Notice of Final Determination of Sales at Less Than Fair Value: Certain Non-Frozen Apple Juice Concentrate from the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce is conducting an antidumping duty investigation of non-frozen apple juice concentrate from the People's Republic of China. We determine that sales have been made at less than fair value. The estimated dumping margins are shown in the Continuation of Suspension of Liquidation section of this notice.

EFFECTIVE DATE:

April 13, 2000.

FOR FURTHER INFORMATION CONTACT:

Craig Matney, Sally Hastings, or Annika O'Hara, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-1778, 482-3464, or 482-3798, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (“the Act”) by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce's (“the Department's”) regulations refer to the regulations codified at 19 CFR Part 351 (April 1998).

Case History

Since the preliminary determination (see 64 FR 65675 (November 23, 1999) (“Preliminary Determination”)), the following events have occurred:

On November 24, 1999, we received an allegation from the respondents in this investigation regarding certain clerical errors in the preliminary determination. On December 27, 1999, we published in the Federal Register a notice of our amended preliminary determination, postponement of the final determination, and extension of provisional measures (64 FR 72316).

On January 10, 2000, one of the respondents, Shaanxi Machinery & Equipment Import & Export Corporation (“SAAME”), notified the Department of its withdrawal from the investigation.

In January and February 2000, we conducted verification of the questionnaire responses submitted by the following respondents: Yantai North Andre Juice Co., Ltd. (“North Andre”); Shaanxi Haisheng Fresh Fruit Juice Co., Ltd. (“Haisheng”); Sanmenxia Lakeside Fruit Juice Co., Ltd. (“Lakeside”); Shandong Zhonglu Juice Group Co., Ltd. (“Zhonglu”); Yantai Oriental Juice Co., Ltd. (“Oriental”); and Qingdao Nannan Foods Co., Ltd. (“Nannan”). We issued the verification reports during February and March 2000.

Pursuant to the Department's request, supplemental information regarding surrogate values was submitted on February 25 and 28, 2000, respectively, by the respondents and by Coloma Frozen Foods, Inc., Green Valley Packers, Knouse Foods Cooperative, Inc., Mason County Fruit Packers Co-op, Inc., and Tree Top Inc. (hereinafter collectively referred to as “the petitioners”).

The petitioners and the respondents filed case and rebuttal briefs, respectively, on March 9 and 14, 2000. At the request of the respondents, the Department held a public hearing on March 17, 2000.

Scope of the Investigation

For purposes of this investigation, the product covered by the scope is all non-frozen concentrated apple juice with a Brix scale of 40 or greater, whether or not containing added sugar or other sweetening matter, and whether or not fortified with vitamins or minerals. Excluded from the scope of this investigation are: frozen concentrated apple juice; non-frozen concentrated apple juice that has been fermented; and non-frozen concentrated apple juice to which spirits have been added. The merchandise subject to this investigation is classified in the HTSUS at subheadings 2009.70.00.20 and 2106.90.52. Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the merchandise under investigation is dispositive.

Period of Investigation

The period of this investigation (“POI”) is October 1, 1998, through March 31, 1999.

Nonmarket Economy Country and Market-Oriented Industry Status

The Department has treated the People's Republic of China (“PRC”) as a nonmarket economy (“NME”) country in all past antidumping investigations. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushrooms from the People's Republic of China, 63 FR 72255 (December 31, 1998) (“Mushrooms”). Under section 771(18)(C) of the Act, this NME designation remains in effect until it is revoked by the Department.

The respondents in this investigation have not requested a revocation of the PRC's NME status and no further information has been provided that would lead to such a revocation. Therefore, we have continued to treat the PRC as an NME in this investigation.

Furthermore, no interested party has requested that the NFAJC industry in the PRC be treated as a market-oriented industry and no further information has been provided that would lead to such a determination. Therefore, we have not treated the NFAJC industry in the PRC as a market-oriented industry in this investigation.

Separate Rates

All responding companies have requested separate, company-specific antidumping duty rates. (Because it has withdrawn from participation in the investigation, SAAME is no longer considered a “responding company.” See “Use of Facts Available” section, below.) In our Preliminary Determination, we preliminarily found that all responding companies had met the criteria for the application of separate antidumping duty rates. See 64 FR at 65677-78. At verification, we found no discrepancies with the information provided in the questionnaire responses of responding companies. We have not received any other information since the Preliminary Determination which would warrant reconsideration of our separate rates determinations with respect to these companies. We, therefore, determine that the responding companies in this investigation should be assigned individual dumping margins.

Antidumping Duty Rate for Those Producers/Exporters That Responded Only to the Separate Rates Questionnaire

For those producers/exporters that responded to our separate rates questionnaire (i.e., Xianyang Fuan Juice Co., Ltd. (“Fuan”); Xian Asia Qin Fruit Co., Ltd. (“Asia Fruit”); Changsha Industrial Products & Minerals Import & Export Corporation (“Changsha”); and Shandong Foodstuffs Imports & Export Corporation (“Shandong Foodstuffs”)), but did not respond to the full antidumping questionnaire because they were not selected to respond or because they did not submit a voluntary response, we have calculated a weighted-average margin based on the rates calculated for the fully-examined responding companies, except that we did not include rates which were zero (i.e., North Andre), based entirely on facts available (i.e., the PRC-wide rate), or for voluntary respondents (i.e., Zhonglu and Lakeside). See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Bicycles from the People's Republic of China, 61 FR 19026 (April 30, 1996) (“Bicycles from the PRC”).

PRC-Wide Rate

As stated in the preliminary determination, information on the record of this investigation indicates that there are numerous producers/exporters of the subject merchandise in the PRC in addition to the companies participating in this investigation. U.S. import statistics show that the responding companies did not account for all imports of NFAJC into the United States from the PRC. Given this discrepancy, it appears that not all PRC exporters of NFAJC responded to our questionnaire. Accordingly, we are applying a single antidumping deposit rate (“the PRC-wide rate”) to all NFAJC exporters in the PRC except those specifically identified in the “Continuation of Suspension of Liquidation” section of this notice.

Use of Facts Available

As explained in the preliminary determination, the PRC-wide antidumping rate is based on adverse facts available, in accordance with section 776 of the Act. Section 776(a)(2) of the Act provides that “if an interested party or any other person—(A) withholds information that has been requested by the administering authority or the Commission under this title, (B) fails to provide such information by the deadlines for submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782, (C) significantly impedes a proceeding under this title, or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority and the Commission shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.” Use of facts available is warranted in this case because the producers/exporters other than those under investigation and the four cooperative exporters who were not selected as respondents, have failed to respond to the Department's questionnaire. While SAAME initially cooperated with the Department in submitting questionnaire responses, it did not permit verification of its information and withdrew from the investigation. Therefore, in accordance with section 776(a)(2)(D) of the Act, we find that use of facts available is warranted with respect to SAAME.

Section 776(b) of the Act provides that adverse inferences may be used when a party has failed to cooperate by not acting to the best of its ability to comply with a request for information. The producers/exporters that decided not to respond in any form to the Department's questionnaire and SAAME, which withdrew from the investigation, failed to act to the best of their ability in this investigation. Further, absent a verifiable response from these firms, we must presume government control of these PRC companies. Thus, the Department has determined that, in selecting from among the facts otherwise available, an adverse inference is warranted and has assigned them a common, PRC-wide rate based on adverse inferences.

In accordance with our standard practice, as adverse facts available, we are assigning to the PRC-wide entity (i.e., those companies not receiving a separate rate), which did not cooperate in the investigation, the higher of: (1) The highest margin stated in the notice of initiation; or (2) the highest margin calculated for any respondent in this investigation (see, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod from Japan, 63 FR 40434 (July 29, 1998)). In this case, the adverse facts available margin is 51.74 percent, the margin from the petition, which is higher than the margin calculated for any respondent in this investigation.

Section 776(c) of the Act provides that where the Department selects from among the facts otherwise available and relies on “secondary information,” such as the petition, the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 103-316 (1994) (SAA), states that “corroborate” means to determine that the information used has probative value. See SAA at 870.

The petitioners' methodology for calculating export price (“EP”) and normal value (“NV”) is discussed in the Notice of Initiation. To corroborate the petitioners” EP calculations, we compared the prices in the petition for the product to the prices submitted by respondents for the same product in similar volumes. To corroborate the petitioners' NV calculations, we compared the petitioners' factor consumption and factor values for the product to the data reported by the respondents for the most significant factors (i.e., apples; labor; electricity; packing materials; factory overhead; selling, general, and administrative expenses; and profit) to the values selected for the final determination, as discussed below. Our analysis showed that, in general, the petitioners' data was reasonably close to the data submitted by the respondents and to the surrogate values chosen by the Department. See April 6, 2000 memorandum to the file (“Corroboration Memo”). Based on our analysis, we find that the figures and calculations set forth in the petition have probative value.

Fair Value Comparisons

To determine whether sales of NFAJC from the PRC to the United States were made at less than fair value, we compared the EP or CEP, as appropriate, to the NV. Our calculations followed the methodologies described in the Preliminary Determination, except as noted below and in the company-specific calculation memoranda dated April 6, 2000, which are on file in the Central Records Unit, Room B-099 of the main Department building.

Export Price and Constructed Export Price

For the price to the United States, we used EP or CEP as defined in section 772 of the Act, as appropriate. We calculated EP and CEP based on the same methodology as in the Preliminary Determination, with the following exception:

We did not use any reported market economy international freight rates where such freight was provided by a non-market economy freight forwarder. Instead, we used the surrogate value for international freight developed using Federal Maritime Commission data. See “Issues and Decision Memorandum” (“Decision Memorandum”) from Richard W. Moreland, Deputy Assistant Secretary, Import Administration to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration, dated April 6, 2000, Comment 3.

Normal Value

1. Surrogate Country

Section 773(c)(4) of the Act requires the Department to value an NME producer's factors of production, to the extent possible, in one or more market economy countries that: (1) Are at a level of economic development comparable to that of the NME, and (2) are significant producers of comparable merchandise. Regarding the first criterion, the Department has determined that India, Pakistan, Sri Lanka, Egypt, Indonesia, and the Philippines are countries comparable to the PRC in terms of overall economic development (see memorandum from Jeff May, Director, Office of Policy, to Susan Kuhbach, Senior Director, AD/CVD Enforcement, Office 1, September 15, 1999) (“Surrogate Memorandum”)).

In the Preliminary Determination, we solicited further comments on this issue from the parties. We received such comments on February 25 and 28, 2000, and in the case and rebuttal briefs filed on March 9 and 14, 2000. For purposes of the final determination, we have continued to rely on India as our primary surrogate country in this investigation. See Decision Memorandum, Comment 1. When Indian values were not available or were determined to be aberrational, we used Indonesian or U.S. values.

2. Factors of Production and Surrogate Values

In our calculation of NV, we have used the same factors of production and the same surrogate values as in the Preliminary Determination, with the following exceptions:

To value rail freight we used a surrogate value based on Northern India Railways data. See

Decision Memorandum, Comment 5. To value aseptic bags for those respondents that did not purchase them from a market economy supplier, we used the average price paid by those respondents who did. See Decision Memorandum, Comment 6.

Critical Circumstances

On November 3, 1999, the Department issued its preliminary determination that critical circumstances exist with respect to SAAME (which has since withdrawn from this investigation), Lakeside, Haisheng, North Andre, Nannan, those non-selected respondents who requested separate rates (Fuan, Asia Fruit, Changsha, and Shandong Foodstuffs), and those entities subject to the PRC-wide rate. We also preliminarily determined that critical circumstances do not exist with respect to Oriental and Zhonglu. See Preliminary Determination of Critical Circumstances: Certain Non-Frozen Apple Juice Concentrate From the People's Republic of China, 64 FR 61835 (November 15, 1999). Our decision was based on the analysis of shipment data submitted by the respondents and available import statistics, as well as evidence of importer knowledge of dumping and the likelihood of resultant material injury. As discussed in the preliminary critical circumstances determination, the Department normally considers margins of 25 percent for EP sales and 15 percent for CEP sales and a preliminary International Trade Commission (“ITC”) determination of material injury sufficient to impute knowledge of dumping and the likelihood of resultant material injury.

Because the final calculated margins for North Andre, Haisheng, Zhonglu, and Oriental are below 15 percent, the Department's threshold for imputing knowledge of dumping is not met as to these companies. Thus, we do not find critical circumstances with respect to these companies. Furthermore, the weighted-average margin we calculated for the non-selected respondents (Fuan, Asia Fruit, Changsha, and Shandong Foodstuffs) is less than the 25 percent threshold for imputing knowledge with respect to EP sales, but greater than the 15 percent threshold for imputing knowledge with respect to CEP sales. Because the record as to these respondents does not indicate whether their sales were EP or CEP sales, we considered whether the 15 percent or 25 percent threshold was applicable with respect to those companies whose rates were used to calculate the weighted-average margin for the non-selected group (i.e., Haisheng, Oriental, and Nannan). Given that the 25-percent threshold was appropriate for two of these three companies, we applied this threshold for the non-selected respondents and thus we did not impute knowledge of dumping to the non-selected respondent group. Accordingly, we also do not find critical circumstances for the companies in this group.

Because the final margins for Lakeside, Nannan and the companies in the PRC-wide entity (including SAAME) continue to be above the threshold for imputing knowledge of dumping, and because, as detailed in the preliminary determination, there is record evidence sufficient to impute knowledge of injury and to support a finding of massive imports over a relatively short period of time, we continue to find that critical circumstances exist with respect to these companies. See Decision Memorandum, Comment 10.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by respondents for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by respondents.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the April 6, 2000, Decision Memorandum which is hereby adopted by this notice. Attached to this notice as an appendix is a list of the issues which parties have raised and to which we have responded in the Decision Memorandum. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, Room B-099 of the Department. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at www.ita.doc.gov/import_admin/records/frn. The paper copy and electronic version of the Decision Memorandum are identical in content.

Continuation of Suspension of Liquidation

In accordance with section 735(c) of the Act, we are directing the U.S. Customs Service (“Customs”) to continue to suspend liquidation of all imports of the subject merchandise from the PRC, except for merchandise both produced and exported by North Andre, which has a zero margin, that are entered, or withdrawn from warehouse, for consumption on or after November 23, 1999, the date of publication of the Preliminary Determination in the Federal Register. In addition, for Lakeside, Nannan, and companies subject to the PRC-wide rate (including SAAME), we are directing Customs to continue to suspend liquidation of any unliquidated entries of subject merchandise entered, or withdrawn from warehouse, for consumption on or after August 25, 1999, the date 90 days prior to the date of publication of the Preliminary Determination in the Federal Register, in accordance with our critical circumstances finding. Consistent with our negative final critical circumstances determination for Haisheng, Fuan, Asia Fruit, Changsha, and Shandong Foodstuffs (all of which were subject to a preliminary critical circumstances finding), we will instruct Customs to liquidate without regard to antidumping duties and refund all bonds and cash deposits posted on subject merchandise exported by these companies that was entered, or withdrawn from warehouse, for consumption prior to November 23, 1999, the date of publication of the Preliminary Determination in the Federal Register.

Customs shall continue to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds the EP or CEP, as appropriate, as indicated in the chart below. These suspension of liquidation instructions will remain in effect until further notice.

The weighted-average dumping margins are as follows:

The PRC-wide rate applies to all entries of the subject merchandise except for entries from exporters that are identified individually above, and to any entries exported by, but Not produced by, North Andre.

ITC Notification

In accordance with section 735(d) of the Act, we have notified the ITC of our determination. As our final determination is affirmative, the ITC will, within 45 days, determine whether these imports are materially injuring, or threaten material injury to, the U.S. industry. If the ITC determines that material injury, or threat of material injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered for consumption on or after the effective date of the suspension of liquidation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Appendix

List of Comments in the Issues and Decision Memorandum

Comment 1: Choice of primary surrogate country

Comment 2: Valuation of apples

Comment 3: Valuation of ocean freight

Comment 4: Valuation of steam coal

Comment 5: Valuation of rail freight

Comment 6: Valuation of aseptic bags

Comment 7: Valuation of apple essence

Comment 8: Valuation of SG&A, factory overhead, and profit

Comment 9: Alleged wrongful initiation of investigation

Comment 10: Critical circumstances

Comment 11: Expansion of scope

Comment 12: Customs instructions

Comment 13: Zhonglu deposit rate