the bona fide analysis and preliminary intent to rescind sections of this notice. If these preliminary results are adopted in our final results of this review, we will instruct U.S. Customs and Border Protection (“CBP”) to assess antidumping duties on appropriate entries of subject merchandise during the POR. Interested parties are invited to comment on these preliminary results.

EFFECTIVE DATE:

January 3, 2007.

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FOR FURTHER INFORMATION CONTACT:

Helen Kramer, Patrick Edwards, or Judy Lao AD/CVD Operations, Office 7, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0405, (202) 482-8029 or (202) 482-7924, respectively.

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SUPPLEMENTARY INFORMATION:

Background

The Department published in the Federal Register the antidumping duty order on honey from the People's Republic of China (“PRC”) on December 10, 2001. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order; Honey from the People's Republic of China, 66 FR 63670 (December 10, 2001). On December 19, 2005, the Department received properly filed requests for the three new shipper reviews, in accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as amended (“the Act”) and 19 CFR § 351.214(b) and (c), from Inner Mongolia, QMD, and Dongtai Peak. The Department determined that the requests met the requirements stipulated in 19 CFR 351.214, and on January 31, 2006, published its initiation of these new shipper reviews. Honey from the People's Republic of China: Initiation of New Shipper Antidumping Duty Reviews, 71 FR 5051 (January 31, 2006).[1] On February 6, 2006, the Department issued antidumping duty new shipper questionnaires to Inner Mongolia, QMD, and Dongtai Peak. Between February 2006 and June 2006, the Department received timely filed original and supplemental questionnaire responses from all three respondents. On July 3, 2006, the Department extended the deadline for the preliminary results to November 21, 2006. See Honey from the People's Republic of China: Notice of Time Limit for Preliminary Results of New Shipper Review, 71 FR 37904 (July 3, 2006).

On September 8, 2006, we invited interested parties to provide information on surrogate market economy values for the factors of production reported by respondents. On September 20, 2006, and September 22, 2006, both respondents and petitioners submitted publicly available surrogate value information. On October 10, 2006, petitioners submitted comments on respondents' surrogate value submission. On October 12, 2006, respondents and QMD submitted comments on petitioners surrogate value submission. On October 25, 2006, the Department received a letter from Inner Mongolia Altin Bee-Keeping Co., Ltd., Dongtai Peak Honey Industry Co., Ltd, and Qinhuangdao Municipal Dafeng Industrial Co., Ltd. agreeing to waive the new shipper time limits in accordance with 19 CFR § 351.214(j)(3). Therefore, in accordance with 19 CFR § 351.214(j)(3), on October 25, 2006, the Department acknowledged respondents' waiver of the new shipper review time limits and aligned the new shipper reviews with the administrative review. See Department's Memo to All Interested Parties, dated October 25, 2006, in which the Department acknowledged that all three remaining new shipper companies waived the new shipper time limits, and the Department aligned the current new shipper reviews with the current administrative review.

On November 13, 2006, the Department further extended the deadline for the preliminary results to December 21, 2006. See Honey from the People's Republic of China: Extension of Time Limit for Preliminary Results of the Antidumping Duty Administrative Review and New Shipper Review, 71 FR 66165 (November 13, 2006).

The Department conducted verification of Inner Mongolia's questionnaire responses at the company's facilities in Hohhot, Inner Mongolia, Autonomous Region, PRC from July 10-11, 2006. The Department conducted verification of QMD's questionnaire responses at the company's facilities in Qinhuangdao, Heibei, PRC, from July 13-14, 2006. The Department conducted verification of Dongtai Peak's questionnaire responses at the company's facility in Dongtai, Jiangsu Province, PRC, from July 17-18, 2006.

Scope of the Antidumping Duty Order

The products covered by this order are natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight, and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb, or chunk form, and whether packaged for retail or in bulk form.

The merchandise subject to this order is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, the Department's written description of the merchandise under order is dispositive.

Bona Fide Sale Analysis

In evaluating whether or not a single sale in a new shipper review is commercially reasonable, and therefore bona fide, the Department considers, inter alia, such factors as: (1) The timing of the sale; (2) the price and quantity; (3) the expenses arising from the transaction; (4) whether the goods were resold at a profit; and (5) whether the transaction was made on an arms-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. United States, 366 F. Supp. 2d 1246, 1250 (TTPC) (CIT 2005), citing Am. Silicon Techs. v. United States, 110 F. Supp. 2d 992, 995 (CIT 2000). Accordingly, the Department considers a number of factors in its bona fides analysis, “all of which may speak to the commercial realities surrounding an alleged sale of subject merchandise.” See Hebei New Donghua Amino Acid Co., Ltd. v. United States, 374 F. Supp. 2d 1333, 1342 (CIT 2005) (New Donghua), citing Fresh Garlic from the PRC: Final Results of Start Printed Page 113Administrative Review and Rescission of New Shipper Review, 67 FR 11283 (March 13, 2002), and accompanying Issues and Decision Memorandum (Clipper NSR).

We preliminarily find that Inner Mongolia's and Dongtai Peak's reported U.S. sales during the POR appear to be bona fide based on the totality of the circumstances on the record. Specifically, we find that: (1) The price of Inner Mongolia's and Dongtai Peak's sales were within the range of the prices of other entries of subject merchandise from the PRC into the United States during the POR; (2) Inner Mongolia's and Dongtai Peak's sales were made between unaffiliated parties at arm's length; and (3) there is no record evidence that indicates that Inner Mongolia's and Dongtai Peak's sales were not made based on commercial principles. See “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Inner Mongolia Altin Bee Keeping Co., Ltd.,” dated December 21, 2006; see also, “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Dongtai Peak Honey Industry Co., Ltd.,” dated December 21, 2006.

However, for QMD, we found evidence that the POR sale in question is not a bona fide transaction. Based on our investigation of the sale, the questionnaire responses submitted by QMD, information from the Department's verification of QMD, and the lack of subsequent POR sales demonstrating that retail sales are within QMD's normal course of business, we preliminarily determine that QMD has not met the requirements to qualify for a new shipper review during the POR. See “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Qinhuangdao Municipal Dafeng Industrial Co., Ltd.,” dated December 21, 2006, and further discussion below.

Preliminary Intent to Rescind

Concurrent with this notice, we are issuing a memorandum detailing our analysis of the bona fides of QMD's U.S. sale and our preliminary decision to rescind the new shipper review with respect to QMD. Although much of the information relied upon by the Department to analyze the issues is business proprietary, the Department based its determination that the new shipper sale made by QMD was not bona fide on the totality of the circumstances surrounding the sale. An analysis of QMD's sales indicates that its POR sale is not within its normal business practices. See “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Qinhuangdao Municipal Dafeng Industrial Co., Ltd.,” dated December 21, 2006. Also, compared to the average unit values of all imports of retail honey shipments from the PRC during the POR, QMD's price and quantity are significantly different from other shipments from the PRC. See Id.

Because the Department has found QMD's single POR sale to be non-bona fide, it is not subject to review. See TTPC, 366 F. Supp. 2d at 1249 (“Pursuant to the rulings of the Court, Commerce may exclude sales from the export price calculation where it finds that they are not bona fide”). For additional information in our determination of QMD's non \ sale determination, see id; see also, “Memorandum to the File: Verification of the Sales and Factors Response of Qinhuangdao Municipal Dafeng Industrial Co., Ltd. in the Antidumping Duty New Shipper Review on Honey from the People's Republic of China,” dated August 29, 2006 (“QMD Verification Report”). Public versions of these memos are on file in the Central Records Unit (“CRU”) located in room B-099 of the Main Commerce Building.

Verification

As provided in section 782(i)(3) of the Act and 19 CFR § 351.307(b)(iv), we conducted verification of the questionnaire responses of Inner Mongolia, QMD, and Dongtai Peak in July 2006. We used standard verification procedures, including on-site inspections of the production facilities and examination of relevant sales and financial records. Our verification results are outlined in the verification reports, public versions of which are on file in the CRU located in room B-099 of the Main Commerce Building. See “Memorandum to the File: Verification of the Sales and Factors Response of Inner Mongolia Altin Bee-Keeping Co., Ltd. in the Antidumping Duty New Shipper Review on Honey from the People's Republic of China,” dated August 17, 2006 (“Inner Mongolia Verification Report”); see also, QMD Verification Report; see also, “Memorandum to the File: Verification of the Sales and Factors Response of Dongtai Peak Honey Industry Co., Ltd. in the Antidumping Duty New Shipper Review on Honey from the People's Republic of China,” dated August 16, 2006 (“Dongtai Peak Verification Report”).

New Shipper Status

As discussed above, we found no evidence that the sale in question for Inner Mongolia, and the sale in question for Dongtai Peak were not bona fide sales. See “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Inner Mongolia Altin Bee Keeping Co., Ltd.,” dated December 21, 2006; see also, “Memorandum to Richard Weible, Office Director: Eighth Antidumping Duty New Shipper Review of the Antidumping Duty Order on Honey from the People's Republic of China: Bona Fide Analysis of Dongtai Peak Honey Industry Co., Ltd.,” dated December 21, 2006. Based on our investigation into the bona fide nature of the sale, for each respondent, the questionnaire responses submitted by each respondent, and our verifications thereof, we preliminarily determine that Inner Mongolia, and Dongtai Peak have met the requirements to qualify as new shippers during the POR. We have determined that Inner Mongolia and Dongtai Peak made their first sale and/or shipment of subject merchandise to the United States during the POR, and that they were not affiliated with any exporter or producer that had previously shipped subject merchandise to the United States during the POR. Therefore, for purposes of these preliminary results of review, pursuant to 19 CFR 351.214(b)(2), we are treating Inner Mongolia's, and Dongtai Peak's sales of honey to the United States as appropriate transactions for a new shipper review. See “Separate Rates” section below.

Separate Rates

In proceedings involving non-market economy (“NME”) countries (see section 771(18) of the Act), the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty 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 export activities. For the new shipper reviews, Start Printed Page 114each respondent submitted information in support of its claim for a company-specific rate. Moreover, we examined each respondent's claims for a separate rate at verification.

Accordingly, we have considered whether respondents are independent from government control, and therefore eligible for a separate rate. To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the Notice of Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), and accompanying Issue and Decision memorandum at Comment 1 (“Sparklers”), as amplified by Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585, at 22586-7 (May 2, 1994) (“Silicon Carbide”). In accordance with the separate-rates criteria, the Department assigns separate rates in NME cases only if respondents can demonstrate the absence of both de jure and de facto government control over export activities. Respondents provided complete separate-rate information in their respective responses to our original and supplemental questionnaires.

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) other formal measures by the government decentralizing control of companies. See Sparklers, 56 FR 20588, and accompanying Issue and Decision memorandum at Comment 1. As discussed below, our analysis shows that the evidence on the record supports a preliminary finding of de jure absence of government control for each respondent based on each of these factors.

Both Inner Mongolia and Dongtai Peak placed on the record a number of documents to demonstrate absence of de jure control, including the “Company Law of the People's Republic of China” (December 29, 1993) and the “Foreign Trade Law of the People's Republic of China” (May 12, 1994). See Exhibit A-2 of Inner Mongolia's and Dongtai Peak's, respective Section A submissions, both dated March 11, 2006, (collectively, “Section A responses”). Respondents also submitted copies of their business licenses in Exhibit A-3 of their respective Section A responses. The Inner Mongolia Autonomous Region Tumd Left Banner Industry Commerce Administration Bureau issued Inner Mongolia's business license. The Dongtai Industry & Commerce Administration Bureau issued Dongtai Peak's business license. Each respondent stated the following in regard to their business license: the business license defines the scope of the company's business activities and ensures the company has sufficient capital to continue its business operations; the business license is issued solely and directly to the company, and no other company can use the business license that they use. Respondents add that their license defines the business activities that they engage in and entitles them to produce and sell honey and honey products. There are no other limitations or entitlements posed by the business license, according to respondents. Furthermore, respondents state that a business entity must obtain a license before it legally operates.

Respondents state that the Foreign Trade Law governs the establishment of limited liability companies, and provides that such a company shall operate independently and be responsible for its own profits and losses. Respondents also placed on the record the Company Law of the People's Republic of China, stating that this law allows them full autonomy from the central authority in governing its business operations. We have reviewed Article 11 of Chapter II of the Foreign Trade Law, which states, “foreign trade dealers shall enjoy full autonomy in their business operation and be responsible for their own profits and losses in accordance with the law.” As in prior cases, we have analyzed such PRC laws and found that they establish an absence of de jure control. See, e.g., Pure Magnesium from the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 63 FR 3085 at 3086 (January 21, 1998) and Preliminary Results of Antidumping Duty New Shipper Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 30695 at 30696 (June 7, 2001), as affirmed in Final Results of New Shipper Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 45006 (August 27, 2001). Therefore, we preliminarily determine that there is an absence of de jure control over the export activities of Dongtai Peak, and Inner Mongolia.

Absence of De Facto Control

Typically, the Department considers four factors in evaluating whether a respondent is subject to de facto government control of its export functions: (1) Whether the export prices are set by, or subject to, the approval of a government 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 at 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 government control that would preclude the Department from assigning separate rates.

Each respondent has asserted the following: (1) It is a privately owned company; (2) there is no government participation in its setting of export prices; (3) its general manager has the authority to sign export contracts; (4) the shareholders appointed the general manager, who selected the other managers, and it does not have to notify government authorities of its management selection; (5) there are no restrictions on the use of its export revenue; and (6) the shareholders decide how profits will be used, see Section A responses. We have examined the documentation provided and note that it does not demonstrate that pricing is coordinated among exporters of PRC honey.

Consequently, because evidence on the record indicates an absence of government control, both in law and in fact, over respondents' export activities, we preliminarily determine that Inner Mongolia, and Dongtai Peak have met the criteria for the application of a separate rate.

Normal Value Comparisons

To determine whether each respondent's sale of honey to the United States was made at prices below normal value (“NV”), we compared their United States prices to NV, as described in the “U.S. Price” and “Normal Value” sections of this notice.Start Printed Page 115

U.S. Price

Export Price

For both respondents, we based U.S. price on export price (“EP”) in accordance with section 772(a) of the Act, because the first sale to an unaffiliated purchaser was made prior to importation, and constructed export price (“CEP”) was not otherwise warranted by the facts on the record. We calculated EP based on the packed price from the exporter to the first unaffiliated customer in the United States. We deducted foreign inland freight and foreign brokerage and handling expenses from the starting price (“gross unit price”), in accordance with section 772(c) of the Act.

Where foreign inland freight and foreign brokerage and handling expenses were provided by PRC service providers or paid for in renminbi, we valued these services using Indian surrogate values (see “Factors of Production” section below for further discussion). For expenses provided by a market-economy provider and paid for in market-economy currency, we used the reported expense, pursuant to 19 CFR § 351.408(c)(1).

Normal Value

1. Methodology

The Department's general policy, consistent with section 773(c)(1)(B) of the Act, is to calculate NV using each of the factors of production (“FOP”) that a respondent consumes in the production of 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, 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 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) (“Garlic”), and accompanying Issues and Decision Memorandum at Comment 1; Certain Preserved Mushrooms from the People's Republic of China: Final Results of First New Shipper Review and First Antidumping Duty Administrative Review, 66 FR 31204 (June 11, 2001), and accompanying Issues and Decision Memorandum at Comment 2. Second, as the Department explained in Garlic, attempting to value the factors used in a production process yielding an intermediate product may lead to an inaccurate result because a significant element of cost would not be adequately accounted for in the overall factors buildup. See Garlic, 71 FR 26329, and accompanying Issues and Decision Memorandum at Comment 2.

We note that Inner Mongolia owns bee hives and contends that their own bee farms supplied all of the raw honey they processed during the POR. Inner Mongolia argues that its processed honey should be valued by using surrogate values for the beekeeping factors used to produce raw honey. In the course of this proceeding, the Department has requested and obtained detailed information from Inner Mongolia with respect to its raw honey production practices.

In order to ascertain whether Inner Mongolia's books and records are able to substantiate accurately the complete costs of producing honey, we have considered and analyzed the factors associated with production, including labor costs, pesticides, overhead expenses, and raw honey supply produced. For labor costs, the Department found that Inner Mongolia did not track the actual labor hours on its bee farms, or maintained records that would allow them to substantiate this information. For pesticides, the Department found that Inner Mongolia could not identify the chemical composition of the pesticides used on the bee farms. Therefore, the Department could not determine the appropriate surrogate value for pesticides. For overhead expenses, Inner Mongolia did not submit public financial statements for a surrogate honey processor that owns bee farms. Also, the available surrogate financial ratios do not capture the overhead costs for beekeeping operations. Therefore, it is impossible to determine an appropriate surrogate value for overhead expenses.

For raw honey supply, the Department verified the quantity of raw honey delivered to Inner Mongolia's processing plant during the POR, and found that the average yield of raw honey per beehive based on the numbers of hives the company reported as having used during the POR is far in excess of maximum yields reported worldwide. See the Department's letter to the interested parties dated Nov. 14, 2006, attaching articles showing yields per hive in various countries ranging from 20 to 100 kg, and the petitioners' letters dated November 22 and 28, 2006. The Department gave the parties an opportunity to comment on the raw honey yields. Based upon the information and comments provided by the parties, the Department has preliminarily determined that Inner Mongolia has not substantiated its aberrationally high yields.

Based on our analysis of the information on the record, we find that Inner Mongolia is unable to record accurately and substantiate the complete costs of producing raw honey. Therefore, we have preliminarily determined that the use of intermediate input methodology is more accurate, and have used raw honey as the direct raw material input. For a complete explanation of the Department's analysis, see the Department's Factor of Production Valuation memo, dated December 21, 2006; Inner Mongolia Altin Bee-Keeping Co., Ltd. Program Analysis for the Preliminary Results of Review, dated December 21, 2006.

In future reviews, should a respondent be able to 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 beekeeping FOPs in the calculation of NV.

Non-Market-Economy Status

In every case conducted by the Department involving the PRC, the PRC has been treated as an NME country. Pursuant to section 771(18)(C)(i) of the Act, any determination that a foreign country is an NME country shall remain in effect until revoked by the administering authority. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Preliminary Results of 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003), as affirmed in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 70488 (December 18, 2003). None of the parties to these reviews has contested such treatment. Accordingly, we calculated NV in accordance with section 773(c) of the Act, which applies to NME countries.Start Printed Page 116

Surrogate Country

Section 773(c)(4) of the Act requires the Department to value an NME producer's factors of production, to the extent possible, in one or more market-economy countries that: (1) Are at a level of economic development comparable to that of the NME country, and (2) are significant producers of comparable merchandise. India is among the countries comparable to the PRC in terms of overall economic development, as identified in the “Memorandum from the Office of Policy to Abdelali Elouaradia, Program Manager Office 7” dated April 20, 2006. In addition, based on publicly available information placed on the record (e.g., world production data), India is a significant producer of honey. Accordingly, we considered India the surrogate country for purposes of valuing the factors of production because it meets the Department's criteria for surrogate-country selection. See “Memorandum to the File: Selection of a Surrogate Country,” dated November 30, 2006.

Factors of Production

In accordance with section 773(c) of the Act, we calculated NV based on the factors of production which included, but were not limited to: (A) Hours of labor required; (B) quantities of raw materials employed; (C) amounts of energy and other utilities consumed; and (D) representative capital costs. We used factors of production reported by the producer for materials, energy, labor, and packing. To calculate NV, we multiplied the reported unit factor quantities by publicly available Indian values.

In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data, in accordance with our practice. See, e.g., Fresh Garlic from the People's Republic of China: Final Results of Antidumping Duty New Shipper Review, 67 FR 72139 (December 4, 2002), and accompanying Issues and Decision Memorandum at Comment 6; and Certain Preserved Mushrooms from China Final Results of First New Shipper Review and First Antidumping Duty Administrative Review: Certain Preserved Mushrooms From the People's Republic of China, 66 FR 31204 (June 11, 2001), and accompanying Issues and Decision Memorandum at Comment 5.

When we used publicly available import data from the Ministry of Commerce of India (Indian Import Statistics) for December 2004 through November 2005 to value inputs sourced domestically by PRC suppliers, we added to the Indian surrogate values a surrogate freight cost calculated using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest port of export to the factory. See, Sigma Corp. v. United States, 117 F. 3d 1401, 1408 (Fed. Cir. 1997). When we used non-import surrogate values for factors sourced domestically by PRC suppliers, we based freight for inputs on the actual distance from the input supplier to the site at which the input was used. In instances where we relied on Indian import data to value inputs, in accordance with the Department's practice, we excluded imports from both NME countries and countries deemed to maintain broadly available, non-industry-specific subsidies which may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand) from our surrogate value calculations. See, e.g., Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields from the People's Republic of China, 67 FR 6482 (February 12, 2002), and accompanying Issues and Decision Memorandum at Comment 1; see also, Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 68 FR 66800 at 66808 (November 28, 2003), unchanged in the Department's final results at Notice of Final Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 69 FR 20594 (April 16, 2004).

For a complete discussion of the import data that we excluded from our calculation of surrogate values, see “Memorandum to the File: Factors of Production Valuation Memorandum for the Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review of Honey from the People's Republic of China,” dated December 21, 2006 (Factor Valuation Memo). This memorandum is on file in the CRU, located in room B099 of the main Commerce building.

Where we could not obtain publicly available information contemporaneous with the POR to value factors, we adjusted the surrogate values using the Indian Wholesale Price Index (WPI) as published in the International Financial Statistics of the International Monetary Fund, for those surrogate values in Indian rupees. We made currency conversions, where necessary, pursuant to 19 CFR § 351.415, to U.S. dollars using the daily exchange rate corresponding to the reported date of each sale. We relied on the daily exchanges rates posted on the Import Administration Web site (http://ia.ita.doc.gov). See Factor Valuation Memo.

We valued the factors of production as follows:

To value raw honey, we took a weighted average of the raw honey prices for each month from December 2002 through June 2003, based on the percentage of each type of honey produced and sold, as derived from EDA Rural Systems Pvt Ltd. Web site, http://www.litchihoney.com (EDA data), and as placed by the Department on the record of this administrative review on December 4, 2006, and used in the prior administrative review of honey from the PRC. See AR3 Final Results and accompanying Issues and Decision Memorandum at Comment 1. We inflated the value for raw honey using the POR average WPI rate.

The respondents in this review submitted news articles to be used as potential sources for the surrogate value data for raw honey, including an article entitled “Monograph on Traditional Sciences and Technologies of India Honey Industry” from the Web site http://www.mandafamily.com/​indhonindresources.htm dated December 2, 2005, an article entitled “Honey prices nosedive as supply exceeds demand” from http://www.financialexpress.com dated July 11, 2006, and an article entitled “Honey, the sure way to make money” from the http://www.thehindu.com dated September 11, 2005. In addition, the Department conducted extensive research on potential raw honey surrogate values for this administrative review. The Department found the sources submitted by respondents and our own research of new sources not to be as reliable as EDA data because of the lack of information detailing how the conclusions stated in the sources were determined, researched, and collected. The EDA data are supported with information detailing how its figures are determined, researched, and collected. Additionally, the EDA data provide multiple price points over the course of an extended period of time, whereas alternative data report very few or just a single weighted-average price for a year or succession of years. Therefore, because we find EDA data to be the best available data on the record, we have not used any of these alternate sources proposed by respondents in the Start Printed Page 117preliminary results. For a complete discussion of the Department's analysis of honey, see Factor Valuation Memo at 3-5.

To value coal, the Department derived the weighted-average of the import volume and value from the Indian Import Statistics, Harmonized Commodity Description and Coding System (HS), for HS 27011920. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand), as identified above in the “Valuation of Factors” section of Factor Valuation Memo, from the dataset. See Id. at 2 and 7.

To value water, we calculated the average price of water rates within and outside of industrial zones from various regions as reported by the Maharashtra Industrial Development Corporation, http://midcindia.org, dated June 1, 2003. We inflated the value for water using the POR average WPI rate. See Id. at 8.

We valued electricity using the 2000 electricity price in India reported by the International Energy Agency statistics for Energy Prices & Taxes, Third Quarter 2003. We inflated the value for electricity using the POR average WPI rate. See Id. at 8.

To value paint, we used Indian Import Statistics, contemporaneous with the POR. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand), as identified above in the “Valuation of Factors” section of Factor Valuation Memo, from the dataset. See Id. at 2 and 7. The Department calculated a POR contemporaneous paint surrogate value by deriving the weighted-average of the import volume and value from the Indian Import Statistics, as identified by the designated Indian Trade Classification, based on the HS 3208 and HS 3209. After deriving the weighted average of each HS category of paint, the Department calculated the simple average of the two categories. See Id. at 2 and 5.

To value drums, we relied upon a price quote from an Indian steel drum manufacturer from September 2000, which was used in the AR3 Final Results, and as placed by the Department on the record of this administrative review on December 4, 2006. We inflated the value for drums using the POR average WPI rate. See Id. at 5.

To value factory overhead, selling, general, and administrative expenses (SG&A), and profit, we relied upon publicly available information in the 2004-2005 annual report of Mahabaleshwar Honey Production Cooperative Society Ltd. (MHPC), a producer of the subject merchandise in India, and placed by the Department on the record of this administrative review on December 4, 2006. Respondents maintain in their September 20, 2006, surrogate values submission that Department should rely on information available in an alternate Indian producer's financial statements, that of Apis India Natural Products Ltd. (Apis), 2003 2004. However, we preliminarily find that MHPC data are more appropriate than Apis data because the Apis data are not as reliable or detailed as that of MHPC. In addition, MHPC materials include a complete annual report, auditor's report, and complete profit and loss business statements that segregate MHPC's honey and fruit canning businesses. We note that MHPC is a honey processing business and its financial statements include details on the costs and revenues related to its honey processing business. Therefore, for these preliminary results we are calculating SG&A based on the MHPC data, which were used in the AR3 Final Results. For a further discussion of this issue, see Id. at 9.

To value truck freight, we calculated a weighted-average freight cost based on publicly available data from www.infreight.com, an Indian inland freight logistics resource Web site. The Department valued international freight, where necessary, based on publicly available price quotes from a Danish international shipping and logistics provider, Maersk Line (formerly Maersk Sealand), a division of the A.P. Moller - Maersk Group, at http://www.maerskline.com. See Id. at 8.

We valued marine insurance, where necessary, based on publicly available price quotes from a marine insurance provider at http://www.rjgconsultants.com/​ insurance.html, which are applicable for all destinations from the Far East. Marine insurance is based on a flat insurance rate, plus an additional “War Risk” fee. We valued international freight expenses, where necessary, using contemporaneous freight quotes that the Department obtained from Maersk Line. See Id. at 9.

To value brokerage and handling, we used a simple average of the publicly summarized versions of the average value for brokerage and handling expenses reported in the U.S. sales listings in Essar Steel Ltd.'s (Essar Steel) February 28, 2005, submission in the antidumping duty review of Certain Hot-Rolled Carbon Steel Flat Products from India, and the March 9, 2004, submission from Pidilite Industries Ltd. (Pidilite) in the antidumping duty investigation of Carbazole Violet Pigment 23 from India, both of which have been placed on the record of this review. See Factor Valuation Memo at Exhibit 20. Since both the reported rate in Essar Steel and the Pidilite rate are not contemporaneous, we adjusted these rates for inflation using the POR wholesale WPI for India to be current with the POR of this administrative review. See Id. at 9.

To value labels, the Department calculated a POR-contemporaneous label surrogate value by deriving the weighted average value per kilogram of the import volume and value from the Indian Import Statistics for HS 482190. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand), as identified above in the “Valuation of Factors” section of Factor Valuation Memo, from the dataset. See Id. at 5.

To value bottles and caps, the Department calculated a POR-contemporaneous bottles and caps surrogate value by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 39233090 and HS 39235010. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). After deriving the weighted average value per kilogram of the HS categories for bottles and caps, the Department calculated the simple average of the two categories. See Id. at 6.

To value cartons, the Department calculated a POR-contemporaneous carton surrogate value by deriving the Start Printed Page 118weighted average of the import volume and value from the Indian Import Statistics for HS 48191000. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 6.

To value tape, the Department calculated a POR-contemporaneous tape surrogate value by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 391910. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id., at 6.

To value plastic pallets, the Department relied upon a price quote from Pilco Storage System Private Limited, an Indian manufacturer of pallets (made predominantly of plastic) from January 2006. The price quotation lists prices for various grades of plastic pallets manufactured by the company. The Department considers this quote to be contemporaneous with the POR. For the surrogate price of pallets, the Department is using the quoted price for C-Type pallets of a size of 1000mm x 1000mm x 120 mm, which the Department determines to be conservative. See Id., at 6.

The Department calculated a POR-contemporaneous plastic film surrogate value by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 39201012. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 6.

The Department calculated a POR-contemporaneous beeswax surrogate value by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 15219010. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 7.

To value pollen, the Department calculated a POR-contemporaneous value of inedible molasses (which is the same HS used to value scrap honey) by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 170390. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 7.

The Department calculated a POR-contemporaneous propolis surrogate value by deriving the weighted average of the import volume and value from the Indian Import Statistics for HS 15219090, “Other Insect Wax”. In calculating the surrogate values, the Department eliminated the data of the countries identified as being non-market economy countries (i.e., the PRC and Vietnam), and those deemed to maintain broadly available, non-industry specific subsidies that may benefit all exporters to all export markets (i.e., Indonesia, South Korea, and Thailand). See Id. at 7.

To value the labor input, we used the PRC's regression-based wage rate published by Import Administration on its Web site. See the Import Administration Web site: http://www.ia.ita.doc.gov/​wages. Because of the variability of wage rates in countries with similar levels of per capita gross domestic product, section 351.408(c)(3) of the Department's regulations requires the use of a regression-based wage rate. See Id. at 8.

In calculating the freight rate for truck shipments, we used the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory, in accordance with the Court of Appeals for the Federal Circuit's decision in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997) (Sigma Freight). To derive the freight cost for each material input, the Department multiplied the surrogate freight value per kilogram per kilometer by the Sigma Freight. The Department added the freight expense to the cost of the material input to determine gross material costs. Where there were multiple suppliers of an input, we calculated a weighted-average distance. See Id. at 8.

The Department valued international freight, where applicable, based on publicly available price quotes from a Danish international shipping and logistics provider, Maersk Line (formerly Maersk Sealand), a division of the A.P. Moller - Maersk Group, at http://www.maerskline.com. The Department calculated a contemporaneous weighted-average shipping cost based on rate quotes for shipping a 18,500 kilogram maximum-load container from China to both the east and west coasts of the United States, and then adjusting the two rates by the WPI for the current POR. See Id. at 9.

In accordance with 19 CFR § 351.301(c)(3)(ii) of the Department's regulations, for the final results of these new shipper reviews, interested parties may submit publicly available information to value the factors of production until 20 days following the date of publication of these preliminary results.

Preliminary Results of Review

We preliminarily determine that the following antidumping duty margins exists:

ExporterMargin
Inner Mongolia Altin Bee Keeping Co., Ltd.145.98%
Dongtai Peak Honey Industry33.08%

For details on the calculation of the antidumping duty weighted-average margin for Inner Mongolia and Dongtai Peak, see Inner Mongolia's and Dongtai Peak's respective analysis memorandums for the preliminary results of the eighth new shipper reviews of the antidumping duty order on honey from the PRC, dated December 21, 2006. Public versions of this memorandum are on file in the CRU.

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 directly to CBP within 15 days of publication of the final results of these new shipper reviews. For assessment purposes, where possible, we calculated importer-specific assessment rates for honey from the PRC on a per-unit basis. Specifically, we divided the total dumping margins (calculated as the difference between normal value and export price or constructed export price) for each importer by the total quantity Start Printed Page 119of subject merchandise sold to that importer during the POR to calculate a per-unit assessment amount. If these preliminary results are adopted in our final results of review, we will direct CBP to levy importer-specific assessment rates based on the resulting per-unit (i.e., per-kilogram) rates by the weight in kilograms of each entry of the subject merchandise during the POR.

Cash Deposit

The following cash-deposit requirements will be effective upon publication of these final results for shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided by section 751(a)(2)(C) of the Act: (1) For subject merchandise produced and exported by Inner Mongolia, and subject merchandise produced and exported by Dongtai Peak we will establish a per-kilogram cash deposit rate which will be equivalent to the company-specific cash deposit established in this review; (2) the cash deposit rate for PRC exporters who received a separate rate in a prior segment of the proceeding will continue to be the rate assigned in that segment of the proceeding; (3) for all other 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 212.39 percent; (4) for all non-PRC exporters of subject merchandise, the cash-deposit rate will be the rate applicable to the PRC supplier of that exporter. These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

Schedule for Final Results of Review

Unless otherwise notified by the Department, interested parties may submit case briefs within 30 days of the date of publication of this notice in accordance with 19 CFR § 351.309(c)(ii). As part of the case brief, parties are encouraged to provide a summary of the arguments not to exceed five pages and a table of statutes, regulations, and cases cited. Rebuttal briefs, which must be limited to issues raised in the case briefs, must be filed within five days after the case brief is filed. See 19 CFR § 351.309(d).

Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR § 351.310(c). Any hearing would normally be held 37 days after the publication of this notice, or the first workday thereafter, at the U.S. Department of Commerce, 14th Street and Constitution Avenue NW, Washington, DC 20230. Individuals who wish to request a hearing must submit a written request within 30 days of the publication of this notice in the Federal Register to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, 14th Street and Constitution Avenue, NW., Washington, DC 20230. Requests for a public hearing should contain: (1) The party's name, address, and telephone number; (2) the number of participants; and, (3) to the extent practicable, an identification of the arguments to be raised at the hearing. If a hearing is held, an interested party must limit its presentation only to arguments raised in its briefs. Parties should confirm by telephone the time, date, and place of the hearing 48 hours before the scheduled time.

The Department will issue the final results or final rescissions of these new shipper reviews, which will include the results of its analysis of issues raised in the briefs, within 90 days from the date of the preliminary results, unless the time limit is extended.

Notification to Interested Parties

This notice also 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 the antidumping duties occurred and the subsequent assessment of double antidumping duties.

These new shipper reviews and this notice are published in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

Start Signature

Dated: December 20, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.

End Signature End Supplemental Information

Footnotes

1.  On December 29, 2006, the Department also received a request on behalf of Tianjin Eulia Honey Co., Ltd. (“Eulia”) to initiate a new shipper review. The Department initiated a new shipper review on Eulia on January 31, 2006. Eulia officially withdrew from the review on July 12, 2006. The Department rescinded the review on July 31, 2006. See Honey from the People's Republic of China: Notice of Rescission of Antidumping Duty Review, 71 FR 43110, (July 31, 2006).

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[FR Doc. E6-22497 Filed 12-29-06; 8:45 am]

BILLING CODE 3510-DS-S