Fresh Garlic from the People's Republic of China: Preliminary Results of New Shipper Reviews, 21219-21225 [E7-8195]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 72, Number 82 (Monday, April 30, 2007)]
[Notices]
[Pages 21219-21225]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E7-8195]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-831


Fresh Garlic from the People's Republic of China: Preliminary 
Results of New Shipper Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting 
new shipper reviews of the antidumping duty order on fresh garlic from 
the People's Republic of China (``PRC'') covering the period of review 
(``POR'') of November 1, 2005, through April 30, 2006.
    On June 27, 2006, the Department initiated semi-annual new shipper 
reviews for Jinxiang Tianma Freezing Storage Co., Ltd. (``Tianma''), 
Shenzhen Xinboda Industrial Co., Ltd. (``Xinboda''), Shandong 
Wonderland Organic Food Co., Ltd. (``Wonderland''), Weifang Hongqiao 
International Logistics Co., Ltd. (``Hongqiao'').\1\ Therefore, this 
review covers four companies.
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    \1\ See Fresh Garlic from the People's Republic of China; 
Initiation of New Shipper Reviews, 71 FR 38607 (July 7, 2006).
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    We preliminarily determine that certain new shipper review 
companies have made sales in the United States at prices below normal 
value. If these preliminary results are adopted in our final results of 
review, we will instruct U.S. Customs and Border Protection (``CBP'') 
to assess antidumping duties on entries of subject merchandise during 
the POR for which the importer-specific assessment rates are above de 
minimis.

EFFECTIVE DATE: April 30, 2007

FOR FURTHER INFORMATION CONTACT: Javier Barrientos, AD/CVD Operations, 
Office 9, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington DC 20230; telephone: (202) 482-2243.

SUPPLEMENTARY INFORMATION:

General Background

    On November 16, 1994, the Department published in the Federal 
Register the antidumping duty order on fresh garlic from the PRC. See 
Antidumping Duty Order: Fresh Garlic From the People's Republic of 
China, 59 FR 59209 (November 16, 1994).
    On May 18, May 24, May 26, and May 30, 2006, we received timely 
requests for new shipper reviews of

[[Page 21220]]

Xinboda,Wonderland, Hongqiao, and Tianma, respectively. On June 30, 
2006, after initiating the reviews, the Department issued antidumping 
duty questionnaires to the four companies participating in the new 
shipper reviews. The Department subsequently issued supplemental 
questionnaires to all companies under review between September 2006 and 
February 2007.

Expansion of the POR

    On April 23, 2007, we issued a memorandum extending the end of the 
POR from April 30, 2006, to May 4, 2006, to capture entries of two of 
the new shippers' merchandise into the United States market. See 
Memorandum to the File from Javier Barrientos, Senior Analyst, through 
Alex Villanueva, Program Manager, Office 9: Expansion of the Period of 
Review in the New Shipper Reviews of Fresh Garlic from the People's 
Republic of China, dated April 23, 2007.

Extension of Preliminary Results Deadline

    On December 20, 2006, the Department published a notice extending 
the preliminary results time limits of these new shipper reviews to 
April 23, 2007. See Fresh Garlic from the People's Republic of China: 
Extension of Time Limits for the Preliminary Results of the New Shipper 
Reviews, 71 FR 76272 (December 20, 2006). The final results continue to 
be due 90 days after the publication of these preliminary results.

Surrogate Country and Surrogate Values

    On November 20, 2006, and April 3, 2007, Petitioners submitted 
surrogate value comments.\2\ To date, no other parties have submitted 
surrogate value or surrogate country comments on the record of this 
proceeding.
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    \2\ Petitioners in this proceeding are the Fresh Garlic 
Producers Association and its individual members.
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Scope of the Order

    The products covered by this antidumping duty order are all grades 
of garlic, whole or separated into constituent cloves, whether or not 
peeled, fresh, chilled, frozen, provisionally preserved, or packed in 
water or other neutral substance, but not prepared or preserved by the 
addition of other ingredients or heat processing. The differences 
between grades are based on color, size, sheathing, and level of decay. 
The scope of this order does not include the following: (a) Garlic that 
has been mechanically harvested and that is primarily, but not 
exclusively, destined for non-fresh use; or (b) garlic that has been 
specially prepared and cultivated prior to planting and then harvested 
and otherwise prepared for use as seed. The subject merchandise is used 
principally as a food product and for seasoning. The subject garlic is 
currently classifiable under subheadings 0703.20.0010, 0703.20.0020, 
0703.20.0090, 0710.80.7060, 0710.80.9750, 0711.90.6000, and 
2005.90.9700 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). Although the HTSUS subheadings are provided for 
convenience and customs purposes, our written description of the scope 
of this order is dispositive. In order to be excluded from the 
antidumping duty order, garlic entered under the HTSUS subheadings 
listed above that is (1) mechanically harvested and primarily, but not 
exclusively, destined for non-fresh use or (2) specially prepared and 
cultivated prior to planting and then harvested and otherwise prepared 
for use as seed must be accompanied by declarations to CBP to that 
effect.

Verification

    Pursuant to 19 CFR 351.307(b)(iv), we conducted verifications of 
the sales and factors of production (``FOP'') for Xinboda\3\, 
Wonderland\4\, Hongqiao\5\, and Tianma\6\.
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    \3\ The verification of Xinboda's sales took place on March 12, 
2007. See Memorandum to the File through Alex Villanueva, Program 
Manager, Office 9, from Javier Barrientos, Senior Case Analyst: 
Verification of Shenzhen Xinboda Industrial Co., Ltd. in the 
Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China, dated April 23, 2007. The verification 
of the FOPs for Zhengzhou Dadi Garlic Industry Co., Ltd. (``Dadi''), 
Xinboda's producer of subject merchandise, took place from March 13, 
through March 14, 2007. Id.
    \4\ The verification of Wonderland's sales and FOPs took place 
from March 15, 2007 through March 16, 2007. See Memorandum to the 
File through Alex Villanueva, Program Manager, Office 9, from Irene 
Gorelik, Analyst, Office 9: Verification of the Sales and Factors 
Response of Shandong Wonderland Organic Food Co., Ltd. in the 
Antidumping New Shipper Review of Fresh Garlic from the People's 
Republic of China, dated April 23, 2007.
    \5\ The verification of Honqiao's sales took place on March 19, 
2007. See Memorandum to the File through Alex Villanueva, Program 
Manager, Office 9, from Javier Barrientos, Senior Case Analyst: 
Verification of Weifang Hongqiao International Logistics Co., Ltd. 
in the Antidumping Duty New Shipper Review of Fresh Garlic from the 
People's Republic of China, dated April 23, 2007. The verification 
of the FOPs for Jinxiang Dingtai Garlic Product Co., Ltd. 
(``Dingtai''), Hongqiao's producer of subject merchandise, took 
place on March 20, 2007. Id.
    \6\ The verification of Tianma's sales and FOPs took place from 
March 21, through March 23, 2007. See Memorandum to the File through 
Alex Villanueva, Program Manager, Office 9, from Irene Gorelik, 
Analyst, Office 9: Verification of the Sales and Factors Response of 
Jinxiang Tianma Freezing Storage Co., Ltd. in the Antidumping New 
Shipper Review of Fresh Garlic from the People's Republic of China, 
dated April 23, 2007.
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New Shipper Reviews Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sales made by Xinboda, Hongqiao, Wonderland, and 
Tianma for the new shipper reviews. We found that new shipper sales 
made by Xinboda, Hongqiao, Wonderland, and Tianma were made on a bona 
fide basis. Based on our investigation into the bona fide nature of the 
sales, the questionnaire responses submitted by the companies, and our 
verifications thereof, as well the companies' eligibility for a 
separate rate (see Separate Rates Determination section below) and the 
Department's preliminary determination that Xinboda, Hongqiao, 
Wonderland, and Tianma were not affiliated with any exporter or 
producer that had previously shipped subject merchandise to the United 
States, we preliminarily determine that each of the above-named 
respondents has met the requirements to qualify as a new shipper during 
the POR. Therefore, for purposes of these preliminary results of 
review, we are treating Xinboda's, Hongqiao's, Wonderland's, and 
Tianma's respective sales of subject merchandise to the United States 
as appropriate transactions for these new shipper reviews.\7\
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    \7\ See Memorandum from Irene Gorelik, Analyst, Office 9, 
through Alex Villanueva, Program Manager, Office 9, to James C. 
Doyle, Director, Office 9: Bona Fide Nature of the Sale in the 
Antidumping Duty New Shipper Review of Fresh Garlic: Shandong 
Wonderland Organic Food Co., Ltd., dated April 23, 2007; Memorandum 
from Javier Barrientos, Senior Analyst, Office 9, through Alex 
Villanueva, Program Manager, Office 9, to James C. Doyle, Office 
Director, Office 9: Bona Fide Nature of the Sale in the Antidumping 
Duty New Shipper Review of Fresh Garlic: Weifang Hongqiao 
International Logistics Co., Ltd., dated April 23, 2007; Memorandum 
from Irene Gorelik, Analyst, Office 9, through Alex Villanueva, 
Program Manager, Office 9, to James C. Doyle, Office Director, 
Office 9: Bona Fide Nature of the Sale in the Antidumping Duty New 
Shipper Review of Fresh Garlic from the People's Republic of China 
(``PRC''): Jinxiang Tianma Freezing Storage Co., Ltd., dated April 
23, 2007; and Memorandum from Javier Barrientos, Senior Analyst, 
Office 9, through Alex Villanueva, Program Manager, Office 9, to 
James C. Doyle, Office Director, Office 9: Bona Fide Nature of the 
Sale in the Antidumping Duty New Shipper Review of Fresh Garlic: 
Shenzhen Xinboda Industrial Co., Ltd., dated April 23, 2007.
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Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a Non-Market Economy (``NME'') country. In 
accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as 
amended (the ``Act''), any determination that a foreign

[[Page 21221]]

country is an NME country shall remain in effect until revoked by the 
administering authority. See Final Determination of Sales at Less Than 
Fair Value and Partial Affirmative Determination of Critical 
Circumstances: Certain Polyester Staple Fiber from the People's 
Republic of China, 72 FR 19690 (April 19, 2007). 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.

Separate Rates Determination

    A designation as an NME remains in effect until it is revoked by 
the Department. See section 771(18)(C) of the Act. Accordingly, there 
is a rebuttable presumption that all companies within the PRC are 
subject to government control and, thus, should be assessed a single 
antidumping duty rate. See e.g., Notice of Final Determination of Sales 
at Less Than Fair Value: Certain Activated Carbon from the People's 
Republic of China, 72 FR 9508 (March 2, 2007).
    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in NME countries a single 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 
exports. To establish whether a company is sufficiently independent to 
be entitled to a separate, company-specific rate, the Department 
analyzes each exporting entity in an NME country under the test 
established in the Final Determination of Sales at Less than Fair 
Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 
6, 1991), as amplified by the Notice of Final Determination of Sales at 
Less Than Fair Value: Silicon Carbide from the People's Republic of 
China, 59 FR 22585 (May 2, 1994).
    A. 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; and (2) any 
legislative enactments decentralizing control of companies.
    Throughout the course of this proceeding, the new shipper companies 
(Xinboda, Hongqiao, Wonderland, and Tianma) have placed sufficient 
evidence on the record that demonstrate the absence of de jure control. 
The new shipper companies have placed on the record a number of 
documents to demonstrate absence of de jure control including the 
``Foreign Trade Law of the People's Republic of China'' and the 
``Administrative Regulations of the People's Republic of China 
Governing the Registration of Legal Corporations.'' The Department has 
analyzed such PRC laws and found that they establish an absence of de 
jure control. See, e.g., Preliminary Results of New Shipper Review: 
Certain Preserved Mushrooms From the People's Republic of China, 66 FR 
30695 (June 7, 2001). We have no information in this proceeding that 
would cause us to reconsider this determination. Thus, we believe that 
the evidence on the record supports a preliminary finding of an absence 
of de jure government control based on: (1) an absence of restrictive 
stipulations associated with the exporter's business license; and (2) 
the legal authority on the record decentralizing control over the 
respondent.
    B. Absence of De Facto Control
    As stated in previous cases, there is some evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998). 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 which would preclude 
the Department from assigning separate rates. The Department typically 
considers four factors in evaluating whether each respondent is subject 
to de facto government control of its export functions: (1) whether the 
exporter sets its own export prices independent of the government and 
without the approval of a government authority; (2) whether the 
respondent has the 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.
    The Department conducted a separate-rates analysis for the new 
shipper companies under review: Hongqiao, Tianma, Wonderland, and 
Xinboda. Hongqiao, Tianma, and Xinboda reported that they are limited-
liability companies owned by private investors. However, one new 
shipper review company, Wonderland, reported that it is wholly owned by 
a foreign entity. Therefore, an additional separate-rates analysis is 
not necessary to determine whether Wonderland's export activities are 
independent from government control. See Notice of Final Determination 
of Sales at Less Than Fair Value: Creatine Monohydrate from the 
People's Republic of China, 64 FR 71104, 71105 (December 20, 1999) 
(where the respondent was wholly foreign-owned, and thus, qualified for 
a separate rate).
    These companies have all asserted the following: (1) there is no 
government participation in setting export prices; (2) sales managers 
and authorized employees have the authority to bind sales contracts; 
(3) they do not have to notify any government authorities of management 
selections; (4) there are no restrictions on the use of export revenue; 
and (5) each is responsible for financing its own losses. The 
questionnaire responses of the new shipper companies (Hongqiao, Tianma, 
Wonderland, and Xinboda) do not suggest that pricing is coordinated 
among exporters. During our analysis of the information on the record, 
we found no information indicating the existence of government control. 
Consequently, we preliminarily determine that Hongqiao, Tianma, 
Wonderland, and Xinboda have met the criteria for the application of a 
separate rate.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's FOPs, valued in a surrogate market 
economy country or countries considered to be appropriate by the 
Department. In accordance with section 773(c)(4) of the Act, in valuing 
the FOPs, the Department shall utilize, to the extent possible, the 
prices or costs of FOPs in one or more market economy countries that 
are: (1) at a level of economic development comparable to that of the 
NME country and (2) significant producers of comparable merchandise. 
The sources of the surrogate factor values are discussed under the 
``Normal Value'' section below and in Memorandum to the File through 
James C. Doyle, Director, Office 9 and Alex Villanueva, Program 
Manager, Office 9 from Javier Barrientos, Senior Analyst, Office 9: 
Surrogate Factor Valuations for the Preliminary Results of the New 
Shipper Reviews, dated April 23, 2007 (``Factor Valuation Memo'').
    As discussed in the ``Separate Rates'' section, the Department 
considers the PRC to be an NME country. The

[[Page 21222]]

Department has treated the PRC as an NME country in all previous 
antidumping proceedings. In accordance with 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. 
None of the parties to this proceeding contested such treatment. 
Accordingly, we treated the PRC as an NME country for purposes of these 
reviews and calculated NV, pursuant to section 773(c) of the Act, by 
valuing the FOPs in a surrogate country.
    The Department determined that India, Sri Lanka, Indonesia, 
Philippines, and Egypt are countries comparable to the PRC in terms of 
economic development. See Memorandum from Ron Lorentzen, Director, 
Office of Policy, to Alex Villanueva, Program Manager, China/NME Group, 
Office 9: Antidumping Administrative Review of Fresh Garlic from the 
People's Republic of China: Request for a List of Surrogate Countries, 
dated August 7, 2006. Moreover, it is the Department's practice to 
select an appropriate surrogate country based on the availability and 
reliability of data from the countries. See Department Policy Bulletin 
No. 04.1: Non-Market Economy Surrogate Country Selection Process, dated 
March 1, 2004. In this case, we have found that India and Egypt are 
both significant producers of comparable merchandise. As previously 
stated, only Petitioners submitted data with respect to surrogate 
factor values with Indian data. No parties submitted Egyptian data on 
the record for this proceeding. Moreover, since India has been the 
primary surrogate country in past segments, for these new shipper 
reviews, we will rely on Indian data with respect to surrogate factor 
valuations and surrogate financial ratios. Therefore, we find India to 
be a reliable source for surrogate values because India is at a similar 
level of economic development pursuant to 773(c)(4) of the Act, is a 
significant producer of comparable merchandise, and has publicly 
available and reliable data. See Memorandum to the File, through James 
C. Doyle, Office Director, Office 9, Import Administration, and Alex 
Villanueva, Program Manager, Office 9, from Javier Barrientos, Senior 
Analyst: Antidumping Duty New Shipper Reviews of Fresh Garlic from the 
People's Republic of China: Selection of a Surrogate Country, dated 
April 23, 2007. Furthermore, we note that India has been the primary 
surrogate country in past segments and Petitioners submitted surrogate 
values based on Indian import data that are contemporaneous with the 
POR, which gives further credence to the use of India as a surrogate 
country.

U.S. Price

    In accordance with section 772(a) of the Act, we calculated the 
export price (``EP'') for sales to the United States for Hongqiao, 
Tianma, Wonderland, and Xinboda because the first sale to an 
unaffiliated party was made before the date of importation and the use 
of constructed EP was not otherwise warranted. We calculated EP based 
on the price to unaffiliated purchasers in the United States. In 
accordance with section 772(c) of the Act, as appropriate, we deducted 
from the starting price to unaffiliated purchasers foreign inland 
freight and brokerage and handling. For Hongqiao, Tianma, Wonderland, 
and Xinboda, each of these services was either provided by an NME 
vendor or paid for using an NME currency. Thus, we based the deduction 
of these movement charges on surrogate values. See Factor Valuation 
Memo for details regarding the surrogate values for movement expenses.

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 FOPs 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. In some cases, 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, e.g., Notice of Final Determination of Sales at Less Than Fair 
Value: Polyvinyl Alcohol from the People's Republic of China, 68 FR 
4753 (August 11, 2003), and accompanying Issues and Decision Memorandum 
at Comment 1 (which cites to 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).
    In the 9\th\ Review Final Results, the Department recognized that 
there were serious discrepancies between the reported FOPs of the 
different respondents and that the standard FOP methodology might not 
be adequate to apply in future reviews.\8\ In the tenth administrative 
review, the Department conducted a ``harvest verification'' of several 
garlic producers in the PRC, interviewing farmers, studying farming 
techniques, and reviewing standard PRC garlic production record-
keeping.\9\ In analyzing the questionnaire responses and ``harvest 
verification'' reports in the tenth administrative review, the 
Department determined that, to capture the complete costs of producing 
fresh garlic, the methodology of valuing the intermediate product, the 
fresh garlic bulb, would more accurately capture the complete costs of 
producing subject merchandise.\10\ In the 10\th\ Review Final Results, 
we also stated that ``should a respondent be able 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 FOPs in the calculation 
of NV.'' See 10th Review Final Results at 26331; see also Fresh Garlic 
from the People's Republic of China: Partial Rescission and Preliminary 
Results of the Eleventh Administrative Review and New Shipper Reviews 
71 FR 71510 (December 11, 2006).
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    \8\ See Fresh Garlic from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 70 FR 34082 (June 
13, 2005) (``9\th\ Review Final Results'').
    \9\ See Memorandum to the File from Irene Gorelik, Analyst; New 
Shipper Reviews of Fresh Garlic from the People's Republic of China: 
Intermediate Input Methodology Memoranda from the 10th 
Administrative Review Final Results and 11th Administrative Review 
Preliminary Results, dated April 23, 2007, in which the Department 
placed the Intermediate Input Methodology memos from the tenth and 
eleventh Administrative Reviews on the record of this proceeding, 
inclusive of the verification reports resulting from the ``harvest 
verification.''
    \10\ 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) (``10\th\ Review Final Results''), and accompanying Issues and 
Decision Memorandum at Comment 1.
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    In the course of these reviews, the Department has requested and 
obtained a vast amount of detailed information from the respondents 
with respect to each company's garlic production practices. 
Questionnaire responses

[[Page 21223]]

revealed, and subsequent verifications confirmed, that only Tianma had 
farming operations to grow fresh garlic.\11\ Based on our analysis of 
the information on the record and for the reasons outlined in the 
Memorandum to the File through James C. Doyle, Director, Office 9 and 
Alex Villanueva, Program Manager, Office 9 from Irene Gorelik, Analyst, 
Office 9: New Shipper Review of the Antidumping Duty Order on Fresh 
Garlic From the People's Republic of China: Intermediate Input 
Methodology, April 23, 2007 (``Intermediate Product Memo''), we 
continue to believe that the sole company that grew fresh garlic, 
Tianma, was unable to accurately record and substantiate the complete 
costs of growing garlic during the POR.
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    \11\ Specifically, Wonderland is a processor and exporter of 
fresh garlic that purchased whole garlic bulb and processed it for 
export. Both Hongqiao and Xinboda are exporters that purchased 
already processed garlic for export from their unaffiliated 
suppliers. Hongqiao and Xinboda's unaffiliated suppliers do not grow 
but purchase whole garlic and process it. Consequently, the FOPs 
provided by Wonderland, Xinboda's unaffiliated supplier and 
Hongqiao's unaffiliated supplier all begin with whole garlic bulb 
and not the factors that are used to grow whole garlic bulb.
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    Thus, in order to eliminate the distortions in our calculation of 
NV for all of the reasons identified above and described in the 
Intermediate Product Memo, we applied an ``intermediate-product 
valuation methodology'' to all companies. Using this methodology, we 
calculated NV by starting with a surrogate value for the garlic bulb 
(i.e., the ``intermediate product''), adjusted for yield losses during 
the processing stages, and adding the respondents' processing costs, 
which were calculated using their reported usage rates for processing 
fresh garlic. For a complete explanation of the Department's analysis, 
and for a more detailed analysis of these issues with respect to each 
respondent, see Intermediate Product Memo.

2. Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the intermediate product value and processing FOPs reported by 
the respondents for the POR. To calculate NV, we multiplied the 
reported per-unit factor quantities by publicly available surrogate 
values in India with the exception of the surrogate value for ocean 
freight, which we obtained from an international freight company. In 
selecting the surrogate values, we considered the quality, specificity, 
and contemporaneity of the data. As appropriate, we adjusted input 
prices by including freight costs to make them delivered prices. We 
calculated these freight costs based on the shorter of the reported 
distance from the domestic supplier to the factory or the distance from 
the port in accordance with the decision in Sigma Corporation v. United 
States, 117 F.3d 1401 (Fed. Cir. 1997). We made currency conversions 
into U.S. dollars, in accordance with section 773A(a) of the Act, based 
on the exchange rates in effect on the dates of the U.S. sale(s) as 
certified by the U.S. Federal Reserve Bank.

Garlic Bulb Value

    In applying the intermediate input methodology, the Department 
sought foremost to identify the best available surrogate value for the 
fresh garlic bulb input to production, as opposed to identifying a 
surrogate value for garlic seed. Therefore, we have valued the fresh 
garlic bulb using prices for the ``super-A'' grade garlic bulb in 
India, as published by Azadpur Agriculture Produce Marketing Committee 
(``APMC'') in its ``Market Information Bulletin'' (the 
``Bulletin'').\12\ Azadpur APMC is the largest fruit and vegetable 
market in Asia and has become a ``National Distribution Centre'' for 
important Indian agricultural products such as garlic. We note that the 
``super-A'' grade denotes a garlic bulb which is over 40 millimeters 
(``mm'') in diameter and that the respondents' subject merchandise is, 
on average, greater than 40 mm in diameter, as identified within the 
respondents' questionnaire responses. As the Department determined in 
past reviews, the price at which garlic is sold is heavily dependent 
upon physical characteristics, such as bulb size and number of cloves. 
See 9\th\ Review Final Results at Comment 2; see also 10\th\ Review 
Final Results at Comment 2. For these preliminary results, we find that 
the ``super-A'' data from Azadpur APMC is the best available and most 
appropriate information on the record to value the garlic bulb input, 
pursuant to section 773(c) of the Act.
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    \12\ For information concerning this surrogate value, see 
Petitioners' November 20, 2006, and April, 3, 2007 submissions.
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    To value the fresh garlic bulb in the last administrative review, 
the Department used information from the Agricultural Marketing 
Information Network (``Agmarknet'') database. The database on the 
Agmarknet website contains daily prices from APMCs throughout India and 
has information on prices and varieties of garlic sold in India, but 
does not contain information on the grade/size of the bulb. In the last 
administrative review, the Department concluded that the ``China'' 
variety bulb, found in the Agmarknet database, is reflective of the 
larger bulb used by the respondents in the production of subject 
merchandise. See 10\th\ Review Final Results at Comment 2. The 
Department believes the Azadpur APMC to be a superior source of 
information for purposes of these reviews for the reasons stated below.
    The Department's practice when selecting the ``best available 
information'' for valuing FOPs, in accordance with section 773(c)(1) of 
the Act, is to select, to the extent practicable, surrogate values 
which are: publicly available, product-specific, representative of a 
broad market average, tax-exclusive and contemporaneous with the POR. 
See Final Determination of Sales at Less Than Fair Value: Certain 
Artist Canvas from the People's Republic of China, 71 FR 16116 (March 
30, 2006), and accompanying Issues and Decision Memorandum at Comment 
2.

(1) The Bulletin is Publicly Available

    We note that the Bulletin is published for public distribution on 
each trading day (six days per week) and contains daily information on 
agricultural products sold at the APMC. In addition, the Bulletin is 
available electronically upon request from Azadpur APMC. Thus, we find 
that the Bulletin is publicly available information.

(2) The Bulletin is Sufficiently Specific

    With respect to garlic prices, the Bulletin contains count size-
specific data such as the grade of the bulb and prices (minimum, 
maximum and modal) in rupees of the various grades of garlic. As we 
have explained in past cases, this is extremely important data for 
purposes of our analysis, as respondents' garlic bulb products/inputs 
are, on average, over 40mm in diameter, and most Indian garlic is not 
that large. ``super-A'' garlic, however, is defined to be that size. 
Thus, the Department finds the ``super-A'' garlic pricing information 
in the Bulletin to be more specific to the input in question than the 
Agmarknet data because it provides a surrogate value based on a 
quantifiable bulb size (grade) with which to value the intermediate 
product.

(3) The Bulletin reports a broad market average

    As noted above, Azadpur APMC is a ``National Distribution Centre'' 
for agricultural products. A careful examination of the Bulletin shows 
that agricultural products from all over India are sold at Azadpur 
APMC, which claims to be the largest fruit and

[[Page 21224]]

vegetable market (by quantity) in the world. See Azadpur APMC's website 
www.apmcazadpurdelhi.com. Thus, we find the Bulletin's ``super-A'' 
garlic prices to be representative of a broad market average.
    Furthermore, there is no record evidence which suggests that the 
prices included in the Bulletin are inclusive of taxes or duties.

Adjustments for Contemporaneity and Other Matters

    In selecting the best available and most appropriate surrogate 
value for the fresh garlic bulb, the Department considered all 
surrogate value comments submitted by Petitioners and have determined 
that certain adjustments are necessary.\13\
---------------------------------------------------------------------------

    \13\ Other than Petitioners, none of the four new shipper 
companies submitted surrogate value comments or data.
---------------------------------------------------------------------------

    With respect to contemporaneity, we note that the Azadpur APMC data 
is not contemporaneous with the POR. We note that the record shows that 
data points for ``super-A'' garlic in the Azadpur Bulletin were not 
publicly recorded until May 2006 (a month after the POR). However, we 
are able to adjust the post-POR surrogate value of ``super-A'' garlic 
by deflating the data points, i.e., we divided the average Wholesale 
Price Index (``WPI'') for the six months of the POR by the average WPI 
of the number of months for which we gathered data points for May - 
July 2006, and applied the resultant ratio to the average price of 
``super-A'' garlic. The Department's methodology for deflation is 
described in detail in the Factor Valuation Memo. Thus, we believe such 
deflation addresses our concerns about the contemporaneity of the data.
    With respect to the markets within India used by the Department, it 
is the Department's practice to use country-wide data instead of 
regional data when the former is available. See Wuhan Bee Healthy Co., 
Ltd. v. United States, Slip Op. 05-142 (CIT 2005), at 5. Thus, we have 
included all data points for sales of ``super-A'' garlic from seven 
Indian states in calculating a surrogate value for fresh garlic bulbs. 
See Factor Valuation Memo at 4.
    In addition, the Department used a simple average rather than a 
weighted average of all ``super-A'' garlic prices to calculate the 
fresh bulb surrogate value because daily arrivals are not recorded on a 
size basis and we were unable to determine the weight of the ``super-
A'' garlic versus the weight of the other grades of garlic.
    Finally, the Department deducted a six percent market fee imposed 
by Azadpur AMPC on sales made at the APMC, as indicated on the APMC 
website.\14\
---------------------------------------------------------------------------

    \14\ We note that the Azadpur APMC Market Information Bulletin 
database also discusses unloading weighing fees. However, we do not 
believe that an adjustment is necessary in our calculations to 
reflect these fees. First, it is not clear that this charge is 
applied to all, or even most, farmers. Furthermore, this charge does 
not appear to be a tax or duty.
---------------------------------------------------------------------------

    Because the Department is applying an ``intermediate-product 
valuation methodology, '' resulting in the valuation of factor inputs 
that begin with whole garlic bulb, the direct material, and other 
factors such as electricity, water, mesh bags, cartons, tape and 
plastic banding, where applicable, that are associated with processing 
whole garlic will be valued with surrogate data from India. 
Furthermore, Indian surrogate financial ratios will also be applied to 
all four new shipper companies. The sources and calculations for the 
surrogate factor valuations and surrogate financial ratios are 
described in full detail in the Factor Valuation Memo.

Preliminary Results of the Reviews

    The Department has determined that the following preliminary 
dumping margins exist for the period November 1, 2005, through May 4, 
2006:

------------------------------------------------------------------------
                                                            Weighted-
                 Manufacturer/Exporter                    Average Margin
                                                            (Percent)
------------------------------------------------------------------------
Produced by Jinxiang Dingtai Garlic Product Co., Ltd.    25.34 [percnt]
 and Exported by Weifang Hongqiao International
 Logistics Co., Ltd....................................
Produced and Exported by Jinxiang Tianma Freezing        8.42 [percnt]
 Storage Co., Ltd......................................
Produced and Exported by Shandong Wonderland Organic     5.24 [percnt]
 Food Co., Ltd.........................................
Produced by Zhengzhou Dadi Garlic Industry Co., Ltd.     0.00 [percnt]
 and Exported by Shenzhen Xinboda Industrial Co., Ltd..   (de minimis)
------------------------------------------------------------------------

The Department will disclose calculations performed for these 
preliminary results to the parties within five days of the date of 
publication of this notice in accordance with 19 CFR 351.224(b).
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in an antidumping new shipper review, interested parties may submit 
publicly available information to value FOPs within 20 days after the 
date of publication of these preliminary results. Interested parties 
may submit case briefs and/or written comments no later than 30 days 
after the date of publication of these preliminary results of review. 
See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in such briefs or comments, may be 
filed no later than 35 days after the date of publication of these 
preliminary results of review. See 19 CFR 351.309(d).
    Any interested party may request a hearing within 30 days of 
publication of these preliminary results. See 19 CFR 351.310(c). 
Requests should contain the following information: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the briefs. If we receive a request for 
a hearing, we plan to hold the hearing seven days after the deadline 
for submission of the rebuttal briefs at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230.
    The Department will issue the final results of these new shipper 
reviews, which will include the results of its analysis of issues 
raised in any such comments, within 90 days of publication of these 
preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department intends to issue assessment instructions to CBP 15 days 
after the date of publication of the final results of review. If these 
preliminary results are adopted in our final results of review, the 
Department shall determine, and CBP shall assess, antidumping duties on 
all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we will 
calculate importer-specific (or customer) ad valorem duty assessment 
rates based on the ratio of the total amount of the dumping margins 
calculated for the examined sales to the total entered value of those 
same sales. We will instruct CBP to assess antidumping duties on all 
appropriate entries covered by this review if any importer-specific 
assessment rate calculated in the final results of this review is above 
de minimis.

Cash Deposit Requirements

    The following cash deposit requirements, when imposed, will be 
effective upon publication of the final results of these new shipper 
reviews for

[[Page 21225]]

all shipments of subject merchandise from Hongqiao, Wonderland, Tianma, 
and Xinboda entered, or withdrawn from warehouse, for consumption on or 
after the publication date, as provided by section 751(a)(2)(C) of the 
Act: (1) for subject merchandise produced and exported by Tianma, 
produced and exported by Wonderland, produced by Dadi and exported by 
Xinboda, or produced by Dingtai and exported by Hongqiao, the cash-
deposit rate will be that established in the final results of these 
reviews; (2) for subject merchandise exported by Hongqiao but not 
manufactured by Dingtai and for subject merchandise exported by Xinboda 
but not manufactured by Dadi, the cash deposit rate will continue to be 
the PRC-wide rate (i.e., 376.67 percent); and (3) for subject 
merchandise exported by Wonderland or Tianma, but manufactured by any 
other party, the cash deposit rate will be the PRC-wide rate (i.e., 
376.67 percent).
    If the cash deposit rate calculated in the final results is zero or 
de minimis, no cash deposit will be required for those specific 
producer-exporter combinations. These cash deposit requirements, when 
imposed, shall remain in effect until further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These the new shipper reviews and this notice are in accordance 
with sections 751(a)(2)(B) and 777(i) of the Act, and 19 CFR 351.214(h) 
and 351.221(b)(4) of the Department's regulations.

    Dated: April 23, 2007.
David A. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E7-8195 Filed 4-27-07; 8:45 am]
BILLING CODE 3510-DS-S