65 FR 33295, May 23, 2000 A-570-831 AR 11/97-10/98 Public Document G1O3: FN MEMORANDUM TO: Troy H. Cribb Acting Assistant Secretary for Import Administration FROM: Richard W. Moreland Deputy Assistant Secretary for Import Administration SUBJECT: Issues and Decision Memorandum for the Administrative Review of Fresh Garlic from the People's Republic of China - November 1, 1997, through October 31, 1998 Summary We have analyzed the comments of interested parties in the November 1, 1997, through October 31, 1998, administrative review of the antidumping duty order covering fresh garlic from the People's Republic of China. Our analysis of the comments resulted in no change to our preliminary results for these final results. We recommend that you approve the positions we have developed in the Discussion of the Issues section of this memorandum. Background On July 21, 1999, the Department of Commerce (the Department) published the preliminary results of the administrative review of the antidumping duty order on fresh garlic from the People's Republic of China (PRC). The review covers three producers/exporters of subject merchandise. The period of review is November 1, 1997, through October 31, 1998. We invited interested parties to comment on our preliminary results. On August 20, 1999, we received comments from the petitioners containing new information. On November 30, 1999, we published a notice of extension of time limit for the final results in order to allow all parties to address the new information submitted by the petitioners. We received further comments from the petitioners, but we did not receive any submissions from the respondents. Use of Facts Available Since we determined that one of the three producers/exporters reviewed did not submit complete responses to our questionnaires and the remaining named respondents did not respond at all to our questionnaires, we preliminarily determined to use facts otherwise available for cash-deposit and assessment purposes for all three of the PRC producers/exporters of the subject merchandise. Furthermore, in the preliminary results we determined that the respondents did not cooperate to the best of their abilities with our requests for necessary information. Therefore, in accordance with section 776(b) of the Tariff Act of 1930, as amended (the Act), we applied adverse inferences when selecting among the facts available. As facts available, we applied a rate of 376.67 percent to all PRC producers/exporters, which is a rate from the petition and constitutes the highest dumping margin used in any segment of this proceeding. As explained in the preliminary results, we determined that this margin was corroborated in accordance with section 776(c) of the Act in a prior review. See Preliminary Results of Administrative Review: Fresh Garlic from the People's Republic of China, 61 FR 68229 (Dec. 27, 1996). We have determined that there is no evidence on the record that would warrant revisiting that issue in these final results. The petitioners submitted comments on our use of adverse facts available, in essence agreeing with our application of facts available. Discussion of the Issues Future Requests for Administrative Review The petitioners propose that the Department require one of the respondents, Fook Huat Tong Kee PTE. Ltd. (FHTK), to submit a good-faith basis for future requests for administrative review before the Department initiates the review. The petitioners comment that in this review FHTK had requested its own review and then withdrew its request rather than make a good-faith effort to comply with the Department's supplemental requests for information. Department's Position: Section 751(a)(1) of the Act states that the Department shall determine the actual antidumping duty if it receives a request for a review. According to 19 CFR 351.213(b)(2), an exporter or producer covered by an order is entitled to request that the Department conduct an administrative review of that exporter or producer within the guidelines of the regulations. The law does not give the Department the authority to decline to initiate an administrative review if it receives a request in proper form from an authorized interested party. If the exporter's or producer's request for review is made properly within the time-frame and form specified in section 751(a) of the Act and section 351.213(b) of the Department's regulations, the law requires that the Department conduct a review. Therefore, we shall continue to conduct administrative reviews upon receipt of requests from any authorized interested parties, made within the guidelines of the regulations. However, we will examine all requests for review closely to ensure that they are in the proper form and comply with the guidelines set forth in our regulations. Evasion of Antidumping Duties The petitioners allege that Comercial Peregrin S.A. (Comercial Peregrin) repackaged Chinese-origin garlic and exported it to the United States as Spanish-origin garlic in order to circumvent the antidumping duty order. The petitioners also provided information to indicate that the volume of imports of fresh garlic from Spain has increased in 1998 and 1999, contending that this increase is consistent with a scenario in which Spanish exporters are sourcing garlic from outside Spain, repackaging it in Spain, and shipping it to the United States as garlic of Spanish origin. The petitioners argue that the information also demonstrates that Spanish exporters have expanded the number of months in which they ship fresh garlic to the United States. The petitioners contend that, because garlic production is constrained by seasonal growing conditions, this increase in the number of months in which Spanish exporters ship garlic suggests that the exporters are sourcing garlic from outside Spain. The petitioners request that the Department address the repackaging scheme and Comercial Peregrin's failure to cooperate in this administrative review by instructing the Customs Service to liquidate entries of Comercial Peregrin's garlic shipments to the United States during the current period of review as garlic from the PRC, regardless of the country of origin claimed on those shipments. Further, the petitioners urge the Department to instruct Customs, to the extent that any of Comercial Peregrin's entries have already been liquidated, to take any available steps to re-liquidate these entries with the application of the appropriate antidumping duty rate. The petitioners also urge the Department to instruct the Customs Service to collect cash deposits in the amount of 376.67 percent ad valorem on all future entries exported by Comercial Peregrin, regardless of the country of origin claimed on those shipments, unless the importer can establish that the country of origin is not the PRC. Finally, the petitioners make one more request concerning the Department's handling of the repackaging scheme. Because of the proprietary nature of this request, we are addressing it in a separate memorandum. See Memorandum to Richard W. Moreland from Laurie Parkhill, May 9, 2000. Department's Position: The petitioners have raised a complex and difficult issue. We have examined this issue from many perspectives. The antidumping duty order in this case covers subject garlic from the PRC. Therefore, under the order, the Department may only instruct Customs to collect cash deposits and assess antidumping duties on garlic determined to be of Chinese origin. While the petitioners make an allegation that Comercial Peregrin may be misrepresenting the country of origin of certain garlic entries through the use of a repackaging scheme, after a close and thorough examination of this allegation, we must determine that the allegation itself is not sufficient for us to conclude that all garlic entries made by Comercial Peregrin are of Chinese origin as opposed to being of Spanish origin. Further, we examined thoroughly the statistical export information which the petitioners provided to us. Although the petitioners contend that the statistics showing both an increase in the volume of Spanish garlic exported to the United States and an increase in the number of months in which garlic is shipped support the existence of a repackaging scheme, we determine that petitioners' interpretation of the data is only one possible interpretation of these very general export statistics. There could be many other, equally plausible, interpretations of this data. Lacking any other record evidence demonstrating that Comercial Peregrin's garlic entries are actually of Chinese origin, we cannot order the Customs Service to collect cash deposits or assess antidumping duties on Comercial Peregrin's non-PRC-origin entries. We are instructing Customs to assess antidumping duties of 376.67 percent on any entries of Chinese-origin garlic from Comercial Peregrin during the period of review and are also instructing Customs to collect cash deposits at the same rate for any future entries of Chinese-origin garlic exported by Comercial Peregrin, pursuant to the final results of this review. Recommendation Based on our analysis of the comments received, we recommend adopting the above positions. If these recommendations are accepted, we will publish in the Federal Register the final results of review and the final antidumping duty margin for all exporters. Agree___________ Disagree___________ Troy H. Cribb Acting Assistant Secretary for Import Administration Date