Freshwater Crawfish Tail Meat From the People's Republic of China; Final Results of New Shipper Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-848]

Freshwater Crawfish Tail Meat From the People's Republic of

China; Final Results of New Shipper Review

AGENCY: Import Administration, International Trade Administration, U.S.

Department of Commerce.

ACTION: Notice of final results of new shipper review: freshwater

crawfish tail meat from the People's Republic of China.

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SUMMARY: On February 22, 1999, the Department of Commerce (the

Department) published the preliminary results of its new shipper review

of the antidumping duty order on freshwater crawfish tail meat from the

People's Republic of China (PRC). The review covers one exporter of the

subject merchandise, Ningbo Nanlian Frozen Foods Co., Ltd. (NNL), and

shipments of this merchandise to the United States during the period

September 1, 1997 through March 31, 1998.

We gave interested parties an opportunity to comment on our

preliminary results. Based on our review of the comments received, we

have made changes to the margin calculations in the final results from

those presented in the preliminary results.

We have determined that NNL's U.S. sales of freshwater crawfish

tail meat have not been made below normal value, and we will instruct

the Customs Service not to assess antidumping duties for NNL.

EFFECTIVE DATE: May 24, 1999.

FOR FURTHER INFORMATION CONTACT: Michael Strollo, Laurel LaCivita, or

Maureen Flannery, Antidumping/Countervailing Duty Enforcement, Import

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

Commerce, 14th Street and Constitution Avenue, N.W., Washington D.C.

20230; telephone (202) 482-3782, (202) 482-4236 and (202) 482-3020,

respectively.

Applicable Statute

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's regulations are to the provisions

codified at 19 CFR part 351 (1998).

Background

On February 22, 1999, the Department published the preliminary

results of review (64 FR 8543). On March 24, 1999, we received comments

from the Crawfish Processors Alliance (petitioner) and the Louisiana

Department of Agriculture and Forestry and Bob Odom, Commissioner. We

also received comments from NNL. On March 29, 1999, petitioner and NNL

submitted rebuttal briefs. All parties presented their comments in a

hearing held on March 31, 1999. The Department has now completed this

new shipper review in accordance with section 751 of the Act.

Scope of Review

The product covered by this review 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.

This review covers the period September 1, 1997 through March 31,

1998.

Analysis of Comments Received

Comment 1: Valuation of Live Crawfish Input From a Basket Category

NNL argues that the selection of Spanish Ministry of Customs data

on prices of Spanish imports from Portugal to value the live crawfish

input is improper. NNL contends that the HTS number under which

crawfish falls is a basket HTS category containing products other than

whole, live crawfish.

NNL maintains that it placed compelling evidence on the record

suggesting that crawfish imported into Spain from Portugal under HTS

0306.29.10 are not just whole, live crawfish. For example, NNL cites to

its December 21, 1998 submission, wherein NNL placed on the record an

affidavit from a U.S. purchaser of Spanish crawfish which claimed that

the high price of Portuguese crawfish precludes such imports from being

only live crawfish. In that same submission, NNL included a letter from

a Spanish crawfish tail meat producer indicating that during the peak

crawfish season, the tail meat producer paid prices one-quarter as high

as the Portuguese import prices used in the preliminary results of

review. NNL also cites to its January 6, 1999 submission, wherein NNL

placed on the record a letter from a Spanish crawfish tail meat

producer stating that the average price paid in the peak season was

$0.19 per pound. In its submission of March 15, 1999, NNL placed on the

record an affidavit from a Spanish producer of crawfish tail meat,

indicating that the Spanish producer paid an average of $0.50 per pound

for Portuguese crawfish in 1997. Furthermore, NNL contends that the

Spanish prices for crawfish conflict with the average U.S. price for

wild crawfish, $0.52 per pound. NNL maintains that this body of

evidence calls into question the accuracy of the Spanish Ministry of

Customs import price, which was $0.91 per pound. NNL argues that where

questions have been raised about the accuracy of surrogate data, it is

the Department's

[[Page 27962]]

responsibility to examine that data and determine whether the import

data from the basket category are consistent with prices in that market

and world prices generally.

In addition, NNL cites to the names of over 30 Portuguese

processors it provided, which it claims have the capability of

processing crawfish. NNL stated that it believes that one of these

companies must be processing crawfish. NNL placed on the record an

affidavit from a Spanish tail meat producer which claims that

Portuguese companies do process crawfish tail meat and export it to

Europe. Finally, NNL challenges the reliability of the evidence placed

on the record by petitioner, which indicated that Spanish imports from

Portugal under HTS category 0306.29.10 consist only of live crawfish.

NNL contends that these facts cast doubt on the Department's

conclusion, in the preliminary results of review, that the Spanish

Ministry of Customs import data contained only whole, live crawfish.

NNL argues that since this HTS category has been demonstrated to be too

broad, the Department should not rely upon it in the valuation of the

crawfish input.

Petitioner states that NNL's challenge to evidence placed on the

record by petitioner is misplaced since the Department did not rely on

the pricing data contained therein, and the evidence is otherwise

reliable. Petitioner argues that NNL has failed to provide credible

evidence that imports under HTS category 0306.29.10 are not limited to

live crawfish. Petitioner argues that none of the invoices or

affidavits submitted by NNL demonstrate that the Spanish import data

include any products other than live crawfish. Petitioner further

argues that such price differences alone do not provide a basis for the

abandonment of valid aggregated import data series, representing actual

prices, on the basis of anecdotal statements such as those provided by

NNL.

Petitioner also notes that the existence of 30 Portuguese seafood

processors does not demonstrate that any imports under HTS category

0306.29.10 include processed crawfish. Petitioner contends that the

statement of NNL's affiant, who claims to have knowledge of crawfish

being processed in Portugal and shipped to Europe, does not constitute

evidence that processed crawfish were imported into Spain from

Portugal.

Department's Position

We agree with petitioner. While the Department has ruled in the

past that import data from basket categories can be too broad to be

reliable, petitioners provided as evidence an affidavit from industry

experts attesting to the fact that imports into Spain from Portugal

consisted solely of whole, live crawfish. In addition, no other

information has been placed on the record to substantiate NNL's claim

that any products other than whole, live crawfish are imported into

Spain under HTS 0306.29.10. See Memorandum to Edward Yang from Laurel

LaCivita: Determination of Surrogate Country Selection for Crawfish

Input, dated February 16, 1999 (Surrogate Selection Memorandum).

Although NNL has speculated that among the more than 30 Portuguese

seafood processors, someone has to be processing whole, live crawfish

and shipping it to Spain under that basket category, NNL has failed to

place any information on the record that substantiates its claim that

crawfish are being processed in Portugal and shipped into Spain.

Furthermore, none of its invoices or affidavits provide any evidence

that the imports from Portugal include anything but whole, live

crawfish. Consequently, the Department continues to determine that the

Spanish Ministry of Customs import data is suitable as a surrogate for

the valuation of whole, live crawfish.

Comment 2: Spanish Data Are Flawed

NNL contends that the volume of Spanish imports of non-frozen

Portuguese crawfish in 1997 was too low to form the basis for

establishing the surrogate value for crawfish in this case. In

addition, NNL argues that, until November of 1997, the quantities and

values reported in the Spanish Ministry of Customs data were rounded.

NNL maintains that this is important because the quantities reported

are so small that rounding can drastically skew unit values. NNL argues

that the low volume of imports and the rounding leads to highly

volatile prices. As a result, NNL claims, the Spanish import data are

flawed and should not be used in the determination of normal value.

Petitioner contends that NNL has failed to demonstrate that Spanish

import prices are aberrational. Petitioner claims that U.S. prices from

the Louisiana State University (LSU) Agricultural Summary submitted by

NNL demonstrate a similar fluctuation in price. Petitioner further

argues that Spanish import values are not subject to the significant

rounding errors claimed by NNL. Petitioner maintains that the use of

numerous months of rounded data eliminates any inaccuracy that rounding

might cause within a single month. Petitioner states that there is no

reason to believe that rounding consistently overstates actual values

in the Spanish import data.

Department's Position

We agree with petitioner. In the Department's Surrogate Selection

Memorandum, we noted that Spain exported 407 metric tons of HTS

0306.19.10, frozen, processed crawfish during 1997. We stated that we

considered this quantity of exports to be indicative that Spain is a

significant producer of crawfish. We further noted that Spanish imports

from Portugal are significantly larger in comparison both to Spanish

imports from countries other than Portugal and U.S. imports of a

similar HTS category, 0306.29.00.'' (Surrogate Selection Memorandum at

p.3.) Therefore, we find that within this industry the imports from

Portugal are significant.

Additionally, even though the Spanish Ministry of Customs data were

rounded, we agree with petitioner that using data for numerous months

tends to minimize inaccuracies that might occur from rounding if only

one month of data were used because rounding may vary in direction from

one month to the next.

Furthermore, as we noted in the Surrogate Selection Memorandum,

price fluctuations are a result of supply and demand and are

particularly endemic to agricultural products with a specific growing

season. Fluctuations may also result from adverse growing conditions,

such as drought or disease, and are not necessarily due to small

quantities. Consequently, the Department continues to believe that the

import data from the Spanish Ministry of Customs is reliable and

accurate.

Comment 3: Spanish Data Conflicts With Other Spanish Import Data

NNL contends that the import data from the Spanish Ministry of

Customs also conflicts with alternative Spanish import statistics from

the European Union and the Spanish Commercial Office of the Embassy of

Spain. NNL argues that this shows that the Spanish data are unreliable.

If the Department nevertheless does use such data, NNL argues, it

should use an average of the three sources.

Petitioner argues that the Spanish import values from other Spanish

sources do not demonstrate that the values used by the Department are

inaccurate. Petitioner maintains that there are similar problems with

the alternative Spanish import data provided by NNL. In addition,

petitioner claims that these sources are secondary sources and do not

represent data from the Spanish department that

[[Page 27963]]

actually collects duties and records data. Petitioner maintains that

the Department should continue to rely on the primary source data.

Department's Position

When using imports as the basis of factor valuation, it is our

normal practice to use official import statistics, unless evidence

demonstrates that such data are unreliable. Here, respondents have not

provided any evidence as to how data from any of the two alternative

sources are collected and analyzed. In fact, as petitioners have

suggested, data from the European Union and the Spanish Commercial

Office of the Embassy of Spain may in fact be derivative of the Spanish

Customs data. Consequently, we cannot conclude that data from either of

the alternate sources contradict the import statistics or otherwise

call into question their reliability. Therefore, we have continued to

use official import statistics published by the Spanish Ministry of

Customs.

Comment 4: Reliance on Affidavits

NNL contends that the Department's reliance upon petitioner's

affidavits is inconsistent with the Department's regulations. NNL notes

that petitioner's affidavits of September 18, 1998, October 22, 1998,

December 22, 1998 and January 21, 1999 were designated as business

proprietary pursuant to 19 CFR 351.105 of the Department's regulations.

NNL maintains that a review of these affidavits demonstrates that these

affidavits fail to meet the strict criteria for business proprietary

treatment set forth in 19 CFR 351.105. Therefore, NNL contends, these

affidavits should be stricken from the record. Moreover, NNL maintains

that petitioner has claimed proprietary treatment of affidavits in a

transparent attempt to prevent NNL from filing information to rebut

petitioner's affidavits. NNL claims that by hiding the name and

location of the affiant, as well as most of the text, petitioner has

prevented NNL from commenting on the affidavit. NNL argues that the

Department should not base the most important decision in this case,

the reliability of the Spanish Ministry of Customs import data, on the

affidavits provided by petitioner.

Petitioner argues that NNL has not been prejudiced in any way by

the proprietary treatment of the affidavits in this case. Petitioner

contends that the key claim in the affidavits, that crawfish of

Portuguese origin are shipped into Spain live and that there is no

crawfish processing in Portugal, has been on the public record since

October 1998. Additionally, petitioner argues that NNL only makes a

conclusory statement that a review of these affidavits demonstrates

that they fail to meet the strict criteria set forth in 19 CFR 351.105.

Petitioner contends that such a statement provides no basis for

rejection of a request for proprietary treatment. Finally, petitioner

maintains that, since NNL did not make a timely objection to the

proprietary treatment of the January 21, 1999 affidavit, it should not

be permitted to raise the issue in its brief.

Department's Position

We agree with petitioner. In accordance with 19 CFR 351.105(c), the

Department afforded business proprietary treatment to (a) some

information in petitioner's affidavits which identified particular

person(s) from whom business proprietary treatment was obtained

(351.105(c)(9)) and (b) other specific information (i.e., information

concerning specific business practices related to the production of

crawfish tail meat in Spain, the release of which to the public would

cause substantial harm to the competitive position of the submitter

(351.105(c)(11))).

Comment 5: Selecting the United States as the Surrogate Country in

Which To Value Crawfish Input

NNL argues that the Department should use the Louisiana State

Agricultural Summary data it provided. NNL contends that the LSU data

is more precise and is superior to the Spanish data. NNL claims that

the LSU data is based upon use of a comparable product, and production

is measured in sufficient quantities to ensure a reliable calculation.

Additionally, NNL contends that legal precedent exists for using

U.S. data. NNL cites the Department's use of U.S. data to value

basswood in Writing Instruments Manufacturers Association versus United

States, 984 F. Supp. 629, 639 (Ct. Int'l Trade 1997). NNL argues that

the Court found that Commerce's use of U.S. basswood is consistent with

the primary objective of the statute and is supported by substantial

evidence and otherwise in accordance with the law. NNL also cites

Sebacic Acid from the People's Republic of China: Final Results of

Antidumping Administrative Review (Sebacic Acid), 63 FR 43373 (August

13, 1998).

NNL notes that live crawfish in China is a wild, live product, the

essential cost of which is the labor needed to obtain it. Because labor

costs in China are a fraction of those in the United States, NNL

argues, the Department must select the fairest, most accurate surrogate

values possible for whole, live crawfish.

Petitioner argues that NNL's claim that the United States is the

next best surrogate country after Spain is inconsistent with the

Department's practice and the record of this proceeding. Petitioner

contends that in this proceeding, the Department has determined that

Spain and the United States are not equally acceptable as surrogates

for China. Petitioner suggests that the alternative U.S. data provided

by NNL do not provide improvements in data quality over the Spanish

import statistics for purposes of the Department's NME methodology

because the data are unofficial and based on estimates. Petitioner

maintains that unlike the Spanish import data, the LSU data are not

derived directly from transaction prices. Additionally, petitioner

contends that the methodological description provided by LSU also

emphasizes that this is not the official document of agricultural data

for the state and that no such official data are published for live

freshwater crawfish production.

Petitioner maintains that the fact that the per capita gross

national product of Spain is more similar to that of China than the

United States is determinative, particularly where the Spanish import

data has not been seriously questioned. Moreover, petitioner argues

that Commerce's practice is to use a value in a surrogate country for

comparable merchandise before resorting to prices for identical

merchandise in the United States.

Finally, petitioner argues that if the Department should use the

LSU data, wild and farmed crawfish are physically identical, and any

valuation of live crawfish should include both farmed and wild

crawfish. Petitioner maintains that the difference in price between

wild and farmed crawfish is explained by the fact that they are not

present in the market in fixed proportions during the course of the

year. Petitioner suggests that wild crawfish come onto the market in

large numbers during the peak season, when prices of all crawfish are

lower. As a result, petitioner contends, annual data may show lower

prices for wild crawfish than for farmed crawfish even though no such

distinction occurs at any point in time in any contemporaneous period.

Consequently, the Department should not make an adjustment to price for

differences in physical characteristics between wild and farmed

crawfish for the valuation of live crawfish.

Department's Position

We agree with petitioner. Section 773(c)(4) of the statute

instructs the Department to value factors of

[[Page 27964]]

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. The Department only departs from this practice if it

cannot find those values in a comparable economy that produces

comparable merchandise.

In Sebacic Acid, the Department determined that India was a

comparable economy to China and produced merchandise comparable to 2-

octanol, a primary material input. The Department determined that when

we have a suitable value from a comparable economy, the Department

should not use a U.S. surrogate value. Since the Department has

determined that import data from the Spanish Ministry of Customs are a

suitable surrogate value from a country more comparable to China than

is the United States, the Department continues to reject the use of the

alternative U.S. data for the valuation of whole, live crawfish.

Since we are continuing to use the Spanish Ministry of Customs

import data in our final results of review, arguments concerning the

need to adjust U.S. data are moot. Moreover, for the reasons explained

in the original investigation, we have determined that it is not

appropriate to adjust this surrogate value to account for alleged

differences in the labor cost between China and the United States or

Spain. See Notice of 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) (Final Determination).

Comment 6: Adjustment to U.S. Price Based on Crawfish Size

NNL argues that the LSU data should be modified since it contains

jumbo crawfish. NNL maintains that the record shows that the crawfish

used by Yinxian No. 2 Freezing Factory (Y2FF) to produce tail meat did

not include jumbo crawfish. NNL claims that petitioner's own expert in

the underlying investigation confirmed that grading was done in

Louisiana and even provided price differentials between small and large

crawfish. NNL suggests that these price differentials should be used as

a basis to modify the average 1997 LSU price to a lower price.

Petitioner argues that no adjustment for crawfish size is warranted

and the Department should again reject this argument as it did in the

preliminary results of review. Petitioner contends that no additional

information or argument has been presented in this proceeding to

warrant such an adjustment.

Department's Position

Since we are continuing to use the Spanish Ministry of Customs

import data in our final results of review, the issue of any adjustment

to the alternative U.S. data is moot.

Comment 7: Surrogate Value for Crawfish Waste

Petitioner argues that the Department should find that the

surrogate value for crawfish scrap and waste is zero because such

material has no commercial value in market-economy countries where

crawfish tail meat is produced. Petitioner cites the Notice of Final

Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from

the People's Republic of China, 60 FR 22544 (May 8, 1995) (Furfuryl

Alcohol) in support of its position. Petitioner also contends that the

material imported into India under the tariff classification

0508.00.05, the classification used for the scrap credit factor, is not

crawfish scrap. Petitioner claims that, because the Department has

determined that, except for the United States, the countries exporting

crawfish scrap to India are not, in fact, producers of crawfish, and

because the United States crawfish processors are not able to sell

crawfish scrap, the scrap being imported by India must contain shells

other than crawfish. Petitioner further argues that the import values

under this tariff classification are aberrational because they exhibit

huge and unexplained variations. Petitioner maintains that these

variations demonstrate that the data are faulty or that imports under

this tariff number include a number of different products with widely

varying values. In addition, petitioner claims that the unit prices for

this tariff classification represent an unreasonably high percentage of

the value of live crawfish. Therefore, petitioner argues that the

surrogate value for crawfish scrap should reflect the value of such

scrap in market economy countries, which is zero.

NNL argues that the Department should continue to treat the offset

for byproduct as it did in the preliminary results. NNL contends that

there is a demand for crawfish shells in the world (in both market and

non-market economy countries). NNL states that information has been

placed on the record regarding the fact that crustacean shells

(including crawfish shells) are used to produce chitosan, and that

chitosan has a wide and quickly growing variety of uses. NNL states

that in India, the country in which we have valued crawfish scrap,

crustacean shells are purchased by producers of chitosan. Therefore,

NNL argues, there is a commercial demand and use for crawfish scrap.

NNL further argues that the actual test for determining whether a

by-product credit should be granted is whether the product for which a

by-product credit is claimed is linked to the production of the subject

merchandise, and a benefit accrues to the manufacturer (or seller) of

the by-product. NNL maintains that it meets the two prongs of the test.

First, crawfish shells are linked to the production of crawfish tail

meat, and second, NNL proved at verification that an economic benefit

accrued to them by way of the sale of the crawfish shells. Therefore,

NNL argues, the Department's policy requires the granting of a credit.

Finally, NNL contends that it is common for the Department to use

comparable merchandise both as a surrogate value for the raw materials

and for by-products. NNL argues that, while Indian HTS 0508.00.05 may

or may not contain the specific items at issue, it does contain

comparable merchandise, namely other shells of crustaceans, and is the

best data on the record.

Department's Position

We agree with NNL. 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 (GAAP) and previous Department practice so long

as an economic benefit accrued to the firm and the benefit was linked

to production of the subject merchandise. We agree that GAAP allows for

by-product offsets on the basis of production quantities. We have

verified 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 NNL.

It is the Department's practice to use comparable merchandise as a

surrogate for valuing by-product. In the original investigation, the

Department valued by-product using the same HTS category used in this

new shipper review. See Final Determination. To date, no tariff

classification exists that includes only shells of crawfish.

Additionally, the Department has determined that the Indian HTS

category is the best data on the record. We attempted to determine the

composition of Indian imports under the HTS category used to value

[[Page 27965]]

the by-product during the period in which we valued factors of

production. We were unable to obtain such information. We also

attempted to find information regarding imports into other countries

deemed comparable to China in terms of economic development. We

discovered that no other tariff classifications for comparable

merchandise are as detailed as the Indian HTS category under which we

valued the crawfish shells. See Memorandum to Edward Yang through

Maureen Flannery from Laurel LaCivita and Mike Strollo: Valuation of

By-Product as an Offset in the New Shipper Review of Freshwater

Crawfish Tail Meat from the People's Republic of China, dated May 13,

1999.

We disagree with petitioner's claim that, since crawfish shells

have no value in market-economy countries, the Department should assign

a surrogate value of zero to NNL's crawfish scrap. Petitioner cites the

Department's treatment of corn cobs in Furfuryl Alcohol. In Furfuryl

Alcohol, the Department valued corn cobs in its surrogate country. In

this country, corn cobs were considered waste and had no value. Unlike

in Furfuryl Alcohol, however, shells of crustaceans, echinoderms, and

molluscs, what the Department considers to be comparable merchandise,

have a value. Therefore, the Department has continued to value crawfish

shells using the Indian surrogate value.

Moreover, it is not uncommon for prices within the same HTS

category to vary. See Antifriction Bearings (Other than Tapered Roller

Bearings) and Parts Thereof from Romania; Tehnoimportexport, S.A.

Analysis Memorandum for the Preliminary Results of the Ninth

Administrative Review, (February 12, 1999), in which the Department

used a steel category as a surrogate which had values ranging from

$0.51 per kilogram to $2.72 per kilogram. While we agree that the per

unit value of imports from Sri Lanka into India is significantly larger

than that of imports from other countries, because it comprises such a

large percentage of India's imports during the POR, and because there

is no evidence to indicate it includes items other than crustacean

shells, we have not eliminated it from the Indian import statistics

used. Consequently, the Department continues to treat the by-product

offset to normal value as it did in the preliminary results of review.

Comment 8: Calculation of Selling, General and Administrative (SG&A)

Expenses

NNL argues that while it does not object to the general methodology

used by the Department, it is apparent that SG&A is overstated, as the

SG&A data used by the Department include costs such as ocean freight,

duties and sales commissions. The Department has already deducted two

of these expenses, ocean freight and duties, from U.S. sales price. NNL

contends that these costs are double-counted by being included in SG&A.

Additionally, NNL argues that sales commissions are not relevant in

this case. NNL contends that the SG&A of two Indian seafood companies

used in the valuation of factory overhead, SG&A and profit (Alsa Marine

and DCL Maritech) should be adjusted to avoid irrelevant costs and

double-counting.

Petitioner argues that the surrogate value for SG&A is intended to

represent the costs of SG&A expenses for an enterprise producing and

selling comparable merchandise in a market-economy country. Petitioner

contends that it is irrelevant whether NNL paid commissions. Instead,

petitioner maintains that the relevant issue is the valuation of

selling expenses in the surrogate country. Petitioner argues that if

Alsa Marine and DCL Maritech have structured their operations in such a

way that they rely upon commissioned sales personnel to move their

products, then commissions are clearly a part of their selling expenses

and must be included. Petitioner argues the amounts denominated as

``Sales Commission'' by Alsa Marine and ``ECGC Commission'' by DCL

Maritech should, therefore, continue to be included as part of the SG&A

ratio.

Department's Position

We agree, in part, with NNL. For these final results, we have

subtracted ocean freight expenses in the calculation of SG&A for Alsa

Marine and DCL Maritech, two of the four Indian companies used to

derive surrogate values for factory overhead, SG&A and profit. These

expenses are not normally part of SG&A, and are subtracted from the

U.S. price. See Final Determination of Sales at Less Than Fair Value:

Bicycles from the People's Republic of China, 61 FR 19026 (April 30,

1996) (Bicycles) and the Final Determination of Sales at Less Than Fair

Value: Brake Drums and Brake Rotors from the People's Republic of

China, 62 FR 9160 (February 28, 1997), where we made adjustments to

surrogate values for SG&A.

On the other hand, we disagree with NNL that the line item for

``Cess. Duty and Shipment'' should be subtracted out of our surrogate

value for SG&A. The Department was unable to determine the proper

definitions of ``Cess. Duty and Shipment'' based upon the financial

statements and the notes to the financial statements of Alsa Marine

and, therefore, could not conclude that this line item contained only

expenses paid for duties.

Furthermore, we disagree with NNL's claim that since commissions

are not relevant in this case, they should be excluded from our

calculation. The total selling expenses of the surrogate producer

represent the total expenses incurred for selling the product,

regardless of whether those expenses are incurred by the producer

itself or by an agent. Furthermore, there is no evidence that the

inclusion of commission expenses in SG&A results in double counting

selling expenses. Therefore, we conclude that it is appropriate to

include all other selling expenses, with the exception of ocean

freight, incurred by the Indian seafood companies, in the calculation

of SG&A.

Comment 9: Calculation of Profit

NNL argues that in calculating a surrogate value for profit, the

Department should use the actual profit data for the four Indian

companies instead of using zero where the company incurred a loss.

Department's Position

We disagree with NNL. Section 773(e)(2)(A) requires that profit for

CV be based on sales in the ordinary course of trade. Negative profit,

or loss, indicates that the surrogate company used to value profit made

sales below the cost of production, which are outside the ordinary

course of trade. Therefore, the Department treated the surrogate

company's loss as zero profit. See Bicycles.

Comment 10: Exchange Rates

Petitioner argues that the Department should use exchange rates

based on the period of review (POR) average rather than the date of

sale to convert surrogate values. Petitioner contends that the approach

used in the preliminary results is inconsistent with the Department's

practice in other NME cases. Petitioner claims that while the

Department uses exchange rates in effect on the date of sale to

translate the price of a U.S. sale that is stated in non-U.S. currency,

the normal value is intended to represent a POR-average value.

Petitioner maintains that it is inconsistent to first inflate pre-POR

[[Page 27966]]

surrogate values to the POR and then translate the inflated price to

U.S. dollars using only the date-of-sale exchange rate.

Department's Position

We agree with petitioner, in part. In Tapered Roller Bearings and

Parts Thereof, Finished and Unfinished, From the People's Republic of

China; Final Results of 1996-1997 Antidumping Duty Administrative

Review, 63 FR 63842 (November 17, 1998), the Department discussed this

issue at length and determined that using a POR-average is a more

appropriate method for currency conversion than the date of sale as

stated in section 351.415 of the Department's regulations.

In this case, however, the factors of production were reported for

a period prior to the POR and valued for a period concurrent with the

period in which the factors were reported. Therefore, in order to

ensure a more accurate valuation of the factors of production, we

valued factors for the same period for which they were reported. Where

necessary, we inflated factor values to the factor valuation period. We

then used a simple average exchange rate to convert factor values to

U.S. dollars.

Comment 11: Ministerial Errors Alleged by NNL

NNL contends that the Department did not convert rupees into

dollars when calculating domestic inland freight and, therefore, should

correct this in its calculations for the final results of review.

Department's Position

We agree with NNL and have corrected the error for these final

results of review.

Final Results of Review

As a result of our review and the comments received, we have

changed the results from those presented in our preliminary results of

the review. Therefore, we determine that the following weighted-average

margin exists as a result of our review:

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

Margin

Manufacturer/ Exporter Time period (percent)

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

Ningbo Nanlian Frozen Foods Co., Ltd............ 09/01/97-03/ 0.00

31/98

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

We will instruct the Customs Service not to assess antidumping

duties on entries of the subject merchandise from NNL made during the

POR.

Furthermore, the following cash deposit rates will be effective

upon publication of this notice of final results of review for all

shipments of freshwater crawfish tail meat from the PRC entered, or

withdrawn from warehouse, for consumption on or after the publication

date, as provided for by section 751(a)(2)(C) of the Act: (1) for NNL,

which was found to merit a separate rate for the final results of this

review, the cash deposit rate will be 0.00 percent; (2) for previously-

reviewed PRC and non-PRC exporters with separate rates, the cash

deposit rate will be the company-specific rate established for the most

recent period; (3) for all other PRC exporters, the cash deposit rate

will be the PRC-wide rate, 201.63 percent; and (4) for non-PRC

exporters of subject merchandise from the PRC, the cash deposit rate

will be the rate applicable to the PRC supplier of that exporter. These

deposit rates, when imposed, shall remain in effect until publication

of the final results of the next administrative review.

Notification of Interested Parties

This notice serves as a final reminder to importers of their

responsibility under 19 CFR 351.402(f) to file a certificate regarding

the reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of antidumping duties occurred and subsequent assessment

of double antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective order (APO) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with section 351.305(a)(3) of the Department's

regulations. Timely written notification of the return/destruction of

APO materials or conversion to judicial protective order is hereby

requested. Failure to comply with the regulations and the terms of an

APO is a sanctionable violation.

This new shipper review and notice are issued and published in

accordance with section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and

19 CFR 351.214.

Dated: May 17, 1999.

Bernard Carreau,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-13075 Filed 5-21-99; 8:45 am]

BILLING CODE 3510-DS-P