Fresh Garlic From the People's Republic of China: Notice of Initiation of New Shipper Antidumping Duty Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In May 2004, the Department of Commerce received three requests to conduct new shipper reviews of the antidumping duty order on fresh garlic from the People's Republic of China. Two of these requests were withdrawn. With respect to the third request, we have determined that it meets the statutory and regulatory requirements for the initiation of a new shipper review. In addition, we believe that there is sufficient information on the record to support the initiation of a middleman dumping inquiry involving the parties named in this request.

EFFECTIVE DATE:

July 7, 2004.

FOR FURTHER INFORMATION CONTACT:

Sochieta Moth or Mark Ross at (202) 482-5047 and (202) 482-4794, respectively, AD/CVD Enforcement 5, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

Background

The notice announcing the antidumping duty order on fresh garlic from the People's Republic of China (PRC) was published on November 16, 1994. On May 11, 24, and 28, 2004, we received three timely requests, in accordance with 19 CFR 351.214(d), to conduct new shipper reviews of the antidumping duty order from Texing Trading Co., Ltd. (Texing Trading), Shandong Dongyue Produce Co., Ltd. (Dongyue), and Shandong Jining Jinshan Textile Co., Ltd. (Jining Jinshan), respectively. Texing Trading and Dongyue withdrew their requests for new shipper reviews on June 9, 2004, and June 25, 2004, respectively.

On June 28, 2004, Jining Jinshan resubmitted its request for a new shipper review to correct certain deficiencies (e.g., illegible exhibits, missing English translations, etc.) that we identified in its submission and to provide additional documentation pertaining to the U.S. sale for which it requested a new shipper review.

Summary of Request for New Shipper Review

Pursuant to 19 CFR 351.214(b)(2)(i), Jining Jinshan certified that it did not export subject merchandise to the United States during the period of investigation (POI). Pursuant to 19 CFR 351.214(b)(2)(iii)(A), Jining Jinshan further certified that, since the initiation of the investigation, it has never been affiliated with any exporters or producers who exported the subject merchandise to the United States during the POI, including those not individually examined during the investigation. As required by 19 CFR 351.214(b)(2)(iii)(B), Jining Jinshan also certified that its export activities were not controlled by the central government.

In addition to the certifications described above, Jining Jinshan submitted documentation establishing the date of its sale to H & T Trading Co., Ltd. (H & T), an unaffiliated customer outside the PRC. Jining Jinshan also provided the volume and value of this shipment. Further, according to the documentation provided by Jining Jinshan, H & T then issued an invoice and resold the subject merchandise to the United States. Jining Jinshan also provided entry documentation establishing the date on which the subject merchandise entered into the United States, as well as the quantity and value of the merchandise that was resold by H & T to an unaffiliated U.S. purchaser.

Initiation of New Shipper Review

Pursuant to section 751(a)(2)(B) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.214(d)(1), we are initiating a new shipper review for shipments of fresh garlic from the PRC grown and exported by Jining Jinshan. Therefore, until completion of the new shipper review, we will instruct U.S. Customs and Border Protection to allow, at the option of the importers, the posting of a bond or security in lieu of a cash deposit for entries of subject merchandise grown and exported from the PRC by Jining Jinshan.

Initiation of Middleman Dumping Inquiry

In cases in which the producer under review sells the subject merchandise to an unaffiliated party prior to its arrival in the U.S. with knowledge of the final destination, we normally use export price, the price at which the producer sells the subject merchandise to the first unaffiliated party, as the basis for U.S. price, pursuant to section 772(a) of the Act.

Based on the material that has been submitted on the record, it appears that the sale for review in the instant case is an export-price sale.

However, when an exporter sells its merchandise to an unaffiliated exporter, who resells its merchandise to the United States below acquisition and selling costs, it is possible that “middleman dumping” may exist. In such cases, the Department will calculate an antidumping duty margin based on a combination of the price paid by the middleman to the exporter, and the price paid to the middleman from the unaffiliated U.S. customer. Congress indicated in its legislative history that it intended for the Department to prevent middleman dumping from occurring, and the Courts have affirmed this application of the law as necessary to prevent the circumvention of the antidumping duty law. See Tung Mung v. United States, 219 F. Supp. 2d 1333, 1343 (CIT 2002), aff'd 354 F. 3d 1371 (Fed. Cir. 2004); S. Rep. No. 96-249 at 94 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 480; and H.R. Rep. No. 96-317 at 75 (1979) (both discussing the need to prevent middleman dumping).

Our analysis of the sales documentation submitted by Jining Jinshan in its request for a new shipper review appears, at first glance, to suggest that a middleman dumping scenario may exist in this case. Accordingly, the Department is initiating a middleman dumping inquiry and will be issuing middleman-oriented questionnaires consistent with our practice in similar past cases. See Fuel Ethanol From Brazil: Final Determination of Sales at Less than Fair Value, 51 FR 5572, 5573 (February 14, 1986); Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Sheet and Strip in Coils from Taiwan, 64 FR 30592 (June 8, 1999); and Notice of Final Determination of Sales at Less than Fair Value: Stainless Steel Plate in Coils from Taiwan, 64 FR 15493 (March 31, 1999).

The period of review is November 1, 2003, through April 30, 2004. See 19 CFR 351.214(g)(1)(i)(B). We intend to issue the preliminary results of this review and inquiry no later than 180 days after the date on which this review is initiated, and the final results of this review and inquiry within 90 days after the date on which the preliminary results are issued. See section 751(a)(2)(B)(iv) of the Act.

Interested parties that need access to proprietary information in this new shipper review and middleman dumping inquiry should submit applications for disclosure under administrative protective order in accordance with 19 CFR 351.305 and 351.306.

This initiation notice is in accordance with section 751(a)(2)(B) of the Act and 19 CFR 351.214 and 351.221(c)(1)(i).