Preliminary Determination of Critical Circumstances: Certain Non- Frozen Apple Juice Concentrate From the People's Republic of China

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-855]

Preliminary Determination of Critical Circumstances: Certain Non-

Frozen Apple Juice Concentrate From the People's Republic of China

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: November 15, 1999.

FOR FURTHER INFORMATION CONTACT: Craig Matney or Vince Kane at (202)

482-1778 or 482-2815, respectively, 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 (URAA). In addition, unless otherwise

indicated, all citations to the Department's regulations are references

to the provisions codified at 19 CFR Part 351 (1998).

Critical Circumstances

On June 28, 1999, the Department of Commerce (the Department)

initiated an investigation to determine whether imports of certain non-

frozen apple juice concentrate (NFAJC) from the People's Republic of

China (PRC) are being, or are likely to be, sold in the United States

at less than fair value (64 FR 36330, July 6, 1999). In the petition

filed on June 7, 1999, petitioners alleged that there is a reasonable

basis to believe or suspect that critical circumstances exist with

respect to imports of NFAJC from the PRC. On July 22, 1999, the

International Trade Commission (ITC) preliminarily determined that

there was a reasonable grounds to believe or suspect that the domestic

industry was being injured by reason of imports of NFAJC from the PRC

(64 FR 40895, July 28, 1999).

In accordance with 19 CFR 351.206(c)(2)(i), because petitioners

submitted a critical circumstances allegation more than 20 days before

the scheduled date of the preliminary determination, the Department

must issue a preliminary critical circumstances determination not later

than the date of the preliminary determination. In a policy bulletin

issued on October 8, 1998, the

[[Page 61836]]

Department stated that it has determined that it may issue a

preliminary critical circumstances determination prior to the date of

the preliminary determination of dumping, assuming adequate evidence of

critical circumstances is available (see Change in Policy Regarding

Timing of Issuance of Critical Circumstances Determinations, 63 FR

55364). In accordance with this policy, we are issuing a preliminary

critical circumstances decision in this investigation of NFAJC imports

from the PRC.

Section 733(e)(1) of the Act provides that the Department will

determine that critical circumstances exist if there is a reasonable

basis to believe or suspect that: (A)(i) there is a history of dumping

and material injury by reason of dumped imports in the United States or

elsewhere of the subject merchandise, 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 subject merchandise at less

than its fair value and that there was likely to be material injury by

reason of such sales, and (B) there have been massive imports of the

subject merchandise over a relatively short period.

History of Dumping and Importer Knowledge

We are not aware of any antidumping order in any country on NFAJC

from the PRC. Therefore, we examined whether there was importer

knowledge. In determining whether there is a reasonable basis to

believe or suspect that an importer knew or should have known that the

exporter was selling NFAJC at less than fair value and thereby causing

material injury, the Department must rely on the facts before it at the

time the determination is made. The Department normally considers

margins of 25 percent or more for EP sales, or 15 percent or more for

CEP sales, and a preliminary ITC determination of material injury

sufficient to impute knowledge of dumping and the likelihood of

resultant material injury.

In the present case, since we have not yet made a preliminary

finding of dumping, the most reasonable source of information

concerning knowledge of dumping is the petition itself. In the

petition, petitioners calculated estimated dumping margins of 91.84

percent. The Department adjusted the estimated dumping margin to 51.74

percent. (See Antidumping Investigation Initiation Checklist dated June

28, 1999, at page 18.) Therefore, because the adjusted margin exceeds

the 25 percent threshold, we preliminarily determine that importers

knew or should have known that the exporters were dumping the subject

merchandise.

As to the knowledge of likely injury from such dumped imports, we

considered the information regarding injury to the domestic industry in

the petition. We also considered other sources of information,

including press reports beginning in October 1998 regarding rising

imports, falling domestic prices resulting from rising imports, and

domestic buyers shifting to foreign suppliers. In addition to this

information, the ITC preliminarily found material injury to the

domestic industry due to imports of NFAJC from the PRC. Therefore, we

preliminarily find that there is a reasonable basis to believe or

suspect that importers knew or should have known that material injury

from the dumped merchandise was likely.

Massive Imports

In determining whether there are ``massive imports'' over a

``relatively short time period,'' the Department ordinarily bases its

analysis on import data for at least the three months preceding (the

base period) and following (the comparison period) the filing of the

petition. Imports normally will be considered massive when imports

during the comparison period have increased by 15 percent or more

compared to imports during the base period. However, as stated in the

Department's regulations, at section 351.206(i), if the Secretary finds

that importers, exporters, or producers had reason to believe, at some

time prior to the beginning of the proceeding, that a proceeding was

likely, then the Secretary may consider a time period of not less than

three months from that earlier time.

In this case, petitioners argue that importers, exporters, or

producers of NFAJC from the PRC had reason to believe that an

antidumping proceeding was likely before the filing of the petition.

The Department examined whether various press reports regarding the

likelihood of the filing of an antidumping petition provided a

sufficient basis for inferring knowledge that a proceeding was likely.

Based on our examination, we find that the press reports in October

1998 are sufficient to establish that, by the end of October 1998,

importers, exporters, or producers knew, or should have known, that a

proceeding was likely. Accordingly, we preliminarily determine that it

is more appropriate to use a comparison period starting in November

1998.

Respondents have argued the comparison supported by petitioners is

distorted. In particular, they point to the nature of apple juice

production in the PRC stating that during the months June--August, no

apples are available and, hence, there is no juice production.

Consequently, shipments during this period would be low. By way of

contrast, respondents argue, the November--March period (the comparison

period advanced by petitioners) represents the height of the production

and shipment season.

We have reviewed the data, and based on the shipments reported by

the companies that provided critical circumstances data, we agree that

the levels of shipments in July and August tend to be small relative to

shipments in other months. The trend of shipments in June is less

clear--sometimes, relatively large shipments have occurred in that

month. We also examined shipments in alleged height of the season

(November--March). Again, the pattern here is not clear: shipments in

April and May can be higher than shipments during months of the high

production period.

Therefore, we agree with respondents that it would be distorted to

compare shipments during a base period of June--October 1998 (i.e.,

including July and August) to shipments during the November 1998--March

1999 period. To address this distortion, we have removed the July and

August 1998 shipments from the amount considered to have been shipped

during the base period and have added into the base period shipments

during April and May 1998. In this way, we are comparing five calendar

months to five calendar months. Also, because there is no consistent

pattern demonstrating that inclusion of the April-June shipments

distorts the base period, we believe we have addressed the production/

shipment problem identified by respondents.

Based on this framework, pursuant to section 733(e) of the Act and

section 351.206(h) of the Department's regulations, we preliminarily

determine that there have been massive imports of NFAJC from the PRC

over a relatively short time for SAAME, Lakeside, Haisheng, Andre,

Nannan, and for all other exporters covered by this investigation,

except Oriental and Zhonglu. For a complete discussion of our analysis,

see Memorandum to Deputy Assistant Secretary Richard W. Moreland, dated

November 3, 1999, on file in Room B-099 of the Department's

headquarters.

[[Page 61837]]

Suspension of Liquidation

In accordance with section 733(e)(2) of the Act, if it issues an

affirmative preliminary determination of sales at less than fair value

in this investigation, the Department will direct the U.S. Customs

Service to suspend liquidation of all entries of NFAJC from the PRC

from all exporters except Oriental and Zhonglu that are entered, or

withdrawn from warehouse, for consumption on or after 90 days prior to

the date of publication in the Federal Register of our preliminary

determination of sales at less than fair value. The Customs Service

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

estimated preliminary dumping margins reflected in the preliminary

determination of sales at less than fair value published in the Federal

Register. This suspension of liquidation will remain in effect until

further notice.

Final Critical Circumstances Determination

We will make a final determination of critical circumstances when

we make our final determination regarding sales at less than fair value

in this investigation, which is expected to be 75 days after the

preliminary determination regarding sales at less than fair value.

ITC Notification

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

ITC of our determination.

This notice is published pursuant to section 777(i) of the Act.

Dated: November 3, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-29751 Filed 11-12-99; 8:45 am]

BILLING CODE 3510-DS-P