Fresh Garlic from the People's Republic of China: Preliminary Results of the Antidumping Duty Administrative and New Shipper Reviews and Intent to Rescind, In Part, the Antidumping Duty Administrative and New Shipper Reviews, 74462-74469 [E8-28973]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 73, Number 236 (Monday, December 8, 2008)]
[Notices]
[Pages 74462-74469]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-28973]


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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 the Antidumping Duty Administrative and New Shipper Reviews 
and Intent to Rescind, In Part, the Antidumping Duty Administrative and 
New Shipper Reviews

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (Department) is conducting 
administrative and 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, 2006 through October 31, 2007. As 
discussed below, we preliminarily determine that sales have been made 
in the United States at prices below normal value (NV) with respect to 
certain exporters who participated fully and are entitled to a separate 
rate in the administrative or new shipper reviews (NSR). In addition, 
we are preliminarily rescinding the NSR for Anqiu Haoshun Trade Co., 
Ltd. (Haoshun). Finally, the Department intends to rescind the 
antidumping duty administrative reviews of three companies that had no 
shipments of subject merchandise to the United States during the POR. 
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 importer-specific assessment rates are above de minimis.

EFFECTIVE DATE: December 8, 2008.

FOR FURTHER INFORMATION CONTACT: Scott Lindsay, Nicholas Czajkowski, or 
Summer Avery, AD/CVD Operations, Office 6, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington DC 20230; telephone: 
(202) 482-0780, (202) 482-1395, and (202) 482-4052, respectively.

SUPPLEMENTARY INFORMATION:

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) (Order). On November 1, 2007, 
the Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on fresh garlic 
from the PRC for the period November 1, 2006 through October 31, 2007. 
See Antidumping or Countervailing Duty Order, Finding, or Suspended 
Investigation; Opportunity to Request Administrative Review, 72 FR 
61859 (November 1, 2007).

New Shipper Reviews

    On November 20, 2007 and November 30, 2007, pursuant to section 
751(a)(2)(B)(i) of the Tariff Act of 1930, as amended (the Act), and 19 
CFR

[[Page 74463]]

351.214(c), the Department received three NSR requests from Haoshun, 
Ningjin Ruifeng Foodstuff Co., Ltd. (Ningjin), and Zhengzhou Yuanli 
Trading Co., Ltd. (Yuanli). On December 21, 2007, the Department 
initiated NSRs for all three companies. See Fresh Garlic From the 
People's Republic of China: Initiation of Antidumping Duty New Shipper 
Reviews, 73 FR 161 (January 2, 2008).
    On March 31, 2008, the Department placed on the record of the new 
shipper review copies of CBP documents pertaining to each shipment of 
garlic from the PRC and exported to the United States by these three 
companies during the POR.\1\
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    \1\ See the Memorandum from Blaine H. Wiltse, Case Analyst 
Office 9, Re: New Shipper Review of Fresh Garlic from the People's 
Republic of China: Customs Data (March 31, 2008).
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    On July 21, 2008, the three respondents in the NSR agreed to waive 
the new shipper review time limits align the instant NSR with the 
instant administrative review. Therefore, on July 23, 2008, in 
accordance with 19 CFR 351.214(j), we aligned the deadlines for the 
NSRs for Yuanli, Ningjin, and Haoshun with the deadlines for the 13th 
administrative review. See the Memorandum to All Interested Parties 
from the Department Re: The Alignment of the New Shipper Reviews with 
the 13th Antidumping Duty Administrative Review of Fresh Garlic from 
the People's Republic of China (July 23, 2008).
    Since the initiation of these reviews, the Department issued 
original and supplemental questionnaires to Haoshun, Ningjin, and 
Yuanli. All three companies have responded to the Department's 
questionnaires in a timely manner. The Fresh Garlic Producers 
Association (FGPA) and its individual members (Christopher Ranch 
L.L.C., the Garlic Company, Valley Garlic, and Vessey and Company, 
Inc.) (collectively, petitioners) have also submitted comments 
regarding the NSRs. See Letter to the Department from Petitioners Re: 
13th Administrative Review and 13th New Shipper Review of the 
Antidumping Duty Order on Fresh Garlic from the People's Republic of 
China (October 16, 2008) (Petitioners' October 16, 2007 Comments) and 
Letter to the Department from Petitioners Re: 13th New Shipper Review 
of the Antidumping Duty Order on Fresh Garlic from the People's 
Republic of China (November 7, 2008).

Administrative Review

    On November 30, 2007, we received requests from the petitioners and 
certain PRC companies to conduct administrative reviews for certain 
companies. See Letter from Petitioners to the Department Re: 13th 
Administrative Review of the Antidumping Duty Order on Fresh Garlic 
from the People's Republic of China Request for Review (November 30, 
2007). On December 27, 2007, the Department initiated administrative 
reviews for 63 producers/exporters of subject merchandise from the PRC. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews, 72 FR 73315 (December 27, 2007) (Initiation Notice). On March 
28, 2008, the Department selected the following two companies as 
mandatory respondents: Anqiu Friend Food Co., Ltd. (Anqiu Friend) and 
Weifang Shennong Foodstuff Co., Ltd. (Weifang Shennong) (collectively, 
mandatory administrative review respondents). See Memorandum from Irene 
Gorelik, Senior International Trade Analyst, Office 9, Re: Antidumping 
Administrative Review of Fresh Garlic from the People's Republic of 
China: Respondent Selection Memorandum (March 28, 2008) (Respondent 
Selection Memorandum).
    On June 24, 2008, petitioners timely withdrew their request for 
review for certain companies in this administrative review. On June 26, 
2008, petitioners timely submitted an amended partial withdrawal of 
request for review. On November 21, 2008, in accordance with 19 CFR 
351.213(d)(1), we rescinded the administrative review with respect to 
30 companies. See Fresh Garlic from the People's Republic of China: 
Partial Rescission of the 13th Antidumping Duty Administrative Review, 
73 FR70621 (November 21, 2008) (Rescission Notice). Furthermore, the 
Department intends to rescind the review of three additional companies 
(see the ``Preliminary Partial Rescission of Administrative Review'' 
section below).
    Therefore, this review covers the 31 producers/exporters of the 
subject merchandise listed in Attachment 1 to this notice.\2\
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    \2\ In their November 30, 2007 request for review, petitioners 
requested that the Department initiate an administrative review of 
Haoshun. See Letter from Petitioners to the Department re: 13th 
Administrative Review of the Antidumping Duty Order on Fresh Garlic 
from the People's Republic of China-Request for Review. However, the 
Department initiated a new shipper review of the company instead. 
Although we did not initiate an administrative review of Haoshun, 
petitioners' partial withdrawal request for the administrative 
review of certain companies included Haoshun and we in turn included 
Haoshun in the list of companies for whom the administrative review 
was rescinded in the Rescission Notice. Therefore, the Department 
formally initiated review of only 29 of the 30 companies named in 
the Rescission Notice. Thus, after rescinding the review of the 
additional three companies for no sales, there are 31 companies 
remaining in this review.
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    On August 4, 2008, the Department extended the deadline for the 
preliminary results of this administrative review until December 1, 
2008. See Fresh Garlic from the People's Republic of China: Extension 
of Time Limit for the Preliminary Results of Administrative Review, 73 
FR 45211 (August 4, 2008).
    Following the initiation, the Department issued original and 
supplemental questionnaires to Anqiu Friend and Weifang Shennong. Both 
companies responded to the Department's questionnaires in a timely 
manner. During the course of this review, petitioners submitted 
comments regarding the administrative review. See Letter to the 
Department from Petitioners Re: 13th Administrative Review of Fresh 
Garlic from the People's Republic of China Comments on Supplemental 
Section A Questionnaire Responses of Anqiu Friend and Weifang Shennong 
(October 6, 2008); Letter to the Department from Petitioners Re: 13th 
Administrative Review and 13th New Shipper Review of the Antidumping 
Duty Order on Fresh Garlic from the People's Republic of China (October 
16, 2008); and Letter to the Department from Petitioners Re: 13th 
Administrative Review of the Antidumping Duty Order on Fresh Garlic 
from the People's Republic of China (November 7, 2008).

Scope of the Order

    The products covered by this 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

[[Page 74464]]

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 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.

Separate Rates

    In proceedings involving non-market economy (NME) countries, the 
Department begins with a rebuttable presumption that all companies 
within the country are subject to government control, and thus, should 
be assigned a single antidumping duty deposit rate. It is the 
Department's policy to assign all exporters of subject merchandise 
subject to review in an NME country a single rate unless an exporter 
can demonstrate that it is sufficiently independent of government 
control to be entitled to a separate rate. See, e.g., Honey from the 
People's Republic of China: Preliminary Results and Partial Rescission 
of Antidumping Duty Administrative Review, 70 FR 74764, 74766 (December 
16, 2005) (unchanged in the final results).
    In the administrative review, for companies who were previously 
assigned a separate rate in a previous segment of this proceeding, the 
Department normally requires entities to submit a separate-rate 
certification stating that they continue to meet the criteria for 
obtaining a separate rate. For entities that were not assigned a 
separate rate in the previous segment of a proceeding, to demonstrate 
eligibility for such, the Department requires a separate-rate 
application. In this administrative review, Jinxiang Dongyun Freezing 
Storage Co., Ltd. (Jinxiang Dongyun), Qingdao Saturn International 
Trade Co., Ltd. (Qingdao Saturn), Qufu Dongbao Import & Export Trade 
Co., Ltd. (Qufu Dongbao), and Shanghai LJ International Trading Co., 
Ltd. (Shanghai LJ) (collectively, separate-rate respondents), each 
submitted a separate-rate certification. Anqiu Friend and Weifang 
Shennong and the four separate-rate respondents each provided company-
specific information and each stated that it met the criteria for the 
assignment of a separate rate. Ningjin, and Yuanli each also provided 
company-specific information and each stated that it met the criteria 
for the assignment of a separate rate. We considered whether Anqiu 
Friend, Weifang Shennong, Ningjin, and Yuanli were eligible for a 
separate rate.\3\
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    \3\ The Department has determined that Haoshun's sale was not 
bona fide and is preliminarily rescinding Haoshun's NSR. Therefore, 
we are not determining whether Haoshun qualifies for a separate 
rate, and it will remain part of the PRC-entity.
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    The Department's separate-rate status test to determine whether the 
exporter is independent from government control does not consider, in 
general, macroeconomic/border-type controls (e.g., export licenses, 
quotas, and minimum export prices), particularly if these controls are 
imposed to prevent dumping. The test focuses, rather, on controls over 
the investment, pricing, and output decision-making process at the 
individual firm level.\4\
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    \4\ See Certain Cut-to-Length Carbon Steel Plate from Ukraine: 
Final Determination of Sales at Less than Fair Value, 62 FR 61754, 
61758 (November 19, 1997), and Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 62 
FR 61276, 61279 (November 17, 1997).
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    To establish whether an exporter is sufficiently independent of 
government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of select criteria, discussed below. See 
Final Determination of Sales at Less Than Fair Value: Sparklers from 
the People's Republic of China, 56 FR 20588, 20589 (May 6, 1991) 
(Sparklers); and Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585, 
22586-87 (May 2, 1994) (Silicon Carbide). Under this test, exporters in 
NME countries are entitled to separate, company-specific margins when 
they can demonstrate an absence of government control over exports, 
both in law (de jure) and in fact (de facto).
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; or (3) any other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589. Anqiu Friend, Weifang Shennong, Ningjin, and 
Yuanli placed on the administrative records documents to demonstrate an 
absence of de jure control (i.e., the Company Law of the People's 
Republic of China (revised in 2005), Regulations of PRC on 
Administration of Registration of Companies (revised in 2005), the 
Foreign Trade Law of the People's Republic of China (revised in 2004), 
the Regulations of the People's Republic of China on the Import and 
Export of Goods, and the Regulations of the People's Republic of China 
for Controlling the Registration of Enterprises as Legal Persons). As 
in prior cases, we analyzed the laws presented to us and found them to 
establish sufficiently an absence of de jure control. See, e.g., Honey 
from the People's Republic of China: Preliminary Results and Partial 
Rescission of Antidumping Duty Administrative Review, 72 FR 102, 105 
(January 3, 2007) (unchanged in final results); Hand Trucks and Certain 
Parts Thereof from the People's Republic of China; Preliminary Results 
and Partial Rescission of Administrative Review and Preliminary Results 
of New Shipper Review, 72 FR 937, 944 (January 9, 2007) (unchanged in 
final results). We find that evidence on the record supports a 
preliminary finding of an absence of de jure government control with 
regard to the export activities of Anqiu Friend, Weifang Shennong, 
Ningjin, and Yuanli.
    The four separate-rate respondents, Jinxiang Dongyun, Qingdao 
Saturn, Qufu Dongbao, and Shanghai LJ each certified that, as with the 
previous period where each company was granted a separate rate, there 
is an absence of de jure government control of its exports. Each of the 
four separate-rate respondents' separate-rate certifications, stated, 
where applicable, that it had no relationship with any level of the PRC 
government with respect to ownership, internal management, and business 
operations. In this segment, we have no new information on the record 
that would cause us to reconsider the previous period's de jure control 
determination with regard to Jinxiang Dongyun, Qingdao Saturn, Qufu 
Dongbao, and Shanghai LJ.
2. Absence of De Facto Control
    3.As stated in previous cases, there is evidence that certain 
enactments of the PRC central government have not been implemented 
uniformly among different sectors and/or jurisdictions in the PRC. See 
Silicon Carbide, 59 FR at 22586-87. Therefore, the Department has 
determined that an analysis of de facto control is critical in 
determining whether the respondents are, in fact, subject to a degree 
of government control which would preclude the Department from 
assigning separate rates.

[[Page 74465]]

    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 export prices are set by, or 
subject to the approval of, a government authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding the disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also 
Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol 
from the People's Republic of China, 60 FR 22544, 22544-45 (May 8, 
1995).
    The Department conducted a separate-rate analysis for companies 
subject to the administrative review that submitted separate rate 
applications. In their separate-rate applications, the companies 
requesting separate rates submitted evidence indicating an absence of 
de facto governmental control over their export activities. 
Specifically, for Anqiu Friend, Weifang Shennong, Ningjin, and Yuanli, 
the evidence we reviewed indicates that: (1) each company sets its own 
export prices independent of the government and without the approval of 
a government authority; (2) each company retains the proceeds from its 
sales and makes independent decisions regarding the disposition of 
profits or financing of losses; (3) each company has a general manager, 
branch manager or division manager with the authority to negotiate and 
bind the company in an agreement; (4) the general manager is selected 
by the board of directors or company employees, and the general manager 
appoints the deputy managers and the manager of each department; and 
(5) there is no restriction on each company's use of export revenues. 
The separate-rate applications of each company 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.
    The four separate-rate respondents, Jinxiang Dongyun, Qingdao 
Saturn, Qufu Dongbao, and Shanghai LJ each certified that, as with the 
previous period where each company was granted a separate rate, there 
is an absence of de facto government control of each company's exports. 
Each of the four separate-rate respondent's separate-rate 
certifications, stated, where applicable, that it had no relationship 
with any level of the PRC government with respect to ownership, 
internal management, and business operations. In this segment, we have 
no new information on the record that would cause us to reconsider the 
previous period's de facto control determination with regard to 
Jinxiang Dongyun, Qingdao Saturn, Qufu Dongbao, and Shanghai LJ.
    Therefore, the Department preliminarily finds that Anqiu Friend, 
Weifang Shennong, Ningjin, and Yuanli have established, prima facie, 
that they qualify for separate rates under the criteria established by 
Silicon Carbide and Sparklers.
    The remaining companies subject to this antidumping administrative 
review (see Attachment 2) did not apply for a separate rate and thus 
will be assigned the PRC-wide rate for their imports of subject 
merchandise during the POR.

Preliminary Partial Rescission of Administrative Review

    On January 14, 2008, Hebei Golden Bird Trading Co., Ltd. (Hebei 
Golden Bird), Jining Yongjia Trade Co. (Jining Yongjia), Ltd., Jinan 
Farmlady Trading Co., Ltd. (Jinan Farmlady), Qingdao Tiantaixing Foods 
Co., Ltd. (Qingdao Tiantaixing), and Qingdao Xintianfeng Foods Co., 
Ltd. (Qingdao Xintianfeng) each certified that they made no shipments 
of subject merchandise to the United States during the POR. As noted 
above, the requests for review were withdrawn with respect to Hebei 
Golden Bird and Jining Yongjia. Therefore, in accordance with 19 CFR 
351.213(d)(1), we rescinded the antidumping duty administrative review 
with respect to these two companies on November 21, 2008. See 
Rescission Notice. The Department's examination of shipment data from 
CBP for Jinan Farmlady, Qingdao Tiantaixing, and Qingdao Xintianfeng 
confirmed that there were no entries of subject merchandise from these 
three companies during the POR. Consequently, because there is no 
evidence on the record to indicate that these three companies had sales 
of subject merchandise under this order during the POR, pursuant to 19 
CFR 351.213(d)(3), the Department is preliminarily rescinding the 
review with respect to Jinan Farmlady, Qingdao Tiantaixing, and Qingdao 
Xintianfeng.

Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sale made by each new shipper, i.e., Haoshun, 
Ningjun, and Yuanli, for these reviews. In evaluating whether or not a 
single sale in a new shipper review is commercially reasonable, and 
therefore bona fide, the Department considers, inter alia, such factors 
as: (1) the timing of the sale; (2) the price and quantity; (3) the 
expenses arising from the transaction; (4) whether the goods were 
resold at a profit; and (5) whether the transaction was made on an 
arm's-length basis. See Tianjin Tiancheng Pharmaceutical Co., Ltd. v. 
United States, 366 F. Supp. 2d 1246, 1250 (CIT 2005). Accordingly, the 
Department considers a number of factors in its bona fides analysis, 
``all of which may speak to the commercial realities surrounding an 
alleged sale of subject merchandise.'' See Hebei New Donghua Amino Acid 
Co., Ltd. v. United States, 374 F. Supp. 2d 1333, 1342 (CIT 2005) 
(citing Fresh Garlic From the People's Republic of China: Final Results 
of Antidumping Administrative Review and Rescission of New Shipper 
Review, 67 FR 11283 (March 13, 2002) and accompanying Issues and 
Decision Memorandum: New Shipper Review of Clipper Manufacturing Ltd.).
    Haoshun: We have preliminarily concluded that the single sale made 
by Haoshun during the POR is not a bona fide commercial transaction 
based on the totality of circumstances, namely: (a) the high price and 
low quantity of Haoshun's single POR sale; and (b) other evidence of a 
non-bona fide transaction. Since much of our analysis regarding the 
evidence of the bona fides of the transaction involves business 
proprietary information, a full discussion of the bases for our 
preliminary result is set forth in the Memorandum from Scott Lindsay, 
Senior Case Analyst, Office 6, Re: Antidumping Duty New Shipper Review 
of Fresh Garlic from the People's Republic of China: Bona Fide Nature 
of the Sale Under Review for Haoshun Trade Co. Ltd. (December 1, 2008) 
(Haoshun Bona Fides Memorandum). In sum, the totality of the 
circumstances of this sale leads the Department to find that Haoshun's 
POR sale is not a bona fide commercial transaction. Therefore, this 
sale does not provide a reasonable or reliable basis for calculating a 
dumping margin. For further information, see Haoshun Bona Fides 
Memorandum. As Haoshun had no other sales of subject merchandise during 
the instant POR, the Department is preliminarily rescinding the NSR 
with respect to Haoshun.
    Yuanli: We preliminarily find that the sale made by Yuanli was a 
bona fide commercial transaction. Specifically, we found that: (1) the 
price and quantity of the sale was within the range of the

[[Page 74466]]

prices and quantities of other entries of subject merchandise from the 
PRC into the United States during the POR; (2) Yuanli and its customer 
did not incur any extraordinary expenses arising from the transaction; 
(3) the sale was made between unaffiliated parties at arm's length; and 
(4) the timing of the sale does not indicate that this sale was not 
bona fide. However, we note that there is other evidence on the record 
that call into question whether Yuanli's sale was bona fide. Since much 
of our analysis regarding the evidence of the bona fides of the 
transaction involves business proprietary information, a full 
discussion of the bases for our preliminary result is set forth in the 
Memorandum from Summer Avery, Case Analyst, Office 6, Re: Bona Fide 
Nature of the Sale in the Antidumping Duty New Shipper Review of Fresh 
Garlic from the People's Republic of China (``PRC''): Zhengzhou Yuanli 
Trading Co., Ltd. (December 1, 2008). Accordingly, we will continue to 
examine Yuanli's sale after the preliminary results.
    Based on our investigation into the bona fide nature of Yuanli's 
reviewed sale, its questionnaire responses, as well as its eligibility 
for a separate rate (see the ``Separate Rates'' section above) and the 
Department's determination that Yuanli was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that Yuanli has met the 
requirements to qualify as a new shipper during the POR. Therefore, for 
purposes of these preliminary results, we are treating Yuanli's sale of 
subject merchandise to the United States as an appropriate transaction 
for this review.
    Ningjin: We preliminarily find that the new shipper sale made by 
Ningjin was a bona fide commercial transaction. Specifically, we found 
that: (1) the price of the sale was within the range of the prices of 
other entries of subject merchandise from the PRC into the United 
States during the POR; (2) neither Ningjin nor its customer incurred 
any extraordinary expenses arising from the transaction; (3) the sale 
was made between unaffiliated parties at arm's length; and (4) the 
timing of the sale does not indicate that this sale was not bona fide. 
However, we note that there is other evidence on the record that call 
into question whether Ningjin sale was bona fide. Since much of our 
analysis regarding the evidence of the bona fides of the transaction 
involves business proprietary information, a full discussion of the 
bases for our preliminary result is set forth in the Memorandum from 
Nicholas Czajkowski, Case Analyst, Office 6, Re: Bona Fide Nature of 
the Sale in the Antidumping Duty New Shipper Review of Fresh Garlic 
from the People's Republic of China (``PRC''): Ningjin Ruifeng 
Foodstuff Co., Ltd. (December 1, 2008). Accordingly, we will continue 
to examine Ningjin's sale after the preliminary results.
    Based on our investigation into the bona fide nature of Ningjin's 
reviewed sale, its questionnaire responses, as well as its eligibility 
for a separate rate (see the ``Separate Rates'' section above) and the 
Department's determination that Ningjin was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that Ningjin has met the 
requirements to qualify as a new shipper during the POR. Therefore, for 
purposes of these preliminary results, we are treating Ningjin's new 
shipper sale of subject merchandise to the United States as an 
appropriate transaction for its review.

Non-Market Economy Country

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. In the investigation of certain 
lined paper products from the PRC, the Department examined the PRC's 
market status and determined that NME status should continue for the 
PRC. See the Department's memorandum Re: Antidumping Duty Investigation 
of Certain Lined Paper Products from the People's Republic of China 
(``China'') China's status as a non-market economy (NME), (August 30, 
2006). This document is available online at: https://ia.ita.doc.gov/
download/prc-nme-status/prc-lined-paper-memo-08302006.pdf. 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. See, e.g., Freshwater Crawfish 
Tail Meat from the People's Republic of China: Notice of Final Results 
of Antidumping Duty Administrative Review, 71 FR 7013 (February 10, 
2006). The presumption of the NME status of the PRC has not been 
revoked by the Department and, therefore, remains in effect for 
purposes of these administrative and new shipper reviews. Accordingly, 
we calculated NV in accordance with section 773(c) of the Act, which 
applies to NME countries.

Surrogate Country

    When the Department investigates 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 factors of production (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. 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 (March 
1, 2004) (Policy Bulletin).
    As discussed in the ``Non-Market Economy Country'' section above, 
the Department considers the PRC to be an NME country. Pursuant to 
section 773(c)(4) of the Act, the Department determined that India, 
Colombia, Indonesia, the Philippines, and Thailand are countries 
comparable to the PRC in terms of economic development. See the 
Memorandum to All Interested Parties Re: The Administrative Review of 
Fresh Garlic from the People's Republic of China (April 24, 2008) at 
Attachment 1 and the Memorandum to All Interested Parties Re: New 
Shipper Review of Fresh Garlic from the People's Republic of China 
(July 23, 2008) at Attachment 1. Also in accordance with section 
773(c)(4) of the Act, the Department has found that India is a 
significant producer of comparable merchandise. Moreover, the 
Department finds 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. Furthermore, 
the Department notes that India has been the primary surrogate country 
in past segments of this proceeding, and the only surrogate value data 
based submitted on the record are from Indian sources. Given the above 
facts, the Department has selected India as the primary surrogate 
country for this review. See the Memorandum from Scott Lindsay, Case 
Analyst, Office 6, Re: Selection of a Surrogate Country for the 
Preliminary Results of the 13th Administrative Review (December 1, 
2008). The sources of the surrogate factor values are discussed under 
the ``Normal Value'' section below and in the Memorandum

[[Page 74467]]

from Nicholas Czajkowski, Case Analyst, Office 6, Re: Preliminary 
Results of the 13th Administrative Review and New Shipper Review of 
Fresh Garlic from the People's Republic of China: Surrogate Values 
(December 1, 2008) (Surrogate Values Memorandum).

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 the two 
administrative review respondents and the three NSR respondents because 
each company made its sale to an unaffiliated party before the date of 
importation and the use of constructed EP was not otherwise warranted. 
We calculated each company's EP based on its 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 the expenses for foreign inland freight, 
international freight, brokerage and handling, marine insurance, 
warehousing, and U.S. customs duties. For the expenses that were either 
provided by an NME vendor or paid for using an NME currency, we used 
surrogate values as appropriate. Where expenses were incurred using a 
market economy supplier or in a market economy currency, we deducted 
these expenses directly. See the ``Factor Valuations'' section below 
for details regarding the surrogate values for movement expenses.

Normal Value

1. Methodology
    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine NV using an FOP methodology if the merchandise is exported 
from an NME and the 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 calculates NV using 
each of the FOPs that a respondent consumes in the production of a unit 
of the subject merchandise because the presence of government controls 
on various aspects of NMEs renders price comparisons and the 
calculation of production costs invalid under the Department's normal 
methodologies. However, there are circumstances 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 
Notice of Final Determination of Sales at Less Than Fair Value: 
Polyvinyl Alcohol from the People's Republic of China, 68 FR 47538 
(August 11, 2003), and accompanying Issues and Decision Memorandum at 
Comment 1 (PVA) (citing to Final Results of First New Shipper Review 
and First Antidumping Duty Administrative Review: Certain Preserved 
Mushrooms from the People's Republic of China, 66 FR 31204 (June 11, 
2001)).
    For the final results of the 11th and 12th administrative reviews, 
and for the final results of the 11th and 12th NSRs, the Department 
found that garlic industry producers in the PRC do not generally track 
actual labor hours incurred for growing, tending, and harvesting 
activities and, thus, do not maintain appropriate records which would 
allow most, if not all, respondents to quantify, report, and 
substantiate this information. See the Memorandum from Scott Lindsay, 
International Trade Compliance Analyst, Office 6, Re: 13th New Shipper 
Review of Fresh Garlic from the People's Republic of China Intermediate 
Methodology Source Documents (December 1, 2008). In the 11th 
administrative review and NSR, the Department also stated that ``should 
a respondent be able to provide sufficient factual evidence that it 
maintains the necessary information in its internal books and records 
that would allow us to establish the completeness and accuracy of the 
reported FOPs, we will revisit this issue and consider whether to use 
its reported FOPs in the calculation of NV.'' See 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, 71520 (December 11, 2006) (unchanged in the final results). In 
the course of these reviews, one company, Haoshun, reported its growing 
FOPs.\5\ Based on our analysis of the information on the record and for 
the reasons outlined in the Memorandum from Scott Lindsay, Senior Case 
Analyst, Office 6, Re: 13th New Shipper Review of Fresh Garlic From the 
People's Republic of China: Intermediate Input Methodology (December 1, 
2008) (Intermediate Input Memorandum), the Department has found that 
Haoshun was not able to accurately record and substantiate the complete 
costs of growing garlic during the POR.\6\
---------------------------------------------------------------------------

    \5\ Ningjin, Yuanli, Anqiu Friend, and Weifang Shennong did not 
report FOPs related to growing whole garlic bulbs.
    \6\ Therefore, the Department would apply an intermediate-
product valuation methodology to Haoshun if the Department were to 
calculate a company-specific margin for Haoshun in this proceeding. 
However, we are not calculating a company-specific margin for 
Haoshun for these preliminary results since we have found its sale 
to be not bona fide. See ``Bona Fide Analysis'' section, above.
---------------------------------------------------------------------------

    Thus, in the preliminary results for these reviews, in order to 
eliminate the distortions in our calculation of NV, for all of the 
reasons identified above and described in the Intermediate Input 
Memorandum, the Department applied an ``intermediate-product valuation 
methodology'' to the mandatory administrative review respondents and 
the NSR respondents for which we are calculating an antidumping duty 
margin in these preliminary results. Using this methodology, the 
Department 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 with respect to Haoshun, see Intermediate Input 
Memorandum.
2. Factor Valuations
    In accordance with section 773(c) of the Act, the Department 
calculated NV based on the intermediate product value and processing 
FOPs reported by the respondents for the POR. To calculate NV, the 
Department 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, the 
Department considered the quality, specificity, and contemporaneity of 
the data. As appropriate, the Department adjusted input prices by 
including freight costs to make them delivered prices. The Department 
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) (Sigma). For more information 
regarding

[[Page 74468]]

the Department's valuation for the various FOPs, see Surrogate Values 
Memorandum.

Garlic Bulb Valuation

    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.
    The Department has applied an intermediate input methodology for 
respondents. Therefore, we sought to identify the best available 
surrogate value for the garlic bulb input to production, as opposed to 
identifying a surrogate value for garlic seed. See Petitioners' October 
16, 2007 Comments at 3. For the preliminary results of these reviews we 
find that data from the Azadpur APMC's ``Market Information Bulletin'' 
is the most appropriate information available to value the respondents' 
garlic bulb input.
    In their FOP databases, respondents reported garlic bulb input size 
ranges for each type of garlic produced and sold to the U.S. during the 
POR. Respondents reported garlic bulb input sizes ranging between 40 mm 
and 60 mm. Petitioners submitted data to the Department stating that 
garlic bulb sizes that range from 55 mm and above are Grade Super-A and 
garlic bulb sizes that range between 40 mm and 55 mm are Grade A and 
Grade Super-A. See Petitioners' October 16, 2007 Comments at 3. 
Therefore, for this preliminary determination, we have used Grade 
Super-A values for bulb input sizes that range from 55 mm and above, 
and an average of Grade A and Super-A values for bulb input sizes that 
are in ranges from 40 mm to 55 mm.
    To calculate the surrogate value for garlic bulbs, we first 
averaged all data points from November 2006 to October 2007 for: (1) 
Grade Super-A; and (2) Grade A. We then subtracted a 7% fee (6% 
commission fee plus 1% market fee) charged on transactions at the 
Azadpur APMC from the Grade A and Grade Super-A averages. See Surrogate 
Values Memorandum at Exhibit 3. We then averaged the Grade A and Grade 
Super-A values for garlic inputs in ranges from 40 mm to 55 mm.

Currency Conversion

    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. sales, as certified by the Federal Reserve Bank. 
See https://www.ia.ita.doc.gov/exchange/.

Verification

    Following the publication of these preliminary results, we intend 
to verify, as provided in section 782(i)(3) of the Act, sales and FOP 
information submitted by respondents, as appropriate. At verification, 
we will use standard verification procedures, including on-site 
inspection of the manufacturer's facilities, the examination of 
relevant sales and financial records, and the selection of original 
source documentation containing relevant information. We will prepare 
verification reports outlining our verification results and place these 
reports on file in the Central Records Unit, room 1117 of the main 
Commerce building.

Preliminary Results of Reviews

    As a result of our reviews, we preliminarily determine that the 
following margins exist for the period November 1, 2006 through October 
31, 2007:

        Fresh Garlic from the PRC 2006-2007 Administrative Review
------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
Anqiu Friend Food Co., Ltd..........................                3.97
Weifang Shennong Foodstuff Co., Ltd.................               10.17
Jinxiang Dongyun Freezing Storage Co., Ltd..........                7.07
Qingdao Saturn International Trade Co., Ltd.........                7.07
Qufu Dongbao Import & Export Trade Co., Ltd.........                7.07
Shanghai LJ International Trading Co., Ltd..........                7.07
PRC-wide Rate (see Attachment 2)....................              376.67
------------------------------------------------------------------------


         Fresh Garlic from the PRC 2006-2007 New Shipper Review
Exported and Produced by Zhengzhou Yuanli Trading                  26.05
 Co., Ltd...........................................
Exported and Produced by Ningjin Ruifeng Foodstuff                 20.39
 Co., Ltd...........................................
PRC-wide Rate.......................................              376.67
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
to these proceedings within five days of the date of publication of 
this notice. See 19 CFR 351.224(b).

Comments

    Interested parties are invited to comment on the preliminary 
results and may submit case briefs and/or written comments within 30 
days of the date of publication of this notice. See 19 CFR 
351.309(c)(ii). Rebuttal briefs, limited to issues raised in the case 
briefs, will be due five days later, pursuant to 19 CFR 351.309(d). 
Parties who submit case or rebuttal briefs in these proceedings are 
requested to submit with each argument: (1) a statement of the issue, 
and (2) a brief summary of the argument. Parties are requested to 
provide a summary of the arguments not to exceed five pages and a table 
of statutes, regulations, and cases cited. Additionally, parties are 
requested to provide its case brief and rebuttal briefs in electronic 
format (e.g., WordPerfect, Microsoft Word, Adobe Acrobat, etc.). 
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 within 30 days of the date of 
publication of this notice. Requests should contain: (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 and 
rebuttal briefs. The Department will issue the final results of these 
reviews, including the results of its analysis of issues raised in any 
such written briefs or at the hearing, if held, not later than 120 days 
after the date of publication of this notice.

Assessment Rates

    Consistent with the final results of the 12th NSR review of Fresh 
Garlic from the PRC, we will direct CBP to assess importer-specific 
assessment rates based on the resulting per-unit (i.e., per kilogram) 
amount on each entry of the subject merchandise during the POR. See 
Fresh Garlic from the People's Republic of China: Final Results and 
Rescission, In Part, of Twelfth New Shipper Reviews, 73 FR 56550, 56552 
(September 29, 2008) (12th NSR of

[[Page 74469]]

Fresh Garlic from the PRC). Therefore, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department will issue appropriate assessment instructions directly 
to CBP 15 days after publication of the final results of this review. 
For assessment purposes, we will calculate importer-specific assessment 
rates for fresh garlic from the PRC. Specifically, we will divide the 
total dumping margins for each importer by the total quantity of 
subject merchandise sold to that importer during the POR to calculate a 
per-unit assessment amount. We will direct CBP to assess importer-
specific assessment rates based on the resulting per-unit (i.e., per 
kilogram) amount on each entry of the subject merchandise during the 
POR if any importer-specific assessment rate calculated in the final 
results of this review is above de minimis.

Cash Deposit Requirements

    Consistent with the final results of the 12th NSR of Fresh Garlic 
from the PRC, we will establish and collect a per-kilogram cash-deposit 
amount which will be equivalent to the company-specific dumping margin 
published in the final results of these reviews. Specifically, the 
following cash deposit requirements will be effective upon publication 
of the final results of these reviews for all 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)(1) of the Act: (1) for subject merchandise exported by Anqiu 
Friend and exported by Weifang Shennong the cash deposit rates will be 
the rates determined in the final results of the administrative review 
(except that if a rate is de minimis, i.e., less than 0.50 percent, a 
zero cash deposit will be required); (2) for subject merchandise 
produced and exported by Yuanli or produced and exported by Ningjin, 
the cash deposit rates will be the rates determined in the final 
results of the new shipper review (except that if a rate is de minimis, 
i.e., less than 0.50 percent, a zero cash deposit will be required); 
(3) for subject merchandise exported by but not produced by Yuanli or 
exported by but not produced by Ningjin, the cash deposit rate will be 
the PRC-wide rate of 376.67 percent; (4) for subject merchandise 
exported by Jinxiang Dongyun, Qingdao Saturn, Qufu Dongbao, and 
Shanghai LJ, the cash deposit rates will be the rates determined in the 
final results of the administrative review (except that if a rate is de 
minimis, i.e., less than 0.50 percent, a zero cash deposit will be 
required); (5) for previously-investigated or previously-reviewed PRC 
and non-PRC exporters who received a separate rate in a prior segment 
of the proceeding (which were not reviewed in this segment of the 
proceeding), the cash deposit rate will continue to be the rate 
assigned in that segment of the proceeding; (6) for subject merchandise 
exported by Haoshun and all other PRC exporters of subject merchandise 
that have not been found to be entitled to a separate rate, the cash 
deposit rate will be the PRC-wide rate of 376.67 percent; and (7) the 
cash deposit rate for non-PRC exporters of subject merchandise which 
have not received their own rate will be the rate applicable to the PRC 
exporter that supplied that non-PRC exporter. These requirements, when 
imposed, shall remain in effect until further notice.

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.
    These administrative and new shipper reviews and notice are in 
accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i) of the Act 
and 19 CFR 351.213 and 351.214.

    Dated: December 1, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.

ATTACHMENT 1

Companies currently subject to the administrative review
(Preliminarily rescinded companies are not included in this list)
1. Anqiu Friend Food Co., Ltd.
2. Weifang Shennong Foodstuff Co., Ltd.
3. APS Qingdao
4. American Pioneer Shipping
5. Beijing Jim International Food Co., Ltd.
6. Burgeon International Inc.
7. Fujian Meitan Import & Export Xiamen Corporation
8. Jining Meiya Foods Co., Ltd.
9. Jining Trans-High Trading Co., Ltd.
10. Jinxian County Huaguang Food Import & Export Co., Ltd.
11. Jinxiang Dongyun Freezing Storage Co., Ltd.
    (a/k/a Jinxiang Eastward Shipping Import and Export Limited 
Company)
12. Junan Auto Imp and Exp Co., Ltd.
13. Linyi Futai Foodstuff Co., Ltd.
14. Marnex (HongKong) Company
15. New Future International Trading Co.
16. Omni Decor China Ltd.
17. Qingdao Rock-It Sports Inc.
18. Qingdao Saturn International Trade Co., Ltd.
19. Qufu Dongbao Import & Export Trade Co., Ltd.
20. Sea Trade International Incorporated
21. Shandong Chengshun Farm Produce Trading Co., Ltd.
22. Shandong Chenhe Int'l Trading Co., Ltd.
23. Shandong Dongsheng Eastsun Foods Co., Ltd.
24. Shandong Garlic Company
25. Shanghai LJ International Trading Co., Ltd.
26. Shanghai New Long March International Trade Co., Ltd.
27. Shenzhen Greening Trading Co., Ltd.
28. Shenzhen Imp & Exp. Ltd.
29. T&S International, LLC
30. Taiwan Wachine Co., Ltd.
31. Taizhou Overseas Int'l Ltd.

ATTACHMENT 2

(Companies subject to the PRC-wide rate)
1. APS Qingdao
2. American Pioneer Shipping
3. Beijing Jim International Food Co., Ltd.
4. Burgeon International Inc.
5. Fujian Meitan Import & Export Xiamen Corporation
6. Jining Meiya Foods Co., Ltd.
7. Jining Trans-High Trading Co., Ltd.
8. Jinxian County Huaguang Food Import & Export Co., Ltd.
9. Junan Auto Imp and Exp Co., Ltd.
10. Linyi Futai Foodstuff Co., Ltd.
11. Marnex (HongKong) Company
12. New Future International Trading Co.
13. Omni Decor China Ltd.
14. Qingdao Rock-It Sports Inc.
15. Sea Trade International Incorporated
16. Shandong Chengshun Farm Produce Trading Co., Ltd.
17. Shandong Chenhe Int'l Trading Co., Ltd.
18. Shandong Dongsheng Eastsun Foods Co., Ltd.
19. Shandong Garlic Company
20. Shanghai New Long March International Trade Co., Ltd.
21. Shenzhen Greening Trading Co., Ltd.
22. Shenzhen Imp & Exp. Ltd.
23. T&S International, LLC.
24. Taiwan Wachine Co., Ltd.
25. Taizhou Overseas Int'l Ltd.
[FR Doc. E8-28973 Filed 12-5-08; 8:45 am]
BILLING CODE 3510-DS-S