[Federal Register: July 16, 2004 (Volume 69, Number 136)]
[Notices]
[Page 42654-42672]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr16jy04-31]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-893]
Notice of Preliminary Determination of Sales at Less Than Fair
Value, Partial Affirmative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain Frozen
and Canned Warmwater Shrimp From the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: July 16, 2004.
FOR FURTHER INFORMATION CONTACT: James C. Doyle or Alex Villanueva,
Import Administration, International Trade Administration, U.S.
Department of Commerce, 14th Street and Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-0159, or 482-3208,
respectively.
Preliminary Determination
We preliminarily determine that certain frozen and canned warmwater
shrimp from the People's Republic of China (``PRC'') is being, or is
likely to be, sold in the United States at less than fair value
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as
amended (``the Act''). The estimated margins of sales at LTFV are shown
in the ``Suspension of Liquidation'' section of this notice.
Interested parties are invited to comment on this preliminary
determination. We will make our final determination not later than 135
days after the date of publication of this preliminary determination.
Case History
On December 31, 2003, the Ad Hoc Shrimp Trade Action Committee, an
ad hoc coalition representative of U.S. producers of frozen and canned
warmwater shrimp and harvesters of wild-caught warmwater shrimp
(hereafter known as, the ``Petitioners'') filed, in proper form,
petitions on imports of certain frozen and canned warmwater shrimp from
Brazil, Ecuador, India, Thailand, the PRC, and the Socialist Republic
of Vietnam (``Vietnam''), filed in proper form by. On January 12, 2003,
the Petitioners filed amendments to the petitions.
On January 8, 2004, the Department requested additional information
about the petition from the Petitioners.
On January 12, 2004, the Coalition of Shrimp Exporters/Producers of
South China (the ``PRC Shrimp Coalition''), Allied Pacific Group \1\,
the National Chamber of Aquaculture of Ecuador (``Expalsa''), the Thai
Frozen Foods Association (``TFFA''), the Vietnam Association of Seafood
Exporters and Producers (``VASEP''), the Vietnamese Shrimp Committee
(``VSC''), the Association of Brazilian Shrimp Producers, and the
Seafood Exporters'Association of India (``SEAI'') submitted comments
regarding domestic industry support. On January 13, 2004, the
Department requested that all interested parties submit comments on the
Petitioners' calculation of industry support.
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\1\ Allied Pacific (H.K.) Co., Ltd.; Allied Pacific Aquatic
Products (Zhanjiang) Co., Ltd.; Allied Pacific Food (Dalian) Co.,
Ltd.; and Allied Pacific Aquatic Products (Zhongshan) Co., Ltd.; and
King Royal Investments, Ltd. (collectively, ``Allied Pacific
Group'').
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On January 13, 2004, the Petitioners filed a supplement to the
petition.
On January 15, 2004, the Department received affidavits in support
of the Petitioners' calculation of industry support. On January 15,
2004, the Respondents submitted additional comments regarding domestic
industry support. On January 16, 2004, the Petitioners submitted
rebuttal comments to the Respondents' January, 15, 2004 comments
regarding industry support.
On January 16, 2004, the Louisiana Shrimp Association (``LSA'')
filed comments regarding the petitions.
On January 20, 2004, the Petitioners submitted supplemental
information to the petition and revised comments to their January 16,
2004, submission.
On January 20, 2004, the Department initiated antidumping duty
investigations on certain frozen and canned warmwater shrimp from
Brazil, Ecuador, India, Thailand, the PRC and Vietnam. See Notice of
Initiation of Antidumping Duty Investigations: Certain Frozen and
Canned Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the
People's Republic of China and the Socialist Republic of Vietnam
(``Initiation Notice'') 69 FR 3876 (January 27, 2004). On January 20,
2004, the Department notified the International Trade Commission
(``ITC'') of the antidumping investigation initiation and the intent to
publish in the Federal Register a notice of such initiation.
Post-Initiation General Case Issues and Letters From Outside Parties
On February 4, 2004, the Petitioners filed an amendment to the
petition adding Versaggi Shrimp Corporation and Indian Ridge Shrimp
Company as petitioners.
On February 10, 2004, the Department issued initiation instructions
to U.S. Customs and Border Protection (``CBP'').
On March 2, 2004, the ITC made an affirmative preliminary
determination in the antidumping investigation and published its report
on such determination. See Certain Frozen or Canned Warmwater Shrimp
and Prawns from Brazil, China, Ecuador, India, Thailand and Vietnam
(``ITC Injury Notice'') 69 FR 9842 (March 2, 2004).
On March 11, 2004, the Department sent the Commercial Secretary at
the Embassy of China notice of the initiation of an antidumping
investigation as well as the questionnaires sent to all Respondents.
On May 24, 2004, the Department published in the Federal Register a
notice of the postponement of the preliminary determination for this
antidumping duty investigation. See Notice of Postponement of
Preliminary Determination of Antidumping Duty Investigations: Certain
Frozen and Canned Warmwater Shrimp from Brazil (A-353-838), Ecuador (A-
331-802), India (A-533-840), Thailand (A-549-822), PRC (A-570-893) and
Vietnam (A-503-802 \2\), 69 FR 29509 (May 24, 2004) (``Postponement
Notice'').
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\2\ The Department inadvertently listed case number A-503-882 as
Vietnam's case number in the Postponement Notice. The correct case
number for Vietnam is A-552-802.
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On June 15, 2004, the Petitioners filed comments on the
Respondents' request to postpone the final determination.
CONNUM Comments
On January 28, 2004, the Department requested comments from
interested parties regarding the appropriate product characteristic
criteria for the investigation matching hierarchy for comparing the
export price to normal value.
[[Page 42655]]
On February 4, 2004, the Department received model match comments
from the VSC \3\; TFFA \4\; the PRC Shrimp Coalition \5\; Camara
Nacional de Acuacultura (``CNA''); Union Frozen Products Co., Ltd.
(``UFP''); SEAI; the Marine Products Export Development Authority
(``MPEDA''); and the Petitioners.
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\3\ Minh Phu Seafood Corporation (``Minh Phu''); Kim Anh Co.,
Ltd. (``Kim Anh''); Minh Hai Joint-Stock Seafoods Processing Company
(``Seaprodex Minh Hai''); Camau Frozen Seafood Processing Import
Export Corporation (``Camimex''); Can Tho Animal Fisheries Product
Processing Export Enterprise (``Cafatex''); Cai Doi Vam Seafood
Import Export Company (``Cadovimex''); Sao Ta Foods Joint Stock
Company (``Fimex VN''); Viet Hai Seafood Company (``Vietnam
FishOne''); Kiengiang Seafood Import Export Company (``Kisimex'');
Soc Trang Aquatic Products and General Import Export Company
(``Stapimex''); Coastal Fisheries Development Corporation
(``Cofidec''); Phuong Nam Co., Ltd.; Cuu Long Seaproducts Company
(``Cuulong Seapro''); Minh Hai Export Frozen Seafood Processing
Joint-Stock Company (``Jostoco''); Can Tho Agriculture and Animal
Products Import Export Company (``Cataco''); Nha Trang Fisheries
Co.; Nhatrang Seaproduct Company (``Nhatrang Seafoods''); Minh Hai
Seaproducts Import and Export Corporation (``Seaprimex''); Thuan
Phuoc Seafoods and Trading Corporation; Nhatrang Fisheries Joint
Stock Company (``Nhatrang Fishco''); Danang Seaproducts Import
Export Company (``Seaprodex Danang''); C.P. Vietnam Livestock; UTXI
Aquatic Products Processing Company; Viet Nhan Company; Investment
Commerce Fisheries Corporation (``Incomfish''); Vinhloi Import
Export Company (``Vimexico''); Bac Lieu Fisheries; Matourimex Ho Chi
Minh City Branch (Tourism Material and Equipment Company); Viet
Foods Co., Ltd.; Truc An Company; Camranh Seafoods Processing
Enterprise PTE (``Camranh Seafoods''); Hai Thuan Comapny; Phu Cuong
Comapny; Ngoc Sinh Company; Aquatic Product Trading Company
(``APT''); Aquatic Songhuong Campany; Hanoi Seaproducts Import
Export Corp. (``Seaprodex Hanoi''); An Giang Fisheries Import-Export
Joint Stock Company (``Agifsih'').
\4\ Andaman Seafood Company Limited (``Andaman''); Chantaburi
Seafoods Limited (``CSC''); Pakfood PLC (``PF''); Thailand Fishery
Cold Storage Public Company Limited (``TFC''); Thai Royal Frozen
Food Co., Ltd. (``TRF'').
\5\ Yihua Aquatic Products Co., Ltd.; Yangjiang City Yelin;
Hoitat Quick Frozen Co., Ltd.; Yelin (Hong Kong) Inc.; Zhejiang
Pingyang Xinye Aquatic Products Co., Ltd.; Taizhou Zhonghua
Industrial Co. Ltd.; Taizhou Lingyang Aquatic Products Co., Ltd.;
North Supreme Seafood (Zhejiang) Co. Ltd.; Zhejiang Cereals, Oils
and Foodstuffs Import and Export Co., Ltd.; AIS AQUA Foods Inc.;
Zhanjiang CNF Sea Products Engineering Ltd.; Beihai Zhengwu Industry
Co., Ltd.; Hainan Jiadexin Aquatic Products Co., Ltd.; Yantai Wei-
Cheng Food Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co.,
Ltd.; Zhenjiang Evergreen Aquatic Products Science and Technology
Co., Ltd.; Zhanjiang Jebshin Seafood Limited; Power Dekor Group Co.,
Ltd.; Shanghai Linghai Fisheries Economic and Trading Co., Ltd.;
Zhoushan Diciyuan Aquatic Products Co., Ltd.; Zhoushan Guangzhou
Aquatic Products Co., Ltd.; Zhoushan Huading Aquatic Products Co.,
Ltd.; Siahsan Baofa Aquatic Products Co., Ltd.; Shoushan Xi'an
Aquatic Products Co., Ltd.; Zhejiang Zhenglong Food Co., Ltd.;
Zhoushan Haichang Food Co., Ltd.; Zhejiang Xintianjiu Sea Products
Co., Ltd.; Zhoushan Zhenyang Develop Co., Ltd.; Zhoushan Guotai
Aquatic Products Co., Ltd.; Zhoushan Jingzhou Aquatic Products Co.,
Ltd.; Zhoushan Provisions and Oil Food Export and Import Co., Ltd.;
Putuo Fahua Aquatic Products Co., Ltd.; Zhoushan International Trade
Co., Ltd.; and Shan Tou Long Feng Foodstuff Co.
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On February 9, 2004, VSC and TFFA filed replies to the Petitioners'
February 4, 2004, model match submissions. On February 10, 2004, CNA
submitted a reply to the Petitioners February 14, 2004, model match
comments.
On February 11, 2004, the Petitioners filed rebuttal comments in
response to model matching comments submitted by respondents in the
investigation. On February 17, 2004, the Department requested comments
from all interested parties on product characteristic reporting.
On February 18, 2004, the PRC Shrimp Coalition, Yelin, and Allied
Pacific Group requested an extension of the time to comment on draft
product characteristics. On February 18, 2004, the Department extended
the deadline for submission of comments on draft product
characteristics until February 23, 2004.
On February 18, 2004, SEAI submitted model match comments. On
February 18, 2004, the Department alerted the Petitioners and
interested parties to an error in the draft product characteristics. On
February 19, 2004, the UFP, CNA, and TFFA submitted model match
comments.
On February 23, 2004, Allied Pacific Group submitted comments on
the proposed CONNUM fields.
On February 23, 2004, VSC, the Brazilian shrimp exporters, and the
Petitioners submitted model match comments.
On March 9, 2004, the Department informed all interested parties of
revised reporting requirements.
On June 7, 2004, the Department received Rubicon's \6\, CNA's,
VSC's, EMPAF's, and the Petitioner's comments on product comparison
methodology.
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\6\ Andaman Seafood Co., Ltd.; Chanthaburi Seafoods Co., Ltd.;
and Thailand Fishery Cold Storage Public Co., Ltd.
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Scope Comments
On February 17, 2004, the Department received scope comments from
the Ocean Duke Corporation (``Ocean Duke'') requesting that the
Department confirm that ``dusted shrimp,'' ``battered shrimp,'' and
``seafood mix,'' not be covered by the scope of the investigation. On
February 17, 2004, LSA filed scope comments. On February 27, 2004,
Rubicon submitted comments in support of Ocean Duke's comments
concerning the status of dusted and battered shrimp. On March 4, 2004,
Ocean Duke requested scope clarification regarding dusted shrimp,
battered shrimp, and seafood mix.
On March 12, 2004, the Petitioners filed their reply to LSA's scope
comments. On March 16, 2004, the Petitioners filed their reply to
various other scope comments.
On April 16, 2004, Ocean Duke submitted additional scope comments
discussing the concept that dusted and battered shrimp fall within the
meaning of breaded shrimp.
On May 6, 2004, SEAI filed comments on product coverage.
On May 10, 2004, Exportadora de Alimentons S.A. (``Expalsa'') filed
scope comments from Expalsa.
On May 19, 2004, the Petitioners submitted scope comments regarding
dusted and battered shrimp, organic shrimp and warmwater salad shrimp,
and the species Macrobachium rosenbergii.
On June 9, 2004, the Department received certifications of factual
accuracy not found in time for filing with the American Breaded Shrimp
Processors Association's (``ABSPA'') June 7, 2004, request for a scope
determination.
On June 4, 2004, Ocean Duke and Expalsa submitted replies to the
Petitioners' May 19, 2004, scope comments.
Quantity and Value (Q&V) Questionnaires
On January 29, 2004, the Department sent a letter to all interested
parties requesting the quantity and value of all exports to the United
States. On January 29, 2004, the Department notified the Commercial
Secretary at the Embassy of the PRC of the initiation of an antidumping
duty investigation and its request for quantity and value information
with regard to exports to the United States. On February 3, 2004, the
PRC Shrimp Coalition and Allied Pacific Group requested an extension of
the response time to the Department's Q&V questionnaire. On February 4,
2004, the Department extended the deadline for filing Q&V data until
February 9, 2004.
On February 9, 2004, the Department received volume and value data
information from Allied Pacific Group; Shantou Yuexing Enterprise
Company; Shantou Sez Xu Hao Fastness Freeze Aquatic Factory Co., Ltd.;
Shantou Long Feng Foodstuffs Co., Ltd.; Meizhou Aquatic Products Quick-
Frozen Industry Co., Ltd. Shengping Shantou; Shantou Jinhang Aquatic
Industry Co., Ltd; Zhangjiang Universal Seafood Co., Ltd.; Zhanjiang
Guolian Aquatic Products Co., Ltd. (``Zhanjiang''); ZJ CNF Sea Products
Engineering Ltd.; Shanghai Linghai Fisheries Economic and Trading Co.,
Ltd.; Zhoushan Cereals Oils and
[[Page 42656]]
Foodstuffs Import and Export Co., Ltd.; Pingyang Xinye Aquatic Products
Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co., Ltd.; Zhoushan
Diciyuan Aquatic Products Co., Ltd.; Zhejiang Evernew Seafood Co.,
Ltd.; Taizhou Zhonghuan Industrial Co., Ltd.; Zhejiang Cereals Oils and
Foodstuffs Import and Export Co., Ltd.; Zhoushan Putuo Huafa Sea
Products Co., Ltd.; Zhoushan Industrial Co., Ltd.; North Supreme
Seafood (Zhejiang) Co., Ltd.; Zhoushan Jingzhou Aquatic Foods Co.,
Ltd.; Zhoushan Haichang Food Co., Ltd.; Zhoushan Zhenyang Developing
Co., Ltd.; Zhejiang Taizhou Lingyang Aquatic Products Co., Ltd.;
Zhoushan Lizou Fishery Co., Ltd.; Zhoushan Huading Seafood Co., Ltd.;
Yantai Wei-Cheng Food Co., Ltd.; Zhoushan Xifeng Aquatic Co., Ltd.;
Kaifeng Ocean Sky Industry Co., Ltd.; Beihai Zhengwu Industry Co.,
Ltd.; Zhejiang Daishan Baofa Aquatic Product Co., Ltd.; Zhejiang
Zhenglong Foodstuffs Co., Ltd.; Jinfu Trading Co., Ltd.; Zhoushan
Juntai Foods Co., Ltd.; as exporter with Zhoushan Guontai Fisheries and
Yelin Enterprise Company. Hong Kong as exporter with (1) Yangjiang City
Hoitat Quick Frozen Seafood Co., Ltd.; (2) Fuqing Yihua Aquatic
Products Ltd.; and (3) Yelin Frozen Seafood Co. As affiliated
suppliers; and 22 producers/exporters.
On February 10, 2004, the Department received Q&V data corrections
from Shantou Yuexing Enterprise Company; Shantou Long Feng Foodstuffs
Co., Ltd.; Shantou Sez Xu Hao Fastness Freeze Aquatic Factory Co.,
Ltd.; and Meizhou Aquatic Products Quick-Frozen Industry Co., Ltd.
Shengping Shantou.
On February 12, 2004, the Department sent a supplemental
questionnaire to Allied Pacific Group regarding their Q&V information.
On February 13, 2004, the Department received clarification from
Allied Pacific Group and Yelin Enterprise Co. Hong Kong, Yangjiang City
Yelin Hoitat Quick Frozen Seafood Co., Ltd., Fuqing Yihua Aguatic
Products Co., Ltd., and Yelin Frozen Seafood Co. (collectively
``Yelin'') regarding their Q&V information.
On February 17, 2004, Zhanjiang Regal Integrated Marine Resources
Co., Ltd.''s submitted Q&V data.
On February 23, 2004, the Department issued its respondent
selection memorandum, selecting Allied Pacific Group; Yelin; Shantou
Red Garden Foodstuff Co., Ltd. (``Red Garden''); and Zhanjiang Guolian
Aquatic Products Co., Ltd. (``ZG'') as mandatory respondents. See
Memorandum to the File from James C. Doyle, Program Manager, to Edward
C. Yang, Director of Office IX, Antidumping Duty Investigation of
Certain Frozen and Canned Warmwater Shrimp from the People'S Republic
of China: Selection of Respondents (``Respondent Selection Memo'').
On March 1, 2004, Meizhou Aquatic Products Quick-Frozen Industry
Co., Ltd. (``Meizhou'') submitted a request regarding selection of
mandatory and voluntary respondents.
Mandatory Respondents
On February 25, 2004, the Department sent Section A questionnaires
to the Respondents.
On March 1, 2004, the Department issued sections C, D, and E of the
Department's non-market economy (``NME'') questionnaire to the
Respondents.
On March 8, 2004, Allied Pacific Group and Yelin requested an
extension of time to respond to Sections A, C, and D of the
questionnaire.
On March 10, 2004, the Department changed to March 31, 2004 the
deadline for all Respondents to respond to the Section A questionnaires
and to April 21, 2004, for Sections C, D, and E.
On April 7, 2004, the Petitioners submitted comments on the
Respondents' Section A questionnaire responses.
On April 13, 2004, the Department issued supplemental Section A
questionnaires to the Respondents.
On April 14, 2004, Allied Pacific Group requested an extension of
the deadline to answer the Section A supplemental questionnaire.
On April 19, 2004, the Department granted an extension to May 4,
2004 to Allied Pacific Group to submit its supplemental Section A
questionnaire response.
On April 21, 2004, the Respondents submitted Section C and D
responses.
On April 21, 2004, Yelin requested an extension of time to respond
to the supplemental Section A questionnaire. The Department extended
the deadline until May 4, 2004. On April 22, 2004, ZG and Red Garden
requested an extension of time to respond to the supplemental Section A
questionnaire. The Department extended the deadline until May 4, 2004.
On May 4, 2004, the Respondents submitted supplemental Section A
questionnaires, and the Petitioners submitted comments on the
Respondents' Section C and D questionnaire responses.
On May 10, 2004, the Petitioners submitted proposed additional
questions for and comments on the Respondents' Section A questionnaire
responses.
On May 11, 2004, Red Garden filed a Section E questionnaire
response.
On May 17, 2004, the Department sent the Respondents supplemental
questionnaires addressing deficiencies in their Section A questionnaire
responses.
On May 20, 2004, Allied Pacific Group requested an extension of
time to respond to the Department's second Section A supplemental
questionnaire.
On May 27, 2004, Yelin requested an extension of time to respond to
the supplemental Section A, C, and D questionnaires. On May 27, 2004,
Red Garden requested an extension of time to respond to the
supplemental Section C and D questionnaires.
On May 27, 2004, the Department extended to June 8, 2004, the
deadline for Allied Pacific and Yelin to submit their responses to
Sections A, C and D.
On May 28, 2004, the Department sent a letter to Red Garden with a
supplemental Section A questionnaire.
On May 28, 2004, ZG requested an extension of time to respond to
the supplemental Sections A, C, and D questionnaires.
On May 28, 2004, the Department sent a letter to Red Garden
addressing certain deficiencies in their Section A, C, and E
questionnaire responses and requesting a correction of such
deficiencies.
On June 1, 2004, the Department extended the deadline for ZG to
submit its response to the Section A, C, and D supplemental
questionnaires until June 8, 2004.
On June 8, 2004, Yelin submitted its second supplemental
questionnaire responses.
On June 8, 2004, Mingfeng requested an extension of time to respond
to the supplemental Section A questionnaire. On June 9, 2004, the
Department granted Mingfeng an extension to June 16, 2004.
On June 9, 2004, Red Garden requested a ten-day extension to
respond to its supplemental Section E questionnaire.
On June 10, 2004, the Department received supplemental Section A
questionnaire responses from ZG, Yelin, and Allied Pacific Group.
On June 16, 2004, Mingfeng submitted its second supplemental
Section A response.
Section A Respondents
As noted above, on February 23, 2003, the Department selected its
mandatory respondents. On March 8, 2004, the Department received a
request from companies who wished to submit voluntary Section A
questionnaires
[[Page 42657]]
responses (hereafter known as ``Section A Respondents'').
On March 17, 2004, the Department sent a letter to Seatech
Corporation rejecting its Section A questionnaire response.
On March 17, 2004, the Department received Dalian Sea-Rich's and
Hainan Golden Spring's Section A questionnaire responses.
On March 29, 2004, the Department received Section A questionnaire
responses from: Shantou Ruiyuan; Go-Harvest; Xuwen Hailang; Fuqing
Dongwei; Zhanjiang Runhai; Leizhou Zhulian; Shantou Ocean; Chenghai
Nichi; Newpro; Shantou Wanya; Gallant; Fuqing Longwei; Shantou/Chaoyang
Qiaofeng; Shantou Oceanstar; Shantou Freezing; Shantoy Yuexing;
Evergreen; and Dongri Aquatic. On March 30, 2004, Shanghai Taoen
submitted a Section A questionnaire response. On March 31, 2004, the
Department received Section A questionnaire responses from: Mingfeng;
Beihai Zhengwu; Zhoushan Diciyuan; ZJ CNF Sea Products; Zhoushan Putuo
Huafa; Yantai Wei-Cheng; Zhanjiang Bobogo; Asian Seafoods; Zhoushan
Industrial; Zhejiang Cofiec; Shanghai Linghai; Zhoushan Cereal Oils;
Zhejiang Zhenglong; Zhoushan Huading; Zhanjiang Guolian; Yelin
Enterprise; Kainfeng Ocean Sky; Hainan Fruit Vegetable Food Allocation;
Jinfu Trading; Taizhou Zhonghuan; Universal; Zhejiang Daishan Baofa;
Shantou Red Garden; Longfeng; Savvy Seafood; Zhoushan Zhenyang;
Zhejiang Taizhou Lingyang; Zhoushan Xifeng; Zhoushan Lizhou; Zhoushan
Haiching; Meizhou; Pingyang Xinye; Zhejiang Evernew; Shantou Sez Xuaho;
and Allied Pacific Group.
On April 12, 2004, the Department issued a letter to Seatech
Corporation requesting correction of deficiencies in its Section A
response.
On April 13, 2004, Seatech Corporation requested an extension of
time to respond to the Section A questionnaire. On April 14, 2004, the
Department rejected Seatech Corporation's submission.
On May 24, 2004, the Department sent supplemental Section A
questionnaires to: Beihai Zhengwu; Zhoushan Cereals; Hainan Fruit;
Pingyang Xinye; Yantai Wei-Cheng; Zhanjiang Bobogo; Zhoushan Huading;
Zuwen Hailang; Zhanjiang Newpro; Dalian; DAP; Shantou Qiafeng; and
Zhoushan Lizhou.
On May 26, 2004, the Department sent a letter to ShantouYuexing
Enterprise; Savvy Seafood Inc; Shantou Longfeng Foodstuff; Zhanjiang
Runhai Foods Co., Ltd.; Zhanjiang Universal Seafoods; Meizhou Aquatic
Products Quick-Frozen; and Shantou Sez Xu Hao requesting additional
information for certain areas of their questionnaire responses. On May
26, 2004, the Department issued supplemental Section A questionnaires
to: Shantou Ruiyuan; Shantou Oceanstar; Fuqing Longwei; Asian
(Zhanjiang); Fuqing Dongwei; Hainan Golden; Zhejiang Zhenglong;
Zhoushan Putuo; Kaifing Ocean Sky; Shantou Freezing; Shanghai Taoen;
and Zhoushan Diciyuan.
On May 26, 2004, the Department received a letter from Beihai
Zhengwu Industry Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co.,
Ltd.; Pingyang Zinye Aquatic Products Co., Ltd.; Yantai Wei-Cheng Food
Co., Ltd.; Zhoushan Cereals Oils and Foodstuffs Import and Export Co.,
Ltd.; Zhoushan Huading Seafood Co., Ltd.; and Zhoushan Lizhou Fishery
Co., Ltd. requesting an extension of time for their supplemental
Section A responses.
On May 27, 2004, the Department issued supplemental Section A
questionnaires to: Shanghai Linghai; Jinfu; Zhoushan; Zhejiang Evernew;
Shantou Jinhang; and Leizhou Zhulian.
On May 27, 2004, the Department extended the deadline to June 8,
2004 for: Beihai Zhengwu Industry Co., Ltd.; Hainan Fruit Vegetable
Food Allocation Co., Ltd.; Pingyang Zinye Aquatic Products Co., Ltd.;
Yantai Wei-Cheng Food Co., Ltd.; Zhoushan Cereals Oils and Foodstuffs
Import and Export Co., Ltd.; Zhoushan Huading Seafood Co., Ltd.; and
Zhoushan Lizhou Fishery Co., Ltd.
On May 28, 2004, the Department received a letter from Zhejiang
Zhenglong Foodstuffs Co., Ltd.; Zhoushan Diciyuan Aquatic Products Co.,
Ltd; Zhoushan Putuo Huafa Sea Products Co., Ltd.; Jinfu Trading Co,
Ltd.; Zhoushan Industrial Co., Ltd.; and Zhejiang Evernew Seafood Co.,
Ltd. requesting an extension for the supplemental Section A
questionnaire response.
On May 28, 2004, the Department received a request from Bobogo,
Savvy, Sez Xu, and Asian for an extension of time to submit responses
to supplemental Section A questionnaires.
On June 1, 2004, the Department extended the deadline to June 8,
2004, for Bobogo, Savvy, Sez Xu, and Asian to respond to the Section A
supplemental questionnaires.
On June 2, 2004, the Department sent letters to: Taizhou Zhonghuan
Industrial; Zhanjiang Go-Harvest Aquatic; Shantou Wanya Food Factory;
Zhoushan Zhenyang Developing; Shantou Jinyuan District Mingfeng;
Zhanjiang Evergreen Aquatic; Chenghai Nichi Lan Foods; Zhejiang Daishan
Baofa Aquatic; Zhoushan Xifeng Aquatic; Shantou Ocean Freezing;
Zhoushan Haichang Food; Zhejian Cereals, Oils and Foodstuffs; ZJ CNF
SEA Products Engineering; and Gallant Ocean (Lianjiang) addressing
certain deficiencies in their Section A supplemental responses. On June
2, 2004, Dalian and Hainan Golden requested an extension of time to
respond to the supplemental Section A questionnaires. The Department
extended the deadline for Dalian until June 8, 2004, and until June 9,
2004 for Hainan Golden.
On June 2, 2004, Shantou Long Feng Foodstuff Co., Ltd. requested an
extension of the deadline to respond to the supplemental Section A
questionnaire. On June 2, 2004, Meizhou and Universal requested an
extension of the deadline to respond to the supplemental Section A
questionnaires.
On June 2, 2004, the Department extended the deadline for Zhejiang
Zhenglong Foodstuffs Co., Ltd.; Zhoushan Diciyuan Aquatic Products Co.,
Ltd.; Zhoushan Putuo Huafa Sea Products Co., Ltd.; and Kaifeng Ocean
Sky Industry Co., Ltd. until June 9, 2004, and until June 10, 2004, for
Shanghai Linghai Fisheries Economic and Trading Co., Ltd.; Jinfu
Trading Co., Ltd.; Zhoushan Industrial Co., Ltd.; and Zhejiang Evernew
Seafood Co., Ltd.
On June 2, 2004, the Department extended the deadline for Shantou
Long Feng Foodstuff Co., Ltd. until June 9, 2004. On June 3, 2004, the
Department revised that deadline and determined that no further
extensions may be granted.
On June 4, 2004, the Department received a request from ZJ CNF Sea
Products Engineering Ltd.; CNF Zhangjiang (Tong Lian) Fisheries Co.,
Ltd., Zhejian Cereals Oils and Foodstuffs Import and Export Co., Ltd.;
Zhejiang Taizhou Lingyang Aquatic Products Co.; Zhoushan Juntai Foods
Co., Ltd.; Zhoushan Haichang Food Co., Ltd.; Zhoushan Xifeng Aquatic
Co., Ltd.; Taizhou Zhonghuan Industrial Co., Ltd.; Zhoushan Zhenyang
Developing Co., Ltd.; and Zhejiang Daishan Baofa Aquatic Product Co.,
Ltd., to extend their time for responding to the Section A
questionnaire. The Department granted an extension for the companies
until June 16, 2004.
On June 8, 2004, the Department received a request from Bobogo,
Savvy, Sez Xu, and Asian to extend the time to respond to the
supplemental Section A questionnaire. On June 8, 2004, the Department
received Dalian FTZ Sea-Rick's and Zhangjiang Goulian's
[[Page 42658]]
supplemental Section A questionnaires responses.
On June 8, 2004, the Department received Section A questionnaire
responses from Hainan Fruit Vegetable Food Allocation Company; Yantai
Wei-Cheng; Pingyang Xinye; Beihai Zhengwu Industry Company; Zhoushan
Hauding; and Zhoushan Lizhou.
On June 9, 2004, the Department received supplemental Section A
questionnaire responses from: Meizhou; Hainan Golden Spring; Long Feng;
Kaifeng Ocean Sky Industry Company; Zhoushan Putuo Huafa Sea Products
Company; Zhoushan Diciyuan Aquatic Products; and Bobogo.
On June 10, 2004, the Department received supplemental Section A
questionnaire responses from: Shantou Xuhao; Zhejiang Evernew; Savvy;
Shanghai Linghai; Asian; Jinfu; and Zhoushan.
On June 10, 2004, the Department extended the filing date for
responding to supplemental questionnaires until June 9, 2004, for
Bobogo and until June 10, 2004, for Savvy, Sez Xu, and Asian.
On June 16, 2004, the Department received supplemental Section A
questionnaire responses from: ZJ CNF Sea Products/CNG Zhangjiang
Fisheries; Zhejiang Cereals, Oils and Foodstuffs; Zhejiang Daishan
Baofa Aquatic Product Company; Zhoushan Haiching; Zhejiang Taizhou
Lingyang Aquatic Products; Zhoushan Xifeng; Zhoushan Zhenyang; and
Taizou Zhonghuan.
On June 4, 2004, the Section A companies requested a one-day
extension of time to respond to supplemental Section A questionnaires.
The Department granted the request; however, it stated that no further
requests would be granted.
Critical Circumstances Allegation
On May 19, 2004, the Petitioners requested an expedited critical
circumstances finding.
On May 26, 2004, the Department sent a letter to Red Garden
requesting that it report monthly shipment data.
On May 28, 2004, the Department sent letters to Yelin, Red Garden,
Allied Pacific, and Zhanjiang Guolian Aquatic Products stating that
they must report their monthly shipment data for 2001, 2002, 2003 and
January through May 2004.
On June 14, 2004, Yelin responded to the Petitioners' critical
circumstances allegations.
On June 14, 2004, ZG, Ming Feng, Red Garden, and Long Feng
submitted critical circumstances information. On June 14, 2004, Allied
Pacific responded to the Petitioners' critical circumstances
allegation.
On June 17, 2004, Allied Pacific submitted corrections to its June
14, 2004, critical circumstances submission.
Surrogate Country and Factors
On March 12, 2004, the Department solicited comments regarding
surrogate country selection from all interested parties.
On March 26, 2004, Allied Pacific Group submitted comments on
surrogate country selection.
On April 26, 2004, Allied Pacific Group requested an extension of
time to submit surrogate value data.
On May 4, 2004, the Petitioners requested an extension of time to
submit surrogate value data. On May 5, 2004 the Department granted an
extension from May 7, 2004, to May 21, 2004, for all parties to submit
surrogate value data.
On May 21, 2004, the Petitioners and the Respondents submitted
surrogate value data.
On June 2, 2004, Yelin and Allied Pacific Group responded to the
Petitioners May 21, 2004, surrogate value submission.
On June 4, 2004, the Petitioners submitted comments on the
Respondents May 21, 2004, surrogate value submission.
On June 9, 2004, the Department selected the surrogate country.
On June 10, 2004, the Department sent supplemental questionnaires
to ZG, Allied Pacific, and Yelin concerning their surrogate value
submissions. On June 10, 2004, Yelin, ZG, and Allied Pacific requested
an extension of time to answer the Department's surrogate value
questionnaire.
On June 14, 2004, the Department extended to June 21, 2004, the
deadline for Yelin, ZG, and Allied Pacific to respond to the surrogate
value questionnaire.
On June 14, 2004, Allied Pacific requested an extension for the
surrogate value supplemental questionnaire response.
On June 15, 2004, the Respondents requested that the Department
seek additional surrogate value data. On June 29, 2004, Allied and
Yelin submitted comments regarding Petitioners' June 4, 2004, surrogate
valuation comments.
Headless, Shell-on (``HLSO'') Issue
On May 21, 2004, the Department sent a letter to all interested
parties requesting comments on the methodology to employ in making
product comparisons, where applicable, and performing margin
calculations for purposes of the preliminary determination.
On June 4, 2004, Red Garden submitted comments on HLSO comparison.
On June 8, 2004, Thai I-Mei, and its affiliated reseller, Ocean
Duke, submitted comments on the calculation methodology.
On June 10, 2004, Rubicon, UFP, and SEAI submitted comments
regarding the Petitioners' submission.
On June 15, 2004, the Petitioners submitted rebuttal comments
regarding the use of the HLSO count sizes.
Pre-Preliminary Determination Comments
On June 23, 2004, Petitioners submitted pre-preliminary
determination comments. On June 29, 2004, Allied and Yelin submitted
rebuttal comments to Petitioners' pre-preliminary comments. On June 30,
2004, Petitioners submitted comments regarding Meizhou's reply to
Petitioners' June 23, 2004 comments and Petitioners submitted comments
regarding Allied and Yelin's June 29, 2004 comments.
Postponement of Final Determination
Section 735(a) of the Act provides that a final determination may
be postponed until no later than 135 days after the date of the
publication of the preliminary determination if, in the event of an
affirmative preliminary determination, a request for such postponement
is made by exporters who account for a significant proportion of
exports of the subject merchandise or, in the event of a negative
preliminary determination, a request for such postponement is made by
the petitioners. Section 351.210(e)(2) of the Department's regulations
requires that requests by respondents for postponement of a final
determination be accompanied by a request for an extension of the
provisional measures from a four-month period to not more than six
months.
On June 28, 2004, the PRC Shrimp Coalition requested that, in the
event of an affirmative preliminary determination in this
investigation, the Department postpone its final determination until
135 days after the publication of the preliminary determination. In
addition, on July 1, 2004, Allied, Yelin, and ZG also requested that,
in the event of an affirmative preliminary determination in this
investigation, the Department postpone its final determination until
135 days after the publication of the preliminary determination. All
requests included a request to extend the provisional measures to not
more than six months after the publication of the
[[Page 42659]]
preliminary determination. Red Garden submitted a request to postpone
the final determination, however, Red Garden did not request to extend
the provisional measures to not more than six months after the
publication of the preliminary determination. Accordingly, because we
have made an affirmative preliminary determination and the requesting
parties account for a significant proportion of the exports of the
subject merchandise, we have postponed the final determination until no
later than 135 days after the date of publication of the preliminary
determination and are extending the provisional measures accordingly as
requested by the PRC Shrimp Coalition, Allied and Yelin. We note that
ZG's request is not applicable as ZG received a de minimis preliminary
determination.
Period of Investigation
The period of investigation (``POI'') is April 1, 2003, through
September 30, 2003. This period corresponds to the two most recent
fiscal quarters prior to the month of the filing of the Petition
(December 31, 2003). See 19 CFR 351.204(b)(1).
Scope of Investigation
The scope of this investigations includes certain warmwater shrimp
and prawns, whether frozen or canned, wild-caught (ocean harvested) or
farm-raised (produced by aquaculture), head-on or head-off, shell-on or
peeled, tail-on or tail-off,\7\ deveined or not deveined, cooked or
raw, or otherwise processed in frozen or canned form.
---------------------------------------------------------------------------
\7\ ``Tails'' in this context means the tail fan, which includes
the telson and the uropods.
---------------------------------------------------------------------------
The frozen or canned warmwater shrimp and prawn products included
in the scope of the investigations, regardless of definitions in the
Harmonized Tariff Schedule of the United States (``HTSUS''), are
products which are processed from warmwater shrimp and prawns through
either freezing or canning and which are sold in any count size.
The products described above may be processed from any species of
warmwater shrimp and prawns. Warmwater shrimp and prawns are generally
classified in, but are not limited to, the Penaeidae family. Some
examples of the farmed and wild-caught warmwater species include, but
are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn
(Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river
prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon),
redspotted shrimp (Penaeus brasiliensis), southern brown shrimp
(Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern
rough shrimp (Trachypenaeus curvirostris), southern white shrimp
(Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white
shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus
indicus).
Frozen shrimp and prawns that are packed with marinade, spices or
sauce are included in the scope of the investigations. In addition,
food preparations, which are not ``prepared meals,'' that contain more
than 20 percent by weight of shrimp or prawn are also included in the
scope of the investigations.
Excluded from the scope are (1) breaded shrimp \8\ and prawns
(1605.20.10.20); (2) shrimp and prawns generally classified in the
Pandalidae family and commonly referred to as coldwater shrimp, in any
state of processing; (3) fresh shrimp and prawns whether shell-on or
peeled (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in
prepared meals (1605.20.05.10); and (5) dried shrimp and prawns.
---------------------------------------------------------------------------
\8\ Pursuant to our scope determination on battered shrimp, we
find that breaded shrimp includes battered shrimp as discussed
below. See Memorandum from Edward C. Yang, Vietnam/NME Unit
Coordinator, Import Administration to Jeffrey A. May, Deputy
Assistant Secretary for Import Administration Antidumping
Investigation on Certain Frozen and Canned Warmwater Shrimp from
Brazil, Ecuador, India, Thailand, the Socialist Republic of Vietnam
and the Socialist Republic of Vietnam: Scope Clarification on Dusted
Shrimp and Battered Shrimp (``Dusted/Battered Scope Memo''), dated
July 2, 2004.
---------------------------------------------------------------------------
The products covered by this scope are currently classifiable under
the following HTSUS subheadings; 0306.13.00.03, 0306.13.00.06,
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18,
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40,
1605.20.10.10, 1605.20.10.30, and 1605.20.10.40. These HTSUS
subheadings are provided for convenience and for CBP purposes only and
are not dispositive, but rather the written descriptions of the scope
of these investigations is dispositive.
In accordance with the preamble to our regulations (see Antidumping
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997), we
set aside a period of time for parties to raise issues regarding
product coverage and encouraged all parties to submit comments within
20 calendar days of publication of the Initiation Notice. See
Initiation Notice 69 FR at 3877.
Throughout the 20 days and beyond, the Department received many
comments and submissions regarding a multitude of scope issues,
including: (1) Fresh (never frozen) shrimp, (2) Ocean Duke's seafood
mix, (3) salad shrimp sold in counts of 250 pieces or higher, (4)
Macrobrachium rosenbergii, organic shrimp, (5) peeled shrimp used in
breading, (6) dusted shrimp and (7) battered shrimp. On May 21, 2004,
the Department determined that the scope of these investigations
remains unchanged, as certain frozen and canned warmwater shrimp,
without the addition of fresh (never frozen) shrimp. See Memorandum
from Jeffrey A. May, Deputy Assistant Secretary for Import
Administration, AD/CVD Enforcement, Group III and Joseph A. Spetrini,
Deputy Assistant Secretary for Import Administration, AD/CVD
Enforcement, Group I to James J. Jochum, Assistant Secretary for Import
Administration Regarding Antidumping Investigations on Certain Frozen
and Canned Warmwater Shrimp from Brazil, Ecuador, India, the Socialist
Republic of Vietnam, Thailand, and the Socialist Republic of Vietnam:
Scope Determination Regarding Fresh (Never Frozen) Shrimp (``Fresh
Shrimp Memo''), dated May 21, 2004.
On July 2, 2004, the Department made scope determinations with
respect to Ocean Duke's seafood mix, salad shrimp sold in counts of 250
pieces or higher, Macrobrachium rosenbergii, organic shrimp and peeled
shrimp used in breading. See Memorandum from Edward C. Yang, Vietnam/
NME Unit Coordinator, Import Administration to Jeffrey A. May, Deputy
Assistant Secretary for Import Administration Antidumping Investigation
on Certain Frozen and Canned Warmwater Shrimp from Brazil, Ecuador,
India, Thailand, the Socialist Republic of Vietnam and the Socialist
Republic of Vietnam: Scope Clarification on Ocean Duke's Seafood Mix,
Salad Shrimp Sold in Counts of 250 Pieces or Higher, Macrobrachium
rosenbergii, Organic Shrimp and Peeled Shrimp Used in Breading (``Scope
Memo''), dated July 2, 2004. Based on the information presented by
interested parties, the Department determines that Ocean Duke's seafood
mix is excluded from the scope of this investigation; however, salad
shrimp sold in counts of 250 pieces or higher, Macrobrachium
rosenbergii, organic shrimp and peeled shrimp used in breading are
included within the scope of this investigation. See Scope Memo at 33.
Additionally, on July 2, 2004, the Department made a scope
determination with respect to dusted shrimp and
[[Page 42660]]
battered shrimp. See Dusted/Battered Scope Memo. Based on the
information presented by interested parties, the Department
preliminarily finds that while substantial evidence exists to consider
battered shrimp to fall within the meaning of the breaded shrimp
exclusion identified in the scope of these proceedings, there is
insufficient evidence to consider that shrimp which has been dusted
falls within the meaning of ``breaded'' shrimp. However, there is
sufficient evidence for the Department to be prepared to exclude this
merchandise from the scope of the order provided an appropriate
description can be developed. See Dusted/Battered Scope Memo at 18. To
that end, along with the previously solicited comments regarding
breaded and battered shrimp, the Department solicits comments from
interested parties which enumerate and describe a clear, administrable
definition of dusted shrimp. The Department considers these comments
would be helpful in its evaluation of the disposition of the status of
dusted shrimp. See Dusted/Battered Scope Memo at 23.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate
individual dumping margins for each known exporter and producer of the
subject merchandise. Section 777A(c)(2) of the Act provides the
Department discretion, when faced with a large number of exporters/
producers, however, to limit its examination to a reasonable number of
such companies if it is not practicable to examine all companies. Where
it is not practicable to examine all known producers/exporters of
subject merchandise, this provision permits the Department to
investigate either (1) A sample of exporters, producers, or types of
products that is statistically valid based on the information available
to the Department at the time of selection or (2) exporters/producers
accounting for the largest volume of the merchandise under
investigation that can reasonably be examined. After considering the
complexities in this proceeding and the resources, the Department
determined that it was not practicable in this investigation to examine
all known producers/exporters of subject merchandise. See Respondent
Selection Memo at 2. Instead, we limited our examination to the four
exporters and producers accounting for the largest volume of the
subject merchandise pursuant to section 777A(c)(2)(B) of the Act. The
four Chinese producers/exporters (Allied, ZG, Red Garden and Yelin)
accounted for a significant percentage of all exports of the subject
merchandise from the PRC during the POI and were selected as mandatory
respondents. See Respondent Selection Memo at 4.
Non Market Economy Country
For purposes of initiation, the Petitioners submitted LTFV analyses
for the PRC as a non-market economy. See Initiation Notice, 69 FR at
3880. In every case conducted by the Department involving the PRC, the
PRC has been treated as a nonmarket-economy (``NME'') country. 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 also Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, From the People's
Republic of China: Preliminary Results 2001-2002 Administrative Review
and Partial Rescission of Review, 68 FR 7500 (February 14, 2003). When
the Department is investigating imports from an NME, section 773(c)(1)
of the Act directs us to base the normal value on the NME producer's
factors of production, valued in an economically comparable market
economy that is a significant producer of comparable merchandise. The
sources of individual factor prices are discussed under the ``Factor
Valuations'' section, below.
Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs it to base normal value (``NV''),
in most circumstances, on the NME producer's factors of production,
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 factors of production, the Department shall
utilize, to the extent possible, the prices or costs of factors of
production in one or more market-economy countries that are at a level
of economic development comparable to that of the NME country and are
significant producers of comparable merchandise. The sources of the
surrogate values we have used in this investigation are discussed under
the NV section below.
The Department determined that India, Indonesia, Sri Lanka, the
Phillippines, Ecuador and Egypt are countries comparable to the PRC in
terms of economic development. See Memorandum from Ron Lorentzen to
James Doyle: Antidumping Duty Investigation onCertain Frozen and Canned
Warmwater Shrimp from the People's Republic of China, dated March 10,
2004. We 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 (``Policy Bulletin''), dated March 1, 2004. In this
case, we have found that India is a significant producer of comparable
merchandise, frozen and canned warmwater shrimp, and is at a similar
level of economic development pursuant to 733(c)(4) of the Act. See
Surrogate Country Memo at 7. Since our issuance of the Surrogate
Country Memo, we have not received comments from interested parties
regarding this issue.
Separate Rates
In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the country 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 merchandise subject to investigation in an NME country
this single rate unless an exporter can demonstrate that it is
sufficiently independent so as to be entitled to a separate rate. The
four mandatory respondents and the Section A respondents have provided
company-specific information and each has stated that it met the
standards for the assignment of a separate rate.
We have considered whether each PRC company is eligible for a
separate rate. The Department's separate-rate test is not concerned, 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 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), 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).
To establish whether a firm is sufficiently independent from
government control of its export activities to be entitled to a
separate rate, the Department analyzes each entity exporting the
subject merchandise under a test arising from the Notice of Final
Determination of Sales at Less Than Fair Value: Sparklers
[[Page 42661]]
from the People's Republic of China, 56 FR 20588 (May 6, 1991)
(``Sparklers''), as amplified by 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''). In accordance
with the separate-rates criteria, the Department assigns separate rates
in NME cases only if respondents can demonstrate the absence of both de
jure and de facto governmental control over export activities.
1. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers, 56 FR at 20589.
Our analysis shows that the evidence on the record supports a
preliminary finding of de jure absence of governmental control based on
the following: (1) An absence of restrictive stipulations associated
with the individual exporter's business and export licenses; (2) the
applicable legislative enactments decentralizing control of the
companies; and (3) any other formal measures by the government
decentralizing control of companies. See Memorandum to Edward C. Yang,
Director, Non-Market Economy Unit, Import Administration, from Julia
Hancock and Hallie Zink, Case Analysts through James C. Doyle, Program
Manager, Certain Frozen and Canned Warmwater Shrimp from the People's
Republic of China: Separate Rates for Producers/Exporters that
Submitted Questionnaire Responses, dated July 2, 2004 (``Separate Rates
Memo'').
2. Absence of De Facto Control
Typically the Department considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices are set by or are
subject to the approval of a governmental agency; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also
Notice of 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). 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.
We determine that, for the mandatory respondents and certain
Section A respondents, the evidence on the record supports a
preliminary finding of de facto absence of governmental control based
on record statements and supporting documentation showing the
following: (1) Each exporter sets its own export prices independent of
the government and without the approval of a government authority; (2)
each exporter retains the proceeds from its sales and makes independent
decisions regarding disposition of profits or financing of losses; (3)
each exporter has the authority to negotiate and sign contracts and
other agreements; and (4) each exporter has autonomy from the
government regarding the selection of management.
Therefore, the evidence placed on the record of this investigation
by the mandatory respondents and certain Section A respondents
demonstrates an absence of government control, both in law and in fact,
with respect to each of the exporter's exports of the merchandise under
investigation, in accordance with the criteria identified in Sparklers
and Silicon Carbide. As a result, for the purposes of this preliminary
determination, we have granted separate, company-specific rates to the
mandatory respondents and certain Section A respondents which shipped
certain frozen and canned warmwater shrimp to the United States during
the POI. For a full discussion of this issue and list of Section A
respondents, please see the Separate-Rates Memo.
PRC-Wide Rate
The Department has data that indicates there are more known
exporters of the certain frozen and canned warmwater shrimp from the
PRC during the POI that responded to our quantity and value (``Q&V'')
questionnaire. See Respondent Selection Memo. Although we issued the
Q&V questionnaire to nine known Chinese exporters of subject
merchandise (as identified in the petition), we received 57 Q&V
questionnaire responses, including those from the four mandatory
respondents. Also, on January 29, 2004, we issued a Section A
questionnaire to the Government of the PRC (i.e., Ministry of
Commerce). Although all known exporters were given an opportunity to
provide information showing they qualify for separate rates, not all of
these other exporters provided a response to either the Department's
Q&V questionnaire or its Section A questionnaire. Further, the
Government of the PRC did not respond to the Department's
questionnaire. Therefore, the Department determines preliminarily that
there were exports of the merchandise under investigation from other
PRC producers/exporters, which are treated as part of the countrywide
entity.
Section 776(a)(2) of the Act provides that, if an interested party:
(A) withholds information that has been requested by the Department;
(B) fails to provide such information in a timely manner or in the form
or manner requested, subject to subsections 782(c)(1) and (e) of the
Act; (C) significantly impedes a determination under the antidumping
statute; or (D) provides such information but the information cannot be
verified, the Department shall, subject to subsection 782(d) of the
Act, use facts otherwise available in reaching the applicable
determination.
Pursuant to section 782(e) of the Act, the Department shall not
decline to consider submitted information if all of the following
requirements are met: (1) The information is submitted by the
established deadline; (2) the information can be verified; (3) the
information is not so incomplete that it cannot serve as a reliable
basis for reaching the applicable determination; (4) the interested
party has demonstrated that it acted to the best of its ability; and
(5) the information can be used without undue difficulties.
Information on the record of this investigation indicates that
there are numerous producers/exporters of the certain frozen and canned
warmwater shrimp in the PRC. As described above, all exporters were
given the opportunity to respond to the Department's questionnaire.
Based upon our knowledge of the volume of imports of subject
merchandise from the PRC and the fact that information indicates that
the responding companies did not account for all imports into the
United States from the PRC, we have preliminary determined that certain
PRC exporters of certain frozen and canned warmwater shrimp failed to
respond to our questionnaires. As a result, use of adverse facts
available
[[Page 42662]]
(``AFA'') pursuant to section 776(a)(2)(A) of the Act is appropriate.
Additionally, in this case, the Government of the PRC did not respond
to the Department's questionnaire, thereby necessitating the use of AFA
to determine the PRC-wide rate. See e.g., Notice of Preliminary
Determination of Sales at Less Than Fair Value, Affirmative Preliminary
Determination of Critical Circumstances and Postponement of Final
Determination: Certain Frozen Fish Fillets from the Socialist Republic
of Vietnam, 68 FR 4986 (January 31, 2003).
Section 776(b) of the Act provides that, in selecting from among
the facts available, the Department may employ adverse inferences if an
interested party fails to cooperate by not acting to the best of its
ability to comply with requests for information. See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled
Flat-Rolled Carbon-Quality Steel Products from the Russian Federation,
65 FR 5510, 5518 (February 4, 2000), See also ``Statement of
Administrative Action'' accompanying the URAA, H.R. Rep. No. 103-316,
870 (1994) (``SAA''). We find that, because the PRC-wide entity and
certain producers/exporters did not respond at all to our request for
information, they have failed to cooperate to the best of their
ability. Therefore, the Department preliminarily finds that, in
selecting from among the facts available, an adverse inference is
appropriate.
In accordance with our standard practice, as AFA, we have assigned
the PRC-wide entity the higher of the highest margin stated in the
notice of initiation (i.e., the recalculated petition margin) or the
highest margin calculated for any respondent in this investigation. See
e.g., Notice of Final Determination of Sales at Less Than Fair Value:
Certain Cold-Rolled Carbon Quality Steel Products from the People's
Republic of China 65 FR 34660 (May 31, 2000) and accompanying Issues
and Decision Memorandum, at Comment 1. In this case, we have applied a
rate of 112.81 percent, the highest rate calculated in the Initiation
Notice of the investigation from information provided in the petition.
See e.g., Notice of Preliminary Determination of Sales at Less Than
Fair Value: Stainless Steel Wire Rod From Germany, 63 FR 10847 (March
5, 1998).
Corroboration of Information
Section 776(b) of the Act authorizes the Department to use AFA
information derived from the petition, the final determination from the
LTFV investigation, a previous administrative review, or any other
information placed on the record.
Section 776(c) of the Act provides that, when the Department relies
on secondary information rather than on information obtained in the
course of an investigation as facts available, it must, to the extent
practicable, corroborate that information from independent sources
reasonably at its disposal. 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 subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.'' See SAA at 870. The SAA provides that to
``corroborate'' means simply that the Department will satisfy itself
that the secondary information to be used has probative value. Id. The
SAA also states that independent sources used to corroborate may
include, for example, published price lists, official import statistics
and customs data, and information obtained from interested parties
during the particular investigation. Id. As explained in Tapered Roller
Bearings and Parts Thereof, Finished and Unfinished, 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) (``Japan Notice''), to
corroborate secondary information, the Department will, to the extent
practicable, examine the reliability and relevance of the information
used.
The Petitioners methodology for calculating the export price and NV
in the petition is discussed in the initiation notice. See Initiation
Notice, 69 FR at 3876. To corroborate the AFA margin of 112.81 percent,
we compared that margin to the margin we found for the largest
exporting respondent.
As discussed in the Memorandum to the File regarding the
corroboration of the AFA rate, dated June 17, 2004, we found that the
margin of 112.81 percent has probative value. See Memorandum to the
File from Alex Villanueva, Senior Case Analyst through James C. Doyle,
Program Manager and Edward C. Yang, Director, NME Unit, Preliminary
Determination in the Investigation of Certain Frozen and Canned
Warmwater Shrimp from the People's Republic of China, Corroboration
Memorandum (``Corroboration Memo''), dated July 2, 2004. Accordingly,
we find that the lowest margin, based on the petition information as
described above, of 112.81 percent is corroborated within the meaning
of section 776(c) of the Act.
Consequently, we are applying a single antidumping rate--the PRC-
wide rate--to producers/exporters that failed to respond to the Q&V
questionnaire or Section A questionnaire, as well as to exporters which
did not demonstrate entitlement to a separate rate. See e.g., Final
Determination of Sales at Less Than Fair Value: Synthetic Indigo from
the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The
PRC-wide rate applies to all entries of the merchandise under
investigation except for entries from the four mandatory respondents
and certain Section A respondents.
Because this is a preliminary determination, the Department will
consider all margins on the record at the time of the final
determination for the purpose of determining the most appropriate final
PRC-wide margin. See Notice of Preliminary Determination of Sales at
Less Than Fair Value: Saccharin from the People's Republic of China, 67
FR 79049, 79054 (December 27, 2002).
Margins for Section A Respondents
The exporters which submitted responses to Section A of the
Department's antidumping questionnaire and had sales of the subject
merchandise to the United States during the POI but were not selected
as mandatory respondents in this investigation (Section A respondents)
have applied for separate rates and provided information for the
Department to consider for this purpose. Therefore, for the Section A
respondents which provided sufficient evidence that they are separate
from the countrywide entity and answered other questions in section A
of the questionnaire, we have established a weighted-average margin
based on the rates we have calculated for the four mandatory
respondents, excluding any rates that are zero, de minimis, or based
entirely on adverse facts available. Companies receiving this rate are
identified by name in the ``Suspension of Liquidation'' section of this
notice.
Date of Sale
Section 351.401(i) of the Department's regulations state that ``in
identifying the date of sale of the subject merchandise or foreign like
product, the Secretary normally will use the date of invoice, as
recorded in the exporter or producer's records kept in the normal
course of business.'' After examining the sales documentation placed on
the record by the respondents, we preliminarily determine that invoice
date is the most
[[Page 42663]]
appropriate date of sale for three of the four respondents. We made
this determination because, at this time, there is not enough evidence
on the record to determine that the contracts used by the respondents
establish the material terms of sale to the extent required by our
regulations in order to rebut the presumption that invoice date is the
proper date of sale. See Saccharin from China, 67 FR at 79054.
With respect to the respondent ZG, we preliminarily determine that
the contract date and/or purchase order dates are the most appropriate
dates of sale because the terms of sale do not change after the
contract is signed or the purchase order is received. ZG also stated
that for some customers the contract date is not available because
repeat customers do not use contracts, but choose to conduct their
transactions using only a purchase order. ZG explained that both the
contract date and purchase order date are generated prior to the
issuance of the invoice. ZG also stated that the invoice is not issued
until the product is shipped. Furthermore, ZG stated that the terms of
sale do not change after the contract is signed or the purchase order
is received. Section 351.401(i) of the Department's regulations state
that ``the Secretary may use a date other than the date of invoice if
the Secretary is satisfied that a different date on which the exporter
or producer established the materials terms of sale.'' Given the unique
business operations by ZG to set the material terms of sale at the
contract date or in the absence of a contract date, the purchase order
date, we have preliminarily determined that the contract date or
purchase order date is the most appropriate date to use ZG's date of
sale. For a detailed discussion of the company-specific analysis
memorandum.
Appropriate Basis for Comparison
On May 24, 2004, the Department requested comments from interested
parties on whether product comparisons and margin calculations in this
investigation should be performed based on data provided on an ``as
sold'' basis or whether those comparisons and calculations should be
performed on data converted to a headless, shell-on (``HLSO'') basis.
On June 4, 2004, the Department received comments on HLSO
comparison from Shantou Red Garden Foodstuff Co., Ltd. (``Red
Garden''). On June 7, 2004, and June 10, 2004, the Department received
comments from the Petitioners in support of subject merchandise on an
HLSO basis. Red Garden argues that by valuing shrimp products on an
HLSO basis, when a significant quantity of such products are not sold
on an HLSO basis, effectively requires converting shrimp products from
a non-HLSO basis to an HLSO basis by employing conversion coefficients
to the quantities and values of the subject merchandise. This
conversion method alters the count-sizes and prices of shrimp in many
instances where count-size and prices were not sold on an HLSO basis,
but were subsequently converted for this investigation to an HLSO
basis. Several other comments were submitted by interested parties both
in support of and in opposition to calculating a margin on an HLSO
basis, although those comments pertained to the Department's market
economy analysis of product comparisons in the U.S., home, and/or third
country markets. Since the market economy methodology of product
comparisons does not apply in NME investigations, those comments will
be addressed in the preliminary determinations for the market economy
countries subject to this investigation.
Section 773(c)(1)(B) of the Act requires that the Department value
the factors of production that a respondent uses to produce the subject
merchandise. The Department notes that it will be less accurate to rely
on HLSO quantities sold and HLSO values of the subject merchandise,
rather than relying on actual quantities sold and actual values of the
subject merchandise.
The Petitioners argue that using an HLSO conversion method will
give a consistent basis for weight-averaging the unit margins in the
calculation of the overall weight-averaged margin. To achieve the
consistent measuring basis, the Petitioners' suggest converting actual
quantities and values of subject merchandise sold by HLSO coefficients
to standardize the different types of subject merchandise sold.
The Department examined the Petitioners' suggested methodology,
which seeks to achieve a consistent measuring standard by adjusting
subject merchandise product values and yields on a HLSO basis. However,
the Department's current NME methodology for calculating margins also
achieves consistency through valuing subject merchandise on an actual,
as sold basis. The Department notes that when calculating the estimated
weighted-average margin, the Department totals the margins for all
CONNUMs to derive the total dumping margin of the company. The values
generated from totaling the margins and sales values for all CONNUMs do
not require converting quantities to the same basis.
The Petitioners also argue that the CONNUM assignment should be
altered to place more weight on the species of subject merchandise, as
it is the species type that is a predominant factor in determining
shrimp prices. However, the Department notes that the placement of the
shrimp species category in the order of CONNUM assignments does not
increase or decrease the weight given to that category in nonmarket
economy margin calculations. In the NME margin calculation methodology,
the CONNUM hierarchy is inconsequential to the normal value
calculation, because each CONNUM characteristic is afforded equal
weight when calculating CONNUM-specific normal values. However, as this
issue is relevant to the market economy margin calculation methodology,
this issue will be addressed by the preliminary determinations of the
market economy countries subject to this investigation.
Fair Value Comparisons
To determine whether sales of certain frozen and canned warmwater
shrimp to the United States of the four mandatory respondents were made
at less than fair value, we compared export price (``EP'') or
constructed export price (``CEP'') to NV, as described in the ``U.S.
Price'' and ``Normal Value'' sections of this notice.
U.S. Price
In accordance with section 772(a) of the Act, we used EP for the
four mandatory respondents, because the subject merchandise was first
sold (or agreed to be sold) before the date of importation by the
producer or exporter of the subject merchandise outside of the United
States to an unaffiliated purchaser in the United States or to an
unaffiliated purchaser for exportation to the United States, and
because the use of constructed export price was not otherwise
indicated. In accordance with section 772(b) of the Act, we used CEP
for Yelin because the subject merchandise was sold in the United States
after the date of importation by a U.S. seller affiliated with the
producer.
We calculated EP and CEP based on the packed F.O.B., C.I.F., or
delivered price to unaffiliated purchasers in, or for exportation to,
the United States. We made deductions, as appropriate, for any movement
expenses (e.g., foreign inland freight from the plant to the port of
exportation, domestic brokerage, ocean freight, marine insurance, U.S.
brokerage, and inland freight from warehouse to unaffiliated U.S.
customer) in accordance with section 772(c)(2)(A) of the Act. For a
detailed description of all adjustments, see the
[[Page 42664]]
company-specific analysis memorandum dated July 2, 2004.
In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the CEP by deducting selling expenses associated
with economic activities occurring in the United States, which includes
credit and indirect selling expenses. We compared NV to weighted-
average EPs and CEPs, in accordance with section 777A(d) of the Act.
Where appropriate, in accordance with sections 772(d)(3) and 772(f) of
the Act, we deducted CEP profit. For a discussion of the surrogate
values used for the movements deductions, see the Factor Valuation Memo
at Exhibits 6-9.
Respondent Yelin indicated that it purchased subject merchandise
from a number of unaffiliated suppliers. Yelin stated that these
unaffiliated suppliers ``had constructive knowledge of the final
destination of the merchandise.'' See Yelin's May 4, 2004, submission
at 1. For these unaffiliated suppliers, Yelin stated that ``the
merchandise was purchased by and sold to HK Yelin in convertible
currency ($US), was marked in a manner consistent with goods destined
for the United States, was packaged and sold to HK Yelin in condition
ready for shipment to and resale in the U.S. market, and was not
processed by any of the Yelin companies prior to shipment or after
importation.'' See Yelin's May 4, 2004, submission at 2. Yelin provided
evidence that demonstrates that purchase orders, commercial invoices
and certificates of origin all indicate an ultimate delivery to the
United States. See Yelin's May 4, 2004, submission at Exhibit 2-4. In
Wonderful Chemical Indus., Ltd. v. United States, F.Supp. 2d 1273 (CIT
2003), the Court of International Trade affirmed the manner in which
the Department administered this ``knowledge test'' in Synthetic Indigo
from the People's Republic of China, Final Determination of Sales at
Less than Fair Value, 65 FR 25706 (May 3, 2000). The CIT also
summarized the Department's application of the ``knew or had reason to
know'' test in NME cases. The Department also applied this ``knowledge
test'' and excluded sales made by a party having such knowledge from
the margin calculation in Canned Pineapple Fruit From Thailand, Notice
of Final Results of Antidumping Duty Administrative Review, 63 FR 7392
(February 13, 1998), in Dynamic Random Access Memory Semiconductors of
One Megabit or Above from the Republic of Korea, Final Results of
Antidumping Duty Administrative Review and Determination Not to Revoke
the Order in Part, 64 FR 69694 (December 14, 1999), and in Certain
Headwear from the People's Republic of China, Final Determination of
Sales at Less than Fair Value, 54 FR 11983 (March 23, 1989).
Consequently, based on the record evidence, we did not request the
factors of production from these unaffiliated suppliers for these U.S.
sales and have not included these sales in our margin calculations as
they are EP sales of the unaffiliated suppliers to a foreign market.
In addition, in response to a supplemental questionnaire, Shantou
Yelin indicated that for this one U.S. sale it did not take title of
the subject merchandise and the subject merchandise was delivered/
released directly to Yelin prior to U.S. exportation. In addition, as
with other purchases from unaffiliated manufacturers, Yelin purchased
in ``U.S. dollars and references U.S. brand names, U.S. packaging sizes
and types; the retail packaging prepared by the supplier contains FDA
labeling requirements and the name of the ultimate U.S. distributors;
microbial reports are prepared by the supplier of U.S. entry and FDA
purposes; and country of origin certifications and freight
documentation indicate a U.S. destination for these sales.'' See
Yelin's June 8, 2004, Submission at 30. In addition, the unaffiliated
supplier stated and provided evidence that it had constructive
knowledge of the final destination of the merchandise. See Yelin's June
8, 2004, Submission at 6-10. ``The merchandise was purchased by and
sold to HK Yelin in convertible currency ($US), was marked in a manner
consistent with goods destined for the U.S., was sold to HK Yelin in
condition ready for shipment to and resale in the U.S. market, and was
not further processed by any of the Yelin companies in condition ready
for shipment to and resale in the U.S. market, and was not further
processed by any of the Yelin companies prior to shipment or after
importation.'' See Yelin's April 21, 2004, Submission at 37.
Consequently, based on the record evidence, we did not request the
factors of production from the unaffiliated supplier for this one U.S.
sale and have not included this sale in our margin calculations as it
is an EP sale of the unaffiliated supplier to a foreign market. See
Yelin's May 4, 2004, submission at Exhibit 1.
Red Garden reported that all sales of subject merchandise to the
United States during the POI were sold to Red Chamber Co. (``Red
Chamber''), and that Red Chamber is affiliated with Red Garden. Section
772(b) of the Act states that the Department must base its CEP
calculations on the price at which the subject merchandise is first
sold in the United States to a purchaser not affiliated with the
producer or exporter, as adjusted. Because Red Garden considers Red
Chamber to be affiliated, Red Garden argues that the Department should
use Red Chamber's downstream sales to its unaffiliated customers in the
United States for Red Garden's CEP sales of subject merchandise.
Section 771(33) of the Act states that the Department considers the
following as affiliated: (A) Members of a family, including brothers
and sisters (whether by the whole or half blood), spouse, ancestors,
and lineal descendants; (B) any officer or director of an organization
and such organization; (C) partners; (D) employer and employee; (E) any
person directly or indirectly owning, controlling, or holding with
power to vote, 5 percent or more of the outstanding voting stock or
shares of any organization and such organization; (F) two or more
persons directly or indirectly controlling, controlled by, or under
common control with, any person; and (G) any person who controls any
other person and such other person. For purposes of affiliation,
section 771(33) states that a person shall be considered to control
another person if the person is legally or operationally in a position
to exercise restraint or direction over the other person. In order to
find affiliation between companies, the Department must find that at
least one of the criteria listed above is applicable to the
respondents.
Red Garden believes it is affiliated with Red Chamber because 100%
of Red Garden's sales of subject merchandise during the POI were to Red
Chamber. However, Red Garden also indicated that no equity relationship
exists between Red Garden and Red Chamber. See March 31, 2004, Section
A response at A-2. In addition, there is no indication that any form of
affiliation as defined under sections 771(33)(A) through (E) of the Act
exists between Red Garden and Red Chamber. Thus, any affiliation
between Red Garden and Red Chamber would only be determined under
section 771(33)(F) (two or more persons directly or indirectly
controlling, controlled by, or under common control with, any person)
or (G) (any person who controls any other person and such other
person).
When, as in this case, the Department is faced with a commercial
relationship between the foreign producer and a U.S. entity, and there
is a question as to whether the producer has legal or operational
control over the U.S. entity, or vice versa, the Department will
examine the facts and circumstances to
[[Page 42665]]
determine whether the parties are affiliated. The Department's
affiliation analysis is based on the facts and circumstances of a given
relationship. As the Department has noted, ``the analysis of whether a
relationship constitutes an agency is case-specific and can be quite
complex; there is no bright line test.'' See Notice of Final
Determination of Sales at Less Than Fair Value: Engineered Process Gas
Turbo-Compressor Systems, Whether Assembled or Unassembled, and Whether
Complete or Incomplete, from Japan, 62 FR 24403 (May 5, 1997) (``Turbo-
Compressors from Japan''). It is the Department's normal practice to
find a principal-agent relationship when one is established by a
written agreement as in Notice of Preliminary Determination of Sales at
Less Than Fair Value: Silicomanganese from Kazakhstan, 66 FR 56639
(November 9, 2002) (``Silicomanganese from Kazakhstan''), and that the
existence of such a formal arrangement is a sufficient basis to find
affiliation. See Silicomanganese from Kazakhstan. The Department
considers the ``control of the principal over its agent'' to be ``the
hallmark of an agency relationship.'' In prior cases, the Department
has found that a principal/agent relationship is characterized by
control because ``{t{time} he agent may act only to the extent that its
actions are consistent with the authority granted by the principal.''
See Notice of Final Determination of Sales at Less Than Fair Value:
Engineered Process Gas Turbo-Compressor Systems, Whether Assembled or
Unassembled, and Whether Complete or Incomplete, from Japan, 62 FR
24403, 24407 (May 5, 1997) (``Turbo-Compressors from Japan''). Even in
the absence of a formal agreement, when the Department finds evidence
that the foreign producer has the potential to control pricing and/or
the terms of sale through the agent to the end-customer, it will find
that an affiliation exists with the agent. See Notice of Final Results
of Antidumping Duty Administrative Review: Furfuryl Alcohol from South
Africa, 62 FR 61084 (November 14, 1997). The Department also considers
who bears the risk of loss as probative of whether one company is
acting as an agent for another. However, this is not a formalistic
exercise. The Department only considers the existence of a principal/
agent relationship (actual or effective) to the extent that it is
probative of Commerce's fundamental inquiry: is one party in a position
to exercise legal or operational restraint or direction over the other?
In this case, we note that while Red Garden may sell 100% of its
subject merchandise to Red Chamber, Red Chamber purchases subject
merchandise from multiple suppliers in the PRC in addition to Red
Garden. See Red Chamber's May 4, 2004, response at Exhibit B-1. Thus,
Red Chamber does not exclusively purchase subject merchandise from Red
Garden. Nor have they argued that Red Chamber has controlled Red
Garden's production or sales decisions, or vice versa. Red Chamber and
Red Garden have not provided evidence of an agreement indicating that
Red Chamber is Red Garden's agent in the United States. Red Garden and
Red Chamber also have not argued that Red Chamber bears the risk of
loss prior to shipment from Red Garden, other than through normal CNF
terms of sale, or that Red Garden bears any risks subsequent to
delivery to Red Chamber.
Based on the record evidence, the Department therefore finds that
Red Garden and Red Chamber do not maintain a principal agent
relationship, and there is no indication that Red Chamber is in a
position to exercise legal or operational control over Red Garden's
decisions concerning the production, pricing, or cost of the subject
merchandise, or vice versa.
As such, we preliminarily determine that the record evidence does
not support a finding that Red Garden is controlled by Red Chamber, or
vice versa. Therefore, we preliminarily find these two companies are
not affiliated. Because Red Garden's first arm's-length transaction
therefore occurred upon the sale to Red Chamber, we have based our
margin calculation for Red Garden on Red Garden's EP sales to Red
Chamber.
Facts Available
Section 776(a)(2) of the Act provides that, if an interested party
withholds information requested by the Department, fails to provide
such information by the deadline or in the form or manner requested,
significantly impedes a proceeding, or provides information which
cannot be verified, the Department shall use facts otherwise available
in reaching the applicable determination.
Section 782(e) of the Act requires the Department to consider
information that is submitted by the respondent and is necessary to the
determination but does not meet all the applicable requirements
established by the Department if: (1) The information is submitted by
the deadline established for its submission; (2) the information can be
verified; (3) the information is not so incomplete that it cannot serve
as a reliable basis for reaching the applicable determination; (4) the
interested party has demonstrated that it acted to the best of its
ability in providing the information and meeting the requirements
established by the Department with respect to the information; and (5)
the information can be used without undue difficulties.
Red Garden did not provide the factors of production for the
following suppliers of subject merchandise sold to the United States:
Chaoyang Jindu Hengchang Aquatic Products Enterprise Co., Ltd.
(``Hengchang''), Raoping County Longfa Seafoods Co., Ltd. (``Longfa''),
and Meizhou Aquatic Products Quick-Frozen Industry Co., Ltd. Shengping,
Shantou (``Meizhou''). Section 773(c)(1) of the Act provides that the
Department shall determine the NV using a factors-of-production
methodology if: (1) The merchandise is exported from an NME country;
and (2) the information available does not permit the calculation of NV
using home-market prices, third-country prices, or constructed value
under section 773(a) of the Act. Because the Department considers the
PRC to be an NME, we must calculate NV using factors of production in
accordance with section 773(c).
Red Garden reported that Hengchang and Longfa each supplied a minor
amount of subject merchandise to Red Garden for sale to the United
States during the POI. See Red Garden's Analysis Memo at 3. Red Garden
requested that the Department ignore the factors of production from
these two companies because the quantity was approximately one percent
or less of Red Garden's total subject merchandise sales to the United
States, and the collection and reporting of such data would pose an
undue administrative burden for the respondent. See Red Garden's April
21, 2004, response at D-2 and May 4, 2004, response at 3. Accordingly,
we have substituted the reported factors of production from Red
Garden's other suppliers to determine the NV of Red Garden's sales of
subject merchandise which were produced by Hengchang and Longfa, as
facts available under section 776(a)(2) of the Act. We note that all
CONNUMs for Red Garden's sales of subject merchandise to the United
States during the POI that were produced by Hengchang and Longfa are
also produced by Mingfeng and/or Longfeng. As facts available, we have
preliminarily substituted Mingfeng and/or Longfeng's factors of
production by CONNUM for merchandise produced by Hengchang and Longfa.
Red Garden has stated that Meizhou, an additional supplier of
subject merchandise that Red Garden sold to the United States, does not
have
[[Page 42666]]
adequate verifiable documents in the POI in order to report its factors
of production. See Red Garden's June 18, 2004, response at 18. Because
Red Garden failed to provide the necessary information to determine the
NV of those sales that were produced by Meizhou, the Department finds
that applying facts available under section 776(a)(2) of the Act is
warranted. We note that all CONNUMs for Red Garden's sales of subject
merchandise to the United States during the POI which were produced by
Meizhou are also produced by Mingfeng and/or Longfeng. As facts
available, we have preliminarily substituted Mingfeng and/or Longfeng's
factors of production by CONNUM for merchandise produced by Meizhou.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the NV using a factors-of-production methodology if the
merchandise is exported from an NME country 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 will base NV on factors of production because the
presence of government controls on various aspects of these economies
renders price comparisons and the calculation of production costs
invalid under its normal methodologies.
For purposes of calculating NV, we valued the PRC factors of
production in accordance with section 773(c)(1) of the Act. Factors of
production include, but are not limited to hours of labor required,
quantities of raw materials employed, amounts of energy and other
utilities consumed, and representative capital costs, including
depreciation. In examining surrogate values, we selected, where
possible, the publicly available value which was an average non-export
value, representative of a range of prices within the POI or most
contemporaneous with the POI, product-specific, and tax-exclusive. We
used the usage rates reported by respondents for materials, energy,
labor, by-products, and packing. For a more detailed explanation of the
methodology used in calculating various surrogate values, see Factor-
Valuation Memo.
In response to a supplemental questionnaire dated June 8, 2004, ZG
stated that it leased shrimp ponds for breeding. See ZG's June 8, 2004,
Submission at 16. On June 24, 2004, in response to another supplemental
questionnaire, ZG provided sample lease agreements for the leasing of
the shrimp ponds. See ZG's June 24, 2004, Submission at Exhibit 2. We
have determined that this factor is an important component in the cost
build-up of NV and is not reflected in the financial ratios calculated
from Devi Sea Foods, Ltd. and Sandhya Marines, Ltd. financial
statements. Consequently, we have valued the cost of land using
information contained in a Notification of Policy for Land Revenue
issued by the State of Rajasthan, India (Indian Policy'') which can be
found at http://www.investrajasthan.com/pdf/policy/wastelandpolicy.pdf
(last visited July 2, 2004).
In that Indian Policy, the Indian State of Rajasthan set the cost
of land and lease rent for cultivable wasteland. The annual lease rent
for the land increases over the period of ten years, as the land
becomes increasingly arable. For example, after ten years, presumably
at the time the land is fully cultivable, the annual lease rent is set
at 400 rupees per hectare.
Based on the limited information available at this time, we have
determined that the rates presented in this Indian Policy serve as the
most reliable surrogate value for calculating a cost of the shrimp
ponds used to grow the subject merchandise as this is the only
information on the record to value ZG's land lease costs. Furthermore,
we find that the price for land that has been cultivated for more than
ten years (400 Rs / Hectare) is the most appropriate surrogate value,
because the land is currently being used for cultivation of food
products. In order to determine the land lease cost for each unit of
production of subject merchandise during the POI, we pro-rated the land
lease price to reflect the six months of the POI. In addition, because
the data is not contemporaneous with the POI, we adjusted the rate for
inflation. We then converted the price from Rs to USD, and multiplied
the USD per hectare price by the number of hectares of ponds leased by
ZG, and allocated that POI costs over Zhanjiang's total POI production
of subject merchandise. See ZG's analysis memorandum for the
calculation of the per kilogram amount of land lease that was added to
overhead.
With regard to Red Garden, who also leased shrimp ponds, we do not
have the necessary information at this time to calculate a land-lease
cost. Although the Department recognizes that this portion of overhead
may not be captured in the margin calculation because the Department
did not request this information from Red Garden, we are not valuing
Red Garden's land-lease costs for shrimp ponds in this preliminary
determination. However, the Department will request the necessary
information in a supplemental questionnaire and may use this
information for the final determination.
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by respondents for the POI. To
calculate NV, we multiplied the reported per-unit factor quantities by
publicly available Indian surrogate values (except as discussed below).
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. As appropriate, we
adjusted input prices by including freight costs to make them delivered
prices. Specifically, we added to Indian import surrogate values a
surrogate freight cost using the shorter of the reported distance from
the domestic supplier to the factory or the distance from the nearest
seaport to the factory where appropriate. 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). For a
detailed description of all surrogate values used for respondents, see
Factor-Valuation Memo. Due to the extensive number of surrogate values
it was necessary to assign in this investigation, we present a
discussion of the main factors. For a detailed description of all
surrogate values used for respondents, see Factor-Valuation Memo. For a
detailed description of all actual values used for market-economy
inputs, see the company-specific analysis memorandum dated July 2,
2004.
Except as discussed below, we valued raw material inputs using the
weighted-average unit import values derived from the World Trade
Atlas[reg] online (``Indian Import Statistics''). See Factor-Valuation
Memorandum. The Indian Import Statistics we obtained from the World
Trade Atlas were published by the DGCI&S, Ministry of Commerce of
India, which were reported in rupees and are contemporaneous with POI.
Where we could not obtain publicly available information
contemporaneous to the POI with which to value factors, we adjusted the
surrogate values using the Indian Wholesale Price Index (``WPI'') as
published in the International Financial Statistics of the
International Monetary Fund.
Furthermore, with regard to both the Indian import-based surrogate
values and the market-economy input values, we have disregarded prices
that we have reason to believe or suspect may be subsidized. We have
reason to believe or
[[Page 42667]]
suspect that prices of inputs from Indonesia, South Korea, and Thailand
may have been subsidized. We have found in other proceedings that these
countries maintain broadly available, non-industry-specific export
subsidies and, therefore, it is reasonable to infer that all exports to
all markets from these countries may be subsidized. See Final
Determination of Sales at Less Than Fair Value: Certain Helical Spring
Lock Washers From The People's Republic, 61 FR 66255 (February 12,
1996) and accompanying Issues and Decision Memorandum at Comment 1. We
are also directed by the legislative history not to conduct a formal
investigation to ensure that such prices are not subsidized. See H.R.
Rep. 100-576 at 590 (1988). Rather, Congress directed the Department to
base its decision on information that is available to it at the time it
makes its determination. Therefore, we have not used prices from these
countries either in calculating the Indian import-based surrogate
values or in calculating market-economy input values. In instances
where a market-economy input was obtained solely from suppliers located
in these countries, we used Indian import-based surrogate values to
value the input. See Notice of Final Determination of Sales at Less
Than Fair Value and Negative Final Determination of Critical
Circumstances: Certain Color Television Receivers From the People's
Republic of China (``CTVs from the PRC''), 69 FR 20594 (April 16,
2004).
Finally, imports that were labeled as originating from an
``unspecified'' country were excluded from the average value, because
the Department could not be certain that they were not from either an
NME or a country with general export subsidies. Unit values were
generally calculated in U.S. dollars (``USD'') per kilogram (``kg'').
On May 10, 2004, the Department requested all mandatory respondents
to provide a chart indicating the Harmonized Tariff Schedule (``HTS'')
heading and article description for each mandatory respondent's factors
of production. The Department prefers to rely upon the mandatory
respondents' HTS classification for its inputs during the POI. However,
for HTS classifications which were supplied incorrectly by the
mandatory respondents, we applied the most similar HTS classification
that best captured the factor of production described by the
Respondents. Where import data is not available for the POI, the
Department sought to obtain data for the six-month period immediately
preceding the POI (10/2002-03/2003). As a third alternative, the
Department sought to obtain data for the period preceding that the
period (i.e., 03/2002-09/2002). Where input values were not
contemporaneous with the POI, we adjusted them for inflation using the
IMF's WPI rate for India.
Indian surrogate values denominated in foreign currencies were
converted to USD using the applicable average exchange rate for India
for the POI. The average exchange rate was based on exchange rate data
from the Department's Web site. The POI exchange rate used is 0.02149
USD per Rupee.
Shrimp Surrogate Value
The Department notes that the value of the main input, head-on,
shell-on (``HOSO'') shrimp, is an important factor of production in our
dumping calculation as it accounts for a significant percentage of
normal value. As a general matter, the Department prefers to use
publicly available data to value surrogate values from the surrogate
country to determine factor prices that, among other things: represent
a broad market average; are contemporaneous with the POI; and are
specific to the input in question. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Saccharin from the
People's Republic of China, 68 FR 27530, (May 20, 2003) and
accompanying Issues and Decision Memorandum, at Comment 1. In this
instance, none of the values placed on the record by the Respondents or
the Petitioners wholly satisfies all three of these requirements.
The Department only considers using surrogate values outside the
primary surrogate country if there are no values from that country
available or if it decides that the values available are aberrational
or otherwise unsuitable for use. The Respondents and Petitioners have
placed numerous Indian shrimp values on the record. In this case, the
Department has found a suitable surrogate value for shrimp from the
surrogate country. Therefore, using a surrogate value from a country
other than one from India is not necessary. Consequently, the
Department did not use any shrimp values from a surrogate country other
than India.
The Department notes that the Petitioners and Respondents have
argued at different times that count size is an important factor in the
control number (``CONNUM'') creation. See Petitioners submission of
February 4, 2004, at 3; Respondents' February 4, 2004, submission at
Attachment 1. However, an analysis of the Respondents' count size data
demonstrates that the final count size prices suggested by the
Respondents relied upon numerous assumptions.
On May 21, 2004, the Respondents submitted surrogate factor prices
to value raw shrimp. Specifically, the Respondents proposed a surrogate
value based on prices published by SEAI in the regions of Andarah
Pradesh and Tamil Nadu. See Respondents' May 21, 2004, Submission at
Exhibit 3. The Respondents explained that SEAI is the organization that
represents Indian exporters and processors of shrimp and has offices in
the main shrimp producing regions of India. The SEAI prices proposed by
the Respondents represented different counts sizes of raw shrimp sold
from farms to exporters and processors. According to the Respondents,
the prices from SEAI are contemporaneous with the POI and reflect
values for shrimp purchased. The Respondents also stated that the SEAI
prices represent prices from two regions in India accounting for over
55% of the Indian shrimp industry's total production. See Respondents'
May 21, 2004, Submission at Exhibit 3.
On June 4, 2004, the Petitioners argued that the Respondents' SEAI
prices are not publically available. The Petitioners provided an
affidavit from an Indian market researcher which states that SEAI does
not collect or publish the information provided in Exhibit 3 of the
Respondents' May 21, 2004, submission to the public at large. See
Petitioner's June 4, 2004, Submission at Attachment II. Furthermore,
the Petitioners argue that SEAI's prices are only available to members
of SEAI.
The Petitioners also argue that the pricing data provided by the
Respondents is data that does not represent market prices because they
do not appear to reflect actual sales transactions and because they are
suggested minimum prices by committee and should be considered floor
prices. The Petitioners note that the affidavit provided from their
Indian market researcher states that ``SEAI does not collect or
maintain actual fresh shrimp transaction prices but provides suggested
minimum prices to be offered to fresh shrimp suppliers.'' See
Petitioners' June 4, 2004, Submission at 6. In addition, the
Petitioners argue that the Respondents have engaged in selectively
submitting a very limited amount of data as the Respondents have only
provided a limited period of prices. Therefore, the Petitioners propose
that the Department use a surrogate value calculated from the May 2002-
June 2003 financial statements of Apex Foods Ltd., a shrimp processor
in Bangladesh or a surrogate value calculated from the
[[Page 42668]]
April 2002-March 2003 financial statements of Nekkanti Sea Foods Ltd.
On June 10, 2004, the Department issued the Respondents a
supplemental questionnaire regarding the surrogate values, including
the SEAI prices. On June 21, 2004, the Respondents provided their
response. On June 28, 2004, the Department called SEAI and spoke with
Mr. Reddy Raghuanath, the current Secretary General of SEAI regarding
the values submitted by the Respondents. See Memorandum to the File
from James C. Doyle Regarding Phone Call to the Seafood Exporter's
Association of India (``SEAI''), dated June 28, 2004 (``SEAI Memo'').
Based on the record evidence, although the Department would prefer
to use count-size specific surrogate values for the raw shrimp input,
the Department finds that the only count-size specific surrogate value
submitted by the Respondents is not the most appropriate basis for
valuing the raw shrimp input for numerous reasons.
First, we note that the Department practice is to rely on publicly
available data. See Notice of Final Determination of Sales at Less Than
Fair Value: Polyvinyl Alcohol from the People's Republic of China, 68 F
47538 (August 11, 2003) and accompanying Issues and Decision Memorandum
at Comment 1. As indicated in the SEAI Memo, Mr. Rughuanath stated that
these prices are ``only available to members of the SEAI.'' See SEAI
Memo. In addition, we asked Mr. Rughuanath if these prices could be
made available to the Department. Although Mr. Rughuanath explained
that he would get back to us, we did not receive any further
communication from him before the preliminary determination. We also
attempted to locate these prices on the internet and were unsuccessful
as SEAI does not maintain a website. Therefore, given that the
Petitioners' Indian market researcher and the Department were unable to
locate these prices either via the internet or through our request to
SEAI, we do not consider these prices to be publicly available.
Second, the SEAI prices provided by the Respondents are not
representative of the entire POI for those prices from the Andarah
Pradesh region. The Respondents only provided prices from a selected
time period within the POI. Specifically, the Respondents provided
prices distributed on June 6, 2003, June 21, 2003, July 26, 2003, and
August 9, 2003. In addition, it is unclear as to whether the SEAI
prices provided by the Respondents are weekly or daily. Mr. Rughuanath
indicated that these prices are distributed monthly, however, the
Respondents provided two sources from SEAI for the month of June 2003.
With regard to the SEAI prices from the Tamil Nadu region, the
Department notes that although these prices are contemporaneous with
the POI because it is an average price from the POI, it is unclear as
to how the average was derived. Therefore, given that the SEAI prices
from the Andarah Pradesh region represent only a selected number of
prices and that the SEAI prices from the Tamil Nadu region are not
provided with supporting documentation (i.e., daily or weekly price
circulars), we do not consider these prices to be a broad market
average.
In addition, the record contains conflicting statements regarding
the representativeness of the regions from which the SEAI prices were
obtained. Mr. Raghuanath stated that the Andarah Pradesh and Tamil Nadu
regions account for 10-11% of India's shrimp purchases. See SEAI Memo.
However, the Respondents' May 21, 2004, submission indicates that these
two regions produced over 55% of the Indian shrimp industry's
production. See Respondents' May 21, 2004, submission at Exhibit 3. The
reliability of the Respondents' supporting documentation is called into
question by the statements made by SEAI Secretary General. See SEAI
Memo. Consequently, it is unclear how the purchased amounts reconcile
with the production figures cited by the Respondents. Therefore, the
representativeness of the Andarah Pradesh and Tamil Nadu regions of
India's shrimp industry as a source for a shrimp surrogate value is
unreliable.
Finally, even if the Department were to use SEAI's count-size
specific prices, the count sizes reported by the Respondents do not
directly correspond to the count sizes indicated in SEAI's prices. The
Respondents' count sizes are provided on a range basis (e.g., 61-70 and
71-80) and these ranges are not consistent with the count-size SEAI
prices (e.g., 60, 70, 80, etc.). For example, if a Respondent reported
a count size of 41-50, it is unclear as to which SEAI price would be
applicable, the 41 count price or the 50 count price. The Department
would also need to adjust prices into different count sizes. Therefore,
because of the lack of consistency between the count sizes in SEAI's
prices and the Respondents' reported count sizes, the Department
determines that relying on SEAI prices and applying them to the
Respondents' reported count sizes would require potentially inaccurate
adjustments not based on the record evidence.
Consequently, based on the record evidence, although the Department
would prefer to use count-size specific surrogate values for the raw
shrimp input, the Department finds that the only count-size specific
surrogate value submitted by the Respondents is not the most
appropriate basis for valuing the raw shrimp input because it is not
publicly available, does not represent a broad market average, has been
shown to be representative of prices in India and does not contain
prices for certain count-size ranges used by the Respondents.
As a result, for this preliminary determination, we are relying on
a raw shrimp surrogate value based on the April 2002-March 2003
financial statements of Nekkanti, from which we derived a purchase
price. We note that although relying on Nekkanti's financial statement
to value the raw shrimp does not provide the Department with a count-
size specific surrogate value, it does not contain the concerns we have
if we used the SEAI prices. This information is publicly available and
represents an average purchase price over Nekkanti's fiscal year (a 12-
month period). We also note that this average price represents an
appropriate valuation basis when compared with the relevant range of
count sizes for the PRC Respondents. See Factor Valuation Memo at 13.
Therefore, we have relied upon Nekkanti's 2002-2003 financial
statements as the basis for the shrimp surrogate value.
To value shrimp larvae for those Respondents that grow shrimp, the
Department has valued shrimp larvae using an average of the price
derived from the Nekkanti Sea Foods Ltd. financial statement for 04/
2002--03/2003, and the price quoted in Fishing Chimes, which is an
Indian seafood industry publication. Both values are contemporaneous
with the POI and are from public Indian sources. See Factor Valuation
Memo at Exhibit 3.
Other Surrogate Values
To value ice, we used the prices submitted by the Respondents,
published in the September 30, 2002 edition of the Hindu Business Line.
See Yelin and Allied's May 21, 2004, submission at Exhibit 12. The
article presents a high and low price paid by seafood processors in
India for block ice. We averaged these prices for a value of Rs 1.05
per kilogram of ice, which was then adjusted for inflation and
converted to USD. See Factor Valuation Memo at Exhibit 4.
To value water, we used the average water tariff rate as reported
in the Asian Development Bank's Second Water
[[Page 42669]]
Utilities Data Book: Asian and Pacific Region (``ADB's Water Utility
Book'') (1997), based on the average of the price per cubic meter
(``m3'') for four cities in India. We adjusted the average
cost of water for the four cities for inflation and converted the value
to USD. See Factor Valuation Memo at Exhibit 4. We have used data from
this source in other antidumping proceedings. See Certain Helical
Spring Lock Washers from the Peoples Republic of China; Preliminary
Results of Antidumping Duty Administrative Review, 68 FR 63060, 63063
(November 7, 2003) (``Lock Washers from the PRC'').
We valued electricity using rates from Key World Energy Statistics
2003, published by the International Energy Agency (``IEA''). We
adjusted the electricity rates for the POI by using the WPI inflator.
See Factor Valuation Memo at Exhibit 11. We have used previous editions
of this report in other antidumping proceedings. See, e.g., Creatine
Monohydrate from the People's Republic of China: Preliminary Results of
Antidumping Duty Administrative Review, 68 FR 62767, 62769 (November 6,
2003) (``Creatine from the PRC''); Notice of Final Results and
Rescission, in Part, of the Antidumping Duty Administrative Review:
Petroleum Wax Candles From the People's Republic of China Monday, 69 FR
12121, 12126 (March 15, 2004) (``Wax Candles from the PRC'').
We valued heavy oil using rates from Key World Energy Statistics
2003, published by the IEA. We adjusted the rate for the POI by using
the WPI inflator. See Factor Valuation Memo at Exhibit 11.
We valued diesel fuel using rates from Key World Energy Statistics
2003, published by the IEA. We adjusted the rate for the POI by using
the WPI inflator. See Factor Valuation Memo at Exhibit 11. We have used
previous editions of this report in other antidumping proceedings. See,
e.g., Creatine from the PRC, 68 FR at 62769; Wax Candles from the PRC,
69 FR at 12126.
We valued coal using rates from Key World Energy Statistics 2003,
published by the IEA. We adjusted the rate for the POI by using the WPI
inflator. See Factor Valuation Memo at Exhibit 11.
Section 351.408(c)(3) of the Department's regulations requires the
use of a regression-based wage rate. Therefore, to value the labor
input, the Department used the regression-based wage rate for China
published by Import Administration on our website. The source of the
wage rate data is the Yearbook of Labour Statistics 2001, published by
the International Labour Office (``ILO''), (Geneva: 2001), Chapter 5B:
Wages in Manufacturing. See the Import Administration website: http://ia.ita.doc.gov/wages/01wages/01wages.html
.
Our treatment of by-products is in accordance with the Department's
practice. ``We allowed recovery/by-product credits where the company
provided information demonstrating that the recoveries/by-products were
sold and/or reused in the production process.'' See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled
Steel Flat Products from the Peoples' Republic of China, 66 FR 49632
(September 28, 2001) and accompanying Issues and Decision Memo at
Comment 3.
To value the by-products, the Department used a surrogate value for
shrimp by-products based on a purchase price quote for wet shrimp
shells from an Indonesian buyer of crustacean shells as Indian values
were not available. Although we recognize that the Respondents reported
by-products other than shells, this information represents the best
information on the record and is being used for this preliminary
determination. See Factor Valuation Memo at Exhibit 10.
To value packing materials, the Department used Indian Import
Statistics published by WTA See Factor Valuation Memo at Exhibit 5.
To value Factory Overhead (``FOH''), Selling, General &
Administrative (``SG&A'') expenses and Profit for those Respondents who
are shrimp processors, we used the 2002-2003 financial statement of
Nekkanti Sea Foods Ltd. (``Nekkanti''), an Indian seafood processor.
See Factor Valuation Memo at Exhibit 13. For FOH, SG&A expenses and
Profit for those Respondents who are integrated producers of processed
shrimp, we used the 2002-2003 financial statements of Devi Sea Foods,
Ltd. (``Devi'') and Sandhya Marines, Ltd. (``Sandhya''), which are both
integrated Indian producers of processed shrimp, and Nekkanti.
The Department notes that two of Red Garden's suppliers, Mingfeng
and Longfeng, as well as ZG, conduct both processing and shrimp farming
operations. The Department also notes that none of these three
surrogate companies whose financial information is on the record
conduct only these two operations. All three are processors and have
nursery operations. The processing company's financial results would
not include any farming operations, while the processor/nursery
companies' include information regarding nursery operations. The
Department therefore averaged the processing company's results with the
two other companies in order to attempt to best approximate the
financial experience of the respondents; by averaging results from a
company with ``less'' expenses with those from companies with ``more''
relevant expenses, the Department achieves the best estimation for the
financial experience of the limited information on the record permits.
Critical Circumstances
On May 19, 2003, the Petitioners alleged that there is a reasonable
basis to believe or suspect critical circumstances exist with respect
to the antidumping investigations of certain frozen and canned
warmwater shrimp from the PRC. On May 27, 2003, the Respondents
submitted comments on the Petitioners' allegation of critical
circumstances. In accordance with 19 CFR 351.206(c)(2)(i), because the
Petitioners submitted critical circumstances allegations more than 20
days before the scheduled date of the preliminary determination, the
Department must issue preliminary critical circumstances determinations
not later than the date of the preliminary determination.
Section 733(e)(1) of the Act provides that the Department will
preliminarily determine that critical circumstances exist if there is a
reasonable basis to believe or suspect that: (A)(i) there is a history
of dumping and material injury by reason of dumped imports in the
United States or elsewhere of the subject merchandise; or (ii) the
person by whom, or for whose account, the merchandise was imported knew
or should have known that the exporter was selling the subject
merchandise at less than its fair value and that there was likely to be
material injury by reason of such sales; and (B) there have been
massive imports of the subject merchandise over a relatively short
period. Section 351.206(h)(1) of the Department's regulations provides
that, in determining whether imports of the subject merchandise have
been ``massive,'' the Department normally will examine: (i) the volume
and value of the imports; (ii) seasonal trends; and (iii) the share of
domestic consumption accounted for by the imports. In addition, section
351.206(h)(2) of the Department's regulations provides that an increase
in imports of 15 percent during the ``relatively short period'' of time
may be considered ``massive.'' Section 351.206(i) of the Department's
regulations defines ``relatively short period'' as normally being the
period beginning on the date the proceeding begins (i.e., the date the
petition is filed)
[[Page 42670]]
and ending at least three months later. The regulations also provide,
however, that if the Department finds that importers, exporters, or
producers had reason to believe, at some time prior to the beginning of
the proceeding, that a proceeding was likely, the Department may
consider a period of not less than three months from that earlier time.
In determining whether the relevant statutory criteria have been
satisfied, we considered: (i) the evidence presented by the Petitioners
in their May 19, 2003, filing; (ii) new evidence obtained since the
initiation of the less-than-fair-value (``LTFV'') investigation (i.e.,
additional import statistics released by the U.S. Census Bureau); and
(iii) the ITC's preliminary determination of material injury by reason
of imports.
To determine whether there is a history of injurious dumping of the
merchandise under investigation, in accordance with section
733(e)(1)(A)(i) of the Act, the Department normally considers evidence
of an existing antidumping duty order on the subject merchandise in the
United States or elsewhere to be sufficient. See Preliminary
Determination of Critical Circumstances: Steel Concrete Reinforcing
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With
regard to imports of certain frozen and canned warmwater shrimp from
the PRC, the Petitioners make no statement concerning a history of
dumping for the PRC. We are not aware of any antidumping order in the
United States or in any country on certain frozen and canned warmwater
shrimp from the PRC. For this reason, the Department does not find a
history of injurious dumping of the subject merchandise from the PRC
pursuant to section 733(e)(1)(A)(i) of the Act.
To determine whether the person by whom, or for whose account, the
merchandise was imported knew or should have known that the exporter
was selling the subject merchandise at less than its fair value and
that there was likely to be material injury by reason of such sales in
accordance with 733(e)(1)(A)(ii) of the Act, the Department normally
considers margins of 25 percent or more for export price sales or 15
percent or more for constructed export price transactions sufficient to
impute knowledge of dumping. See Preliminary Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the
People's Republic of China, 62 FR 31972, 31978 (October 19, 2001).
Because the preliminary dumping margins two of the Respondents, Yelin
and Allied, and the Section A Respondents, are greater than 25 percent
for EP and 15 percent for CEP, we find there is a reasonable basis to
impute to importers knowledge of dumping with respect to all imports
from the PRC. See Critical Circumstance Memo at Attachment II.
In determining whether there are ``massive imports'' over a
``relatively short period,'' pursuant to section 733(e)(1)(B) of the
Act, the Department normally compares the import volumes of the subject
merchandise for at least three months immediately preceding the filing
of the petition (i.e., the ``base period'') to a comparable period of
at least three months following the filing of the petition (i.e., the
``comparison period''). However, as stated in section 351.206(i) of the
Department's regulations, if the Secretary finds importers, exporters,
or producers had reason to believe at some time prior to the beginning
of the proceeding that a proceeding was likely, then the Secretary may
consider a time period of not less than three months from that earlier
time. Imports normally will be considered massive when imports during
the comparison period have increased by 15 percent or more compared to
imports during the base period.
For the reasons set forth in the Critical Circumstances Memo, we
find sufficient bases exist for finding importers, or exporters, or
producers knew or should have known an antidumping case was pending on
certain frozen and canned shrimp imports from the PRC by August 2003,
at the latest. In addition, in accordance with 351.206(i) of the
Department's regulations, we determined December 2002 through August
2003 should serve as the ``base period,'' while September 2003 through
May 2004 should serve as the ``comparison period'' in determining
whether or not imports have been massive in the comparison period as
these periods represent the most recently available data for analysis.
In this case, the volume of imports of certain frozen and canned
warmwater shrimp from the PRC increased 51.57 percent from the critical
circumstances base period December 2002 through August 2003) to the
critical circumstances comparison period (September 2003 through May
2004).
For two of the mandatory respondents who submitted critical
circumstances data, Yelin and Allied, and the Section A Respondents, we
preliminarily determine, as noted above, that importers knew or should
have known that the exporter was selling the subject merchandise at
less than its fair value and that there was likely to be material
injury by reason of such sales in accordance with 733(e)(1)(A)(ii) of
the Act. For Yelin, Allied and the Section A Respondents, we also found
massive imports over a relatively short period. See Critical
Circumstance Memo at Attachment I. These two Respondents and the
Section A Respondents satisfy imputed knowledge of injurious dumping
criterion under 733(e)(1)(A)(ii) of the Act and the massive imports in
accordance with 733(e)(1)(B) of the Act. Therefore, we preliminarily
find that critical circumstances exist for these Respondents.
With regard to the PRC-wide entity, as noted above, we preliminary
find that importers knew or should have known that the exporter was
selling the subject merchandise at less than its fair value and that
there was likely to be material injury by reason of such sales in
accordance with 733(e)(1)(A)(ii) of the Act. In addition, we also find
massive imports over a relatively short period because the volume of
imports of certain frozen and canned warmwater shrimp from the PRC-wide
entity increased more than 15 percent. See Critical Circumstance Memo
at Attachment I. Therefore, we preliminary find that critical
circumstances exist for the PRC-wide entity.
Given the analysis summarized above, and described in more detail
in the Critical Circumstances Memo, we preliminarily determine that
critical circumstances exist for imports of certain frozen and canned
warmwater shrimp from Allied, Yelin, the Section A Respondents
receiving a separate rate and the PRC-wide entity. However, for ZG and
Red Garden, we preliminarily determine that no critical circumstances
exist.
We will make a final determination concerning critical
circumstances for all producers/ exporters of subject merchandise from
the PRC when we make our final dumping determinations in this
investigation, which will be 135 days after publication of the
preliminary dumping determination.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify
the information upon which we will rely in making our final
determination.
Preliminary Determination
The weighted-average dumping margins are as follows:
[[Page 42671]]
Certain Frozen and Canned Warmwater Shrimp From the PRC--Mandatory
Respondents
------------------------------------------------------------------------
Weighted-
average
Manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Allied..................................................... 90.05
ZG......................................................... \1\ 0.04
Red Garden....