Notice of Final Results of Antidumping Duty New Shipper Review: Honey From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

On December 4, 2003, the Department published the preliminary results of the new shipper review of the antidumping duty order on honey from the People's Republic of China (68 FR 67832). The review covers one producer/exporter, Sichuan-Dujiangyan Dubao Bee Industrial Co., Ltd. (“Dubao”), and one exporter, Shanghai Xiuwei International Trade Co., Ltd. (“Shanghai Xiuwei”), of subject merchandise to the United States during the period February 10, 2001 through November 30, 2002.

Based on our analysis of the record, including factual information obtained since the preliminary results, we have made changes to Dubao's margin calculations and are now using a more contemporaneous labor rate, which was revised in September 2003 and was recently posted to IA's web site. Also, we have found Dubao's second sale to not be a bona fide transaction and are therefore only calculating an antidumping margin based on its first sale. For Shanghai Xiuwei, we are applying adverse facts available (“AFA”), which is 183.80 percent. Therefore, the final results differ from the preliminary results. See “Final Results of Review” section below.

EFFECTIVE DATE:

May 3, 2004.

FOR FURTHER INFORMATION CONTACT:

Brandon Farlander (Shanghai Xiuwei), Dena Aliadinov (Dubao), and Abdelali Elouaradia, AD/CVD Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-0182, (202) 482-3362, or (202) 482-1374, respectively.

SUPPLEMENTARY INFORMATION:

Background

We published in the Federal Register the preliminary results of this new shipper review on December 4, 2003. See Notice of Preliminary Results of Antidumping Duty New Shipper Review: Honey From the People's Republic of China, 68 FR 67832 (December 4, 2003) (Preliminary Results). On February 25, 2004, the Department extended the final results of this new shipper review by 30 days until March 25, 2004. See Notice of Extension of Time Limit on Final Results of New Shipper Review: Honey From the People's Republic of China, 69 FR 8625 (February 25, 2004). On March 31, 2004, the Department extended the final results of this new shipper review by 14 days until April 8, 2004. See Notice of Extension of Time Limit on Final Results of New Shipper Review: Honey From the People's Republic of China, 69 FR 16892 (March 31, 2004). On April 14, 2004, the Department extended the final results of this new shipper review by 16 days until April 26, 2004. See Notice of Extension of Time Limit on Final Results of New Shipper Review: Honey From the People's Republic of China, 69 FR 19814 (April 14, 2004).

The period of review (POR) is February 10, 2001 through November 30, 2002. We invited parties to comment on our Preliminary Results. We received case briefs from petitioners (the American Honey Producers Association and the Sioux Honey Association (collectively, petitioners)), on January 21, 2004. We received rebuttal briefs from Dubao and Shanghai Xiuwei on January 27, 2004. On February 27, 2004, we invited petitioners to comment on the new information in Shanghai Xiuwei's rebuttal brief, but we did not receive any comments.

Scope of Antidumping Duty Order

The products covered by this order are natural honey, artificial honey containing more than 50 percent natural honey by weight, preparations of natural honey containing more than 50 percent natural honey by weight, and flavored honey. The subject merchandise includes all grades and colors of honey whether in liquid, creamed, comb, cut comb, or chunk form, and whether packaged for retail or in bulk form.

The merchandise subject to this review is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and the U.S. Customs and Border Protection (CBP) purposes, the Department's written description of the merchandise under order is dispositive.

Analysis of Comments Received

All issues raised in the briefs are addressed in the Issues and Decision Memorandum, which is hereby adopted by this notice. A list of the issues raised, all of which are in the Issues and Decision Memorandum, is attached to this notice as Appendix I. Parties can find a complete discussion of all issues raised in the briefs 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 Issues and Decision Memorandum can be accessed directly on the Web at http://ia/ita/doc/gov. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on the comments received from the interested parties, we have made changes to the margin calculation for Shanghai Xiuwei and for Dubao. For Shanghai Xiuwei, we are now applying an AFA rate. See the AFA rate section below for details. For Dubao, we are calculating an antidumping margin based only on its first sale and not its second sale because we have determined that its second sale was not a bona fide transaction. For this second sale, we are applying an adverse facts available rate of 183.80 percent for assessment purposes because the U.S. importer is an interested party, according to 771(9)(A) of the Act, and failed to cooperate with the Department's numerous requests for it to respond to the Department's importer questionnaire. See the discussion below on the specifics of this U.S. importer's failure to cooperate. Also, with respect to Dubao's other sale, we are changing the labor wage rate. See the discussion below for specifics on the labor wage rate change. For a detailed discussion of the Shanghai Xiuwei AFA rate and an analysis of the bona fides of Dubao's second sale, see Issues and Decision Memorandum. For business proprietary details of our analysis of the change described below to Dubao's preliminary margin calculation, see Memo to the File regarding Analysis of the Data Submitted by Sichuan-Dujiangyan Dubao Bee Industrial Co., Ltd. (April 26, 2004) (“Dubao Final Analysis Memo”). For details on the proprietary information for Shanghai Xiuwei, see Memo to the File regarding Analysis of the Data Submitted by Shanghai Xiuwei International Trading Co., Ltd. (“Shanghai Xiuwei Final Analysis Memo”) (April 26, 2004).

For labor, during the Preliminary Results, we used the PRC regression-based wage rate at Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in September 2002 and corrected in February 2003. On February 10, 2004, the Expected Wages of Selected NME Countries was updated. For these Final Results, we are using the PRC regression-based wage rate in the Expected Wages of Selected NME Countries, revised in September 2003.

Application of Facts Available

Dubao

The Department has determined that the application of adverse facts available is warranted with respect to Dubao's U.S. importer for its second sale.

Dubao's importer for its second sale failed to respond to the Department's questionnaires or participate in any way in this proceeding. Indeed, the Department made numerous attempts to contact the U.S. importer for Dubao's second U.S. sale, yet found the importer to be unavailable and/or unwilling to assist in the conduct of this administrative review. See the Department's bona fide memorandum from Brandon Farlander and Dena Aliadinov through Abdelali Elouaradia to the File regarding the New Shipper Review on Honey from the People's Republic of China (“PRC”) (“Bona Fide Memo”), dated November 26, 2003. On June 13, 2003, the Department issued an importer questionnaire to White & Case, the legal counsel for Dubao, and instructed that it be forwarded to Dubao's importers. On June 30, 2003, the Department received an importer questionnaire response for Dubao's U.S. customer, but this entity was not the U.S. importer for the second sale. In Dubao's second supplemental questionnaire, Dubao stated that its U.S. customer was not the importer of record for its second sale and provided a Customs Form 7501, which listed the importer of record and an address for this importer. The Department sent an importer questionnaire twice to the 7501 Form address but did not get a response. In addition, the Department sent an importer questionnaire to the address for this U.S. importer listed with the California Secretary of State's office and it was returned, with FedEx indicating that no business existed at that location. The Department located the owner of the 7501 Form address, via the Los Angeles Office of the Assessor's property ownership records and called this owner and he stated that he had lived at that address for two years and had never heard of the U.S. importer, nor was he employed by or an owner of the U.S. importer. At Dubao's verification, the Department informed Dubao that we were unable to locate the U.S. importer and we requested Dubao's contact names and numbers for this U.S. importer. The Department called this person provided by Dubao and she stated that the U.S. importer's address was the address listed on the Customs Form 7501, except for a slight address difference. We sent the importer questionnaire a second time to the Customs Form 7501 address and, again, did not get a response. Also, we left a message with this contact person and asked her to provide another address if necessary. The Department did not hear from this contact, nor did the U.S. importer respond to the Department's importer questionnaire.

The Department was successful in locating a website for this U.S. importer and called the phone number appearing on that website, but discovered that the number had been disconnected. Furthermore, the Department e-mailed the company but no one responded. Finally, the Department called information for the greater Los Angeles area and the operator could not locate the U.S. importer in its phone directory.

Section 771(9) of the Act defines an “interested party” under the antidumping duty law as including producers, exporters, or “United States importer of subject merchandise.” The U.S. importer for Dubao's second sale was an interested party. 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; (B) fails to provide such information by the deadlines for the 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 shall, subject to section 782(d), use facts otherwise available in reaching the applicable determination.

Further, section 776(b) of the Act provides that the Department may use in inference adverse to the interests of a party that has failed to cooperate by not acting to the best of its ability to comply with the Department's request for information. See also Statement of Administrative Action (SAA) accompanying the Uruguay Round Agreements Act (URAA), H.R. Rep. No. 103-316 at 870 (1994).

Clearly, Dubao's importer for its second transaction failed to participate in any way in this review and did not act to the best of its ability. Accordingly, we are applying the adverse facts available rate of 183.80 percent as an assessment rate for the U.S. importer for Dubao's second sale, which we have determined is not a bona fide sale.

An adverse inference may include reliance on information derived from the petition, the final determination in the investigation, any previous review, or any other information placed on the record. See section 776(b) of the Act. It is the Department's practice to assign the highest rate from any segment of a proceeding as total adverse facts available when a respondent rails to cooperate to the best of its ability. (See e.g., Certain Forged Stainless Steel Flanges From India: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review, 67 FR 10358 (March 7, 2002) (“Because we were unable to calculate margins for these respondents, we have assigned them the highest margin from any segment of this proceeding, in accordance with our practice.”); Stainless Steel Plate in Coils From Taiwan; Preliminary Results and Rescission in Part of Antidumping Duty Administrative Review, 67 FR 5789 (February 7, 2002) (“Consistent with Department practice in cases where a respondent fails to cooperate to the best of its ability, and in keeping with section 776(b)(3) of the Act, as adverse facts available we have applied a margin based on the highest margin from this or any prior segment of the proceeding.”)

In keeping with Department precedent, for this new shipper review, we have determined that is appropriate to assign Dubao's U.S. importer for the second sale the rate of 183.80 percent—the highest rate determined in any segment of this proceeding. This rate was established in the LTFV investigation based on information contained in the petition. See Notice of Final Determination of Sales at Less Than Fair Value; Honey from the PRC, 66 FR 50608 (October 4, 2001) and accompanying Issues and Decisions Memorandum (Final Determination). In selecting a rate for adverse facts available, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Final Determination of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23, 1998).

We note that information from a prior segment of this proceeding constitutes “secondary information”, and section 776(c) of the Act provides that, when the Department relies on such secondary information rather than on information obtained in the course of a review, the Department shall, to the extent practicable, corroborate that information from independent sources that are 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 the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See SAA at 870.) The SAA states that the independent sources may include published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation or review. The SAA also clarifies that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value. See SAA at 870. As noted 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) (“TRBs”), to corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.

As noted above, we are applying as AFA the highest rate from any segment of this administrative proceeding, which is the petition rate from the LTFV investigation. We note that in the LTFV investigation, the Department corroborated the information in the petition that formed the basis of the 183.80 percent PRC-wide entity rate. See Final Determination. Specifically, in the LTFV investigation, the Department compared the prices in the petition to the prices submitted by individual respondents for comparable merchandise. Moreover, the information upon which the AFA rate we are applying for the current review was corroborated again during the 2001-2002 administrative review, and found to be both reasonable and reliable. See Honey from the People's Republic of China: Preliminary Results of First Antidumping Duty Administrative Review, 68 FR 69988, 69992 (December 16, 2003) (“01-02 Preliminary Results”). No information has been presented in the current review that calls into question the reliability of this information. Thus, the Department finds that the information is reliable.

We further note that, with respect to the relevance aspect of corroboration, the Department stated in TRBs that it will “consider information reasonably at its disposal as to whether there are circumstances that would render a margin irrelevant. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin.” See TRBs at 61 FR 57392. See also Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (disregarding the highest margin in the case as best information available because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin). Similarly, the Department does not apply a margin that has been discredited. See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated). The information used in calculating this margin was based on information from the petition, which was deemed reliable as compared to the selling prices of actual PRC exporters of the subject merchandise. This rate is also currently applicable to all exporters subject to the PRC-wide rate. Moreover, as there is no information on the record of this review that demonstrates that this rate is not appropriately used as adverse facts available, we determine that this rate has relevance.

As the rate is both reliable and relevant, we determine that it has probative value. Accordingly, we determine that the highest rate from any segment of this administrative proceeding) i.e., the petition rate of 193.80 percent, which is the current PRC-wide rate) is in accordance with section 776(c)'s requirement that secondary information be corroborated (i.e., that it have probative value).

Shanghai Xiuwei

For Shanghai Xiuwei, we conducted verification of its questionnaire responses on August 4-7, 2003. See Verification of U.S. Sale for respondent Shanghai Xiuwei International Trading Co., Ltd. (“Shanghai Xiuwei”) and Factors of Production Information Submitted by Henan Oriental Bee Products Co., Ltd. (“Henan Oriental”) (“Shanghai Xiuwei verification report”). Despite certain inconsistencies on the record, for the preliminary determination, the Department calculated a margin for Shanghai Xiuwei's U.S. sale. See Preliminary Results. However, upon further review of the record and, in particular CBP information on the record, Commerce has revisited its findings. See Bona Fide Memo for the CBP data. Commerce now has determined for these final results that Shanghai Xiuwei failed to provide at verification complete and accurate information about its total shipments of honey to the United States. Moreover, we have determined that Shanghai Xiuwei failed to report in its questionnaire responses and at verification that one of its owners also owned a U.S. importer of subject merchandise and that these two companies are affiliates based on this common ownership. For these reasons, we believe that the application of facts available is warranted.

Shanghai Xiuwei withheld information that was specifically requested by the Department. It is extremely important that an exporter provide all requested information to the agency at verification and in questionnaire responses, and that includes information pertaining to all U.S. affiliates. In particular, this is very important when the U.S. affiliate or affiliates are involved in the production, distribution or sales of subject merchandise. Shanghai Xiuwei did not provide the Department with the identity of its affiliate and did not report its shipments of subject merchandise to that affiliate. Therefore, by withholding this important data from the Department, Shanghai Xiuwei significantly impeded this proceeding, and other information which it provided at verification was called into question, pursuant to sections 776(a)(2)(A), (B), (C), and (D) of the Act. Accordingly, for the reasons discussed in detail in the attached Issues and Decision memorandum, we find that the application of facts available is necessary in this case to determine the antidumping duty rate for Shanghai Xiuwei.

Furthermore, as provided above, the Department has determined, pursuant to section 776(b) of the Act, that an adverse inference is warranted in this case because Shanghai Xiuwei failed to cooperate to the best of its ability to provide the information requested by the Department in this new shipper review. As discussed in detail in the attached Issues and Decision Memorandum, we determine that Shanghai Xiuwei could have complied with the Department's request to respond accurately to the Department's initial questionnaire, requests for supplemental information, and questions asked at verification, but failed to do so. Moreover, at no point in the administrative review, prior to or during verification, did Shanghai Xiuwei notify the Department of the existence of any inaccuracies in information it reported to the Department, or seek guidance on the applicable reporting requirements, as contemplated in section 782(c)(1) of the Act. Furthermore, Shanghai Xiuwei was the only party which had access to this information and, therefore, the only party that could have complied with the Department's request for information on Shanghai Xiuwei's affiliate and additional U.S. sales. For all of the aforementioned reasons, the Department finds that Shanghai Xiuwei failed to cooperate to the best of its ability. See Issues and Decision Memorandum.

In keeping with Department precedent, for this administrative review, we have determined that it is appropriate to assign Shanghai Xiuwei the rate of 183.80 percent—the highest rate determined in any segment of this proceeding. See, e.g., Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review: Brake Rotors from the People's Republic of China, 64 FR 61581, 61584 (November 12, 1999). This rate was established in the LTFV investigation based on information contained in the petition. See Notice of Final Determination of Sales at Less Than Fair Value; Honey from the PRC, 66 FR 50608 (October 4, 2001) and accompanying Issues and Decision Memorandum (Final Determination). In selecting a rate for adverse facts available, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Final Determination of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (February 23, 1998).

For complete details of the Department's application of adverse facts available and its corroboration of the rate selected, see the Issues and Decision Memorandum, dated April 26, 2004. For business proprietary information related to Shanghai Xiuwei, see Shanghai Xiuwei Final Analysis Memo.

Final Results of Review

We determine that the following antidumping margin percentage exists for Shanghai Xiuwei and Dubao during the period February 10, 2001 through November 30, 2002:

Assessment of Antidumping Duties

The Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an exporter/importer specific assessment rate for merchandise subject to this review. The Department will issue appropriate assessment instructions directly to CBP within 15 days of publication of the final results of review. We will direct CBP to assess the resulting assessment rates against the CBP entered values for the subject merchandise on each of the importer's/customer's entries during the review period. For assessment purposes for Dubao's second sale, which we have determined is not a bona fide transaction, we are applying an adverse facts available rate of 183.80 percent.

Cash Deposits Requirements

Bonding will no longer be permitted to fulfill security requirements for shipments from Shanghai Xiuwei and Dubao of honey from the PRC entered, or withdrawn from warehouse, for consumption in the United States on or after the publication of this notice in the Federal Register.

The following cash deposit rates shall be required for merchandise subject to the order entered, or withdrawn from warehouse, for consumption on or after the publication date of these final results for this new shipper review, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rates for Dubao (i.e., for subject merchandise both manufactured and exported by Dubao only) and Shanghai Xiuwei (i.e., for subject merchandise manufactured by Henan Oriental Bee Products Co., Ltd. and exported by Shanghai Xiuwei) will be the rates indicated above; (2) the cash deposit rate for PRC exporters who received a separate rate in a prior segment of the proceeding will continue to be the rate assigned in that segment of the proceeding; (3) the cash deposit rate for the PRC NME entity and for subject merchandise exported by Dubao and Shanghai Xiuwei but not manufactured by Dubao and Henan Oriental, respectively, will continue to be the PRC-wide rate (i.e., 183.80 percent); and (4) the cash deposit rate for non-PRC exporters of subject merchandise form the PRC will be the rate applicable to the PRC exporter that supplied that exporter. In addition, for all honey imported by the U.S. importer (company A) for Dubao's second sale, the cash deposit rate is the PRC-wide rate of 183.80 percent. These deposit requirements shall remain in effect until publication of the final results of the next administrative review. There are no changes to the rates applicable to any other company under this antidumping duty order.

Notification to Interested Parties

The Department will disclose calculations performed in connection with these final results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) 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 subsequent assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with § 351.305(a)(3) of the Department's regulations. 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 the terms of an APO is a sanctionable violation.

This new shipper review and notice are in accordance with sections 751(a)(2)(B) and 777(i)(1) of the Act.

Appendix I—Comments Discussed in Issues and Decision Memorandum

1. Bona Fides of Sichuan-Dujiangyan Dubao Bee Industrial Co., Ltd. U.S. Sales and Application of Adverse Facts Available for Dubao's Importer in the Second Sale.

2. Application of Adverse Facts Available for Shanghai Xiuwei.