Certain Preserved Mushrooms From the People's Republic of China: Preliminary Results of Antidumping Duty New Shipper Reviews, 46270-46277 [2011-19530]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 76, Number 148 (Tuesday, August 2, 2011)]
[Notices]
[Pages 46270-46277]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-19530]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-851]


Certain Preserved Mushrooms From the People's Republic of China: 
Preliminary Results of Antidumping Duty New Shipper Reviews

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

DATES: Effective Date: August 2, 2011.
SUMMARY: The Department of Commerce (the Department) is currently 
conducting two new shipper reviews (NSRs) of the antidumping duty order 
on certain preserved mushrooms from the People's Republic of China 
(PRC).\1\ We preliminarily determine that the sales made by Guangxi 
Hengyong Industrial & Commercial Dev., Ltd (Hengyong) were not made 
below normal value (NV), and that sales made by Zhangzhou Hongda Import 
& Export Trading Co., Ltd (Hongda), were made below NV. As described 
below, the period of review (POR) of the NSR for Hengyong is February 
1, 2010, through

[[Page 46271]]

August 31, 2010, and the POR for Hongda is February 1, 2010, through 
July 31, 2010. If these preliminary results are adopted in our final 
results of this review, we will instruct U.S. Customs and Border 
Protection (CBP) to assess antidumping duties on all appropriate 
entries of subject merchandise during the POR.
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    \1\ See Notice of Amendment of Final Determination of Sales at 
Less Than Fair Value and Antidumping Duty Order: Certain Preserved 
Mushrooms From the People's Republic of China, 64 FR 8308 (February 
19, 1999) (Order).

FOR FURTHER INFORMATION CONTACT: Fred Baker, Scott Hoefke, or Robert 
James, AD/CVD Operations, Office 7, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
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(202) 482-2924, (202) 482-4947 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1999, the Department published the antidumping duty 
order on certain preserved mushrooms from the People's Republic of 
China. See Notice of Amendment of Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order: Certain Preserved Mushrooms 
From the People's Republic of China, 64 FR 8308 (February 19, 1999) 
(the Order).
    On August 31, 2010, pursuant to section 751(a)(2)(B)(i) of the 
Tariff Act of 1930, as amended (the Act), and 19 CFR 351.214(c), the 
Department received NSR requests from Hengyong and Hongda. The 
Department determined that both of these requests had not been properly 
filed due to bracketing issues, and therefore returned them on 
September 23, 2010. On September 24, 2010, both companies resubmitted 
their requests. Hengyong certified that it was the exporter and 
Hengyong Industrial & Commercial Dev. Ltd. Hengxian Food Division 
(Hengxian) was the manufacturer. Hongda certified it was the exporter 
and Fujian Haishan Foods Co., Ltd. (Haishan) was the manufacturer.
    On September 29, 2010, the Department initiated antidumping duty 
NSRs on certain preserved mushrooms from the PRC covering the two 
companies. See Certain Preserved Mushrooms From the People's Republic 
of China: Notice of Initiation of Antidumping Duty New Shipper Reviews, 
75 FR 62108 (October 7, 2010) (Initiation Notice).
    On October 4, 2010, the Department issued its standard antidumping 
questionnaire to both Hengyong and Hongda. They submitted their section 
A responses on November 2, 2010, and their sections C and D responses 
on November 16, 2010. On April 12, 2011, and April 15, 2011, the 
Department issued supplemental sections A, C, and D questionnaires to 
Hongda and Hengyong, respectively. Hongda and Hengyong responded to 
these supplemental questionnaires on April 25, 2011, and April 28, 
2011, respectively.
    On November 8, 2010, the Department sent interested parties a 
letter requesting comments on surrogate country selection and 
information pertaining to valuing factors of production (FOP) in a 
surrogate market economy country. No party submitted surrogate country 
or surrogate value data.
    On March 25, 2011, the Department extended the time limit for 
issuing the preliminary results of review. See Certain Preserved 
Mushrooms From the People's Republic of China; Extension of Time Limit 
for the Preliminary Results of Antidumping Duty New Shipper Reviews, 76 
FR 16727 (March 25, 2011).

Period of Review

    In the initiation notice of these NSRs, we indicated that the POR 
was February 1, 2010, through July 31, 2010. See Initiation Notice, 75 
FR at 62108. However, for Hengyong we are extending the POR by one 
month to capture entries corresponding to Hengyong's sales to the 
United States during the period February 1, 2010, through July 31, 
2010. Therefore, the POR of the NSR of Hengyong is February 1, 2010, 
through August 31, 2010, and the POR of the NSR of Hongda is February 
1, 2010, through July 31, 2010.

Scope of the Order

    The products covered by this order are certain preserved mushrooms, 
whether imported whole, sliced, diced, or as stems and pieces. The 
certain preserved mushrooms covered under this order are the species 
Agaricus bisporus and Agaricus bitorquis. ``Certain Preserved 
Mushrooms'' refers to mushrooms that have been prepared or preserved by 
cleaning, blanching, and sometimes slicing or cutting. These mushrooms 
are then packed and heated in containers including, but not limited to, 
cans or glass jars in a suitable liquid medium, including, but not 
limited to, water, brine, butter or butter sauce. Certain preserved 
mushrooms may be imported whole, sliced, diced, or as stems and pieces. 
Included within the scope of this order are ``brined'' mushrooms, which 
are presalted and packed in a heavy salt solution to provisionally 
preserve them for further processing.\2\
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    \2\ On June 19, 2000, the Department affirmed that 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms containing 
less than 0.5 percent acetic acid are within the scope of the 
antidumping duty order. See Recommendation Memorandum-Final Ruling 
of Request by Tak Fat, et al. for Exclusion of Certain Marinated, 
Acidified Mushrooms from the Scope of the Antidumping Duty Order on 
Certain Preserved Mushrooms from the People's Republic of China,'' 
dated June 19, 2000. On February 9, 2005, the United States Court of 
Appeals for the Federal Circuit upheld this decision. See Tak Fat v. 
United States, 396 F.3d 1378 (Fed. Cir. 2005).
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    Excluded from the scope of this order are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms;'' (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.
    The merchandise subject to this order is classifiable under 
subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143, 
2003.10.0147, 2003.10.0153, and 0711.51.0000 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and Customs purposes, the written 
description of the scope of this order is dispositive.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, we 
have treated the PRC as a non-market economy (NME) country. See, e.g., 
Pure Magnesium from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review, 73 FR 76336 (December 16, 
2008); and Frontseating Service Valves from the People's Republic of 
China: Final Determination of Sales at Less Than Fair Value and Final 
Negative Determination of Critical Circumstances, 74 FR 10886 (March 
12, 2009). 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., Brake 
Rotors From the People's Republic of China: Final Results and Partial 
Rescission of the 2004/2005 Administrative Review and Notice of 
Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 
2006). None of the parties to this proceeding have contested such 
treatment. Accordingly, we calculated NV in accordance with section 
773(c) of the Act, which applies to NME countries.

[[Page 46272]]

Separate Rates Determination

    A designation of a country 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. It is the Department's 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), (Sparklers) 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) 
(Silicon Carbide).
    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.\3\
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    \3\ 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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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 the 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) any other 
formal measures by the government decentralizing control of companies. 
See Sparklers, 56 FR at 20589. In this NSR, Hengyong and Hongda 
submitted complete responses to the separate rates section of the 
Department's questionnaire. The evidence submitted by Hengyong and 
Hongda includes government laws and regulations on corporate ownership 
and control, these companies' individual business licenses, and 
narrative information regarding the companies' operations and selection 
of management. In addition, Hengyong and Hongda have placed on the 
record copies of certain laws and regulations, including the ``Company 
Law of the People's Republic of China,'' the ``Regulations of the 
People's Republic of China for Controlling the Registration of 
Enterprises as Legal Persons.'' The Department has analyzed these PRC 
laws and found that they establish 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 Honey from the People's 
Republic of China: Final Results and Final Rescission, In Part, of 
Antidumping Duty Administrative Review, 72 FR 37715, 37716 (July 11, 
2007). We have no information in this proceeding that would cause us to 
reconsider this determination.
    Thus, we determine that the evidence on the record supports a 
preliminary finding of an absence of de jure government control of 
Hengyong and Hongda based on an absence of restrictive stipulations 
associated with the exporter's business license, as well as the legal 
authority on the record decentralizing control over the respondent. The 
evidence on the record provided by Hengyong and Hongda supports a 
preliminary finding of a de jure absence of government control over 
their export activities because: (1) There are no controls on exports 
of subject merchandise, such as quotas applied to, or licenses required 
for, exports of the subject merchandise to the United States; (2) the 
government of the PRC has passed legislation decentralizing control of 
companies. See Hongda's September 24, 2010, submission at exhibits 4, 
7, appendix 1 and Hongda's November 2, 2010, submission at section A 1-
7, and Hengyong's September 24, 2010, submission at exhibit 4, 
appendices1-3 and Hengyong's November 2, 2010, submission at section A 
1-7.

Absence of De Facto Control

    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, 
e.g., 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.
    The absence of de facto government control over exports is based on 
whether the company: (1) Sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
retains the proceeds from its export sales and makes independent 
decisions regarding the disposition of profits or financing of losses; 
(3) has the authority to negotiate and sign contracts and other 
agreements; and (4) has autonomy from the government regarding the 
selection of management. See Silicon Carbide, 59 FR at 22587; 
Sparklers, 56 FR at 20589; and Final Determination of Sales at Less 
Than Fair Value: Furfuryl Alcohol From the People's Republic of China, 
60 FR 22544, 22545 (May 8, 1995).
    In its November 2, 2010, submission, Hengyong submitted evidence 
demonstrating an absence of de facto government control over its export 
activities. Specifically, this evidence indicates that: (1) The company 
sets its own export prices independent of the government and without 
the approval of a government authority; (2) the company retains the 
proceeds from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) the company has a 
general manager with the authority to negotiate and bind the company in 
an agreement; (4) the general manager is selected by the owners; (5) 
the general manager appoints the manager of each department; and (6) 
there are no restrictions on the company's use of export revenues. 
Therefore, we preliminarily find that Hengyong has established that it 
qualifies for a separate rate under the criteria established by Silicon 
Carbide and Sparklers.
    Similarly, in its November 2, 2010, submission, Hongda also 
submitted evidence demonstrating an absence of de facto government 
control over its export activities. Specifically, this evidence 
indicates that: (1) The company sets its own export prices independent 
of the government and without the approval of a government authority; 
(2) the company retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) the company has a sales manager with authority to 
negotiate and bind the company in an agreement; (4) the company's 
shareholders appoint the general manager, who appoints the senior 
managers; and (5) there are no

[[Page 46273]]

restrictions on the company's use of export revenues. Therefore, we 
preliminarily find that Hongda has established that it qualifies for a 
separate rate under the criteria established by Silicon Carbide and 
Sparklers.

Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sales made by Hengyong and Hongda for these NSRs. In 
evaluating whether a single sale in a NSR is commercially reasonable, 
and therefore bona fide, the Department considers, inter alia, such 
factors as: (1) Timing of the sales; (2) price and quantity; (3) the 
expenses arising from the transaction; (4) whether the goods were sold 
at a profit; and (5) whether the transaction was made on an arms-length 
basis. See Tianjin Tiancheng Pharmaceutical Co. v. the United States, 
366 F. Supp. 2d 1246, 1250 (CIT 2005) (TTPC). Accordingly, the 
Department considers a number of factors in its bona fide analysis, 
``all of which may be specific to the commercial realities surrounding 
an alleged sale of subject merchandise.'' See Hebei New Donghua Amino 
Acid Co. v. the United States, 374 F. Supp. 2d 1333, 1342 (CIT 2005) 
(New Donghua) (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). In TTPC, the court also affirmed the 
Department's decision that ``any factor which indicates that the sale 
under consideration is not likely to be typical of those which the 
producer will make in the future is relevant,'' (TTPC, 366 F. Supp. 2d 
at 1250), and found that ``the weight given to each factor investigated 
will depend on the circumstances surrounding the sale.'' TTPC, 366 F. 
Supp. 2d at 1263. Finally, in New Donghua, the CIT affirmed the 
Department's practice of evaluating the circumstances surrounding a NSR 
sale, so that a respondent does not unfairly benefit from an atypical 
sale and obtain a lower dumping margin than the producer's usual 
commercial practice would dictate.
    In examining Hengyong's and Hongda's sales in relation to these 
factors, the Department observed no evidence that would indicate that 
these sales were not bona fide. For purposes of these preliminary 
results, we preliminarily find that the new shipper sales made by 
Hongda and Hengyong during the POR were bona fide commercial 
transactions based on the totality of circumstances, namely: (1) The 
prices were comparable to the average unit values reported to CBP for 
all entries of subject merchandise; (2) The quantities sold were of 
commercial quantities within the range of normal commercial quantities; 
(3) neither Hengyong, nor Hongda, nor their customers incurred any 
extraordinary expenses arising from the transactions; (4) the sales 
were made between unaffiliated parties at arm's length; and (5) the 
timing of the sales does not indicate that they were not bona fide.
    However, we note that the Department will continue to examine all 
aspects of Hongda's and Hengyong's POR sales including whether it is 
atypical, and, as such, not indicative of what its future sales may be. 
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 decision is set forth in 
Memorandum to Richard Weible through Robert James, Program Manager, 
Import Administration from Scott Hoefke, International Trade Compliance 
Analyst, Import Administration: Bona Fide Sales Analysis of Shangdong 
Guangxi Hengyong Industrial & Commercial Dev., Ltd (Hengyong) in the 
Antidumping Duty New Shipper Review of Certain Preserved Mushrooms from 
the People's Republic of China, dated July 26, 2011; and Memorandum to 
Richard Weible through Robert James, Program Manager, Import 
Administration from Fred Baker, International Trade Compliance Analyst, 
Import Administration: Bona Fide Sales Analysis of Zhangzhou Hongda 
Import & Export Trading Co., Ltd. (Hongda) in the Antidumping Duty New 
Shipper Review of Certain Preserved Mushrooms from the People's 
Republic of China, dated July 26, 2011.
    Based on our preliminary findings that: (1) Hengyong's and Hongda's 
sales are bona fide; (2) Hengyong and Hongda are each eligible for a 
separate rate (see the ``Separate Rates'' section above); (3) Hengyong 
and Hongda are not affiliated with any exporter or producer that had 
previously shipped subject merchandise to the United States; and (4), 
Hengyong's manufacturer of subject merchandise, Hengxian, and Hongda's 
manufacturer of subject merchandise, Haishan, did not export the 
subject merchandise to the United States during the period of 
investigation, we preliminary determine that Hengyong and Hongda meet 
the requirements to qualify as new shippers during the POR.
    Therefore, for purposes of these preliminary results of review, we 
are treating Hengyong's and Hongda's sales of subject merchandise to 
the United States during the POR as appropriate transactions for these 
NSRs.

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 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 Status'' 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, 
Philippines, Indonesia, Thailand, Ukraine, and Peru are countries 
comparable to the PRC in terms of economic development.\4\ Also in 
accordance with section 773(c)(4) of the Act, the Department has found 
that India is a significant producer of comparable merchandise. 
Specifically, we have selected India because we have found that India 
is at a level of economic development similar to the PRC, pursuant to 
section 773(c)(4) of the Act, is a significant producer of comparable 
merchandise, and we have reliable, publicly available data from

[[Page 46274]]

India representing broad-market average.
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    \4\ See Memorandum from Carole Showers, Acting Director, Office 
of Policy, to Richard Weible, Director, Office 7; Subject: Request 
for a List of Surrogate Countries for New Shipper Reviews of the 
Antidumping Duty Order on Certain Preserved Mushrooms from the 
People's Republic of China, dated October 22, 2010. The Department 
notes that these six countries are part of a non-exhaustive list of 
countries that are at a level of economic development comparable to 
the PRC. See the Department's letter to ``All Interested Parties; 
First Administrative Review of Steel Wire Garment Hangers from the 
People's Republic of China: Deadlines for Surrogate Country and 
Surrogate Value Comments,'' dated November 8, 2010 at 1 and 
Attachment I.
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    Furthermore, the Department notes that in the most recently 
completed proceeding involving the Order, we determined that India is 
comparable to the PRC in terms of economic development and has 
surrogate value data that are available and reliable. See Certain 
Preserved Mushrooms From the People's Republic of China: Final Results 
and Final Rescission in Part, of Antidumping Duty New Shipper Reviews, 
76 FR 16604, (March 24, 2011). In the current proceeding, we received 
no comments regarding surrogate country selection. No information has 
been provided in this review indicating that the Department should 
deviate from its selection of India in the most recently completed 
administrative review of the Order. Given the above facts, the 
Department has selected India as the appropriate primary surrogate 
country for this review. The sources of the surrogate factor values are 
discussed under the ``Normal Value'' section below and in the 
Memorandum to Richard Weible, Office Director, and Robert James, 
Program Manager, from Carole Showers, Office of Policy Director, 
Subject: Request for a List of Surrogate Countries for New Shipper 
Reviews of the Antidumping Duty Order on Certain Preserved Mushrooms 
from the People's Republic of China (the PRC), dated October 22, 2010.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in a NSR, interested parties may submit publicly available information 
to value FOPs within 20 days after the date of publication of these 
preliminary results.

U.S. Price

    In accordance with section 772(a) of the Act, we based Hengyong's 
and Hongda's U.S. prices on export prices (EP), because their first 
sales to an unaffiliated purchaser were made before the date of 
importation and the use of constructed export price was not otherwise 
warranted by the facts on the record. In accordance with section 772(c) 
of the Act, when appropriate, we deducted from the starting price (or 
gross unit price) to the unaffiliated purchaser the expenses for 
foreign inland freight and foreign brokerage and handling. These 
services were provided by NME vendors for both Hengyong's and Hongda's 
U.S. sales. Therefore, we based the deduction of these movement charges 
on surrogate values.
    For both Hengyong and Hongda, we valued foreign inland freight 
(which consisted of truck freight) using a per-unit, POR-wide, average 
rate calculated from Indian data on the following Web site: https://www.infobanc.com/logistics/logtruck.htm. The logistics section of this 
Web site contains inland freight truck rates between many large Indian 
cities. See Memoranda to the File, ``New Shipper Review of Certain 
Preserved Mushroom from the People's Republic of China: Surrogate 
Values for the Preliminary Results'' (Surrogate Values Memorandum) at 
Exhibit 7.
    We valued brokerage and handling using a price list of export 
procedures necessary to export a standardized cargo of goods in India. 
The price list is compiled based on a survey case study of the 
procedural requirements for trading a standard shipment of goods by 
ocean transport in India that is published in Doing Business 2010: 
India, published by the World Bank. See Surrogate Values Memorandum at 
Exhibit 8.
    In their section A responses, both Hengyong and Hongda stated that 
they intended to use the invoice date as the date of sale, stating that 
this was the date that best represented when the terms of sale are 
fixed. See Hengyong's November 2, 2010, submission at 10; and Hongda's 
November 2, 2010, submission at 10-11. However, both Hengyong and 
Hongda in their supplemental questionnaire submissions stated that they 
had no instances of quantity or price changes after the receipt of the 
purchase order. See Hengyong's April 25, 2011, submission at 2; and 
Hongda's April 25, 2011, submission at 2. Therefore, we used the 
purchase order date as the date of sale for both Hengyong and Hongda 
because there were no changes to either the prices or quantities of 
either companies' sales after this date, and there is no record 
evidence that the material terms of sale are subject to change between 
the purchase order date and the invoice date. The Department concludes 
that the purchase order date is therefore the date that best represents 
when Hengyong and Hongda established the final material terms of sale. 
See 19 CFR 351.401(i).
1. Methodology
    Section 773(c)(1)(B) of the Act provides that the Department shall 
determine the NV using an FOP methodology if the merchandise under 
review 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. See, e.g., Tapered Roller Bearings 
and Parts Thereof, Finished or Unfinished, From the People's Republic 
of China: Preliminary Results of Antidumping Duty Administrative Review 
and Notice of Intent to Rescind in Part, 70 FR 39744 (July 11, 2005), 
unchanged in Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China: Final Results of 2003-
2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 
(January 17, 2006).
2. Factor Valuations
    In selecting the SVs, consistent with our past practice, we 
considered the quality, specificity, and contemporaneity of the data. 
See, e.g., Folding Metal Tables and Chairs from the People's Republic 
of China; Final Results of Antidumping Duty Administrative Review, 71 
FR 71509 (December 11, 2006), and accompanying Issues and Decision 
Memorandum at Comment 9. In selecting the ``best available information 
for surrogate values,'' in accordance with section 773(c)(1) of the 
Act, we considered whether the information was: publicly available; 
product-specific; representative of broad market average prices; 
contemporaneous with the POR; and free of taxes. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value, Negative 
Preliminary Determination of Critical Circumstances and Postponement of 
Final Determination: Certain Frozen and Canned Warmwater Shrimp From 
the Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic 
of Vietnam, 69 FR 71005 (December 8, 2004). See also 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.
    Where we could obtain only surrogate values that were not 
contemporaneous with the POR consistent with our practice, we inflated 
the surrogate values using, where appropriate, the Indian Wholesale 
Price Index (WPI) as published in International Financial Statistics by 
the International Monetary Fund (IMF). See, e.g., Certain Preserved 
Mushrooms From the People's Republic of China: Final results of 
Antidumping

[[Page 46275]]

Duty New Shipper Review, 74 FR 65520, (December 10, 2009); see also 
Surrogate Values Memorandum at Exhibit 2 and the IMF Web site at https://www.imfstatistics.org/imf.
    In accordance with these guidelines, we calculated surrogate 
values, except as noted below, from import statistics of the primary 
selected surrogate country, India, from Global Trade Atlas (GTA), as 
published by Global Trade Information Services. Our use of GTA import 
data is in accordance with past practice and satisfies all of our 
criteria for surrogate values noted above.\5\
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    \5\ See, e.g.,Certain Preserved Mushrooms From the People's 
Republic of China: Preliminary Results of Antidumping Duty New 
Shipper Review, 74 FR 50946, 50950 (October 2, 2009), unchanged in 
Certain Preserved Mushrooms From the People's Republic of China: 
Final Results of Antidumping Duty New Shipper Review, 74 FR 65520 
(December 10, 2009).
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    Furthermore, in accordance with the legislative history of the 
Omnibus Trade and Competitiveness Act of 1988, see Conf. Report to 
Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess. (1988) 
(OTCA 1988) at 590, the Department continues to apply its long-standing 
practice of disregarding surrogate values if it has a reason to believe 
or suspect the source data may be subsidized. In this regard, the 
Department has previously found that it is appropriate to disregard 
such prices from Indonesia, South Korea and Thailand because we have 
determined that these countries maintain broadly available, non-
industry specific export subsidies. Based on the existence of these 
subsidy programs that were generally available to all exporters and 
producers in these countries at the time of the POR, the Department 
finds it reasonable to infer that all exporters from Indonesia, South 
Korea and Thailand may have benefitted from these subsidies.\6\ 
Additionally, we disregarded prices from NME countries. Finally, 
imports that were labeled as originating from an ``unspecified'' 
country were excluded from the average value, because the Department 
could not be certain that they were not from either an NME country or a 
country with general export subsidies. See Certain Non-Frozen Apple 
Juice Concentrate from the People's Republic of China: Notice of 
Preliminary Results of the New Shipper Review, 75 FR 47270 (August 5, 
2010) and Drill Pipe From the People's Republic of China: Preliminary 
Determination of Sales at Less Than Fair Value and Affirmative 
Determination of Critical Circumstances, and Postponement of Final 
Determination, 75 FR 51004 (August 18, 2010).
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    \6\ See, e.g., Expedited Sunset Review of the Countervailing 
Duty Order on Certain Cut-to-Length Carbon Quality Steel Plate from 
Indonesia, 70 FR 45692 (August 8, 2005), and accompanying Issues and 
Decision Memorandum at page 4; Corrosion-Resistant Carbon Steel Flat 
Products from the Republic of Korea: Final Results of Countervailing 
Duty Administrative Review, 74 FR 2512 (January 15, 2009), and 
accompanying Issues and Decision Memorandum at Comment 1, pages 17, 
19-20; and Certain Hot-Rolled Carbon Steel Flat Products from 
Thailand: Final Results of Countervailing Duty Determination, 66 FR 
50410 (October 3, 2001), and accompanying Issues and Decision 
Memorandum at Comment 1.
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    To value the input of wheat straw, we used the wheat straw value 
from the FY 2006-2007 (April 2006-March 2007) financial statement of 
the Indian mushroom producer Agro Dutch Industries, Ltd. (Agro Dutch) 
because this value is specific to the input. To value the input of 
manure, we used the manure value from Agro Dutch's FY 2004-2005 
financial statement because this value is specific to the input. See 
Surrogate Values Memorandum at Exhibit 2. We adjusted these values for 
inflation. See Surrogate Values Memorandum at Exhibit 1.
    To value land rent, the Department used data from the 2001 Punjab 
State Development Report, administered by the Planning Commission of 
the Government of India. Since the value of land rent was not 
contemporaneous with the POR, the Department adjusted the value for 
inflation. See Surrogate Values Memorandum at Exhibit 2.
    We valued electricity using price data for small, medium, and large 
industries, as published by the Central Electricity Authority of the 
Government of India in its publication titled Electricity Tariff & Duty 
and Average Rates of Electricity Supply in India, dated March 2008. 
These electricity rates represent actual country-wide publicly-
available information on tax-exclusive electricity rates charged to 
industries in India. As the rates listed in this source became 
effective on a variety of different dates, we are not adjusting the 
average value for inflation. See Surrogate Value Memorandum at Exhibit 
4.
    To value water, the Department used the revised Maharastra 
Industrial Development Corporation water rates, which are available at 
https://www.midcindia.com/water-supply. The Department found this source 
to be the best available information since it includes a wide range of 
industrial water rates. Since the water rates were not contemporaneous 
with the POR, the Department adjusted the value for inflation. See 
Surrogate Values Memorandum at Exhibit 4.
    We offset Hongda's material costs for revenue generated from the 
sale of tin scrap. See Surrogate Values Memorandum at 10 and Exhibit 3.
    We valued truck freight expenses for inputs using the same 
surrogate data we used for valuing domestic inland freight for Hengyong 
and Hongda's U.S. sales (i.e., we used data from the Web site https://www.infobanc.com/logistics/logtruck.htm, which contains inland freight 
truck rates between many large Indian cities). See Surrogate Values 
Memorandum at Exhibit 6.
    Finally, to value overhead, selling, general, and administrative 
expenses (SG&A), and profit, we used the 2009-10 financial statements 
of the Indian mushroom producers Flex Foods Limited and Himalya 
International Limited. See Surrogate Values Memorandum at Exhibit 9 for 
our computations.
    In accordance with section 773(c) of the Act, we calculated NV by 
adding the value of the FOPs, general expenses, profit, and packing 
costs reported by Hengyong and Hongda. The FOPs for subject merchandise 
include: (1) Quantities of raw materials employed; (2) hours of labor 
required; (3) amounts of energy and other utilities consumed; (4) 
representative capital and selling costs; and (5) packing materials. We 
used the FOPs reported by Hengyong and Hongda for materials, energy, 
labor, and packing, and valued those FOPs by multiplying the amount of 
the factor consumed in producing subject merchandise by the average 
unit surrogate value of the factor derived from the Indian surrogate 
values selected for their NSRs.
    To calculate NV, we multiplied the reported per-unit factor-
consumption rates by publicly available Indian surrogate values. As 
appropriate we added freight costs to the surrogate values that we 
calculated for Hengyong's and Hongda's material inputs to make these 
prices delivered prices. We calculated these freight costs by 
multiplying surrogate freight rates by the shorter of the reported 
distance from the domestic supplier to the factory that produced the 
subject merchandise or the distance from the nearest seaport to the 
factory that produced the subject merchandise, as appropriate. This 
adjustment is in accordance with the decision of the U.S. Court of 
Appeals for the Federal Circuit in Sigma Corp. v. United States, 117 
F.3d 1401, 1408 (Fed. Cir. 1997). Where there were multiple domestic 
suppliers of a material input, we calculated a weighted-average 
distance after limiting each supplier's distance to no more than the 
distance from the nearest seaport to Hengyong and Hongda. We increased 
the calculated costs of the FOPs for surrogate general expenses and 
profit.

[[Page 46276]]

See Surrogate Values Memorandum at Exhibit 9.
    For direct labor, indirect labor, and packing labor, previously, 
the Department used regression-based wages that captured the worldwide 
relationship between per capita Gross National Income (GNI) and hourly 
manufacturing wages, pursuant to 19 CFR 351.408(c)(3), to value the 
respondent's cost of labor. However, on May 14, 2010, the Court of 
Appeals for the Federal Circuit (Federal Circuit), in Dorbest Ltd. v. 
United States, 604 F.3d 1363, 1372 (Fed. Cir. 2010) (Dorbest), 
invalidated 19 CFR 351.408(c)(3). As a consequence of the Federal 
Cirucit's ruling in Dorbest, the Department no longer relies on the 
regression-based wage rate methodology described in its regulations. On 
February 18, 2011, the Department published in the Federal Register a 
request for public comment on our interim methodology, and the data 
sources. See Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor, Request for 
Comment, 76 FR 9544 (Feb. 18, 2011).
    On June 21, 2011, the Department revised its methodology for 
valuing the labor input in NME antidumping proceedings. See Antidumping 
Methodologies in Proceedings Involving Non-Market Economies: Valuing 
the Factor of Production: Labor, 76 FR 36092 (June 21, 2011) (Labor 
Methodologies). In Labor Methodologies, the Department determined that 
the best methodology to value the labor input is to use industry-
specific labor rates from the primary surrogate country. Additionally, 
the Department determined that the best data source for industry-
specific labor rates is Chapter 6A: Labor Cost in Manufacturing, from 
the International Labor Organization (ILO) Yearbook of Labor Statistics 
(Yearbook).
    In these preliminary results, the Department calculated the labor 
input using the wage method described in Labor Methodologies. To value 
the respondent's labor input, the Department relied on data reported by 
India to the ILO in Chapter 6A of the Yearbook. The Department further 
finds the two-digit description under ISIC-Revision 3 (``Manufacture of 
Food Products and Beverages'') to be the best available information on 
the record because it is specific to the industry being examined, and 
is therefore derived from industries that produce comparable 
merchandise. Accordingly, relying on Chapter 6A of the Yearbook, the 
Department calculated the labor input using labor data reported by 
India to the ILO under Sub-Classification 15 of the ISIC-Revision 3 
standard, in accordance with section 773(c)(4) of the Act. For these 
preliminary results, the calculated industry-specific wage rate is 
$1.21. A more detailed description of the wage rate calculation 
methodology is provided in the Surrogate Values Memorandum. As stated 
above, the Department used India ILO data reported under Chapter 6A of 
the Yearbook, which reflects all costs related to labor, including 
wages, benefits, housing, training, etc.
    For further details regarding the surrogate values used for these 
preliminary results, see Surrogate Value Memorandum.

Currency Conversion

    Indian surrogate values were denominated in rupees and were 
converted to U.S. dollars using the applicable average exchange rate 
based on exchange rate data from the Department's Web site. We made all 
currency conversions on the date of the U.S. sale.

Preliminary Results of the Review

    The Department has determined that the following preliminary 
dumping margins exist for the period February 1, 2010, through August 
31, 2010, for Hengyong, and the period February 1, 2010, through July 
31, 2010, for Hongda:

                Certain Preserved Mushrooms from the PRC
------------------------------------------------------------------------
                                                              Weighted-
                                                               Average
                   Exporter/Manufacturer                        margin
                                                              (percent)
------------------------------------------------------------------------
Hengyong (exporter)/Hengxian (manufacturer)................         0.00
Hongda (exporter)/Haishan (manufacturer)...................        69.43
------------------------------------------------------------------------

Public Comment

    The Department will disclose to parties to this proceeding the 
calculations performed in reaching the preliminary results within five 
days of the date of publication of these preliminary results. See 19 
CFR 351.224(b). Interested parties may submit written comments (case 
briefs) within 30 days of publication of the preliminary results and 
rebuttal comments (rebuttal briefs) within five days after the time 
limit for filing case briefs. See 19 CFR 351.309(c)(1)(ii) and 
351.309(d)(1). Pursuant to 19 CFR 351.309(d)(2), rebuttal briefs must 
be limited to issues raised in the case briefs. Parties who submit 
arguments are requested to submit with the argument: (1) A statement of 
the issue; (2) a brief summary of the argument; and (3) a table of 
authorities. Further, the Department requests that parties submitting 
written comments provide the Department with a diskette containing the 
public version of those comments.
    Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). 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 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 the briefs.
    Unless the deadline is extended pursuant to section 
751(a)(2)(B)(iv) of the Act, the Department will issue the final 
results of these NSRs, including the results of our analysis of the 
issues raised by the parties in their comments, within 90 days after 
issuance of these preliminary results.

Deadline for Submission of Publicly Available Surrogate Value 
Information

    In accordance with 19 CFR 351.301(c)(3), the deadline for 
submission of publicly available information to value factors of 
production under 19 CFR 351.408(c) is 20 days after the date of 
publication of the preliminary determination. In accordance with 19 CFR 
351.301(c)(1), if an interested party submits factual information less 
than ten days before, on, or after (if the Department has extended the 
deadline), the applicable deadline for submission of such factual 
information, an interested party has ten days to submit factual 
information to rebut, clarify, or correct the factual information no 
later than ten days after such factual information is served on the 
interested party. However, the Department notes that 19 CFR 
351.301(c)(1), permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. See, 
e.g., Glycine from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review and Final Rescission, in Part, 
72 FR 58809 (October 17, 2007), and accompanying Issues and Decision 
Memorandum at Comment 2. Furthermore, the Department generally will not 
accept business proprietary information in either the surrogate value 
submissions or the rebuttals thereto, as the regulation regarding the 
submission of surrogate

[[Page 46277]]

values allows only for the submission of publicly available 
information.

Assessment Rates

    Assessment rates will be based upon the final results of review. 
Upon issuing the final results of the review, the Department shall 
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. 
Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-specific 
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 NSRs for all 
shipments of subject merchandise exported by Hengyong or Hongda and 
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 manufactured by Hengxian and exported by 
Hengyong or manufactured by Haishan and exported by Hongda, the cash-
deposit rate will be that established in the final results of this 
review; (2) for subject merchandise exported by Hengyong or Hongda but 
not manufactured by Hengixan or Haishan, respectively, the cash deposit 
rate will continue to be the PRC-wide rate (i.e., 198.63 percent); and 
(3) for subject merchandise manufactured by Hengxian or Haishan, but 
exported by any other party, the cash deposit rate will be the rate 
applicable to the exporter. If the cash deposit rates calculated for 
Hengyong or Hongda in the final results is zero or de minimis, no zero 
cash deposit will be required for entries of subject merchandise both 
produced by Hengxian and Haishan and exported by Hengyong or Hongda, 
respectively. These cash deposit 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 NSRs and notice are in accordance with sections 751(a)(2)(B) 
and 777(i) of the Act and 19 CFR 351.214(i).

    Dated: July 26, 2011.
Ronald Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2011-19530 Filed 8-1-11; 8:45 am]
BILLING CODE 3510-DS-P