Initiation and Preliminary Results of Antidumping Duty Changed Circumstances Review: Fresh Garlic From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to a letter from Shandong Heze International Trade and Developing Company (Shandong Heze) notifying the Department of Commerce (the Department) that its corporate name has changed to Heze Ever-Best International Trade Co., Ltd. (Heze Ever-Best), the Department is initiating a changed circumstances administrative review of the antidumping duty order on fresh garlic from the People's Republic of China (see Antidumping Duty Order: Fresh Garlic From the People's Republic of China, 59 FR 59209 (November 16, 1994)).

Based on information submitted by Shandong Heze, we preliminarily determine that Heze Ever-Best is the successor-in-interest to Shandong Heze and, as such, is entitled to Shandong Heze's cash deposit rate with respect to entries of subject merchandise.

EFFECTIVE DATE:

August 25, 2004.

FOR FURTHER INFORMATION CONTACT:

Sochieta Moth or Charles Riggle at (202) 482-0168 or (202) 482-0650, respectively; NME Office, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

Background

On July 8, 2004, Shandong Heze requested that the Department initiate a changed circumstances review to confirm that Heze Ever-Best is the successor-in-interest to Shandong Heze for purposes of determining antidumping duty liabilities. On July 28, 2004, the Department requested additional information from Heze Ever-Best concerning the circumstances of the name change. On August 4, 2004, Heze Ever-Best responded to our request for information.

Scope of the Review

The products subject to this antidumping duty order are all grades of garlic, whole or separated into constituent cloves, whether or not peeled, fresh, chilled, frozen, provisionally preserved, or packed in water or other neutral substance, but not prepared or preserved by the addition of other ingredients or heat processing. The differences between grades are based on color, size, sheathing, and level of decay.

The scope of this order does not include (a) garlic that has been mechanically harvested and that is primarily, but not exclusively, destined for non-fresh use or (b) garlic that has been specially prepared and cultivated prior to planting and then harvested and otherwise prepared for use as seed.

The subject merchandise is used principally as a food product and for seasoning. The subject garlic is currently classifiable under subheadings 0703.20.0000, 0710.80.7060, 0710.80.9750, 0711.90.6000, and 2005.90.9500 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this proceeding is dispositive.

In order to be excluded from antidumping duties, garlic entered under the HTSUS subheadings listed above that is (1) mechanically harvested and primarily, but not exclusively, destined for non-fresh use, or (2) specially prepared and cultivated prior to planting and then harvested and otherwise prepared for use as seed, must be accompanied by declarations to the U.S. Customs and Border Protection (CBP) to that effect.

Initiation and Preliminary Results of Changed Circumstances Review

Pursuant to section 751(b)(1) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.216, the Department will conduct a changed circumstances review upon receipt of information concerning, or a request from an interested party for a review of, an antidumping duty finding which shows changed circumstances sufficient to warrant a review of the order. Therefore, in accordance with section 751(b)(1) of the Act, we are initiating a changed circumstances review based upon the information contained in Shandong Heze's submissions.

Section 351.221(c)(3)(ii) of the regulations permits the Department to combine the notice of initiation of a changed circumstances review and the notice of preliminary results in a single notice, if the Department concludes that expedited action is warranted. In this instance, because we have the information necessary to make a preliminary finding already on the record and no other interested party has commented on, or objected to, Shandong Heze's request for a changed circumstances review, we find that expedited action is warranted and have combined the notice of initiation and the notice of preliminary results.

In determining whether one company is the successor to another for purposes of applying the antidumping duty law, the Department examines a number of factors including, but not limited to, changes in (1) management, (2) production facilities, (3) suppliers, and (4) customer base. See, e.g., Industrial Phosphoric Acid From Israel; Final Results of Antidumping Duty Changed Circumstances Review, 59 FR 6944 (February 14, 1994). While no single factor, or combination of factors, will necessarily provide a dispositive indication of succession, the Department will generally consider one company to be a successor to another company if its resulting operation is essentially the same as that of its predecessor. Thus, if the evidence demonstrates that, with respect to the production and sale of the subject merchandise, the new company operates as the same business entity as the prior company, the Department will assign the new company the cash deposit rate of its predecessor.

In its July 8, 2004, submission, Shandong Heze stated that the name change was effected solely for the purpose of enhancing its international and domestic sales, explaining that “Ever-Best” describes the quality of their products, and that the deletion of “Shandong” and “Developing” from its name specifies its operations as a trading company. Shandong Heze also stated that the name change was not due to any changes in ownership, corporate structure, management, supplier relationships, or customer base, all of which remain the same. Shandong Heze provided documentation in support of these claims including copies of the business licenses of the company before and after the name change, the resolution of the Board of Directors authorizing the name change, the application for the name change filed with the Heze Industry and Commerce Administration Bureau and the Bureau's approval of the application, and corporate organization charts before and after the name change. Shandong Heze also stated that since the name change, subject merchandise was produced at the same facilities that had been utilized by the company prior to the name change, and provided a copy of its lease as supporting documentation. Shandong Heze has provided evidence that there were no changes in the company's corporate structure and management as a result of, or contemporaneously with, the change of name.-

With respect to supplier relationships, Shandong Heze stated that Heze Ever-Best works with the same subject merchandise supplier as Shandong Heze did prior to the name change. Finally, Shandong Heze asserts that there have been no changes in its customer relationships or customer base due to the name change and there have been no changes in product names or product brands. Shandong Heze submitted copies of e-mails and fascimiles that were sent to the company's suppliers and customers informing them of the name change to support their assertion that Heze Ever-Best has the same supplier and customer base as Shandong Heze.

Based on information submitted by Shandong Heze, we preliminarily find that Heze Ever-Best is the successor-in-interest to Shandong Heze. We find that the company's organizational structure, senior management, production facilities, supplier relationships, and customers have remained essentially unchanged. Furthermore, Shandong Heze has provided sufficient documentation of its name change. Based on all the evidence reviewed, we find that Heze Ever-Best operates as the same business entity as Shandong Heze. Thus, we preliminarily find that Heze Ever-Best should receive the same antidumping duty cash-deposit rate with respect to the subject merchandise as Shandong Heze, its predecessor company.

Should our final results remain the same as these preliminary results, we will instruct CBP to assign Heze Ever-Best the antidumping duty cash deposit rate applicable to Shandong Heze.

Public Comment

Any interested party may request a hearing within 14 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held 28 days after the date of publication of this notice, or the first working day thereafter. Interested parties may submit case briefs and/or written comments not later than 14 days after the date of publication of this notice. Rebuttal briefs and rebuttals to written comments, which must be limited to issues raised in such briefs or comments, may be filed not later than 21 days after the date of publication of this notice. Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument with an electronic version included. Consistent with section 351.216(e) of the Department's regulations, we will issue the final results of this changed circumstances review not later than 270 days after the date on which this review was initiated, or within 45 days if all parties agree to our preliminary finding. We are issuing and publishing this finding and notice in accordance with sections 751(b)(1) and 777(i)(1) of the Act and sections 351.216 and 351.221(c)(3) of the Department's regulations.