69 FR 42654, July 16, 2004

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-893]

Notice of Preliminary Determination of Sales at Less Than Fair Value, 
Partial Affirmative Preliminary Determination of Critical Circumstances 
and Postponement of Final Determination: Certain Frozen and Canned 
Warmwater Shrimp From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

EFFECTIVE DATE: July 16, 2004.

FOR FURTHER INFORMATION CONTACT: James C. Doyle or Alex Villanueva, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230; telephone: (202) 482-0159, or 482-3208, 
respectively.

Preliminary Determination

    We preliminarily determine that certain frozen and canned warmwater 
shrimp 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"). The estimated margins of sales at LTFV are shown 
in the "Suspension of Liquidation" section of this notice.
    Interested parties are invited to comment on this preliminary 
determination. We will make our final determination not later than 135 
days after the date of publication of this preliminary determination.

Case History

    On December 31, 2003, the Ad Hoc Shrimp Trade Action Committee, an 
ad hoc coalition representative of U.S. producers of frozen and canned 
warmwater shrimp and harvesters of wild-caught warmwater shrimp 
(hereafter known as, the "Petitioners") filed, in proper form, 
petitions on imports of certain frozen and canned warmwater shrimp from 
Brazil, Ecuador, India, Thailand, the PRC, and the Socialist Republic 
of Vietnam ("Vietnam"), filed in proper form by. On January 12, 2003, 
the Petitioners filed amendments to the petitions.
    On January 8, 2004, the Department requested additional information 
about the petition from the Petitioners.
    On January 12, 2004, the Coalition of Shrimp Exporters/Producers of 
South China (the "PRC Shrimp Coalition"), Allied Pacific Group \1\, 
the National Chamber of Aquaculture of Ecuador ("Expalsa"), the Thai 
Frozen Foods Association ("TFFA"), the Vietnam Association of Seafood 
Exporters and Producers ("VASEP"), the Vietnamese Shrimp Committee 
("VSC"), the Association of Brazilian Shrimp Producers, and the 
Seafood Exporters'Association of India ("SEAI") submitted comments 
regarding domestic industry support. On January 13, 2004, the 
Department requested that all interested parties submit comments on the 
Petitioners' calculation of industry support.
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    \1\ Allied Pacific (H.K.) Co., Ltd.; Allied Pacific Aquatic 
Products (Zhanjiang) Co., Ltd.; Allied Pacific Food (Dalian) Co., 
Ltd.; and Allied Pacific Aquatic Products (Zhongshan) Co., Ltd.; and 
King Royal Investments, Ltd. (collectively, "Allied Pacific 
Group").
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    On January 13, 2004, the Petitioners filed a supplement to the 
petition.
    On January 15, 2004, the Department received affidavits in support 
of the Petitioners' calculation of industry support. On January 15, 
2004, the Respondents submitted additional comments regarding domestic 
industry support. On January 16, 2004, the Petitioners submitted 
rebuttal comments to the Respondents' January, 15, 2004 comments 
regarding industry support.
    On January 16, 2004, the Louisiana Shrimp Association ("LSA") 
filed comments regarding the petitions.
    On January 20, 2004, the Petitioners submitted supplemental 
information to the petition and revised comments to their January 16, 
2004, submission.
    On January 20, 2004, the Department initiated antidumping duty 
investigations on certain frozen and canned warmwater shrimp from 
Brazil, Ecuador, India, Thailand, the PRC and Vietnam. See Notice of 
Initiation of Antidumping Duty Investigations: Certain Frozen and 
Canned Warmwater Shrimp from Brazil, Ecuador, India, Thailand, the 
People's Republic of China and the Socialist Republic of Vietnam 
("Initiation Notice") 69 FR 3876 (January 27, 2004). On January 20, 
2004, the Department notified the International Trade Commission 
("ITC") of the antidumping investigation initiation and the intent to 
publish in the Federal Register a notice of such initiation.

Post-Initiation General Case Issues and Letters From Outside Parties

    On February 4, 2004, the Petitioners filed an amendment to the 
petition adding Versaggi Shrimp Corporation and Indian Ridge Shrimp 
Company as petitioners.
    On February 10, 2004, the Department issued initiation instructions 
to U.S. Customs and Border Protection ("CBP").
    On March 2, 2004, the ITC made an affirmative preliminary 
determination in the antidumping investigation and published its report 
on such determination. See Certain Frozen or Canned Warmwater Shrimp 
and Prawns from Brazil, China, Ecuador, India, Thailand and Vietnam 
("ITC Injury Notice") 69 FR 9842 (March 2, 2004).
    On March 11, 2004, the Department sent the Commercial Secretary at 
the Embassy of China notice of the initiation of an antidumping 
investigation as well as the questionnaires sent to all Respondents.
    On May 24, 2004, the Department published in the Federal Register a 
notice of the postponement of the preliminary determination for this 
antidumping duty investigation. See Notice of Postponement of 
Preliminary Determination of Antidumping Duty Investigations: Certain 
Frozen and Canned Warmwater Shrimp from Brazil (A-353-838), Ecuador (A-
331-802), India (A-533-840), Thailand (A-549-822), PRC (A-570-893) and 
Vietnam (A-503-802 \2\), 69 FR 29509 (May 24, 2004) ("Postponement 
Notice").
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    \2\ The Department inadvertently listed case number A-503-882 as 
Vietnam's case number in the Postponement Notice. The correct case 
number for Vietnam is A-552-802.
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    On June 15, 2004, the Petitioners filed comments on the 
Respondents' request to postpone the final determination.

CONNUM Comments

    On January 28, 2004, the Department requested comments from 
interested parties regarding the appropriate product characteristic 
criteria for the investigation matching hierarchy for comparing the 
export price to normal value.

[[Page 42655]]

    On February 4, 2004, the Department received model match comments 
from the VSC \3\; TFFA \4\; the PRC Shrimp Coalition \5\; Camara 
Nacional de Acuacultura ("CNA"); Union Frozen Products Co., Ltd. 
("UFP"); SEAI; the Marine Products Export Development Authority 
("MPEDA"); and the Petitioners.
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    \3\ Minh Phu Seafood Corporation ("Minh Phu"); Kim Anh Co., 
Ltd. ("Kim Anh"); Minh Hai Joint-Stock Seafoods Processing Company 
("Seaprodex Minh Hai"); Camau Frozen Seafood Processing Import 
Export Corporation ("Camimex"); Can Tho Animal Fisheries Product 
Processing Export Enterprise ("Cafatex"); Cai Doi Vam Seafood 
Import Export Company ("Cadovimex"); Sao Ta Foods Joint Stock 
Company ("Fimex VN"); Viet Hai Seafood Company ("Vietnam 
FishOne"); Kiengiang Seafood Import Export Company ("Kisimex"); 
Soc Trang Aquatic Products and General Import Export Company 
("Stapimex"); Coastal Fisheries Development Corporation 
("Cofidec"); Phuong Nam Co., Ltd.; Cuu Long Seaproducts Company 
("Cuulong Seapro"); Minh Hai Export Frozen Seafood Processing 
Joint-Stock Company ("Jostoco"); Can Tho Agriculture and Animal 
Products Import Export Company ("Cataco"); Nha Trang Fisheries 
Co.; Nhatrang Seaproduct Company ("Nhatrang Seafoods"); Minh Hai 
Seaproducts Import and Export Corporation ("Seaprimex"); Thuan 
Phuoc Seafoods and Trading Corporation; Nhatrang Fisheries Joint 
Stock Company ("Nhatrang Fishco"); Danang Seaproducts Import 
Export Company ("Seaprodex Danang"); C.P. Vietnam Livestock; UTXI 
Aquatic Products Processing Company; Viet Nhan Company; Investment 
Commerce Fisheries Corporation ("Incomfish"); Vinhloi Import 
Export Company ("Vimexico"); Bac Lieu Fisheries; Matourimex Ho Chi 
Minh City Branch (Tourism Material and Equipment Company); Viet 
Foods Co., Ltd.; Truc An Company; Camranh Seafoods Processing 
Enterprise PTE ("Camranh Seafoods"); Hai Thuan Comapny; Phu Cuong 
Comapny; Ngoc Sinh Company; Aquatic Product Trading Company 
("APT"); Aquatic Songhuong Campany; Hanoi Seaproducts Import 
Export Corp. ("Seaprodex Hanoi"); An Giang Fisheries Import-Export 
Joint Stock Company ("Agifsih").
    \4\ Andaman Seafood Company Limited ("Andaman"); Chantaburi 
Seafoods Limited ("CSC"); Pakfood PLC ("PF"); Thailand Fishery 
Cold Storage Public Company Limited ("TFC"); Thai Royal Frozen 
Food Co., Ltd. ("TRF").
    \5\ Yihua Aquatic Products Co., Ltd.; Yangjiang City Yelin; 
Hoitat Quick Frozen Co., Ltd.; Yelin (Hong Kong) Inc.; Zhejiang 
Pingyang Xinye Aquatic Products Co., Ltd.; Taizhou Zhonghua 
Industrial Co. Ltd.; Taizhou Lingyang Aquatic Products Co., Ltd.; 
North Supreme Seafood (Zhejiang) Co. Ltd.; Zhejiang Cereals, Oils 
and Foodstuffs Import and Export Co., Ltd.; AIS AQUA Foods Inc.; 
Zhanjiang CNF Sea Products Engineering Ltd.; Beihai Zhengwu Industry 
Co., Ltd.; Hainan Jiadexin Aquatic Products Co., Ltd.; Yantai Wei-
Cheng Food Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co., 
Ltd.; Zhenjiang Evergreen Aquatic Products Science and Technology 
Co., Ltd.; Zhanjiang Jebshin Seafood Limited; Power Dekor Group Co., 
Ltd.; Shanghai Linghai Fisheries Economic and Trading Co., Ltd.; 
Zhoushan Diciyuan Aquatic Products Co., Ltd.; Zhoushan Guangzhou 
Aquatic Products Co., Ltd.; Zhoushan Huading Aquatic Products Co., 
Ltd.; Siahsan Baofa Aquatic Products Co., Ltd.; Shoushan Xi'an 
Aquatic Products Co., Ltd.; Zhejiang Zhenglong Food Co., Ltd.; 
Zhoushan Haichang Food Co., Ltd.; Zhejiang Xintianjiu Sea Products 
Co., Ltd.; Zhoushan Zhenyang Develop Co., Ltd.; Zhoushan Guotai 
Aquatic Products Co., Ltd.; Zhoushan Jingzhou Aquatic Products Co., 
Ltd.; Zhoushan Provisions and Oil Food Export and Import Co., Ltd.; 
Putuo Fahua Aquatic Products Co., Ltd.; Zhoushan International Trade 
Co., Ltd.; and Shan Tou Long Feng Foodstuff Co.
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    On February 9, 2004, VSC and TFFA filed replies to the Petitioners' 
February 4, 2004, model match submissions. On February 10, 2004, CNA 
submitted a reply to the Petitioners February 14, 2004, model match 
comments.
    On February 11, 2004, the Petitioners filed rebuttal comments in 
response to model matching comments submitted by respondents in the 
investigation. On February 17, 2004, the Department requested comments 
from all interested parties on product characteristic reporting.
    On February 18, 2004, the PRC Shrimp Coalition, Yelin, and Allied 
Pacific Group requested an extension of the time to comment on draft 
product characteristics. On February 18, 2004, the Department extended 
the deadline for submission of comments on draft product 
characteristics until February 23, 2004.
    On February 18, 2004, SEAI submitted model match comments. On 
February 18, 2004, the Department alerted the Petitioners and 
interested parties to an error in the draft product characteristics. On 
February 19, 2004, the UFP, CNA, and TFFA submitted model match 
comments.
    On February 23, 2004, Allied Pacific Group submitted comments on 
the proposed CONNUM fields.
    On February 23, 2004, VSC, the Brazilian shrimp exporters, and the 
Petitioners submitted model match comments.
    On March 9, 2004, the Department informed all interested parties of 
revised reporting requirements.
    On June 7, 2004, the Department received Rubicon's \6\, CNA's, 
VSC's, EMPAF's, and the Petitioner's comments on product comparison 
methodology.
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    \6\ Andaman Seafood Co., Ltd.; Chanthaburi Seafoods Co., Ltd.; 
and Thailand Fishery Cold Storage Public Co., Ltd.
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Scope Comments

    On February 17, 2004, the Department received scope comments from 
the Ocean Duke Corporation ("Ocean Duke") requesting that the 
Department confirm that "dusted shrimp," "battered shrimp," and 
"seafood mix," not be covered by the scope of the investigation. On 
February 17, 2004, LSA filed scope comments. On February 27, 2004, 
Rubicon submitted comments in support of Ocean Duke's comments 
concerning the status of dusted and battered shrimp. On March 4, 2004, 
Ocean Duke requested scope clarification regarding dusted shrimp, 
battered shrimp, and seafood mix.
    On March 12, 2004, the Petitioners filed their reply to LSA's scope 
comments. On March 16, 2004, the Petitioners filed their reply to 
various other scope comments.
    On April 16, 2004, Ocean Duke submitted additional scope comments 
discussing the concept that dusted and battered shrimp fall within the 
meaning of breaded shrimp.
    On May 6, 2004, SEAI filed comments on product coverage.
    On May 10, 2004, Exportadora de Alimentons S.A. ("Expalsa") filed 
scope comments from Expalsa.
    On May 19, 2004, the Petitioners submitted scope comments regarding 
dusted and battered shrimp, organic shrimp and warmwater salad shrimp, 
and the species Macrobachium rosenbergii.
    On June 9, 2004, the Department received certifications of factual 
accuracy not found in time for filing with the American Breaded Shrimp 
Processors Association's ("ABSPA") June 7, 2004, request for a scope 
determination.
    On June 4, 2004, Ocean Duke and Expalsa submitted replies to the 
Petitioners' May 19, 2004, scope comments.

Quantity and Value (Q&V) Questionnaires

    On January 29, 2004, the Department sent a letter to all interested 
parties requesting the quantity and value of all exports to the United 
States. On January 29, 2004, the Department notified the Commercial 
Secretary at the Embassy of the PRC of the initiation of an antidumping 
duty investigation and its request for quantity and value information 
with regard to exports to the United States. On February 3, 2004, the 
PRC Shrimp Coalition and Allied Pacific Group requested an extension of 
the response time to the Department's Q&V questionnaire. On February 4, 
2004, the Department extended the deadline for filing Q&V data until 
February 9, 2004.
    On February 9, 2004, the Department received volume and value data 
information from Allied Pacific Group; Shantou Yuexing Enterprise 
Company; Shantou Sez Xu Hao Fastness Freeze Aquatic Factory Co., Ltd.; 
Shantou Long Feng Foodstuffs Co., Ltd.; Meizhou Aquatic Products Quick-
Frozen Industry Co., Ltd. Shengping Shantou; Shantou Jinhang Aquatic 
Industry Co., Ltd; Zhangjiang Universal Seafood Co., Ltd.; Zhanjiang 
Guolian Aquatic Products Co., Ltd. ("Zhanjiang"); ZJ CNF Sea Products 
Engineering Ltd.; Shanghai Linghai Fisheries Economic and Trading Co., 
Ltd.; Zhoushan Cereals Oils and

[[Page 42656]]

Foodstuffs Import and Export Co., Ltd.; Pingyang Xinye Aquatic Products 
Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co., Ltd.; Zhoushan 
Diciyuan Aquatic Products Co., Ltd.; Zhejiang Evernew Seafood Co., 
Ltd.; Taizhou Zhonghuan Industrial Co., Ltd.; Zhejiang Cereals Oils and 
Foodstuffs Import and Export Co., Ltd.; Zhoushan Putuo Huafa Sea 
Products Co., Ltd.; Zhoushan Industrial Co., Ltd.; North Supreme 
Seafood (Zhejiang) Co., Ltd.; Zhoushan Jingzhou Aquatic Foods Co., 
Ltd.; Zhoushan Haichang Food Co., Ltd.; Zhoushan Zhenyang Developing 
Co., Ltd.; Zhejiang Taizhou Lingyang Aquatic Products Co., Ltd.; 
Zhoushan Lizou Fishery Co., Ltd.; Zhoushan Huading Seafood Co., Ltd.; 
Yantai Wei-Cheng Food Co., Ltd.; Zhoushan Xifeng Aquatic Co., Ltd.; 
Kaifeng Ocean Sky Industry Co., Ltd.; Beihai Zhengwu Industry Co., 
Ltd.; Zhejiang Daishan Baofa Aquatic Product Co., Ltd.; Zhejiang 
Zhenglong Foodstuffs Co., Ltd.; Jinfu Trading Co., Ltd.; Zhoushan 
Juntai Foods Co., Ltd.; as exporter with Zhoushan Guontai Fisheries and 
Yelin Enterprise Company. Hong Kong as exporter with (1) Yangjiang City 
Hoitat Quick Frozen Seafood Co., Ltd.; (2) Fuqing Yihua Aquatic 
Products Ltd.; and (3) Yelin Frozen Seafood Co. As affiliated 
suppliers; and 22 producers/exporters.
    On February 10, 2004, the Department received Q&V data corrections 
from Shantou Yuexing Enterprise Company; Shantou Long Feng Foodstuffs 
Co., Ltd.; Shantou Sez Xu Hao Fastness Freeze Aquatic Factory Co., 
Ltd.; and Meizhou Aquatic Products Quick-Frozen Industry Co., Ltd. 
Shengping Shantou.
    On February 12, 2004, the Department sent a supplemental 
questionnaire to Allied Pacific Group regarding their Q&V information.
    On February 13, 2004, the Department received clarification from 
Allied Pacific Group and Yelin Enterprise Co. Hong Kong, Yangjiang City 
Yelin Hoitat Quick Frozen Seafood Co., Ltd., Fuqing Yihua Aguatic 
Products Co., Ltd., and Yelin Frozen Seafood Co. (collectively 
"Yelin") regarding their Q&V information.
    On February 17, 2004, Zhanjiang Regal Integrated Marine Resources 
Co., Ltd."s submitted Q&V data.
    On February 23, 2004, the Department issued its respondent 
selection memorandum, selecting Allied Pacific Group; Yelin; Shantou 
Red Garden Foodstuff Co., Ltd. ("Red Garden"); and Zhanjiang Guolian 
Aquatic Products Co., Ltd. ("ZG") as mandatory respondents. See 
Memorandum to the File from James C. Doyle, Program Manager, to Edward 
C. Yang, Director of Office IX, Antidumping Duty Investigation of 
Certain Frozen and Canned Warmwater Shrimp from the People'S Republic 
of China: Selection of Respondents ("Respondent Selection Memo").
    On March 1, 2004, Meizhou Aquatic Products Quick-Frozen Industry 
Co., Ltd. ("Meizhou") submitted a request regarding selection of 
mandatory and voluntary respondents.

Mandatory Respondents

    On February 25, 2004, the Department sent Section A questionnaires 
to the Respondents.
    On March 1, 2004, the Department issued sections C, D, and E of the 
Department's non-market economy ("NME") questionnaire to the 
Respondents.
    On March 8, 2004, Allied Pacific Group and Yelin requested an 
extension of time to respond to Sections A, C, and D of the 
questionnaire.
    On March 10, 2004, the Department changed to March 31, 2004 the 
deadline for all Respondents to respond to the Section A questionnaires 
and to April 21, 2004, for Sections C, D, and E.
    On April 7, 2004, the Petitioners submitted comments on the 
Respondents' Section A questionnaire responses.
    On April 13, 2004, the Department issued supplemental Section A 
questionnaires to the Respondents.
    On April 14, 2004, Allied Pacific Group requested an extension of 
the deadline to answer the Section A supplemental questionnaire.
    On April 19, 2004, the Department granted an extension to May 4, 
2004 to Allied Pacific Group to submit its supplemental Section A 
questionnaire response.
    On April 21, 2004, the Respondents submitted Section C and D 
responses.
    On April 21, 2004, Yelin requested an extension of time to respond 
to the supplemental Section A questionnaire. The Department extended 
the deadline until May 4, 2004. On April 22, 2004, ZG and Red Garden 
requested an extension of time to respond to the supplemental Section A 
questionnaire. The Department extended the deadline until May 4, 2004.
    On May 4, 2004, the Respondents submitted supplemental Section A 
questionnaires, and the Petitioners submitted comments on the 
Respondents' Section C and D questionnaire responses.
    On May 10, 2004, the Petitioners submitted proposed additional 
questions for and comments on the Respondents' Section A questionnaire 
responses.
    On May 11, 2004, Red Garden filed a Section E questionnaire 
response.
    On May 17, 2004, the Department sent the Respondents supplemental 
questionnaires addressing deficiencies in their Section A questionnaire 
responses.
    On May 20, 2004, Allied Pacific Group requested an extension of 
time to respond to the Department's second Section A supplemental 
questionnaire.
    On May 27, 2004, Yelin requested an extension of time to respond to 
the supplemental Section A, C, and D questionnaires. On May 27, 2004, 
Red Garden requested an extension of time to respond to the 
supplemental Section C and D questionnaires.
    On May 27, 2004, the Department extended to June 8, 2004, the 
deadline for Allied Pacific and Yelin to submit their responses to 
Sections A, C and D.
    On May 28, 2004, the Department sent a letter to Red Garden with a 
supplemental Section A questionnaire.
    On May 28, 2004, ZG requested an extension of time to respond to 
the supplemental Sections A, C, and D questionnaires.
    On May 28, 2004, the Department sent a letter to Red Garden 
addressing certain deficiencies in their Section A, C, and E 
questionnaire responses and requesting a correction of such 
deficiencies.
    On June 1, 2004, the Department extended the deadline for ZG to 
submit its response to the Section A, C, and D supplemental 
questionnaires until June 8, 2004.
    On June 8, 2004, Yelin submitted its second supplemental 
questionnaire responses.
    On June 8, 2004, Mingfeng requested an extension of time to respond 
to the supplemental Section A questionnaire. On June 9, 2004, the 
Department granted Mingfeng an extension to June 16, 2004.
    On June 9, 2004, Red Garden requested a ten-day extension to 
respond to its supplemental Section E questionnaire.
    On June 10, 2004, the Department received supplemental Section A 
questionnaire responses from ZG, Yelin, and Allied Pacific Group.
    On June 16, 2004, Mingfeng submitted its second supplemental 
Section A response.

Section A Respondents

    As noted above, on February 23, 2003, the Department selected its 
mandatory respondents. On March 8, 2004, the Department received a 
request from companies who wished to submit voluntary Section A 
questionnaires

[[Page 42657]]

responses (hereafter known as "Section A Respondents").
    On March 17, 2004, the Department sent a letter to Seatech 
Corporation rejecting its Section A questionnaire response.
    On March 17, 2004, the Department received Dalian Sea-Rich's and 
Hainan Golden Spring's Section A questionnaire responses.
    On March 29, 2004, the Department received Section A questionnaire 
responses from: Shantou Ruiyuan; Go-Harvest; Xuwen Hailang; Fuqing 
Dongwei; Zhanjiang Runhai; Leizhou Zhulian; Shantou Ocean; Chenghai 
Nichi; Newpro; Shantou Wanya; Gallant; Fuqing Longwei; Shantou/Chaoyang 
Qiaofeng; Shantou Oceanstar; Shantou Freezing; Shantoy Yuexing; 
Evergreen; and Dongri Aquatic. On March 30, 2004, Shanghai Taoen 
submitted a Section A questionnaire response. On March 31, 2004, the 
Department received Section A questionnaire responses from: Mingfeng; 
Beihai Zhengwu; Zhoushan Diciyuan; ZJ CNF Sea Products; Zhoushan Putuo 
Huafa; Yantai Wei-Cheng; Zhanjiang Bobogo; Asian Seafoods; Zhoushan 
Industrial; Zhejiang Cofiec; Shanghai Linghai; Zhoushan Cereal Oils; 
Zhejiang Zhenglong; Zhoushan Huading; Zhanjiang Guolian; Yelin 
Enterprise; Kainfeng Ocean Sky; Hainan Fruit Vegetable Food Allocation; 
Jinfu Trading; Taizhou Zhonghuan; Universal; Zhejiang Daishan Baofa; 
Shantou Red Garden; Longfeng; Savvy Seafood; Zhoushan Zhenyang; 
Zhejiang Taizhou Lingyang; Zhoushan Xifeng; Zhoushan Lizhou; Zhoushan 
Haiching; Meizhou; Pingyang Xinye; Zhejiang Evernew; Shantou Sez Xuaho; 
and Allied Pacific Group.
    On April 12, 2004, the Department issued a letter to Seatech 
Corporation requesting correction of deficiencies in its Section A 
response.
    On April 13, 2004, Seatech Corporation requested an extension of 
time to respond to the Section A questionnaire. On April 14, 2004, the 
Department rejected Seatech Corporation's submission.
    On May 24, 2004, the Department sent supplemental Section A 
questionnaires to: Beihai Zhengwu; Zhoushan Cereals; Hainan Fruit; 
Pingyang Xinye; Yantai Wei-Cheng; Zhanjiang Bobogo; Zhoushan Huading; 
Zuwen Hailang; Zhanjiang Newpro; Dalian; DAP; Shantou Qiafeng; and 
Zhoushan Lizhou.
    On May 26, 2004, the Department sent a letter to ShantouYuexing 
Enterprise; Savvy Seafood Inc; Shantou Longfeng Foodstuff; Zhanjiang 
Runhai Foods Co., Ltd.; Zhanjiang Universal Seafoods; Meizhou Aquatic 
Products Quick-Frozen; and Shantou Sez Xu Hao requesting additional 
information for certain areas of their questionnaire responses. On May 
26, 2004, the Department issued supplemental Section A questionnaires 
to: Shantou Ruiyuan; Shantou Oceanstar; Fuqing Longwei; Asian 
(Zhanjiang); Fuqing Dongwei; Hainan Golden; Zhejiang Zhenglong; 
Zhoushan Putuo; Kaifing Ocean Sky; Shantou Freezing; Shanghai Taoen; 
and Zhoushan Diciyuan.
    On May 26, 2004, the Department received a letter from Beihai 
Zhengwu Industry Co., Ltd.; Hainan Fruit Vegetable Food Allocation Co., 
Ltd.; Pingyang Zinye Aquatic Products Co., Ltd.; Yantai Wei-Cheng Food 
Co., Ltd.; Zhoushan Cereals Oils and Foodstuffs Import and Export Co., 
Ltd.; Zhoushan Huading Seafood Co., Ltd.; and Zhoushan Lizhou Fishery 
Co., Ltd. requesting an extension of time for their supplemental 
Section A responses.
    On May 27, 2004, the Department issued supplemental Section A 
questionnaires to: Shanghai Linghai; Jinfu; Zhoushan; Zhejiang Evernew; 
Shantou Jinhang; and Leizhou Zhulian.
    On May 27, 2004, the Department extended the deadline to June 8, 
2004 for: Beihai Zhengwu Industry Co., Ltd.; Hainan Fruit Vegetable 
Food Allocation Co., Ltd.; Pingyang Zinye Aquatic Products Co., Ltd.; 
Yantai Wei-Cheng Food Co., Ltd.; Zhoushan Cereals Oils and Foodstuffs 
Import and Export Co., Ltd.; Zhoushan Huading Seafood Co., Ltd.; and 
Zhoushan Lizhou Fishery Co., Ltd.
    On May 28, 2004, the Department received a letter from Zhejiang 
Zhenglong Foodstuffs Co., Ltd.; Zhoushan Diciyuan Aquatic Products Co., 
Ltd; Zhoushan Putuo Huafa Sea Products Co., Ltd.; Jinfu Trading Co, 
Ltd.; Zhoushan Industrial Co., Ltd.; and Zhejiang Evernew Seafood Co., 
Ltd. requesting an extension for the supplemental Section A 
questionnaire response.
    On May 28, 2004, the Department received a request from Bobogo, 
Savvy, Sez Xu, and Asian for an extension of time to submit responses 
to supplemental Section A questionnaires.
    On June 1, 2004, the Department extended the deadline to June 8, 
2004, for Bobogo, Savvy, Sez Xu, and Asian to respond to the Section A 
supplemental questionnaires.
    On June 2, 2004, the Department sent letters to: Taizhou Zhonghuan 
Industrial; Zhanjiang Go-Harvest Aquatic; Shantou Wanya Food Factory; 
Zhoushan Zhenyang Developing; Shantou Jinyuan District Mingfeng; 
Zhanjiang Evergreen Aquatic; Chenghai Nichi Lan Foods; Zhejiang Daishan 
Baofa Aquatic; Zhoushan Xifeng Aquatic; Shantou Ocean Freezing; 
Zhoushan Haichang Food; Zhejian Cereals, Oils and Foodstuffs; ZJ CNF 
SEA Products Engineering; and Gallant Ocean (Lianjiang) addressing 
certain deficiencies in their Section A supplemental responses. On June 
2, 2004, Dalian and Hainan Golden requested an extension of time to 
respond to the supplemental Section A questionnaires. The Department 
extended the deadline for Dalian until June 8, 2004, and until June 9, 
2004 for Hainan Golden.
    On June 2, 2004, Shantou Long Feng Foodstuff Co., Ltd. requested an 
extension of the deadline to respond to the supplemental Section A 
questionnaire. On June 2, 2004, Meizhou and Universal requested an 
extension of the deadline to respond to the supplemental Section A 
questionnaires.
    On June 2, 2004, the Department extended the deadline for Zhejiang 
Zhenglong Foodstuffs Co., Ltd.; Zhoushan Diciyuan Aquatic Products Co., 
Ltd.; Zhoushan Putuo Huafa Sea Products Co., Ltd.; and Kaifeng Ocean 
Sky Industry Co., Ltd. until June 9, 2004, and until June 10, 2004, for 
Shanghai Linghai Fisheries Economic and Trading Co., Ltd.; Jinfu 
Trading Co., Ltd.; Zhoushan Industrial Co., Ltd.; and Zhejiang Evernew 
Seafood Co., Ltd.
    On June 2, 2004, the Department extended the deadline for Shantou 
Long Feng Foodstuff Co., Ltd. until June 9, 2004. On June 3, 2004, the 
Department revised that deadline and determined that no further 
extensions may be granted.
    On June 4, 2004, the Department received a request from ZJ CNF Sea 
Products Engineering Ltd.; CNF Zhangjiang (Tong Lian) Fisheries Co., 
Ltd., Zhejian Cereals Oils and Foodstuffs Import and Export Co., Ltd.; 
Zhejiang Taizhou Lingyang Aquatic Products Co.; Zhoushan Juntai Foods 
Co., Ltd.; Zhoushan Haichang Food Co., Ltd.; Zhoushan Xifeng Aquatic 
Co., Ltd.; Taizhou Zhonghuan Industrial Co., Ltd.; Zhoushan Zhenyang 
Developing Co., Ltd.; and Zhejiang Daishan Baofa Aquatic Product Co., 
Ltd., to extend their time for responding to the Section A 
questionnaire. The Department granted an extension for the companies 
until June 16, 2004.
    On June 8, 2004, the Department received a request from Bobogo, 
Savvy, Sez Xu, and Asian to extend the time to respond to the 
supplemental Section A questionnaire. On June 8, 2004, the Department 
received Dalian FTZ Sea-Rick's and Zhangjiang Goulian's

[[Page 42658]]

supplemental Section A questionnaires responses.
    On June 8, 2004, the Department received Section A questionnaire 
responses from Hainan Fruit Vegetable Food Allocation Company; Yantai 
Wei-Cheng; Pingyang Xinye; Beihai Zhengwu Industry Company; Zhoushan 
Hauding; and Zhoushan Lizhou.
    On June 9, 2004, the Department received supplemental Section A 
questionnaire responses from: Meizhou; Hainan Golden Spring; Long Feng; 
Kaifeng Ocean Sky Industry Company; Zhoushan Putuo Huafa Sea Products 
Company; Zhoushan Diciyuan Aquatic Products; and Bobogo.
    On June 10, 2004, the Department received supplemental Section A 
questionnaire responses from: Shantou Xuhao; Zhejiang Evernew; Savvy; 
Shanghai Linghai; Asian; Jinfu; and Zhoushan.
    On June 10, 2004, the Department extended the filing date for 
responding to supplemental questionnaires until June 9, 2004, for 
Bobogo and until June 10, 2004, for Savvy, Sez Xu, and Asian.
    On June 16, 2004, the Department received supplemental Section A 
questionnaire responses from: ZJ CNF Sea Products/CNG Zhangjiang 
Fisheries; Zhejiang Cereals, Oils and Foodstuffs; Zhejiang Daishan 
Baofa Aquatic Product Company; Zhoushan Haiching; Zhejiang Taizhou 
Lingyang Aquatic Products; Zhoushan Xifeng; Zhoushan Zhenyang; and 
Taizou Zhonghuan.
    On June 4, 2004, the Section A companies requested a one-day 
extension of time to respond to supplemental Section A questionnaires. 
The Department granted the request; however, it stated that no further 
requests would be granted.

Critical Circumstances Allegation

    On May 19, 2004, the Petitioners requested an expedited critical 
circumstances finding.
    On May 26, 2004, the Department sent a letter to Red Garden 
requesting that it report monthly shipment data.
    On May 28, 2004, the Department sent letters to Yelin, Red Garden, 
Allied Pacific, and Zhanjiang Guolian Aquatic Products stating that 
they must report their monthly shipment data for 2001, 2002, 2003 and 
January through May 2004.
    On June 14, 2004, Yelin responded to the Petitioners' critical 
circumstances allegations.
    On June 14, 2004, ZG, Ming Feng, Red Garden, and Long Feng 
submitted critical circumstances information. On June 14, 2004, Allied 
Pacific responded to the Petitioners' critical circumstances 
allegation.
    On June 17, 2004, Allied Pacific submitted corrections to its June 
14, 2004, critical circumstances submission.

Surrogate Country and Factors

    On March 12, 2004, the Department solicited comments regarding 
surrogate country selection from all interested parties.
    On March 26, 2004, Allied Pacific Group submitted comments on 
surrogate country selection.
    On April 26, 2004, Allied Pacific Group requested an extension of 
time to submit surrogate value data.
    On May 4, 2004, the Petitioners requested an extension of time to 
submit surrogate value data. On May 5, 2004 the Department granted an 
extension from May 7, 2004, to May 21, 2004, for all parties to submit 
surrogate value data.
    On May 21, 2004, the Petitioners and the Respondents submitted 
surrogate value data.
    On June 2, 2004, Yelin and Allied Pacific Group responded to the 
Petitioners May 21, 2004, surrogate value submission.
    On June 4, 2004, the Petitioners submitted comments on the 
Respondents May 21, 2004, surrogate value submission.
    On June 9, 2004, the Department selected the surrogate country.
    On June 10, 2004, the Department sent supplemental questionnaires 
to ZG, Allied Pacific, and Yelin concerning their surrogate value 
submissions. On June 10, 2004, Yelin, ZG, and Allied Pacific requested 
an extension of time to answer the Department's surrogate value 
questionnaire.
    On June 14, 2004, the Department extended to June 21, 2004, the 
deadline for Yelin, ZG, and Allied Pacific to respond to the surrogate 
value questionnaire.
    On June 14, 2004, Allied Pacific requested an extension for the 
surrogate value supplemental questionnaire response.
    On June 15, 2004, the Respondents requested that the Department 
seek additional surrogate value data. On June 29, 2004, Allied and 
Yelin submitted comments regarding Petitioners' June 4, 2004, surrogate 
valuation comments.

Headless, Shell-on ("HLSO") Issue

    On May 21, 2004, the Department sent a letter to all interested 
parties requesting comments on the methodology to employ in making 
product comparisons, where applicable, and performing margin 
calculations for purposes of the preliminary determination.
    On June 4, 2004, Red Garden submitted comments on HLSO comparison.
    On June 8, 2004, Thai I-Mei, and its affiliated reseller, Ocean 
Duke, submitted comments on the calculation methodology.
    On June 10, 2004, Rubicon, UFP, and SEAI submitted comments 
regarding the Petitioners' submission.
    On June 15, 2004, the Petitioners submitted rebuttal comments 
regarding the use of the HLSO count sizes.

Pre-Preliminary Determination Comments

    On June 23, 2004, Petitioners submitted pre-preliminary 
determination comments. On June 29, 2004, Allied and Yelin submitted 
rebuttal comments to Petitioners' pre-preliminary comments. On June 30, 
2004, Petitioners submitted comments regarding Meizhou's reply to 
Petitioners' June 23, 2004 comments and Petitioners submitted comments 
regarding Allied and Yelin's June 29, 2004 comments.

Postponement of Final Determination

    Section 735(a) of the Act provides that a final determination may 
be postponed until no later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise or, in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioners. Section 351.210(e)(2) of the Department's regulations 
requires that requests by respondents for postponement of a final 
determination be accompanied by a request for an extension of the 
provisional measures from a four-month period to not more than six 
months.
    On June 28, 2004, the PRC Shrimp Coalition requested that, in the 
event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination until 
135 days after the publication of the preliminary determination. In 
addition, on July 1, 2004, Allied, Yelin, and ZG also requested that, 
in the event of an affirmative preliminary determination in this 
investigation, the Department postpone its final determination until 
135 days after the publication of the preliminary determination. All 
requests included a request to extend the provisional measures to not 
more than six months after the publication of the

[[Page 42659]]

preliminary determination. Red Garden submitted a request to postpone 
the final determination, however, Red Garden did not request to extend 
the provisional measures to not more than six months after the 
publication of the preliminary determination. Accordingly, because we 
have made an affirmative preliminary determination and the requesting 
parties account for a significant proportion of the exports of the 
subject merchandise, we have postponed the final determination until no 
later than 135 days after the date of publication of the preliminary 
determination and are extending the provisional measures accordingly as 
requested by the PRC Shrimp Coalition, Allied and Yelin. We note that 
ZG's request is not applicable as ZG received a de minimis preliminary 
determination.

Period of Investigation

    The period of investigation ("POI") is April 1, 2003, through 
September 30, 2003. This period corresponds to the two most recent 
fiscal quarters prior to the month of the filing of the Petition 
(December 31, 2003). See 19 CFR 351.204(b)(1).

Scope of Investigation

    The scope of this investigations includes certain warmwater shrimp 
and prawns, whether frozen or canned, wild-caught (ocean harvested) or 
farm-raised (produced by aquaculture), head-on or head-off, shell-on or 
peeled, tail-on or tail-off,\7\ deveined or not deveined, cooked or 
raw, or otherwise processed in frozen or canned form.
---------------------------------------------------------------------------

    \7\ "Tails" in this context means the tail fan, which includes 
the telson and the uropods.
---------------------------------------------------------------------------

    The frozen or canned warmwater shrimp and prawn products included 
in the scope of the investigations, regardless of definitions in the 
Harmonized Tariff Schedule of the United States ("HTSUS"), are 
products which are processed from warmwater shrimp and prawns through 
either freezing or canning and which are sold in any count size.
    The products described above may be processed from any species of 
warmwater shrimp and prawns. Warmwater shrimp and prawns are generally 
classified in, but are not limited to, the Penaeidae family. Some 
examples of the farmed and wild-caught warmwater species include, but 
are not limited to, whiteleg shrimp (Penaeus vannemei), banana prawn 
(Penaeus merguiensis), fleshy prawn (Penaeus chinensis), giant river 
prawn (Macrobrachium rosenbergii), giant tiger prawn (Penaeus monodon), 
redspotted shrimp (Penaeus brasiliensis), southern brown shrimp 
(Penaeus subtilis), southern pink shrimp (Penaeus notialis), southern 
rough shrimp (Trachypenaeus curvirostris), southern white shrimp 
(Penaeus schmitti), blue shrimp (Penaeus stylirostris), western white 
shrimp (Penaeus occidentalis), and Indian white prawn (Penaeus 
indicus).
    Frozen shrimp and prawns that are packed with marinade, spices or 
sauce are included in the scope of the investigations. In addition, 
food preparations, which are not "prepared meals," that contain more 
than 20 percent by weight of shrimp or prawn are also included in the 
scope of the investigations.
    Excluded from the scope are (1) breaded shrimp \8\ and prawns 
(1605.20.10.20); (2) shrimp and prawns generally classified in the 
Pandalidae family and commonly referred to as coldwater shrimp, in any 
state of processing; (3) fresh shrimp and prawns whether shell-on or 
peeled (0306.23.00.20 and 0306.23.00.40); (4) shrimp and prawns in 
prepared meals (1605.20.05.10); and (5) dried shrimp and prawns.
---------------------------------------------------------------------------

    \8\ Pursuant to our scope determination on battered shrimp, we 
find that breaded shrimp includes battered shrimp as discussed 
below. See Memorandum from Edward C. Yang, Vietnam/NME Unit 
Coordinator, Import Administration to Jeffrey A. May, Deputy 
Assistant Secretary for Import Administration Antidumping 
Investigation on Certain Frozen and Canned Warmwater Shrimp from 
Brazil, Ecuador, India, Thailand, the Socialist Republic of Vietnam 
and the Socialist Republic of Vietnam: Scope Clarification on Dusted 
Shrimp and Battered Shrimp ("Dusted/Battered Scope Memo"), dated 
July 2, 2004.
---------------------------------------------------------------------------

    The products covered by this scope are currently classifiable under 
the following HTSUS subheadings; 0306.13.00.03, 0306.13.00.06, 
0306.13.00.09, 0306.13.00.12, 0306.13.00.15, 0306.13.00.18, 
0306.13.00.21, 0306.13.00.24, 0306.13.00.27, 0306.13.00.40, 
1605.20.10.10, 1605.20.10.30, and 1605.20.10.40. These HTSUS 
subheadings are provided for convenience and for CBP purposes only and 
are not dispositive, but rather the written descriptions of the scope 
of these investigations is dispositive.
    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997), we 
set aside a period of time for parties to raise issues regarding 
product coverage and encouraged all parties to submit comments within 
20 calendar days of publication of the Initiation Notice. See 
Initiation Notice 69 FR at 3877.
    Throughout the 20 days and beyond, the Department received many 
comments and submissions regarding a multitude of scope issues, 
including: (1) Fresh (never frozen) shrimp, (2) Ocean Duke's seafood 
mix, (3) salad shrimp sold in counts of 250 pieces or higher, (4) 
Macrobrachium rosenbergii, organic shrimp, (5) peeled shrimp used in 
breading, (6) dusted shrimp and (7) battered shrimp. On May 21, 2004, 
the Department determined that the scope of these investigations 
remains unchanged, as certain frozen and canned warmwater shrimp, 
without the addition of fresh (never frozen) shrimp. See Memorandum 
from Jeffrey A. May, Deputy Assistant Secretary for Import 
Administration, AD/CVD Enforcement, Group III and Joseph A. Spetrini, 
Deputy Assistant Secretary for Import Administration, AD/CVD 
Enforcement, Group I to James J. Jochum, Assistant Secretary for Import 
Administration Regarding Antidumping Investigations on Certain Frozen 
and Canned Warmwater Shrimp from Brazil, Ecuador, India, the Socialist 
Republic of Vietnam, Thailand, and the Socialist Republic of Vietnam: 
Scope Determination Regarding Fresh (Never Frozen) Shrimp ("Fresh 
Shrimp Memo"), dated May 21, 2004.
    On July 2, 2004, the Department made scope determinations with 
respect to Ocean Duke's seafood mix, salad shrimp sold in counts of 250 
pieces or higher, Macrobrachium rosenbergii, organic shrimp and peeled 
shrimp used in breading. See Memorandum from Edward C. Yang, Vietnam/
NME Unit Coordinator, Import Administration to Jeffrey A. May, Deputy 
Assistant Secretary for Import Administration Antidumping Investigation 
on Certain Frozen and Canned Warmwater Shrimp from Brazil, Ecuador, 
India, Thailand, the Socialist Republic of Vietnam and the Socialist 
Republic of Vietnam: Scope Clarification on Ocean Duke's Seafood Mix, 
Salad Shrimp Sold in Counts of 250 Pieces or Higher, Macrobrachium 
rosenbergii, Organic Shrimp and Peeled Shrimp Used in Breading ("Scope 
Memo"), dated July 2, 2004. Based on the information presented by 
interested parties, the Department determines that Ocean Duke's seafood 
mix is excluded from the scope of this investigation; however, salad 
shrimp sold in counts of 250 pieces or higher, Macrobrachium 
rosenbergii, organic shrimp and peeled shrimp used in breading are 
included within the scope of this investigation. See Scope Memo at 33.
    Additionally, on July 2, 2004, the Department made a scope 
determination with respect to dusted shrimp and

[[Page 42660]]

battered shrimp. See Dusted/Battered Scope Memo. Based on the 
information presented by interested parties, the Department 
preliminarily finds that while substantial evidence exists to consider 
battered shrimp to fall within the meaning of the breaded shrimp 
exclusion identified in the scope of these proceedings, there is 
insufficient evidence to consider that shrimp which has been dusted 
falls within the meaning of "breaded" shrimp. However, there is 
sufficient evidence for the Department to be prepared to exclude this 
merchandise from the scope of the order provided an appropriate 
description can be developed. See Dusted/Battered Scope Memo at 18. To 
that end, along with the previously solicited comments regarding 
breaded and battered shrimp, the Department solicits comments from 
interested parties which enumerate and describe a clear, administrable 
definition of dusted shrimp. The Department considers these comments 
would be helpful in its evaluation of the disposition of the status of 
dusted shrimp. See Dusted/Battered Scope Memo at 23.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. Section 777A(c)(2) of the Act provides the 
Department discretion, when faced with a large number of exporters/
producers, however, to limit its examination to a reasonable number of 
such companies if it is not practicable to examine all companies. Where 
it is not practicable to examine all known producers/exporters of 
subject merchandise, this provision permits the Department to 
investigate either (1) A sample of exporters, producers, or types of 
products that is statistically valid based on the information available 
to the Department at the time of selection or (2) exporters/producers 
accounting for the largest volume of the merchandise under 
investigation that can reasonably be examined. After considering the 
complexities in this proceeding and the resources, the Department 
determined that it was not practicable in this investigation to examine 
all known producers/exporters of subject merchandise. See Respondent 
Selection Memo at 2. Instead, we limited our examination to the four 
exporters and producers accounting for the largest volume of the 
subject merchandise pursuant to section 777A(c)(2)(B) of the Act. The 
four Chinese producers/exporters (Allied, ZG, Red Garden and Yelin) 
accounted for a significant percentage of all exports of the subject 
merchandise from the PRC during the POI and were selected as mandatory 
respondents. See Respondent Selection Memo at 4.

Non Market Economy Country

    For purposes of initiation, the Petitioners submitted LTFV analyses 
for the PRC as a non-market economy. See Initiation Notice, 69 FR at 
3880. In every case conducted by the Department involving the PRC, the 
PRC has been treated as a nonmarket-economy ("NME") country. In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a foreign country is an NME country shall remain in effect until 
revoked by the administering authority. See also Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, From the People's 
Republic of China: Preliminary Results 2001-2002 Administrative Review 
and Partial Rescission of Review, 68 FR 7500 (February 14, 2003). When 
the Department is investigating imports from an NME, section 773(c)(1) 
of the Act directs us to base the normal value on the NME producer's 
factors of production, valued in an economically comparable market 
economy that is a significant producer of comparable merchandise. The 
sources of individual factor prices are discussed under the "Factor 
Valuations" section, below.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base normal value ("NV"), 
in most circumstances, on the NME producer's factors of production, 
valued in a surrogate market-economy country or countries considered to 
be appropriate by the Department. In accordance with section 773(c)(4) 
of the Act, in valuing the factors of production, the Department shall 
utilize, to the extent possible, the prices or costs of factors of 
production in one or more market-economy countries that are at a level 
of economic development comparable to that of the NME country and are 
significant producers of comparable merchandise. The sources of the 
surrogate values we have used in this investigation are discussed under 
the NV section below.
    The Department determined that India, Indonesia, Sri Lanka, the 
Phillippines, Ecuador and Egypt are countries comparable to the PRC in 
terms of economic development. See Memorandum from Ron Lorentzen to 
James Doyle: Antidumping Duty Investigation onCertain Frozen and Canned 
Warmwater Shrimp from the People's Republic of China, dated March 10, 
2004. We select an appropriate surrogate country based on the 
availability and reliability of data from the countries. See Department 
Policy Bulletin No. 04.1: Non-Market Economy Surrogate Country 
Selection Process ("Policy Bulletin"), dated March 1, 2004. In this 
case, we have found that India is a significant producer of comparable 
merchandise, frozen and canned warmwater shrimp, and is at a similar 
level of economic development pursuant to 733(c)(4) of the Act. See 
Surrogate Country Memo at 7. Since our issuance of the Surrogate 
Country Memo, we have not received comments from interested parties 
regarding this issue.

Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to investigation in an NME country 
this single rate unless an exporter can demonstrate that it is 
sufficiently independent so as to be entitled to a separate rate. The 
four mandatory respondents and the Section A respondents have provided 
company-specific information and each has stated that it met the 
standards for the assignment of a separate rate.
    We have considered whether each PRC company is eligible for a 
separate rate. The Department's separate-rate test is not concerned, in 
general, with macroeconomic/border-type controls, e.g., export 
licenses, quotas, and minimum export prices, particularly if these 
controls are imposed to prevent dumping. The test focuses, rather, on 
controls over the investment, pricing, and output decision-making 
process at the individual firm level. See Certain Cut-to-Length Carbon 
Steel Plate from Ukraine: Final Determination of Sales at Less than 
Fair Value, 62 FR 61754, 61757 (November 19, 1997), and Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 62 FR 61276, 61279 (November 17, 1997).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Notice of Final 
Determination of Sales at Less Than Fair Value: Sparklers

[[Page 42661]]

from the People's Republic of China, 56 FR 20588 (May 6, 1991) 
("Sparklers"), as amplified by Notice of Final Determination of Sales 
at Less Than Fair Value: Silicon Carbide from the People's Republic of 
China, 59 FR 22585 (May 2,1994) ("Silicon Carbide"). In accordance 
with the separate-rates criteria, the Department assigns separate rates 
in NME cases only if respondents can demonstrate the absence of both de 
jure and de facto governmental control over export activities.

1. Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    Our analysis shows that the evidence on the record supports a 
preliminary finding of de jure absence of governmental control based on 
the following: (1) An absence of restrictive stipulations associated 
with the individual exporter's business and export licenses; (2) the 
applicable legislative enactments decentralizing control of the 
companies; and (3) any other formal measures by the government 
decentralizing control of companies. See Memorandum to Edward C. Yang, 
Director, Non-Market Economy Unit, Import Administration, from Julia 
Hancock and Hallie Zink, Case Analysts through James C. Doyle, Program 
Manager, Certain Frozen and Canned Warmwater Shrimp from the People's 
Republic of China: Separate Rates for Producers/Exporters that 
Submitted Questionnaire Responses, dated July 2, 2004 ("Separate Rates 
Memo").

2. Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a governmental agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; see also 
Notice of Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995). The Department has determined that an analysis of 
de facto control is critical in determining whether respondents are, in 
fact, subject to a degree of governmental control which would preclude 
the Department from assigning separate rates.
    We determine that, for the mandatory respondents and certain 
Section A respondents, the evidence on the record supports a 
preliminary finding of de facto absence of governmental control based 
on record statements and supporting documentation showing the 
following: (1) Each exporter sets its own export prices independent of 
the government and without the approval of a government authority; (2) 
each exporter retains the proceeds from its sales and makes independent 
decisions regarding disposition of profits or financing of losses; (3) 
each exporter has the authority to negotiate and sign contracts and 
other agreements; and (4) each exporter has autonomy from the 
government regarding the selection of management.
    Therefore, the evidence placed on the record of this investigation 
by the mandatory respondents and certain Section A respondents 
demonstrates an absence of government control, both in law and in fact, 
with respect to each of the exporter's exports of the merchandise under 
investigation, in accordance with the criteria identified in Sparklers 
and Silicon Carbide. As a result, for the purposes of this preliminary 
determination, we have granted separate, company-specific rates to the 
mandatory respondents and certain Section A respondents which shipped 
certain frozen and canned warmwater shrimp to the United States during 
the POI. For a full discussion of this issue and list of Section A 
respondents, please see the Separate-Rates Memo.

PRC-Wide Rate

    The Department has data that indicates there are more known 
exporters of the certain frozen and canned warmwater shrimp from the 
PRC during the POI that responded to our quantity and value ("Q&V") 
questionnaire. See Respondent Selection Memo. Although we issued the 
Q&V questionnaire to nine known Chinese exporters of subject 
merchandise (as identified in the petition), we received 57 Q&V 
questionnaire responses, including those from the four mandatory 
respondents. Also, on January 29, 2004, we issued a Section A 
questionnaire to the Government of the PRC (i.e., Ministry of 
Commerce). Although all known exporters were given an opportunity to 
provide information showing they qualify for separate rates, not all of 
these other exporters provided a response to either the Department's 
Q&V questionnaire or its Section A questionnaire. Further, the 
Government of the PRC did not respond to the Department's 
questionnaire. Therefore, the Department determines preliminarily that 
there were exports of the merchandise under investigation from other 
PRC producers/exporters, which are treated as part of the countrywide 
entity.
    Section 776(a)(2) of the Act provides that, if an interested party: 
(A) withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act; (C) significantly impedes a determination under the antidumping 
statute; or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Pursuant to section 782(e) of the Act, the Department shall not 
decline to consider submitted information if all of the following 
requirements are met: (1) The information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    Information on the record of this investigation indicates that 
there are numerous producers/exporters of the certain frozen and canned 
warmwater shrimp in the PRC. As described above, all exporters were 
given the opportunity to respond to the Department's questionnaire. 
Based upon our knowledge of the volume of imports of subject 
merchandise from the PRC and the fact that information indicates that 
the responding companies did not account for all imports into the 
United States from the PRC, we have preliminary determined that certain 
PRC exporters of certain frozen and canned warmwater shrimp failed to 
respond to our questionnaires. As a result, use of adverse facts 
available

[[Page 42662]]

("AFA") pursuant to section 776(a)(2)(A) of the Act is appropriate. 
Additionally, in this case, the Government of the PRC did not respond 
to the Department's questionnaire, thereby necessitating the use of AFA 
to determine the PRC-wide rate. See e.g., Notice of Preliminary 
Determination of Sales at Less Than Fair Value, Affirmative Preliminary 
Determination of Critical Circumstances and Postponement of Final 
Determination: Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam, 68 FR 4986 (January 31, 2003).
    Section 776(b) of the Act provides that, in selecting from among 
the facts available, the Department may employ adverse inferences if an 
interested party fails to cooperate by not acting to the best of its 
ability to comply with requests for information. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 
65 FR 5510, 5518 (February 4, 2000), See also "Statement of 
Administrative Action" accompanying the URAA, H.R. Rep. No. 103-316, 
870 (1994) ("SAA"). We find that, because the PRC-wide entity and 
certain producers/exporters did not respond at all to our request for 
information, they have failed to cooperate to the best of their 
ability. Therefore, the Department preliminarily finds that, in 
selecting from among the facts available, an adverse inference is 
appropriate.
    In accordance with our standard practice, as AFA, we have assigned 
the PRC-wide entity the higher of the highest margin stated in the 
notice of initiation (i.e., the recalculated petition margin) or the 
highest margin calculated for any respondent in this investigation. See 
e.g., Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Quality Steel Products from the People's 
Republic of China 65 FR 34660 (May 31, 2000) and accompanying Issues 
and Decision Memorandum, at Comment 1. In this case, we have applied a 
rate of 112.81 percent, the highest rate calculated in the Initiation 
Notice of the investigation from information provided in the petition. 
See e.g., Notice of Preliminary Determination of Sales at Less Than 
Fair Value: Stainless Steel Wire Rod From Germany, 63 FR 10847 (March 
5, 1998).

Corroboration of Information

    Section 776(b) of the Act authorizes the Department to use AFA 
information derived from the petition, the final determination from the 
LTFV investigation, a previous administrative review, or any other 
information placed on the record.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. Secondary information is described in the 
SAA as "information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise." See SAA at 870. The SAA provides that to 
"corroborate" means simply that the Department will satisfy itself 
that the secondary information to be used has probative value. Id. The 
SAA also states that independent sources used to corroborate may 
include, for example, published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. Id. As explained in Tapered Roller 
Bearings and Parts Thereof, Finished and Unfinished, from Japan, and 
Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and 
Components Thereof, from Japan; Preliminary Results of Antidumping Duty 
Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996) ("Japan Notice"), to 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
used.
    The Petitioners methodology for calculating the export price and NV 
in the petition is discussed in the initiation notice. See Initiation 
Notice, 69 FR at 3876. To corroborate the AFA margin of 112.81 percent, 
we compared that margin to the margin we found for the largest 
exporting respondent.
    As discussed in the Memorandum to the File regarding the 
corroboration of the AFA rate, dated June 17, 2004, we found that the 
margin of 112.81 percent has probative value. See Memorandum to the 
File from Alex Villanueva, Senior Case Analyst through James C. Doyle, 
Program Manager and Edward C. Yang, Director, NME Unit, Preliminary 
Determination in the Investigation of Certain Frozen and Canned 
Warmwater Shrimp from the People's Republic of China, Corroboration 
Memorandum ("Corroboration Memo"), dated July 2, 2004. Accordingly, 
we find that the lowest margin, based on the petition information as 
described above, of 112.81 percent is corroborated within the meaning 
of section 776(c) of the Act.
    Consequently, we are applying a single antidumping rate--the PRC-
wide rate--to producers/exporters that failed to respond to the Q&V 
questionnaire or Section A questionnaire, as well as to exporters which 
did not demonstrate entitlement to a separate rate. See e.g., Final 
Determination of Sales at Less Than Fair Value: Synthetic Indigo from 
the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The 
PRC-wide rate applies to all entries of the merchandise under 
investigation except for entries from the four mandatory respondents 
and certain Section A respondents.
    Because this is a preliminary determination, the Department will 
consider all margins on the record at the time of the final 
determination for the purpose of determining the most appropriate final 
PRC-wide margin. See Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Saccharin from the People's Republic of China, 67 
FR 79049, 79054 (December 27, 2002).

Margins for Section A Respondents

    The exporters which submitted responses to Section A of the 
Department's antidumping questionnaire and had sales of the subject 
merchandise to the United States during the POI but were not selected 
as mandatory respondents in this investigation (Section A respondents) 
have applied for separate rates and provided information for the 
Department to consider for this purpose. Therefore, for the Section A 
respondents which provided sufficient evidence that they are separate 
from the countrywide entity and answered other questions in section A 
of the questionnaire, we have established a weighted-average margin 
based on the rates we have calculated for the four mandatory 
respondents, excluding any rates that are zero, de minimis, or based 
entirely on adverse facts available. Companies receiving this rate are 
identified by name in the "Suspension of Liquidation" section of this 
notice.

Date of Sale

    Section 351.401(i) of the Department's regulations state that "in 
identifying the date of sale of the subject merchandise or foreign like 
product, the Secretary normally will use the date of invoice, as 
recorded in the exporter or producer's records kept in the normal 
course of business." After examining the sales documentation placed on 
the record by the respondents, we preliminarily determine that invoice 
date is the most

[[Page 42663]]

appropriate date of sale for three of the four respondents. We made 
this determination because, at this time, there is not enough evidence 
on the record to determine that the contracts used by the respondents 
establish the material terms of sale to the extent required by our 
regulations in order to rebut the presumption that invoice date is the 
proper date of sale. See Saccharin from China, 67 FR at 79054.
    With respect to the respondent ZG, we preliminarily determine that 
the contract date and/or purchase order dates are the most appropriate 
dates of sale because the terms of sale do not change after the 
contract is signed or the purchase order is received. ZG also stated 
that for some customers the contract date is not available because 
repeat customers do not use contracts, but choose to conduct their 
transactions using only a purchase order. ZG explained that both the 
contract date and purchase order date are generated prior to the 
issuance of the invoice. ZG also stated that the invoice is not issued 
until the product is shipped. Furthermore, ZG stated that the terms of 
sale do not change after the contract is signed or the purchase order 
is received. Section 351.401(i) of the Department's regulations state 
that "the Secretary may use a date other than the date of invoice if 
the Secretary is satisfied that a different date on which the exporter 
or producer established the materials terms of sale." Given the unique 
business operations by ZG to set the material terms of sale at the 
contract date or in the absence of a contract date, the purchase order 
date, we have preliminarily determined that the contract date or 
purchase order date is the most appropriate date to use ZG's date of 
sale. For a detailed discussion of the company-specific analysis 
memorandum.

Appropriate Basis for Comparison

    On May 24, 2004, the Department requested comments from interested 
parties on whether product comparisons and margin calculations in this 
investigation should be performed based on data provided on an "as 
sold" basis or whether those comparisons and calculations should be 
performed on data converted to a headless, shell-on ("HLSO") basis.
    On June 4, 2004, the Department received comments on HLSO 
comparison from Shantou Red Garden Foodstuff Co., Ltd. ("Red 
Garden"). On June 7, 2004, and June 10, 2004, the Department received 
comments from the Petitioners in support of subject merchandise on an 
HLSO basis. Red Garden argues that by valuing shrimp products on an 
HLSO basis, when a significant quantity of such products are not sold 
on an HLSO basis, effectively requires converting shrimp products from 
a non-HLSO basis to an HLSO basis by employing conversion coefficients 
to the quantities and values of the subject merchandise. This 
conversion method alters the count-sizes and prices of shrimp in many 
instances where count-size and prices were not sold on an HLSO basis, 
but were subsequently converted for this investigation to an HLSO 
basis. Several other comments were submitted by interested parties both 
in support of and in opposition to calculating a margin on an HLSO 
basis, although those comments pertained to the Department's market 
economy analysis of product comparisons in the U.S., home, and/or third 
country markets. Since the market economy methodology of product 
comparisons does not apply in NME investigations, those comments will 
be addressed in the preliminary determinations for the market economy 
countries subject to this investigation.
    Section 773(c)(1)(B) of the Act requires that the Department value 
the factors of production that a respondent uses to produce the subject 
merchandise. The Department notes that it will be less accurate to rely 
on HLSO quantities sold and HLSO values of the subject merchandise, 
rather than relying on actual quantities sold and actual values of the 
subject merchandise.
    The Petitioners argue that using an HLSO conversion method will 
give a consistent basis for weight-averaging the unit margins in the 
calculation of the overall weight-averaged margin. To achieve the 
consistent measuring basis, the Petitioners' suggest converting actual 
quantities and values of subject merchandise sold by HLSO coefficients 
to standardize the different types of subject merchandise sold.
    The Department examined the Petitioners' suggested methodology, 
which seeks to achieve a consistent measuring standard by adjusting 
subject merchandise product values and yields on a HLSO basis. However, 
the Department's current NME methodology for calculating margins also 
achieves consistency through valuing subject merchandise on an actual, 
as sold basis. The Department notes that when calculating the estimated 
weighted-average margin, the Department totals the margins for all 
CONNUMs to derive the total dumping margin of the company. The values 
generated from totaling the margins and sales values for all CONNUMs do 
not require converting quantities to the same basis.
    The Petitioners also argue that the CONNUM assignment should be 
altered to place more weight on the species of subject merchandise, as 
it is the species type that is a predominant factor in determining 
shrimp prices. However, the Department notes that the placement of the 
shrimp species category in the order of CONNUM assignments does not 
increase or decrease the weight given to that category in nonmarket 
economy margin calculations. In the NME margin calculation methodology, 
the CONNUM hierarchy is inconsequential to the normal value 
calculation, because each CONNUM characteristic is afforded equal 
weight when calculating CONNUM-specific normal values. However, as this 
issue is relevant to the market economy margin calculation methodology, 
this issue will be addressed by the preliminary determinations of the 
market economy countries subject to this investigation.

Fair Value Comparisons

    To determine whether sales of certain frozen and canned warmwater 
shrimp to the United States of the four mandatory respondents were made 
at less than fair value, we compared export price ("EP") or 
constructed export price ("CEP") to NV, as described in the "U.S. 
Price" and "Normal Value" sections of this notice.

U.S. Price

    In accordance with section 772(a) of the Act, we used EP for the 
four mandatory respondents, because the subject merchandise was first 
sold (or agreed to be sold) before the date of importation by the 
producer or exporter of the subject merchandise outside of the United 
States to an unaffiliated purchaser in the United States or to an 
unaffiliated purchaser for exportation to the United States, and 
because the use of constructed export price was not otherwise 
indicated. In accordance with section 772(b) of the Act, we used CEP 
for Yelin because the subject merchandise was sold in the United States 
after the date of importation by a U.S. seller affiliated with the 
producer.
    We calculated EP and CEP based on the packed F.O.B., C.I.F., or 
delivered price to unaffiliated purchasers in, or for exportation to, 
the United States. We made deductions, as appropriate, for any movement 
expenses (e.g., foreign inland freight from the plant to the port of 
exportation, domestic brokerage, ocean freight, marine insurance, U.S. 
brokerage, and inland freight from warehouse to unaffiliated U.S. 
customer) in accordance with section 772(c)(2)(A) of the Act. For a 
detailed description of all adjustments, see the

[[Page 42664]]

company-specific analysis memorandum dated July 2, 2004.
    In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the CEP by deducting selling expenses associated 
with economic activities occurring in the United States, which includes 
credit and indirect selling expenses. We compared NV to weighted-
average EPs and CEPs, in accordance with section 777A(d) of the Act. 
Where appropriate, in accordance with sections 772(d)(3) and 772(f) of 
the Act, we deducted CEP profit. For a discussion of the surrogate 
values used for the movements deductions, see the Factor Valuation Memo 
at Exhibits 6-9.
    Respondent Yelin indicated that it purchased subject merchandise 
from a number of unaffiliated suppliers. Yelin stated that these 
unaffiliated suppliers "had constructive knowledge of the final 
destination of the merchandise." See Yelin's May 4, 2004, submission 
at 1. For these unaffiliated suppliers, Yelin stated that "the 
merchandise was purchased by and sold to HK Yelin in convertible 
currency ($US), was marked in a manner consistent with goods destined 
for the United States, was packaged and sold to HK Yelin in condition 
ready for shipment to and resale in the U.S. market, and was not 
processed by any of the Yelin companies prior to shipment or after 
importation." See Yelin's May 4, 2004, submission at 2. Yelin provided 
evidence that demonstrates that purchase orders, commercial invoices 
and certificates of origin all indicate an ultimate delivery to the 
United States. See Yelin's May 4, 2004, submission at Exhibit 2-4. In 
Wonderful Chemical Indus., Ltd. v. United States, F.Supp. 2d 1273 (CIT 
2003), the Court of International Trade affirmed the manner in which 
the Department administered this "knowledge test" in Synthetic Indigo 
from the People's Republic of China, Final Determination of Sales at 
Less than Fair Value, 65 FR 25706 (May 3, 2000). The CIT also 
summarized the Department's application of the "knew or had reason to 
know" test in NME cases. The Department also applied this "knowledge 
test" and excluded sales made by a party having such knowledge from 
the margin calculation in Canned Pineapple Fruit From Thailand, Notice 
of Final Results of Antidumping Duty Administrative Review, 63 FR 7392 
(February 13, 1998), in Dynamic Random Access Memory Semiconductors of 
One Megabit or Above from the Republic of Korea, Final Results of 
Antidumping Duty Administrative Review and Determination Not to Revoke 
the Order in Part, 64 FR 69694 (December 14, 1999), and in Certain 
Headwear from the People's Republic of China, Final Determination of 
Sales at Less than Fair Value, 54 FR 11983 (March 23, 1989). 
Consequently, based on the record evidence, we did not request the 
factors of production from these unaffiliated suppliers for these U.S. 
sales and have not included these sales in our margin calculations as 
they are EP sales of the unaffiliated suppliers to a foreign market.
    In addition, in response to a supplemental questionnaire, Shantou 
Yelin indicated that for this one U.S. sale it did not take title of 
the subject merchandise and the subject merchandise was delivered/
released directly to Yelin prior to U.S. exportation. In addition, as 
with other purchases from unaffiliated manufacturers, Yelin purchased 
in "U.S. dollars and references U.S. brand names, U.S. packaging sizes 
and types; the retail packaging prepared by the supplier contains FDA 
labeling requirements and the name of the ultimate U.S. distributors; 
microbial reports are prepared by the supplier of U.S. entry and FDA 
purposes; and country of origin certifications and freight 
documentation indicate a U.S. destination for these sales." See 
Yelin's June 8, 2004, Submission at 30. In addition, the unaffiliated 
supplier stated and provided evidence that it had constructive 
knowledge of the final destination of the merchandise. See Yelin's June 
8, 2004, Submission at 6-10. "The merchandise was purchased by and 
sold to HK Yelin in convertible currency ($US), was marked in a manner 
consistent with goods destined for the U.S., was sold to HK Yelin in 
condition ready for shipment to and resale in the U.S. market, and was 
not further processed by any of the Yelin companies in condition ready 
for shipment to and resale in the U.S. market, and was not further 
processed by any of the Yelin companies prior to shipment or after 
importation." See Yelin's April 21, 2004, Submission at 37. 
Consequently, based on the record evidence, we did not request the 
factors of production from the unaffiliated supplier for this one U.S. 
sale and have not included this sale in our margin calculations as it 
is an EP sale of the unaffiliated supplier to a foreign market. See 
Yelin's May 4, 2004, submission at Exhibit 1.
    Red Garden reported that all sales of subject merchandise to the 
United States during the POI were sold to Red Chamber Co. ("Red 
Chamber"), and that Red Chamber is affiliated with Red Garden. Section 
772(b) of the Act states that the Department must base its CEP 
calculations on the price at which the subject merchandise is first 
sold in the United States to a purchaser not affiliated with the 
producer or exporter, as adjusted. Because Red Garden considers Red 
Chamber to be affiliated, Red Garden argues that the Department should 
use Red Chamber's downstream sales to its unaffiliated customers in the 
United States for Red Garden's CEP sales of subject merchandise.
    Section 771(33) of the Act states that the Department considers the 
following as affiliated: (A) Members of a family, including brothers 
and sisters (whether by the whole or 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; and (G) any person who controls any 
other person and such other person. For purposes of affiliation, 
section 771(33) states that a person shall be considered to control 
another person if the person is legally or operationally in a position 
to exercise restraint or direction over the other person. In order to 
find affiliation between companies, the Department must find that at 
least one of the criteria listed above is applicable to the 
respondents.
    Red Garden believes it is affiliated with Red Chamber because 100% 
of Red Garden's sales of subject merchandise during the POI were to Red 
Chamber. However, Red Garden also indicated that no equity relationship 
exists between Red Garden and Red Chamber. See March 31, 2004, Section 
A response at A-2. In addition, there is no indication that any form of 
affiliation as defined under sections 771(33)(A) through (E) of the Act 
exists between Red Garden and Red Chamber. Thus, any affiliation 
between Red Garden and Red Chamber would only be determined under 
section 771(33)(F) (two or more persons directly or indirectly 
controlling, controlled by, or under common control with, any person) 
or (G) (any person who controls any other person and such other 
person).
    When, as in this case, the Department is faced with a commercial 
relationship between the foreign producer and a U.S. entity, and there 
is a question as to whether the producer has legal or operational 
control over the U.S. entity, or vice versa, the Department will 
examine the facts and circumstances to

[[Page 42665]]

determine whether the parties are affiliated. The Department's 
affiliation analysis is based on the facts and circumstances of a given 
relationship. As the Department has noted, "the analysis of whether a 
relationship constitutes an agency is case-specific and can be quite 
complex; there is no bright line test." See Notice of Final 
Determination of Sales at Less Than Fair Value: Engineered Process Gas 
Turbo-Compressor Systems, Whether Assembled or Unassembled, and Whether 
Complete or Incomplete, from Japan, 62 FR 24403 (May 5, 1997) ("Turbo-
Compressors from Japan"). It is the Department's normal practice to 
find a principal-agent relationship when one is established by a 
written agreement as in Notice of Preliminary Determination of Sales at 
Less Than Fair Value: Silicomanganese from Kazakhstan, 66 FR 56639 
(November 9, 2002) ("Silicomanganese from Kazakhstan"), and that the 
existence of such a formal arrangement is a sufficient basis to find 
affiliation. See Silicomanganese from Kazakhstan. The Department 
considers the "control of the principal over its agent" to be "the 
hallmark of an agency relationship." In prior cases, the Department 
has found that a principal/agent relationship is characterized by 
control because "{t{time} he agent may act only to the extent that its 
actions are consistent with the authority granted by the principal." 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Engineered Process Gas Turbo-Compressor Systems, Whether Assembled or 
Unassembled, and Whether Complete or Incomplete, from Japan, 62 FR 
24403, 24407 (May 5, 1997) ("Turbo-Compressors from Japan"). Even in 
the absence of a formal agreement, when the Department finds evidence 
that the foreign producer has the potential to control pricing and/or 
the terms of sale through the agent to the end-customer, it will find 
that an affiliation exists with the agent. See Notice of Final Results 
of Antidumping Duty Administrative Review: Furfuryl Alcohol from South 
Africa, 62 FR 61084 (November 14, 1997). The Department also considers 
who bears the risk of loss as probative of whether one company is 
acting as an agent for another. However, this is not a formalistic 
exercise. The Department only considers the existence of a principal/
agent relationship (actual or effective) to the extent that it is 
probative of Commerce's fundamental inquiry: is one party in a position 
to exercise legal or operational restraint or direction over the other?
    In this case, we note that while Red Garden may sell 100% of its 
subject merchandise to Red Chamber, Red Chamber purchases subject 
merchandise from multiple suppliers in the PRC in addition to Red 
Garden. See Red Chamber's May 4, 2004, response at Exhibit B-1. Thus, 
Red Chamber does not exclusively purchase subject merchandise from Red 
Garden. Nor have they argued that Red Chamber has controlled Red 
Garden's production or sales decisions, or vice versa. Red Chamber and 
Red Garden have not provided evidence of an agreement indicating that 
Red Chamber is Red Garden's agent in the United States. Red Garden and 
Red Chamber also have not argued that Red Chamber bears the risk of 
loss prior to shipment from Red Garden, other than through normal CNF 
terms of sale, or that Red Garden bears any risks subsequent to 
delivery to Red Chamber.
    Based on the record evidence, the Department therefore finds that 
Red Garden and Red Chamber do not maintain a principal agent 
relationship, and there is no indication that Red Chamber is in a 
position to exercise legal or operational control over Red Garden's 
decisions concerning the production, pricing, or cost of the subject 
merchandise, or vice versa.
    As such, we preliminarily determine that the record evidence does 
not support a finding that Red Garden is controlled by Red Chamber, or 
vice versa. Therefore, we preliminarily find these two companies are 
not affiliated. Because Red Garden's first arm's-length transaction 
therefore occurred upon the sale to Red Chamber, we have based our 
margin calculation for Red Garden on Red Garden's EP sales to Red 
Chamber.

Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information requested by the Department, fails to provide 
such information by the deadline or in the form or manner requested, 
significantly impedes a proceeding, or provides information which 
cannot be verified, the Department shall use facts otherwise available 
in reaching the applicable determination.
    Section 782(e) of the Act requires the Department to consider 
information that is submitted by the respondent and is necessary to the 
determination but does not meet all the applicable requirements 
established by the Department if: (1) The information is submitted by 
the deadline established for its submission; (2) the information can be 
verified; (3) the information is not so incomplete that it cannot serve 
as a reliable basis for reaching the applicable determination; (4) the 
interested party has demonstrated that it acted to the best of its 
ability in providing the information and meeting the requirements 
established by the Department with respect to the information; and (5) 
the information can be used without undue difficulties.
    Red Garden did not provide the factors of production for the 
following suppliers of subject merchandise sold to the United States: 
Chaoyang Jindu Hengchang Aquatic Products Enterprise Co., Ltd. 
("Hengchang"), Raoping County Longfa Seafoods Co., Ltd. ("Longfa"), 
and Meizhou Aquatic Products Quick-Frozen Industry Co., Ltd. Shengping, 
Shantou ("Meizhou"). Section 773(c)(1) of the Act provides that the 
Department shall determine the NV using a factors-of-production 
methodology if: (1) The merchandise is exported from an NME country; 
and (2) the information available does not permit the calculation of NV 
using home-market prices, third-country prices, or constructed value 
under section 773(a) of the Act. Because the Department considers the 
PRC to be an NME, we must calculate NV using factors of production in 
accordance with section 773(c).
    Red Garden reported that Hengchang and Longfa each supplied a minor 
amount of subject merchandise to Red Garden for sale to the United 
States during the POI. See Red Garden's Analysis Memo at 3. Red Garden 
requested that the Department ignore the factors of production from 
these two companies because the quantity was approximately one percent 
or less of Red Garden's total subject merchandise sales to the United 
States, and the collection and reporting of such data would pose an 
undue administrative burden for the respondent. See Red Garden's April 
21, 2004, response at D-2 and May 4, 2004, response at 3. Accordingly, 
we have substituted the reported factors of production from Red 
Garden's other suppliers to determine the NV of Red Garden's sales of 
subject merchandise which were produced by Hengchang and Longfa, as 
facts available under section 776(a)(2) of the Act. We note that all 
CONNUMs for Red Garden's sales of subject merchandise to the United 
States during the POI that were produced by Hengchang and Longfa are 
also produced by Mingfeng and/or Longfeng. As facts available, we have 
preliminarily substituted Mingfeng and/or Longfeng's factors of 
production by CONNUM for merchandise produced by Hengchang and Longfa.
    Red Garden has stated that Meizhou, an additional supplier of 
subject merchandise that Red Garden sold to the United States, does not 
have

[[Page 42666]]

adequate verifiable documents in the POI in order to report its factors 
of production. See Red Garden's June 18, 2004, response at 18. Because 
Red Garden failed to provide the necessary information to determine the 
NV of those sales that were produced by Meizhou, the Department finds 
that applying facts available under section 776(a)(2) of the Act is 
warranted. We note that all CONNUMs for Red Garden's sales of subject 
merchandise to the United States during the POI which were produced by 
Meizhou are also produced by Mingfeng and/or Longfeng. As facts 
available, we have preliminarily substituted Mingfeng and/or Longfeng's 
factors of production by CONNUM for merchandise produced by Meizhou.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if the 
merchandise is exported from an NME country and the information does 
not permit the calculation of NV using home-market prices, third-
country prices, or constructed value under section 773(a) of the Act. 
The Department will base NV on factors of production because the 
presence of government controls on various aspects of these economies 
renders price comparisons and the calculation of production costs 
invalid under its normal methodologies.
    For purposes of calculating NV, we valued the PRC factors of 
production in accordance with section 773(c)(1) of the Act. Factors of 
production include, but are not limited to hours of labor required, 
quantities of raw materials employed, amounts of energy and other 
utilities consumed, and representative capital costs, including 
depreciation. In examining surrogate values, we selected, where 
possible, the publicly available value which was an average non-export 
value, representative of a range of prices within the POI or most 
contemporaneous with the POI, product-specific, and tax-exclusive. We 
used the usage rates reported by respondents for materials, energy, 
labor, by-products, and packing. For a more detailed explanation of the 
methodology used in calculating various surrogate values, see Factor-
Valuation Memo.
    In response to a supplemental questionnaire dated June 8, 2004, ZG 
stated that it leased shrimp ponds for breeding. See ZG's June 8, 2004, 
Submission at 16. On June 24, 2004, in response to another supplemental 
questionnaire, ZG provided sample lease agreements for the leasing of 
the shrimp ponds. See ZG's June 24, 2004, Submission at Exhibit 2. We 
have determined that this factor is an important component in the cost 
build-up of NV and is not reflected in the financial ratios calculated 
from Devi Sea Foods, Ltd. and Sandhya Marines, Ltd. financial 
statements. Consequently, we have valued the cost of land using 
information contained in a Notification of Policy for Land Revenue 
issued by the State of Rajasthan, India (Indian Policy") which can be 
found at http://www.investrajasthan.com/pdf/policy/wastelandpolicy.pdf 

(last visited July 2, 2004).
    In that Indian Policy, the Indian State of Rajasthan set the cost 
of land and lease rent for cultivable wasteland. The annual lease rent 
for the land increases over the period of ten years, as the land 
becomes increasingly arable. For example, after ten years, presumably 
at the time the land is fully cultivable, the annual lease rent is set 
at 400 rupees per hectare.
    Based on the limited information available at this time, we have 
determined that the rates presented in this Indian Policy serve as the 
most reliable surrogate value for calculating a cost of the shrimp 
ponds used to grow the subject merchandise as this is the only 
information on the record to value ZG's land lease costs. Furthermore, 
we find that the price for land that has been cultivated for more than 
ten years (400 Rs / Hectare) is the most appropriate surrogate value, 
because the land is currently being used for cultivation of food 
products. In order to determine the land lease cost for each unit of 
production of subject merchandise during the POI, we pro-rated the land 
lease price to reflect the six months of the POI. In addition, because 
the data is not contemporaneous with the POI, we adjusted the rate for 
inflation. We then converted the price from Rs to USD, and multiplied 
the USD per hectare price by the number of hectares of ponds leased by 
ZG, and allocated that POI costs over Zhanjiang's total POI production 
of subject merchandise. See ZG's analysis memorandum for the 
calculation of the per kilogram amount of land lease that was added to 
overhead.
    With regard to Red Garden, who also leased shrimp ponds, we do not 
have the necessary information at this time to calculate a land-lease 
cost. Although the Department recognizes that this portion of overhead 
may not be captured in the margin calculation because the Department 
did not request this information from Red Garden, we are not valuing 
Red Garden's land-lease costs for shrimp ponds in this preliminary 
determination. However, the Department will request the necessary 
information in a supplemental questionnaire and may use this 
information for the final determination.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POI. To 
calculate NV, we multiplied the reported per-unit factor quantities by 
publicly available Indian surrogate values (except as discussed below). 
In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices by including freight costs to make them delivered 
prices. Specifically, we added to Indian import surrogate values a 
surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the distance from the nearest 
seaport to the factory where appropriate. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). For a 
detailed description of all surrogate values used for respondents, see 
Factor-Valuation Memo. Due to the extensive number of surrogate values 
it was necessary to assign in this investigation, we present a 
discussion of the main factors. For a detailed description of all 
surrogate values used for respondents, see Factor-Valuation Memo. For a 
detailed description of all actual values used for market-economy 
inputs, see the company-specific analysis memorandum dated July 2, 
2004.
    Except as discussed below, we valued raw material inputs using the 
weighted-average unit import values derived from the World Trade 
Atlas[reg] online ("Indian Import Statistics"). See Factor-Valuation 
Memorandum. The Indian Import Statistics we obtained from the World 
Trade Atlas were published by the DGCI&S, Ministry of Commerce of 
India, which were reported in rupees and are contemporaneous with POI. 
Where we could not obtain publicly available information 
contemporaneous to the POI with which to value factors, we adjusted the 
surrogate values using the Indian Wholesale Price Index ("WPI") as 
published in the International Financial Statistics of the 
International Monetary Fund.
    Furthermore, with regard to both the Indian import-based surrogate 
values and the market-economy input values, we have disregarded prices 
that we have reason to believe or suspect may be subsidized. We have 
reason to believe or

[[Page 42667]]

suspect that prices of inputs from Indonesia, South Korea, and Thailand 
may have been subsidized. We have found in other proceedings that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, it is reasonable to infer that all exports to 
all markets from these countries may be subsidized. See Final 
Determination of Sales at Less Than Fair Value: Certain Helical Spring 
Lock Washers From The People's Republic, 61 FR 66255 (February 12, 
1996) and accompanying Issues and Decision Memorandum at Comment 1. We 
are also directed by the legislative history not to conduct a formal 
investigation to ensure that such prices are not subsidized. See H.R. 
Rep. 100-576 at 590 (1988). Rather, Congress directed the Department to 
base its decision on information that is available to it at the time it 
makes its determination. Therefore, we have not used prices from these 
countries either in calculating the Indian import-based surrogate 
values or in calculating market-economy input values. In instances 
where a market-economy input was obtained solely from suppliers located 
in these countries, we used Indian import-based surrogate values to 
value the input. See Notice of Final Determination of Sales at Less 
Than Fair Value and Negative Final Determination of Critical 
Circumstances: Certain Color Television Receivers From the People's 
Republic of China ("CTVs from the PRC"), 69 FR 20594 (April 16, 
2004).
    Finally, imports that were labeled as originating from an 
"unspecified" country were excluded from the average value, because 
the Department could not be certain that they were not from either an 
NME or a country with general export subsidies. Unit values were 
generally calculated in U.S. dollars ("USD") per kilogram ("kg").
    On May 10, 2004, the Department requested all mandatory respondents 
to provide a chart indicating the Harmonized Tariff Schedule ("HTS") 
heading and article description for each mandatory respondent's factors 
of production. The Department prefers to rely upon the mandatory 
respondents' HTS classification for its inputs during the POI. However, 
for HTS classifications which were supplied incorrectly by the 
mandatory respondents, we applied the most similar HTS classification 
that best captured the factor of production described by the 
Respondents. Where import data is not available for the POI, the 
Department sought to obtain data for the six-month period immediately 
preceding the POI (10/2002-03/2003). As a third alternative, the 
Department sought to obtain data for the period preceding that the 
period (i.e., 03/2002-09/2002). Where input values were not 
contemporaneous with the POI, we adjusted them for inflation using the 
IMF's WPI rate for India.
    Indian surrogate values denominated in foreign currencies were 
converted to USD using the applicable average exchange rate for India 
for the POI. The average exchange rate was based on exchange rate data 
from the Department's Web site. The POI exchange rate used is 0.02149 
USD per Rupee.

Shrimp Surrogate Value

    The Department notes that the value of the main input, head-on, 
shell-on ("HOSO") shrimp, is an important factor of production in our 
dumping calculation as it accounts for a significant percentage of 
normal value. As a general matter, the Department prefers to use 
publicly available data to value surrogate values from the surrogate 
country to determine factor prices that, among other things: represent 
a broad market average; are contemporaneous with the POI; and are 
specific to the input in question. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Saccharin from the 
People's Republic of China, 68 FR 27530, (May 20, 2003) and 
accompanying Issues and Decision Memorandum, at Comment 1. In this 
instance, none of the values placed on the record by the Respondents or 
the Petitioners wholly satisfies all three of these requirements.
    The Department only considers using surrogate values outside the 
primary surrogate country if there are no values from that country 
available or if it decides that the values available are aberrational 
or otherwise unsuitable for use. The Respondents and Petitioners have 
placed numerous Indian shrimp values on the record. In this case, the 
Department has found a suitable surrogate value for shrimp from the 
surrogate country. Therefore, using a surrogate value from a country 
other than one from India is not necessary. Consequently, the 
Department did not use any shrimp values from a surrogate country other 
than India.
    The Department notes that the Petitioners and Respondents have 
argued at different times that count size is an important factor in the 
control number ("CONNUM") creation. See Petitioners submission of 
February 4, 2004, at 3; Respondents' February 4, 2004, submission at 
Attachment 1. However, an analysis of the Respondents' count size data 
demonstrates that the final count size prices suggested by the 
Respondents relied upon numerous assumptions.
    On May 21, 2004, the Respondents submitted surrogate factor prices 
to value raw shrimp. Specifically, the Respondents proposed a surrogate 
value based on prices published by SEAI in the regions of Andarah 
Pradesh and Tamil Nadu. See Respondents' May 21, 2004, Submission at 
Exhibit 3. The Respondents explained that SEAI is the organization that 
represents Indian exporters and processors of shrimp and has offices in 
the main shrimp producing regions of India. The SEAI prices proposed by 
the Respondents represented different counts sizes of raw shrimp sold 
from farms to exporters and processors. According to the Respondents, 
the prices from SEAI are contemporaneous with the POI and reflect 
values for shrimp purchased. The Respondents also stated that the SEAI 
prices represent prices from two regions in India accounting for over 
55% of the Indian shrimp industry's total production. See Respondents' 
May 21, 2004, Submission at Exhibit 3.
    On June 4, 2004, the Petitioners argued that the Respondents' SEAI 
prices are not publically available. The Petitioners provided an 
affidavit from an Indian market researcher which states that SEAI does 
not collect or publish the information provided in Exhibit 3 of the 
Respondents' May 21, 2004, submission to the public at large. See 
Petitioner's June 4, 2004, Submission at Attachment II. Furthermore, 
the Petitioners argue that SEAI's prices are only available to members 
of SEAI.
    The Petitioners also argue that the pricing data provided by the 
Respondents is data that does not represent market prices because they 
do not appear to reflect actual sales transactions and because they are 
suggested minimum prices by committee and should be considered floor 
prices. The Petitioners note that the affidavit provided from their 
Indian market researcher states that "SEAI does not collect or 
maintain actual fresh shrimp transaction prices but provides suggested 
minimum prices to be offered to fresh shrimp suppliers." See 
Petitioners' June 4, 2004, Submission at 6. In addition, the 
Petitioners argue that the Respondents have engaged in selectively 
submitting a very limited amount of data as the Respondents have only 
provided a limited period of prices. Therefore, the Petitioners propose 
that the Department use a surrogate value calculated from the May 2002-
June 2003 financial statements of Apex Foods Ltd., a shrimp processor 
in Bangladesh or a surrogate value calculated from the

[[Page 42668]]

April 2002-March 2003 financial statements of Nekkanti Sea Foods Ltd.
    On June 10, 2004, the Department issued the Respondents a 
supplemental questionnaire regarding the surrogate values, including 
the SEAI prices. On June 21, 2004, the Respondents provided their 
response. On June 28, 2004, the Department called SEAI and spoke with 
Mr. Reddy Raghuanath, the current Secretary General of SEAI regarding 
the values submitted by the Respondents. See Memorandum to the File 
from James C. Doyle Regarding Phone Call to the Seafood Exporter's 
Association of India ("SEAI"), dated June 28, 2004 ("SEAI Memo").
    Based on the record evidence, although the Department would prefer 
to use count-size specific surrogate values for the raw shrimp input, 
the Department finds that the only count-size specific surrogate value 
submitted by the Respondents is not the most appropriate basis for 
valuing the raw shrimp input for numerous reasons.
    First, we note that the Department practice is to rely on publicly 
available data. See Notice of Final Determination of Sales at Less Than 
Fair Value: Polyvinyl Alcohol from the People's Republic of China, 68 F 
47538 (August 11, 2003) and accompanying Issues and Decision Memorandum 
at Comment 1. As indicated in the SEAI Memo, Mr. Rughuanath stated that 
these prices are "only available to members of the SEAI." See SEAI 
Memo. In addition, we asked Mr. Rughuanath if these prices could be 
made available to the Department. Although Mr. Rughuanath explained 
that he would get back to us, we did not receive any further 
communication from him before the preliminary determination. We also 
attempted to locate these prices on the internet and were unsuccessful 
as SEAI does not maintain a website. Therefore, given that the 
Petitioners' Indian market researcher and the Department were unable to 
locate these prices either via the internet or through our request to 
SEAI, we do not consider these prices to be publicly available.
    Second, the SEAI prices provided by the Respondents are not 
representative of the entire POI for those prices from the Andarah 
Pradesh region. The Respondents only provided prices from a selected 
time period within the POI. Specifically, the Respondents provided 
prices distributed on June 6, 2003, June 21, 2003, July 26, 2003, and 
August 9, 2003. In addition, it is unclear as to whether the SEAI 
prices provided by the Respondents are weekly or daily. Mr. Rughuanath 
indicated that these prices are distributed monthly, however, the 
Respondents provided two sources from SEAI for the month of June 2003. 
With regard to the SEAI prices from the Tamil Nadu region, the 
Department notes that although these prices are contemporaneous with 
the POI because it is an average price from the POI, it is unclear as 
to how the average was derived. Therefore, given that the SEAI prices 
from the Andarah Pradesh region represent only a selected number of 
prices and that the SEAI prices from the Tamil Nadu region are not 
provided with supporting documentation (i.e., daily or weekly price 
circulars), we do not consider these prices to be a broad market 
average.
    In addition, the record contains conflicting statements regarding 
the representativeness of the regions from which the SEAI prices were 
obtained. Mr. Raghuanath stated that the Andarah Pradesh and Tamil Nadu 
regions account for 10-11% of India's shrimp purchases. See SEAI Memo. 
However, the Respondents' May 21, 2004, submission indicates that these 
two regions produced over 55% of the Indian shrimp industry's 
production. See Respondents' May 21, 2004, submission at Exhibit 3. The 
reliability of the Respondents' supporting documentation is called into 
question by the statements made by SEAI Secretary General. See SEAI 
Memo. Consequently, it is unclear how the purchased amounts reconcile 
with the production figures cited by the Respondents. Therefore, the 
representativeness of the Andarah Pradesh and Tamil Nadu regions of 
India's shrimp industry as a source for a shrimp surrogate value is 
unreliable.
    Finally, even if the Department were to use SEAI's count-size 
specific prices, the count sizes reported by the Respondents do not 
directly correspond to the count sizes indicated in SEAI's prices. The 
Respondents' count sizes are provided on a range basis (e.g., 61-70 and 
71-80) and these ranges are not consistent with the count-size SEAI 
prices (e.g., 60, 70, 80, etc.). For example, if a Respondent reported 
a count size of 41-50, it is unclear as to which SEAI price would be 
applicable, the 41 count price or the 50 count price. The Department 
would also need to adjust prices into different count sizes. Therefore, 
because of the lack of consistency between the count sizes in SEAI's 
prices and the Respondents' reported count sizes, the Department 
determines that relying on SEAI prices and applying them to the 
Respondents' reported count sizes would require potentially inaccurate 
adjustments not based on the record evidence.
    Consequently, based on the record evidence, although the Department 
would prefer to use count-size specific surrogate values for the raw 
shrimp input, the Department finds that the only count-size specific 
surrogate value submitted by the Respondents is not the most 
appropriate basis for valuing the raw shrimp input because it is not 
publicly available, does not represent a broad market average, has been 
shown to be representative of prices in India and does not contain 
prices for certain count-size ranges used by the Respondents.
    As a result, for this preliminary determination, we are relying on 
a raw shrimp surrogate value based on the April 2002-March 2003 
financial statements of Nekkanti, from which we derived a purchase 
price. We note that although relying on Nekkanti's financial statement 
to value the raw shrimp does not provide the Department with a count-
size specific surrogate value, it does not contain the concerns we have 
if we used the SEAI prices. This information is publicly available and 
represents an average purchase price over Nekkanti's fiscal year (a 12-
month period). We also note that this average price represents an 
appropriate valuation basis when compared with the relevant range of 
count sizes for the PRC Respondents. See Factor Valuation Memo at 13. 
Therefore, we have relied upon Nekkanti's 2002-2003 financial 
statements as the basis for the shrimp surrogate value.
    To value shrimp larvae for those Respondents that grow shrimp, the 
Department has valued shrimp larvae using an average of the price 
derived from the Nekkanti Sea Foods Ltd. financial statement for 04/
2002--03/2003, and the price quoted in Fishing Chimes, which is an 
Indian seafood industry publication. Both values are contemporaneous 
with the POI and are from public Indian sources. See Factor Valuation 
Memo at Exhibit 3.

Other Surrogate Values

    To value ice, we used the prices submitted by the Respondents, 
published in the September 30, 2002 edition of the Hindu Business Line. 
See Yelin and Allied's May 21, 2004, submission at Exhibit 12. The 
article presents a high and low price paid by seafood processors in 
India for block ice. We averaged these prices for a value of Rs 1.05 
per kilogram of ice, which was then adjusted for inflation and 
converted to USD. See Factor Valuation Memo at Exhibit 4.
    To value water, we used the average water tariff rate as reported 
in the Asian Development Bank's Second Water

[[Page 42669]]

Utilities Data Book: Asian and Pacific Region ("ADB's Water Utility 
Book") (1997), based on the average of the price per cubic meter 
("m3") for four cities in India. We adjusted the average 
cost of water for the four cities for inflation and converted the value 
to USD. See Factor Valuation Memo at Exhibit 4. We have used data from 
this source in other antidumping proceedings. See Certain Helical 
Spring Lock Washers from the Peoples Republic of China; Preliminary 
Results of Antidumping Duty Administrative Review, 68 FR 63060, 63063 
(November 7, 2003) ("Lock Washers from the PRC").
    We valued electricity using rates from Key World Energy Statistics 
2003, published by the International Energy Agency ("IEA"). We 
adjusted the electricity rates for the POI by using the WPI inflator. 
See Factor Valuation Memo at Exhibit 11. We have used previous editions 
of this report in other antidumping proceedings. See, e.g., Creatine 
Monohydrate from the People's Republic of China: Preliminary Results of 
Antidumping Duty Administrative Review, 68 FR 62767, 62769 (November 6, 
2003) ("Creatine from the PRC"); Notice of Final Results and 
Rescission, in Part, of the Antidumping Duty Administrative Review: 
Petroleum Wax Candles From the People's Republic of China Monday, 69 FR 
12121, 12126 (March 15, 2004) ("Wax Candles from the PRC").
    We valued heavy oil using rates from Key World Energy Statistics 
2003, published by the IEA. We adjusted the rate for the POI by using 
the WPI inflator. See Factor Valuation Memo at Exhibit 11.
    We valued diesel fuel using rates from Key World Energy Statistics 
2003, published by the IEA. We adjusted the rate for the POI by using 
the WPI inflator. See Factor Valuation Memo at Exhibit 11. We have used 
previous editions of this report in other antidumping proceedings. See, 
e.g., Creatine from the PRC, 68 FR at 62769; Wax Candles from the PRC, 
69 FR at 12126.
    We valued coal using rates from Key World Energy Statistics 2003, 
published by the IEA. We adjusted the rate for the POI by using the WPI 
inflator. See Factor Valuation Memo at Exhibit 11.
    Section 351.408(c)(3) of the Department's regulations requires the 
use of a regression-based wage rate. Therefore, to value the labor 
input, the Department used the regression-based wage rate for China 
published by Import Administration on our website. The source of the 
wage rate data is the Yearbook of Labour Statistics 2001, published by 
the International Labour Office ("ILO"), (Geneva: 2001), Chapter 5B: 
Wages in Manufacturing. See the Import Administration website: 
http://ia.ita.doc.gov/wages/01wages/01wages.html.

    Our treatment of by-products is in accordance with the Department's 
practice. "We allowed recovery/by-product credits where the company 
provided information demonstrating that the recoveries/by-products were 
sold and/or reused in the production process." See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled 
Steel Flat Products from the Peoples' Republic of China, 66 FR 49632 
(September 28, 2001) and accompanying Issues and Decision Memo at 
Comment 3.
    To value the by-products, the Department used a surrogate value for 
shrimp by-products based on a purchase price quote for wet shrimp 
shells from an Indonesian buyer of crustacean shells as Indian values 
were not available. Although we recognize that the Respondents reported 
by-products other than shells, this information represents the best 
information on the record and is being used for this preliminary 
determination. See Factor Valuation Memo at Exhibit 10.
    To value packing materials, the Department used Indian Import 
Statistics published by WTA See Factor Valuation Memo at Exhibit 5.
    To value Factory Overhead ("FOH"), Selling, General & 
Administrative ("SG&A") expenses and Profit for those Respondents who 
are shrimp processors, we used the 2002-2003 financial statement of 
Nekkanti Sea Foods Ltd. ("Nekkanti"), an Indian seafood processor. 
See Factor Valuation Memo at Exhibit 13. For FOH, SG&A expenses and 
Profit for those Respondents who are integrated producers of processed 
shrimp, we used the 2002-2003 financial statements of Devi Sea Foods, 
Ltd. ("Devi") and Sandhya Marines, Ltd. ("Sandhya"), which are both 
integrated Indian producers of processed shrimp, and Nekkanti.
    The Department notes that two of Red Garden's suppliers, Mingfeng 
and Longfeng, as well as ZG, conduct both processing and shrimp farming 
operations. The Department also notes that none of these three 
surrogate companies whose financial information is on the record 
conduct only these two operations. All three are processors and have 
nursery operations. The processing company's financial results would 
not include any farming operations, while the processor/nursery 
companies' include information regarding nursery operations. The 
Department therefore averaged the processing company's results with the 
two other companies in order to attempt to best approximate the 
financial experience of the respondents; by averaging results from a 
company with "less" expenses with those from companies with "more" 
relevant expenses, the Department achieves the best estimation for the 
financial experience of the limited information on the record permits.

Critical Circumstances

    On May 19, 2003, the Petitioners alleged that there is a reasonable 
basis to believe or suspect critical circumstances exist with respect 
to the antidumping investigations of certain frozen and canned 
warmwater shrimp from the PRC. On May 27, 2003, the Respondents 
submitted comments on the Petitioners' allegation of critical 
circumstances. In accordance with 19 CFR 351.206(c)(2)(i), because the 
Petitioners submitted critical circumstances allegations more than 20 
days before the scheduled date of the preliminary determination, the 
Department must issue preliminary critical circumstances determinations 
not later than the date of the preliminary determination.
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily 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. Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been "massive," the Department normally will examine: (i) the volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, section 
351.206(h)(2) of the Department's regulations provides that an increase 
in imports of 15 percent during the "relatively short period" of time 
may be considered "massive." Section 351.206(i) of the Department's 
regulations defines "relatively short period" as normally being the 
period beginning on the date the proceeding begins (i.e., the date the 
petition is filed)

[[Page 42670]]

and ending at least three months later. The regulations also provide, 
however, that if the Department 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, the Department may 
consider a period of not less than three months from that earlier time.
    In determining whether the relevant statutory criteria have been 
satisfied, we considered: (i) the evidence presented by the Petitioners 
in their May 19, 2003, filing; (ii) new evidence obtained since the 
initiation of the less-than-fair-value ("LTFV") investigation (i.e., 
additional import statistics released by the U.S. Census Bureau); and 
(iii) the ITC's preliminary determination of material injury by reason 
of imports.
    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i) of the Act, the Department normally considers evidence 
of an existing antidumping duty order on the subject merchandise in the 
United States or elsewhere to be sufficient. See Preliminary 
Determination of Critical Circumstances: Steel Concrete Reinforcing 
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). With 
regard to imports of certain frozen and canned warmwater shrimp from 
the PRC, the Petitioners make no statement concerning a history of 
dumping for the PRC. We are not aware of any antidumping order in the 
United States or in any country on certain frozen and canned warmwater 
shrimp from the PRC. For this reason, the Department does not find a 
history of injurious dumping of the subject merchandise from the PRC 
pursuant to section 733(e)(1)(A)(i) of the Act.
    To determine whether 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 in 
accordance with 733(e)(1)(A)(ii) of the Act, the Department normally 
considers margins of 25 percent or more for export price sales or 15 
percent or more for constructed export price transactions sufficient to 
impute knowledge of dumping. See Preliminary Determination of Sales at 
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate from the 
People's Republic of China, 62 FR 31972, 31978 (October 19, 2001). 
Because the preliminary dumping margins two of the Respondents, Yelin 
and Allied, and the Section A Respondents, are greater than 25 percent 
for EP and 15 percent for CEP, we find there is a reasonable basis to 
impute to importers knowledge of dumping with respect to all imports 
from the PRC. See Critical Circumstance Memo at Attachment II.
    In determining whether there are "massive imports" over a 
"relatively short period," pursuant to section 733(e)(1)(B) of the 
Act, the Department normally compares the import volumes of the subject 
merchandise for at least three months immediately preceding the filing 
of the petition (i.e., the "base period") to a comparable period of 
at least three months following the filing of the petition (i.e., the 
"comparison period"). However, as stated in section 351.206(i) of the 
Department's regulations, if the Secretary finds 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. 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.
    For the reasons set forth in the Critical Circumstances Memo, we 
find sufficient bases exist for finding importers, or exporters, or 
producers knew or should have known an antidumping case was pending on 
certain frozen and canned shrimp imports from the PRC by August 2003, 
at the latest. In addition, in accordance with 351.206(i) of the 
Department's regulations, we determined December 2002 through August 
2003 should serve as the "base period," while September 2003 through 
May 2004 should serve as the "comparison period" in determining 
whether or not imports have been massive in the comparison period as 
these periods represent the most recently available data for analysis.
    In this case, the volume of imports of certain frozen and canned 
warmwater shrimp from the PRC increased 51.57 percent from the critical 
circumstances base period December 2002 through August 2003) to the 
critical circumstances comparison period (September 2003 through May 
2004).
    For two of the mandatory respondents who submitted critical 
circumstances data, Yelin and Allied, and the Section A Respondents, we 
preliminarily determine, as noted above, that importers 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 in accordance with 733(e)(1)(A)(ii) of 
the Act. For Yelin, Allied and the Section A Respondents, we also found 
massive imports over a relatively short period. See Critical 
Circumstance Memo at Attachment I. These two Respondents and the 
Section A Respondents satisfy imputed knowledge of injurious dumping 
criterion under 733(e)(1)(A)(ii) of the Act and the massive imports in 
accordance with 733(e)(1)(B) of the Act. Therefore, we preliminarily 
find that critical circumstances exist for these Respondents.
    With regard to the PRC-wide entity, as noted above, we preliminary 
find that importers 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 in 
accordance with 733(e)(1)(A)(ii) of the Act. In addition, we also find 
massive imports over a relatively short period because the volume of 
imports of certain frozen and canned warmwater shrimp from the PRC-wide 
entity increased more than 15 percent. See Critical Circumstance Memo 
at Attachment I. Therefore, we preliminary find that critical 
circumstances exist for the PRC-wide entity.
    Given the analysis summarized above, and described in more detail 
in the Critical Circumstances Memo, we preliminarily determine that 
critical circumstances exist for imports of certain frozen and canned 
warmwater shrimp from Allied, Yelin, the Section A Respondents 
receiving a separate rate and the PRC-wide entity. However, for ZG and 
Red Garden, we preliminarily determine that no critical circumstances 
exist.
    We will make a final determination concerning critical 
circumstances for all producers/ exporters of subject merchandise from 
the PRC when we make our final dumping determinations in this 
investigation, which will be 135 days after publication of the 
preliminary dumping determination.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information upon which we will rely in making our final 
determination.

Preliminary Determination

    The weighted-average dumping margins are as follows:

[[Page 42671]]



   Certain Frozen and Canned Warmwater Shrimp From the PRC--Mandatory
                               Respondents
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
Allied.....................................................        90.05
ZG.........................................................     \1\ 0.04
Red Garden.................................................         7.67
Yelin......................................................        98.34
PRC-Wide Rate..............................................      112.81
------------------------------------------------------------------------
\1\ De Minimis.


   Certain Frozen and Canned Warmwater Shrimp From the PRC--Section A
                               Respondents
------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Manufacturer/exporter                        margin
                                                              (percent)
------------------------------------------------------------------------
Beihai Zhengwu Industry Co., Ltd...........................        49.09
Chenghai Nichi Lan Food Co., Ltd...........................        49.09
Dalian Ftz Sea-Rich International Trading Co., Ltd.........        49.09
Dongri Aquatic Shantou Ocean Freezing......................        49.09
Gallant Ocean (Liangjiang) Co., Ltd........................        49.09
Meizhou Aquatic Products Quick-Frozen Industry Co., Ltd....        49.09
Pingyang Xinye Aquatic Products Co., Ltd...................        49.09
Savvy Seafood Inc..........................................        49.09
Shanghai Taoen International Trading Co., Ltd..............        49.09
Shantou Jinyuan District Mingfeng Quick-Frozen Factory.....        49.09
Shantou Long Feng Foodstuffs Co., Ltd......................        49.09
Shantou Ocean Freezing Industry and Trade General                  49.09
 Corporation...............................................
Shantou Wanya Food Factory Co., Ltd........................        49.09
Xuwen Hailang Breeding Co., Ltd............................        49.09
Yantai Wei-Cheng Food Co., Ltd.............................        49.09
Zhangjiang Bobogo Ocean Co., Ltd...........................        49.09
Zhangjiang Newpro Food Co., Ltd............................        49.09
Zhangjiang Universal Seafood Corp..........................        49.09
Zhoushan Cereals Oils and Foodstuffs Import and Export Co.,        49.09
 Ltd.......................................................
Zhoushan Huading Seafood Co., Ltd..........................        49.09
Zhoushan Lizhou Fishery Co., Ltd...........................        49.09
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations performed within five days of the 
date of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct the 
CBP to suspend liquidation of all entries of subject merchandise, 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. We will 
instruct CBP to require a cash deposit or the posting of a bond equal 
to the weighted-average amount by which the normal value exceeds U.S. 
price, as indicated above for Red Garden. For ZG, we will not direct 
the U.S. Customs Service to suspend liquidation of any entries of 
certain frozen and canned warmwater shrimp from the PRC as described in 
the "Scope of Investigation" section, that are entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
this notice in the Federal Register. The Department does not require 
any cash deposit or posting of a bond for this preliminary 
determination for ZG. With respect to Allied, Yelin, the Section A 
Respondents receiving a separate rate and the PRC-wide entity, the 
Department will direct CBP to suspend liquidation of all entries of 
certain frozen and canned warmwater shrimp from the PRC 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 determinations in these investigations. The suspension of 
liquidation will remain in effect until further notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination of sales 
at less than fair value. Section 735(b)(2) of the Act requires that the 
ITC make a final determination before the later of 120 days after the 
date of the Department's preliminary determination or 45 days after the 
Department's final determination whether the domestic industry in the 
United States is materially injured, or threatened with material 
injury, by reason of imports of certain frozen and canned warmwater 
shrimp, or sales (or the likelihood of sales) for importation, of the 
subject merchandise. Because we have postponed the deadline for our 
final determination to 135 days from the date of publication of this 
preliminary determination, the ITC will make its final determination 
within 45 days of our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report issued in this 
proceeding and rebuttal briefs limited to issues raised in case briefs, 
no

[[Page 42672]]

later than five days after the deadline date for case briefs. A list of 
authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we will intend to hold the hearing three days 
after the deadline of submission of rebuttal briefs at the U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230, at a time and location to be determined. Parties 
should confirm by telephone the date, time, and location of the hearing 
two days before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days after the date of publication of this notice. See 
19 CFR 351.310(c). Requests should contain the party's name, address, 
and telephone number, the number of participants, and a list of the 
issues to be discussed. At the hearing, each party may make an 
affirmative presentation only on issues raised in that party's case 
brief and may make rebuttal presentations only on arguments included in 
that party's rebuttal brief.
    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a)(2) of the Act.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: April 2, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-16110 Filed 7-15-04; 8:45 am]