[Federal Register: December 16, 2003 (Volume 68, Number 241)]
[Notices]
[Page 69988-69994]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16de03-29]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-863]
Honey from the People's Republic of China: Preliminary Results of
First Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of first antidumping duty
administrative review.
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SUMMARY: In response to requests from interested parties, the
Department of Commerce (the Department) is conducting the first
administrative review of the antidumping duty order on honey from the
People's Republic of China. The period of review for those entities
with an affirmative critical circumstances finding is February 10,
2001, through November 30, 2002. For all other companies, the period of
review is May 11, 2001, through November 30, 2002. Two companies named
in the initiation of this review had no exports or sales of the subject
merchandise during their applicable period of review, and consequently
we rescinded the review of these companies. In addition, we rescinded
our review of three companies that are participating in new shipper
reviews covering the period February 10, 2001, through November 30,
2002. We preliminarily determine that three companies have failed to
cooperate by not acting to the best of their ability to comply with our
requests for information and, as a result, should be assigned a rate
based on adverse facts available. Finally, we have preliminarily
determined that one respondent did make sales to the United States of
the subject merchandise at prices below normal value.
We invite interested parties to comment on these preliminary
results. Parties that submit comments are requested to submit with each
argument (1) a statement of the issue, and (2) a brief summary of the
argument(s).
EFFECTIVE DATE: December 16, 2003.
FOR FURTHER INFORMATION CONTACT: Angelica Mendoza or Brandon Farlander
at (202) 482-3019 or (202) 482-0182, respectively; Antidumping and
Countervailing Duty Enforcement Group III, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230.
SUPPLEMENTARY INFORMATION:
Background
On December 17, 2002, the Department published a notice of
opportunity to request an administrative review of the antidumping duty
order on honey from the People's Republic of China (PRC), 67 FR 77222
(December 17, 2002). On December 31, 2002, the Department received a
timely request from the American Honey Producers Association and the
Sioux Honey Association (collectively, petitioners) requesting that the
Department conduct an administrative review of the antidumping duty
order on honey shipments exported to the United States from the
following PRC honey producers/exporters during the period of May 11,
2001, through November 30, 2002: (1) Anhui Native Produce Import &
Export Corp. (Anhui), (2) Henan Native Produce and Animal By-Products
Import & Export Company (Henan), (3) High Hope International Group
Jiangsu Foodstuffs Import and Export Corp. (High Hope), (4) Inner
Mongolia Autonomous Region Native Produce and Animal By-Products Import
& Export Corp. (Inner Mongolia), (5) Kunshan Foreign Trade Company
(Kunshan), (6) Shanghai Eswell Enterprise Co., Ltd. (Shanghai Eswell),
(7) Shanghai Xiuwei International Trading Co., Ltd. (Shanghai Xiuwei),
(8) Sichuan-Dujiangyan Dubao Bee Industrial Co., Ltd. (Sichuan Dubao),
(9) Wuhan Bee Healthy Co., Ltd. (Wuhan), and (10) Zhejiang Native
Produce and Animal By-Products Import & Export Corp. On December
31, 2002, we received a timely request from Zhejiang Native Produce and
Animal By-Products Import & Export Corp. a.k.a. Zhejiang Native
Produce and Animal By-Products Import and Export Group Corporation
(Zhejiang) requesting that the Department conduct an administrative
review of its honey shipments to the United States during the period
May 11, 2001, through November 30, 2002. On January 22, 2003, the
Department initiated an administrative review of the antidumping duty
order on honey from the PRC, for the period of May 11, 2001, through
November 30, 2002, in order to determine whether merchandise imported
into the United States is being sold at less than fair value with
respect to these ten companies. See Initiation of Antidumping and
Countervailing Duty Administrative Review and Requests for Revocations
in Part, 68 FR 3009 (January 22, 2003) (Administrative Review
Initiation).\1\ On January 27, 2003, the Department clarified that the
period of review (POR) for High Hope, Kunshan, Zhejiang, Wuhan,
Shanghai Xiuwei, and Sichuan Dubao is February 10, 2001, through
November 30, 2002. See Memorandum to the File through Donna L.
Kinsella, Case Manager, Office 8; POR for Exporters of Honey from the
People's Republic of China with Affirmative Critical Circumstances
Findings (January 27, 2003).
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\1\ In a separate proceeding, the Department also received
timely requests from Shanghai Xiuwei and Sichuan Dubao, in
accordance with 19 CFR 351.214(c), for new shipper reviews of the
antidumping duty order on honey from the PRC, which has a December
annual anniversary month. On February 5, 2003, we initiated new
shipper reviews for Shanghai Xiuwei and Sichuan Dubao. See
Initiation of New Shipper Antidumping Duty Reviews, 68 FR 5868
(February 5, 2003) (New Shipper Initiation). The POR for the new
shipper reviews of these two companies is identical to the POR for
the administrative review.
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On February 20, 2003, the Department issued antidumping duty
questionnaires to the above-referenced ten PRC companies. On February
28, 2003, Wuhan submitted a letter certifying that it did not have any
other shipments during the first review period that are not already
subject to an ongoing new shipper review.\2\ On February 28, 2003,
Inner Mongolia and Anhui submitted separate letters each certifying
that they did not have any shipments of subject merchandise during the
period of May 11, 2001, through November 30, 2002.
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\2\ The Department conducted a six-month new shipper review of
Wuhan's sales during the period December 1, 2001, through May 31,
2002. See, e.g., Preliminary Results of Antidumping Duty New Shipper
Review: Honey from the People's Republic of China, 68 FR 33099 (June
3, 2003); and Honey from the People's Republic of China: Final
Results of Antidumping Duty New Shipper Review, 68 FR 62053 (October
31, 2003) (Wuhan NSR Final Results). On March 18, 2003, Wuhan
submitted an additional letter clarifying that although it did have
additional exports and sales during the period February 10, 2001,
through November 30, 2002, nevertheless the entries for consumption
of this merchandise did not occur until after this POR.
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On April 4, 2003, we received responses to Section A of our
antidumping duty questionnaire from Zhejiang, Wuhan, and High Hope. In
its reply to the antidumping duty questionnaire, High Hope stated that
it is unwilling to make the expenditure of time and money required to
participate in the review, and therefore, has concluded that it is not
able to fully respond to the Department's questionnaire. On April 7,
2003, the Department received notification from Kunshan that it will
not be participating in this proceeding, and therefore, it is not
responding to our questionnaire. See Memorandum to the File from
Angelica L. Mendoza; Non-Responsive Company, dated April 7, 2003. On
April 18, 2003,
[[Page 69989]]
the Department received responses to Sections C and D of the
antidumping duty questionnaire from Zhejiang and Wuhan. Henan did not
respond to its questionnaire.\3\
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\3\ On March 31, 2003, the Department issued a letter to Henan
informing the company that it had failed to respond to our
antidumping duty questionnaire issued on February 20, 2003.
Additionally, we confirmed Henan's address and receipt of our March
31, 2003, letter. See Memorandum to The File from Angelica L.
Mendoza, Case Analyst, First Administrative Review of the
Antidumping Duty Order on Honey from the People's Republic of China:
Correct Addresses, dated March 31, 2003.
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On April 22, 2003, petitioners withdrew their request for review of
Shanghai Eswell. On May 6, 2003, the Department rescinded, in part, the
administrative review of the antidumping duty order on honey with
respect to Shanghai Eswell. See Honey from the People's Republic of
China: Notice of Partial Rescission of Antidumping Duty Administrative
Review, 68 FR 23963 (May 6, 2003).
On May 6, 2003, the Department preliminarily determined to rescind,
in part, the administrative reviews with respect to Anhui, Inner
Mongolia, Shanghai Xiuwei, Sichuan Dubao, and Wuhan. See Memorandum to
Barbara Tillman, Acting Deputy Assistant Secretary, AD/CVD Enforcement
Group III; Intent to Partially Rescind Administrative Reviews (May 6,
2003) (Rescission Memo). As discussed in the Rescission Memo, Anhui and
Inner Mongolia did not ship subject merchandise during the POR. As also
discussed in the Rescission Memo, the Department determined that
Shanghai Xiuwei, Sichuan Dubao, and Wuhan should not be subject to this
proceeding because all of their POR sales were already subject to
ongoing new shipper reviews.
On May 16, 2003, we issued a supplemental questionnaire to
Zhejiang. On June 10, 2003, we invited interested parties to comment on
the Department's surrogate country selection and/or significant
production in the potential countries, and to submit publicly-available
information to value the factors of production. On June 20, 2003, we
received Zhejiang's supplemental questionnaire response. On June 24,
2003, we received petitioners' comments on the selection of a surrogate
country in this proceeding. Zhejiang did not comment on the selection
of a surrogate country in this proceeding. On June 30, 2003,
petitioners submitted comments on Zhejiang's supplemental questionnaire
response. On July 7, 2003, we issued a second supplemental
questionnaire to Zhejiang. On July 7, 2003, Zhejiang and petitioners
submitted surrogate information with which to value the factors of
production. On July 17, 2003, we received Zhejiang's comments on
petitioners' July 7, 2003, surrogate value submission. On July 18,
2003, we received Zhejiang's second supplemental questionnaire
response.
On July 25, 2003, the Department issued a final determination to
rescind, in part, the administrative reviews of Anhui, Inner Mongolia,
Shanghai Xiuwei, Sichuan Dubao, and Wuhan. See Honey from the People's
Republic of China: Final Rescission, in Part, of Antidumping Duty
Administrative Review, 68 FR 44045 (July 25, 2003). On July 25, 2003,
the Department also determined to extend the time limits for these
preliminary results. See Honey from the People's Republic of China:
Extension of Time Limit for Preliminary Results of First Antidumping
Duty Administrative Review, 68 FR 44046 (July 25, 2003).
Scope of the Antidumping Duty Order
The products covered by this order are natural honey, artificial
honey containing more than 50 percent natural honey by weight,
preparations of natural honey containing more than 50 percent natural
honey by weight, and flavored honey. The subject merchandise includes
all grades and colors of honey whether in liquid, creamed, comb, cut
comb, or chunk form, and whether packaged for retail or in bulk form.
The merchandise subject to this review is currently classifiable
under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the
Harmonized Tariff Schedule of the United States (HTSUS). Although the
HTSUS subheadings are provided for convenience and U.S. Customs and
Border Protection (CBP) purposes, the Department's written description
of the merchandise under order is dispositive.
Verification
As provided in section 782(i)(2) of the Tariff Act of 1930, as
amended (the Act), and section 351.307 of the Department's regulations,
we conducted verification of the questionnaire and supplemental
responses of Zhejiang. We used standard verification procedures,
including on-site inspection of the production facility of Zhejiang's
unaffiliated supplier. Our verification results are outlined in the
Memorandum to the File, through Abdelali Elouaradia, Program Manager,
Verification of U.S. Sales Information Submitted by Zhejiang Native
Produce & Animal By-Products Import & Export Group Corporation (a.k.a.
Zhejiang Native Produce and Animal By-Products Import & Export Corp.)
(Zhejiang) and Factors of Production Information Submitted by
Zhejiang's Unaffiliated Supplier, dated September 26, 2003 (Zhejiang
Verification Report). A public version of this report is on file in the
Central Records Unit (CRU) located in room B-099 of the Main Commerce
Building.
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 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 its export
activities. In this review, Zhejiang requested a separate company-
specific rate.
To establish whether a company is sufficiently independent in its
export activities from government control to be entitled to a separate,
company-specific rate, the Department analyzes the 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, 20589 (May 6, 1991) (Sparklers), and amplified by
the Final Determination of Sales at Less Than Fair Value: Silicon
Carbide from the People's Republic of China, 59 FR 22585, 22586-22587
(May 2, 1994) (Silicon Carbide).
The Department's separate-rate test is unconcerned, in general,
with 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. See, e.g., Certain Cut-to-Length Carbon Steel
Plate from Ukraine: Final Determination of Sales at Less Than Fair
Value, 62 FR 61754, 61757 (November 19, 1997); 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); and Honey from the People's
Republic of China: Preliminary Determination of Sales at Less Than Fair
Value, 60 FR 14725, 14726 (March 20, 1995).
Zhejiang provided separate-rate information in its responses to our
original and supplemental questionnaires. Accordingly, we performed a
separate-rates analysis to
[[Page 69990]]
determine whether this exporter is independent from government control
(see Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People's Republic of China, 61 FR 56570 (April 30,
1996)).
As stated-above in the ``Background'' section, Kunshan and High
Hope did not respond to the Department's antidumping questionnaire.
Rather, as noted-above, these companies informed the Department that
they would not be participating in this proceeding. Moreover, the
Department did not receive any type of response from Henan, although we
issued it a supplemental request for information as noted in the
``Background'' section above. Because none of these three companies
responded to our request for information regarding separate rates, we
preliminarily determine that these companies do not merit separate
rates. See, e.g., Natural Bristle Paint Brushes and Brush Heads from
the People's Republic of China; Preliminary Results of Antidumping Duty
Administrative Review, 61 FR 57389 (November 6, 1996). Consequently,
consistent with the statement in our notice of initiation, we find
that, because these companies do not qualify for separate rates, they
are deemed to be part of the PRC-entity. See Administrative Review
Initiation. See also ``The PRC-wide Rate and Use of Facts Otherwise
Available'' section below.
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; and (3) any other
formal measures by the government decentralizing control of companies.
See Sparklers, 56 FR 20588, 20589.
Zhejiang has placed on the record a number of documents to
demonstrate absence of de jure control, including the ``Law of the
People's Republic of China on Industrial Enterprises Owned by the Whole
People'' (April 13, 1998) (Enterprises Owned by the Whole People), the
``Company Law of the People's Republic of China'' (December 29, 1993)
(Company Law), ``Foreign Trade Law of the People's Republic of China''
(May 12, 1994) (Foreign Trade Law), and the ``Administrative
Regulations of the People's Republic of China Governing the
Registration of Legal Corporations'' (June 3, 1998) (Legal Corporations
Regulations). See Exhibit 2 of Zhejiang's April 4, 2003, submission. In
particular, we found that the PRC law, Enterprises Owned by the Whole
People, grants enterprises owned by all the people status of a legal
person which allows for autonomy in management and provides full
responsibility over their profits and losses. Chapter III of this law
outlines the rights and responsibilities of business enterprises owned
by the whole people. Under Article 27 of this chapter, enterprises are
granted the right to negotiate and sign contracts with foreign parties,
and allowed to withdraw and use their portion of foreign exchange
earnings. Zhejiang states that the Company Law governs the
establishment of limited liability companies, and provides that such a
company shall operate independently and be responsible for its own
profits and losses. See page 6 of Zhejiang's April 4, 2003, submission.
We reviewed Article 11 of Chapter II of the Foreign Trade Law, which
states that ``foreign trade dealers shall enjoy full autonomy in their
business operation and be responsible for their own profits and losses
in accordance with the law.'' Moreover, in other proceedings, the
Department has analyzed such PRC laws and found that they establish an
absence of de jure control. See, e.g., Pure Magnesium from the People's
Republic of China: Final Results of New Shipper Review, 63 FR 3085,
3086 (January 21, 1998) and Preliminary Results of New Shipper Review:
Certain Preserved Mushrooms From the People's Republic of China, 66 FR
30695, 30696 (June 7, 2001).
Zhejiang submitted a copy of its business license in Exhibit 4 of
its Section A questionnaire response, dated April 4, 2003. This license
was issued by the Zhejiang Province Industrial and Commercial
Administration Bureau. Zhejiang explains that its business license is
necessary to register the company. Zhejiang affirms that its business
operations are limited to the scope of the license, and that the
license may be revoked if the company engages in illegal activities or
if the company is found to have insufficient capital. At verification,
we found that Zhejiang's business license and ``Certificate of
Approval: For Enterprises with Foreign Trade Rights in the People's
Republic of China'' were granted in accordance with the above-reference
PRC laws. Moreover, the results of verification support the information
provided regarding these PRC laws. See Zhejiang Verification Report at
4-5.
Therefore, consistent with our final determination in the less-
than-fair-value investigation (LTFV), we preliminarily determine that
there is an absence of de jure control over Zhejiang's export
activities.
De Facto Control
Typically, the Department considers four factors in evaluating
whether a respondent is subject to de facto governmental control of its
export functions: (1) whether the export prices are set by, or subject
to, the approval of a governmental 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 its management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses. See Silicon Carbide at 22587.
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Silicon Carbide at 22586-22587. Therefore, the Department has
determined that an analysis of de facto control is critical in
determining whether respondents are, in fact, subject to a degree of
governmental control which would preclude the Department from assigning
separate rates.
Zhejiang has asserted the following: (1) it is a publicly-owned
company that is independent from government control; (2) it sets prices
through direct negotiations with U.S. customers, and such prices
consider the company's total costs, including acquisition costs as well
as movement expenses, overhead expenses and profit; (3) there is no
government participation in its setting of export prices; (4) its
Manager of the Bee Products Departments and authorized employees have
the authority to bind sales contracts; (5) it does not have to notify
any government authorities of its management selection; (6) there are
no restrictions on the use of its export revenue and that its President
decides how profits will be used; (7) it is responsible for financing
its own losses; and (8) it is not required to sell any portion of
foreign currency earned to the government.\4\ Our analysis of the
responses during verification reveals no other information indicating
the existence of government control. See Zhejiang Verification Report
at 6. Consequently, because evidence on the
[[Page 69991]]
record indicates an absence of government control, both in law and in
fact, over the company's export activities, we preliminarily determine
that Zhejiang has met the criteria for the application of a separate
rate.
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\4\ Zhejiang's questionnaire responses do not suggest that
pricing is coordinated among exporters. Zhejiang states that its
President is elected by the employees of the company, and in turn,
the President selects the other management of the company. See
Zhejiang's April 4, 2003, submission.
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The PRC-wide Rate and Use of Facts Otherwise Available
Zhejiang, Kunshan, Henan, and High Hope were given the opportunity
to respond to the Department's questionnaire. As explained above, we
received questionnaire responses from Zhejiang, and we have calculated
a separate rate for Zhejiang. The PRC-wide rate applies to all entries
of subject merchandise except for entries from PRC producers/exporters
that have their own calculated rate.
As discussed above, Kunshan, Henan, and High Hope are appropriately
considered to be part of the PRC-wide entity. Therefore, we determine
it is necessary to review the PRC-wide entity because it did not
provide information necessary to the instant proceeding. In doing so,
we note that section 776(a)(1) of the Act mandates that the Department
use the facts available if necessary information is not available on
the record of an antidumping proceeding. In addition, section 776(a)(2)
of the Act provides that if an interested party or any other person:
(A) withholds information that has been requested by the administering
authority; (B) fails to provide such information by the deadlines for
the submission of the information or in the form and manner requested,
subject to subsections (c)(1) and (e) of section 782; (C) significantly
impedes a proceeding under this title; or (D) provides such information
but the information cannot be verified as provided in section 782(i),
the Department shall, subject to section 782(d) of the Act, use the
facts otherwise available in reaching the applicable determination
under this title.\5\
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\5\ Where the Department determines that a response to a request
for information does not comply with the request, section 782(d) of
the Act provides that the Department shall promptly inform the party
submitting the response of the nature of the deficiency and shall,
to the extent practicable, provide that party with an opportunity to
remedy or explain the deficiency. Section 782(e) of the Act provides
that the Department shall not decline to consider information that
is submitted by an interested party and is necessary to the
determination but does not meet all the applicable requirements
established by the administering authority. Because the PRC-wide
entity provided no information, we determine that sections 782(d)
and (e) of the Act are not relevant to our analysis.
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According to section 776(b) of the Act, if the Department finds
that an interested party ``has failed to cooperate by not acting to the
best of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of the
party as facts otherwise available. Adverse inferences are appropriate
``to ensure that the party does not obtain a more favorable result by
failing to cooperate than if it had cooperated fully.'' See Statement
of Administrative Action (SAA) accompanying the URAA, H. Doc. No. 316,
103d Cong., 2d Session at 870 (1994). Furthermore, ``an affirmative
finding of bad faith on the part of the respondent is not required
before the Department may make an adverse inference.'' Antidumping
Duties; Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19,
1997).
As above stated, the PRC-wide entity did not respond to our
requests for information. Because the PRC-wide entity did not respond
to our request for information, we find it necessary, under section
776(a)(2) of the Act, to use facts otherwise available as the basis for
the preliminary results of review for the PRC-wide entity.
In addition, pursuant to section 776(b) of the Act, we find that
the PRC-wide entity failed to cooperate by not acting to the best of
its ability to comply with a request for information. As noted above,
the PRC-wide entity informed the Department that it would not
participate in this review, or otherwise, did not provide any response
to the Department's questionnaire, despite repeated requests that it do
so. Thus, because the PRC-wide entity refused to participate fully in
this proceeding, we find it appropriate to use an inference that is
adverse to the interests of the PRC-wide entity in selecting from among
the facts otherwise available. By doing so, we ensure that the
companies that are part of the PRC-wide entity will not obtain a more
favorable result by failing to cooperate than had they cooperated fully
in this review.
An adverse inference may include reliance on information derived
from the petition, the final determination in the investigation, any
previous review, or any other information placed on the record. See
section 776(b) of the Act. It is the Department's practice to assign
the highest rate from any segment of a proceeding as total adverse
facts available when a respondent fails to cooperate to the best of its
ability. See, e.g., Stainless Steel Plate in Coils from Taiwan;
Preliminary Results and Rescission in Part of Antidumping Duty
Administrative Review, 67 FR 5789 (February 7, 2002) (``Consistent with
Department practice in cases where a respondent fails to cooperate to
the best of its ability, and in keeping with section 776(b)(3) of the
Act, as adverse facts available, we have applied a margin based on the
highest margin from any prior segment of the proceeding.'').
In accordance with the Department's practice, we have preliminarily
assigned to the PRC-wide entity (including Kunshan, Henan, and High
Hope) the rate of 183.80 percent as adverse facts available. See, e.g.,
Rescission of Second New Shipper Review and Final Results and Partial
Rescission of First Antidumping Duty Administrative Review: Brake
Rotors from the People's Republic of China, 64 FR 61581, 61584
(November 12, 1999). This rate is the highest dumping margin from any
segment of this proceeding and was established in the LTFV
investigation based on information contained in the petition. See
Notice of Final Determination of Sales at Less Than Fair Value; Honey
from the PRC, 66 FR 50608 (October 4, 2001) and accompanying Issues and
Decision Memorandum (Final Determination). In selecting a rate for
adverse facts available, the Department selects a rate that is
sufficiently adverse ``as to effectuate the purpose of the facts
available rule to induce respondents to provide the Department with
complete and accurate information in a timely manner.'' See Final
Determination of Sales at Less Than Fair Value: Static Random Access
Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23,
1998).
We note that information from a prior segment of this proceeding
constitutes ``secondary information,'' and section 776(c) of the Act
provides that, when the Department relies on such secondary information
rather than on information obtained in the course of a review, the
Department shall, to the extent practicable, corroborate that
information from independent sources that are reasonably at its
disposal.\6\ The SAA states that the independent sources may include
published price lists, official import statistics and customs data, and
information obtained from interested parties during the particular
investigation or review. The SAA also clarifies that ``corroborate''
means that the Department will satisfy itself that the secondary
information to be used has probative value. See SAA at 870. As noted in
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
[[Page 69992]]
from Japan, and Tapered Roller Bearings, Four Inches or Less in Outside
Diameter, and Components Thereof, from Japan; Preliminary Results of
Antidumping Duty Administrative Reviews and Partial Termination of
Administrative Reviews, 61 FR 57391, 57392 (November 6, 1996) (TRBs),
to corroborate secondary information, the Department will, to the
extent practicable, examine the reliability and relevance of the
information used.
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\6\ Secondary information is described in the SAA as
``information derived from the petition that gave rise to the
investigation or review, the final determination concerning the
subject merchandise, or any previous review under section 751
concerning the subject merchandise.'' See SAA at 870.
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We note that in the LTFV investigation, the Department corroborated
the information in the petition that formed the basis of the 183.80
percent PRC-wide entity rate. See Final Determination. Specifically, in
the LTFV investigation, the Department compared the prices in the
petition to the prices submitted by individual respondents for
comparable merchandise. For normal value (NV), we compared petitioners'
factor-consumption data to data reported by respondents. See Notice of
Preliminary Determination of Sales at Less Than Fair Value: Honey from
the People's Republic of China, 66 FR 24101 (May 11, 2001).
In order to satisfy the corroboration requirements under section
776(c) of the Act, in the instant review, we reviewed the Department's
corroboration of the petition rates from the LTFV investigation. See
Memorandum to the File, dated December 10, 2003, placing the Memorandum
to Richard O. Weible, Office Director, The Use of Facts Available for
the PRC-wide entity; and Corroboration of Secondary Information, dated
May 4, 2001 (AFA & Corroboration Memo) on the record of this
administrative review. Following the methodology of our corroboration
analysis from the LTFV investigation, we compared the petition
information to information on the record of this proceeding. We find
that the petition information is both reasonable and reliable when
compared to the range of Zhejiang's reported gross unit prices for
honey it sold to the United States during the current POR. See AFA &
Corroboration Memo at 5 and Exhibit 7 of Zhejiang's July 18, 2003,
submission. Moreover, following the methodology of our corroboration
analysis from the LTFV investigation, the highest calculated NV for
Zhejiang (calculated as a separate NV for each of its two processed
honey suppliers) is comparable to the NV relied on by petitioners to
calculate the petition rate. See AFA & Corroboration Memo at 6 and the
Margin Calculation Output for Zhejiang, dated December 10, 2003.
We further note that, with respect to the relevance aspect of
corroboration, the Department stated in TRBs that it will ``consider
information reasonably at its disposal as to whether there are
circumstances that would render a margin irrelevant. Where
circumstances indicate that the selected margin is not appropriate as
adverse facts available, the Department will disregard the margin and
determine an appropriate margin.'' See TRBs at 61 FR 57392. See also
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty
Administrative Review, 61 FR 6812, 6814 (February 22, 1996)
(disregarding the highest margin in the case as best information
available because the margin was based on another company's
uncharacteristic business expense resulting in an extremely high
margin). The rate used is the rate currently applicable to all
exporters subject to the PRC-wide rate. Further, as noted above, there
is no information on the record that the application of this rate would
be inappropriate in this administrative review or that the margin is
not relevant. Thus, we find that the information is relevant.
Therefore, the Department preliminarily determines that the PRC-wide
entity rate of 183.80 is still reliable, relevant, and has probative
value within the meaning of section 776(c) of the Act.
Normal Value Comparisons
To determine whether Zhejiang's sales of the subject merchandise to
the United States were made at prices below normal value, we compared
their United States prices to normal values, as described in the
``United States Price'' and ``Normal Value'' sections of this notice.
United States Price
For Zhejiang, we based United States price on export price (EP) in
accordance with section 772(a) of the Act, because the first sale to an
unaffiliated purchaser was made prior to importation, and constructed
export price (CEP) was not otherwise warranted by the facts on the
record. We calculated EP based on the packed price from the exporter to
the first unaffiliated
customer in the United States. Where applicable, we deducted
foreign inland freight, international freight, marine insurance
expenses, and bank charges from the starting price (gross unit price),
in accordance with section 772(c) of the Act.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine NV using a factors-of-production methodology if (1) the
merchandise is exported from an NME country, and (2) available
information does not permit the calculation of NV using home-market
prices, third-country prices, or constructed value under section 773(a)
of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. Pursuant to 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. Zhejiang did not contest such treatment in
this review. Accordingly, we have applied surrogate values to the
factors of production to determine NV for each of Zhejiang's processed
honey suppliers. See Factors of Production Valuation Memorandum for the
Preliminary Results of the First Administrative Review of the
Antidumping Duty Order on Honey from the People's Republic of China,
dated December 10, 2003 (Factor Valuation Memo). A public version of
this memorandum is on file in the CRU located in room B-099 of the Main
Commerce Building.
We calculated NV based on factors of production in accordance with
section 773(c)(4) of the Act and section 351.408(c) of our regulations.
Consistent with the LTFV investigation of this order and the final
results of a recent new shipper review covering the subject
merchandise, we determine that India (1) is comparable to the PRC in
level of economic development, and (2) is a significant producer of
comparable merchandise.\7\ Accordingly, we valued the factors of
production using publicly-available information from India.
---------------------------------------------------------------------------
\7\ See Final Determination and Wuhan NSR Final Results.
---------------------------------------------------------------------------
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data, in accordance with our
practice. Where appropriate, we adjusted Indian import prices by adding
foreign inland freight expenses to make them delivered prices. When we
used Indian import values to value inputs sourced domestically by PRC
suppliers, we added to Indian surrogate values a surrogate freight cost
calculated using the shorter of the reported distance from the domestic
supplier to the factory or the distance from the nearest port of export
to the factory. This adjustment is in accordance with the Court of
Appeals for the Federal Circuit's decision in Sigma Corp. v. United
States, 117 F. 3d 1401 (Fed. Cir. 1997). When we used non-import
surrogate values for factors sourced domestically by PRC suppliers, we
based freight for inputs on the actual distance from the input supplier
to the
[[Page 69993]]
site at which the input was used. When we relied on Indian import
values to value inputs, in accordance with the Department's practice,
we excluded imports from both NMEs and countries deemed to have
generally available export subsidies (i.e., Indonesia, Korea, and
Thailand) from our surrogate value calculations. For those surrogate
values not contemporaneous with the POR, we adjusted for inflation
using the wholesale price indices for India, as published in the
International Monetary Fund's publication, International Financial
Statistics.
We valued the factors of production as follows:
To value raw honey, we continue to use the average of the highest
and lowest price for one kilogram (kg.) of raw honey stated in an
article published in The Tribune of India on March 1, 2000, entitled,
``Apiculture, a major foreign exchange earner'' (later republished in
The Agricultural Tribune on May 1, 2000). Consistent with the
methodology established in the previous proceeding, to account for raw
honey price increases in India, we have inflated the average raw honey
price from the March 2000, Tribune of India article (i.e., Rs. 35 per
kg.) to December 2001 by dividing the Indian WPI for December 2001 by
the Indian WPI for March 2000. See Wuhan NSR Final Results and
accompanying Issues and Decision Memorandum at Comment 2. We note that
pricing data submitted by petitioners in Exhibit 1 of their July 7,
2003, submission for Jallowal and Tiwana Bee Farms clearly indicate
that inflating the March 2000, Tribune of India price data only by the
WPI does not appropriately reflect the significant increase in Indian
raw honey prices during the POR. Specifically, in reviewing the average
raw honey purchase prices from Jallowal and Tiwana Bee Farms, we find
that during the period December 2001, through May 2002, raw honey
prices dramatically increased on a monthly basis in excess of the WPI.
Therefore, to account for such increases in Indian raw honey prices
from December 2001, through May 2002, in excess of inflation, we
averaged raw honey purchase prices from the Tiwana and Jallowal Bee
Farms submitted by petitioners in Exhibit 1 of their July 7, 2003,
submission to calculate a total average raw honey price for each month
from December 2001, through May 2002. Next, we calculated monthly price
increases on a percentage-basis, and then applied these price increases
(percentage) to our adjusted raw honey price from the March 2000,
Tribune of India article. Then, we calculated a simple average of these
adjusted monthly raw honey prices to derive our raw honey surrogate
value for the period for which we had raw honey purchase pricing data
(i.e., December 1, 2001, through May 31, 2002). In order to make this
value fully-contemporaneous to the POR, we further adjusted the raw
honey surrogate value for inflation during the period of June 2002,
through November 2002 based on the Indian WPI. Finally, we converted
the raw honey value from a per kg.-basis to a per metric ton-(MT)
basis. See Attachments 2 and 3 of the Factor Valuation Memo for further
details. The Department intends to continue to carefully examine this
issue for the final results of this review and invites interested
parties to submit comments on this issue for purposes of the final
results.
To value beeswax, a raw honey by-product, we used the average per
kilogram import value of beeswax into India for the POR under the
Indian Customs' heading of ``152190'' obtained from the World Trade
Atlas, which notes that its data was obtained from the Ministry of
Commerce of India (World Trade Atlas). To value scrap honey, a raw
honey by-product, we used the average per kilogram import value of
inedible molasses into India for the POR under the Indian Customs'
heading of ``170390'' obtained from the World Trade Atlas. We converted
the surrogate values for beeswax and scrap honey from a per kg.-basis
to a per MT-basis.
To value coal, we relied upon contemporaneous Indian import values
of ``steam coal'' under the Indian Customs' heading of ``2701011902''
obtained from the World Trade Atlas. We also adjusted the surrogate
value for coal to include freight costs incurred between the supplier
and the factory. To value electricity, we used the 2000 total average
price per kilowatt hour, adjusted for inflation, for ``Electricity for
Industry'' as reported in the International Energy Agency's
publication, Energy Prices and Taxes, Second Quarter, 2002. To value
water, we used the water tariff rate, as reported on the Municipal
Corporation of Greater Mumbai's website. See http://www.mcgm.gov.in/Stat%20&%20Fig/Revenue.htm
and Attachment 6 of the Factor Valuation
Memo for source documents.
To value packing materials (i.e., paint and steel drums), we relied
upon contemporaneous Indian import data reported by the World Trade
Atlas under the Indian Customs' heading ``3209,'' and a price quote
from an Indian steel drum manufacturer, respectively. We adjusted the
surrogate value for steel drums to reflect inflation. We also adjusted
the surrogate values of packing materials to include freight costs
incurred between the supplier and the factory.
To value factory overhead, selling, general, and administrative
expenses (SG&A), and profit, we relied upon publicly-available
information in the 2001-2002 annual report of the Mahabaleshwar Honey
Producers Cooperative Society, Ltd. (MHPC), a producer of the subject
merchandise in India. We applied these rates to the calculated cost of
manufacture and cost of production using the same methodology
established in Wuhan NSR Final Results.
For labor, we used the PRC regression-based wage rate at Import
Administration's home page, Import Library, Expected Wages of Selected
NME Countries, revised in September 2002, and corrected in February
2003. Because of the variability of wage rates in countries with
similar per capita gross domestic products, section 351.408(c)(3) of
the Department's regulations requires the use of a regression-based
wage rate. The source of these wage rate data on the Import
Administration's web site is the Year Book of Labour Statistics 2001,
International Labour Office (Geneva: 2001), Chapter 5B: Wages in
Manufacturing.
To value truck freight, we used an average truck freight cost based
on Indian market truck freight rates on a per MT basis published in the
Iron and Steel Newsletter, April 2002. To value rail freight, we used
an average rail freight cost based on rail freight costs of
transporting molasses to various cities within India as stated on the
Indian Railways' website (Indian Government Agency).
To value marine insurance expenses, where necessary, we used
publicly-available price quotes from a marine insurance provider at
http://www.rigconsultants.com/insurance/html.
For details on factor of production valuation calculations, see
Factor Valuation Memo.
Currency Conversion
We made currency conversions pursuant to section 351.415 of the
Department's regulations at the rates certified by the Federal Reserve
Bank.
Preliminary Results of Review
We preliminarily determine that the following antidumping duty
margins exist:
[[Page 69994]]
----------------------------------------------------------------------------------------------------------------
Exporter POR Margin (percent)
----------------------------------------------------------------------------------------------------------------
Zhejiang Native Produce & Animal By-Products Import 02/10/01 - 11/30/02 77.09
& Export Corporation a.k.a. Zhejiang Native Produce
& Animal By-Products Import & Export Group
Corporation........................................
PRC-wide Entity (including Kunshan, Henan, and High 02/10/01 - 11/30/02 183.80
Hope)..............................................
----------------------------------------------------------------------------------------------------------------
For details on the calculation of the antidumping duty weighted-
average margin for Zhejiang, see the Analysis Memorandum for the
Preliminary Results of the First Administrative Review of the
Antidumping Duty Order on Honey from the People's Republic of China,
dated December 10, 2003. A public version of this memorandum is on file
in the CRU.
Assessment Rates
Pursuant to section 351.212(b), the Department calculates an
assessment rate for each importer of the subject merchandise. Upon
issuance of the final results of this review, if any importer-specific
assessment rates calculated in the final results are above de minimis
(i.e., at or above 0.50 percent), the Department will issue
appraisement instructions directly to CBP to assess antidumping duties
on appropriate entries by applying the assessment rate to the entered
value of the merchandise. For assessment purposes, we calculated
importer-specific assessment rates for the subject merchandise by
aggregating the dumping duties due for all U.S. sales to each importer
and dividing the amount by the total quantity of the sales to that
importer. If these preliminary results are adopted in our final results
of review, we will direct CBP to assess the resulting rate against the
total quantity for the subject merchandise on each of Zhejiang's
importer's/customer's entries during the POR.
Cash-Deposit Requirements
The following cash-deposit rates will be effective upon publication
of the final results of this review for all shipments of honey from the
PRC entered, or withdrawn from warehouse, for consumption on or after
publication date, as provided for by section 751(a)(2)(C) of the Act:
(1) for subject merchandise exported by Zhejiang, the cash-deposit rate
will be that established in the final results of this review, except if
the rate is less than 0.50 percent and, therefore, de minimis within
the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit
rate will be zero; (2) for previously investigated or reviewed
companies not listed above that have separate rates, the cash-deposit
rate will continue to be the company-specific rate published for the
most recent period (except for Kunshan, Henan, and High Hope, whose
cash-deposit rates have changed in this review to the PRC-wide entity
rate as noted below); (3) the cash-deposit rate for all other PRC
exporters (including Kunshan, Henan, and High Hope) will be the ``PRC-
wide'' rate established in the final results of this review; and (4)
the cash deposit rate for all other non-PRC exporters will be the rate
applicable to the PRC exporter that supplied that exporter.
These deposit requirements, when imposed, shall remain in effect
until publication of the final results of the next administrative
review.
Schedule for Final Results of Review
The Department will disclose calculations performed in connection
with the preliminary results of this review within five days of the
date of publication of this notice in accordance with section
351.224(b) of the Department's regulations. Any interested party may
request a hearing within 30 days of publication of this notice in
accordance with section 351.310(c) of the Department's regulations. Any
hearing would normally be held 37 days after the publication of this
notice, or the first workday thereafter, at the U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230. Individuals who wish to request a hearing must submit a written
request within 30 days of the publication of this notice in the Federal
Register to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, Room 1870, 14th Street and Constitution Avenue,
NW, Washington, DC 20230. Requests for a public hearing should contain:
(1) the party's name, address, and telephone number; (2) the number of
participants; and (3) to the extent practicable, an identification of
the arguments to be raised at the hearing.
Unless otherwise notified by the Department, interested parties may
submit case briefs within 30 days of the date of publication of this
notice in accordance with section 351.309(c)(ii) of the Department's
regulations. As part of the case brief, parties are encouraged to
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations, and cases cited. Rebuttal briefs, which must
be limited to issues raised in the case briefs, must be filed within
five days after the case brief is filed. If a hearing is held, an
interested party may make an affirmative presentation only on arguments
included in that party's case brief and may make a rebuttal
presentation only on arguments included in that party's rebuttal brief.
Parties should confirm by telephone the time, date, and place of the
hearing within 48 hours before the scheduled time. The Department will
issue the final results of this review, which will include the results
of its analysis of issues raised in the briefs, not later than 120 days
after the date of publication of this notice.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under section 351.402(f) of the Department's
regulations to file a certificate regarding the reimbursement of
antidumping duties prior to liquidation of the relevant entries during
these review periods. Failure to comply with this requirement could
result in the Secretary's presumption that reimbursement of antidumping
duties occurred and the subsequent assessment of double antidumping
duties.This administrative review and this notice are published in
accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.
Dated: December 10, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-31017 Filed 12-15-03; 8:45 am]