Freshwater Crawfish Tail Meat From the People's Republic of China: Notice of Preliminary Results of Antidumping Duty Administrative Review, 58672-58679 [05-20287]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 70, Number 194 (Friday, October 7, 2005)]
[Notices]
[Pages 58672-58679]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-20287]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-848]


Freshwater Crawfish Tail Meat From the People's Republic of 
China: Notice of Preliminary Results of Antidumping Duty Administrative 
Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: The Department of Commerce (``the Department'') is conducting 
an administrative review of the antidumping duty order on freshwater 
crawfish tail meat from the People's Republic of China (``PRC''). The 
period of review (``POR'') is September 1, 2003, through August 31, 
2004. The Department has preliminarily determined that sales have been 
made below normal value. If these preliminary results are adopted in 
the 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. 
Interested parties are invited to comment on these preliminary results. 
See the ``Preliminary Results of Review'' section of this notice.

DATES: Effective date: October 7, 2005.

FOR FURTHER INFORMATION CONTACT: P. Lee Smith or Scot Fullerton, AD/CVD 
Operations, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-1655 or (202) 482-1386, 
respectively.

Background

    On September 15, 1997, the Department published an amended final 
determination and antidumping duty order on freshwater crawfish tail 
meat from the PRC. See Notice of Amendment of Final Determination of 
Sales at Less Than Fair Value and Antidumping Duty Order: Freshwater 
Crawfish Tail Meat from the People's Republic of China, 62 FR 48218 
(September 15, 1997).
    Based on timely requests from various interested parties, the 
Department initiated an administrative review of the antidumping duty 
order on freshwater crawfish tail meat from the PRC with respect to the 
following companies: China Kingdom International (``China Kingdom''); 
Qingdao Jinyongxiang Aquatic Foods Co., Ltd. (``JYX Aquatic''); Qingdao 
Xiyuan Refrigerate Food Co., Ltd. (``Qingdao Xiyuan''); Weishan Zhenyu 
Foodstuff Co., Ltd. (``Weishan Zhenyu''); Yancheng Hi-King Agriculture 
Developing Co., Ltd. (``Yancheng Hi-King''); and Yancheng Yaou Seafood 
Co., Ltd. (``Yancheng Yaou''). See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews, 69 FR 62022 (October 22, 
2004) (``Initiation Notice'').
    On January 10, 2005, the Crawfish Processors Alliance 
(``petitioner'') withdrew its request for review with respect to 
Qingdao Xiyuan. The Department rescinded the administrative review of 
Qingdao Xiyuan on February 11, 2005. See Freshwater Crawfish Tail Meat 
from the People's Republic of China: Partial Rescission of Antidumping 
Duty Administrative Review, 70 FR 7232 (February 11, 2005). On March 
31, 2005, the Department found that JYX Aquatic had no entries of 
subject merchandise during the POR and rescinded the administrative 
review with respect to JYX Aquatic. See Freshwater Crawfish Tail Meat 
from the People's Republic of China: Partial Rescission of Antidumping 
Duty Administrative Review, 70 FR 16484 (March 31, 2005).
    On May 31, 2005, the Department extended the time limit for the 
completion of the preliminary results of review to no later than 
September 30, 2005. See Freshwater Crawfish Tail Meat from the People's 
Republic of China: Extension of Time Limit for Preliminary Results of 
Antidumping Duty Administrative Review, 70 FR 30926 (May 31, 2005).
    On October 29, 2004, the Department issued an antidumping duty 
questionnaire to each PRC company listed in the above-referenced 
initiation notice and received responses from China Kingdom, Weishan 
Zhenyu, Yancheng Hi-King and Yancheng Yaou between December 6, 2004 and 
January 18, 2005.
    The Department issued supplemental questionnaires to China Kingdom, 
Weishan Zhenyu, Yancheng Hi-King and Yancheng Yaou and received 
responses from February 9, 2005 through July 25, 2005.

Scope of Order

    The product covered by this antidumping duty order is freshwater 
crawfish tail meat, in all its forms (whether washed or with fat on, 
whether purged or unpurged), grades, and sizes; whether frozen, fresh, 
or chilled; and regardless of how it is packed, preserved, or prepared. 
Excluded from the scope of the order are live crawfish and other whole 
crawfish, whether boiled, frozen, fresh, or chilled. Also excluded are 
saltwater crawfish of any type, and parts thereof. Freshwater crawfish 
tail meat is currently classifiable in the Harmonized Tariff Schedule 
of the United States (HTSUS) under item numbers 1605.40.10.10 and 
1605.40.10.90, which are the new HTSUS numbers for prepared foodstuffs, 
indicating peeled crawfish tail meat and other, as introduced by CBP in 
2000, and HTSUS numbers 0306.19.00.10 and 0306.29.00.00, which are 
reserved for fish and crustaceans in general. The HTSUS subheadings are 
provided for convenience and customs purposes only. The written 
description of the scope of this order is dispositive.

Non-Market Economy

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (``NME''). Pursuant to 
section 771(18)(C)(i) of Tariff Act of 1930, as amended (``the Act''), 
any determination that a foreign country is a NME country shall remain 
in effect until revoked by the administering authority. See Fresh 
Garlic from the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review and Rescission in Part, 69 FR 
70638 (December 7, 2004). None of the parties to this proceeding has 
contested such treatment. Accordingly, we calculated normal value 
(``NV'') in accordance with section 773(c) of the Act, which applies to 
NME countries.

Surrogate Country and Factors

    On February 25, 2005, the Department provided interested parties 
the opportunity to submit comments regarding the selection of a 
surrogate country and factor valuation in these preliminary results. On 
April 15, 2005, Weishan Zhenyu submitted publicly

[[Page 58673]]

available information for factor valuation. In its submission, Weishan 
Zhenyu included the financial report of an Indian seafood processor for 
valuing surrogate selling, general & administrative expenses 
(``SG&A''), overhead and profit. Weishan Zhenyu also included publicly 
available Spanish import statistics of non-frozen whole live freshwater 
crawfish from Portugal. The Department received no other comments 
regarding surrogate country or factor valuation.
    Section 773(c)(4) of the Act requires the Department to value an 
NME producer's factors of production (``FOP''), 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. The Office of Policy 
issued a memorandum listing appropriate surrogate countries. See 
Memorandum from Ron Lorentzen to Carrie Blozy re: Administrative Review 
of Freshwater Crawfish Tail Meat (``Tail Meat'') from the People's 
Republic of China (PRC): Request for a List of Surrogate Countries, 
dated November 24, 2004. The memorandum listed five countries, 
including India and Indonesia.
    Of the five countries named in the memorandum, none are significant 
producers of crawfish tail meat. However, India does have a seafood 
processing industry that is a comparable industry with respect to 
factory overhead, SG&A and profit. Therefore, we used India as the 
surrogate country to value all inputs with the exception of the raw 
material (whole live crawfish) and the by-product (crawfish scrap 
shell). Since we have determined that other forms of seafood are not 
sufficiently comparable to serve as surrogate values for the primary 
input, we have considered other countries in which to value the 
crawfish input. As done in prior segments of this proceeding, we have 
decided to use Spain as the surrogate country for the valuation of 
whole live crawfish because we have found that Spain is a significant 
producer of comparable merchandise, i.e., whole crawfish. See 
Memorandum from Benjamin Kong to The File through Carrie Blozy re: 
Administrative Review of Freshwater Crawfish Tail Meat from the 
People's Republic of China: Factor Valuation, dated September 30, 2005 
(``Factor Valuation Memo''); and Freshwater Crawfish Tail Meat from the 
People's Republic of China: Notice of Final Results of Antidumping Duty 
Administrative Revew, and Final Partial Rescission of Antidumping Duty 
Administrative Review, 67 FR 19546 (April 22, 2002) (``1999-2000 Final 
Results''). In addition, we have decided to use Indonesia as the 
surrogate country for the valuation of the crawfish by-product scrap 
based on the availability of a public price quote from an Indonesian 
company that has been used in prior segments of this proceeding. See 
Memorandum to Barbara E. Tillman from Christian Hughes and Adina 
Teodorescu through Maureen Flannery re: Surrogate Valuation of Shell 
Scrap: Freshwater Crawfish Tail Meat from the People's Republic of 
China, Administrative Review 9/1/00-8/31/01 and New Shipper Reviews 9/
1/00-8/31/01 and 9/1/00-10/15/01, dated August 5, 2002; which was 
placed on the record of this review in Factor Valuation Memo, 
Attachment 5. We have not received comments from interested parties 
suggesting other possible surrogate values for these factors and have 
found no other data. We note that Weishan Zhenyu also suggested the use 
of Spanish import data from the period September 2003 through August 
2004 to value whole live crawfish. For further discussion of our 
surrogate country selection, see Memorandum from P. Lee Smith through 
Carrie Blozy and James C. Doyle to The File re: Antidumping Duty 
Administrative Review of Freshwater Crawfish Tail Meat from the 
People's Republic of China: Selection of a Surrogate Country, dated 
September 30, 2005.

Verification

    As provided in section 782(i) of the Act, the Department conducted 
verification of the responses of Yancheng Hi-King, Weishan Zhenyu and 
China Kingdom. The Department verified the questionnaire responses of 
Yancheng Hi-King from July 27 through July 29, 2005 using standard 
verification procedures, including on-site inspection of the 
manufacturer's facilities and the examination of relevant sales and 
financial records. See Memorandum to the File re: Antidumping Duty 
Administrative Review of Freshwater Crawfish Tail Meat from the 
People's Republic of China: Verification of U.S. Sales for Respondent 
Yancheng Hi-King Agriculture Developing Co., Ltd. (``Yancheng Hi-King 
Verification Report''), dated September 30, 2005.
    The Department conducted verification of the questionnaire 
responses of Weishan Zhenyu from August 8 through August 13, 2005, 
using standard verification procedures, including on-site inspection of 
the manufacturer's facilities and the examination of relevant sales and 
financial records. For more information, see the ``Application of 
Adverse Facts Available'' section below; and Memorandum to the File 
from Carrie Blozy and Scot T. Fullerton through James C. Doyle re: 
Antidumping Duty New Shipper Review of Freshwater Crawfish Tail Meat 
from the People's Republic of China (A-570-848): Verification report 
for Weishan Zhenyu Foodstuff Co., Ltd., dated September 30, 2005 
(``Weishan Zhenyu Verification Report'').
    The Department conducted verification of the questionnaire 
responses of China Kingdom from August 2 through August 5, 2005, using 
standard verification procedures, including on-site inspection of the 
manufacturer's facilities and the examination of relevant sales and 
financial records. See the ``Application of Adverse Facts Available'' 
section below; and Memorandum to the File from Carrie Blozy and 
Benjamin Kong re: Antidumping Duty Administrative Review of Freshwater 
Crawfish Tail Meat from the People's Republic of China: Verification 
Report for China Kingdom International Group Co., Ltd., dated September 
27, 2005 (``China Kingdom Verification Report'').
    Verification of the questionnaire responses of Yancheng Yaou was 
scheduled for August 2 through August 5, 2005. However, as described in 
the ``Application of Adverse Facts Available'' section above, Yancheng 
Yaou withdrew from verification on August 5, 2005. See Memorandum to 
the File from Scot Fullerton and Kristina Boughton through Carrie Blozy 
re: Memorandum Discussing the On Site Meetings to Verify the Response 
of Yancheng Yaou Seafood Co., Ltd. In the Antidumping Duty Review of 
Freshwater Crawfish Tail Meat from the People's Republic of China, 
dated August 17, 2005 (``On Site Meetings with Yancheng Yaou Memo'').
    The verification results are on file in the main Department of 
Commerce building, in the Central Records Unit, Room B-099.

Separate Rates

    To establish whether a company operating in an NME is sufficiently 
independent to be entitled to a separate rate, the Department analyzes 
each exporting entity under the test established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified by 
the Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994).

[[Page 58674]]

Under the separate-rates criteria, the Department assigns separate 
rates in NME cases only if the respondent can demonstrate the absence 
of both de jure and de facto governmental control over export 
activities.
    As discussed above, Yancheng Yaou withdrew from verification. See 
On Site Meetings with Yancheng Yaou Memo. Yancheng Yaou also filed a 
letter stating it would no longer participate in the current 
administrative review. See Letter from Yancheng Yaou Seafood Co., Ltd. 
to the Department, dated August 5, 2005. Therefore, the Department was 
unable to verify Yancheng Yaou's questionnaire responses concerning its 
eligibility for a separate rate. The Department therefore determines 
that Yancheng Yaou has not established that it is eligible for a 
separate rate. See ``Application of Adverse Facts Available'' section 
below.

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 an individual 
exporter's business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and (3) any other formal measures 
by the government decentralizing control of companies.
    In their questionnaire responses, China Kingdom, Weishan Zhenyu and 
Yancheng Hi-King stated that they are independent legal entities. 
Evidence on the record indicates that the government does not have de 
jure control over their export activities. China Kingdom, Weishan 
Zhenyu and Yancheng Hi-King submitted evidence of their legal right to 
set prices independent of all governmental oversight. Furthermore, the 
business licenses of China Kingdom, Weishan Zhenyu and Yancheng Hi-King 
indicate that they are permitted to engage in the exportation of 
crawfish. We also found no evidence of de jure governmental control 
restricting China Kingdom, Weishan Zhenyu or Yancheng Hi-King's 
exportation of crawfish.
    In their responses, China Kingdom, Weishan Zhenyu and Yancheng Hi-
King stated that no export quotas apply to crawfish. Prior 
verifications have confirmed that there are no commodity-specific 
export licenses required and no quotas for the seafood category 
``Other,'' which includes crawfish, in China's Tariff and Non-Tariff 
Handbook for 1996. In addition, we have previously confirmed that 
crawfish is not on the list of commodities with planned quotas in the 
1992 PRC Ministry of Foreign Trade and Economic Cooperation document 
entitled Temporary Provisions for Administration of Export Commodities. 
See Freshwater Crawfish Tail Meat From the People's Republic of China; 
Preliminary Results of New Shipper Review, 64 FR 8543 (February 22, 
1999), and Freshwater Crawfish Tail Meat From the People's Republic of 
China; Final Results of New Shipper Review, 64 FR 27961 (May 24, 1999) 
(Ningbo New Shipper Review).
    The following laws, which have been placed on the record of this 
review, indicate a lack of de jure government control. The Company Law 
of the People's Republic of China, made effective on July 1, 1994, with 
the amended version promulgated on August 28, 2004, states that a 
company is an enterprise legal person, that shareholders shall assume 
liability towards the company to the extent of their shareholdings and 
that the company shall be liable for its debts to the extent of all its 
assets. Weishan Zhenyu and Yancheng Hi-King also provided copies of the 
Foreign Trade Law of the PRC, promulgated on May 12, 1994, which 
identifies the rights and responsibilities of organizations engaged in 
foreign trade, grants autonomy to foreign-trade operators in management 
decisions and establishes the foreign trade operator's accountability 
for profits and losses. China Kingdom, Weishan Zhenyu and Yancheng Hi-
King also provided copies of their business licenses stating their 
right to conduct business within the scope of their licenses. The 
Department therefore preliminarily determines that there is an absence 
of de jure control over the export activities of China Kingdom, Weishan 
Zhenyu and Yancheng Hi-King.

De Facto Control

    De facto absence of government control over exports is based on 
four factors: (1) Whether each exporter sets its own export prices 
independently of the government and without the approval of a 
government authority; (2) whether each exporter retains the proceeds 
from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) whether each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and (4) whether each exporter has autonomy from the 
government regarding the selection of management.
    China Kingdom, Weishan Zhenyu and and Yancheng Hi-King each has 
asserted the following: (1) It establishes its own export prices; (2) 
it negotiates contracts without guidance from any governmental entities 
or organizations; (3) it makes its own personnel decisions; and (4) it 
retains the proceeds of its export sales, uses profits according to its 
business needs, and has the authority to sell its assets and to obtain 
loans. The Department verified these responses and found no information 
contradicting them. As a result, there is a sufficient basis to 
preliminarily determine that China Kingdom, Weishan Zhenyu and Yancheng 
Hi-King have demonstrated de facto absence of governmental control of 
their export functions and are entitled to separate rates. 
Consequently, the Department has preliminarily determined that China 
Kingdom, Weishan Zhenyu and Yancheng Hi-King have met the criteria for 
the application of separate rates based on the documentation each has 
submitted on the record.

Application of Adverse Facts Available

    1. China Kingdom. Pursuant to sections 776(a)(2)(A),(C) and (D), 
and section 776(b) of the Act, the Department determines that the 
application of total adverse facts available (``AFA'') is warranted for 
respondent China Kingdom. When an interested party withholds 
information that has been requested by the Department, significantly 
impedes the proceeding or provides unverifiable information, sections 
776(a)(2)(A),(C) and (D) of the Act require the use of facts otherwise 
available.
    Information discovered at verification indicates that China Kingdom 
withheld certain sales documentation over the course of the 
administrative review and at verification regarding its single POR sale 
of subject merchandise to the United States. See China Kingdom 
Verification Report. Where a company's request for an antidumping 
administrative review is based entirely on a single sale of subject 
merchandise during the POR, it is essential that the company provide 
all documentation related to that sale.
    The Department specifically asked China Kingdom in several 
questionnaires to describe in full the sales-transaction process and to 
provide all sales-related documentation. See China Kingdom's original 
questionnaire response, dated January 19, 2005 (``CK Original 
Response''), at page 14; China Kingdom's first supplemental 
questionnaire response, dated March 25, 2005, at page 9; and China 
Kingdom's second supplemental questionnaire response, dated July 20, 
2005, at page 1. In response to all of these requests, China Kingdom 
never provided any documentation identifying any other parties to the 
transaction under review

[[Page 58675]]

besides the importer of record. See CK Original Response, at exhibits 
12-15.
    At verification, the Department again requested that China Kingdom 
provide the verification team with all U.S. sales documentation. 
Despite claims by company officials present at verification that all 
such documentation for China Kingdom's U.S. sale had been provided, in 
the course of reviewing China Kingdom's sales documentation file, the 
verification team found several documents pertaining to the sale under 
review that had not previously been provided, including evidence of a 
previously undisclosed financial arrangement with a third company not 
previously reported as a party to the transaction. These documents 
contradicted the information provided by China Kingdom in its 
questionnaire responses, thereby making China Kingdom's questionnaire 
responses unverifiable.
    Additionally, China Kingdom refused to provide invoices to this 
third party and other information which had been requested by the 
Department. As such, the Department finds that China Kingdom withheld 
information specifically requested by the Department, and significantly 
impeded the investigation.
    Section 776(b) of the Act provides that, in selecting from among 
the facts available, the Department may use an inference that is 
adverse to the interests of the respondent, if it determines that a 
party has failed to cooperate to the best of its ability. The 
Department finds that China Kingdom has failed to cooperate to the best 
of its ability because it could have complied with the Department's 
request to respond accurately to the Department's questionnaires, 
requests for supplemental information, and questions asked at 
verification. Moreover, at no point in the administrative review, prior 
to or during verification, did China Kingdom notify the Department of 
the existence of any inaccuracies in information it reported to the 
Department, or seek guidance on the applicable reporting requirements, 
as contemplated in section 782(c)(1) of the Act. In sum, despite the 
Department's detailed requests for information in questionnaires and at 
verification, China Kingdom gave insufficient attention to its 
statutory duty to reply accurately to requests for factual information. 
For all of the aforementioned reasons, the Department finds that China 
Kingdom failed to cooperate to the best of its ability. For a detailed 
analysis of the Department's decision to apply AFA, see Memorandum from 
James C. Doyle to Barbara E. Tillman: Application of Adverse Facts 
Available to China Kingdom, dated September 30, 2005.
    Therefore, in selecting from the facts available, the Department 
determines that an adverse inference is warranted. In accordance with 
section 776(b) of the Act, because of the breadth of the missing, 
unsupported and unverifiable data, the Department is applying total AFA 
to China Kingdom.
    2. Weishan Zhenyu. Pursuant to sections 776(a)(2)(A),(C) and (D), 
and section 776(b) of the Act, the Department determines that the 
application of total AFA is warranted for respondent Weishan Zhenyu. 
When an interested party withholds information that has been requested 
by the Department, significantly impedes the proceeding, or provides 
information, but that information cannot be verified, sections 
776(a)(2)(A),(C) and (D) of the Act provide for the use of facts 
otherwise available.
    In the instant case, the Department has determined that facts 
available is warranted due to Weishan Zhenyu's withholding of 
information concerning the actual location of its production 
facilities. Throughout the review, the Department relied on Weishan 
Zhenyu's repeated assertions as to the specific location of the 
company's production facility, as well as the assertion that the 
company had only one production facility. At verification however, only 
after the Department discovered that the address where the plant was 
physically located was different from the location reported to the 
Department, did company officials state that its responses to the 
Department's questions on the location of its production facility were 
incorrect. See Weishan Zhenyu Verification Report. This information was 
discovered by the Department only after it inquired as to the location 
of the facilities where the Department had been taken for verification. 
In addition, Weishan Zhenyu's explanations for the discrepency could 
also not be verified, as the company offered inconsistent explanations 
as to the significance of the address originally provided to the 
Department and offered no supporting documentation, which was requested 
by the Department. As the Department has incomplete information 
regarding the location and number of production facilities used by 
Weishan Zhenyu during the POR, the Department could not verify that the 
factors of production submitted to the Department were related to 
Weishan Zhenyu or to another company, and is thus precluded from 
calculating a margin for Weishan Zhenyu.
    Weishan Zhenyu also was unable to provide the Department with the 
original source documentation for its purchases of the whole crawfish 
input, the most significant input in the production of freshwater 
crawfish tail meat. Given that the Department normally reviews such 
documentation at verifications of crawfish tail meat, and also given 
the inconsistencies provided to the Department regarding payment for 
Weishan Zhenyu's whole crawfish purchases, the Department requested the 
original source documentation for the company's purchases of crawfish 
tail meat. Although company officials stated that the company did not 
retain such documentation, the Department found that the company had 
retained the documentation for other time periods. Given that the 
Department could not verify the reported factors of production due to 
both the withholding of information regarding the location of Weishan 
Zhenyu's production facilities, as well as the company's failure to 
provide the Department with source documents for the whole crawfish 
input, the Department finds that Weishan Zhenyu significantly impeded 
the proceeding and facts available, pursuant to sections 776(a)(2)(A), 
(C) and (D), is warranted.
    Section 776(b) of the Act provides that, in selecting from among 
the facts available, the Department may use an inference that is 
adverse to the interests of the party, if it determines that a party 
has failed to cooperate to the best of its ability. The Department 
finds that by not providing accurate information regarding the location 
of its production facilities despite multiple opportunities to do so 
and by failing to provide the Department with the original source 
documentation for the whole crawfish input, Weishan Zhenyu failed to 
cooperate to the best of its ability. Weishan Zhenyu could have 
accurately and completely replied to the Department's requests for 
information. Because the Department concludes that Weishan Zhenyu 
failed to cooperate to the best of its ability, in applying the facts 
otherwise available, the Department finds that an adverse inference is 
warranted, pursuant to section 776(b) of the Act. For a detailed 
analysis of the Department's decision to apply AFA, see Memorandum from 
James C. Doyle to Barbara E. Tillman: Application of Adverse Facts 
Available to Weishan Zhenyu, dated September 30, 2005.
    3. Yancheng Yaou. As further discussed below, pursuant to sections 
776(a)(2)(D) and 776(b) of the Act, the Department determines that the

[[Page 58676]]

application of total AFA, as part of the PRC-wide entity, is warranted 
for respondent Yancheng Yaou, as part of the PRC-wide entity, because 
Yancheng Yaou failed to allow the Department to verify its 
questionnaire responses. Section 776(a)(2)(D) warrants the use of facts 
otherwise available in reaching a determination when information is 
provided, but cannot be verified. The Department attempted to conduct 
verification of the questionnaire responses of Yancheng Yaou from 
August 2 through August 5, 2005. On August 5, 2005, Yancheng Yaou 
withdrew from verification and reclaimed all of its verification 
exhibits. See On Site Meetings with Yancheng Yaou Memo. On August 5, 
2005, Yancheng Yaou also submitted a letter stating that it was 
withdrawing from the current administrative review. See Letter from 
Yancheng Yaou Seafood Co., Ltd. to the Department, dated August 5, 
2005.
    Verification is integral to the Department's analysis because it 
allows the Department to satisfy itself that the information upon which 
the Department relies in calculating a margin is accurate and therefore 
enables the Department to comply with its mandate to calculate the 
dumping margin as accurately as possible. In the Initiation Notice, the 
Department stated that if one of the companies for which we initiated a 
review does not qualify for a separate rate, all other exporters of 
freshwater crawfish tail meat from the PRC who have not qualified for a 
separate rate are deemed to be covered by this review as part of the 
single PRC entity of which the named exporter is a part. See Initiation 
Notice, at fn. 3. Yancheng Yaou notified the Department that it would 
no longer participate in the current administrative review and 
therefore could not establish its eligibility for a separate rate. The 
Department therefore finds Yancheng Yaou to be part of the PRC-wide 
entity. As a result, the Department determines that it is necessary to 
review the single PRC-wide entity, including Yancheng Yaou, in this 
proceeding.
    4. PRC-wide Entity. The PRC-wide entity (including Yancheng Yaou) 
did not provide verifiable information to the Department. Pursuant to 
section 776(a)(2)(D) of the Act, as the information provided by the 
PRC-wide entity is unverifiable, the Department must resort to the 
facts otherwise available. According to section 776(b) of the Act, if 
the Department finds that an interested party ``has failed to cooperate 
by not acting to the best of its ability to comply with a request for 
information,'' the Department may use information that is adverse to 
the interests of the party as facts otherwise available. Adverse 
inferences are appropriate ``to ensure that the party does not obtain a 
more favorable result by failing to cooperate than if it had cooperated 
fully.'' See Statement of Administrative Action (``SAA'') accompanying 
the Uruguay Round Agreements Act (``URAA''), H.R. Rep. No. 103-316 at 
870 (1994). Furthermore, ``an affirmative finding of bad faith on the 
part of the respondent is not required before the Department may make 
an adverse inference.'' Antidumping Duties; Countervailing Duties: 
Final Rule, 62 FR 27296, 27340 (May 19, 1997). As explained above, the 
PRC-wide entity (including Yancheng Yaou) withdrew from verification 
and informed the Department that it would not participate further in 
this review. Because the PRC-wide entity indicated it would no longer 
cooperate in the proceeding, the Department finds it necessary, 
pursuant to sections 776(a)(2)(D) and 776(b) of the Act, to use AFA as 
the basis for these preliminary results of review for the PRC-wide 
entity.

Selection of AFA Rate

    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the Department to rely on 
information derived from (1) the petition, (2) a final determination in 
the investigation, (3) any previous review or determination, or (4) any 
information placed on the record. In reviews, it is the Department's 
practice to select, as AFA, the highest rate determined for any 
respondent in any segment of the proceeding. See, e.g., Freshwater 
Crawfish Tail Meat from the People's Republic of China; Notice of Final 
Results of Antidumping Duty Administrative Review, 68 FR 19504 (April 
21, 2003).
    The Court of International Trade (``CIT'') and the Federal Circuit 
have consistently upheld the Department's practice. See Rhone Poulenc, 
Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Circ. 1990) (``Rhone 
Poulenc''); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 (Ct. 
Int'l Trade 2004) (upholding a 73.55 percent total AFA rate, the 
highest available dumping margin from a different respondent in a LTFV 
investigation); see also Kompass Food Trading Int'l v. United States, 
24 CIT 678, 689 (2000) (upholding a 51.16% total AFA rate, the highest 
available dumping margin from a different, fully cooperative 
respondent); and Shanghai Taoen International Trading Co., Ltd. v. 
United States, Slip Op. 05-22, at 16 (CIT February 17, 2005) (upholding 
a 223.01 percent total AFA rate, the highest available dumping margin 
from a different respondent in a previous administrative review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' See Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). 
The Department's practice also ensures ``that the party does not obtain 
a more favorable result by failing to cooperate than if it had 
cooperated fully.'' See SAA at 870. See also Final Determination of 
Sales at Less than Fair Value: Certain Frozen and Canned Warmwater 
Shrimp from Brazil, 69 FR 76910 (December 23, 2004); See also D&L 
Supply Co. v. United States, 113 F. 3d 1220, 1223 (Fed. Cir. 1997). In 
choosing the appropriate balance between providing respondents with an 
incentive to respond accurately and imposing a rate that is reasonably 
related to the respondent's prior commercial activity, selecting the 
highest prior margin ``reflects a common sense inference that the 
highest prior margin is the most probative evidence of current margins, 
because, if it were not so, the importer, knowing of the rule, would 
have produced current information showing the margin to be less.'' 
Rhone Poulenc, 899 F.2d at 1190.
    Consistent with the statute, court precedent, and its practice, the 
Department has assigned the rate of 223.01 percent, the highest rate 
calculated in any segment of the proceeding, to China Kingdom, Weishan 
Zhenyu, and the PRC-wide entity as AFA. See, e.g., Rescission of Second 
New Shipper Review and Final Results and Partial Rescission of First 
Antidumping Duty Administrative Review: Brake Rotors from the People's 
Republic of China, 64 FR 61581 61584 (November 12, 1999). See 1999-2000 
Final Results. As discussed further below, this rate has been 
corroborated.

Corroboration of Secondary Information Used as AFA

    Section 776(c) of the Act provides that when the Department relies 
on the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. The SAA states that ``corroborate'' means to

[[Page 58677]]

determine that the information used has probative value. See SAA at 
870. The Department has determined that to have probative value, 
information must be reliable and relevant. See Tapered Roller Bearings 
and Parts Thereof, Finished and Unfinished from Japan, 61 FR 57391, 
57392 (November 6, 1996). The SAA also states that independent sources 
used to corroborate such evidence may include, for example, published 
price lists, official import statistics and customs data, and 
information obtained from interested parties during the particular 
investigation. See Preliminary Determination of Sales at Less Than Fair 
Value: High and Ultra-High Voltage Ceramic Station Post Insulators from 
Japan, 68 FR 35627 (June 16, 2003); and Final Determination of Sales at 
Less Than Fair Value: Live Swine from Canada, 70 FR 12181 (March 11, 
2005).
    The reliability of the AFA rate was determined by the calculation 
of the margin based on sales and production data of a respondent in a 
prior review, and on the most appropriate surrogate value information 
available to the Department, chosen from submissions by the parties in 
that review, as well as information gathered by the Department itself. 
Furthermore, the calculation of this margin was subject to comment from 
interested parties in the proceeding. See 1999-2000 Final Results. The 
Department has received no information to date that warrants revisiting 
the issue of the reliability of the rate calculation itself. This rate 
has been used as AFA in every subsequent segment of this proceeding and 
the Department has received no comments challenging the reliability of 
the margin. No information has been presented in the current review. 
Thus, the Department finds that the margin calculated in the 1999-2000 
review is reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. For example, in Fresh Cut Flowers from Mexico: 
Final Results of Antidumping Administrative Review, 61 FR 6812 
(February 22, 1996), the Department disregarded the highest margin in 
that case as adverse best information available (the predecessor to 
facts available) because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin. Similarly, the Department does not apply a margin that has been 
discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 
(Fed. Cir. 1997) (the Department will not use a margin that has been 
judicially invalidated). None of these unusual circumstances are 
present here. As there is no information on the record of this review 
that indicates that this rate is not relevant as AFA for China Kingdom, 
Weishan Zhenyu and the PRC-wide entity, we determine that this rate has 
probative value. Accordingly, we determine that the highest rate 
determined in any segment of this administrative proceeding (i.e., 
223.01 percent) is in accord with section 776(c)'s requirement that 
secondary information be corroborated (i.e., that it have probative 
value).

Normal-Value Comparisons

    To determine whether Yancheng Hi-King's sales of the subject 
merchandise to the United States were made at prices below NV, Yancheng 
Hi-King's United States prices were compared to NV, as described in the 
``United States Price'' and ``Normal Value'' sections of this notice.

United States Price

    For Yancheng Hi-King, the Department based United States price on 
export price (``EP'') in accordance with section 772(a) of the Act, 
because the first sales to unaffiliated purchasers were made prior to 
importation, and constructed export price (``CEP'') was not otherwise 
warranted by the facts on the record. We calculated EP based on packed 
prices from the exporter to the first unaffiliated purchaser in the 
United States. Where applicable, foreign inland freight, foreign 
brokerage and handling expenses, and ocean freight were deducted from 
the starting price (gross unit price) in accordance with section 772(c) 
of the Act.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME country and the available information does not permit the 
calculation of NV using home-market prices, third-country prices, or 
constructed value under section 773(a) of the Act. The Department will 
base NV on the factors of production because the presence of government 
controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under its 
normal methodologies. See Tapered Roller Bearings and Parts Thereof, 
Finished or Unfinished, From the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review and 
Notice of Intent to Rescind in Part, 70 FR 29744, 39754 (July 11, 
2005).
    For purposes of calculating NV, we selected surrogate values for 
the PRC factors of production in accordance with section 773(c)(1) of 
the Act. Factors of production include, but are not limited to, hours 
of labor required, quantities of raw materials employed, amounts of 
energy and other utilities consumed, and representative capital costs, 
including depreciation. See section 773(c)(3) of the Act. In choosing 
surrogate values, we selected, where possible, a publicly available 
value which was an average non-export value, representative of a range 
of prices within the POR or most contemporaneous with the POR, product-
specific, and tax-exclusive. See, e.g., Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Chlorinated Isocyanurates from the People's 
Republic of China, 69 FR 75294, 75300 (December 16, 2004) 
(``Chlorinated Isocyanurates''). In selecting the surrogate values, we 
considered the quality, specificity, and contemporaneity of the data. 
See Manganese Metal from the People's Republic of China: Final Results 
and Partial Rescission of Antidumping Duty Administrative Review, 63 FR 
12442 (March 13, 1998). We used the usage rates reported by the 
respondents for materials, energy, labor, by-products, and packing. For 
a more detailed explanation of the methodology used in calculating 
various surrogate values, see Factor Valuation Memo.

Factor Valuations

    In accordance with section 773(c) of the Act, the Department 
calculated NV based on the FOPs reported by the Yancheng Hi-King for 
the POR. To calculate NV, the reported per-unit factor quantities was 
multiplied by publicly available surrogate values (except where noted 
below). As appropriate, we adjusted input prices by including freight 
costs to reflect delivered prices. For a detailed explanation of all 
surrogate values used for respondents, see Factor Valuation Memo.
    Except where discussed below, we valued raw material inputs using 
September 2003-August 2004 weighted-average Indian import values 
derived from the World Trade Atlas online (``WTA'') (see Factor 
Valuation Memo). The Indian import statistics we obtained from the WTA 
were published by the

[[Page 58678]]

DGCI&S, Ministry of Commerce of India and are contemporaneous with the 
POR. As the Indian surrogate values were denominated in rupees, they 
were converted to U.S. dollars using the exchange rate for India on the 
date of the applicable sale. The daily exchange rate was the exchange 
rate data from the Department's website, which are taken from publicly 
available data from the Federal Reserve and Dow Jones. See https://
www.ia.ita.doc.gov/exchange/. Where we could not obtain 
publicly available information contemporaneous with the POR with which 
to value factors, we adjusted the publicly available information for 
inflation using Indian wholesale price indices (``WPIs'') as published 
in the International Monetary Fund's International Financial Statistics 
(``IFS''). See Factor Valuation Memo.
    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, 
66808 (November 28, 2003), unchanged in the Department's final 
determination at 69 FR 20594 (April 16, 2004). Also consistent with our 
policy, we excluded, in a few instances, import data that appeared to 
be aberrational when compared to the average import value of all 
countries not excluded. See Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Color Television Receivers From the 
People's Republic of China, 69 FR 20594, April 16, 2004, and 
accompanying Issues and Decision Memorandum at Comment 5. 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.

Surrogate Valuations

    To value the input of whole live crawfish we used publicly 
available data for Spanish imports of whole live crawfish from 
Portugal. The Department obtained the data from ``aduanas e 
I.especiales,'' the Spanish Customs database for foreign trade 
statistics (Estadisticas Comercio Exterior).
    The Department derived a price for polyethylene bags during the POR 
from Indian import statistics for HTS subheading 3923.2100 from the 
WTA.
    To value a by-product, crawfish scrap, the Department used a price 
quote from Indonesia for wet crab and shrimp shells. See Factor 
Valuation Memo, Attachment 5. The Department has used this surrogate 
value in previous segments of this proceeding and interested parties 
have not submitted any additional information for valuing this by-
product.
    Section 351.408(c)(3) of the Department's regulations requires the 
use of a regression-based wage rate. Therefore, to value the labor 
input, the Department used the regression-based wage rate for China 
published by Import Administration on its Web site. See https://
www.ia.ita.doc.gov/wages/.
    To calculate the cost of coal, the Department used Indian import 
data for steam coal (HTS subheading 2701.1902) during the POR from the 
WTA.
    To value water, the Department used the industrial water rates 
within the Maharashtra Province of India from June 2003. To achieve 
comparability of water prices to the factors reported for the POR, we 
adjusted this factor value to reflect inflation to the POR using the 
WPI for India, as published in the 2005 IFS.
    To value SG&A, factory overhead and profit, the Department used the 
2002-2003 financial statements from Nekkanti Sea Foods Ltd. 
(``Nekkanti''). See Factor Valuation Memo, at Attachment 13.
    For foreign inland freight, respondent reported that all raw 
materials were delivered by truck. Respondent reported the distance of 
the material inputs in kilometers, from the supplier of the material 
input to the factory. In calculating the freight rate, the Department 
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). To 
value the cost of truck freight, we used an average truck freight cost 
based on Indian market truck freight rates on a per-metric ton basis 
published in the Iron and Steel Newsletter, April 2002, and inflated 
the value to be contemporaneous to the POR. To derive the freight cost 
for each material input, the Department multiplied the surrogate 
freight value by the freight distance and subsequently multiplied this 
value by the reported quantity of the input consumed in the production 
of one unit of the subject merchandise during the POR. The Department 
added the freight expense to the cost of the material input to 
determine gross material costs.
    To value the inland freight expense for packaged crawfish tail meat 
from the producer to the port of export, the Department used an Indian 
refrigerated truck freight rate based on price quotations from CTC 
Freight Carriers of Delhi, India, placed on the record of the 
antidumping investigation of Certain Frozen and Canned Warmwater Shrimp 
from the People's Republic of China. This rate was contemporaneous with 
the POR. The Department has placed this information on the record of 
this proceeding (see Factor Valuation Memo, Attachment 10).
    To value brokerage and handling, the Department used a simple 
average of the publicly summarized version of the average value for 
brokerage and handling expenses reported in the U.S. sales listings in 
the February 28, 2005, submission from Essar Steel Ltd. (``Essar 
Steel'') in the antidumping duty administrative 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. See Public version of section C questionnaire response from 
Essar Steel Limited, dated February 28, 2005; and Public version of 
section C questionnaire response from Pidilite Industries Ltd., dated 
March 9, 2004. The reported rate of Essar Steel was contemporaneous 
with the POR. Since the Pidilite rate was dated from October 2002 
through September 2003, it was necessary to inflate the rate to be 
contemporaneous with the POR. The Department has placed this 
information on the record of this proceeding (see Factor Valuation 
Memo, Attachment 11).
    Where respondent used an NME shipper, we valued international 
freight expenses using freight quotes from Maersk Sealand, a market-
economy shipper. These quotes have been used in prior reviews of this 
case. See Freshwater Crawfish Tail Meat from the People's Republic of 
China: Notice of

[[Page 58679]]

Final Results of Antidumping Duty Administrative Review and New Shipper 
Reviews, and Final Partial Rescission of Administrative Review, 66 FR 
20634 (April 24, 2001). We obtained quotes for each month of the POR, 
from the PRC to Long Beach, and took a simple average. See Factor 
Valuation Memo, Attachment 12.

Currency Conversions

    We made currency conversions using exchange rates obtained from the 
Web site of Import Administration at https://ia.ita.doc.gov/exchange/
index.html.

Preliminary Results of the Review

    The Department preliminarily finds that the following margins exist 
for the following exporters under review during the period September 1, 
2003, through August 31, 2004:

               Freshwater Crawfish Tail Meat From the PRC
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
China Kingdom International................................       223.01
Weishan Zhenyu Foodstuff Co., Ltd..........................       223.01
Yancheng Hi-King Agriculture Developing Co., Ltd...........        32.53
PRC-wide Rate (including Yancheng Yaou Seafood Co., Ltd.)..       223.01
------------------------------------------------------------------------

    The Department will disclose the calculations used in our analysis 
to parties to this proceeding within five days of the date of 
publication of this notice. Case briefs from interested parties may be 
submitted not later than October 31, 2005, pursuant to 19 CFR 
351.309(c). Rebuttal briefs, limited to issues raised in the case 
briefs, will be due not later than November 7, 2005, pursuant to 19 CFR 
351.309(d). Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations and cases cited. Any 
interested party may request a hearing within 30 days of publication of 
this notice.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should include (1) The 
party's name, address, and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c). Issues raised in the hearing will be limited to those 
raised in case briefs and rebuttal briefs.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
such written briefs or at the hearing, if held, no later than 120 days 
after the date of publication of this notice.

Assessment of Antidumping Duties

    The Department will determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appropriate assessment instructions directly to CBP within 15 days of 
publication of the final results of this review. For assessment 
purposes for companies with a calculated rate, where possible, the 
Department calculated importer-specific assessment rates for freshwater 
crawfish tail meat from the PRC on a per-unit basis. Specifically, the 
Department divided the total dumping margins (calculated as the 
difference between normal value and export price) for each importer by 
the total quantity of subject merchandise sold to that importer during 
the POR to calculate a per-unit assessment amount. The Department will 
direct CBP to assess 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 Deposits

    The following cash-deposit requirements will be effective upon 
publication of the 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 exported by China 
Kingdom and Weishan Zhenyu, the cash-deposit rate will be equal to 
223.01 percent; (2) for subject merchandise exported by Yancheng Hi-
King, we will establish a per-kilogram cash deposit rate which will be 
equivalent to the company-specific cash deposit established in this 
review; (3) 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; (4) for all other 
PRC exporters of subject merchandise which have not been found to be 
entitled to a separate rate (including Yancheng Yaou), the cash-deposit 
rate will be the PRC-wide rate of 223.01 percent; (5) for all non-PRC 
exporters of subject merchandise, the cash-deposit rate will be the 
rate applicable to the PRC exporter that supplied that exporter.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative 
review.

Notification to Importers

    This notice 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 administrative review and notice is in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

    Dated: September 30, 2005.
Barbara E. Tillman,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-20287 Filed 10-6-05; 8:45 am]
BILLING CODE 3510-DS-P