65 FR 20948 April 19, 2000
                                                     A-570-848
                                                     ARP: 3/26/97-8/31/98
                                                     Public Document
                                                     G3O7: SCE/MAS/TGG

MEMORANDUM TO: Joseph A. Spetrini
               Acting Assistant Secretary
                 for Import Administration

FROM:          Edward C. Yang
               Director, Office 9
               AD/CVD Enforcement Group III


SUBJECT:       Issues and Decision Memo for the Administrative Review of 
               the Antidumping Duty Order on Freshwater Crawfish Tail Meat 
               from the People's Republic of China--
               March 26, 1997 through August 31, 1998


Summary

We have analyzed the comments and rebuttals of interested parties in the 1997-
1998 new shipper and administrative reviews of the antidumping duty order
covering freshwater crawfish tail meat from the People's Republic of China
(PRC). As a result of our analysis, we have made changes, including corrections
of certain inadvertent programming and clerical errors in the margin
calculations. We recommend that you approve the positions we have developed in
the Discussion of the Issues section of the memorandum. Below is the complete
list of the issues in this administrative review for which we received comments
and rebuttals by parties:


1. Facts Available (FA)
   A. Non-Respondents and Parties Who Improperly Filed and Served Responses
   B. Lianyungang Haiwang Aquatic Products, Ltd. (Haiwang)
   C. Ningbo Nanlian Frozen Foods Company, Ltd. (Ningbo Nanlian)
   D. Huaiyin Foreign Trade Corporation (5) (HFTC5)

2. Recission of the New Shipper Review of Yancheng Baolong Biochemical
   Products Co., Ltd. (Baolong Biochemical)

3. Circumstance of Sale Adjustments: Imputed Credit Expense

4. Factor Valuation

5. Deposit and Assessment Rates for Huaiyin Foreign Trade Corporation (30)
   (HFTC30) and other companies with Huaiyin Foreign Trade Corporation in 
   their title


Background

On October 12, 1999, the Department of Commerce (the Department) published the
preliminary results of administrative review of the antidumping duty order on
freshwater crawfish tail meat from the PRC. The merchandise covered by this
order is freshwater crawfish tail meat, in all its forms (whether washed or
with fat on, whether purged or unpurged), grades, and sizes; whether frozen,
fresh, or chilled; and regardless of how it is packed, preserved, or prepared.
Excluded from the scope of the order are live crawfish and other whole
crawfish, whether boiled, frozen, fresh or chilled. Also excluded are saltwater
crawfish of any type, and parts thereof. Freshwater crawfish tail meat is
currently classifiable in the Harmonized Tariff Schedule of the United States
(HTS) under item numbers 0306.19.00.10 and 0306.29.00.00. The HTS subheadings
are provided for convenience and Customs purposes only. The written description
of the scope of this order is dispositive. The period of review is 
March 26, 1997 through August 31, 1998, with the exception of Ningbo Nanlian,
whose period of review is April 1, 1998 through August 31, 1998. At the request
of certain interested parties, we held a public hearing on March 23, 2000.


Discussion of the Issues

1. Facts Available

A. Non-Respondents and Parties Who Improperly Filed and Failed to Serve
Responses

Section 776(a) of the Tariff Act of 1930, as amended (the Act) provides that
if an interested party withholds information that has been requested by the
Department, fails to provide such information in a timely manner or in the form
or manner requested, significantly impedes a proceeding, or provides
information which cannot be verified, the Department shall use, subject to
sections 782(d) and (e), the facts otherwise available in reaching the
applicable determination. In this administrative review the Department has
determined, for the reasons stated below, that Yancheng Foreign Trade
Corporation (Yancheng FTC) and Nantong Delu Aquatic Food Company, Ltd. (Nantong
Delu) failed to provide any information requested by the Department. Therefore,
pursuant to section 776(a) of the Act, we have determined that the use of the
facts otherwise available is necessary in this instance.

However, the statute requires that certain conditions be met before the
Department may resort to the facts available. Where the Department determines
that a response to a request for information does not comply with the request,
section 782(d) of the Act provides that the Department will so inform the party
submitting the response and will, to the extent practicable, provide that party
the opportunity to remedy or explain the deficiency. If the party fails to
remedy the deficiency within the applicable time limits, the Department may,
subject to section 782(e), disregard all or part of the original and
subsequent responses, as appropriate. Section 782(e) provides that the
Department ``shall not decline to consider information that is submitted by an
interested party and is necessary to the determination but does not meet all
the applicable requirements established by [the Department]'' if the
information is timely, can be verified, is not so incomplete that it cannot be
used, and if the interested party acted to the best of its ability in providing
the information. Where all of these conditions are met, and the Department can
use the information without undue difficulties, the statute requires it to do
so.

Finally, in selecting from among the facts otherwise available, section 776(b)
of the Act permits the use of an adverse inference if the Department also finds
that an interested party failed to cooperate by not acting to the best of its
ability to comply with the requests for information. Adverse inferences are
appropriate ``to ensure that the party does not obtain a more favorable result
by failing to cooperate than if it had cooperated fully.'' See the Statement of
Administrative Action (SAA), reprinted in H.R. Doc. 103-316 at 870 (1994).
Furthermore, ``an affirmative finding of bad faith on the part of the
respondent is not required before the Department may make an
adverse inference.'' Antidumping Duties; Countervailing Duties; Final Rule, 62
FR 27296, 27340 (May 19, 1997) (Final Rules). The statute states that in
selecting from among the facts available the Department may, subject to the
corroboration requirements of section 776(c), rely upon information drawn from
the petition, a final determination in the investigation, any previous
administrative review conducted under section 751 (or section 753 for
countervailing duty cases), or any other information on the record.

As explained in the Department's response to Comment 1, we

have determined that we must resort to the FA with respect to Yancheng FTC and
Nantong Delu's failure to provide a questionnaire response. Accordingly, as
provided in section 776(b) of the Act, we find that Yancheng FTC and Nantong
Delu have failed to cooperate by not acting to the best of their
ability in responding to the Department's requests for information. Therefore,
we have relied upon adverse facts available (AFA) for the entirety of the data
submitted by Yancheng FTC and Nantong Delu. Because neither of these exporters
merits a separate rate, we have considered them part of the PRC entity.
Accordingly, as facts available for the PRC-wide rate, we have assigned the
highest rate determined in any segment of this proceeding, which is 201.63
percent. See also the Memorandum to Barbara E. Tillman from the Crawfish Team;
Determination of Adverse Facts Available in the Administrative Review and New
Shipper Review of Freshwater Crawfish Tail Meat from the PRC, dated September
30, 1999 (Determination of Adverse Facts Available Memo).

Three companies did not respond to the Department's antidumping questionnaire:
Binzhou Prefecture Foodstuffs Import & Export Corp., Huaiyin Ningtai Fisheries
Co., and Yancheng Baolong Aquatic Foods Co., Ltd. In accordance with section
776(a)(2)(A) of the Act, we applied FA for these three companies. Since these
firms have not demonstrated that they qualify for a separate rate, the
Department considers them to be part of the PRC entity and will receive the PRC-
wide rate. Notice of Preliminary Results of Antidumping Duty Administrative
Review and New Shipper Reviews, Partial Rescission of the Antidumping Duty
Administrative Review, and the Rescission of the New Shipper Review for
Yancheng Baolong Biochemical Products, Co. Ltd.: Freshwater Crawfish Tail Meat
From the People's Republic of China, 64 FR 55236 (October 12, 1999) (Crawfish
Preliminary Results). We have received no comments on this issue. Accordingly,
these exporters will be subject to the PRC-wide rate, which is based on AFA as
indicated above. 

Nantong Delu Aquatic Food Co., Ltd. and Yancheng Foreign Trade Corporation
failed to file their questionnaire responses in the proper manner and to serve
responses on the other interested parties in this review as required by
sections 351.303 and 351.304 of the Department's regulations. Although the
Department informed both companies that their responses were deficient and
offered both companies the opportunity to rectify the deficiencies in their
responses, in accordance with section 782(d) of the Act, neither company
complied with the applicable regulations. The Department subsequently returned
the responses of Yancheng FTC and Nantong Delu on February 19, 1999 and 
April 5, 1999, respectively. In the preliminary results of review, the
Department applied FA for both of these firms in accordance with section
776(a)(2)(B) of the Act. For these final results, we continue to find that
these exporters are subject to the PRC-wide rate, which is based on AFA as
indicated above. 

Comment 1: Yancheng FTC and Nantong Delu, producers and exporters of the
subject merchandise, and Ocean Harvest Wholesale Inc., a U.S. importer of
subject merchandise from Nantong Delu and Yancheng FTC, argue that Nantong Delu
and Yancheng FTC were not given proper time to remedy the deficiencies in their
responses. These interested parties state that the Department offered only two
days in which the companies could rectify the deficiencies and resubmit the
responses to the Department. These interested parties argue that the letter the
Department sent to Nantong Delu offered conflicting deadlines as to when the
responses were to be resubmitted to the Department. According to these
interested parties, the Department's letter of 

April 5, 1999 stated that Nantong Delu must rectify the deficiencies in its
responses and return the responses to the Department within two business days,
yet later in the letter the Department stated that if the responses were not
properly filed by April 20, 1999, the Department might resort to AFA.

These interested parties argues that, in a letter dated 
February 11, 1999, the Department also gave Yancheng FTC conflicting deadlines
for re-submission of its responses. The Department's letter initially stated
that the response must be properly filed within two business days, or the
Department might resort to AFA, but later gave a deadline of February 26, 1999.
These interested parties state that, even if Yancheng FTC and Nantong Delu were
given proper time to respond, since both Yancheng FTC and Nantong Delu did
initially submit a response, the Department should not apply AFA. These
interested parties argue that AFA, according to the Act and the Department's
regulations, should only be applied when a company offers no response to the
Department's questionnaire and does not in any way indicate compliance with the
Department's regulations. These interested parties state that since they did
submit responses, the Department should apply FA rather than AFA.

Petitioner argues that, since Yancheng FTC and Nantong Delu never served a
questionnaire response on the domestic parties during this segment of the
proceeding, AFA is justified. Petitioner contends that, since Nantong Delu and
Yancheng FTC failed in completing this relatively simple task, the Department
is well within its regulations to determine that they have not cooperated fully
and to apply AFA to both companies. Petitioner also argues that these companies
did not provide the Department proper information with which to make a separate
rates determination, and that therefore the companies are part of the PRC
entity and deserve the 201.63% PRC-wide rate. Petitioner asserts that,
regardless of the two-day deadline cited by respondents, the companies could
have submitted the document by the second deadline given in the letter and each
firm chose not to do so.


Department's Position: We agree with Petitioner that AFA should be applied for
Yancheng FTC and Nantong Delu for this review. The Department offered Yancheng
FTC and Nantong Delu adequate opportunities to rectify their submissions. The
companies never contacted the Department regarding their confusion regarding
the deadlines given in the letters. In any event, neither company properly
filed its responses even by the later of the deadlines mentioned in the letters.

On January 11, 1999, the Department sent a letter to Yancheng FTC, stating
that Yancheng FTC's response to Section A of the Department's questionnaire was
improperly submitted and that Yancheng FTC was responsible for serving all
interested parties with its submission. This letter contained instructions as
to how to properly file the documents and a list of the interested parties in
the case. The Department received a response on January 12, 1999 from Yancheng
FTC regarding the Department's January 11, 1999 letter. In this letter,
Yancheng FTC stated that it had received the Department's January 11, 1999
letter and it was sending its Section C and D responses to the Department by
mail. The Department sent another letter to Yancheng FTC on February 11, 1999,
stating that the Department had received Yancheng FTC's Section C and D
responses to the Department's questionnaire and detailing the requirements for
properly identifying business proprietary information. The Department informed
Yancheng FTC in this letter that it was returning all of Yancheng FTC's
submissions because of the failure to properly identify business proprietary
information. This letter set a deadline of February 26, 1999 for Yancheng FTC
to resubmit its response and stated that the Department might use AFA in its
determination if it did not receive the properly filed and served responses by
this date. The Department did not receive a response to its February 11, 1999
letter. In another letter to Yancheng FTC, dated February 17, 1999, the
Department again stated that if the submissions were not resubmitted in the
proper format and properly filed by February 26, 1999, the Department might
resort to AFA in its determination. The Department did not receive a response
from Yancheng FTC to its letter dated February 17, 1999.

On January 11, 1999 we sent a letter to Nantong Delu, stating that Nantong
Delu's response to Section A of the Department's questionnaire was improperly
submitted and that Nantong Delu was responsible for serving all interested
parties with its submission. This letter detailed how to serve the response and
included a list of the interested parties in this review. On April 5, 1999, the
Department stated in a letter that it had received Nantong Delu's Section C and
D responses and its reorganized Section A response, submitted to the Department
on February 2, 1999. The Department also informed Nantong Delu that, despite
its claim in its February 2, 1999 letter that it had sent reorganized Section C
and D responses, the Department had not received reorganized Section C and D
responses. The Department explained in this letter to Nantong Delu that none of
its responses properly identified business proprietary information and that,
per the Department's regulations, the Department was now returning sections A,
C & D. In that letter, we also required that Nantong Delu properly identify
business proprietary information and resubmit the responses. While the letter
does initially mention that the documents should be resubmitted within two
business days, the last paragraph of the letter states that the document must
be resubmitted in the proper format and served on all parties by April 20,
1999, with the date in bold print. On April 15, 1999, Nantong Delu requested 
an extension of the deadline given in the Department's April 5, 1999 letter. 
We then sent a letter to Nantong Delu on April 19, 1999, explaining that the 
Department was granting an extension to Nantong Delu, as it requested. The 
Department informed Nantong Delu in this letter that if it did not resubmit 
its documents in the proper format and serve them on all interested parties 
by this deadline, the Department might use AFA in its determination. The 
Department did not receive a response from Nantong Delu to its April 19, 1999 
letter.

Since we gave each party two or three opportunities to make changes to their
responses, the Department considers that AFA is warranted, because the
respondents did not cooperate with the Department's request for information to
the best of their ability. Section 351.308 of the Department's regulations
allows the Department to apply AFA in any case where it warrants that the
company has not fully responded. For more information, see the Determination of
Adverse Facts Available Memo, dated September 30, 1999. Therefore, for these
final results of review, we have continued to apply the AFA rate of 201.63% to
Yancheng FTC and Nantong Delu.


B. Facts Available for Haiwang


Comment 2: Haiwang argues that the Department's verification report is
factually inaccurate and based on incorrect subjective observations. Haiwang
states that, at verification, it was not given an opportunity to address any of
the specific concerns later raised in the Haiwang verification report. Haiwang
argues that, since the verification report was released at the same time as the
preliminary results, Haiwang was not given appropriate opportunity to comment
on the inaccuracies contained within the verification report prior to the
preliminary results. Citing Bowe-Passat v. United States, 17 CIT 335, 339
(1993), Haiwang argues that by not allowing Haiwang to address these concerns
at verification, and by not releasing the verification report prior to the
preliminary results of review, the Department is not in compliance with the
requirements of the U.S. Court of International Trade (CIT) that the
verification and review process be fair and reasonable. Haiwang requests that
the Department conduct another verification of Haiwang.

Petitioner asserts that the Department is not required to give respondents an
opportunity to comment on the verification report prior to the preliminary
results and that, therefore, Haiwang has not been denied any opportunity to
comment on this issue. Petitioner contends that the case cited by Haiwang
concerning the fair and just conduct of the Department in its proceedings does
not mention anything regarding the proper timing of verification reports or any
mandate of the Department to ask certain questions at verification. Petitioner
states that the CIT has consistently given the Department latitude concerning
its verification procedures. Petitioner states that Haiwang does not prove that
any of the Department's verification procedures were unjust, and argues that
the Department should apply AFA to Haiwang.


Department's Position: We agree with Petitioner. Section 782(i) of the Act and
section 351.307 of the Department's regulations grant the Department
significant latitude in methods used at verification. Section 782(i) of the Act
requires the Department to "verify all information relied upon in making . . .
a final determination in a review." However, Congress has not prescribed the
manner in which verification must occur. See Micron Tech., Inc. v. U.S., 117
F.3d 1386 (United States Court of Appeals for the Federal Circuit (CAFC) 1997);
see also Hercules, Inc. v. United States, 673 F.Supp. 454, 469 (1987)
(recognizing Commerce's sole discretion "to select a particular verification
methodology"). 

Further, the cases cited by Haiwang are inapposite here. Haiwang cites Bowe-
Passat v. United States, 17 CIT 335, 339 (1993) (addressing the Department's
failure to accept new factual information after the pre-hearing brief stage)
and Rubberflex SDN BHD v. U.S., Slip Op. 99-68 at 21 (July 23, 1999)
(addressing the Department's abuse of discretion during verification) in
support of the proposition that the review process is bilateral and
interactive. However, here the verification was reasonable. The verification
and the review process was a give and take between the Department and the
respondents. The Department complied with its responsibility to verify the
information submitted by Haiwang during the review, and throughout the
verification process the verifiers asked questions of the officials at Haiwang.
Furthermore, after Haiwang was verified, the interactive process continued with
the Department's subsequent acceptance of post-preliminary results briefs, and
Haiwang was given an opportunity for presenting comments at the hearing on
March 23, 2000. 

In its case brief, Haiwang has submitted comments on this issue; therefore, it
has not been denied any opportunity to comment regarding this issue. Therefore,
for these final results of review, we have continued to apply AFA to Haiwang.

As for Haiwang's request that the Department "re-verify," as we stated in
Antifriction Bearings (Other than Tapered Roller Bearings) and Parts Thereof
from France, Germany, Italy, Japan, Singapore, Sweden, and the United Kingdom;
Final Results of Antidumping Duty Administrative Reviews and Partial
Termination of Administrative Reviews, 61 Fed. Reg. 66481, 66482 
(December 17, 1996), "It is incumbent on the respondent to establish the
accuracy of the information it submits during the time period allotted for
verification." This position is supported by the CIT, which stated, "There is
no statutory mandate as to how long the process of verification must
last....[the Department] is afforded wide discretion when conducting a
verification pursuant to 19 U.S.C. 1677e(b)."; see also Ceramica Regiomontana,
S.A. v. U.S., 636 F.Supp. 961, 967 (1986) (holding that the Department has wide
latitude in determining the time to be spent and the procedures to be used to
conduct verification).

Conducting a second verification, after a company fails a first verification,
would be an extraordinary action, and to do so would signal to respondents that
a failed verification can be overcome, which would undermine the Department's
ability to obtain complete and accurate information in time to conduct proper
verifications and to complete reviews in a timely and efficient manner as
required by the Act. The Department is not required to conduct an additional
verification. The CIT has ruled that "[d]ue to stringent time deadlines and the
significant limitations on Commerce's resources it is vital that accurate
information be provided promptly to allow the agency sufficient time for
review." Id. at 967. Supplemental verifications have occurred in the past;
however, these re-verifications were generally conducted pursuant to requests
for additional information from the Department. See Porcelain-on-Steel Cooking
Ware From the People's Republic of China; Final Results of Antidumping Duty
Administrative Review, 62 Fed. Reg. 54825, 54830 (October 22, 1997) (the
Department declined to re-verify respondent after it failed verification).
Moreover, the nature of the deficiencies at the facility weighs against re-
verification. For example, the Department concluded, based on its verification,
that Haiwang did not have adequate freezer storage for tail meat allegedly
being processed; any correction of this situation subsequent to verification
would give no indication of Haiwang's ability to freeze and store crawfish tail
meat during the period of review (POR). Thus, there is no reason that the
Department should take the extraordinary measure in this case of conducting a
second verification.


Comment 3: Haiwang further contends that much of the verification report
supports the veracity of Haiwang's response (i.e., the Department found no
discrepancies within the sales trace, the corporate structure and history,
quantity and value, quantity of production, crawfish collection, crawfish shell
production, and consumption of other factors, including packing materials), and
that this conflicts with the Department's findings regarding the Haiwang
factory which are the basis of the Department's decision to apply AFA to
Haiwang.


Department's Position: Section 776(a) of the Act provides that if an
interested party withholds information that has been requested by the
Department, fails to provide such information in a timely manner or in the form
or manner requested, significantly impedes a proceeding, or provides
information which cannot be verified, the Department shall use, subject to
sections 782(d) and (e), the facts otherwise available in reaching the
applicable determination. In this administrative review the Department has
determined, for the reasons stated in detail below, that we were unable to
verify portions of Haiwang's responses. Therefore, pursuant to section 776(a)
of the Act, we have determined that the use of the facts otherwise available is
necessary in this instance. For more information, see the Determination of
Adverse Facts Available Memo, dated September 30, 1999. Section 351.307 gives
the Department wide latitude concerning verification and does not state that if
a company passes one portion of the verification it automatically passes all
portions of the verification. Section 351.308 of the Department's regulations
states that the Department can apply FA in cases where "the Secretary is unable
to verify submitted information." Haiwang reported that the facility that the
verifiers toured was the facility where the crawfish tail meat was processed;
however, the Department's verifiers were unable to confirm that production
could have taken place at the facility. It is fundamental to verification that
a respondent be able to show, through a simple plant tour, that production
occurred in the manner the respondent described in its responses. The
Department was unable to verify that production of subject merchandise took
place in the location Haiwang represented as its production facility.


Comment 4: Haiwang further argues that many of the inaccuracies documented in
the verification report and upon which the Department based its decision to use
AFA are false. Haiwang addresses these items point by point.

Petitioner argues that some of the information provided by Haiwang in its case
brief at pages 7-10 (in which Haiwang presents an item-by-item discussion of
the Department's verification report) is untimely and unverified information
that cannot be relied upon or accepted.


Department's Position: In the Memorandum for Robert S. LaRussa from Barbara E.
Tillman; Issues for the Preliminary Results of Review: Lianyungang Haiwang
Aquatic Products Co., Ltd. (Haiwang): The Use of Facts Available (Haiwang Facts
Available Memo), dated September 30, 1999, we note that no single fact is
dispositive in our determination that Haiwang's production information is
unreliable and unverifiable. Thus, even where Haiwang's comment draws into
question the significance of some of the verifiers' observations at
verification, the weight of the evidence still leads to the conclusion that the
reported processing facilities did not produce the merchandise sold during the
POR. The following comments address the specific points Haiwang made.
Considering the totality of the deficiencies found at the factory tour at
Haiwang, the Department will continue to apply AFA to Haiwang. While no single
factor is dispositive in this case, a totality of the circumstances warrants
the application of AFA to Haiwang in these final results of review. See Haiwang
Facts Available Memo, dated September 30, 1999.


Comment 5: Haiwang disputes the Department's statements, in the Memorandum to
the File from Laurel LaCivita and Sarah Ellerman; New Shipper Review of
Freshwater Crawfish Tail Meat from the People's Republic of China (A-570-848):
Sales and Factors of Production Verification of Lianyungang Haiwang Aquatic
Products Co., Ltd. (Haiwang) (Haiwang Verification Report), dated September 30,
1999 and the Haiwang Facts Available Memo, that the verification was held at a
local hotel at Haiwang's request. Haiwang argues that it suggested the
verification be held at a hotel because Haiwang did not have a meeting room
suitable for verification, and that the decision to hold verification in a
local hotel was mutually agreed upon by the company and the Department.

Haiwang states that, although the Haiwang Facts Available Memo and Haiwang
Verification Report claim that the company offices did not appear to be in use,
actually there were two file cabinets, two telephones, one printer, three desks
and one computer. Haiwang claims that any preconceived notions the Department
verifiers held concerning what a proper office should consist of are subjective
and not proper guidelines upon which to base a decision of the viability of a
company.


Department's Position We agree with Haiwang that we never objected to holding
verification at the hotel. The Department did not cite this decision as a
factor leading to the application of facts available. Rather, we included this
fact to explain that we saw the offices only during the tour. We note in the
Haiwang Facts Available Memo and the Haiwang Verification Report, however, that
during this tour the verifiers observed that the office had only "minimal
furnishings," that is, tables and chairs. To the Department verifiers, the
office did not appear to be in use. As the Department described in the Haiwang
Verification Report on page 13, "There was no evidence that these rooms {the
office} were in use, and no office equipment, books, references, calenders,
people working or paper work." The office was only one of the factors the
Department considered in its determination to apply AFA to Haiwang. As outlined
in the Haiwang Verification Report and the Haiwang Facts Available Memo, we
noted many problems with the factory at Haiwang, especially the lack of a
working freezer. 


Comment 6: Haiwang asserts that the Department misunderstood Haiwang's
production process, as evidenced by the verifiers' statement that they expected
to see a mechanism by which to track live crawfish intake at the factory.
Haiwang explains that the volume of live crawfish were weighed and recorded for
each collection worker at the collection site. Haiwang also argues that, since
the Department confirmed Haiwang's supplemental response data for the amount of
crawfish collected during the POR and found no discrepancies, the Department
should be able to assume that Haiwang has a reliable live crawfish tracking
system.

Department's Position: The Department did visit the river where the crawfish
were collected and the intake was supposedly reported. The Department did not
see this recording taking place; however, Haiwang did say that the majority of
collection takes place in the morning, and we visited the river in the
afternoon. While it is possible that the crawfish are recorded in this manner,
the Department did not see this process taking place at either the river or the
processing facility.


Comment 7: Haiwang contends that the Department incorrectly stated that the
crawfish intake area did not appear to have a drain and that the verification
team did not see any means of transporting the crawfish from the outside
cleaning facility to inside the processing facility. Haiwang explains that the
water tank did have a drain, and since the verifiers did not see pools of water
resulting from the cleaning of the crawfish, it makes logical sense that a
drain was there. In addition, Haiwang explains that the live crawfish were hand-
carried 50 feet to the cooking area in light plastic containers.


Department's Position: Although the Department did not see an obvious drain,
we agree that it is possible that the cleaning bath had a drain. However, the
Department continues to find that AFA is warranted based on the totality of
evidence. See the Haiwang Facts Available Memo, dated September 30, 1999, and
the Determination of Adverse Facts Available Memo, dated 

September 30, 1999.


Comment 8: Haiwang argues that it was the sales manager, not the production or
operations manager, that led the verifiers into the processing room and that
the sales manager was confused as to how to enter the facility because the
processing workshop manager had recently blocked the first door and changed the
entrance route for sanitary purposes. Haiwang states that the verifiers did not
ask about this confusion at verification and that Haiwang could have easily
answered this concern had it been presented at verification.


Department's Position: The Department agrees that it was the sales manager
that led the verifiers into the facility; however, we also note that Haiwang
said that the sales manager had day-to-day managerial responsibility of the
sales and production of Haiwang. (See Haiwang Verification Report at 12.) Since
the sales manager was so intimately connected to both the production and sales
of Haiwang, the Department concludes he should have had knowledge of how to
enter the processing facilities.


Comment 9: Haiwang contends that the Department's assertion that lack of
chlorine and soap constitute improper sanitary facilities for a crawfish
processing factory is subjective and unfounded. Haiwang argues that the
Department is not an expert in what sanitary facilities are necessary or
reasonable at a crawfish processing facility, and that a mild acid liquid is
used in the foot bath and the hand cleaning facility instead of soap and
chlorine.


Department's Position: Although it is possible that the foot baths could have
used a mild, acidic liquid to disinfect people as they enter the facility, the
verifiers did not observe such a liquid. The Department's observations in this
regard are not so much directed at Haiwang's sanitary standards, as they are to
observations which, taken as a whole, led the verifiers to the 
conclusion that the facility was not in use. 


Comment 10: Haiwang argues that, if the verifiers had stayed to see the end of
the quick freezing process, they would have seen the workers carry the crawfish
to the ledge and lift it up to the storage freezer. Haiwang explains that
because the facility was not originally designed for crawfish processing,
Haiwang has had to make many adjustments to work with the configuration of the
facility.


Department's Position: Regarding the transfer from the quick freezer to the
storage freezer, the Department notes in the Haiwang Verification Report that
"There did not seem to be a system for moving the packed crawfish from the
quick freezer to this ledge, which was above the head of most of the packers
that the verification team saw. The ante-room of the storage freezer looked
like it hadn't been used or swept for a long time." See Haiwang Verification
Report at 14. This "ante-room" is the ledge onto which the workers had to lift
the crawfish. The Department does not know how the workers present could have
accomplished such a feat (i.e. carry 24-pound boxes 50 feet, then lift them to
a ledge over their heads) on a repeated basis. Furthermore, if the transfer had
been made in this manner, the boxes and the feet of those transferring the
boxes to the storage freezer should have caused some disturbance of the dust on
the ledge.


Comment 11: Haiwang states that there is no inconsistency between the amount
of production Haiwang claims versus the number of containers shipped per week.
Haiwang contends that the Department based its calculation on the maximum
number of metric tons (MT) a container can hold; however, Haiwang contends that
one container load can hold a minimum of 17 MT of crawfish tail meat to a
maximum of 20.41 MT, the figure the Department used in its analysis. Thus,
citing the Haiwang Facts Available Memo and the Haiwang Verification Report,
Haiwang argues that, even using the Department's methodology, Haiwang is able
to produce the amounts of crawfish it reported.


Department's Position: The Department, as explained further in the Haiwang
Facts Available Memo, used the standard of a full container load, which is
approximately 20.41 metric tons, in its analysis of Haiwang's ability to
produce the amounts it claimed. See Haiwang Facts Available Memo and Memorandum
to the File from Laurel LaCivita and Michael Strollo; Ocean Freight Rates for
the Administrative Review of Freshwater Crawfish Tail Meat from the People's
Republic of China, dated September 30, 1999. The Department assumed that the
container amount Haiwang claimed it produced per week was based on this
standard of full container loads. Haiwang did not mention at verification that
the container loads it claimed to produce per week were not full containers. We
agree, given the production quantity information that we verified, that it is
possible, using Haiwang's amount per container, that Haiwang could produce the
number of containers per week it claimed.

We continue to hold that AFA are warranted given the other factors considered
by the Department.




Comment 12: Haiwang agrees with the Department that the one storage freezer
examined was the only storage facility at the factory; Haiwang claims that the
Department erroneously concluded that this storage freezer was not functional.
Haiwang further claims that the ammonia leak in the cooling system of the
storage freezer did not completely eliminate the freezing capability of the
entire freezer and that the freezer was cool enough to keep the cartons stored
there until the refrigerated container trucks arrived to transport the subject
merchandise. Haiwang contends that the freezer contained a few hundred cartons
of frozen crawfish. Haiwang states that a more detailed tour of the freezer
would have been given if the Department had requested it.


Department's Position: A working freezer is an essential piece of equipment in
crawfish tail meat production. As detailed in the Haiwang Facts Available Memo,
"Although the crawfish being processed would not be picked up for several days,
there was no functioning storage freezer. Company officials showed the team
what was reported to be the storage freezer. Although there were a few boxes in
the freezer, it was not functioning and there was evidence of an ammonia leak.
Because of the danger presented by the ammonia leak, the team's examination was
brief. However, they were able to see that the interior was not cold and,
despite Haiwang's claim that a shipment had just been picked up the day before,
there were no signs of recent use (e.g., the interior was completely dry,
without even signs of condensation, and the door appeared to be rusted and was
extremely difficult to open)." See Haiwang Facts Available Memo at 3. Haiwang
explained at verification that the freezer the verifiers were shown was the
only storage freezer in use at the facility. See Haiwang Verification Report at
14-15. Accordingly, in light of our inability to verify that the facility which
the verifiers were shown was actually Haiwang's production facility, the
Department continues to find that AFA is warranted.


C. Facts Available for Ningbo Nanlian


In its Crawfish Preliminary Results, the Department stated that it was
exploring the issue of affiliation as it related to the parties in the
administrative and new shipper reviews. 

HFTC5, a.k.a., Huaiyin Foreign Trade Corporation (HFTC), is a crawfish
exporter and received the lowest company-specific cash deposit rate in the
investigation of sales at less than fair value (LFTV). HFTC5's rate is 91.5%
and the country-wide rate is 201.63%. 

Ningbo Nanlian is a Sino-American joint venture formed in January 1998. Ningbo
Nanlian is owned by Yinxian No. 2 Freezing Factory (YFF) and Louisiana Packing
Company (Louisiana Packing). Ningbo Nanlian participated in a new shipper
review that covered the period 09/01/97-03/31/98 and received a 0.00% rate. In
the preliminary results of the current review, Ningbo Nanlian received a rate
of 0.00%, while HFTC5 received the AFA rate of 201.63% because it refused
verification. 

In exploring the relationship between these companies, we reviewed documents
on the record and requested new information from Ningbo Nanlian and HFTC5. We
then conducted an on-site verification of Ningbo Nanlian's questionnaire
responses and attempted, unsuccessfully, to conduct an on-site verification of
information submitted by HFTC5. After reviewing the record, we have concluded
that the relationship between Ningbo Nanlian and HFTC5 is such that the
companies should receive a single antidumping duty rate. 

We have determined that evidence on the record shows that the export
operations of HFTC5 and Ningbo Nanlian were intertwined such that these
relationships have the potential to impact pricing and export decisions
pertaining to the subject merchandise and create a potential for manipulation.
In particular, the evidence indicates that the export activities of both
companies were under common control. These relationships are reflected by
evidence on the public record that shows Ningbo Nanlian and HFTC5 share a vice
general manager named Mr. Wei Wei, as well as other factors described in the
proprietary version of the Memorandum from Edward C. Yang to Joseph A.
Spetrini; Relationship of Ningbo Nanlian Frozen Foods Company, Ltd. and Huaiyin
Foreign Trade Corporation (5) (Ningbo Nanlian/HFTC5 Decision Memo) dated April
7, 2000. We conclude that the relationship between Ningbo Nanlian and HFTC5 is
such that a significant potential for manipulation exists and thus the
companies should receive a single antidumping duty rate. 


Comment 13: Ningbo Nanlian asserts that, to be deemed a manager, one must have
a certain level of supervisory responsibilities, exercise a certain level of
control over the day-to-day activities of the company, and be able to formulate
company policies and take discretionary actions on behalf of the company. 

Ningbo Nanlian cites to Black's Law Dictionary 6th Edition, 1990, at 960, as
well as several federal statutes and regulations which provide definitions or
tests on how to determine whether employees qualify as managers. Ningbo Nanlian
also points to federal and state case law that addresses the role of a manager. 

Finally, Ningbo Nanlian cites Chinese law, which it asserts describes the
general authorities of company managers as having responsibility over areas
such as production and operations, and for formulating the rules and
regulations of a company, its business plans, etc. 

Ningbo Nanlian contends that evidence on the record of this review shows that
Ningbo Nanlian and HFTC5 did not share managers during the POR. 

Ningbo Nanlian states that the one individual who performed services for both
Ningbo Nanlian and HFTC5 during the POR, 

Mr. Wei, performed these services as a part-time independent consultant.
Ningbo Nanlian asserts that Mr. Wei was neither a manager nor even an employee
of HFTC5 or Ningbo Nanlian during 1998. Ningbo Nanlian argues that Mr. Wei's
activities on behalf of each company were limited and do not rise to the level
of making him a manager at either company. 

Ningbo Nanlian asserts that evidence on the record of this review shows that
Mr. Wei was not vested with discretion or general power in operating the
business of either HFTC5 or Ningbo Nanlian, that all of his actions were
limited in scope and duration, and that none required Mr. Wei to exercise any
independent judgment. Ningbo Nanlian claims the following. Mr. Wei never, in
fact, acted as vice chairman or deputy general manager for Ningbo Nanlian
during the POR. While Mr. Wei received authority to sign certain documents on
behalf of Louisiana Packing, he did not in fact have the power or authority of
the titles delegated to him on the business license. Moreover, the acts
undertaken by Mr. Wei were taken before April 1, 1998, the date that Ningbo 
Nanlian's POR began.

Ningbo Nanlian asserts that all actions undertaken by Mr. Wei on behalf of
HFTC5 during 1998 were done with explicit instructions from HFTC5's general
manager. Ningbo Nanlian asserts that, during 1998, Mr. Wei contacted HFTC5's
U.S. customers, signed sales agreements, and attended trade fairs. Ningbo
Nanlian asserts that, while all HFTC5's salesmen were empowered to sign sales
agreements, only HFTC5's general manager had the power to set prices.

Ningbo Nanlian states that HFTC5's general manager instructed Mr. Wei to
contact U.S. Customs in Beijing to obtain assistance in preventing a perceived
abuse of HFTC5's antidumping rate, because of Mr. Wei's knowledge of the
crawfish industry and his proficiency in English. 

Ningbo Nanlian asserts that Mr. Wei did not take, and had no authority to
take, any unilateral or independent actions with regard to HFTC5, including the
setting of prices or terms of sale for crawfish. Ningbo Nanlian asserts that
since his resignation, Mr. Wei has not: supervised or managed any HFTC5
employees; had authority to fire or hire any HFTC5 employees; or devoted time
to coordinating the day-to-day operations of HFTC5. Ningbo Nanlian asserts that
Mr. Wei has not been on HFTC5's payroll since his October 1997 resignation.
Ningbo Nanlian asserts that HFTC5 paid Mr. Wei a cash commission for his
services.

Ningbo Nanlian states that Mr. Wei was neither an officer nor a manager of
Ningbo Nanlian. Ningbo Nanlian asserts that Mr. Wei's name does appear on
Ningbo Nanlian's business license and that, at the request of Louisiana
Packing, Mr. Wei signed the joint venture contract forming Ningbo Nanlian on
behalf of Louisiana Packing. 

Ningbo Nanlian states that its intention was that Mr. Wei become a full time
employee of Ningbo Nanlian, but that for personal reasons, Mr. Wei declined to
become one. Ningbo Nanlian asserts that Mr. Wei was paid cash by Louisiana
Packing for his activities and that Mr. Wei was never on Ningbo Nanlian's
payroll. 

Ningbo Nanlian described Mr. Wei's activities on behalf of Ningbo Nanlian,
after April 1, 1998 as follows. Ningbo Nanlian's co-owner recognized that
Ningbo Nanlian's staff had no experience in exporting, so he asked Mr. Wei to
assist Ningbo Nanlian in preparing the necessary export documentation. In sum,
Ningbo Nanlian argues that, under the law, Mr. Wei simply cannot be deemed a
"manager" of either HFTC5 or Ningbo Nanlian.


Department's Position: We disagree with Ningbo Nanlian. Ningbo Nanlian's
arguments about the definition of the term "manager" ignore the fact that the
focus of the statute is on whether these two companies are effectively a single
entity. With respect to that issue, Mr. Wei's actions and the central role he
played with respect to the export activities of both HFTC5 and Ningbo Nanlian
are significant. The facts on the record show that Mr. Wei was an official with
significant authority in both companies. 

The record also shows that, under the direction of Louisiana Packing, Mr. Wei
played a vital role in the formation of Ningbo Nanlian. While performing
services for HFTC5, Mr. Wei was hired by Louisiana Packing to set up a joint
venture for Louisiana Packing and YFF. Mr. Wei, at Louisiana Packing's
direction, set up Ningbo Nanlian and is listed as the vice chairman and vice
general manager on Ningbo Nanlian's business license. The Department has found
that the Chinese business license is the legal document which establishes the
identity of a Chinese company.

Ningbo Nanlian has also maintained that Mr. Wei was never a manager at HFTC5
during the POR. However, evidence on the record of this review shows that Mr.
Wei acted as a manager for HFTC5 throughout the POR. As discussed in the
Department's Memorandum regarding Freshwater Crawfish Tail Meat (crawfish) from
the People's Republic of China (PRC) Administrative Review: Meeting with the
U.S. Customs Service, American Embassy, Beijing People's Republic of China from
Thomas Gilgunn to the File dated 
March 13, 2000 (Customs Memo), Mr. Wei was the vice general manager of HFTC5
in charge of crawfish exports to the United States. Attachments to the Customs
Memo show that Mr. Wei interacted with U.S. customers, HFTC5 management, local
officials, and U.S. Customs as the vice general manager of HFTC5. 

Comment 14: Ningbo Nanlian claims that it was truthful in its assertion that
it did not share managers or owners with other Chinese crawfish exporters
during the POR.

Ningbo Nanlian argues that, regardless of what the Department concludes,
Ningbo Nanlian did not believe that Mr. Wei was a manager of Ningbo Nanlian.
Citing page 3 and exhibit 5 of the Ningbo Nanlian verification report dated
March 13, 2000, Ningbo Nanlian asserts that Mr. Wei was not listed in Ningbo
Nanlian's salary records as an employee of Ningbo Nanlian. Ningbo Nanlian also
asserts that Mr. Wei never received any remuneration from either Ningbo Nanlian
or YFF. 

Ningbo Nanlian states that, in Ningbo Nanlian's new shipper review, the
Department verified the identities of Board of Directors and management of
Ningbo Nanlian, and Mr. Wei was not identified as a member of the board or
management. Ningbo Nanlian asserts that Mr. Wei was never discussed at
verification in the new shipper review and he was not present there. In sum,
Ningbo Nanlian asserts that it did not in 1998, and does not now believe, that
Mr. Wei was a manager or officer of Ningbo Nanlian. Therefore, Ningbo Nanlian
asserts, even if it believed that Mr. Wei was a manager of HFTC5 in 1998 (which
it certainly did not), it would not have been under an obligation to state in
its questionnaire response that Ningbo Nanlian shared managers with other
Chinese exporters.

Ningbo Nanlian states that, regardless of how the Department characterizes Mr.
Wei's relationship with Ningbo Nanlian, Ningbo Nanlian was not on notice that
Mr. Wei was a manager of HFTC5 in 1998. Ningbo Nanlian asserts that it had been
told that Mr. Wei resigned from HFTC5 in October of 1997, and had a copy of his
resignation letter in its files. Ningbo Nanlian maintains that it had no
control over Mr. Wei. Therefore, Ningbo Nanlian argues, when it responded to
the Department's questionnaire, it had no basis on which it could have asserted
that it shared managers with HFTC5. Ningbo Nanlian asserts that to punish
Ningbo Nanlian now for not reporting something to the Department that it had no
way of knowing, would be unjust and contrary to the antidumping laws.

Ningbo Nanlian cites the Department's Memorandum dated March 13, 2000,
relating to its meeting with U.S. Customs in Beijing, which contains
information about how Mr. Wei represented himself to Customs and contains a
copy of one of Mr. Wei's business cards. Ningbo Nanlian notes that, although
the Department had public documents, including a business card from Mr. Wei,
that indicated that he had identified himself as Vice General Manager of HFTC5,
at Ningbo Nanlian's verification the Department did not mention them. Ningbo
Nanlian also notes that the Department did not ask Mr. Lin or Mr. Lee (the
principals of YFF and Louisiana Packing, respectively) if they knew that Mr.
Wei had held himself out as a manager of HFTC5. Ningbo Nanlian maintains that
it is critical to note that in its 
January 12, 2000 letter, the Department asked Ningbo Nanlian to explain why
they had not stated in their questionnaire that Ningbo Nanlian and HFTC5 shared
managers. Ningbo Nanlian asserts that the truthfulness of Ningbo Nanlian's
statement with respect to shared managers hinges on whether Mr. Lin and Mr. Lee
believed that Mr. Wei was a manager of HFTC5. 

Ningbo Nanlian states that in Ta Chen Stainless Steel Pipe v. United States,
1999 Ct. Intl. Trade LEXIS 110; Slip Op. 99-117 (Court No. 97-08-01344)(Ta
Chen), the CIT examined a plethora of factors and determined that, given the
numerous financial connections and opportunities between two companies, they
were affiliated. However, nonetheless, the Court found that the Department's
decision to apply facts available to the companies to be made not in accordance
with law. The Court stated:

In this case, Ta Chen had a good basis to argue that it did not control Sun
and it made that argument to Commerce. If a respondent reasonably believes it
is not affiliated with its reseller, and therefore that it has EP rather than
CEP sales, then it has reason not to submit information on the subject
reseller's U.S. sales until Commerce tells the respondent that it wants the
information on the particular reseller or until Commerce's questions are clear
enough that the respondent knows what it should submit. ... If Commerce wishes
to place the full burden of error of an affiliation assessment on the
respondent, at a minimum it must make that clear, otherwise this is simply
another instance of error which respondents must have an opportunity to correct
under 19 U.S.C. § 1677m(d). 


Additionally, Ningbo Nanlian states that the Court discussed whether Ta Chen
should have understood that it would be deemed affiliated to Sun. The Court
took notice of the Department's regulations on affiliation and stated that:

The court therefore cannot conclude that a respondent in Ta Chen's situation
could be expected to have a thorough understanding of how Commerce would apply
the new affiliation standard, where Commerce itself said that it would develop
its affiliation practice, "through the adjudication of actual cases." Final
Rules, 62 Fed. Reg. at 27,297. 


Ningbo Nanlian asserts that the same can be said of Ningbo Nanlian in the
present instance. Ningbo Nanlian maintains that, based on the facts of this
case, should the Department decide that Mr. Wei is a "manager" of HFTC5, it
will be precedent setting. Ningbo Nanlian argues that there is simply no way
that it could have predicted that outcome.

In sum, Ningbo Nanlian maintains that it had no reason to believe that its
statement that it did not share managers with another crawfish exporter was not
true.

The petitioner notes that, since January 2000, the Department has collected
extensive factual information regarding the relationship between Ningbo
Nanlian, HFTC5, and Mr. Wei. The petitioner states that the results of this
investigation warrant an application of AFA to Ningbo Nanlian. 

The petitioner states that, in its February 4, 2000 supplemental
questionnaire, the Department asked that Ningbo Nanlian provide copies of all
correspondence written or received by Mr. Wei on HFTC5's behalf since October
25, 1997. The petitioner asserts that in its response, Ningbo Nanlian submitted
three documents. (See exhibit 1 of Ningbo Nanlian's 
February 11, 2000 response.) The petitioner notes that the three documents
submitted by Ningbo Nanlian supported Ningbo Nanlian's claim that Mr. Wei did
not act as a manager for HFTC5 during the POR. The petitioner contends Customs
provided additional communications sent by Mr. Wei to Customs that show Mr. Wei
did act as the vice general manager of HFTC5. The petitioner notes that Ningbo
Nanlian did not provide copies of the documents that showed Mr. Wei was acting
as the vice general manager of HFTC5.

The petitioner asserts that, since Ningbo Nanlian has hindered the
investigation by concealing its relationship with HFTC5 and failing to provide
information requested by the Department, the Department should base Ningbo
Nanlian's final rate on AFA.


Department's Position: It is clear from the evidence on the record of this
case that Ningbo Nanlian has not been forthcoming with regard to Mr. Wei's
relationship with Ningbo Nanlian and HFTC5 during the POR. Ningbo Nanlian has
repeatedly informed the Department that Mr. Wei was not a manager at either
Ningbo Nanlian or HFTC5 during the POR. However, there is evidence on the
record of this review that shows Ningbo Nanlian had reason to believe that Mr.
Wei was a manager at both Ningbo Nanlian and HFTC5. Specifically, Ningbo
Nanlian has stated that it was aware that Mr. Wei is shown on its business
license as its vice general manager and vice chairman. The fact that Mr. Wei
appears on Ningbo Nanlian's business license, as its vice general manager and
vice chairman, belies Ningbo Nanlian's assertion that it had no reason to
believe that Mr. Wei was a manager at Ningbo Nanlian. 

Furthermore, the record of this review shows the following: Mr. Wei was the
vice general manager of HFTC5 in charge of crawfish sales to the United States
in 1998, a period when he had significant contact with Ningbo Nanlian's
principals. (See the proprietary version of the Ningbo Nanlian/HFTC5 Decision
Memo.) Mr. Edward Lee, the principal in Louisiana Packing, instructed Mr. Wei
to set up a joint venture between Louisiana Packing and YFF. Ningbo Nanlian
makes much of the fact that most of the record evidence of Mr. Wei's actions on
behalf of Ningbo Nanlian occurred prior to April 1, 1998, the beginning of the
review period for Ningbo Nanlian. However, we note that all his actions on
behalf of Ningbo Nanlian occurred after the date of Mr. Wei's letter of
resignation from HFTC5, indicating that the letter is not an indication of Mr.
Wei's level of functioning on behalf of HFTC5. Evidence on the record shows
that he was a manager at both companies.

We note that Ningbo Nanlian expressed concern that, during verification, the
Department did not mention that it had public documents that indicated Mr. Wei
had interacted with third parties as vice general manager of HFTC5 during the
POR. While the Department did not mention the relevant documents during
verification, it did put them on record immediately afterwards. The Department
has also afforded all interested parties an opportunity to submit comments on
these documents. In addition, all interested parties were afforded an
opportunity to participate in a public hearing. Consequently, all interested
parties have had an adequate opportunity to comment on these documents. 

Ningbo Nanlian has also expressed concern that the Department did not ask Mr.
Lee or Mr. Lin if they knew that Mr. Wei had interacted with third parties as a
manager of HFTC5. We note that the record of this review shows that Ningbo
Nanlian has stated repeatedly that Mr. Wei was not a manager at HFTC5 during
the POR, thus indicating that they were familiar with his role. Ningbo
Nanlian's statements on this matter have been consistent and unequivocal
throughout. For Mr. Lee or Mr. Lin to have repeated this assertion verbally at
verification would not have constituted a verification of the assertion.

Ningbo Nanlian's reliance on Ta Chen is misplaced. In Ta Chen, the Court held
that where a respondent reasonably believed that it was not affiliated with its
reseller, then it has reason not to submit information on the reseller's U.S.
sales unless the Department informs the respondent that it wants the
information on a particular reseller, or until the Department's questions are
sufficiently clear that the respondent knows what it should submit. In that
case, the Court upheld the Department's determination that the respondents were
affiliated on the basis of a close supplier relationship because the
respondents were established by current or former managers or officers, shared
employees, and because one respondent was the sole distributor of the other
respondent's products. See Ta Chen, at 20. Moreover, the Department in its
Crawfish Preliminary Results stated that it was exploring the issue of
affiliation as it related to the parties in the administrative and new shipper
reviews. See Crawfish Preliminary Results. Therefore, Ningbo Nanlian was on
notice that the Department was investigating the issue of its relationship with
HFTC5. Also, see Letter to Respondents dated 
January 12, 2000. In addition, the Department conducted verification at Ningbo
Nanlian on March 2-3 2000, to explore its relationship with HFTC5. Based on the
above, we conclude that Ningbo Nanlian did not cooperate to the best of its
ability in providing information to the Department regarding its relationship
with HFTC5. However, the rate applicable to Ningbo Nanlian is not based on this
conclusion, but on our determination that Ningbo Nanlian and HFTC5 did not act
independently and that the two companies should be given a single rate. 


Comment 15: Ningbo Nanlian argues that the real impact of the issue of Mr. Wei
is whether his 1998 activities with both HFTC5 and Ningbo Nanlian rise to the
level of making these two companies "affiliated" for purposes of the
antidumping laws. Ningbo Nanlian maintains that Mr. Wei's involvement with both
HFTC5 and Ningbo Nanlian does not meet the statutory, regulatory, case law, or
common sense definition of "affiliated."

Ningbo Nanlian cites the definition of affiliated persons as set forth in
Section 771(33) of the Act:

Affiliated persons. The following persons shall be considered to be
"affiliated" or "affiliated persons":


(A) Members of a family, including brothers and sisters (whether by the whole
of half blood), spouse, ancestors, and lineal descendants.

(B) Any officer or director of an organization and such organization.

(C) Partners.

(D) Employer and employee.

(E) Any person directly or indirectly owning, controlling, or holding with
power to vote, 5 percent or more of the outstanding voting stock or shares of
any organization and such organization.

(F) Two or more persons directly or indirectly controlling, controlled by, or
under common control with, any person.

(G) Any person who controls any other person and such other person.


For purposes of this paragraph, a person shall be considered to control
another person if the person is legally or operationally in a position to
exercise restraint over the other person.


See 19 U.S.C. § 1677(33). Ningbo Nanlian notes that the Department's
regulations adopted this statutory definition of affiliated persons:
"affiliated persons" and "affiliated parties" have the same meaning as in
section 771(33) of the Act." See 19 C.F.R. § 351.102(b).

Ningbo Nanlian argues that, in the present instance, due to the lack of any
equity interest or formal management position of Mr. Wei in HFTC5 or Ningbo
Nanlian, the Department's real question is whether Ningbo Nanlian and HFTC5 are
affiliated by virtue of a "control relationship" via Mr. Wei.

Ningbo Nanlian maintains that in the SAA, the Department states that "control"
exists "if one person is legally or operationally in a position to exercise
restraint or direction over another person." SAA, accompanying H.R. 103-5110 at
168 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 4174. Additionally, 19 C.F.R.
§ 351.102(b) states in relevant part:

In determining whether control over another person exists, within the meaning
of Section 771(33) of the Act, the Secretary will consider the following
factors, among others: corporate or family groupings; franchise or joint
venture agreements; debt financing; and close supplier relationships. The
Secretary will not find that control exists on the basis of these factors
unless the relationship has the potential to impact decisions concerning the
production, pricing, or cost of the subject merchandise or foreign like
product. The Secretary will consider the temporal aspect of a relationship in
determining whether control exists; normally, temporary circumstances will not
suffice as evidence of control.


In codifying this regulation, Ningbo Nanlian notes that it was recognized that
the statute and SAA do not provide much guidance on when the Department will
consider an affiliation to exist by virtue of "control." Ningbo Nanlian also
states that the Department declined to spell out in this regulation when
parties will be deemed to be affiliated due to control, stating that it would
develop its practice regarding affiliation through adjudication of actual
cases. See 62 FR 27297 (May 19, 1997). Thus, Ningbo Nanlian states that, in
determining whether "control" exists, a review of the Department's
administrative decisions, and the decisions of the Court of International
Trade, is necessarily required.

Ningbo Nanlian argues that the facts in this case do not support a finding
that Mr. Wei exercised control over HFTC5 or Ningbo Nanlian in such a way that
these companies are affiliated via a control relationship.(1) 

Ningbo Nanlian states that, pursuant to 19 C.F.R. § 351.102(b), in order to
find "control," the Department must necessarily find that the relationship that
Mr. Wei had with Ningbo Nanlian and HFTC5 had the potential to impact decisions
concerning the production, pricing, or cost of the subject merchandise sold to
the United States. Ningbo Nanlian argues that the evidence on record in this
review clearly shows that Mr. Wei did not, nor did he have the potential to,
impact decisions concerning production, prices, or costs at either HFTC5 or
Ningbo Nanlian.

Ningbo Nanlian asserts that the record of this review shows that Mr. Wei
assisted HFTC5 on a part-time consultancy basis. Ningbo Nanlian notes that both
HFTC5 and Ningbo Nanlian are trading companies, and do not actually produce
crawfish tail meat. Therefore, Ningbo Nanlian argues, there can be no claim
that HFTC5 could impact "production" or "costs." Ningbo Nanlian asserts that
issues regarding costs and production of the crawfish it purchases are
determined by YFF, the crawfish tail meat producer. Ningbo Nanlian states that,
although YFF is affiliated with Ningbo Nanlian, the record contains no evidence
that Mr. Wei had any relationship, authority, or impact over YFF. Ningbo
Nanlian notes that at verification, Mr. Wei stated that he had never worked or
consulted for YFF, and he had never received any money (salary, commission, or
otherwise) from YFF. Thus, Ningbo Nanlian argues, Mr. Wei could not, and did
not, impact production or costs of Ningbo Nanlian. 

Ningbo Nanlian asserts that, with respect to price, the record shows that only
the General Manager of HFTC5 had the authority to set prices. Additionally,
Ningbo Nanlian notes that in the verification of HFTC5 during the original
investigation, the General Manager of HFTC5 stated specifically that the
General Manager of HFTC5 sets prices. Therefore, Ningbo Nanlian argues, Mr. Wei
did not have the potential to, and did not, impact prices on behalf of HFTC5. 

Ningbo Nanlian asserts that, with respect to its prices, there are two
possible prices at issue. First, there is the price at which Ningbo Nanlian
sells crawfish tail meat to Louisiana Packing. Second, there is the price at
which Louisiana Packing sells crawfish tail meat to unaffiliated U.S.
purchasers. Ningbo Nanlian asserts that Mr. Wei did not have the potential to,
and in fact did not, impact either of these prices. Ningbo Nanlian maintains
that the price for which Ningbo Nanlian sold crawfish tail meat to Louisiana
Packing was determined by Mr. Lin and Mr. Lee, owners of YFF and Louisiana
Packing, respectively, while the price for which Louisiana Packing sold
crawfish tail meat to unaffiliated U.S. customers was determined solely by
negotiations between Mr. Lee and those unaffiliated customers.

Ningbo Nanlian maintains that a review of pertinent Department administrative
decisions and CIT decisions reveals that there is no legal precedent for
finding a control relationship between Ningbo Nanlian and HFTC5 via Mr. Wei.
First, Ningbo Nanlian cites Ta Chen, where the issue of whether Ta Chen was
affiliated with a U.S. distributor was thoroughly analyzed. Finding no factor
in and of itself to be determinative, yet considering the facts as a whole, the
Court found numerous connections between the two companies indicating control
(and thus affiliation). Ningbo Nanlian asserts that in the current situation,
none of these factors exist. Ningbo Nanlian asserts that the sole connection
between Ningbo Nanlian and HFTC5 is Mr. Wei, who was not an employee of either
company during the POR, and who only assisted each company, on a cash basis, in
his spare time. Ningbo Nanlian asserts that this is hardly an indication that
the two companies are affiliated.

Ningbo Nanlian also cites from Ferro Union, Inc. and Asoma Corporation v.
United States et al., 44 F. Supp. 2d 1310 (CIT 1999), where the Court found
affiliation through family ownership. Ningbo Nanlian maintains that there has
been no allegation of family connections between Ningbo Nanlian and HFTC5 and,
thus, this case has no bearing whatsoever on the present situation.

Ningbo Nanlian states that, in the Final Determination Of Sales At Less Than
Fair Value: Oil Country Tubular Goods From Argentina, 60 FR 33539 (June 28,
1995) (OCTG From Argentina), the Department analyzed the question of
affiliation between a respondent and its customer considering, in addition to
equity factors, non-equity factors such as shared management and indirect
control, before concluding that the producer was not related to the customer.
Ningbo Nanlian notes that, aside from the fact that the companies at issue
shared a director, a consultant employed by the respondent was at the same time
working for the customer. (OCTG From Argentina at 33543.) Ningbo Nanlian
asserts that the facts of this case are similar, and thus indicative that the
Department's holding is that two companies may share a board of directors, and
may both have a common employee on their payrolls; but that such is not enough
to establish control. Ningbo Nanlian asserts that, by contrast, in the present
situation, HFTC5 and Ningbo Nanlian do not share a board of directors and do
not have a common employee.

Ningbo Nanlian asserts that 19 C.F.R. § 351.102(b) states in relevant part
that "[t]he Secretary will consider the temporal aspect of a relationship in
determining whether control exists; normally, temporary circumstances will not
suffice as evidence of control." Ningbo Nanlian states that any fair reading of
the facts of this case shows that Mr. Wei's activities with both HFTC5 and
Ningbo Nanlian were limited in duration. Ningbo Nanlian asserts that Mr. Wei's
activities with Ningbo Nanlian in the time period at issue is April 1, 1998 -
August 31, 1998, the administrative review period for Ningbo Nanlian, were
almost non-existent. Ningbo Nanlian claims that Mr. Wei's assistance with the
formation of the joint venture, obtaining the business license, and assisting
in preparing the necessary documents for the first shipments, took place prior
to April 1, 1998. 

Ningbo Nanlian maintains that the same appears to be true with regard to Mr.
Wei's activities with HFTC5. Ningbo Nanlian asserts that it is clear from the
Verification Report that Mr. Wei's activities on behalf of HFTC5 were limited
to discrete issues. Additionally, Ningbo Nanlian claims that, since resigning
from HFTC5, Mr. Wei's main activity has been working for his father's company. 

The petitioner asserts that, based on evidence on the record, Ningbo Nanlian
and HFTC5 are "affiliated persons" within the meaning of the antidumping
statute. The petitioner asserts that the U.S. Court of International Trade has
held that:

The plain language of the statute, along with the SAA, make it clear that
"control" for the purposes of 19 U.S.C. 1677(33) does not require a finding of
actual control; rather[,] one controls if one is "legally or operationally in a
position to exercise restraint or direction over the other person." The
determination of "control" under the URAA is thus dependent on actually
exercising control, but rather on the capacity to exercise control. 


(See Ferro Union, Inc. and Asoma Corporation v. United States et al., 44 F.
Supp. 2d 1310 (CIT 1999).)

The petitioner asserts the record of this review shows that Mr. Wei was
legally and operationally in a position to exercise restraint or direction over
Ningbo Nanlian and HFTC5. In addition, the petitioner asserts that both Ningbo
Nanlian and HFTC5 were in a position to exercise restraint or direction over
Mr. Wei. Therefore, the petitioner asserts that Ningbo Nanlian and HFTC5 are
"two . . . persons directly or indirectly controlling, controlled by, or under
common control with, any person," and are "affiliated persons" under 19 U.S.C.
1677(33)(F).


Department's Position: In non-market economy (NME) cases, all exporters
receive the same antidumping duty rate, except where an exporter demonstrates
an absence of government control over its export activities. Such an exporter
may receive a separate rate. This does not preclude, however, the possibility
that the export activities of two or more such exporters nonetheless are
intertwined, such as by common control, such that a significant potential for
manipulation exists and thus these exporters should receive a single
antidumping duty rate. The control provisions of section 771(33) of the Act are
instructive in analyzing the relationship between Ningbo Nanlian and HFTC5. The
activities of Mr. Wei on behalf of Ningbo Nanlian and HFTC5, together with
proprietary information on the record, indicate that HFTC5 and Ningbo Nanlian
did not operate independently and that the relationship between Ningbo Nanlian
and HFTC5 is such that the companies should receive a single antidumping duty
rate. 

First, as noted above, the record shows that during the POR, Mr. Wei
interacted with U.S. customers, local government officials, and U.S. Customs as
HFTC5's vice general manager. Although HFTC5 and Ningbo Nanlian assert that Mr.
Wei was as an independent agent rather than an employee, the record shows that
Mr. Wei played a significant role in HFTC5's sales activities and represented
himself as the vice general manager of HFTC5. Mr. Wei contacted new customers,
maintained communications with established customers, attended trade fairs, and
participated in the sales negotiation process. Finally, Mr. Wei repeatedly
contacted U.S. Customs regarding a perceived abuse of HFTC5's cash deposit
rate. 

Also during the review period, he served as vice chairman and vice general
manager of Ningbo Nanlian. Ningbo Nanlian also claims that Mr. Wei was acting
as an independent agent on its behalf rather than an employee. However,
regardless of what one calls Mr. Wei's position, it is important to note Mr.
Wei represented only two companies involved in the production or export of
crawfish tail meat: Ningbo Nanlian and HFTC5. 


Comment 16: Collapsing Ningbo Nanlian and HFTC5.

Ningbo Nanlian asserts that, assuming arguendo, the Department determines that
HFTC5 and Ningbo Nanlian are affiliated, there is nevertheless no basis for
collapsing them. Ningbo Nanlian maintains that the Department may "collapse"
affiliated entities only where all three of the following criteria are met:

1. The producers are affiliated;

2. The producers have production facilities for producing similar or identical
products that are sufficiently similar so that a shift in production would not
require substantial retooling; and

3. There is significant potential for the manipulation of price or production.


In support, Ningbo Nanlian cites Cut-to Length Carbon-Quality Steel Plate
Products from Indonesia, 64 FR 41206 (July 29, 1999). 


Ningbo Nanlian maintains that the Department's primary focus in its collapsing
methodology should be on comparing the production facilities of the affiliated
parties, and on quantifying the potential for manipulation of price or
production. 

Ningbo Nanlian asserts that, in determining whether the affiliated producers
in question "have production facilities for similar or identical products that
would not require substantial retooling of either facility in order to
restructure manufacturing priorities," the Department is generally required to
compare the production facilities and processes of the affiliated parties to
determine the ease with which production could be shifted between them. 

Ningbo Nanlian asserts that, because neither it nor HFTC5 were producers of
the subject merchandise during the POR, on its face, the test is not met.

Ningbo Nanlian asserts that determining whether "there is a significant
potential for the manipulation of price or production" begins with an analysis
of the factors set forth in 19 C.F.R. § 351.401(f)(2), i.e., the level of
common ownership; the commonality of directors and management; and whether the
operations are intertwined. Ningbo Nanlian asserts that the potential for
manipulation of price or production must be more than a mere possibility; it
must be "significant." 

Ningbo Nanlian cites Cut-to-length Plate from Indonesia, supra, and Notice of
Final Determination of Sales at Less than Fair Value: Certain Cold-Rolled Flat
Rolled Carbon-Quality Steel Products From Brazil, 65 FR 5554 (February 4,
2000), as cases in which the Department collapsed companies as a result of a
significant level of common ownership and intertwined operations.

Ningbo Nanlian cites a third case, Atlantic Salmon from Chile, 63 FR 31411
(June 9, 1998), in which the Department declined to collapse two producers
because there was not a significant potential for the manipulation of price or
production. Ningbo Nanlian asserts that, in that case, because the companies
did not have any common stock ownership or common directors on their respective
boards, the Department found that the first two factors were not met (level of
common ownership and extent to which managerial employees or board members of
one firm sit on the board of directors of an affiliated firm). With respect to
the third factor, whether operations are intertwined, the Department concluded
that evidence of significant intertwining or the sharing of sensitive business
data did not exist. 

Ningbo Nanlian maintains that, in the present review, these factors simply do
not exist. First, Ningbo Nanlian claims, there is no common ownership between
HFTC5 and Ningbo Nanlian. Ningbo Nanlian notes that there has never been an
allegation that Mr. Wei sits on the board of HFTC5 and that, even if the
Department were to decide for some reason that Mr. Wei was a manager or board
member of Ningbo Nanlian, he cannot be claimed to also sit on HFTC5's board.
Finally, Ningbo Nanlian claims that there is no allegation or evidence that the
operations of Ningbo Nanlian and HFTC5 are intertwined: they do not share sales
information; they have no involvement in each other's production and pricing
decisions; they do not share facilities; they do not share employees; and there
were no transactions between them.

Ningbo Nanlian maintains that the record contains no evidence of coordination
between HFTC5 and Ningbo Nanlian. Ningbo Nanlian asserts the following. Ningbo
Nanlian made no sales to HFTC5 or vice versa. HFTC5 and Ningbo Nanlian did not
share customers. Ningbo Nanlian argues that any reading of the record leads to
a single conclusion: the Department has no authority to collapse Ningbo Nanlian
and HFTC5 for purposes of this review. Ningbo Nanlian asserts that Mr. Wei, the
sole link between HFTC5 and Ningbo Nanlian, had no role in setting prices at
either company. Ningbo Nanlian also asserts that, with respect to Ningbo
Nanlian, it is clear that Mr. Wei had no influence over U.S. price as Louisiana
Packing, not Ningbo Nanlian, set prices in the United States.

The petitioner argues that, because Ningbo Nanlian did not provide sufficient
information to permit the Department to evaluate sales of subject merchandise
by its affiliate, HFTC5, and since Ningbo Nanlian's affiliate HFTC5 refused
verification, the Department should base Ningbo Nanlian's final margin on
adverse facts available.


Department's Position: As stated in our response to comment 13, above, we find
that Mr. Wei's role at both HFTC5 and Ningbo Nanlian was significant. In
addition, other aspects of the relationship between HFTC5 and Ningbo Nanlian
lead us to conclude that Ningbo Nanlian and HFTC5 are little more than separate
distribution channels for the same producer to the same customer. Moreover,
contrary to Ningbo Nanlian's assertions, there is significant potential for
manipulation inherent in the relationship between Ningbo Nanlian and HFTC5. Our
decision that Ningbo Nanlian and HFTC5 should be treated as a single entity for
purposes of margin calculations for this administrative review are discussed in
detail in the proprietary version of the Ningbo Nanlian/HFTC5 Decision Memo.

With regard to the applicability of section 351.401(f), that provision
addresses the situation in which the Department is generally required to treat
two producing entities as a single company. That provision does not address the
Department's authority in the current situation of two trading companies in an
NME context.


D. Facts Available for Huaiyin Foreign Trade Corporation #5


Comment 17: Louisiana Packing , an importer of subject merchandise from HFTC5,
argues that HFTC5 should not receive AFA and a rate of 201.63% because HFTC5
responded to all of the Department's questionnaire requests. Louisiana Packing
contends that the fact that HFTC5 supplemented its Section D questionnaire
response twice proves that HFTC5 was having difficulty in obtaining information
from its suppliers and that it communicated this difficulty to the Department.
Louisiana Packing asserts, therefore, that HFTC5 worked diligently and to the
best of its ability to provide the Department with all requested information.

Louisiana Packing claims that it was not the fault of HFTC5 that HFTC5 was
unable to convince its suppliers to submit to verification. Louisiana Packing
asserts that, in a letter to the Department, dated May 21, 1999, HFTC5
explained its difficulties in convincing its suppliers to agree to
verification. Louisiana Packing argues that, since HFTC5's inability to submit
to verification was due to the refusal of its unrelated suppliers, it should
not have AFA applied to it.

Louisiana Packing claims that, in accordance with 

19 U.S.C.§1677(e)(b) (section 776 (b) of the Act), the Department can consider
the use of AFA if an interested party "has failed to cooperate by not acting to
the best of its ability." Citing Notice of Final Determination of Sales at Less
Than Fair Value: Steel Wire Rod from Germany, 63 FR 8953 (February 23, 1998),
where the Department held that if a respondent acts to the best of its ability,
it will receive FA that are "less adverse," Louisiana Packing contends that,
since HFTC5 did cooperate to the best of its ability, if the Department applies
FA to Louisiana Packing, it should use a margin less than AFA. Louisiana
Packing, citing Roller Chain, Other Than Bicycle, from Japan: Final Results and
Partial Rescission of Antidumping Duty Administrative Review, 63 FR 63671,
63675 (November 16, 1998), also argues that if the Department applies FA to
HFTC5 it should use a rate that serves as a "significant increase. . .[to] the
company's current cash deposit rate and . . .is sufficiently adverse to induce
cooperation . . .in future reviews."

Maritime Trading Co. (Maritime), an importer of the subject merchandise from
HFTC5, similarly challenges the Department's decision to apply AFA to HFTC5.
Citing Ferro Union, Inc. v. United States, 44 F. Supp. 2d 1310, 1329 (CIT
1999), Maritime argues that Commerce must distinguish between applying FA and
AFA. Furthermore, citing Borden, Inc. v. United States, 4F. Supp. 2d 1221 (CIT
1998), Maritime notes that the CIT has reversed the Department's decision to
apply AFA in cases where a respondent has failed to provide certain information
because it was unable to provide that information, rather than because it was
unwilling to provide that information. Maritime argues that the Department
cannot resort to AFA unless the respondent "willingly refuses to comply" and
that, in this instance, HFTC5 has complied to the best of its ability. Maritime
argues that it is not the fault of HFTC5, a trading company, that it could not
convince its suppliers to comply with the Department's request for
verification. According to Maritime, the Department knew of the difficulties
HFTC5 was having with its suppliers, because HFTC5 explained the difficulties
in its supplemental response.

Maritime argues that HFTC5 explained to the Department in a letter dated May
21, 1999 that its suppliers would not permit verification and that is why HFTC5
was unable to allow the Department to conduct verification. Maritime argues
that HFTC5 fully participated in the investigation and demonstrated its
willingness to participate in this review by responding to all of the
Department's requests for information. Maritime agrees that FA is warranted for
HFTC5, but contends that AFA is not because HFTC5 cooperated to the best of its
ability in this review. 

Maritime argues that to apply the 201.63% margin from the petition to HFTC5 is
excessively punitive. Citing Ferro Union, Maritime argues that the Department
must do more than rely on past margins for its application of FA. Maritime
argues that the PRC-wide rate should not be applied to HFTC5 because this rate
was applied to respondents in the original investigation that did not respond
to the Department's questionnaire and did not establish their independence from
the government. Maritime asserts that HFTC5 was determined to be separate from
government control in the original investigation. According to Maritime, HFTC5
submitted the same proof regarding lack of government control in this review.
Since this proof was accepted and verified by the Department in the original
investigation and the Department ruled that HFTC5 is separate from the
government, then the Department should not apply the PRC-wide rate to HFTC5
because it has already been proven that HFTC5 is not part of the PRC entity.

Maritime claims that the 201.63% rate applied to HFTC5 in the preliminary
results of this review lacks probative value. Maritime cites Ferro Union, where
the Department sought to apply as total adverse facts available the highest
margin from any segment of the proceedings, concluding that this margin was
reliable because it had been affirmed by the CIT as an applicable rate for
another respondent. Maritime asserts that the CIT rejected this margin because
the margin was calculated eight years prior to the POR in the case, was
calculated for another producer of the subject merchandise and was calculated
using best information available. The CIT held in its decision that the
Department must do more than assume past margins are reliable and relevant and
noted that the Department had other margins previously calculated that might
have been more reasonable to the instant situation. Maritime argues that the
PRC-wide rate lacks probative value because it was derived from the margin
asserted in the petition, and was applied to respondents that did not respond
to the Department's questionnaire during the investigation and that did not
establish their independence from the government. Maritime contends that, given
the evidence of HFTC5's independence from the PRC government in the original
investigation and lack of government control during this POR, the PRC-wide rate
is purely punitive and not probative of the actual dumping margin.

Captain Charlie Seafood Wholesale Co., U.S.A. (Captain Charlie), an importer
of crawfish tail meat, argued that it supported the above comments made by
Maritime, and that importers of crawfish from HFTC5 should not be assessed
antidumping duties at the 201.63% rate because that rate is too punitive.
Captain Charlie argues that HFTC5's refusal of verification was beyond the
control of the importers and was the result only of HFTC5's inability to
convince its suppliers to participate in verification, not HFTC5's
unwillingness to cooperate; therefore, the rate of 201.63% should not be
applied to HFTC5. Captain Charlie asserts that the more reasonable margin of
122.92%, the weighted average of the rates determined for respondents that
received separate rates during the investigation, should be applied instead.

Petitioner argues that the PRC-wide rate of 201.63% is the proper antidumping
duty rate for HFTC5 in this administrative review. Petitioner asserts that
refusing verification is a sufficient reason to apply AFA to HFTC5. Petitioner
notes that, in a letter to the Department on May 4, 1999, HFTC5 did not limit
its refusal to submit to verification of information provided by its suppliers,
but simply stated that verification during the "very busy crawfish season"
would "put an unfair and extreme burden on Huaiyin Foreign Trade Corporation
and its suppliers." Petitioner points out that only in the letter of 

May 21, 1999 did HFTC5 blame its suppliers, and that HFTC5 offered no
explanation for its refusal to allow verification of its own responses. 

Petitioner contends that the Department made the proper decision in the
preliminary results by not assigning a separate rate to HFTC5 because it
refused verification of its own separate rates information, and states that
this approach has been endorsed by the U.S. Court of Appeals for the Federal
Circuit, citing Sigma Corp. v. the United States, 117 F.3d 1401 (Fed. Cir.
1997). Petitioners argue that the Department presumes state control of all PRC
enterprises unless the firm proves it is independent. Petitioner contends that,
since HFTC5 did not allow verification, the Department has no guarantee that it
is an autonomous enterprise; thus, the Department must assign the 201.63% all
others rate to HFTC5.

Petitioner, citing Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from the People's Republic of China; Final Results of 1997-1998
Antidumping Duty Administrative Review and Final Results of New Shipper Review,
64 FR 61837 

(November 15, 1999), argues that the Department has previously determined that
a respondent's inability to obtain information or cooperation from its
suppliers is not reason to excuse them from adverse facts available. Petitioner
argues that giving exporters of subject merchandise the benefit of the doubt in
such matters would be unfair to domestic interests and mitigate the
effectiveness of the antidumping law. 


Department's Position: As noted by petitioner, HFTC5 refused verification of
its questionnaire response; that fact alone requires that HFTC5 be treated as
part of the PRC-wide entity. We note that this was not merely a verification of
HFTC5's suppliers, but of HFTC5 itself. Thus, this is not a situation in which
HFTC5 was unable to provide information. Because HFTC5 refused verification,
there was no information on the record that the Department could use. See Brake
Rotors From the People's Republic of China: Recission of Second New Shipper
Review and Final Results of Partial Recission of First Antidumping Duty
Administrative Review, 64 FR 61581 (November 12, 1999); Notice of Final
Determination of Sales at Less Than Fair Value: Collated Roofing Nails from the
People's Republic of China, 62 FR 51410 (October 1, 1997); and Notice of Final
Determination of Sales at Less Than Fair Value: Circular Welded Non-Alloy Steel
Pipe from Romania, 61 FR 24274 (May 14, 1996). As a general practice in NME
cases, when a respondent fails to cooperate in a proceeding to such an extent
that the Department cannot ascertain whether it is entitled to a separate rate,
we consider such uncooperative respondents to be part of the NME entity, and,
as such, subject to the PRC country-wide rate. Therefore, it is appropriate
that HFTC5 receive the PRC-wide rate of 201.63 percent.

By refusing to allow verification, HFTC5 failed to cooperate by not acting to
the best of its ability. Apart from its letter dated May 21, 1999, HFTC5 made
no showing that it could not comply with the Department's request to verify,
nor did HFTC5 provide any evidence that it asked its supplier to be verified.
We determine that HFTC5 was unwilling to submit to verification. Thus, HFTC5
meets the requirements for the application of AFA under section 776(b) of the
Act. See Facts Available section above.

Furthermore, we note that, contrary to the claims of Maritime and Louisiana
Packing, HFTC5 failed to provide the Department with all requested information
to the best of its ability. The Department, through verification of another
supplier, learned that HFTC5 had a supplier which it never reported in any of
its section D responses. Thus, HFTC5 failed to accurately name its suppliers.
See Verification Report for Ningbo Nanlian Frozen Foods Company, Ltd. in the
Antidumping Duty Review of Freshwater Crawfish Tail Meat (crawfish) from the
People's Republic of China (PRC), dated March 13, 2000 (exhibit 12).

Finally, we note that HFTC5 refused to allow the Department to verify
information it submitted on February 17, 2000 with respect to its relationships
with other companies involved in the sale or production of crawfish. See
Freshwater Crawfish Tail Meat (crawfish) from the People's Republic of China
(PRC) Administrative Review: Attempts to conduct verification at Huaiyin
Foreign Trade Corporation (5) (HFTC5), dated 

March 13, 2000.

With respect to Maritime's claim that the 201.63% rate from the investigation
is not probative of HFTC5's dumping margin in this review, we note that, in
contrast to the situation described in Ferro Union, the current review is the
proceeding segment immediately following the one for which the rate in question
was determined. Therefore, it has probative value with respect to a company,
such as HFTC5, that has not established itself as meriting a separate in the
current review. Finally, we note that the rate, although based on data
submitted by petitioner, was adjusted based on information received in the
course of the investigation. See Final Determination of Sales at Less than Fair
Value: Freshwater Crawfish Tail Meat from the People's Republic of China, 62 FR
41347 (August 1, 1997).

Additionally, we note that the 201.63 percent rate is the PRC-wide rate. In
cases involving the PRC, the Department presumes a company is under the control
of the government until it establishes its entitlement to a separate rate for
the relevant segment of the proceeding. Although HFTC5 submitted information to
establish this, because it did not permit verification, the Department could
not verify this information, or determine whether facts had changed from the
prior segment of the proceeding.

Moreover, we find that the respondent's reliance on Ferro Union is incorrect.
In Ferro Union, the CIT remanded the decision to the Department to determine
whether the respondents cooperated to the best of their ability before applying
AFA, and to determine whether the highest dumping margin from any prior
administrative review was reliable and relevant. Ferro Union, at 1335. Here, as
discussed above, the Department has determined that the respondents have failed
to cooperate to the best of their ability. In addition, the dumping margin that
the Department has assigned to HTFC5 as AFA is the margin that was established
in the investigation. This rate was determined to be the PRC-wide rate, and the
rate was corroborated during that segment of the proceeding. The PRC-wide rate
in the instant review therefore has probative value, and is sufficient to deter
respondents from non-compliance with the Department's request for information
and verification in the administrative review. 


Rescission of New Shipper Review of Yancheng Baolong Biochemical Products
(Baolong Biochemical) 


Comment 18: Baolong Biochemical argues that substantial evidence on the record
proves that the rescission was not a final determination and that the
Department has latitude to reopen or reconsider the decision. Baolong
Biochemical argues that, since the factors verification report had not been
issued at the time of the preliminary results, and the Department is required
to allow respondent to comment on this report, the decision to rescind could
not have been final. Baolong Biochemical also notes that the Department did not
direct the U.S. Customs Service to begin collecting a cash deposit on entries
of products exported by Baolong Biochemical, again indicating that the decision
was not meant to be final. Baolong Biochemical argues that the decision to
extend the deadline of the final results of the new shipper reviews again
indicates that Baolong was included and that the decision was not final.
Baolong Biochemical points out that the Department states that the rescission
is preliminary in a Memorandum from Barbara E. Tillman, Director, Office 7, to
Joseph A. Spetrini, Deputy Assistant Secretary AD/CVD Enforcement Group III;
New Shipper Review of Freshwater Crawfish Tail Meat from the People's Republic
of China: Rescission of New Shipper Review for Yancheng Baolong Biochemical
Products Co., Ltd. (Baolong Biochemical Rsecission Memo). Finally, respondent
argues that numerous cases give agencies the authority to reconsider a
decision. Citing Alberta Gas Chemicals Ltd. v. Ceylonese Corp., 650 F.2d9(2d
Cir. 1981), Baolong Biochemical argues that the Court found that the
International Trade Commission (ITC) was able to reconsider a case upon
discovery of possible false testimony provided in its initial investigation.
According to Baolong Biochemical, the ITC has stated in numerous instances that
agencies are able to reconsider decisions in order ensure that procedure is
properly followed. Also, Baolong Biochemical argues that the summons it filed
regarding the decision to rescind the review of Baolong Biochemical is not
"ripe for judicial review" and therefore the CIT has no jurisdiction in the
case. 

Petitioner argues that the recission of Baolong Biochemical was final in the
preliminary results. Petitioner notes that, because the review was being
rescinded, the Department did not perform a separate rates analysis for Baolong
Biochemical or pursue allegations concerning relationships between Baolong
Biochemical and other crawfish businesses. Petitioner, citing Hylsa, S.A. de
C.V. v. United States, slip op. 98-10, 1998, Court of International Trade LEXIS
2 (February 3, 1998, as amended February 24, 1998)(Restani, J.), argues that
the Department is unable to reopen a proceeding in which a final decision has
been made unless a remand is ordered by the CIT. Petitioner contends that,
because Baolong Biochemical filed a summons with the CIT on November 8, 1999
challenging the decision, the matter is under the purview of the CIT, not the
Department.

Moreover, petitioner argues that the case brief of Baolong Biochemical
includes untimely factual information.


Department's Position: We disagree with Petitioners that the rescission of the
review of Baolong Biochemical was final in the preliminary results. The
Department's practice is to allow parties a chance to comment on a substantive
issue before issuing a final decision, whether that be through comments on the
preliminary results, or by issuing a separate memorandum prior to the final
decision. This issue was first raised in a preliminary results notice; thus, it
is appropriate to allow comment subsequent to the preliminary results, as we
have done. Furthermore, in the Baolong Biochemical Rescission Memo, we noted
that the rescission of Baolong Biochemical announced in the preliminary results
notice was not final and that Baolong would be allowed to comment on this
issue. 


Comment 19: Baolong Biochemical argues that its sale is bona fide and that it
is therefore entitled to its own dumping rate. Baolong Biochemical asserts that
neither the Act nor the Department's regulations state that a new shipper
cannot be a new entrant into the industry. Referring to section 751(a)(2)(B) of
the Act, Baolong Biochemical contends that the only requirements for a new
shipper are that the company did not export subject merchandise during the
period of investigation and that the company is not affiliated with any
exporter or producer who exported subject merchandise to the United States
during the period of investigation. Baolong Biochemical contends that, because
1) it provided certification regarding both of these points, and 2) (it claims)
there is no evidence on the record providing substantive proof that it did not
qualify for a new shipper review, it is entitled to a new shipper review.

Baolong Biochemical addresses the factors cited by the Department in its
Memorandum to Robert S. La Russa from Barbara E. Tillman; Issues for the
Preliminary Results of Review: Yancheng Baolong Biochemical Products Co., Ltd.
(Baolong):

Bona Fide Sales (Baolong Biochemical Decision Memo), dated September 30, 1999.
First, Baolong Biochemical states that the Department erred when it concluded
that Baolong Biochemical had a tolling agreement with an established producer
for the sole purpose of making a single sale to the United States, rather than
as a means of establishing an ongoing business relationship. Baolong
Biochemical states that the reason for its tolling agreement, which the
Department cited as an unusual factor of Baolong Biochemical's sale, was two-
fold: 1) to earn the largest profit possible, since it would control all phases
of production, and 2) to ensure a supply of shells for its other business.
Baolong Biochemical contends that both the stated objectives of the tolling
agreement were fulfilled. Baolong Biochemical states that the Department did
not review the profitability of the transaction between the processor and
Baolong Biochemical; it did, however, verify that Baolong Biochemical obtained
the shells from its supplier. Baolong Biochemical argues that there is no
specific number of shells it must receive in order for the tolling agreement to
make business sense for the company and, since the Department verified that
Baolong Biochemical received the shells from the crawfish processor for the
tolling agreement, that objective was obviously fulfilled. Baolong Biochemical
argues that, while the Department discounted the amount of shells from the
tolling transaction as "small," the amount is not an issue and that it was
attempting to establish a professional relationship which it could use to
procure more shells in the future. 

Furthermore, Baolong Biochemical argues that the Baolong Biochemical Decision
Memo, dated September 30, 1999, errs when it states that Baolong claimed one of
the reasons for its tolling arrangement was to extend the length of the season.
The verification report, Baolong Biochemical states, was correct in explaining
that Baolong Biochemical's imports were made to extend the processing season.
Baolong Biochemical states that the length of time the processing took is
legally irrelevant to the circumstances of the sale. 

Baolong Biochemical explained that the reason it did not have a tolling
agreement subsequent to the POR is that all the processors it contacted were
under long-term contract with another new shipper which had already received a
zero rate.

Baolong Biochemical also argues that whether it had a tolling agreement for
the subsequent POR is legally irrelevant because the subsequent POR is not
subject to this review; therefore, Baolong Biochemical argues, the Department
cannot declare the tolling agreement "atypical" for Baolong Biochemical on the
basis of whether or not it had a tolling agreement for the subsequent POR.
Because Baolong Biochemical had only one tolling agreement during the POR, it
claims, a tolling agreement was its normal business routine and cannot be found
to be otherwise.

Baolong Biochemical argues that the Department is implicitly stating that an
exporter who is not a producer and does not own production facilities has no
right to a new shipper review. Baolong Biochemical asserts that in the original
investigation of crawfish tail meat from the PRC many of the respondents were
only exporters, with no facilities to process crawfish, yet many received their
own dumping margin. Baolong Biochemical also argues that the Department has
conducted other new shipper reviews where the respondent has used a tolling
agreement, such as Certain Pasta from Italy: Final Results of New Shipper
Antidumping Duty Administrative Review (Certain Pasta from Italy, 64 FR 852
(January 6, 1999)).

Baolong Biochemical challenges the assertion of the Department that the
quantity of the sale was low and the price was high. Baolong Biochemical states
that there is nothing on the record to suggest that all importers purchase
crawfish tail meat in container lots or that any seller in the U.S. market must
sell only full container loads. Baolong Biochemical argues that, with the
current antidumping duty rate, most importers cannot afford to purchase a whole
container of crawfish tail meat, as it would entail a cash deposit of over
$400,000. Baolong Biochemical also notes that other companies involved in new
shipper reviews have not sold in full container loads and therefore the
Department should not consider such a practice "unusual." Baolong Biochemical
asserts that its sales price was not unusually high in comparison to other
sales prices of companies in the investigation and this review, and that the
normal value (NV) necessitates that an exporter sell at a price higher than
what might be the typical market value based on United States import
statistics. Baolong Biochemical also argues that the Department made a
procedural error in not asking it what the market price in the United States
was, and claims that the Department should find the price acceptable if it is
not "outrageously higher" than the price of any tail meat in the United States,
not simply imported tail meat.

Baolong Biochemical objects to the Department's use of official trade
statistics to show that Baolong Biochemical did not import whole crawfish from
the United States to China. Baolong Biochemical states that the Department
confirmed all of the documentation regrading this importation by Baolong
Biochemical, and therefore cannot use trade statistics to refute this fact.
Secondly, Baolong Biochemical contends that it was denied the opportunity to
answer this accusation and would have assisted the Department in contacting the
exporter to confirm the exportation if the Department had simply requested the
information instead of attempting to resolve the question on its own. Baolong
Biochemical argues that official trade statistics may not be complete and
therefore can not be used in the Department's analysis. Baolong Biochemical
also argues that it would have provided the Department with the price of the
whole crawfish purchased by Baolong if the Department had only requested such
information.

Finally, Baolong Biochemical argues that the totality of the evidence does not
suggest that its sale was so artificially constructed as to be commercially
unreasonable. While Baolong Biochemical admits that its transactions in the
United States fall outside of its normal business practice, Baolong Biochemical
maintains that this is not a barrier to its being considered for a new shipper
review. Moreover, citing FAG U.K. Ltd. V. United States, 945 F. Supp. 260, 265
(CIT 1996) and American Permac Inc. v. United States, Slip Op. 92-8 (February
12, 1992), Baolong Biochemical states that since there is no information on the
record that the quantity was unreasonably low; that the price was unreasonably
high; that the U.S. importer sold the merchandise at a loss; or that Baolong
Biochemical incurred high transport costs, there is no basis on which the
Department can consider the sale not bona fide.


Department's Position: In accordance with section 351.214 (f)(2) of the
Department's regulations, the Department is rescinding the new shipper review
of Baolong Biochemical because it has no bona fide sale of subject merchandise
in the POR, as explained in the preliminary results of these reviews. Because
it did not have a bona fide sale to the United States during the POR, Baolong
Biochemical is not entitled to a review under section 751(a)(2)(B) of the Act.

In determining whether sales are bona fide commercial transactions, the
Department examines the totality of the circumstances surrounding the sales in
question. If the weight of the evidence indicates that "the transaction has
been so artificially structured as to be commercially unreasonable," it is not
a bona fide commercial transaction and must be excluded. See Certain Cut-to-
Length Carbon Steel Plate From Romania: Notice of Rescission of Antidumping
Duty Administrative Review, 63 FR 47232 (September 4, 1998); see also Baolong
Biochemical Decision Memo.

We agree with Baolong Biochemical that the statute and regulations do not
prohibit new entrants into an industry from requesting a new shipper review.
However, the facts surrounding the transaction in question indicate that it was
not structured in a commercially reasonable manner. Furthermore, the facts do
not indicate that Baolong Biochemical undertook the transaction as a serious
commercial venture with an eye to long-term participation in crawfish tail meat
production.

First, Baolong Biochemical's method of production does not appear to be
commercially reasonable. During the POR, Baolong Biochemical imported a small
amount of crawfish from the United States to the PRC, a major producer of whole
crawfish. Baolong Biochemical then paid a fee to a toller to process the whole
crawfish into tail meat, a job which may have taken less than a day. While
Baolong Biochemical states that the reason for its tolling agreement was to
earn a larger profit and ensure a supply of shells, we noted that Baolong
Biochemical had been in business as a crawfish shell processor prior to
initiating this tolling arrangement and never engaged in a tolling arrangement
to obtain crawfish shells until this agreement. We also note that it is unusual
for Baolong Biochemical to arrange a tolling agreement at the end of the
crawfish processing season to obtain shells, when this amount of shells is
minuscule in the context of Baolong Biochemical's shell processing business.
Thus, even Baolong Biochemical's stated reasons for structuring production in
this manner are not supported by the evidence. 

The Department also notes that, in Certain Pasta from Italy, cited by Baolong
Biochemical, the Department determined that there was a legitimate tolling
agreement. In the instant review, the Department has not determined that the
tolling agreement by itself is illegitimate. Rather, the Department has
determined that the tolling arrangement, in addition to the other circumstances
surrounding the sale, cause the Department to consider the sale not bona fide.

In regard to the size of the sale to the United States, we are not rejecting
the sale solely on the basis of the size of shipment. However, the small size
of the shipment considered together with the fact that the entire tolling
arrangement constituted only one day or less of processing on the last day of
the crawfish processing season, indicate that the sale was not necessarily
arranged to ensure a steady supply of shells or that the sale was to lead
towards a long-term processing arrangement.

Contrary to Baolong Biochemical's assertion, we find that importing U.S. whole
crawfish, then only processing part of that crawfish into tail meat and
exporting the whole crawfish and crawfish tail meat back to the United States
is unusual and atypical for companies in China. The importation of whole
crawfish was not necessary, as China has plenty of crawfish suppliers;
therefore, this arrangement, coupled with the totality of the circumstances,
leads the Department to the conclusion that the sale is so artificially
structured as to be commercially unreasonable. See Baolong Biochemical Decision
Memo, dated September 30, 1999. The Department examined U.S. export statistics
for whole crawfish to determine whether exportation of such merchandise was,
indeed, typical during the POR. As the U.S. statistics show no exports of whole
crawfish from the United States to the PRC during the POR, we consider this
practice atypical. The Department was not attempting to discredit the fact that
Baolong Biochemical imported whole crawfish into the PRC, but simply
highlighting that such transactions are not typical. As for the veracity of
official U.S. export trade data, the Department acknowledges that such data may
not be complete; however, if the practice of exporting whole crawfish to China
was a typical practice at least some of these exports would be recorded in the
trade statistics.

Taken in totality, these facts demonstrate the sale of Baolong Biochemical was
"so artificially structured to be commercially unreasonable" and, therefore,
does not constitute a 

bona fide transaction. Therefore, we are rescinding the new shipper review
with respect to Baolong Biochemical.

Baolong Biochemical's reliance on American Permac, Inc. v. United States, 783
F.Supp. 1421 (CIT 1992) and FAG U.K., Ltd. v. United States, 945 F.Supp. 260,
is misplaced. In American Permac, the Court held that the Department acted
within its discretion when the Department failed to exclude subject merchandise
upon which almost all of the duties were imposed on although the sales
represented less than five percent of sales of subject merchandise and which
were of a design that was being replaced in the market. See American Permac, at
1422 and 1424. The Court made clear that sales that are distortive can be
excluded if they are not representative. Id. at 1424. Under the totality of the
circumstances, the Department finds that Baolong Biochemical's one sale is
distortive, and not representative of its normal business practices. Neither is
it representative of the business and practice of other Chinese crawfish
companies. See Verification Report of Baolong Biochemical. Baolong Biochemical
cites to FAG U.K., Ltd. v. United States, 945 F.Supp. 260 (CIT 1996); however,
that case acknowledges that "the statute does not require that absolutely every
U.S. sale of merchandise under investigation be included in every case." The
Department finds that the one U.S. sale was unrepresentative and distortive.
See the Baolong Biochemical Decision Memo.


Comment 20: Baolong Biochemical states that the mere allegation that it may be
affiliated with a company which exported during the original period of
investigation, without substantive proof, is not a bar to participation in a
new shipper review, particularly when it is contrary to verified data. Baolong
Biochemical argues that the Department has determined that it is not a new
shipper based merely on an allegation from an unknown source, with no
substantial, verified evidence. Baolong Biochemical contrasts this with the
verified information submitted.


Department's Position: Our decision to rescind the new shipper review for
Baolong Biochemical is based solely on our determination that Baolong
Biochemical had no bona fide sales to the United States during the POR. For
this review, we have made no determination as to whether Baolong Biochemical
was affiliated with any company that exported crawfish tail meat to the United
States during the period of the original investigation.


3. Circumstance of Sale Adjustment: Imputed Credit Expense


Comment 21: Improper Inclusion of Imputed Credit Expense


Qingdao Rirong argues that the Department improperly adjusted NV for credit
expenses incurred on Rirong's sales to the United States. Qingdao Rirong notes
that the Department has acknowledged that Rirong's sale was an export price
sale rather than a constructed export price sale, and contends that the
Department has consistently held that it is inappropriate in NME cases to make
an adjustment for credit expenses and other circumstance of sale adjustments.
To support its position, Qingdao Rirong cites Titanium Sponge from the Russian
Federation; Notice of Final Results of Antidumping Duty Administrative Review
(Titanium Sponge), 62 FR 48601 (September 16, 1997) (citing Final Determination
of Sales at Less Than Fair Value: Certain Helical Spring Lock Washers from the
People's Republic of China (Lock Washers), 58 FR 48833 (September 20, 1993);
Final Determination of Sales at Less Than Fair Value: Managnese Metal from the
People's Republic of China, 60 FR 56045 (November 6, 1995); Final Determination
of Sales at Less Than Fair Value: Saccharin from the People's Republic of
China, 59 FR 58818 (November 15, 1994); and Final Determination of Sales at
Less Than Fair Value: Oscillating Fans and Ceiling Fans from the People's
Republic of China, 56 FR 55271 

(October 25, 1991).

Petitioner did not comment on this issue.


Department's Position: We agree with Qingdao Rirong. In cases involving non-
market economy countries, Departmental practice is not to adjust for
differences in the circumstances of sale, such as imputed credit. See Lock
Washers, DOC Position to Comment 4. Therefore, for these final results, we have
eliminated the calculation of imputed credit expense from our margin program.


4. Factor Valuation


Comment 22: The surrogate value for crawfish processing scrap should be zero. 

Petitioner contends that there is no evidence on the record that demonstrates
that crab or shrimp scrap is commercially comparable to crawfish scrap, and
that, in fact, crawfish scrap has only a negative value in market economies.
Consequently, petitioner maintains that crawfish scrap is not comparable to
other scrap for purposes of the Department's analysis, and the Department
should use the value of crawfish scrap, not scrap from other crustaceans, as
the surrogate value for crawfish scrap produced in China.

Petitioner argues that it placed on the record in this review evidence that
demonstrates that crawfish scrap has zero or negative value in the United
States, while scrap of certain other crustaceans in North America has a value
of 4 cents per pound on a delivered, wet-weight basis. Citing the Notice of
Final Determination of Sales at Less Than Fair Value: Certain Cased Pencils
from the People's Republic of China (Cased Pencils), 59 FR 55625 (November 8,
1994), petitioner argues that economic comparability - not just physical
comparability - is the key to selection of an appropriate surrogate value.
Petitioner further contends that respondent has the burden of demonstrating
that crab and shrimp scrap is comparable to crawfish scrap for purposes of the
Department's analysis. Finally, petitioner maintains that, although the
Department did assign crawfish processing scrap a positive value in the new
shipper review of Ningbo Nanlian, the Department must now consider the new
evidence before it.

Ningbo Nanlian argues that the Department has verified that the by-product is
a result of the production process and that, through the sale of crawfish
shells, an economic benefit accrued to Ningbo Nanlian. In addition, Ningbo
Nanlian claims that petitioner's own expert states in his affidavit that it is
possible to use crawfish scrap to produce saleable products, i.e., fertilizer,
fish meal, and chitosan. Therefore, Ningbo Nanlian contends, since crustacean
shells have a value based on their chitin content, and because crawfish shells
are crustacean shells, crawfish shells are comparable to other crustacean
shells. Finally, Ningbo Nanlian maintains that the Department has already
considered and ruled on this issue in prior segments of this proceeding, and
claim that no new facts or information have been presented to make the
Department change its position.

Qingdao Rirong argues that the Department properly determined that scrap
crawfish shells sold by respondents should be considered a factor of production
and assigned a surrogate value. Qingdao Rirong contends that, based on the
Department's determinations in the original investigation and previous reviews,
which establish that shells of crustaceans, echinoderms, and mollusks are
comparable to crawfish shells, it is petitioner who bears the burden of proof
of demonstrating that crab and shrimp scrap is not comparable to crawfish shell
scrap. Therefore, Qingdao Rirong claims, petitioner's attempt to shift the
burden of proof is inappropriate and should be rejected.

In addition, Qingdao Rirong argues that the evidence petitioner placed on the
record of these reviews supports the Department's position that crab and shrimp
shells are sufficiently comparable to crawfish shells for purposes of
application as a surrogate value. Qingdao Rirong cites an affidavit from Dr.
Kenneth J. Roberts, the Project Leader for Marine Resource Economics of
Louisiana State University Agricultural Center, contained in its case brief,
which states that it is possible to use crawfish scrap to produce other
saleable products, including fertilizer, fish meal and chitosan, and, in fact,
there is a plant in Louisiana which uses crawfish scrap as an input to produce
meal and liquids. Therefore, Qingdao Rirong maintains, petitioner's own
information confirms that crawfish shells, just like crab shells, may be used
to produce other products, and thus have value.

Qingdao Rirong further argues that petitioner's interpretation that the
Department's analysis of a surrogate value's comparability is based primarily
on economic factors, rather than physical factors, is misguided. Qingdao Rirong
contends that while the Department has rejected proposed surrogate values
because they were aberrational, it has rejected such values only where there is
an alternative surrogate value that is similar or identical to the factor in
question. Qingdao Rirong maintains that petitioner correctly noted that the
Department in Manganese Metal, rejected the use of values for electrolytic
manganese dioxide (EMD) as a surrogate for a by-product credit. However,
Qingdao Rirong notes that the Department determined that the PRC by-product did
not sufficiently match the physical characteristics of EMD. Furthermore, the
Department ultimately held that respondent's by-product did have some resale
value and that an alternative surrogate value based on the Indian import
statistics would be more appropriate to value the by-product factor. Qingdao
Rirong asserts that, in Cased Pencils, the Department similarly rejected the
proposed surrogate value for jetulong wood from the primary surrogate country
as aberrational because basswood was more physically comparable to lindenwood,
the wood actually used by respondents, and because a surrogate value for
basswood was available from another market economy country. In the present
case, Qingdao Rirong contends petitioner's information acknowledges that crab
and shrimp shells are physically comparable to crawfish shells and petitioner
has failed to provide any better alternative surrogate value that is more
comparable to crawfish shells. Therefore, Qingdao Rirong maintains, absent the
availability of surrogate values for identical merchandise, i.e., crawfish
shells, the Department appropriately applied surrogate values for comparable
merchandise, i.e., crab and shrimp shells. 


Department's Position: We agree with Ningbo Nanlian and Qingdao Rirong. We
have determined, in prior segments of this proceeding, that crawfish scrap has
value. See Freshwater Crawfish Tail Meat from the People's Republic of China:
Final Results of New Shipper Review (Ningbo New Shipper Review), 64 FR 27961
(May 24, 1999). Also, in the Final Determination of Sales at Less Than Fair
Value: Coumarin from the People's Republic of China, 59 FR 66895 (December 28,
1994), the Department determined that the treatment of a by-product as an
offset is consistent with generally accepted accounting principles and previous
Department practice so long as an economic benefit accrued to the firm and the
benefit was linked to the production of the subject merchandise. As in the
preliminary results of the current reviews and the Ningbo New Shipper Review,
we continue to conclude that the by-product is a result of the production
process, and that through the sale of crawfish shells an economic benefit has
accrued to respondents.

We also disagree with petitioner's claim that crawfish shells are not
comparable to shells of other crustaceans since its value in market economy
countries is zero. Information has been placed on the record which demonstrates
that what makes shells of crustaceans valuable is their chitin content.
Crawfish shells, like shells of other crustaceans, contain chitin. Therefore,
we deem them to be comparable to shells of other crustaceans. In addition, as
petitioner's affidavit has stated, crawfish shells can be used to produce
saleable products, i.e. fertilizer, fish meal, and chitosan. Therefore, for the
final results of these reviews, we have continued to value crawfish shells as
we did for the preliminary results of these reviews.


Comment 23: Scrap should be valued in the same country as crawfish


Petitioner argues that the Department, where possible, seeks to obtain
surrogate values from the same surrogate country for both scrap and the primary
input from which it is produced. See Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished from the People's Republic of China (Tapered Roller
Bearings), 64 FR 81837 (November 15, 1999). Petitioner contends that Spain is
the most appropriate surrogate for crawfish scrap for the same reasons that the
Department has concluded that Spain is the most appropriate source from which
to value the live crawfish input; freshwater crawfish are not produced in
India, the primary surrogate country, and Spain is more similar to China in
terms of economic development than the United States, the only other market-
economy country with significant crawfish production. In Spain, as in the
United States, crawfish scrap is not sold but instead treated as refuse; thus,
the proper surrogate value is zero.

Ningbo Nanlian argues that there is no such requirement in the law, nor does
the Department precedent support the position, that crawfish scrap should be
valued in the same country as the raw material. Ningbo Nanlian maintains that
the Department has wide discretion to select surrogate values that are logical
and reasonable. Ningbo Nanlian also argues that, since Spain has no chitosan
industry, using it as a surrogate to value crawfish scrap does not make sense.
In Tapered Roller Bearings, Ningbo Nanlian contends, the Department has
historically relied upon steel bar prices in Indonesia, with the remaining
prices from India, including scrap. Additionally, Ningbo Nanlian maintains that
in this case, the Department has chosen India for purposes of surrogate values
with the exception of the valuation of the crawfish input; for this, the
Department relied on a surrogate value from Spain. Ningbo Nanlian argues that
this shows that the Department is not committed to using surrogate values from
only one country. Finally, Ningbo Nanlian contends that if the Department were
to value scrap in the same country in which it valued the crawfish input, the
surrogate value for scrap would not be zero, but, instead, $0.22/lb., based on
information Ningbo Nanlian placed on the record in this review.

Qingdao Rirong argues that the Department has consistently exercised its
statutory discretion to select surrogate values from multiple countries,
notwithstanding its preference to select surrogate values only from the primary
surrogate country, citing Cased Pencils. Additionally, according to the court's
decision in Nation Ford Chemical Co., v. United States, 166 F.3d 1373, 1377
(Fed. Cir. 1999), Qingdao Rirong contends that the Department has been directed
to select surrogate values that are as representative of the situation in the
NME country as is feasible, but the Department is not required to duplicate the
exact production experience of the NME producer at the expense of choosing a
surrogate value that most accurately represents the fair market value of the
various factors of production. Qingdao Rirong further argues that the fact that
U.S. crawfish tail meat producers currently are unable to sell crawfish shells
as scrap does not negate the fact, verfied by the Department, that the Chinese
crawfish tail meat producers were able to sell crawfish shells as scrap during
the POR. Qingdao Rirong maintains that, consistent with its practice in Brake
Drums and Brake Rotors from the People's Republic of China (Brake Drums), 62 FR
9160 (February 28, 1997), the Department should value respondent's factors
based on its production experience during the POR.




Department's Position: While it is normally our practice to value factors of
production, such as the primary input and scrap, from the same country (see
section 351.408(c)(2) of the Department's regulations), the statute
demonstrates no preference for using surrogate values for the primary input and
scrap from the same country. Section 773(c) of the Act states that the
administering authority, in valuing factors of production, shall utilize, to
the extent possible, the prices or costs of factors of production in one or
more market economy countries that are: (a) at a level of economic development
comparable to that of the nonmarket economy country, and (b) significant
producers of comparable merchandise. Since Spain is a significant producer of
comparable merchandise with respect to whole, live crawfish, we have valued the
primary input from Spain. However, since we do not have a sufficiently reliable
surrogate for shells from Spain, we have chosen to value crawfish scrap from
another market economy country. With respect to the Spanish value offered by
Ningbo Nanlian, we find that this value represents the value of a category of
products which is substantially broader than the category from which the
Department has taken a Canadian value. Therefore, for the final results of
these reviews, we have continued to value crawfish shells as we did for the
preliminary results of these reviews.


Comment 24: Prices from the Central Institute of Fisheries and Technology
(CIFT) provide the most suitable value for crab and shrimp scrap on the records
of these reviews.


Petitioner argues that, if the Department continues to regard crab and shrimp
scrap as comparable to crawfish scrap, then the most appropriate surrogate
value for scrap on the records of these reviews is the price obtained from
India's CIFT, adjusted to a wet-weight basis. Petitioner contends that the
prices furnished by the CIFT summarize the results of project reports, prepared
by CIFT, intended to provide advice on business prospects in this industry and
therefore are more broadly based than a quote from a single company at a single
point in time. Petitioner notes the Department's preference for obtaining
surrogate values that reflect prices for an entire country rather than one
specific company, citing Tapered Roller Bearings. In addition, petitioner
maintains that the Department's regulations state that, when compared to a
publicly available price that reflects numerous transactions between many
buyers and sellers, a single input price reported by a single surrogate
producer may be less representative of the cost of that input in the surrogate
country. Moreover, petitioner contends that while it is acceptable practice to
use surrogate values from other countries when necessary, the better course of
action in this review is to select a surrogate value from India, which has been
chosen as the principal surrogate.

Petitioner argues that, contrary to Ningbo Nanlian's suggestion, in its
September 21, 1999 submission, that the Department is barred from using data
from an "unofficial" source as a surrogate value, the Department routinely
bases its surrogate values on publicly available information from both
"official" and "unofficial" sources, i.e., from both governmental and private
sources. Petitioner cites the Department's choice of surrogate values in
Certain Preserved Mushrooms from the People's Republic of China, 63 FR 72255
(December 31, 1998) to demonstrate that the Department routinely uses data from
both "official" and "unofficial" sources in choosing surrogate values.

Ningbo Nanlian argues that the by-product data placed on the record by
petitioners, including a letter from the CIFT of India, was flawed to such an
extent that it cannot be used to value crawfish scrap. Ningbo Nanlian asserts
that the Department can not rely on the information contained in the letter
from the CIFT since the information contained therein has since been repudiated
by the deputy director of the Indian Council of Agricultural Research (ICAR),
of which the CIFT is a subordinate office. Ningbo Nanlian contends that the
affidavit submitted by petitioner was not officially approved by ICAR and that
the advice given by petitioner's affidavit should not be taken seriously.
Additionally, Ningbo Nanlian argues that the reason the Department should not
use the CIFT data is not that it is either "official" or "unofficial," but,
rather, that the data has been repudiated and is unreasonable.

Ningbo Nanlian also contends that there is no indication that the data from
the CIFT refer to actual aggregate sales. Instead, Ningbo Nanlian maintains
that the prices are derived from project reports. Ningbo Nanlian submits that
the Department cannot be sure whether these project reports are based on actual
sale prices, anecdotal evidence, guesses, etc. Also, Ningbo Nanlian asserts
that these prices are for fishermen, and Ningbo Nanlian maintains that
crustacean shell sales would come from processors rather than fishermen.
Finally, Ningbo Nanlian argues that it is unclear whether the prices are based
on data from a specific city, from a particular region, or that are country-
wide. Ningbo Nanlian claims that, without knowing the geographical basis of the
data, the data cannot be presumed to be representative of India.

Qingdao Rirong argues that the Department should reject petitioner's proposal
to use surrogate values for crawfish scrap based on prices obtained from the
CIFT. Qingdao Rirong notes that the Department has consistently rejected this
type of non-public information. See Brake Drums and Final Determination of
Voluntary Remand Determination in Certain Compact Ductile Iron Waterworks
Fittings and Glands from the People's Republic of China, 62 FR 9160 (February
28, 1997). Qingdao Rirong notes that it is the Department's practice to rely
on, to the extent possible, publicly available information. See Certain Carbon
Steel Butt-Weld Pipe Fittings from the PRC, 57 FR 21058 (May 18, 1992).
Therefore, Qingdao Rirong argues, the Department should disregard the CIFT data.


Department's Position: On September 16, 1999, petitioner submitted a letter
from K.G. Ramachandran Nair of the CIFT quoting a price of sand-free, dried
prawn and crab shells of 6 rupees per kilogram. However, in response to this
letter, Ningbo Nanlian submitted a letter from Dr. K. Gopakumar, the Deputy
Director General of ICAR, of which CIFT is a part. This letter advises that the
letter from Mr. Nair is not to be taken as an official statement. While we
agree with petitioner that the Department is not barred from using data as a
surrogate value from an unofficial source, this is not the same as using data
that has been refuted by the organization where it originated. Furthermore, we
do not know the basis of the project reports from which the CIFT data was said
to have been derived. (However, it is not necessary for data to be country-wide
for us to use them for surrogate valuation.) Because the record is ultimately
unclear as to the validity of the data, we cannot reasonably rely on the
information provided. Therefore, for the final results of these reviews, we
have continued to value crawfish shells as we did for the preliminary results
of these reviews.


Comment 25: The CIFT prices must be converted from dry weight to the
equivalent weight of raw, wet scrap.


Petitioner maintains that the prices identified by CIFT are stated on a dry-
weight basis, while the weights reported by respondents are for raw, wet scrap.
Therefore, petitioner contends, the direct application of CIFT prices to the
quantities reported by respondents would grossly overstate the byproduct value.
Petitioner argues that, to avert this error, the Department must use an
appropriate conversion factor. Petitioner cites its June 29, 1999 submission of
a Malaysian article entitled "Chitin and Chitosan: The Versatile
Environmentally Friendly Modern Materials," as a source by which to determine
the equivalent price for wet scrap, as opposed to dry scrap.

Ningbo Nanlian argues that this point is moot since the Department should
reject the data outright, because it has been repudiated by the agency that
issued it.


Department's Position: We agree with Ningbo Nanlian. Since we are continuing
to use the Canadian price quote for crustacean shells in our final results of
review, the issue of any adjustment to the alternative CIFT data is moot.


Comment 26: The Canadian price quotation must be adjusted to a wet-weight basis.


Petitioner maintains that the price quotation received from the Canadian
seller of crustacean scrap was treated by the Department as the value for wet
scrap. However, petitioner argues that, based on an affidavit from Mr. Dave
Byer of Resource Development Associates, the Canadian seller of the crustacean
shells in question, the quotation it provided was on a dry-weight basis.
Therefore, petitioner contends, if the Department continues to use this price
quotation as the basis for scrap valuation for these final results, the figure
must be converted to a wet-weight basis.

Ningbo Nanlian contends that the wet-to-dry crustacean scrap conversion factor
cited by petitioner's article is unsubstantiated and we have no idea of the
factor's derivation. Therefore, Ningbo Nanlian maintains that this is not the
type of evidence that the Department can rely on to reduce the by-product
credit by 70% or more. In addition, Ningbo Nanlian argues that there are
various gradations of wet and dry, but no evidence on the record as to how wet
or dry was respondents' crawfish scrap sold during these reviews, and there is
simply no way any wet-to-dry ratio could be applied to the by-product.

Qingdao Rirong argues that the Department should not adjust the crawfish shell
values from a dry-weight basis to a wet-weight basis. Qingdao Rirong maintains
that petitioner assumes that the value of shells corresponds directly to the
weight and form of the shells but provides no support for that assumption. In
addition, Qingdao Rirong asserts that a conversion based solely on weight fails
to account for the value, if any, assigned by shell processors for drying the
shells. Additionally, Qingdao Rirong posits that, although processors may sell
shells on a dried basis, they may be able to purchase shells only on a wet
basis because that is the only reliable basis for the sales transaction between
the shell seller and the processor. Therefore, Qingdao Rirong contends that,
absent a reliable basis for assessing the value of the drying process, any
conversion from a dry weight shell price to a wet weight shell price would be
based on an arbitrary guess.


Department's Position: We agree with petitioner. Information has been placed
on the record of these reviews establishing a dry-to-wet conversion factor for
various forms of crustacean shell scrap. Other than claiming that the
information contained therein is unsubstantiated, Ningbo Nanlian and Qindao
Rirong have not placed any additional information on the record which would
call into question the accuracy of this conversion factor, nor have they placed
any information on the record with respect to how wet or dry their scrap is,
despite the fact that petitioner raised this issue on June 29, 1999. Therefore,
for these final results of reviews, we converted the Canadian price quote of
crustacean shell scrap from a dry-weight to a wet-weight basis by applying the
conversion factor established in exhibit 9 of petitioner's June 29, 1999
submission.


Comment 27: The treatment of raw crawfish


Qingdao Rirong argues that the Department improperly treated raw crawfish as a
factor of production even though Qingdao Rirong's actual accounting records
demonstrate that it did not purchase crawfish, but instead incurred extra labor
costs for employees involved in crawfish collection. Qingdao Rirong asserts
that in its response to section D of the Department's questionnaire and
subsequent supplemental responses, it informed the Department that it did not
record raw crawfish as a factor of production in its normal accounting records
because it did not purchase raw crawfish, but instead collected live crawfish
by company-employed laborers, the salaries of which were recorded in Qingdao
Rirong's accounting records.

Qingdao Rirong argues that it is the Department's practice in NME cases to
value a respondent's factors based on its actual production experience during
the period. Therefore, Qingdao argues, it would have been appropriate to use a
surrogate value for crawfish input only if it had produced, rather than
purchased, the input. Qingdao Rirong cites Brake Drums, where the application
of surrogate values of purchased inputs was more appropriate than a build-up of
surrogate values for factors of production since the former would correspond to
the actual experience of the respondent. Qingdao Rirong maintains that the
relevant factor of production for the crawfish input was the crawfish
collection labor and the Department should correct its preliminary normal value
calculation to reflect this fact.

Petitioner counters that, since live crawfish are a raw material that Qingdao
Rirong used to produce the subject merchandise, the plain language of the
statute requires the Department to treat live crawfish as a factor of
production. In addition, petitioner maintains that Qingdao Rirong has
misconstrued the language of the questionnaire. Petitioner asserts that the
Department's questionnaire asks respondents to report the amounts of crawfish
used, not their costs, based on the data kept by Qingdao Rirong in its ordinary
course of business. Petitioner further suggests that, since China is an NME,
the costs of production as recorded in Rirong's normal accounting system are
largely irrelevant. Finally, petitioner argues that Qingdao Rirong's reliance
on Brake Drums is misplaced. Petitioner claims that in that instance, the
Department declined to build up a value for castings where the respondent
purchased (and did not produce) such castings. Petitioner maintains that this
approach was required under the statute because the various raw materials that
would have been needed by the respondent to produce its own castings were not
factors of production utilized in producing the merchandise, in accordance with
19 U.S.C. 1677b(c)(1)(B)(section 773(c)(1)(B) of the Act). However, petitioner
argues that, in this case, there is no question that Qingdao Rirong actually
used crawfish to produce crawfish tail meat.


Department's Position: We agree with petitioner. In accordance with section
773(c)(3) of the Act, the factors of production utilized in producing subject
merchandise include, but are not limited to, (a) hours of labor required, (b)
quantities of raw materials employed, (c) amounts of energy and other utilities
consumed, and (d) representative capital cost, including depreciation. The
statute clearly indicates that, for the purposes of constructing normal value
in an NME case, the Department builds up its factors of production based on the
quantities of the inputs, not the costs associated with those inputs. Thus,
whether Qingdao Rirong purchased or collected crawfish, the Department still
utilizes the quantities of raw materials employed during its calculation of
constructed value. Therefore, for these final results, we have continued to
value Qingdao Rirong's raw crawfish as a factor of production.


Comment 28: Double-counting of crawfish collection labor


Qingdao Rirong maintains that, if the Department continues to treat live
crawfish as a factor of production, the Department should adjust Qingdao
Rirong's labor costs in order to avoid an improper double-counting of its labor
costs. Qingdao Rirong claims that, in its preliminary results, the Department
has applied a surrogate value for the purchase of crawfish and also has applied
a surrogate value to the labor required for the collection of the crawfish.
Qingdao Rirong asserts that the Department should remove the reported labor
hours reported for the collection stage from the total hours needed to produce
subject merchandise.

Petitioner argues that, contrary to Qingdao Rirong's claim, the Department has
not double-counted the labor involved in collecting crawfish. Petitioner cites
the statute's requirements that the Department calculate normal value on the
basis of the value of the factors of production utilized in the production of
the subject merchandise which include, but are not limited to, hours of labor
required and quantities of raw materials employed. Petitioner contends that,
under the plain meaning of the statute, the crawfish themselves and the
collection labor are both factors of production, not substitutes for one
another. Petitioner asserts that, because of the production method employed by
Qingdao Rirong, it would not have had crawfish with which to produce subject
merchandise without the presence of both factors together. 


Department's Position: We agree with Qingdao Rirong. Section 773(c)(1)(B) of
the Act specifies that the administering authority shall determine the normal
value of the subject merchandise on the basis of the value of the factors of
production utilized in producing the merchandise. The labor hours required to
collect crawfish can not be directly attributed to the production of subject
merchandise, but, rather, are attributable to the production of the live
crawfish raw material input. Therefore, we have not included these hours in our
valuation of the factors of production for Qingdao Rirong.


Comment 29: The Department's use of unadjusted Spanish import prices is
improper. 


Ningbo Nanlian asserts that the Spanish import classification number
0306.29.10, used by the Department to value the crawfish input for these
preliminary results of reviews, consists of a variety of crawfish products,
including crawfish which is peeled, cooked, or steamed, and makes no
distinction between the end uses of crawfish - i.e., whether for peeling or for
the whole, live market. Ningbo Nanlian argues that the import price used by the
Department in its preliminary results is not consistent with actual prices paid
in Spain for crawfish to be used to produce tail meat, according to an
affidavit from Alfocan, S.A., a Spanish tail meat producer, it submitted on
November 1, 1999 and supporting invoices for the purchase of Portuguese
crawfish. In addition, Ningbo Nanlian points out that Alfocan, S.A. does
purchase very large, expensive Portuguese crawfish in the whole, live market
which are not intended for the production of crawfish tail meat. Ningbo Nanlian
contends that the Department should modify the Spanish import data to remove
high-priced crawfish bound for the more costly, whole, live market, thereby
deriving a more accurate surrogate value for crawfish to be used to produce
tail meat.

Petitioner argues that no new information has been placed on the record of
this review which demonstrate that Spanish imports from Portugal consist of
anything other than whole, live crawfish, nor has Ningbo Nanlian demonstrated
that such imports were materially different from the crawfish used by Chinese
processors to make tail meat. Petitioner posits that crawfish processors, by
definition, are not in the business of selling whole, live crawfish. Therefore,
petitioner concludes that the transaction described by Ningbo Nanlian's
affidavit from Alfocan, S.A. was unusual and not representative of its normal
treatment of Portuguese crawfish. Thus, petitioner contends, the Department
should continue to use the unadjusted Spanish import price as the surrogate
value for live crawfish in the final results of these reviews.


Department's Position: We agree with petitioner. No additional information has
been placed on the record of these reviews which indicate that Spanish imports
from Portugal under HTS tariff classification 0306.29.10 include anything other
than whole, live crawfish or crawfish unsuitable for use in the production of
tail meat. Therefore, for these final results of reviews, we have continued to
utilize the unadjusted imports of whole, live crawfish from Portugal into Spain
as the basis for the crawfish surrogate value.


Comment 30: The Department used outdated Indian data to value water.

Ningbo Nanlian argues that the Department used outdated Indian water prices to
value the water factor for these preliminary results. Ningbo Nanlian maintains
that, in order to derive the most accurate surrogate value for water in this
review, the Department should utilize the most recent data available, the
Second Water Utilities Data Book for the Asian and Pacific Region, as submitted
by Ningbo Nanlian in its November 1, 1999 submission.

Petitioner contends that the information Ningbo Nanlian submitted on November
1, 1999 shows that the rupee-denominated water rates in India have not changed;
instead, what has changed is that the new summary of those rates provides less
information than the old summary. Petitioner argues that when the new amounts
are converted to U.S. dollars, the table used in the preliminary results and
that submitted by Ningbo Nanlian on November 1, 1999 provide different results,
but only because the exchange rates in 1991-1992 (the time period of the
original data) were different from the average exchange rate for the entire
1991-1996 period (the time period of the recently submitted data). Petitioner
notes that in the most recent data, the 1991-1996 table, does not list the
sewerage surcharge even though the surcharge is imposed as an inseparable part
of providing water service. Petitioner maintains that, since the tables cover
overlapping time periods, it must be inferred that the 30% surcharge applicable
to the 1991-1992 table has not changed. Therefore, petitioner asserts, the
Department should add the 30% surcharge to derive the proper surrogate value.

Finally, petitioner claims that the Department must apply the proper tariff
rate. Petitioner argues that a seafood processing facility would quickly use up
its small monthly allotment of cheaper water, and the top marginal rate would
apply to the vast bulk of its water usage. Therefore, petitioner concludes that
the top marginal rate of 8.00 Rs/cubic meter is more representative of water
usage costs for a seafood processor that a simple average of the three staged
rates. Thus, for these final results, petitioner suggests that the Department
should use a rate of 8.00 Rs/cubic meter, plus the 30% sewer surcharge,
converted at an exchange rate appropriate to the POR, as the surrogate value
for water.


Department's Position: While Ningbo Nanlian purports that, in order to derive
the most accurate surrogate value for water in this review, the Department
should utilize the most recent data available, we agree with petitioner that
these data show the same information as that used in the preliminary results of
these reviews. Since the exchange rates for the 1991-1992 (the time period of
the original data) were different from the average exchange rate for the entire
1991-1996 period (the time period of the recently submitted data), the
surrogate water value will differ only because the average exchange rate has
changed. Therefore, since the information contained in the most recent
submission is no different than that used in the preliminary results, we have
continued to use the value from the preliminary results of these reviews, but
inflated from the 1991-1996 period rather than for the 1991-1992 period.

With respect to petitioner's comment that we should be using the top marginal
rate of 8.00 Rs/cubic meter, plus the 30% sewer surcharge, as the surrogate
value for water in this review, we have revised our calculation to reflect the
actual water usage of the respondent. See the Memorandum to the File from
Michael Strollo; Analysis for the Final Results of Administrative Review of
Freshwater Crawfish Tail Meat from the People's Republic of China: Qingdao
Rirong Foodstuffs Co., Ltd., dated April 7, 2000. Also, we have continued to
exclude the sewer surcharge from our calculation of the surrogate value for
water. Consistent with the Department's standard practice as reflected in
Sulfanilic Acid from the People's Republic of China; Final Results and Partial
Rescission of the Antidumping Duty Administrative Review, 61 FR 53702 (October
15, 1996) and Brake Drums, we have calculated a tax-exclusive surrogate value
for water.


5. Deposit and Assessment Rates for HFTC30 and other companies with Huaiyin
Foreign Trade in their title


The petitioner submitted a brief and comments on the verification report.
HFTC30, together with its U.S. importers Worldwide Link, Inc., Captain Charlie
Seafood Wholesale Co., U.S.A., GMRI,Inc./Red Lobster, Ocean Duke and Intraco
(collectively, the coalition) submitted a brief and comments on the
verification report.


Comment 31: Liquidation of entries from HTFC30

The coalition argues that neither the petitioner, HFTC30, nor members of the
coalition requested a review of HFTC30's crawfish exports for the 1997-1998
review period. The coalition contends that the Department's notice of
initiation of this review named only HFTC and did not name HFTC30. In addition,
the coalition states that the public file of this review does not indicate that
the Department sent an antidumping questionnaire to HFTC30. The coalition also
asserts that the public file indicates that the only antidumping questionnaire
that the Department sent to a HFTC entity was to HFTC at 77 East Huaihai Road.
The coalition argues that, if no review is requested for a company and the
company is not named in the Department's notice initiating the review, pursuant
to 19 U.S.C. §1675(a) and 19 C.F.R. §351.212, the duties are "assessed. . . at
. . . the cash deposit rate applicable at the time the merchandise was
entered." In support of this position, the coalition cites Federal-Mogul Corp.
v. United States, 822 F.Supp. 782, 787-88 (CIT 1993) ("The statutory framework
for administrative reviews clearly anticipates that in cases where a company
makes cash deposits on entries of merchandise subject to antidumping duties,
and no administrative review is requested, the cash deposit rate automatically
becomes that company's assessment rate for those entries.")

The coalition also asserts that when Chinese exporters are not named in the
notice of initiation of an antidumping review, imports from those exporters
should be liquidated at the cash deposit rate. The coalition cites Transcom,
Inc. v. United States, 182 F.3d 876, 880, 882-884 (Fed. Cir. 1999) (Transcom):

The notification requirement in the statute and the Customs regulations serves
to notify any interested party that the antidumping rate on goods obtained from
exporters named in the notice of initiation for an administrative review may be
affected by the outcome of that review. 

* * * *

What the statutory and regulatory notification provisions requires is that any
reasonable informed party should be able to determine, from the published
notice of initiation read in light of announced Commerce Department policy,
whether particular entries in which it has an interest may be affected by the
administrative review.

* * * *

Yet if that party does not have notice that its interests are at stake in a
particular administrative review, it has no meaningful opportunity to rebut the
presumption. Commerce may be free to choose a variety of means to give
reasonable notice that certain exporters' goods are subject to an
administrative review, but before taking action that significantly affects
parties such as Transcom, it must provide some form of notice that the
administrative review may result in an increase in the importer's liability by
affecting the antidumping duty rates applicable to its foreign exporters.
Because no such notice was provided in this case, the final results of the. . .
administrative reviews . . . cannot be sustained as they apply to the entries
derived from Transcom's unnamed exporters.


The coalition argues that, since the Department did not name HFTC30 in its
initiation notice for this administrative review and did not send a
questionnaire to HFTC30 or its importers, neither HFTC30 nor its importers were
notified of the review. The coalition further contends that since neither
HFTC30 nor its importers were notified of the administrative review, imports
from HFTC30 during the 1997-1998 POR should be liquidated at the cash deposit
rates paid upon entry. 

The petitioner agrees with the coalition that no party has requested an
administrative review of entries of subject merchandise exported by HFTC30
during the POR. The petitioner contends that, since no review was requested for
HFTC30's entries, the Department cannot issue a separate rate for them. The
petitioner states the following. Under section 751(a)(1) of the Act, the
Department may conduct a review of a party's entries only "if a request for
such a review has been received." Under section 751(a)(2)(C) of the Act, the
determination made under such a § 751 review may be the basis for assessment of
duties only on the entries that have been reviewed pursuant to such a request.

Where no review is requested, the assessment of antidumping duties on entries
for which liquidation was suspended is governed by 19 C.F.R. § 351.212(c),
which provides for automatic assessment "at rates equal to the cash deposit of,
or bond for, estimated antidumping duties or countervailing duties required on
that merchandise at the time of entry." Petitioner cites Manganese Metal in
support of this position.

However, the petitioner contends that this mechanism of automatic assessment
is entirely separate from the administrative review process. The petitioner
states that the arguments made by the coalition are really about whether the
"cash deposit. . . required" on their entries was 91.5% or some other rate. The
petitioner maintains that the Department does not have the authority in an
administrative review to render a determination regarding the proper deposit
rate for past entries; instead, an administrative review establishes deposit
rates only for future entries by companies for which a review was requested.
Accordingly, the petitioner asserts that the coalition's arguments regarding
the manner in which the Department and Customs have implemented 19 C.F.R. §
351.212(c) are not justiciable in this proceeding.


Department's Position: As both the coalition and the petitioner recognize, no
party specifically named HTFC30 in its request for review, and HFTC30 was not
named in our initiation notice for this administrative review. However, we
disagree with the coalition's contention that, since HFTC30 was not named in
the Department's initiation notice, neither HFTC30 nor its importers were
notified of the review. The Department's initiation notice clearly states: 

"If one of the above named companies does 

not qualify for a separate rate, all other 

exporters of freshwater crawfish from the 

People's Republic of China who have not 

qualified for a separate rate are deemed to

be covered by this review as part of the 

PRC entity of which the named exporter is part."


This constitutes notice of an administrative review to both exporters and
importers of crawfish tail meat from the PRC. Consequently, all PRC exporters
of crawfish were potentially subject to the review even in instances where the
exporter was not specifically named in the initiation notice. See Transcom
(Fed. Cir. 1999). 

We agree with the petitioner's assertion that the Department cannot issue a
separate rate for HFTC30 in the context of the current administrative review.
Members of the coalition could have specifically requested a review of HFTC30;
however, they did not. Moreover, HFTC30 could have participated in the review
and demonstrated that it is entitled to a separate rate. Therefore, the
Department did not determine a separate rate for HFTC30. 

In order for a company to receive a separate rate, it must demonstrate an
absence of government control of its export activities. Absent such a showing
of independence, the company will be regarded as part of the PRC entity and
subject to the PRC-wide rate. See Sigma Corp. v. U.S., 117 F3d 1701, 1405, 1406
(Fed Cir. 1997). The CAFC has upheld the presumption of state control and
recognizes that the exporter has a duty to demonstrate its independence because
the exporter is in the best position to demonstrate the absence of state
control. In a case such as this, the inclusion of unnamed exporters in this
review as part of the PRC entity is necessary to prevent unnamed exporters from
exporting through exporters that have been assigned a separate rate. See
Transcom at p. 883. These are necessarily the legitimate concerns that the CAFC
expresses in Transcom. Thus, to the extent that HFTC30 is arguing that its
prospective cash deposit rate should not be the China-wide rate, HFTC30 had an
obligation to request a review and provide evidence to establish its
entitlement to a separate rate. We reviewed the PRC entity of which HFTC30 is a
part. Accordingly, the margin determined for the PRC-entity applies to HFTC30's
exports.


Comment 32: HFTC30's cash deposit rate 

The petitioner argues that, in the final results of this review, the
Department by law cannot, and should not, render an opinion on the coalition's
argument that when 19 C.F.R. § 351.212(c) is applied to their unreviewed past
entries the proper rate is 91.5%. The petitioner argues that members of the
coalition are not entitled to such an opinion on the record of this review, and
they are not entitled to attempt to use the final results of this review as a
vehicle for challenging the Department's automatic liquidation policy in the
CIT. 


Department's Position: Section 351.212(c) of the Department's regulations does
not apply: therefore, the issue is moot. See Comment 33, below.


Comment 33: HFTC30's cash deposit rate during the POR

The coalition maintains that many of its members imported crawfish from HFTC30
during the POR. The coalition asserts that in the summer 1998, some of its
members (e.g. GMRI/Red Lobster (Red Lobster)) made attempts to contact the U.S.
government, including the U.S. Embassy and the Department, to determine whether
the 91.5% cash deposit rate for HFTC applied to HFTC30. The coalition states
that after seeking such clarification, they received a copy of the antidumping
order with the 91.5% cash deposit rate for HFTC. In addition, coalition members
contacted HFTC30, who informed them that the 91.5% cash deposit rate applied to
its exports. HFTC30 has stated that it participated in the LFTV investigation.
Coalition members, such as Red Lobster, claim that they imported crawfish from
HFTC30 relying on HFTC30's assurances and on the language in the antidumping
order which showed that HFTC was entitled to a dumping margin of 91.5%. The
coalition states that, at the time of entry of these shipments, Customs
required that the importers post a cash deposit rate of 91.5% of the entered
value.

The coalition asserts that until September 1999, Customs routinely gave the
91.5% cash deposit rate to crawfish import shipments whose entry documents
(commercial invoices and bills of lading) clearly showed the HFTC30 as the
Chinese exporter. Moreover, the coalition asserts that Customs allowed these
entries the 91.5% cash deposit rate despite the fact that another HFTC entity
had repeatedly contacted Customs seeking its assistance in stopping other
Chinese exporters from using HFTC's cash deposit rate. The coalition argues
that, since HFTC30's entry documents clearly indicated that HFTC30 was the
exporter, the Department cannot assume that HFTC30 fraudulently represented
itself to Customs in order to utilize HFTC5's low rate. The coalition asserts
that HFTC30 told Customs that it was HFTC30 on its entry paperwork, and Customs
still allowed the crawfish to enter at HFTC's 91.5% cash deposit rate. The
coalition states that it believes that a major reason that HFTC5 could not
clear up its problem with Customs was that it never revealed to Customs that it
was not HFTC, but really HFTC5, a company like HFTC30 that uses HFTC's export
license.

The petitioner asserts that Ningbo Nanlian's 

September 17, 1999 submission included a certified statement from HFTC that:
"[w]e are the only Crawfish Exporter in Huaiyin City that was reviewed by the
U.S. Department of Commerce in the 'Crawfish Antidumping' case . . .." The
petitioner argues that no party has disputed this claim. Indeed, the petitioner
argues that all interested parties taking a position on the issue concede that
HFTC5 is the same entity that submitted questionnaire responses and underwent
verification in the LTFV investigation. The petitioner points out that no
position on this issue is taken by Baolong Biochemical, Nantong Delu, Yancheng
FTC or Ocean Harvest Wholesale, Inc. The petitioner argues that the 91.5% rate
from the investigation applies only to the HFTC entity now known as HFTC5.

The petitioner argues that the coalition's contention that, since they may
have imported from a Chinese entity allegedly named HFTC, their imports were
entitled to the 91.5% deposit rate calculated in the LTFV determination for the
company of a similar name, is misguided. The petitioner contends that, in
assessing this claim, the Department must bear in mind that the members of the
coalition admit that their imports did not come from the same company that was
investigated in the LTFV proceeding.

The petitioner contends that there is nothing in the antidumping statute or
the Department's regulations to suggest that antidumping duty deposit rates or
assessment rates are assigned to names. The petitioner argues that, to the
contrary, the statutory and regulatory scheme clearly contemplates that rates
are assigned to "producers" and "exporters." For example, section 735 of the
Act directs the Department to "determine the estimated weighted average dumping
margin for each exporter and producer individually investigated" and to
"determine... the estimated all-others rate for all exporters and producers not
individually investigated." 19 U.S.C. § 1673d(c)(1)(B)(i)(I) & (II)(sections
735(c)(l)(B)(i)(I) & (II) of the Act). The petitioner argues that when the
Department published the final LTFV determination and the antidumping duty
order pursuant to section 735, there could be no doubt that the rates listed
for individual companies were rates for specific "exporter[s] and producer[s]
individually investigated." The petitioner also contends that there also could
be no doubt that the PRC-wide rate was the proper rate for any PRC exporter or
producer that was not individually investigated. The petitioner contends that
this is stated in the notice of the Department's final LTFV determination:

We are applying a single antidumping deposit rate--the China-wide rate--to all
exporters in the PRC other than those firms that were fully responsive to our
requests for information.


See Notice of Final Determination of Sales at Less Than Fair Value: Freshwater
Crawfish Tail Meat From the People's Republic of China (Freshwater Crawfish
Tail Meat), 62 FR 41347 

(August 1, 1997). 


The petitioner argues that since the members of the coalition, by their own
admission, did not import from one of "those firms that were fully responsive
to [the Department's] requests for information," their entries were subject to
the China-wide rate. 

The petitioner states that importers know that a company's name can only serve
as partial identification. The petitioner contends that there is no area of the
law in which a name alone is conclusive evidence of identity. The petitioner
states that the law is concerned not with form, but with substance -- not with
names, but with identities. The petitioner argues that, given the demands on
its administrative resources, the Department cannot possibly ensure that all of
the parties named in its published notices are described in such fashion that
they are uniquely distinguished, on the face of the publication, from all other
entities. The petitioner states that the best that can be accomplished is to
put the world on notice that further inquiry may be warranted. The petitioner
argues that the antidumping duty order in this instance did exactly that: it
notified the world that there was an antidumping order on crawfish tail meat
from the PRC and that one company, which the Department investigated and
verified, was entitled to a 91.5% deposit rate. The petitioner argues that the
Department stated in its 

August 1, 1997 Federal Register that: "We are applying a single antidumping
deposit rate--the China-wide rate--to all exporters in the PRC other than those
firms that were fully responsive to our requests for information." (See 62 FR
41349.) The petitioner contends that no reasonable person could have been
misled by this statement into believing that anything but the 201.63% rate
would be applied to entries from exporters that had not been investigated.

The petitioner argues that when coalition importers became interested in
importing subject merchandise from a company claiming to be HTFC, then it was
their job to protect their own interests by inquiring further and obtaining the
necessary assurances from their new Chinese business partner. The petitioner
states that the coalition's brief acknowledges that the August 1, 1997 Federal
Register notice was sufficient to prompt as least some of the importers to make
further inquiries. The petitioner states that some coalition members blame the
Department and even the U.S. embassy for declining to do their due diligence
footwork for them. Citing 19 U.S.C. 1673d(d) (section 735(d) of the Act), the
petitioner argues that the Department does not have the resources or the
statutory obligation to undertake such investigations and that the Department
satisfied its obligations by notifying the petitioner and other parties and
publishing the notices, which is all the statute requires. 

The petitioner asserts that the public file of the LTFV investigation was
available to all members of the coalition, but that it appears that they did
not review it until after September 1999. The petitioner asserts that these
companies could have checked the public file to see whether the addresses in
the questionnaire responses matched the address of their Chinese supplier and
whether the names of the company officials listed in the public version of the
verification report were the names of the people with whom they were dealing.
The petitioner also contends that the importers could have asked their Chinese
supplier to provide documents to them to demonstrate that it was the same
company investigated in the LTFV proceeding; for example, the Chinese supplier
could have been requested to provide copies of the invoices from the law firm
representing it in the LTFV investigation, and the importers could have called
the law firm to verify the authenticity of such invoices. The petitioner also
contends that the importers were in a position to demand contractual assurances
and indemnifications to protect themselves in the event that the Chinese
supplier misrepresented its entitlement to the 91.5% deposit rate.

The petitioner argues that the importer's reliance on the supplier's name
alone, or even the name coupled with an address, was unreasonable as a means of
determining that the supplier was the same company investigated in the LTFV
proceeding. The petitioner contends that the notion that experienced traders
would have relied solely on their Chinese supplier's name is difficult to
believe. The petitioner asserts that the coalition importers were the only
parties in a position to select their business partners, make inquiries, and
obtain assurances to protect their interests. The petitioner states that the
domestic industry was not present when these deals were concluded and could do
none of those things. The petitioner also asserts that the U.S. industry ought
not be punished, through a weakening of enforcement of a lawful antidumping
order, for the importers' lapses in judgment.


Department's Position: As noted in our response to Comment 31, above, the
Department, in its notice of initiation of this review, stated:

If one of the above-named companies does not qualify for a separate rate, all
other exporters of freshwater crawfish from the People's Republic of China who
have not qualified for a separate rate are deemed to be covered by this review
as part of the PRC entity of which the named exporter is a part.


Several exporters named in the initiation of this review have not qualified
for a separate rate; thus, we are reviewing the PRC entity. See Crawfish
Preliminary Results. Because HFTC30 has never qualified for a separate rate,
either in this review or the LTFV investigation, it is necessarily part of the
PRC entity. Thus, the rate assigned to the PRC entity in this review applies to
HFTC30. The question of what was the appropriate deposit rate for HFTC30
entries made during the period of this review is moot as the PRC-wide rate from
this review, not the deposit rate, will be the basis of assessment for the POR
entries from HFTC30. 


Comment 34: The Department's September 1999 "clarification" instructions to
Customs 

The coalition contends that the Department issued a "clarification" in
September 1999 which effectively changed the antidumping order by no longer
giving the 91.5% cash deposit rate to HFTC, but instead assigning it to HFTC5.
The coalition asserts that this clarification was in reality a re-determination
which had the effect of retroactively increasing the cash deposit rates of
numerous importers who had relied on the language in the Department's
antidumping order which showed that HFTC was entitled to the 91.5% rate. The
coalition contends that the Department's September 1999 "re-determination"
violated the Department's own regulations by changing the cash deposit rate for
HFTC without providing interested parties with proper notice and opportunity to
comment. 

The coalition asserts that, based on this "re-determination," Customs
immediately issued notices of action to all importers of crawfish from HFTC30
and required the importers to post additional cash deposits of approximately
110%. The coalition argues that in its "clarification" the Department made it
clear to Customs that the 91.5% cash deposit rate assigned to HFTC's exports in
the antidumping duty order now only applied to crawfish imported from HFTC5.
The coalition argues that, in effect, the Department determined to
retroactively change the cash deposit rates for a specific company by no longer
giving the 91.5% cash deposit rate to the HFTC, the export license holder, but
to give the cash deposit rate to HFTC5, the company which participated in the
investigation. The coalition maintains that this determination had the effect
of retroactively increasing the cash deposit rates of numerous importers that
had relied on the language in the Department's antidumping order, which named
HFTC.

Therefore, the coalition maintains, the Department's September 7, 1999 notice
to Customs was not a clarification but a change to the antidumping order. The
coalition asserts that, as the CAFC Circuit stated in Ericsson GE Mobile
Communications, Inc. v. United States, 60 F.3d 778, 781 (Fed. Cir. 1995), the
Department cannot modify an order:

The Commerce Department enjoys substantial freedom to interpret and clarify
its antidumping duty orders. But while it may interpret those orders, it may
not change them. . . . A comparison of the 1985 order and the 1991 scope
determination makes clear that the Commerce Department's purported
"clarification" of the antidumping order strayed beyond the limits of
interpretation and into the realm of amendment.


The coalition contends that, although this principle applies to scope
determinations regarding the products covered by the antidumping order, the
same principle applies to post facto determinations of the companies that are
entitled to specific cash deposit rates. The coalition argues that once the
Department issues a cash deposit rate for a certain company in the antidumping
order, it cannot retroactively change that cash deposit rate without notice and
opportunity to be heard.

The coalition maintains that the Department did not give the U.S. importers,
HFTC, or HFTC30 any notice or opportunity to be heard before sending the
"clarification" to Customs. The coalition maintains that the only provision of
the U.S. antidumping law which would allow the Department to retroactively
change the cash deposit rate for a Chinese exporter after the antidumping order
has been issued would appear to be section 735(e), which provides for the
correction of ministerial errors. The coalition contends that even this
provision provides for "opportunity for interested parties to present their
views regarding any such errors."

The coalition also asserts that section 351.224 of the Department's
regulations establishes procedures for the correction of ministerial errors,
and specifically provides for comments by interested parties on the ministerial
errors. The coalition argues that this regulation also requires that the
Department publicly announce the results and "publish notice of such
corrections in the Federal Register."

The coalition maintains that through its "clarification," the Department
modified the cash deposit rate in the antidumping order without any notice,
comment period or publication of the results in the Federal Register. The
coalition asserts that, therefore, the Department violated its own regulations.
The coalition cites Davis and Pierce in Administrative Law Treatise (1994) §9.2
at 3:

The Due Process Clause requires a hearing of some kind only when government
deprives an individual of "life, liberty, or property" based on resolution of
contested factual issues concerning that individual. 


As Justice Jackson stated in Mullane, Special Guardian v. Central Hanover Bank
& Trust Co., 399 U.S. 306, 313 (1950):

An elementary and fundamental requirement of due process in any proceeding
which is to be accorded finality is notice reasonably calculated, under all
circumstances, to apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.


The coalition argues that in this case, the Department determined to
retroactively modify the antidumping order and assess 201.63% cash deposit
rates on imports of crawfish tail meat from HFTC, the export license holder,
without providing any notice or opportunity to be heard. The coalition asserts
that this was directly contrary to the law.

The petitioner states that the coalition's contention that the Department has
deprived its members of their due process is without merit. The petitioner
asserts that the antidumping duty order was published after a full
investigation by the Department in which all interested parties were given the
opportunity to participate, and that thereafter, all interested parties had the
opportunity to request an administrative review. The petitioner contends that
this is all of the process due under the antidumping statute.

The petitioner maintains that there is no Constitutional right to import
merchandise into the United States, citing Buttfield v. Stranahan, 192 U.S.
470, 492-93, 48 L. Ed. 525, 24 S. Ct. 349 (1904); The Abby Dodge, 223 U.S. 166,
176-77, 56 L. Ed. 390, 32 S. Ct. 310 (1912); Arjay Assocs., Inc. v. Bush, 891
F.2d 894, 896 (Fed. Cir. 1989). Accordingly, the petitioner argues that there
is no right to substantive due process under the antidumping laws beyond the
process that Congress has provided by statute, citing NEC Corp. v. United
States, 151 F.3d 1361 (Fed. Cir. 1998). The petitioner asserts that the actions
that the coalition wishes to contest here -- i.e., a decision by the Department
to provide Customs with more precise information about the identity of the
company entitled to the 91.5% deposit rate, and an effort by Customs to ensure
that the deposit paid is the same as the rate "required . . . at the time of
entry" pursuant to 19 C.F.R. § 351.212(c) -- are not actions for which Congress
has deemed it necessary to hold on-the-record, adversarial proceedings that are
reviewable by the CIT. The petitioner asserts that while the antidumping law
provides for LTFV determinations, administrative reviews, new shipper reviews,
sunset reviews, scope inquiries, and changed circumstances reviews, it does not
provide for formal, reviewable proceedings to determine the true identity of an
exporter whose entries are subject to automatic liquidation.

The petitioner maintains that not every element of every decision made in the
course of administering the antidumping laws requires notice and an opportunity
to be heard. The petitioner asserts that in this instance, it was well within
Customs' authority, in consultation with the Department, to correct false or
misleading statements in the entry documents to ensure that the deposit rate
paid is the same as the rate required to be paid under the antidumping duty
order previously issued by the Department. In support of this the contention,
petitioner cites Manganese Metal. The petitioner asserts that there is no
injustice in this, particularly since HFTC30 and members of the coalition could
have obtained an on-the-record proceeding, with full rights to subsequent
judicial review, by requesting an administrative review. The petitioner argues
that if the importers' purported reliance on the name alone was reasonable, as
they contend, then they are not without a remedy: if their exporter
misrepresented itself as the same Huaiyin Foreign Trade Corporation
investigated in the LTFV proceeding, the importers may sue the exporter for
fraud in a civil action to recover, as damages, the amount of additional duties
that they are now required by Customs to pay.


Department's Position: We agree with the petitioner. The Department's
September 7, 1999 clarification instructions to Customs were not a re-
determination of the antidumping duty order. In addition, the clarification
instructions were not issued to correct a ministerial error as conceived in
section 735(e) of the Act, but simply provided further information to Customs
regarding the company which received a separate rate in the Department's LFTV
investigation. The additional information provided in the clarification was the
company's address and the two other names the company was also known as.

As for the coalition's argument that the Department's September 7, 1999 notice
to Customs was an amendment to the order, we disagree. The coalition cites
Ericsson GE Mobile Communications, Inc. v. United States, 60 F.3d 778, 781
(Fed. Cir. 1995) to support its contention that the Department cannot modify
its orders. Ericsson held that the Department's scope determination expanded
the original antidumping duty order. Id. at 779. The CAFC noted in Ericsson
that the Department may interpret and clarify its antidumping duty orders, but
the Department may not change them. Id. 782. The CAFC also held that the
Department has broad discretion in interpreting its antidumping duty orders and
the court has limited judicial review over the Department's actions. See Id. at
783. In this case, the Department's clarification instructions were not
tantamount to an amendment of the antidumping duty order, but actions that
instead derive from the Department's responsibility to fairly administer the
antidumping laws. The Department must make sure that the proper entity is
assessed.

While the antidumping law provides for formal, reviewable proceedings such as
LTFV determinations, administrative reviews, new shipper reviews, sunset
reviews, scope inquiries, and changed circumstances reviews, it does not
provide for formal, reviewable proceedings covering the Department's provision
of further information to Customs to regarding the company which received a
separate rate from the Department's LFTV investigation. The Department's
decision to provide Customs with more precise information about the identity of
the company entitled to the 91.5% deposit rate is not an action for which
Congress has deemed it necessary to hold on-the-record, adversarial proceedings
that are reviewable by the CIT. 


Comment 35: Failure to distinguish HFTC from HFTC5 

The coalition contends that the Department should have distinguished between
HFTC5 and HFTC in its antidumping order. As indicated in the Department's
verification report of HFTC5, the Department investigators were told at
verification:

Huaiyin uses two different names in its normal course of business: Huaiyin
Foreign Trade Corp. (5) and Huaiyin Cereals, Oils & Foodstuffs Import and
Export Corp. We found that there are several companies in Huaiyin with the
name, "Huaiyin Foreign Trade," some of which export crawfish.

* * * * *

Huaiyin stated that there are several companies in Huaiyin with the same name
of Huaiyin Foreign Trade Corporation and that the number in parenthesis at the
end of its name serves to differentiate the companies. We asked Huaiyin whether
the other Huaiyin Foreign Trade companies also export crawfish. Huaiyin stated
that it believes that some do export crawfish but it not positive about which
companies.


The coalition contends that despite the fact that HFTC5 told the Department at
verification that it does business under the name HFTC5, the Department in its
antidumping order issued the 91.5% cash deposit rate to HFTC, which, in fact,
was the name of the export license holder. The coalition argues that this set
up the situation where numerous importers, such as GMRI/Red Lobster, imported
crawfish from HFTC30, which also exported using HFTC's export license, with the
expectation that their imports would be subject to the 91.5 percent cash
deposit rate. The coalition maintains that these importers did not know that
Customs intended to levy a 201.63% duty on imports from HFTC30, which, like
HFTC5, was exporting through HFTC.

The coalition states that Department's decision to assign the 91.5% rate to
HFTC created widespread confusion among U.S. importers, Chinese exporters, and
Customs. The coalition asserts that Red Lobster, in particular, took a number
of steps in order to determine whether its imports from HFTC30 qualified for
the 91.5% cash deposit rate. In addition, another coalition member, Intraco,
asserts that "our Custom broker and second Huaiyin Foreign Trade Corp. (30)
guaranteed that this was their current import tariff rate." Ocean Duke, another
coalition member, assumed "along with the rest of industry, that the rate
applied to Huaiyin 30." 

The coalition asserts that HFTC30 participated in the crawfish investigation,
paid its fees to its lawyer, and was told by the lawyer that it had the right
to the 91.5% dumping margin. 

The coalition maintains that the Chinese business license, (the legal document
that establishes the name of a Chinese company) that HFTC5 submitted in both
the investigation and the current review, was actually the business license of
another company. The coalition states that HFTC5's section A submissions in
both the investigation and the current administrative review contain copies of
HFTC's business license. (See HFTC's 

December 16, 1997 section A and HFTC's December 22, 1998 section A response.)
The coalition states that examination of the Chinese business license submitted
by HFTC5 to the Department in these section A responses show an address of No.
27 N. Huaihai Road, Huaiyin, Jiangsu. The coalition contends that the record of
this review shows that HFTC5's address has been 77 East Huaihai Road, Huaiyin,
Jiangsu, China since January 1996. (See Ningbo's September 17, 1999
submission.) 

The coalition also notes another discrepancy regarding the business license
submitted by HFTC5. The coalition asserts that the legal representative named
on the business license is Mr. Zhu Baolin. The coalition states that Ningbo
Nanlian's September 17, 1999 submission included a letter from HFTC5 stating
that its legal representative was Mr. Yang Yixing. 

The coalition argues that, after submitting the business license of HFTC,
HFTC5 submitted additional documents to confuse the relationship between HFTC5
and HFTC. The coalition argues that the effect of these actions was to confuse
the fact that HFTC5 was using HFTC's export license, which it did in both the
period of investigation and the POR. The coalition states that HFTC5 and HFTC30
are former departments of HFTC that are now separate and competitive companies,
and that both are legally entitled to use HFTC's export license. 

The coalition maintains that the Department's verification report from the
investigation and its notification to Customs, show that the Department did not
realize that HFTC5 was using HFTC's export license. The coalition asserts that,
however, since HFTC5 used HFTC's export license, it stands to reason that other
Chinese companies, specifically HFTC30, were also using HFTC's export license.
Therefore, the coalition argues that this is not a simple situation where
Chinese companies, like HFTC30, called themselves HFTC and used HFTC's 91.5%
dumping margin. 


Department's Position: The coalition appears to be arguing that the Department
was aware that HFTC5 was a separate company from HFTC, and that the Department
knew that it was only investigating HFTC5. The coalition further appears to
argue that the Department consciously decided, for some unexpressed reason, to
apply HFTC5's rate to HFTC and HFTC30. This is not the case. We disagree with
the coalition's contention that, based on evidence on the record of the
investigation, the Department in its antidumping duty order should not have
assigned a separate rate to HFTC, but rather should have assigned a separate
rate to HFTC5. With the benefit of hindsight, the coalition points to clues
during the investigation which might have led the Department to realize that
the company it was investigating was HFTC5 rather than HFTC. This argument is
offered to support the argument that in naming HFTC rather than HFTC5, the
Department was making a decision that all HFTC entities, including HFTC30,
should receive the same rate. However, a close review of the record of the
investigation shows that information submitted to the Department by HFTC was
submitted by an entity that presented itself as HFTC. Indeed, each submission
made by HFTC was certified by HFTC's "general manager assistant." At
verification, the Department verified HFTC's information and received a
certification from the China Council for the Promotion of International Trade
(CCPIT) certifying that HFTC was the same company as HFTC5 and Huaiyin Cereals.
Thus, the evidence on the record shows that throughout the investigation, the
company that we now know as HFTC5 maintained that its official name was HFTC.
Furthermore, the passage from the HFTC verification report cited above by the
coalition indicates that the verifiers were told that HFTC5 was an alternate
name for HFTC, not that HFTC5 was a separate company. 

In fact, the company calling itself HFTC only started to refer to itself as
HFTC, a.k.a. Huaiyin Cereals, during the current review. (See page 1 of HFTC's
January 27, 1999 section C response.) During the current review, "HFTC" again
certified that it was the same company as HFTC5 and Huaiyin Cereals. (See page
1 and exhibit 2 of HFTC's April 8, 1999 supplemental questionnaire response.)
It was not until September 1999 that HFTC stated that its official name was
HFTC5. (See exhibit 3 of Ningbo's September 17, 1999 submission.)

All parties taking a position on the issue concede that the entity that we now
know to be HFTC5 is the same entity that submitted questionnaire responses and
underwent verification in the LTFV investigation. The record of investigation
shows that this entity identified itself as HFTC, submitted official documents
and certifications from HFTC, and submitted to verification. Thus, based on the
evidence on the record of the investigation, the Department understandably
calculated a separate rate for HFTC and named HFTC in its antidumping duty
order. This was not a decision by the Department that all companies with HFTC
or some variant thereof in their names should receive the rate of the HFTC we
investigated. After it became evident that companies other than the HFTC we
investigated (i.e. HFTC5) were using the HFTC rate, we provided Customs with
additional information to help it identify entries originating from HFTC5. 

We note that the record of the current administrative review contains
conflicting information regarding the official name of HFTC vis a vis HFTC5.
However, evidence on the record does demonstrate that whatever its official
name, the entity that now calls itself HFTC5 is the same entity that submitted
the sales and factors information on which the Department based the separate
rate for "HFTC" in the LTFV investigation. Furthermore, the record of the
investigation does not support the coalition's claim that HFTC30 participated
in the investigation.

Irrespective of the above, assessment pursuant to this review must be based on
HFTC30's inclusion in the PRC entity. 

Thus, as noted in our response to Comment 33, the question of HFTC's POR
deposit rate is moot. 


Comment 36: HFTC's export licence 

The coalition asserts that since, under Chinese law, HFTC30 is legally
entitled to export using HFTC's export license, HFTC30's exports are legally
entitled to be entered at the 91.5% cash deposit rate. 

The coalition contends that in numerous past cases, the Department has
determined to give antidumping margins to Chinese companies that use another
company's authority to export to get the product out of the country. The
coalition states that so long as the Chinese company sets the export price with
the U.S. customer, the Department has given the dumping margin to that Chinese
company, even though it used a separate company to export the product to the
United States. 

The coalition cites Sulfanilic Acid from China, 63 FR 63834, 63836 (November
17, 1998), in which two Chinese producers and their affiliated U.S. importer
used another company to help with the exportation of the product to the United
States. For this service, it was paid a fee by the U.S. importer. In such a
situation, the Department determined that the import/export company was not
entitled to the dumping margin because it was not involved in the sales process
and did not take title to the product.

The coalition further cites Sebacic Acid from China, 62 Fed. Reg. 10530 (March
7, 1997), where the Department gave a higher dumping margin to a Chinese
exporter because it made sales of another exporter's material. The Department
in that case specifically contrasted the situation in Sebacic Acid with that in
Sulfanilic Acid, finding that in Sebacic Acid the exporter did not just process
the paperwork, but was involved in the sales process.

The coalition argues that the record of the investigation shows that the
Department verified that HFTC5 made the sales of crawfish during the POI. The
coalition argues that the record also shows that HFTC's role was solely to
allow use of its export license. The coalition states that, in the final
determination and antidumping order, the Department erroneously determined to
give the 91.5% deposit rate to HFTC, the export license holder, knowing that
HFTC5 was the company that made the U.S. sales. The coalition argues that since
the Department knowingly gave the cash deposit rate to the export license
holder, that all companies that use HFTC's export license (e.g. HFTC30) also
have the right to that cash deposit rate.


Department's Position: The two cases cited by the coalition are evidence of
the Department's practice of calculating a rate for the party that made the
sale for export to the United States. 

As noted above, evidence on the record demonstrates that whatever its official
name, the entity that now calls itself HFTC5 is the same entity that made the
sales for export to the United States. It is also the "HFTC" entity that
submitted the sales and factors information on which the Department based the
separate rate for "HFTC" in the LTFV investigation. 

In any case, as noted in our response to Comment 33, the question of the cash
deposit rate applicable to HFTC30's sales in the POR is moot. 


1. 19 U.S.C. § 1677 (33)(F)(section 771(33)(F) of the Act) requires a finding
of common control, not merely common affiliation. Notice of Final Determination
of Sales at Less than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-
Quality Steel Products from Brazil, 62 Fed. Reg. 5554, 5566 (Feb. 4, 2000).