Certain Preserved Mushrooms From the People's Republic of China: Final Results of the Seventh Antidumping Duty New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On July 28, 2004, the Department of Commerce (“the Department”) published the preliminary results of the seventh new shipper review of the antidumping duty order on certain preserved mushrooms from the People's Republic of China (“PRC”). See Certain Preserved Mushrooms from the People's Republic of China: Preliminary Results of the Seventh New Shipper Review, 69 FR 45012 (July 28, 2004) (“Preliminary Results”). This review examined one exporter Guangxi Hengxian Pro-Light Foods, Inc. (“Guangxi Hengxian”), which the Department found qualified for a separate rate. The period of review (“POR”) is February 1, 2003, through July 31, 2003. We gave interested parties the opportunity to comment on our preliminary results.

Based on the comments received from the interested parties, we have made changes in the margin calculation for the respondent in this review (see section entitled “Changes Since the Preliminary Results” below for details). However, these changes did not impact the overall weighted-average margin calculated in the preliminary results. The final weighted-average dumping margin for the reviewed firm is listed below in the section entitled “Final Results of Review.”

EFFECTIVE DATE:

November 1, 2004.

FOR FURTHER INFORMATION CONTACT:

Brian C. Smith, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-1766.

SUPPLEMENTARY INFORMATION:

Background

On July 29, 2004, the Department published in the Federal Register the Preliminary Results (see 69 FR 45012). On September 1, 2004, the petitioner ¹ filed its case brief. On September 8, 2004, Guangxi Hengxian submitted its rebuttal brief.

Scope of Order

The products covered by this order are certain preserved mushrooms whether imported whole, sliced, diced, or as stems and pieces. The preserved mushrooms covered under this order are the species Agaricus bisporus and Agaricus bitorquis. “Preserved mushrooms” refer to mushrooms that have been prepared or preserved by cleaning, blanching, and sometimes slicing or cutting. These mushrooms are then packed and heated in containers including, but not limited to, cans or glass jars in a suitable liquid medium, including, but not limited to, water, brine, butter or butter sauce. Preserved mushrooms may be imported whole, sliced, diced, or as stems and pieces. Included within the scope of this order are “brined” mushrooms, which are presalted and packed in a heavy salt solution to provisionally preserve them for further processing.

Excluded from the scope of this order are the following: (1) All other species of mushroom, including straw mushrooms; (2) all fresh and chilled mushrooms, including “refrigerated” or “quick blanched mushrooms”; (3) dried mushrooms; (4) frozen mushrooms; and (5) “marinated,” “acidified” or “pickled” mushrooms, which are prepared or preserved by means of vinegar or acetic acid, but may contain oil or other additives.²

The merchandise subject to this order is currently classifiable under subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143, 2003.10.0147, 2003.10.0153 and 0711.51.0000 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Analysis of Comments Received

All issues raised in the case brief are addressed in the Issues and Decision Memorandum (Decision Memo), which is hereby adopted by this notice. A list of the issues raised, all of which are in the Decision Memo, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in the case brief and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099 of the main Department building. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov/frn . The paper copy and electronic version of the Decision Memo are identical in content.

Changes Since the Preliminary Results

Based on the comments received from the interested parties, we have made changes in the margin calculation for Guangxi Hengxian as noted below. For a discussion of these changes, see the “Margin Calculations” section of the Decision Memo.

In the Preliminary Results, we included a surrogate cost amount for leasing land in the total cost of manufacture based on the assumption that the 2002-2003 financial reports of the two surrogate Indian producers (i.e., Agro Dutch Foods Ltd. (“Agro Dutch”) and Flex Foods Ltd. (“Flex Foods”)) which we used to derive our surrogate financial ratios did not include this expense. However, after further considering this same issue in a recently completed administrative review, where we used the same financial data to derive surrogate financial ratios, we concluded that the 2002-2003 financial reports of Agro Dutch and Flex Foods should include any and/or all additional costs associated with producing fresh mushrooms (i.e., land lease costs and/or mushroom shed usage) even if these Indian producers do not in fact own the land used to grow fresh mushrooms. (See Certain Preserved Mushrooms from the People's Republic of China: Final Results of Sixth Antidumping Duty New Shipper Review and Final Results and Partial Rescission of the Fourth Antidumping Duty Administrative Review, 69 FR 54635 (September 9, 2004) and its accompanying Issues and Decision Memorandum at Comment 3) (“PRC Mushrooms 4th AR/6th NSR”). In PRC Mushrooms 4th AR/6th NSR, we found that the land lease expense was included in the financial data of the Indian surrogate producers that we used to derive surrogate financial ratios and, as such, it was inappropriate to separately value the cost of the land lease. Therefore, in order to avoid double-counting in the final results of this new shipper review, we have removed the surrogate value amount for land lease from the total cost of manufacturing.

In the Preliminary Results, we included in the selling, general, and administrative expense (“SG&A”) calculation the expenses noted in line item 4 of Schedule 15 of Agro Dutch's 2002-2003 financial report (i.e., “selling expenses-customs duties and others”). However, after further considering this same issue in PRC Mushrooms 4th AR/6th NSR, where we used the same financial data of Agro Dutch in our SG&A calculation, we concluded that the above-mentioned line item included customs duties, antidumping duty deposits and assessments paid by Agro Dutch, and/or freight/movement expenses because the context in which these expenses were reported in Agro Dutch's financial report sufficiently identified them as non-selling expenses (see PRC Mushrooms 4th AR/6th NSR at Comment 9). Therefore, in the final results of this review, we have also removed from the calculation of Agro Dutch's SG&A percentage the expenses included in the above-mentioned line item because these expenses are associated with customs duties and/or freight/movement expenses and, therefore, should not be considered as selling expenses.

We corrected the surrogate value for citric acid based on publicly available information submitted in the petitioner's March 3, 2004, publicly available information submission.

We corrected Guangxi Hengxian's per-unit consumption factor for coal and the distances reported for salt and tape based on the Department's verification findings.

We corrected a calculation error by including the total surrogate cost for tin cans and tin lids in Guangxi Hengxian's total material costs.

Final Results of Review

We determine that the following weighted-average margin percentage exists for the company listed below during the period February 1, 2003, through July 31, 2003:

Assessment Rates

The Department shall determine, and U.S. Customs and Border Protection (“CBP”) shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we calculated importer- or customer-specific ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. In accordance with 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties all entries of subject merchandise during the POR for which the importer- or customer-specific assessment rate is zero or de minimis (i.e., less than 0.50 percent). The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of this review.

Cash Deposit Requirements

Bonding will no longer be permitted to fulfill security requirements for shipments of certain preserved mushrooms from the PRC that are manufactured and exported by Guangxi Hengxian and entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this new shipper review.

The following cash deposit requirements will be effective upon publication of the final results of this review for all shipments of subject merchandise from Guangxi Hengxian entered, or withdrawn from warehouse, for consumption on or after the publication date of this final results, as provided by section 751(a)(2)(B) and (C) of the Act: (1) The cash deposit rate for subject merchandise manufactured and exported by Guangxi Hengxian will be zero; (2) the cash deposit rate for subject merchandise exported by Guangxi Hengxian but not manufactured by it will continue to be the PRC-wide rate (i.e., 198.63 percent); and (3) the cash deposit rate for subject merchandise manufactured by Guangxi Hengxian but not exported by it will be the rate applied to the exporter.

These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.

This notice also serves as the only reminder to parties subject to administrative protective orders (“APO”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(2)(B) and 777(i) of the Act and 19 CFR 351.214.

Appendix--Issues in Decision Memo

Comments

Issue 1: Surrogate Value for Tin Cans and Tin Lids

Issue 2: Distance for Tin Cans

Issue 3: Miscellaneous Corrections