Notice of Final Determination of Sales at Less Than Fair Value; Honey From the People's Republic of China

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of Final Determination of Sales at Less Than Fair Value.

EFFECTIVE DATE:

October 4, 2001.

FOR FURTHER INFORMATION CONTACT:

Angelica Mendoza (Inner Mongolia and Zhejiang) at (202) 482-3019, Fred Baker (Kunshan) at (202) 482-2924, Charles Rast at (202) 482-1324 or Donna Kinsella at (202) 482-0194; Antidumping and Countervailing Duty Enforcement Group III, Office Eight, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act of 1930 (the Act) by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department of Commerce (Department) regulations are to the regulations codified at 19 CFR part 351 (April 2000).

Final Determination

We determine that honey from the People's Republic of China (PRC) is being sold, or is likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Act. The estimated margins of sales at LTFV are shown in the “Suspension of Liquidation” section of this notice.

Case History

We published in the Federal Register the preliminary determination in this investigation on May 11, 2001. See Notice of Preliminary Determination of Sales at Less Than Fair Value: Honey from the People's Republic of China, 66 FR 24101 (May 11, 2001) (Preliminary Determination). Since publication of the preliminary determination, the following events have occurred.

On May 14, 2001, the producers/exporters of subject merchandise from the PRC requested that the Department postpone its final determination to the fullest extent permitted by the statute and the Department's regulations. Additionally, the PRC producers/exporters consented to an extension of the period for the imposition of provisional measures to the fullest extent permitted, or six months, whichever is later. On June 6, 2001, we published in the Federal Register a notice of postponement of the final determination and extension of provisional measures in this investigation. See Notice of Postponement of Final Determinations of Sales at Less Than Fair Value: Honey from Argentina and the People's Republic of China and Postponement of Final Countervailing Duty Determination: Honey from Argentina, 66 FR 30413-02 (June 6, 2001).

On May 18, 2001, the American Honey Producers Association and the Sioux Honey Association (collectively, petitioners) submitted comments alleging certain ministerial errors in the Department's preliminary determination. On May 21, 2001, respondents submitted comments regarding certain alleged ministerial errors in petitioners' May 18, 2001, proposed corrections to the Preliminary Determination. Petitioners commented on respondents' submission on May 23, 2001. On August 2, 2001, we published in the Federal Register an amended preliminary determination in this investigation. See Notice of Amended Preliminary Determination of Sales at Less Than Fair Value: Honey from the People's Republic of China, 66 FR 40191-01 (August 2, 2001).

The Department conducted verification at The Ministry of Foreign Trade and Economic Cooperation (MOFTEC) and the China Chamber of Commerce of Importers and Exporters of Foodstuffs, Native Produce and Animal By-Products (the Chamber) from May 28, 2001 through May 29, 2001 in Beijing, PRC. See “Verification Meeting at MOFTEC and the Chamber in the Antidumping Duty Investigation of Honey from the PRC,” July 27, 2001. The Department also conducted verification of information submitted by Inner Mongolia Autonomous Region Native Produce and Animal By-Products Import and Export Corporation (Inner Mongolia), Kunshan Foreign Trading Company (Kunshan), and Zhejiang Native Produce and Animal By-Products Import and Export Corporation (Zhejiang) from May 30, 2001 through June 9, 2001, at each respondent's respective administrative headquarters and suppliers' facilities in the PRC. See Memorandum For the File; “Verification of U.S. Sales and Factors of Production—Inner Mongolia and its affiliated processing factory Inner Mongolia Sheng Li Food Company (Sheng Li);” “Verification of U.S. Sales and Factors of Production—Zhejiang and Hangzhou Green Forever Apiculture (Group) Co. (Hangzhou);” and, “Verification of U.S. Sales and Factors of Production—Kunshan and Kunshan Xinlong Food Co. Ltd. (Xinlong),” July 27, 2001 (collectively, Sales Verification Reports). Public versions of these, and all other Departmental memoranda referred to herein, are on file in the Central Records Unit, room B-099 of the main Commerce building.

On June 7, 2001, petitioners requested a public hearing. Respondents requested a public hearing on June 11, 2001.

On July 3, 2001, petitioners and respondents submitted additional publicly available information to value the factors of production for honey exported from the PRC.

On July 3, 2001, petitioners requested that the Department solicit updated, exporter-specific information for purposes of determining critical circumstances for Inner Mongolia, Kunshan, Shanghai Eswell, Anhui, and Henan. Respondents commented on petitioners' submission on July 12, 2001. Petitioners filed additional comments on July 13, 2001 and August 1, 2001. Respondents filed additional comments on July 17, 2001. On August 9, 2001, we requested additional shipment information from respondents and from cooperative exporters with respect to their exports of honey to the United States. Parties submitted the requested information on August 24, 2001.

On August 8, 2001, petitioners and respondents (Inner Mongolia, Kunshan, and Zhejiang) filed case briefs. We received rebuttal briefs from all parties on August 14, 2001. A public hearing in this investigation was held on August 27, 2001.

Although the deadline for this determination was originally September 24, 2001, in light of the events of September 11, 2001 and the subsequent closure of the Federal Government for reasons of security, the timeframe for issuing this determination has been extended by two days.

Period of Investigation

The period of investigation (POI) is January 1, 2000 through June 30, 2000.

Non-Market Economy

The Department has treated the PRC as a non-market economy (NME) country in all its past antidumping investigations. See Final Determination of Sales at Less Than Fair Value: Bulk Aspirin from the PRC, 65 FR 33805 (May 25, 2000), and Final Determination of Sales at Less Than Fair Value: Steel Concrete Reinforcing Bars from the PRC, 66 FR 33522 (June 22, 2001). A designation as an NME country remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. The respondents in this investigation have not requested a revocation of the PRC's NME status. Therefore, we have continued to treat the PRC as an NME in this investigation. For further details, see the Department's Preliminary Determination.

Separate Rates

In our Preliminary Determination, we found that Inner Mongolia, Kunshan, Zhejiang, High Hope, Shanghai Eswell, Anhui, and Henan had met the criteria for the application of separate antidumping duty rates. We have not received any other information since the Preliminary Determination which would warrant reconsideration of our separate rates determination with respect to the above-listed entities. Therefore, we continue to find that Inner Mongolia, Kunshan, Zhejiang, High Hope, Shanghai Eswell, Anhui, and Henan should be assigned individual dumping margins. For a complete discussion of the Department's determination that the respondents are entitled to separate rates, see the Preliminary Determination.

Margins for Cooperative Exporters Not Selected

On December 19, 2000, the Department determined to examine a limited number of respondents. In its memo limiting the number of respondents, the Department selected Inner Mongolia, Kunshan, and Zhejiang as mandatory respondents. High Hope, Shanghai Eswell, Anhui, and Henan cooperated in the investigation, filed separate rates information and were determined to meet the criteria for separate rates. See Memorandum to the File from Richard Weible to Joseph A. Spetrini; Selection of Respondents dated December 19, 2000. For the reasons set forth in the Preliminary Determination, we have continued to calculate a weighted-average margin based on the rates calculated for those exporters that were selected to respond in this investigation for High Hope, Shanghai Eswell, Anhui, and Henan. Companies receiving this rate are identified by name in the “Suspension of Liquidation” section of this notice.

Use of Facts Available

In the Preliminary Determination, the Department determined that the application of total adverse facts available (AFA) was appropriate with respect to the PRC-wide entity, as this entity failed to respond to the Department's antidumping questionnaire. As AFA, the Department applied a margin rate of 183.80 percent, the highest margin alleged in the petition and which the Department was able to corroborate. See Memorandum to the File from Donna L. Kinsella; The Use of Facts Available for the PRC-wide entity and Corroboration of Secondary Information dated May 4, 2001. The interested parties did not object to the use of AFA for the PRC-wide entity, or to the Department's choice of facts available, and no new facts were submitted which would cause the Department to revisit this decision. Therefore, for the reasons set out in the preliminary determination, we have continued to use the highest margin alleged in the petition for the purposes of this final determination notice.]

Surrogate Country

For purposes of the final determination, we find that India remains the appropriate primary surrogate country for the PRC. For further discussion and analysis regarding the surrogate country selection for the PRC, see the Department's Preliminary Determination.

Critical Circumstances

We determine that critical circumstances exist for imports of honey from High Hope, Kunshan, Zhejiang, and the PRC-wide entity, in accordance with section 735(a)(3) of the Act. Because we did not find that massive imports, within the meaning of 19 CFR 351.206(h), exist for imports from Inner Mongolia, Shanghai Eswell, Anhui, and Henan, we determine that critical circumstances do not exist for imports of honey exported by these entities. For further discussion of our determination and analysis of critical circumstances, see Memo to Richard Weible regarding Final Affirmative and Negative Determinations of Critical Circumstances, September 26, 2001 and Comment 2 of the Decision Memorandum, which is on file in room B-099 and available on the World Wide Web at www.ia.ita.doc.gov/frn.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this investigation are addressed in the “Issues and Decision Memorandum” (Decision Memorandum) from Joseph A. Spetrini, Deputy Assistant Secretary, AD/CVD Enforcement Group III, to Faryar Shirzad, Assistant Secretary for Import Administration, dated September 26, 2001, which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are in the Decision Memorandum, is attached to this notice as an Appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in room B-099. In addition, a complete version of the Decision Memorandum can be accessed directly on the World Wide Web at www.ia.ita.doc.gov/frn. The paper copy and electronic version of the Decision Memorandum are identical in content.

Scope of Investigation

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

The merchandise subject to this investigation is currently classifiable under subheadings 0409.00.00, 1702.90.90, and 2106.90.99 of the harmonized tariff schedule of the United States (HTSUS). Although the HTSUS subheadings are provided for convenience and U.S. Customs Service (Customs) purposes, the Department's written description of the merchandise under investigation is dispositive.

Changes Since the Preliminary Determination

Based on our analysis of comments received and findings at verification, we have made the following changes in the margin calculations: (1) Based factory overhead, selling and general administrative expenses, and profit ratios on the adjusted 1999-2000 financial statements of the Mahabaleshwar Honey Producers Cooperative Society, Ltd.; (2) valued scrap honey, a by-product offset, using an Indian surrogate value for inedible molasses; (3) valued energy inputs (i.e., coal and electricity) using Indian surrogate values as reported by the International Energy Agency; (4) used Hangzhou's verified raw honey consumption in valuing raw honey; (5) used Hangzhou's and Sheng Li's verified water consumption in valuing water; (6) used Hangzhou's and Sheng Li's verified electricity consumption in valuing electricity; (7) revised our cost calculation for iron drums used to pack subject merchandise; (8) used the correct wholesale price index to value inland water transportation costs incurred by Kunshan; (9) deleted the adjustment to Inner Mongolia's freight rate for inflation, because the value is contemporaneous with the POI; (10) used Hubei Yangzijiang Apiculture Co. Ltd.”s (Hubei) correct by-product consumption figure; (11) valued water costs incurred by Hubei and Hangzhou; (12) deleted the adjustment to Zhejiang's and Inner Mongolia's labor rates for inflation; (13) used the corrected inland freight rates for Kunshan's shipments greater than 100 kilometers; (14) revised the calculation of weighted-average of Hubei's and Hangzhou's normal value; (15) revised the calculation of beeswax for Hubei and Hangzhou; and (16) used Xinlong's inland freight distance for drums and coal as verified. These changes are described in greater detail in various sections of the Decision Memorandum, accessible in room B-099 and on the Web at www.ia.ita.doc.gov/frn.

Suspension of Liquidation

In accordance with section 735(c)(4)(B) of the Act, for Zhejiang and Kunshan, the Department will direct the Customs Service to suspend liquidation of all unliquidated entries of subject merchandise from the PRC that are entered, or withdrawn from warehouse, for consumption on or after February 10, 2001, the date 90 days prior to the date of publication of the Preliminary Determination. With respect to High Hope and the PRC-wide entity, in accordance with section 735(c)(4)(A) of the Act, the Department will instruct the Customs to continue to suspend liquidation of all entries of subject merchandise from the PRC that are entered, or withdrawn from warehouse, for consumption on or after February 10, 2001. For the remaining companies (i.e., Inner Mongolia, Shanghai Eswell, Anhui, and Henan), we are instructing Customs to continue to suspend liquidation of all entries of honey from the PRC that are entered, or withdrawn from warehouse, for consumption on or after May 11, 2001, the date of publication of the Preliminary Determination. The Customs Service shall continue to require a cash deposit or the posting of a bond based on the estimated weighted-average dumping margins shown below. The suspension of liquidation instructions will remain in effect until further notice.

We determine that the following weighted-average dumping margins and critical circumstances exist for the period January 1, 2000 through June 30, 2000:

ITC Notification

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

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

Appendix I—Issues in Decision Memo

Comments and Responses

General Issues

1. Cooperation of PRC Producers/Exporters and Compliance Under the Suspension Agreement

2. Critical Circumstances

3. Factory Overhead, SG&A, and Profit

4. Surrogate Value for Raw Honey

5. Surrogate Value for Beeswax

6. Surrogate Value for Scrap Honey

7. Surrogate Value for Drums

8. Surrogate Value for Energy

9. Labor Hours

Company-Specific Issues

Zhejiang

10. Zhejiang Willing

11. Raw Honey

12. Water

13. Electricity

Inner Mongolia

14. Movement Expenses

Kunshan

15. Inland Insurance

16. Electricity