Notice of Preliminary Determination of Sales at Less Than Fair Value: Fresh Garlic From the People's Republic of China

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-831]

Notice of Preliminary Determination of Sales at Less Than Fair

Value: Fresh Garlic From the People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: July 11, 1994.

FOR FURTHER INFORMATION CONTACT:

John Beck, Office of Antidumping Investigations, Import Administration,

International Trade Administration, U.S. Department of Commerce, 14th

Street and Constitution Avenue NW., Washington, DC, 20230; telephone

(202) 482-3464.

Preliminary Determination

We preliminarily determine that fresh garlic from the People's

Republic of China (PRC) is being, or is likely to be, sold in the

United States at less than fair value (LTFV), as provided in section

733 of the Tariff Act of 1930, as amended (the Act).

Case History

Since the notice of initiation on February 22, 1994 (59 FR 9470,

February 28, 1994), the following events have occurred.

On March 17, 1994, the U.S. International Trade Commission (ITC)

issued an affirmative preliminary determination.

Departmental Efforts to Obtain Information

During March and April 1994, the Department requested information

relating to producers/exporters of the subject merchandise in the PRC,

as follows:

On March 3, 1994, we sent an abbreviated section A

questionnaire to China's Ministry of Foreign Trade and Economic

Cooperation (MOFTEC);

On March 4, 1994, we sent a cable to the American Embassy

in Beijing;

On March 11, 1994, we sent a cable to the American Embassy

in Tokyo, and to the U.S. consulate in Hong Kong; and

On April 7, 1994, we sent an abbreviated section A

questionnaire to the China Chamber of Commerce of Imports & Exports of

Foodstuffs, Native Produce, and Animal By-Products (China Chamber)

Having received no response to our initial inquiries, follow-up

requests for information were made as follows:

On April 7, 1994, to MOFTEC; and

On April 15, 1994, to the American Embassies in Beijing

and Tokyo, and to the U.S. consulate in Hong Kong.

Respondents and Status of Questionnaires

On May 11 and 12, 1994, the Department received information from

MOFTEC and the American Embassy in Beijing, respectively, containing

the names and addresses of 40 producers/exporters of the subject

merchandise in the PRC. Based on an analysis of ships' manifest data

(PIERS), the Department estimated that the named respondents accounted

for approximately 40 percent of exports of the subject merchandise to

the United States during the period of investigation. Consequently, on

May 18, 1994, the Department sent 40 antidumping questionnaires to the

named firms, with additional copies sent to MOFTEC and the China

Chamber.

Following an entry of appearance by counsel for a previously

unnamed producer/exporter, the Department sent a questionnaire to this

additional firm on May 31, 1994. Finally, at the request of a second

previously unnamed producer/exporter, the Department sent a

questionnaire to this additional firm on June 21, 1994.

Other Events

On June 2, 1994, the Department issued a decision memorandum which

stated that we would not postpone our preliminary determination.

Based on reasonably supported allegations submitted by petitioner

on June 10, 1994, the Department initiated an investigation on June 14,

1994, of whether critical circumstances exist with respect to imports

of fresh garlic from the PRC. On June 14 and 21, 1994, the Department

requested monthly shipment data for exports to the United States from

questionnaire recipients.

Scope of Investigation

The products covered by this investigation are all grades of

garlic, whole or separated into constituent cloves, whether or not

peeled, fresh, chilled, frozen, provisionally preserved, or packed in

water or other neutral substance, but not prepared or preserved by the

addition of other ingredients or heat processing. The differences

between grades are based on color, size, sheathing and level of decay.

The subject merchandise is used principally as a food product and

for seasoning. The subject garlic is currently classifiable under

subheadings 0703.20.0000, 0710.80.7060, 0710.80.9750, 0711.90.6000, and

2005.90.9500 of the Harmonized Tariff Schedule of the United States

(HTSUS). Although the HTSUS subheadings are provided for convenience

and customs purposes, our written description of the scope of this

proceeding is dispositive.

The scope description provided above differs from the scope

description used by the Department in its notice of initiation of this

investigation (59 FR 9470, February 28, 1994). Changes to the scope

include (a) the addition of more concise language (and additional HTS

subheadings) related to the packing of the subject merchandise, and (b)

additional language to exclude further processed products. The

revisions are a result of comments received from the Customs Service on

March 17 and June 30, 1994, and from counsel for petitioner on June 29

and 30, 1994.

Period of Investigation

The period of investigation (POI) is August 1, 1993, to January 31,

1994.

Best Information Available

We have determined, in accordance with section 776(c) of the Act,

that the use of best information available (BIA) is appropriate for

sales of the subject merchandise in this investigation. In deciding

whether to use BIA, section 776(c) provides that the Department may

take into account whether the respondent was able to produce

information requested in a timely manner and in the form required. In

this case, exporters of fresh garlic from the PRC did not respond to

our requests for information.

As outlined in the ``Case History'' section of this notice, the

Department made several attempts to obtain information from a number of

sources. We have not received any responses to our questionnaire with

which to perform our antidumping analysis. Consequently, we based our

preliminary determination in this investigation on BIA.

In determining what to use as BIA, the Department follows a two-

tiered methodology, whereby the Department normally assigns lower

margins to those respondents who cooperate in an investigation, and

margins based on more adverse assumptions for those respondents who do

not cooperate in an investigation. Since the potential respondents in

this case have not cooperated, we assigned a BIA margin based on the

most adverse assumptions.

In this case, BIA is the highest margin contained in the petition

(see Initiation of Antidumping Duty Investigation: Fresh Garlic from

the People's Republic of China, 59 FR 9470, February 28, 1994), and is

listed below for all manufacturers, producers and exporters of fresh

garlic in the PRC.

Critical Circumstances

Petitioner alleges that ``critical circumstances'' exist with

respect to imports of fresh garlic from the PRC. Section 733(e)(1) of

the Act provides that there is a reasonable basis to believe or suspect

that critical circumstances exist if:

(A)(i) There is a history of dumping in the United States or

elsewhere of the class or kind of merchandise which is the subject of

the investigation, or

(ii) The person by whom, or for whose account, the merchandise was

imported knew or should have known that the exporter was selling the

merchandise which is the subject of investigation at less than its fair

value, and

(B) There have been massive imports of the class or kind of

merchandise which is the subject of the investigation over a relatively

short period.

Regarding criterion (A) above, we normally consider margins of 25

percent or more as sufficient to impute knowledge of dumping. Since the

preliminary estimated dumping margin for all exporters of fresh garlic

in the PRC is in excess of 25 percent, we can impute knowledge of

dumping under section 733(e)(1)(A)(ii) of the Act.

Regarding criterion (B) above, pursuant to 19 CFR 353.16(f), we

generally consider the following factors in determining whether imports

have been massive over a short period of time: (1) the volume and value

of the imports; (2) seasonal trends (if applicable); and (3) the share

of domestic consumption accounted for by the imports. If imports during

the period immediately following the petition increase by 15 percent

over imports during a comparable period immediately preceding the

filing of a petition, we consider them massive. Respondents have failed

to respond to the Department's questionnaire, as well as to our request

for monthly export data. As a result, the Department has assumed, as

BIA, that there have been massive imports over a relatively short

period of time.

Accordingly, because the dumping margin is sufficient to impute

knowledge of dumping, and because we have determined that imports of

fresh garlic have been massive, we preliminarily determine that

critical circumstances do exist in this investigation.

Suspension of Liquidation

In accordance with section 733(d)(1) of the Act, we are directing

the Customs Service to suspend liquidation of all entries of fresh

garlic from the PRC, as defined in the ``Scope of Investigation''

section of this notice, that are entered, or withdrawn from warehouse,

for consumption on or after the date 90 days before the date of

publication of this notice in the Federal Register. The Customs Service

shall require a cash deposit or posting of a bond equal to the

estimated margin amount by which the foreign market value of the

subject merchandise exceeds the United States price as shown below. The

suspension of liquidation will remain in effect until further notice.

------------------------------------------------------------------------

Weighted-

average

Manufacturer/producer/exporter margin

percent

------------------------------------------------------------------------

All Manufacturers/Producers/Exporters........................ 376.67

------------------------------------------------------------------------

ITC Notification

In accordance with section 733(f) of the Act, we have notified the

ITC of this determination.

Public Comment

In accordance with 19 CFR 353.38, case briefs or other written

comments in at least ten copies must be submitted to the Assistant

Secretary for Import Administration by no later than August 26, 1994,

and rebuttal briefs by no later that September 2, 1994. In accordance

with 19 CFR 353.38(b), we will hold a public hearing, if requested, to

give interested parties an opportunity to comment on arguments raised

in case or rebuttal briefs. Tentatively, the hearing will be held on

September 7, 1994, at 10:00 a.m. at the U.S. Department of Commerce,

Room 3708, 14th Street and Constitution Avenue, NW., Washington, DC

20230. Parties should confirm by telephone, the time, date, and place

of the hearing 48 hours before the scheduled time.

Interested parties who wish to request a hearing must submit a

written request to the Assistant Secretary for Import Administration,

U.S. Department of Commerce, Room B-099, within ten days of the

publication of this notice in the Federal Register. Requests should

contain: (1) the party's name, address, and telephone number; (2) the

number of participants; and (3) a list of the issues to be discussed.

In accordance with 19 CFR 353.38(b), oral presentations will be limited

to issues raised in the briefs.

This notice is published pursuant to section 733(f) of the Act (19

U.S.C. 1673b(f)) and 19 CFR 353.15(a)(4).

Dated: July 6, 1994.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 94-16741 Filed 7-8-94; 8:45 am]

BILLING CODE 3510-DS-P