Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (“Department”) has received information sufficient to warrant initiation of a changed circumstances review of the antidumping duty order on certain frozen warmwater shrimp from the People's Republic of China (“PRC”). Based on a request filed by Yelin Enterprise Co. Hong Kong (“Yelin”), the Department is initiating a changed circumstances review to determine whether Hilltop International (“Hilltop”) is the successor-in-interest to Yelin, a respondent in the original investigation and first administrative review.
May 2, 2007.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Erin Begnal or Christopher Riker, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230; telephone: 202-482-1442 or 202-482-3441, respectively.End Further Info End Preamble Start Supplemental Information
The antidumping duty order for certain frozen warmwater shrimp from the PRC was published on February 1, 2005. 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 5149 (February 1, 2005) (“PRC Shrimp Order”). As part of the antidumping duty order on certain frozen warmwater shrimp from the PRC, Yelin received a separate rate of 82.27 percent. Id. at 70 FR at 5151. Moreover, as part of the preliminary results of the first administrative review, Yelin preliminarily received a separate rate of 0.00 percent. See Certain Frozen Warmwater Shrimp From the People's Republic of China: Preliminary Results and Partial Rescission of the 2004/2006 Administrative Review and Preliminary Intent To Rescind 2004/2006 New Shipper Review, 72 FR 10645 (March 9, 2007).
On March 16, 2007, Yelin filed a submission requesting that the Department conduct a changed circumstances review of the antidumping duty order on certain frozen warmwater shrimp from the PRC to confirm that Hilltop is the successor-in-interest to Yelin.1 In its submission, Yelin provided information on the events leading to the transition from Yelin to Hilltop. Yelin also provided documentation relating to the change in name to Hilltop and documentation relating to the share transfer from Yelin to its partners to Hilltop, to carry on the business of Yelin. In addition, Yelin provided documentation relating to the ownership structure and management, organizational structure, customer base, accounting processes, supplier relationships, products, and pricing. As part of its March 16, 2007, submission, Yelin requested that the Department conduct an expedited review.
Scope of Order
The scope of this order includes certain frozen warmwater shrimp and prawns, whether wild-caught (ocean harvested) or farm-raised (produced by aquaculture), head-on or head-off, shell-on or peeled, tail-on or tail-off,2 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 investigation, regardless of definitions in the Harmonized Tariff Schedule of the United States (“HTS”), 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, white-leg shrimp Start Printed Page 24274(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 investigation. 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 investigation.
Excluded from the scope are: (1) Breaded shrimp and prawns (HTS 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 (HTS subheadings 0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in prepared meals (HTS subheading 1605.20.05.10); (5) dried shrimp and prawns; (6) Lee Kum Kee's shrimp sauce; (7) canned warmwater shrimp and prawns (HTS 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 10 percent of the product's total weight after being dusted, but prior to being frozen; and (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 investigation are currently classified under the following HTS 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 HTS subheadings are provided for convenience and for customs purposes only and are not dispositive, but rather the written description of the scope of this investigation is dispositive.
Initiation of Changed Circumstances Review
Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (“Act”), the Department will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty order, which shows changed circumstances sufficient to warrant a review of the order. Additionally, section 751(b)(4) of the Act states that the Department shall not conduct a review less than 24 months after the date of publication of the determination, in the absence of good cause. As noted above, Yelin and Hilltop filed their request for a changed circumstances review on March 16, 2007, a little over 24 months after the publication of the amended final determination and order. See PRC Shrimp Order.
In a changed circumstances review involving a successor-in-interest determination, the Department typically examines several factors including, but not limited to, changes in: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base. See Certain Cut-to-Length Carbon Steel Plate from Romania: Initiation and Preliminary Results of Changed Circumstances Antidumping Duty Administrative Review, 70 FR 22847 (May 3, 2005). While no single factor or combination of factors will necessarily be dispositive, the Department generally will consider the new company to be the successor to the predecessor if the resulting operations are essentially the same as those of the predecessor company. See, e.g., Notice of Initiation of Antidumping Duty Changed Circumstances Review: Certain Forged Stainless Steel Flanges from India, 71 FR 327 (January 4, 2006). Thus, if the record demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the predecessor company, the Department may assign the new company the cash deposit rate of its predecessor. See, e.g., Fresh and Chilled Atlantic Salmon From Norway: Final Results of Changed Circumstances Antidumping Duty Administrative Review, 64 FR 9979, 9980 (March 1, 1999).
Based on the information provided in its submission, Yelin has provided sufficient evidence to warrant a review to determine if Hilltop is the successor-in-interest to Yelin. Therefore, pursuant to section 751(b)(1) of the Act and 19 CFR 351.216(b), we are initiating a changed circumstances review.
Preliminary Results of the Review
Pursuant to section 751(b) of the Act, and 19 CFR 351.216, we will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty finding or order that shows changed circumstances sufficient to warrant a review of the order. The information submitted by Yelin stating the change in ownership and change in the respondent entity's legal name demonstrates changed circumstances sufficient to warrant a review. See 19 CFR 351.216(d).
As noted above in the “Background” section of this notice, in its request for a changed circumstances review, Yelin stated that it underwent a change in ownership. Yelin was renamed Hilltop International, and subsequent to the name change, the share capital of Yelin was transferred to its two original partners, and reinvested in Hilltop by one original and one new shareholder. The company conducted business under both names of Yelin and Hilltop, until July 2006, although Yelin was not formally dissolved until December 2006.
In determining whether one company is the successor-in-interest to another for purposes of applying the antidumping duty law, the Department examines several factors including, but not limited to, changes in: (1) Management; (2) production facilities; (3) supplier relationships; and (4) customer base. See, e.g., Notice of Final Results of Changed Circumstances Antidumping Duty Administrative Review: Polychloroprene Rubber From Japan, 67 FR 58 (January 2, 2002) (“Polychloroprene Rubber from Japan”) (citing Brass Sheet and Strip from Canada: Final Results of Antidumping Duty Administrative Review, 57 FR 20460, 20462 (May 13, 1992) (“Canadian Brass”)).3 While no single factor or combination of factors will necessarily provide a dispositive indication, the Department will generally consider the new company to Start Printed Page 24275be the successor-in-interest to the previous company if the resulting operation with regard to the subject merchandise is not materially dissimilar to that of its predecessor. See, e.g., Industrial Phosphoric Acid from Israel; Final Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944, 6945 (February 14, 1994); and Notice of Final Determination of Sales at Less Than Fair Value and Affirmative Final Determination of Critical Circumstances: Certain Orange Juice from Brazil, 71 FR 2183 (January 13, 2006) and accompanying Issues and Decision Memorandum, at Comment 3. Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the former company, the Department will accord the new company the same antidumping duty treatment as its predecessor.
Beginning with management, Yelin reported that there has been no change in the company's management or management structure after becoming Hilltop. See Yelin's CCR Request at 5 and Exhibit 4. We find that the management structure has remained unchanged.
Second, we looked at the operational structure of Hilltop. Yelin explained that there have been no material changes to its operations or the way it sells subject merchandise. Additionally, Yelin provided a sales documentation flowchart and a flow of goods/payment chart, which demonstrates how products are ordered and sold, and stated that these processes are identical between Yelin and Hilltop. See Yelin's CCR Request at 6 and Exhibit 5. We find that Yelin's operational structure has not changed as a result of becoming Hilltop.
Third, we reviewed the supplier relationships of Yelin and Hilltop. Yelin stated that the two affiliated producers, Yangjiang City Hoitat Quick-Frozen Seafood Co., Ltd. and Fuqing Yihua Aquatic Food Co., Ltd., which supplied Yelin with all subject merchandise, continue to supply Hilltop with the subject merchandise, and have done so since the publication of the antidumping duty order. Yelin noted that there have also been no substantial changes to either producer's product lines, production output, or capacity. See Yelin's CCR Request at 7. For non-subject merchandise that is sold by Yelin and Hilltop, Yelin states that there have been no changes in the list of unaffiliated suppliers.
Fourth, we reviewed the customer base of both Yelin and Hilltop. Yelin explained that Yelin and subsequently, Hilltop, has only one customer, Ocean Duke, which is invoiced through Taiwanese affiliates. See Yelin's CCR Request at 7 and Exhibit 5.
In summary, Yelin reported that its conversion from Yelin to Hilltop did not meaningfully affect the supplier relationships, customer base, management, marketing or sale of products and services. Moreover, there have been no material changes to Yelin's operations or the way it produces and sells subject merchandise resulting in the conversion from Yelin to Hilltop.
Based on Yelin's evidence of the change in ownership and absent any other record evidence that would contradict Yelin's statements, we preliminarily determine that Hilltop should receive the same antidumping duty treatment with respect to certain frozen warmwater shrimp from the PRC as Yelin. If the above preliminary results are affirmed in the Department's final results, the cash deposit rate most recently calculated for Yelin will apply to all entries of subject merchandise by Hilltop, entered, or withdrawn from warehouse, for consumption on or after the date of publication of the final results of this changed circumstances review. See, e.g., Granular Polytetrafluoroethylene Resin from Italy; Final Results of Changed Circumstances Review, 68 FR 25327 (May 12, 2003). This cash deposit rate, if imposed, shall remain in effect until further notice.
Any interested party may request a hearing within 30 days of publication of this notice in accordance with 19 CFR 351.310(c). Interested parties may submit case briefs no later than 30 days after the date of publication of this notice, in accordance with 19 CFR 351.309(c)(1)(ii). Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed no later than 5 days after the case briefs, in accordance with 19 CFR 351.309(d)(1). Any hearing, if requested, will normally be held two days after rebuttal briefs are due, in accordance with 19 CFR 351.310(d)(1).
The Department will issue its final results of review within 270 days after the date on which the changed circumstances review is initiated, or within 45 days if all parties to the proceeding agree to the outcome of the review, in accordance with 19 CFR 351.216(e), and will publish these results in the Federal Register.
The current requirement for a cash deposit of estimated antidumping duties on all subject merchandise will continue unless and until it is modified pursuant to the final results of this changed circumstances review.
This notice is published in accordance with sections 751(b)(1) and 777(i) of the Act and 19 CFR 351.216 of the Department's regulations.Start Signature
Dated: April 25, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
1. See Letter from Yelin, to the Department, regarding Request for Expedited Changed Circumstances Determination, Certain Frozen and Canned Warmwater Shrimp from China (Case No. A-570-848) (March 16, 2007) (“Yelin's CCR Request”).Back to Citation
2. “Tails” in this context means the tail fan, which includes the telson and the uropods.Back to Citation
3. “Generally, in the case of an asset acquisition, the Department will consider the acquiring company to be a successor to the company covered by the antidumping duty order, and thus subject to its duty deposit rate, if the resulting operation is essentially similar to that existing before the acquisition.” See Canadian Brass, 57 FR at 20461.Back to Citation
[FR Doc. E7-8386 Filed 5-1-07; 8:45 am]
BILLING CODE 3510-DS-S