67 FR 19546, April 22, 2002
                                                            A-570-848
                                                  POR: 9/1/99-8/31/00
                                                      Public Document
                                                      IA/III/VII: MER

MEMORANDUM TO: Faryar Shirzad
               Assistant Secretary 
                 for Import Administration

FROM:          Joseph A. Spetrini
               Deputy Assistant Secretary
                 for Import Administration, Group III

SUBJECT:      Issues and Decision Memorandum for the Final Results of 
              the Antidumping Duty Administrative Review and Final 
              Partial Rescission of Antidumping Duty Administrative 
              Review of Freshwater Crawfish Tail Meat from the People's 
              Republic of China: September 1, 1999 through Agust 31, 2000.

SUMMARY: 

We have analyzed the case and rebuttal briefs of interested parties in
response to Freshwater Crawfish Tail Meat from the People's Republic of
China: Notice of Preliminary Results of Antidumping Duty Administrative
Review and Preliminary Partial Rescission of Antidumping Duty
Administrative Review 66 FR 52100 (October 12, 2001) (Preliminary
Results). As a result of our analysis, we have made changes from the
Preliminary Results. The specific calculation changes can be found in the
final analysis memorandum for each company in this review. We recommend
that you approve the positions we have developed in the "Discussion of the
Issues" section of this Issues and Decision Memorandum. Below is the
complete list of the issues in this administrative review:

Issues:

1.  Use of Australia Bureau of Agriculture and Resource Economics 
    (ABARE) Statistics or Mulataga Information to Value Live Crawfish 

2.  Whether the Spanish Study is a Reliable Source of Live Crawfish 
    Prices and Represents the Best Available Information 

3.  Size and Weight of Live Spanish Crawfish 

4.  Whether Crawfish Capture in Spain Is Performed with Unbaited Nets 

5.  Whether Spanish Crawfish Prices Are Aberrational 

6.  Similarity of Spanish GDP to That of China 

7.  The Spain Trip Versus the Australia and Mexico Trips 

8.  Use of Mexican Data as a Surrogate Value for Whole, Live Crawfish 

9.  Comparability of Economies 

10. Suggested Wet-Dry Weight Conversion Factor for Crawfish Scrap, 
    Based on Information from an Indian Chitosan Producer 

11. The Appropriate Factor for Use in Calculating a Wet-Dry 
    Conversion Factor 

12. Suggested Wet-Dry Weight Conversion Ratio of 50 Percent 
    for Crawfish Scrap 

13. Incorporation of a Wet-Dry Weight Conversion Factor for Scrap 
    for Yangzhou Lakebest (Lakebest) 

14. Suqian's Wet-Dry Conversion 

15. Suqian's and Yancheng Haiteng's Coal Freight Expense 

16. Rescission of Review for Yancheng Foreign Trade, Ltd. (YFT) 

17. The Department's Refusal to Review Certain Sales of Huaiyin 
    Foreign Trade Corporation (30) (Huaiyin 30) 

18. Whether the Department Improperly Determined that Fujian 
    Pelagic and Pacific Coast are not Affiliated Parties 

19. Whether the Department Improperly Applied Facts Available 
    to Yancheng Yaou 

20. Single Rate for Huaiyin 5 and Ningbo Nanlian 

21. Yancheng Haiteng's Indirect Selling Expenses Ratio 

22. Yancheng Haiteng's Marine Insurance Factor 

23. Certain Domestic Parties' Status as Interested Parties 

24. Application of the Continued Dumping and Subsidy Offset 
    Act of 2000 (Byrd Amendment) 

Discussion of the Issues

Surrogate Value Information- Introduction

In the original investigation, and in certain previous reviews of this
order, the Department of Commerce (the Department) used data on imports
into Spain from Portugal to value the whole, live, freshwater crawfish
input into crawfish tail meat. See e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Freshwater Crawfish Tail Meat from the
People's Republic of China, 62 FR 41347, 41355 (August 1, 1997) (LTFV
Final). However, because of a significant decline in the quantity of
Spanish imports, for the preliminary results of a subsequent new shipper
review the Department used data on Spanish exports to the European Union
(EU), as these exports were made in significant quantities. See Freshwater
Crawfish Tail Meat from the People's Republic of China; Notice of
Preliminary Results of Antidumping Duty Administrative Review and New
Shipper Reviews, and Final Partial Rescission of Antidumping Duty
Administrative Review, 65 FR 60399 (October 11, 2000). Both petitioner and
respondents argued against the Department's use of this data because
evidence on the record of that new shipper review showed that the Spanish
exports to the EU included exports of items other than live freshwater
crawfish. Id.

For the 1998-1999 reviews (see Freshwater Crawfish Tail Meat from the
People's Republic of China; Notice of Final Results of Antidumping Duty
Administrative Review and New Shipper Reviews, and Final Partial
Rescission of Antidumping Duty Administrative Review, 66 FR 20634 (April
24, 2001) (Final Results ADR & NSR (9/98-8/99), and accompanying Decision
Memorandum at Comment 1), the Department again used data on imports from
Portugal to Spain to value live crawfish, as it was the best available
information on the record. However, the Department stated its intention to
search for new sources of surrogate data for the valuation of the whole,
live freshwater crawfish input in ongoing and future reviews because there
was no longer a significant level of imports into Spain from Portugal for
whole, live freshwater crawfish. Thus, for purposes of the September 1999
to March 2000 new shipper review, the September 1999 to September 2000 new
shipper review, and the current administrative review, we searched for
data reflecting a more substantial volume of sales. See Freshwater
Crawfish Tail Meat From the People's Republic of China; Notice of Final
Results of Antidumping Duty New Shipper Reviews, 66 FR 45002 (August 27,
2001) (Final Results NSR (9/99-3/00)), and accompanying Decision
Memorandum at Comment 1. On April 30, 2001, petitioner submitted onto the
record of this review publicly available surrogate value information from
Australia, and respondents submitted publicly available surrogate value
information from Mexico. On May 10, 2001, both petitioner and respondents
offered conflicting arguments (discussed in greater detail below)
concerning the appropriateness and usability of surrogate value
information from Australia and Mexico. In response to information and
arguments supplied by respondents and petitioner that crawfish sales in
Australia or Mexico could provide a more appropriate surrogate value for
whole, live crawfish than what the Department had used in prior reviews,
the Department took the additional step of sending teams of analysts to
both of those countries to discuss the information submitted with
government and industry officials. The Department ultimately utilized
surrogate value information from Australia. Id.

Surrogate country selection for this administrative review is discussed
in the "Memorandum from the Office of Policy to Maureen Flannery, Program
Manager, Group III/Office 7 of AD/CVD Enforcement," dated March 5, 2001.
Based on information obtained in prior segments of this proceeding, we
have determined that none of the countries named in the memorandum are
significant producers of crawfish tail meat, nor do they provide a
surrogate value for the whole, live crawfish input. Consistent with the
most recent new shipper reviews under this order, for the preliminary
results of this administrative review, we used Australia as a surrogate
country for the valuation of the crawfish input because we have found that
Australia is a significant producer of whole freshwater crawfish, and it
provides an appropriate surrogate value for the crawfish input. See
Preliminary Results; see also Final Results NSR (9/99-3/00); see also
Freshwater Crawfish Tail Meat From the People's Republic of China; Notice
of Final Results of Antidumping Duty New Shipper Reviews, 66 FR 45002
(August 27, 2001) (Final Results NSR (9/99-9/00)); see also "Freshwater
Crawfish Tail Meat from the People's Republic of China (PRC): Meetings
Regarding the Crawfish Industry in Western Australia," dated July 31, 2001
("Australia Memo").

On October 29, 2001, a study of the Spanish freshwater crawfish industry
("the Spanish Study")-titled "Estudio Sobre el Impacto Economico del
Sector de Cangrejo de Rio en Andalucia," and printed by the Junta de
Andalucia, Consejeria de Agricultura y Pesca (Government of Andalucia,
Department of Agriculture and Fisheries)-was submitted to the Department
by respondents Ningbo Nanlian Frozen Foods Company, Ltd., and Louisiana
Packing (collectively, NN/LP). The Spanish Study is a general study of the
crawfish industry in Andalucia, Spain, covering calendar years 1999 and
2000. NN/LP requested that the Department consider live crawfish prices
referenced in the Spanish Study to value the whole, live crawfish input
used in the production of crawfish tail meat in the PRC for purposes of
the final results of this administrative review. Subsequently, petitioner
provided the Department with timely factual information contradicting
certain information within the Spanish Study, and bringing into question
the Spanish Study's validity and reliability as a whole. See proprietary
Crawfish Processors Alliance and the Louisiana Department of Agriculture &
Forestry ("CPA/LDA&F") Letter, dated November 13, 2001.

As discussed in greater detail below, in the current review, petitioner
and respondents submitted timely factual information and arguments
concerning the appropriateness and usability of surrogate value
information from Spain. Due to the type of information submitted, and the
conflicting information submitted by respondents and petitioner, the
Department could not determine, without further examination, the usability
of the value information contained in the publicly available information
(PAI) submitted by respondents. Therefore, as was done for Australia and
Mexico, the Department sent a team of analysts to Spain during the week of
February 25, 2002, to examine whether the price information for whole,
live crawfish in the Spanish Study was usable. See the several reports
titled "Freshwater Crawfish Tail Meat from The People's Republic of China-
Meetings Regarding the Crawfish Industry in Spain," dated March 12, 2002
("Spain Trip Reports"), each addressing separate meetings with parties
involved with or affected by the Spanish Study.

For purposes of these final results, we have found the Australian PAI to
be the best available information for valuing the whole, live crawfish
input. Comment 1: Use of Australia Bureau of Agriculture and Resource
Economics (ABARE) Statistics or Mulataga Information to Value Live
Crawfish 

Petitioner argues that the Department should use statistics issued by
ABARE to value the whole, live crawfish input. According to petitioner,
the ABARE statistics, which cover 245-306 metric tons annually, are
collected for the express purpose of developing meaningful production
quantity and value data for the products at issue. They are collected and
published by a government agency whose mission, methods, and competence
are, in petitioner's opinion, clearly established by uncontroverted
evidence on the record. See Petitioner's PAI Exhibits 1 and 3 (May 25,
2001). Furthermore, petitioner asserts, ABARE has special expertise in
researching and reporting on agricultural, fisheries, and forestry
commodities. Id. Petitioner argues that no other source of crawfish
pricing data on the record of this review has been collected with the same
rigor or by a more qualified source. And unlike the Mulataga Aquaculture
(Mulataga) price list used by the Department in the Preliminary Results,
and other ad hoc sources proposed by respondents, petitioner contends,
ABARE statistics are also regularly updated. See Petitioner's PAI Exh. 1
(May 25, 2001). 

Petitioner further argues that it is appropriate to use ABARE statistics
for yabbies (a species of freshwater crawfish found in Australia) to
calculate the whole, live crawfish surrogate value for this proceeding.
However, if the Department does not use the ABARE statistics, petitioner
states that the Department should use the prices of Australian crawfish
processor Mulataga for live crawfish up to 70 grams, and should not limit
itself to the use of prices for live crawfish under 40 grams. Petitioner
argues that crawfish up to 70 grams are used for tail meat production in
China, and that, therefore, if the Department's calculations include
prices for live crawfish ranging up to 70 grams, then the appropriate
surrogate value would be $4.67 Australian Dollars per kilogram.

Petitioner also argues that the surrogate value should not be limited to
prices for "seconds" ("aesthetically imperfect" crawfish) because there is
no evidence on the record that Chinese processors only use "aesthetically
imperfect" crawfish to produce tail meat. According to petitioner,
Australian processors use crawfish of all sizes and grades to produce tail
meat.

Petitioner notes that it has submitted publicly available information
demonstrating that Chinese processors routinely sell tail meat sized at
under 80 tails per pound, including counts as low as 60 tails per pound.
See Petitioner's PAI Exhibits 30-31 (November 1, 2001). Petitioner states
that per pound tail counts also frequently appear in respondents' invoices
and other sales documentation. 

According to petitioner, where the number of tails per pound is known,
the live weight of the whole, live crawfish input can be determined by
dividing the weight of each crawfish tail piece by the appropriate tail
meat yield. However, petitioner states that the respondents' reported
average processing yields are not appropriate for use in this calculation,
as the processing yield for large p. clarkii is significantly lower than
the average yield of 15-20 percent encompassing all sizes (i.e., the
processing yield for large p. clarkii is 10 percent or less). Petitioner
asserts that, according to its calculations, the whole, live crawfish that
the Chinese use to produce tail meat range in size from 60 to 110 pieces
per pound, and have whole, live weights of 41 to 76 grams, even if one
assumes that the yield rate never drops below 10 percent. 

As noted above, petitioner argues that Chinese processors regularly
produce tail meat from crawfish with whole, live weights of 40 to in
excess of 70 grams, and that Australian processors use crawfish of all
sizes and grades to produce tail meat. Thus, according to petitioner,
because Australian and Chinese crawfish are "comparable merchandise" and
the size ranges used in the two countries overlap almost entirely, the
ABARE statistics should no longer be rejected for use by the Department on
the basis stated in the Preliminary Results. However, according to
petitioner, unit values derived from the ABARE statistics should be
adjusted downward to account for charges paid in Australia to depot
operators for functions that Chinese processors perform themselves.
According to petitioner, there are no published nationwide figures for
depot charges, but an adjustment could be made based on the charges paid
by Mulataga. Department's Position: For these final results, pursuant to
section 773(c) of the Act, consistent with the Final Results NSR (9/99-
3/00), and Final Results NSR (9/99-9/00), and for the reasons listed
below, we have valued whole, live crawfish by using the best PAI on the
record of this proceeding, which we determined to be the price for
Australian yabbies 30-40 grams in weight, and including only the price
paid to the farmers and catchers. See Final Results NSR (9/99-9/00) and
accompanying Decision Memorandum at Comment 1. 

We find that the price for 30-40 gram Australian yabbies is an
appropriate surrogate value for valuing Chinese crawfish for the following
reasons. First, we have determined that 30-40 gram Australian yabbies are
comparable to Chinese crawfish. These smaller yabbies are comparable to
Chinese crawfish in size. Second, during our examination of the crawfish
industry in Australia, the Department was informed by private commercial
sources that freshwater tail meat is produced from yabbies weighing 40
grams or less and larger seconds. Final Results NSR (9/99-9/00) and
accompanying Decision Memorandum at Comment 1. Third, the prices paid by
Australian processors (to the farmers and catchers) are at the same point
of production/distribution as the sales of whole, live crawfish to PRC
processors.

We disagree with petitioner that the surrogate value for live crawfish
should reflect Australian yabby prices paid for all sizes. As with any
product, the sales value of crawfish to the processor or any other
consumer would likely vary according to the quality and demand for the
particular variety of crawfish. See Final Results ADR & NSR (9/98-8/99),
and accompanying Decision Memorandum at Comment 1. Australian yabbies are
priced by weight and quality. Id. The general size ranges for export
quality and domestic quality are 30-40 grams, 41-50 grams, 51-70 grams, 71-
90 grams, and 91+ grams, with the larger sizes fetching higher prices. Id.
The general size ranges for seconds (yabbies less than 40 grams or yabbies
larger than 40 grams with deformities) are 30-40, 40-70, 71-90, and 91+.
Id. Only smaller yabbies (40 grams or less), yabbies with physical
deformities, or surplus yabbies are processed into tail meat. Id. In
addition, the lower weight ranges of yabbies (40 grams or less) are
comparable in size to the freshwater crawfish grown in China. Id.

We agree with petitioner that the Department has previously found that
the live crawfish surrogate value must represent all sizes of crawfish,
not just the smaller crawfish, which are the ones normally processed into
tail meat. See LTFV Final, 62 FR at 41354. However, this decision was made
when the surrogate value was based on the same species of crawfish found
in China-procambarus clarkii (p. clarkii). Because Australian crawfish are
of a different species, it is appropriate to evaluate the comparability
(e.g., the sizes of whole, live Australian crawfish utilized in the
production of tail meat) of this species to p. clarkii. Again, only
smaller yabbies (40 grams or less), yabbies with physical deformities, or
surplus yabbies are processed into tail meat. 

As noted in the Final Results NSR (9/99-3/00), and accompanying Decision
Memorandum at Comment 1, while we would prefer to use published statistics
for the valuation of the input, the clear demarcation in sizes between
Australian and Chinese freshwater crawfish processed into tail meat, as
well as the fact that only the small, seconds or surplus yabbies go into
tail meat production in Australia, leads us to conclude that using the
total value and volume inclusive of all sizes, as issued by ABARE, is not
appropriate in this case, and the best publicly available information on
the record is the price for smaller size yabbies, which we have verified. 

Although respondents did not directly comment on size with respect to the
issue of whether or not it is appropriate to use prices for yabbies with a
whole, live size of over 40 grams per piece, they do address size in
Comment 3, below. Comment 2: Whether the Spanish Study is a Reliable
Source of Live Crawfish Prices and Represents the Best Available
Information 

Petitioner argues that the suitability of Spain as a source of surrogate
values is a moot point unless there is a reliable source of Spanish
crawfish prices on the record. According to petitioner, the Spanish Study
cannot be used for this purpose because there is no substantial evidence
on the record of this review to demonstrate that unit prices calculated
from the Spanish Study would reliably depict actual live crawfish prices
in Spain. Petitioner argues that the record demonstrates that the Spanish
Study is inaccurate and unreliable. First, petitioner argues, there is no
evidence that the Spanish Study is based on actual sales or purchase data.
Second, petitioner argues, the Spanish Study is inaccurate in that it
overstates tail meat production in Spain by a factor of at least two.
Because there are other sources of surrogate values on the record that are
better substantiated, petitioner reasons, the Spanish Study does not
provide the best available information regarding the values of such
factors in a market economy country, as required under section
773(c)(1)(B) of the Act. 

According to petitioner, the Spanish Study presents the conclusions of
one individual. Petitioner argues that the Government of Andalucia did not
initiate the Spanish Study, did not select, supervise, or pay the
consultant, and did not perform the data analysis. Instead, petitioner
asserts, the consultant was selected, hired, and paid for by Alfocan S.A.-
and Andalucian crawfish processor. Petitioner asserts that the consultant
drafted the questionnaire himself, without the imposition of any criteria
or parameters by the Andalucian government. Furthermore, petitioner
argues, it appears that final approval of the Spanish Study was reserved
for Alfocan, as evidenced by the other Andalucian crawfish processors who
indicated that they never received drafts for their approval. Finally,
petitioner asserts, the consultant's conclusions were not checked against
any of the companies' actual data. Thus, petitioner argues, the Spanish
Study is not entitled to presumptions of neutrality and reliability that
can be afforded official government data.

According to petitioner, the Spanish Study does not provide actual data
for the total volume and value of whole, live crawfish sold in Spain
during any period. Instead, petitioner asserts, the data for total volume
is based on rough estimates provided by only a portion of the industry,
and the data for total value was derived through the application of a
flawed allocation to the volume data based on the average prices reported
by only a few companies (or possibly only one). Petitioner argues that no
value figure derived in this manner can possibly be accurate. Petitioner
asserts that total quantity was requested for each season, but not total
value. Instead, petitioner states, an average unit price for each season
was requested. According to petitioner, in a market with such large
variations in supply, and therefore in price, during each season, a rough
estimate of average unit prices is not likely going to be accurate.
Petitioner argues that the consultant then compounded the error by
reallocating the value data, based on the experience of one or more other
companies. In light of the consultant's refusal to identify the company or
companies used to perform the reallocations, petitioner argues, it is
difficult to comment further on the methodology. However, petitioner
asserts, it should be clear that the purchasing patterns of so-called
"nurseries," which are interested in larger and more attractive specimens
for the live market, are unlikely to correspond to the purchasing patterns
of processors who make tail meat.

NN/LP contend that Spanish data contained in the Spanish Study are
preferable to Australian data for purposes of valuing live crawfish, and
that the Department should revert to its previous determinations and hold
that the Spanish crawfish prices should be used as the surrogate value for
live crawfish. According to NN/LP, the Andalucian crawfish industry is
responsible for almost 100% of total Spanish crawfish production. NN/LP
argues the Spanish Study contains comprehensive, detailed, definitive
information on the price of live crawfish in the Spanish market, including
charts of average monthly prices for live Spanish crawfish. 

Citing section 351.408(c)(1) of the Department's regulations, NN/LP
asserts that the Department has a clear preference for publicly available
data when it comes to calculating normal value for nonmarket economy (NME)
cases. NN/LP argues that the Department did not meet this requirement in
this instant case. Instead, NN/LP states, the Department relied upon an
Australian live crawfish price that was provided by a private individual,
and is not in any sense "publicly available" data. 

Furthermore, NN/LP asserts that the only "support" for the Australian
price consists of sample invoices. NN/LP argues that this is inadequate.
According to NN/LP, while the Australian producer may have provided some
selected invoices in support of the price list, this is not the type of
"proof" normally used to prove crawfish prices-the key surrogate value in
this case. According to NN/LP, in the Preliminary Results, the Department
relied upon Australian prices based upon a single price quotation, without
any real proof that this price was based upon a significant quantity of
sales. Moreover, NN/LP argues, none of the data used was actually verified
by the Department. According to NN/LP, it has, in previous reviews in this
same case, placed invoices from producers of crawfish tail meat from Spain
on the record. However, NN/LP states, the Department has strenuously
avoided using those invoices on the grounds that they are not a reliable
source of published government data. NN/LP argues that the same logic
applies here, in that in contrast to the Australian prices, the Spanish
data is from an official, publicly available government report. Thus,
according to NN/LP, the Department should rely upon the Spanish Study
because it is PAI.

According to NN/LP, in a recent new shipper review, petitioner argued
that the Australian prices were superior to other data on the record
because Australia had live crawfish production of 419 metric tons, and
that this quantity was allegedly larger than data from other countries.
See Final Results NSR (9/99-3/00), and accompanying Decision Memorandum at
Comment 1. NN/LP asserts that the surrogate value which can be derived
from the Spanish data is based on a much higher quantity than the
Australian data used by the Department for purposes of the Preliminary
Results. According to NN/LP, the data supplied by the Spanish Study shows
that Spain captured 2,721 metric tons of crawfish during the period of
review-a total over 708% higher than that of Australia. Thus, NN/LP
argues, the Spanish Study clearly demonstrates that Spain is a significant
producer of crawfish. 

Furthermore, NN/LP states, it appears that the Department relied upon a
single price from a single producer in Australia. NN/LP argues that this
is not scientific. In contrast, according to NN/LP, the Spanish data
allows the Department to base its surrogate value upon a much larger
sampling and should therefore be preferred. According to NN/LP, the
Department has determined on repeated occasions that it is the
Department's aim to use surrogate price data which is representative of a
range of prices within the period of review (POR). NN/LP asserts that the
data provided in the Spanish Study correspond to the catch volumes and the
prices for whole, live crawfish paid to fishermen in every month of the
POR (including months in which tail meat was produced). NN/LP argues that
the Australian data is clearly inferior in quality when compared to the
Spanish data because the latter is more representative of what the price
of whole crawfish would be in China if that price was market-driven. NN/LP
asserts that in its new shipper review, the Department made it clear that
the quantity of the data involved is a determining factor in selecting
surrogate values: "We agree with Petitioners. In the Department's
'Surrogate Selection Memorandum' . . . we further noted that Spanish
imports from Portugal are significantly larger in comparison both to
Spanish imports from countries other than Portugal and U.S. imports of a
similar HTS category . . . ." Freshwater Crawfish Tail Meat from the
People's Republic of China; Final Results of New Shipper Review, 64 FR
27961, 27962 (May 24, 1999) (Final Results NSR (9/97-3/98). Thus, NN/LP
argues, Department precedent clearly mandates the use of Spanish data in
lieu of Australian data. 

According to NN/LP, when available, the Department prefers to use
surrogate data for identical merchandise. NN/LP argues that the Department
has repeatedly expressed its preference for identical merchandise. In this
case, NN/LP points out, the Department relied upon the price for yabbies-a
species of crawfish differing from p. clarkii: the species found in both
China and the United States. NN/LP states that crawfish from Spain are of
the same species (p. clarkii) as the Chinese crawfish under review, and
are therefore identical merchadise. According to NN/LP, as there is no
reason to believe that the Spanish data is distorted or unreliable, the
Spanish data is preferable to the Australian prices for yabbies, which
can, at best, be considered a comparable product. 

According to NN/LP, petitioner's Case Brief focuses in great part on
allegations that the Spanish Study performed by the Government in
Andalucia is flawed. NN/LP claims that it has placed on the record an
official Government of Andalucia publication, printed and sanctioned by
the Department of Fishing and Agriculture of the Government of Andalucia.
According to NN/LP, governments frequently hire outside consultants to
assist them with various reports/projects. Nonetheless, NN/LP asserts,
these reports are still government, not private, reports. 

NN/LP notes that in the last review, petitioner complained about official
Government of Spain import statistics, and that, in that case, respondents
merely requested that the Department contact the Government of Spain
directly to confirm to the accuracy of the statistics at issue. According
to NN/LP, the Department did so and found that petitioner's allegations
were false. NN/LP encourages the Department to do the same thing for the
current administrative review.

In this case, NN/LP states, petitioner again asks the Department to
ignore official government publications because petitioner's confidential
informant thinks that the Spanish Study may in some way be inaccurate.
According to NN/LP, if the Department accepts petitioner's allegations,
then any government publication in the future, be it import statistics,
World Bank studies, etc., could similarly be impugned by any petitioner
and/or respondent who can find somebody to say something negative against
the data at issue.

NN/LP argues the petitioner is asking the Department to make a stark
choice: (1) whether to accept an official government report; or (2)
whether to accept at face value an affidavit from a confidential source to
overrule what NN/LP considers an official Government of Andalucia
publication. However, NN/LP asserts, even if the Department were to
consider accepting at face value the affidavit of petitioner's
confidential informant, the Government of Andalucia's publication would
still have to be used for purposes of the final results.

According to NN/LP, the Spanish Study sets forth in exacting detail
several aspects of the Spanish crawfish industry: (1) it describes the
history of crawfish production in Spain; (2) it provides prices and
quantities for crawfish catches during calendar years 1999 and 2000; (3)
it sets forth quantities of tail meat produced; and (4) it delineates the
months in which there is crawfish tail meat production. According to
NN/LP, even if one accepts petitioner's argument that the figure in the
Spanish Study for total tail meat produced in 2000 is inaccurate, Spain is
still a large producer of crawfish tail meat-a much larger crawfish tail
meat producer than Australia, the preferred country for petitioner.

More importantly, NN/LP argues, petitioner's informant did not contradict
the quantity of live crawfish caught and the prices of those live
crawfish. According to NN/LP, a large part of petitioner's Case Brief goes
to the fact that they believe that the Spanish prices are aberationally
low. However, NN/LP argues, petitioner's confidential informant could not
dispute the quantities of live crawfish caught, or the average prices for
those crawfish. In effect, NN/LP asserts, petitioner's confidential
informant has unintentionally confirmed the validity of the live crawfish
prices reported in the Spanish Study.

NN/LP argues that the Spanish Study does not represent the conclusions of
a single man. Instead, NN/LP asserts, officials from the Andalucian
Department of Environment participated in, were consulted on, and
contributed information to, the Spanish Study. NN/LP also argues that
officials of the Andalucian Department of Agriculture and Fisheries
assisted in the Spanish Study's creation, and reviewed it before it was
finalized. 

NN/LP further argues that the consultant did not draft the survey
questionnaire by himself. Instead, NN/LP asserts, the consultant drafted
it in conjunction with Andalucian Department of Agriculture and Fisheries
officials. NN/LP also argues that Alfocan did not have final approval
authority over the Spanish Study, and that there is no evidence on the
record to indicate this. To the contrary, NN/LP asserts, the Spanish Study
was submitted to Andalucian Department of Agriculture and Fisheries
officials for review, and that there is nothing on the record to indicate
that these officials were not in possession of the information needed to
assess the data. 

NN/LP argues that, despite the fact that it didn't request data on a
monthly basis, the questionnaire used in development of the Spanish Study
clearly requested enough data to make the Spanish Study reliable, and
provided an adequate basis upon which to establish live crawfish prices.
Furthermore, NN/LP argues that monthly data was obtained from certain
companies, and that it was reasonable for the consultant to assume that
prices paid by the various crawfish processors did not vary significantly
from processor to processor. 

According to Yangzhou Lakebest Co., Ltd., Qindao Rirong Foodstuff Co.,
Ltd., Yancheng Heiteng Aquatic Products & Foods Co., Ltd., and Suqian
Foreign Trade Corp. (Lakebest et al.), the Department's trip reports
establish that the Andalucian crawfish industry is significant, that its
companies harvest and process the same genus and species of crawfish that
are harvested in China and the United States, and that its overall
structure, considering harvesting techniques and growing seasons, is
nearly identical to that of China. Lakebest et al. assert that the scope,
variety, and expertise of those individuals the Department interviewed
during its trip to Spain provide proof that the Andalucian crawfish
industry is a significant contributor to the region's agricultural
economy, and is of interest to relevant government agencies in Spain. 

Lakebest et al. also assert that the Department's "Spain Trip Reports"
evidence total annual production of tail meat in Andalucia at roughly 165
metric tons-far exceeding the 40 metric tons of annual production of whole
Australian yabbies, as cited in the Department's July 18, 2001 trip
report. Furthermore, Lakebest et al. argue that the issue is not whether
the Spanish Study was an official government report, but whether it was
reliable. Lakebest et al. assert that the Spanish Study is reliable. 

According to Lakebest et al., the Spanish Study is comparable to
surrogate value sources the Department has used in other cases. Lakebest
et al. give as an illustrative example the Department's use of surrogate
data from the publication "Chemical Weekly" in many NME proceedings, even
though it is not an official government publication, and provides only a
summary of price quotes based on inquiries to an assortment of companies.
Lakebest et al. point out that "Chemical Weekly" specifically states that
it cannot guarantee the accuracy of the prices it publishes, as they are
based only on the enquiries made by their correspondent, and as such, are
not firm prices between buyer and seller. 

According to Lakebest et al., the Department has also acknowledged a
preference for using surrogate values that are based on broad averages.
Lakebest et al. argue that the Spanish Study reflects a broad average of
crawfish prices in Spain, representative of the industry. Department's
Position: We agree with petitioner, in part. The Department considers it
appropriate, in NME cases, to rely, to the extent possible, on PAI from
the first choice surrogate country to value all factors of production.
However, if there is no reliable information from the first choice
surrogate country for a particular factor, we will attempt to use public
data from another surrogate country. 

As noted in Cut-to-Length Carbon Steel Plate from the People's Republic
of China; Final Results and Partial Rescission of Antidumping Duty
Administrative Review, 62 FR 61964, 61973 (November 20, 1997) (CTL Plate),
certain general principles have guided the Department's practice in
selecting surrogate values. We have a long-standing practice of preferring
PAI to other types of information. As noted in Manganese Metal From the
People's Republic of China; Final Results and Partial Rescission of
Antidumping Duty Administrative Review, 63 FR 12441, 12442 (March 13,
1998) (Manganese Metal), where possible, we select PAI which is: (1) an
average non-export value; (2) representative of a range of prices within
the POR or most contemporaneous with the POR; (3) product-specific; and
(4) tax-exclusive. 

It is important to emphasize, however, that our overarching mandate is to
select the best available information (in accordance with section
773(c)(1) of the Act, which involves weighing all of the relevant
characteristics of the data, rather than relying solely on one or two
absolute "rules"). There is no hierarchy for applying the above-stated
principles. Thus, the Department must weigh available information with
respect to each input value and make a product-specific and case-specific
decision as to what the "best" surrogate value is for each input. CTL
Plate, 62 FR at 61973. More specifically, there is no ranking or hierarchy
that attaches to the four criteria in Manganese Metal, and the
determination of what data are best necessarily is made on a case-by-case
basis. 

It is undisputed that, in the original investigation of sales at less
than fair value (LTFV), and in all subsequent reviews under this order,
none of the countries listed in the surrogate country selection memos for
this order have ever been found to be significant producers of crawfish
tail meat. See e.g., Notice of Preliminary Determination of Sales at Less
Than Fair Value: Freshwater Crawfish Tail Meat from the People's Republic
of China, 62 FR 14392, 14393; see also, "Memorandum from the Office of
Policy to Maureen Flannery, Program Manager, Group III/Office 7 of AD/CVD
Enforcement," dated March 5, 2001. Moreover, we have no surrogate value
for the whole, live crawfish input from any of those countries.
Consequently, the Department has always been forced to rely upon PAI from
other market economy countries. As noted above, in the original
investigation, and in certain previous reviews of this order, the
Department used data on imports into Spain from Portugal. In the Final
Results ADR & NSR (9/98-8/99), the Department stated its intention to
search for new sources of surrogate data for the valuation of the whole,
live freshwater crawfish input in ongoing and future reviews because the
imports into Spain from Portugal were no longer usable.

Thus, for purposes of the September 1999 to March 2000 new shipper
review, the September 1999 to August 2000 new shipper review, and the
current administrative review, we looked for more appropriate data. See
Final Results NSR (9/99-3/00), and accompanying Decision Memorandum at
Comment 1. We found it in the Australian data which now forms the basis of
our live crawfish surrogate value. In the Australian data, we have fully
verified, fully reliable, product-specific, average non-export values
representative of prices over several years, including the POR. Id.; see
also Final Results NSR (9/99-9/00), and accompanying Decision Memorandum
at Comment 1. It satisfies the criteria of both CTL Plate and Manganese
Metal. As noted above, there is no hierarchy for applying the principles
discussed in CTL Plate and Manganese Metal, and the Department must fully
consider available information to satisfy the overarching mandate to
select the best available information, weighing all relevant
characteristics of the data, in accordance with 773(c)(1) of the Act. We
followed this rationale in choosing the Australian data over all other
sources of information that had been considered and/or utilized in setting
the live crawfish surrogate value, and we follow it again now in comparing
the Australian data to the Spanish Study, for the purpose of determining
whether the information contained within the Spanish Study constitutes the
best available information on the record.

The Spanish Study is a general study of the crawfish industry in Andalucia, 
Spain, covering calendar years 1999 and 2000. See "Freshwater Crawfish Tail 
Meat from The People's Republic of China-Meetings Regarding the Crawfish
Industry in Spain: Consejeria de Agricultura y Pesca (Department of
Agriculture and Fisheries), Junta de Andalucia," (the "Spanish Trip
Reports"), dated March 12, 2002. Whole, live crawfish price data are only
one small part of the Spanish Study. The Spanish Study does not contain
data on live crawfish prices, regularly maintained and published by
government authorities. The Spanish Study is only a study, and not a
compilation of price statistics, regularly maintained by a government.
Therefore, in order to determine whether price information within the
Spanish Study constituted the best available information for the live
crawfish surrogate value, our first step was to develop an understanding
of the fundamental nature of the price information in the Spanish Study
(e.g., to examine the methodology used in gathering and calculating the
data, to determine the extent to which it was tested and checked for
accuracy and statistical validity, etc.). In other words, the Department
wanted to take steps to assure itself of the reliability and accuracy of
the Spanish Study. It was not necessary to perform this type of analysis
for the ABARE price statistics (which ultimately were not utilized by the
Department in the previous administrative review-see Final Results ADR &
NSR (9/98-8/99)) because they were data on live crawfish prices, regularly
maintained and published by government authorities, and were not part of a
broad-based "study" of the industry, as is the case with Spain. 

As noted above, while we would have preferred to use the published
government statistics in Australia for the valuation of the input, the
clear demarcation in sizes between Australian and Chinese freshwater
crawfish processed into tail meat, as well as the fact that only the
small, seconds or surplus yabbies go into tail meat production in
Australia, led us to conclude that using the ABARE statistics, which were
inclusive of all sizes, was not appropriate. See Final Results ADR & NSR
(9/98-8/99), and accompanying Decision Memorandum at Comment 1. Because of
this, we gathered additional Australian price information from two of the
five yabby producers in Western Australia (in the form of price lists and
supporting invoices supplied by individual crawfish producers) for smaller-
sized yabbies, which we verified were processed into tail meat. We found
that the price for yabbies was consistent over time, from company to
company. See "Freshwater Crawfish Tail Meat from the People's Republic of
China: Meetings Regarding the Crawfish Industry in Western Australia (the
"Australia Report") at 4-6. We also found that Australian yabby production
was significant, with a total annual quantity of 290 metric tons. See
Final Results ADR & NSR (9/98-8/99), and accompanying Decision Memorandum
at Comment 1. We subsequently determined that this was the best available 
information on the record to be used for the surrogate value of live 
crawfish. Id.

As noted above, the Spanish Study does not consist of a discrete set of
data on live crawfish prices, regularly maintained and published by
government authorities. In fact, despite the fact that it was published by
the Department of Agriculture and Fisheries, Goverment of Andalucia, the
Spanish Study does not appear to be a government product at all. As noted
in the "Freshwater Crawfish Tail Meat from The People's Republic of China-
Meetings Regarding the Crawfish Industry in Spain: Consejeria de
Agricultura y Pesca (Department of Agriculture and Fisheries), Junta de
Andalucia" ("Agriculture and Fisheries Report"), and the "Freshwater
Crawfish Tail Meat from The People's Republic of China-Meetings Regarding
the Crawfish Industry in Spain: Alfocan S.A." ("Alfocan Report"), both
dated March 12, 2002, the Spanish Study was actually conceived, and paid
for, by one individual, the owner of Alfocan, S.A. (Alfocan)-an Andalucian
crawfish processor that directly competes with other Andalucian crawfish
processors. He came up with the idea for the Spanish Study, proposed to
the Department of Agriculture and Fisheries that it print the Spanish
Study, hired an acquaintance of his as the consultant to perform the
study, and initially paid the consultant on his own (the only other
contribution to the consultant's fees came when one subcontractor of
Alfocan was later convinced by Alfocan to contribute a minimal sum-see
"Alfocan Report"). Id. The Department of Agriculture and Fisheries did not
come up with the idea for the Spanish Study, did not design or otherwise
plan the Spanish Study, and did not pay for the Spanish Study. Id. 

Furthermore, the price information contained within the Spanish Study is
not based on complete or actual, transaction-based data. As noted above,
the owner of Alfocan hired an acquaintance to perform the Spanish Study.
This acquaintance, the consultant owner of Mediterranean Business
Consulting (MBC), and author of the Spanish Study, informed the
Department's team that his research for the Spanish Study consisted of
issuing a questionnaire to crawfish companies in Andalucia, and then
following up with personal interviews with each. See "Freshwater Crawfish
Tail Meat from The People's Republic of China-Meetings Regarding the
Crawfish Industry in Spain: Mediterranean Business Consulting" ("MBC
Report"), dated March 12, 2002. The questionnaire contained requests for a
variety of general information, including the range of products produced
by each company, the percentage of total sales attributable to crawfish,
employment numbers for crawfish production, the percentage of production
sold to domestic and/or export markets, etc. See Exhibit 1 of the
"Agriculture and Fisheries Report." The questionnaire also asked for data
on total annual production of whole crawfish versus tail meat, as well as
total purchases of whole, live crawfish, and the associated minimum,
average, and maximum prices paid for whole, live crawfish in each of the
two production seasons (March to July, and July to November). The
questionnaire did not request data on a monthly basis. Id. 

The consultant further informed the Department's team that some of the
companies to which he sent the questionnaire provided full responses, and
some provided only partial responses-varying in degree of completeness.
See the "MBC Report." He did not examine purchase or sales documentation,
nor any purchase, sales or production accounting records. He followed up
with personal interviews with each crawfish company after receiving
questionnaire responses from them. According to the consultant, these
visits were made with the purpose of discussing and clarifying, as
necessary, the information submitted in the questionnaire responses. The
consultant informed the Department's team that he did not examine purchase
or sales documentation, nor any purchase, sales, or production accounting
records. Id. The consultant also indicated that he did not cross check the
information he received from the crawfish companies against any other
corroborating records or information. Id. The consultant stated that he
did send drafts of the Spanish Study to each participating company so that
the companies could check them for any errors. However, as noted in
"Spanish Trip Reports," most of the companies the Department's team met
with-which make up the bulk of the Spanish crawfish industry (see page 27
of the Spanish Study)-indicated that they never received these drafts. 

Information provided to us by other Spanish crawfish producers the
Department's team interviewed while examining the reliability of the
Spanish Study give us further reason to question the validity and accuracy
of the price data in it. For example, one company indicated that one of
its workers recognized the consultant as someone who had worked with
another competing crawfish company. See "Freshwater Crawfish Tail Meat
from The People's Republic of China-Meetings Regarding the Crawfish
Industry in Spain: Seafood Seville S.L." ("Seafood Seville Report"), dated
March 12, 2002. After learning of the consultant's alleged long-term
relationship with its competitor, Seafood Seville officials notified all
of the other crawfish companies in the area of the suspected affiliation
with their competitor, Alfocan, and themselves provided the consultant
only with rough approximations of their production, purchase price and
volume information. Id. Two other companies (Emfacar S.L. and Arroyo y
Terriza S.L.) also indicated that they only provided the consultant with
estimated data. 

As noted in the "MBC Report," according to the consultant, he received
purchase price and volume data from a few companies on a weekly basis
(however, as noted in the various "Spanish Trip Reports," the only company
the Department's team met with that said it provided any information on
anything more detailed than a seasonal basis was Alfocan). From these
data, the consultant stated that he calculated weighted-average prices and
purchase volumes for each month. Id. He declined to reveal which companies-
or how many companies-provided data on this basis. However, he explained
that he used these data as the basis upon which to allocate the season-
total/season-average price and volume figures he had collected in the
survey questionnaire responses from other companies to individual months,
as reflected in the graphs on pages 22 and 23 of the untranslated version
of the Spanish Study. Id. According to the consultant, this allocation was
made under the assumption that purchase price and volume fluctuations over
the course of the year would be the same across all companies. Id. In
other words, if, in a particular month, purchase prices or volumes rose or
fell by a certain degree at the company or companies which provided data
on a weekly basis, the consultant assumed that purchases prices and
volumes rose or fell by the same degree at those companies for which he
had only season-wide totals or averages. According to the consultant, he
did not cross-check his assumption that purchase price and volume
fluctuations over the course of the year would be the same across all
companies, nor did he cross-check the accuracy of his monthly purchase
price or volume allocations versus any actual company-specific data. Id.

As indicated by the information provided by the consultant, Alfocan, the
Department of Agriculture and Fisheries, and the other parties noted in
the "Spanish Trip Reports," the price data in the Spanish Study were
averages calculated on the basis of allocations, which were themselves
based upon numerous assumptions and possibly incomplete and/or inaccurate
and/or roughly estimated data. Although the Department's team attempted to
ascertain the following information, we do not know how many companies
supplied the detailed information that the consultant claims to have based
his allocation upon. We do not know whether the assumptions upon which
this allocation was based were sound. We do not know how many companies
provided complete responses to the consultant's questions regarding
seasonal averages of purchase prices or volumes. We do not know how many
of the companies that responded at all provided accurate information. We
do know that the price information provided by the majority of companies
participating in the Spanish Study was, at best, roughly estimated, and
was not calculated on the basis of actual transactional prices and/or
weighted averages thereof. We do know that the consultant did not examine
the purchase or sales documentation, nor any purchase, sales or production
accounting records of participant companies, and that he did not cross-
check the accuracy of his monthly purchase price and volume allocations
against any actual company-specific data. We also know that the Spanish
Study cannot be construed as an official government report, and that the
data in it are not regularly maintained and published by government
authorities. In light of all of this, we cannot conclude that the Spanish
Study satisfies the "fully reliable" component of the CTL Plate criteria
discussed above. Furthermore, although the Spanish Study may adequately
serve the purposes for which it was designed and produced by the
consultant and the company which paid for it, we cannot reasonably
conclude that there is even a substantial likelihood that the price
information contained within it is comprised of averages and/or is
representative of a wide, or otherwise appropriate, range of prices from
within the POR, and not potentially distorted by the influence and/or
special interests of any private sector parties. 

Considering all of the above information, we have determined that the
price data contained within the Spanish Study are not the best available
information for the live crawfish surrogate value. Consequently, we are
continuing to use the whole, live freshwater crawfish price utilized in
the Preliminary Results of this administrative review, and the final
results of the two most recent new shipper reviews.

Comment 3: Size and Weight of Live Spanish Crawfish

Petitioner states that, according to information provided by other
Spanish crawfish industry participants, the whole, live crawfish processed
in Spain may range in size from15 to 20 grams. Furthermore, petitioner
asserts, according to information in the Spanish Study, the average size
of whole, live crawfish processed in Spain is just over 22 grams.

Citing a study by Professor Jay Huner, petitioner claims that Chinese
processors routinely produce tail meat from crawfish with live weights
well over 20 grams, including crawfish with live weights of 40-70 grams.
Thus, petitioner argues, based on the record of this review, there is a
significant difference in physical characteristics between Spanish and
Chinese crawfish. In contrast, petitioner asserts, the range of crawfish
sizes used in China overlaps almost entirely with the range of sizes
represented in the Australian data. According to petitioner, in market
economies, smaller crawfish are less valuable to the processor for tail
meat production because more crawfish must be peeled to produce a given
quantity of tail meat, thereby increasing the processor's labor costs.
Petitioner argues that it is therefore inappropriate to use a surrogate
value that does not reflect prices for the larger crawfish used regularly
by Chinese processors.

According to petitioner, persons interviewed by the Department, and the
Spanish Study itself, acknowledge that crawfish prices in Spain vary based
on crawfish size. However, petitioner asserts, the Spanish Study does not
provide any size-specific price information. According to petitioner, the
record establishes that crawfish size is determined overwhelmingly by
environmental factors, as opposed to genetics. Thus, petitioner argues,
while the Spanish and Chinese crawfish may be of the same species, more
must be know to determine whether they are of comparable sizes. Petitioner
argues that the record of this review indicates that Spanish crawfish are
significantly smaller than the crawfish used by processors in China. In
contrast, petitioner asserts, the Australian crawfish data permit the
Department to ensure that it is using a value appropriate to the crawfish
sizes that are actually used in China. Thus, petitioner argues, the
Department should not use a Spanish average price for a range of sizes
that has not been shown to correspond to the range of sizes used in China. 

NN/LP asserts that petitioner has put nothing on the record to support a
conclusion that p. clarkii in Spain and China would not be the same size
due to differing environmental factors. NN/LP argues that evidence
suggests otherwise, as both countries have short crawfish seasons, and
both countries harvest a significant portion of their crawfish from rice
fields. 

NN/LP argues that there is no evidence showing that Spanish crawfish are
significantly smaller than Chinese crawfish. According to NN/LP,
petitioner's PAI indicating various size ranges offered for sale by
Chinese producers does not show how much of each size the Chinese actually
have. NN/LP argues that it would be more logical to conclude that
petitioner's PAI indicates that Chinese crawfish may be smaller than
Spanish crawfish because the majority of sizes that Chinese companies
offer for sale in the PAI are above the 150 count size. NN/LP also asserts
that there is no evidence on the record to support petitioner's affiant's
statement that tail meat in Spain is only available in sizes above 150
pieces of tail meat per pound. Finally, NN/LP argues that the Department's
prior use of Spanish import and export statistics never contained data
based on different sizes of crawfish, and that in fact the Department has,
in the new shipper and first administrative review for NN/LP, rejected
arguments supporting price differentiation based on size. 

In addition, NN/LP indicates that it has difficulty understanding the
basis for rejecting Spanish data simply because crawfish in Spain may be
slightly smaller than Chinese crawfish. In fact, NN/LP states, there is no
information on the record to suggest that the Chinese routinely use larger
size crawfish than do Spanish producers.

Lakebest et al. echoe the arguments of NN/LP on this issue. Lakebest et
al. also assert that size is irrelevant in a comparison of Spain and China
because all sizes of crawfish are processed into tail meat in both of
these countries. Size only matters in a comparison of China and Australia,
Lakebest et al. contend, because only certain sizes of yabbies are
processed into tail meat.

Department's Position: For the reasons provided in Comment 2, we have
concluded that the Spanish Study does not provide an appropriate surrogate
value for whole, live crawfish. These comments are therefore moot.

Comment 4: Whether Crawfish Capture in Spain Is Performed with Unbaited
Nets

Petitioner states that according to the Spanish Study, crawfish in Spain
are captured using 

unbaited nets, which are laid out in the rice fields and adjacent
channels. According to petitioner, this is a highly unusual method of
crawfish capture which appears to be unique to Spain. As pointed out by
petitioner, Professor Huner (a marine biologist and crawfish specialist)
reports that, in North America, "[c]rayfish are harvested almost
exclusively with baited mesh traps." Petitioner's PAI Exh. 7 at 48 (citing
five other studies). According to petitioner, the following quote from
Professor Huner's work indicates that the use of nets produces inferior
results, both in terms of the physical characteristics of the crawfish and
in terms of the economic consequences: "Seine and trawl systems are not
widely used to harvest crayfish for two reasons. First, they capture all
crayfish in their paths so that sensitive and fragile premolt, soft, and
recently molted postmolt crayfish are caught as well as the stable
intermolt specimen attracted to traps. The weak crayfish must be sorted
from the strong ones, an additional expense warranted only if the sorted
crayfish have high enough value to justify the added expense. Second,
seines and trawls are difficult to use in heavily vegetated crayfish
ponds." Id. at 55. See also Petitioner's PAI, dated May 25, 2001, at
Exhibit 9 (describing the "unique" Spanish method). Petitioner argues
Huner's concerns are echoed by Fisheries Western Australia, which notes
that the act of dragging a net "stirs up the bottom sediment in the dam
greatly... and is not recommended for commercial producers" and refers to
it as "a bad harvesting method." See "Australia Report" at Exhibit 1.
According to petitioner, there is no evidence that crawfish in China are
captured through the use of nets. To the contrary, petitioner argues, the
Department has found that the methods employed for crawfish production in
China are similar to those used in Australia, where nets are not used.
According to petitioner, in contrast to nets, crawfish traps are baited
and are only about one meter long by one-half meter in diameter.
Petitioner's PAI, dated May 25, 2001, at Exhibit 9. In natural fisheries,
such as those found in China and Australia, petitioner asserts that a
fisherman uses 100-500 traps, and must check each trap once to three times
daily, depending on catch rates-entailing much more cost and effort than
the use of an unbaited net, and limiting the catch to larger crawfish.
Petitioner also argues that where unbaited nets are used, and
extraordinary efforts are not made to sort the catch, the fisherman's cost
per kilogram of crawfish is lower, as is the average size of each crawfish
captured. Thus, petitioner reasons, the use of a radically different
method of capture in Spain has concrete commercial consequences: lower
costs, smaller crawfish, and crawfish of inferior quality. Petitioner
argues that each of these factors is likely to push unit values downward
in comparison to crawfish captured with traps. According to petitioner,
these differences, which were not explored on the record of previous
reviews, counsel against the use of Spain as the surrogate country for
valuation of Chinese crawfish in this review.

According to NN/LP, petitioner's case brief is misleading because the
Spanish Study states as follows: "The most common fishing method is the
place nets in the rice fields and adjacent channels without any bait. In
some areas, during the summer season (July-November), there is such
abundance of red crabs {crawfish} that it is not even necessary to lay out
nets. The art of fishing consists of going to the field with a shovel and
pick up red crabs." However, NN/LP argues, even if petitioner's allegation
were true, it is not relevant. To NN/LP's knowledge, never in the history
of antidumping cases has the method of production/capture been considered
by the Department in determining the validity of a surrogate value.
According to NN/LP, in any NME case, the Department simply tries to find
the prices of the factors which are used to make the subject merchandise. 

NN/LP notes that the Department has already made a determination on this
issue in the original crawfish investigation: "We have determined that it
is not appropriate to adjust the surrogate value to account for alleged
differences between the labor cost in the country in which the input is
valued and the labor costs in another country which is more economically
comparable to the NME country{f}or the Department to attempt such an
adjustment, whether to account for the alleged impact of a differential in
labor rates, or any other costs underlying the price of the imported
product would require a complex economic analysis. There are a number of
factors, including production and regional demand and supply functions as
well as the market price for a particular imported product. The impact of
these factors would be difficult if not impossible to determine with any
certainty." Final Determination 3/96-8/96.

Department's Position: For the reasons provided in Comment 2, we have 
concluded that the Spanish Study does not provide an appropriate surrogate 
value for whole, live crawfish. These comments are therefore moot.

Comment 5: Whether Spanish Crawfish Prices Are Aberrational

Petitioner points out that Petitioner's PAI Exhibit 23 (May 25, 2001)
provides import and export prices for freshwater crawfish in thirteen 
European countries, including Spain. Petitioner notes that the weighted-
average unit value, including both imports and exports, for all twelve 
countries other than Spain, was $8.40 per kilogram. In contrast, 
petitioner notes, the average unit value for Spain was just $4.36 per 
kilogram. At the same time, the weighted-average unit value of crawfish 
exports from all twelve countries other than Spain was $9.04 per kilogram, 
while the average unit value of Spanish crawfish exports was only $4.45 
per kilogram. Petitioner points out that in each comparison, Spanish 
unit prices were lower than unit prices found in any other country.

According to petitioner, it is well established that in NME cases, the
Department will disregard potential surrogate values that are
aberrational. See Final Determination of Sales at Less Than Fair Value:
Steel Concrete Reinforcing Bars from the People's Republic of China, 66 FR
33522 (June 22, 2001) (Reinforcing Bars), and accompanying Decision
Memorandum. Furthermore, according to petitioner, in deciding whether a
value is aberrational, the Department may compare the value to values
found in other market economy countries. Id. Petitioner argues that here,
the record shows that crawfish prices in Spain are aberrationally low
compared to other market economy countries. Accordingly, it is
petitioner's view that prices in Spain cannot provide an appropriate
surrogate value, based on the record of this review. 

According to NN/LP, the basis for petitioner's allegation is an undated
study which includes a chart based upon 1990 import and export prices for
freshwater crawfish in various European countries. NN/LP argues that, in
essence, petitioner's argument is that the Department should reject
official POR data from the Government of Andalucia on the grounds that a
1990 private study shows prices which are seemingly higher or lower than
prices in the Spanish Study. NN/LP asserts that the Department should use
the live crawfish prices in the Spanish Study for purposes of the final
results.

Department's Position: For the reasons provided in Comment 2, we have
concluded that the Spanish Study does not provide an appropriate surrogate
value for whole, live crawfish. These comments are therefore moot.

Comment 6: Similarity of Spanish GDP to That of China

According to NN/LP, Spain has long been championed by petitioner and the
Department as the best surrogate country for live crawfish valuation.
NN/LP argues that the Department has stated that Spain is at a level of
economic development, in terms of Gross Domestic Product (GDP), more
comparable to China than other countries which were significant producers
of tail meat, and that the Department used Spanish live crawfish data in
the 1997-1998 and 1998-1999 administrative reviews, as well as several new
shipper reviews. 

NN/LP asserts that per capita GDP is a key factor in the selection of a
proper country for obtaining surrogate values. According to NN/LP, section
351.408(b) of the Department's regulations provides that the Department
"will place primary emphasis on per capita GDP as the measure of economic
comparability." NN/LP also asserts that, according to 1999 World Bank
economic data, China had a per capita GDP of $780, Spain had a per capita
GDP of $14,800, and Australia had per capita income of $20,950. According
to NN/LP, one of the reasons Spain was selected over the United States in
NN/LP's new shipper review was that the per capita income of Spain was
closer to that of China than was that of the United States. NN/LP argues
that the same logic applies here. Since Spain's per capita income is
closer to that of China than is that of Australia, if the surrogate value
is equally valid, NN/LP asserts that the statutory preference is for Spain.

NN/LP asserts that petitioner's central argument in the past was that
because per capita GDP was lower in Spain than the United States, then
Spain must be selected as the source for a surrogate value for live
crawfish. Here, NN/LP states, Australia (like the United States) clearly
has a per capita GDP higher than Spain. Given the quality of Spanish
prices for live crawfish on the record, NN/LP argues that the Department
must use the Spanish data.

Department's Position: The Department's regulations state that the
Department will place primary emphasis on per capita GDP as the measure of
economic comparability. See section 351.408(b) of the Department's
regulations. However, economic comparability is required only to the
extent possible. In instances when the Department is not able to find
surrogate value information using a country at a comparable level of
economic development, the Department has the discretion to select another
country as a surrogate to determine the appropriate value. See Writing
Instrument Mfrs. Ass'n, Pencil Section v. United States, 984 F. Supp. 629,
638-639 (November 13, 1997). Although Australia's per capita GDP is
substantially above that of China, we are using the Australian crawfish to
value whole, live freshwater crawfish, because, as discussed in further
detail in Comment 1 above, it is the best available information on the
record.

Comment 7: The Spain Trip Versus the Australia and Mexico Trips

NN/LP claims that it has been asking the Department to collect Spanish
crawfish prices for years now, and that it has submitted (in previous
segments of this proceeding) Spanish invoices to the record. NN/LP also
implies that the Department should have gone to greater lengths to obtain
usable live crawfish surrogate value data from Spain prior to the February
2002 trip. 

NN/LP asserts that, in choosing a surrogate value, the Department
basically looks at three key issues: (1) comparability of the surrogate
country selected with the subject country; (2) volume of the surrogate
item in the surrogate country and whether that surrogate item is
comparable to the factor input; and (3) the value of the surrogate item.
Section 773(c) of the Act. According to NN/LP, the Department has stated
that "section 773(c)(1) of the Act mandates that the Department will
determine the factors of production in an NME using the best available
information. Inherent in the best available information standard is
Congress' recognition that while the Department should strive to identify
ideal values for factors of production, ideal factor information may not
be available given the statutory deadlines as well as the Department's
limited resources." See Final Results NSR (9/99-3/00).

According to NN/LP, the Court of International Trade in Shandong Huarong
General Corp.; Lianoning Machinery Import and Export Company; and Tianjin
Machinery Import and Export Corp. v. United States, 159 F. Supp. 2d 715,
719-720 (Ct. Int'l Trade 2001) held that "despite the broad latitude
afforded Commerce and its substantial discretion in choosing the
information it relies upon, the agency must act in a manner consistent
with the underlying objective of 19 U.S.C.  1677b(c).This objective is
achieved only when Commerce's choice of what constitutes the best
available information evidences a rational and reasonable relationship to
the factor of production it represents." NN/LP argues that the Department
has yet to satisfy its section 773(c)(1) obligations in the present
administrative review with respect to live Spanish crawfish.

NN/LP claims that it has been asking the Department to collect Spanish
crawfish prices for years now, and that it has submitted (in previous
segments of this proceeding) Spanish invoices to the record. NN/LP also
argues that it requested that the Department conduct audits of as many
producers as possible while in Spain, and that it ask the various Spanish
Study participants if they thought the prices in the Spanish Study were
accurate. According to NN/LP, the Department was required by law to
investigate the Spanish Study further. NN/LP further argues that there is
a pattern (including the Department's research efforts involving Mexico)
of the Department refusing to collect price data from countries other than
Australia.

NN/LP also argues that in its trip to Spain, the Department examined the
Spanish Study in a very cursory and subjective fashion, and, unlike in
Australia, either did not collect price information, or collected price
information and failed to report it. NN/LP argues that neither of these
possibilities is legally acceptable. 

Lakebest et al. argue that the Department's visit to Spain should have
been to corroborate Andalucian crawfish prices that had been placed on the
record of this proceeding. Lakebest et al. also contend the Department
failed to collect and/or report price information from the Spain trip,
despite the fact that they went to Australia for this purpose, and had
many opportunities to gather price information from a variety of
government and industry representatives in Andalucia. Petitioner contends
that it is neither the Department's normal practice, nor a requirement of
the antidumping statute or regulations, for the Department to conduct
field trips to other countries in order to test the validity of publicly
available surrogate value data, or to collect its own surrogate value
data. According to petitioner, the Department's regulations envision a
process by which respondents and domestic parties submit PAI, which the
Department then evaluates, in order to promote accuracy, fairness, and
predictability. See Antidumping Duties; Countervailing Duties; Final Rule,
62 FR 27295, 27366 (May 19, 1997). Petitioner asserts that if the
Department finds inadequacies in the PAI submitted, the Department may,
and often does, seek alternative PAI on its own initiative-usually by
local research in Washington, or through queries to overseas offices of
the Foreign Commercial Service. According to petitioner, field trips are
rarely used for this purpose. 

In this case, petitioner asserts, the Department went to the
extraordinary effort of sending teams to Australia and Mexico in June
2001, for the purpose of ascertaining the reliability of PAI submitted by
both themselves and respondents. According to petitioner, the Department
did not go to Spain at that time because all Spanish surrogate valuation
information then on the record had been shown to be unusable. 

Petitioner contends that the Department attempted to locate reliable data
on the Spanish crawfish industry in July 2001, through its normal channels
of inquiry (e.g., via the Foreign Commercial Service Office and Foreign
Agricultural Service officials in Madrid), but found nothing usable.
Petitioner further argues that the fact that "Central Government Sources
(Madrid), Regional Government Sources (Andalucia), and Provincial Sources
(Sevilla)" were unable to reference a source of data on crawfish
production in Spain when contacted by the Foreign Commercial Service
official attempting to locate data on the Department's behalf is evidence
that the Spanish Study was not something that the Andalucian Government
took seriously or stood behind. 

According to petitioner, subsequent to submission of the Spanish Study,
the Department's only responsibility with respect to the Spanish Study was
to determine whether it was the best source of surrogate data on the
record. Petitioner argues that it was wrong of the Department to attempt
to corroborate the Spanish Study, as it was flawed on its face, and in
light of the fact that respondents had, up to that point, put virtually
nothing on the record of this review regarding the Spanish crawfish
industry. According to petitioner, when the Department got to Spain, it
found not a careful government study, but an unscientific, unsupervised
hodgepodge of rough estimates and unsupportable allocations, all
orchestrated by a single company with longstanding connections to
respondents and the Chinese crawfish trade. 

In contrast to the Australian prices, which were stable over time,
petitioner asserts that the prices and supply in the Spanish Study
fluctuate wildly from month to month. According to petitioner, under these
conditions, people cannot be trusted to calculate weighted averages
accurately in their heads. Furthermore, according to petitioner, the
Spanish Study questionnaire's request for "average" price is ambiguous.
Petitioner asserts that in a market with wild fluctuations in supply, the
average unit price would be quite different from the weighted average unit
price. 

As a result of these problems, petitioner argues, the Department could
not possibly have validated the consultant's flawed research by asking
individual parties whether the prices appeared to be correct. According to
petitioner, the record of this case would not have been improved by the
addition of more flawed data from Spain. Petitioner concludes that NN/LP's
arguments boil down to a claim that the Department should have collected
its own monthly volume and value data from each of the Spanish crawfish
processors-after the Preliminary Results had been published, after the
deadline for submission of PAI, and after the briefs had been filed.
According to petitioners, NN/LP fails to cite a single statute,
regulation, or case in support of this assertion. 

Department's Position: In conducting our background research in Spain on
the Spanish Study, once the Department's team learned that price
information contained therein did not reflect actual prices, but rather
unchecked estimates, our inquiry essentially ended. At that point, it was
not appropriate for the team to begin collecting, analyzing, and
establishing the accuracy of new Spanish whole crawfish price information
for the purpose of calculating average, product-specific, non-export
values, representative of a range of prices within a period matching or
nearly contemporaneous with the POR. That would have entailed collecting
and analyzing data, and essentially composing an original study, which is
not responsibility of the Department. See section 773(c)(1) of the Act.
The purpose of the trip was only to examine the potential usability of the
PAI placed on the record by respondents-to consider the relative quality
of alternative information, submitted and proposed for our use by NN/LP,
in order to determine whether it could be considered the best available
information on the record. Once we found that the data in the Spanish
Study could not be an appropriate basis for our analysis, there was no
basis for proceeding further to rehabilitate the data.

As explained in Final Results ADR& NSR (9/98-8/99), and accompanying
Decision Memorandum at Comment 1, at the time that the Department sent
teams to Mexico and Australia, we had no usable surrogate value
information for live crawfish on the record. We had determined that both
Spanish import prices from Portugal and Spanish export prices were
unusable. See Final Results ADR& NSR (9/98-8/99), and accompanying
Decision Memorandum at Comment 1. Accordingly, in order to find a raw
crawfish surrogate value for use in the ongoing reviews, the Department
conducted research into the existence of freshwater crawfish industries
worldwide, through the internet, libraries, and the U.S. Foreign
Commercial Service. Notably, officials with the U.S. Embassy in Madrid,
researching the Spanish crawfish industry on our behalf, were not able to
obtain data on the size of the industry, the value or volume of production
of this industry, or the value and volume of sales of this industry. See
"Memorandum to the File from Abdelali Elouaradia, Mark Hoadley, Jacky
Arrowsmith and Christian Hughes: Communication and Findings Regarding
Whole Live Crawfish Production in Reference to the Administrative Review
and New Shipper Reviews of Freshwater Crawfish Tail Meat from the People's
Republic of China" ("Crawfish Research Report"), dated July 31, 2001.
Because interested parties had submitted information for the record
supporting their contention that there were commercial crawfish industries
in Australia and Mexico, the Department also sent teams of analysts to
Australia and Mexico to examine whether prices for whole, live crawfish
produced in those countries could serve as an appropriate surrogate value.
The Department sent teams to those countries because it was not clear from
the PAI submitted by the parties exactly what price information might be
appropriate for use as a surrogate value for whole, live crawfish, and
because the parties submitted contradictory information. We did not send
teams to any other countries at that time because no other PAI had been
submitted by the parties. Although the Department will search for PAI
using as many research methods as reasonably possible, we cannot send
teams to various countries to conduct research, or to collect, compile,
and analyze surrogate price information.

Thus, the purpose of the team's trips to Mexico and Australia was
entirely different than for the trip to Spain. At the time of the Mexico
and Australia trips, the Department had no usable surrogate information
for live crawfish. We, therefore, took the additional step of traveling to
those countries to actively examine the PAI on the record, and to seek, if
necessary and reasonably possible, new information. At the time of the
Spain trip, the Department did in fact, have price information that it had
found usable. It was therefore not our objective to obtain new or
replacement information, but simply to consider the relative quality of
alternative information, submitted and proposed for our use by NN/LP, in
order to determine whether it could be considered the best available
information on the record. The trip was therefore appropriately limited in
scope.

The Spanish Study was not placed on the record of this case (or otherwise
made known to the Department) until October 29, 2001-after publication of
the Preliminary Results. At that point, no other surrogate value
information regarding Spain had been placed on the record of this review.
Although the Department's regulations allow for the submission of
surrogate value information up until 20 days after publication of
preliminary results, the late timing of such submissions significantly
restricts the extent to which the Department can utilize or follow up on
any information contained therein. See section 351.301(c)(3)(ii) of the
Department's regulations. The current proceeding illustrates this. 

Regardless of when, subsequent to the October 29, 2001, submission of the
Spanish Study, we determined that the information contained within the
Spanish Study was not usable as surrogate value information for live
crawfish, any attempt by the Department to recreate the Spanish Study by
collecting, analyzing, and adequately verifying new Spanish live crawfish
price information for the purpose of calculating average, product-
specific, non-export values, representative of a range of prices within a
period matching or nearly contemporaneous with the POR, for use as a
surrogate value for the current review, would have created serious
logistical and procedural problems. Such an exercise would have entailed
the collection, from at least four Spanish crawfish companies, of actual
transactional purchase data, on at least a monthly basis, for a period
ideally covering the current POR. This information would have had to have
been cross-checked against company accounting records. Given that usable
Australian price information was on the record, the Department was not
required to conduct such an exercise prior to the fully extended deadline
for these final results, particularly where we would not have been able to
give parties an adequate opportunity to comment. 

Section 773(c)(1) of the Act mandates that the Department will determine
the factors of production in an NME using the best available information.
Inherent in the best available information valuation standard is Congress'
recognition that while the Department should strive to identify the best
available information for factors of production, ideal factor information
may not be available given the statutory deadlines as well as the
Department's limited resources. See Final Results ADR & NSR (9/98-8/99),
and accompanying Decision Memorandum at Comment 5. It is not the
Department's responsibility to recreate PAI submitted by interested
parties in order to make it usable. We can only evaluate whether it is
usable or not.

In light of the history of the Department's efforts to obtain better
Spanish surrogate value data for live crawfish under this order, as
described in Comment 2, any suggestion by interested parties that the
Department's efforts in this regard were lacking under this segment of the
proceeding is contradicted by the facts. In all of the segments discussed
in Comment 2, the Department tried to find better Spanish data, but was
unsuccessful. The interested parties also failed to submit better Spanish
data. 

As for this segment of the proceeding, until the October 29, 2001,
submission of the Spanish Study (which was first published in the Summer
of 2001), no other surrogate value information regarding Spain had been
placed on the record of this review. Nevertheless, we again attempted to
obtain usable surrogate value data from Spain with the help of U.S. &
Foreign Commercial Service and Foreign Agricultural Service contacts with
the U.S. consular community in Spain. See "Memorandum to the File from
Abdelali Elouaradia, Mark Hoadley, Jacky Arrowsmith and Christian Hughes:
Communication and Findings Regarding Whole Live Crawfish Production in
Reference to the Administrative Review and New Shipper Reviews of
Freshwater Crawfish Tail Meat from the People's Republic of China"
("Crawfish Research Report"), dated July 31, 2001. In fact, as Andalucian
Government officials associated with the Spanish Study stated to the
Department's team, "there had never been a study {of the Spanish crawfish
industry} done before." See "Freshwater Crawfish Tail Meat from The
People's Republic of China-Meetings Regarding the Crawfish Industry in
Spain: Junta de Andalucia, Consejeria de Medio Ambiente," dated March 12,
2002 (Consejeria de Medio Ambiente). Regardless, until the October 29,
2001, submission of the Spanish Study, there was no Spanish surrogate
value information on the record of this segment of the proceeding-and
certainly nothing to suggest that the effort and expense of a trip to
Spain before the submission of the Spanish Study by the Department would
have yielded worthwhile, usable results. 

Comment 8: Use of Mexican Data as a Surrogate Value for Whole, Live
Crawfish

Fujian Pelagic Fishery Group Co., Huaiyin Foreign Trade Corporation 30,
Yancheng Foreign Trade Corporation, and Yancheng Yaou Seafood Co.
(collectively, Fujian Pelagic et al.) argue that the Department's choice
of Australia to value whole freshwater crawfish is flawed. Fujian Pelagic
et al. suggest that the Department use Mexican data as the surrogate value
for the whole, live crawfish, and they submitted information which they
claim establishes that Mexico is a significant producer of crawfish and
that Mexico is exporting frozen crawfish tail meat to the United States.
Fujian Pelagic et al. state that the Department had dismissed such
information for purposes of surrogate valuation in prior proceedings and
that the key issue for the Department has been its impression that there
is no significant commercial industry in Mexico. See Final Results NSR
(9/99-3/00), and accompanying Decision Memorandum at Comment 1.

Fujian Pelagic et al. state that there is some disagreement as to the
existence of freshwater crawfish tail meat in the Mexican state of
Veracruz, and reference a letter from the local government official who
serves as the Veracruz Sub-Delegate of Fisheries for the Office of the
Secretary for Agriculture, Livestock, Rural Development, Fish and Food
(Secretaria de Agricultura Ganaderia Desarollo Rural Pesca Y Alimentacion
(SAGARPA)). In this submission, the official states that local fishermen
produce, consume and engage in "commercialization" with respect to
crawfish. See November 27, 2001 Fujian Pelagic et al. Case Brief at 25. In
Exhibit 1C of the Fujian Pelagic et al. November 1, 2001 Surrogate Values
Submission, the letter from the local government official who serves as
the Veracruz Sub-Delegate of Fisheries for SAGARPA states: "It is the
local people near the coast that take advantage of the volume of
production for their own consumption and commercialization within the
region without leaving a statistical trace of its exact origin." See
November 1, 2001, Fujian Pelagic et al. Surrogate Values at Exhibit 1C.

Fujian Pelagic et al. explain that because complete official statistics
are unavailable, they submitted sample sales information from a company
called Pescatalan, S.A. de C.V. (Pescatalan). Fujian Pelagic et al. claim
that Pescatalan processed "frozen freshwater crawfish tail meat" locally
harvested by fishermen in and around the city of Alvarado in the Mexican
State of Veracruz, at a company called Planta Congeladora "Planeta Azul."
Fujian Pelagic et al. state that this crawfish tail meat was sold to
companies in the United States in late 1999 and early 2000, and note that
they included three sample invoices in their surrogate value submission.
Fujian Pelagic et al. state that the crawfish tail meat that Pescatalan
purchased was invoiced as acocil, camarn, reculilla, and/or langostino.
Fujian Pelagic et al. also argue that this merchandise was imported into
the United States as frozen freshwater crawfish tail meat and that it
would constitute fraud on the U.S. Customs Service to mislabel the
merchandise as freshwater crawfish tail meat and then to provide another
product. In addition, Fujian Pelagic et al. state that they submitted
certain affidavits and statements regarding the collection and
availability of data for freshwater crawfish in Mexico, and photographs of
commercial facilities used both previously and currently for freshwater
crawfish production in the city of Alvarado. Fujian Pelagic et al. claim
that they provided evidence that a freshwater crawfish industry has
operated in the Alvarado area (of Veracruz) since approximately 1970.

Petitioner states that the affidavit from Pescatalan's proprietor and the
affidavit from one of Fujian Pelagic et al.'s attorneys submitted in
Fujian Pelagic's Surrogate Values Submission, on November 1, 2001, fails
to demonstrate that the merchandise 'produced' by Pescatalan, a
repackager, was made from freshwater crawfish from Mexico. As for Fujian
Pelagic et al.'s claim that the merchandise was imported into the United
States as frozen freshwater crawfish tail meat, petitioner notes that
Fujian Pelagic et al. did not include customs entry documents with the
materials submitted. Petitioner contends, however, that even a customs
entry form would not be dispositive. Petitioner states that the U.S.
Customs Service rarely performs physical inspections of commercial
shipments and that, even when it does, the U.S. Customs Service normally
accepts the importer's classification without further inquiry. Petitioner
argues that even with the photographs submitted by Fujian Pelagic et al.,
it has not been shown that Planeta Azul or Casa Zobek, processing
facilities in Alvarado, actually process crawfish tail meat. (Fujian
Pelagic's attorney provided photographs of another Mexican processor, Casa
Zobek, in the November 1, 2001 Surrogate Value submission to establish
that tail meat processing exists in Alvarado, since Planeta Azul was not
processing tail meat during his visit to Alvarado.) Because Fujian Pelagic
et al. have not provided conclusive evidence that these processing
companies are actually processing freshwater crawfish tailmeat,
information regarding these facilities does not provide a usable surrogate
value. Furthermore, petitioner points out that the Pescatalan invoices
were self-selected by respondents using unspecified criteria. 

Petitioner states that the letter from a representative of the transport
union workers' union in Alvarado, Veracruz, states that "commercial
amounts of processed crawfish pulp (reculilla)" are transported to
different cities, but this union representative does not explain what he
means by "commercial amounts," and his statement does not establish that
Mexico is a significant producer of comparable merchandise. Petitioner
claims that the letter from a SAGARPA official, another piece of new
information that was submitted in Fujian Pelagic et al.'s November 1, 2001
Surrogate Value Submission, is consistent with the Department's previous
findings in Mexico.

Petitioner contends that Fujian Pelagic et al. have failed to demonstrate
that any species of freshwater crawfish found in Mexico is physically or
commercially comparable to the freshwater crawfish used by Chinese
processors. According to petitioner, the various species of crawfish were
either smaller than p. clarkii (the species of freshwater crawfish that
are cultivated in both Louisiana and China) or found not to exist outside
the laboratory setting by the Department team. Petitioner concludes that
Mexico cannot be used as a surrogate country for the valuation of live
crawfish when there is no evidence that freshwater crawfish cultivated in
Mexico are comparable to crawfish cultivated in China.

Petitioner also contends that the record of this review does not contain
reliable price information for freshwater crawfish in Mexico. Petitioner
explains that the SEMARNAP (SEMARNAP is the former name for the Office of
the Secretary for the Environment, Natural Resources and Fish) data cannot
be used for this purpose, because it does not appear to be limited to
freshwater crawfish, is collected irregularly, and covers only sporadic
shipments in specific months.

Department's Position: We disagree with Fujian Pelagic et al. that the
information they submitted establishes that Mexico is a significant
producer of freshwater crawfish. In June 2001, the Department sent a team
of analysts to Mexico to research freshwater crawfish and the possible
existence of a freshwater crawfish industry. See "Memorandum to the File
from Jacqueline Arrowsmith and Mark Hoadley: Freshwater Crawfish Tail Meat
from the People's Republic of China: Meetings Regarding the Crawfish
Industry in Mexico," dated July 18, 2001 ("Mexico Trip Report") at 1.
While the team was in Mexico, its members interviewed numerous government
officials in both Mexico City and in Veracruz, as well as industry
officials and researchers in Veracruz who provided information which
directly contradicts Fujian Pelagic et al.'s conclusion that a crawfish 
tail meat processing industry exists in any commercial form. The 
following excerpts from the "Mexico Trip Report" clearly show that no 
such commercial industry has existed in Mexico in recent years:

     As far as procambarus clarkii, Mr. Nieto explained that 
     the Mexican government had tried to start commercial 
     production of procambarus clarkii through the use of 
     farms on Mexico's east coast. Eventually some of these
     procambarus clarkii farming initiatives were transplanted 
     to the west coast (Sinaloa, Sonora, and Baja California 
     Sur). Because the farms were not successful in cultivating
     procambarus clarkii, the farms with the assistance of the 
     government imported what is called the Malaysian crawfish
     ...as an alternative to cultivate...The macrobrachium 
     farmers, according to Mr. Nieto, in general had determined 
     that shrimp farming was more lucrative and abandoned the 
     macrobrachium...."Mexico Trip Report" at page 3. 

Another passage states:

     Mr. Nieto explained that, although procambarus clarkii and 
     macrobrachium farming projects had failed, macrobrachium 
     was still caught wild by fishermen. Id. at page 3. 

Lastly, the "Mexico Trip Report" states:

     She {Rosa Nunez, a biologist at the Centro Nancional de 
     Investigacion Pesquera} explained that her job is to compile 
     information on local species of freshwater crustaceans: 
     primarily, macrobrachium carcinus, macrobrachium acanthurus, 
     and macrobrachium heterochirus. She stated that she had 
     proposed to her superiors a study of acocil, but her proposal 
     was rejected because her superiors did not believe acocil 
     was commercially significant. Id. at page 6.

We agree with the petitioner that there is no dispositive evidence that
what Pescatalan sold during December 1999 and January 2000 is even
crawfish and not some other type of crustacean. As stated on page 10 of
our "Mexico Trip Report," there is ambiguity in the definition of the word
acocil (a colloquial Mexican Spanish word for crawfish):

     Mr. Fuentes and Ms. Cardena, along with the Atlas Pesquero de 
     Mexico, define acocil as cambarellus montezumae montezumae, 
     astacus cambarus, and procambarus clarkii. Mr. Nieto defined 
     acocil as belonging to the cambarellus genus, but added that 
     the definition had been expanding over the past two decades 
     at least in its vernacular use. Ms. Lorn defined acocil as 
     procambarus acanthophorus. Mr. Cruz defined acocil as procambarus
     acanthophorus and atya scabra. The fisherman in La Rinconada 
     referred to a burrito (atya scabra) as acocil. Mr. Hernandez 
     defined acocil as primarily procambarus montezumae, and 
     secondarily as procambarus astacus. 

The invoices for sales of partially processed tail meat provided by
Fujian Pelagic et al. in their November 1, 2001 surrogate value submission
indicate a number of Spanish terms: langostino, pulpa langostino,
reculilla, and pulpa de camern. Given the variations in the terminology
and the fact that camern means shrimp in Spanish, we find that the
information regarding Pescatalan's purchases and sales is not sufficient
to overcome the findings of the Department team which traveled to Mexico
and met with Mexican officials knowledgeable about crustaceans in Mexico,
and specifically Veracruz, where Alvarado is located. Furthermore, we
agree with petitioner regarding the flaws in the SEMARNAP data. Thus, we
conclude there are no reliable Mexican commercial prices of raw crawfish
on the record. Assuming that the documentation submitted by Fujian Pelagic
et al. provided dispositive evidence that there was a commercial
freshwater crawfish tail meat processing industry, this documentation
would not validate the use of flawed statistics for whole, live freshwater
crawfish prices.

Comment 9: Comparability of Economies

Fujian Pelagic et al. argue that the Department cannot use Australian
yabby prices because Australia is not a comparable economy to China.
Fujian Pelagic et al. do note that, where the Department is unable to
locate surrogate value information using a country at a comparable level
of economic development, the Department has some discretion to select
another country as a surrogate to determine the appropriate value.

Fujian Pelagic et al. assert that the Mexican economy is more comparable
to the Chinese economy than is the Australian economy. Fujian Pelagic et
al. argue that because the respondent parties have established through
record evidence that there exists a commercial freshwater crawfish
industry in Mexico, based upon the requirements of 19 CFR  351.408(b),
which states that the Department will place its "primary emphasis on per
capita GDP as the measure of economic comparability," the Department
should accept the Mexican whole, live crawfish data supplied by the
respondent parties. Fujian Pelagic et al. state that the Department
determined in its most recent 

reviews that Australia's per capita GDP is well above that of China,
Fujian Pelagic et al. also refer to exhibits contained in their surrogate
values submission, which provide data from several World Bank
publications, indicating that Australia is much less comparable to China
than is Mexico. 

Department's Position: The Department's regulations state that the
Department will place primary emphasis on per capita GDP as the measure of
economic comparability in selecting a country to use in surrogate
valuation. See 19 CFR 351.408(b). However, economic comparability is
required only to the extent possible. In instances where the Department is
not able to find surrogate value information using a country at a
comparable level of economic development, the Department has the
discretion to select another country as a surrogate to determine the
appropriate value. See Final Determination of Sales at Less Than Fair
Value: Certain Cased Pencils From the People's Republic of China, 59 FR
55625, 55630 (November 8, 1994). In the original investigation and in
several subsequent reviews, the Department used Spain as a surrogate for
the valuation of whole, live crawfish, even though Spain's economy is not
comparable to China's, because the data on Spanish imports of crawfish
from Portugal were the best available information on the record.
Similarly, in a subsequent new shipper review, we used data from Australia
as a surrogate for raw crawfish valuation, because it was the best
information on the record. See Final Results NSR (9/99-3/00), and
accompanying Decision Memorandum at Comment 1. Because we have determined
that there is not a commercial crawfish industry in Mexico, the relative
comparability of the Mexican and Australian economies to China does not
preclude the use of surrogate values from Australia to value whole, live
crawfish.

Comment 10: Suggested Wet-dry Weight Conversion Factor for Crawfish
Scrap, based on Information from an Indian Chitosan Producer

As discussed in the 1997-1998 review, the production of crawfish tail
meat from whole crawfish results in a byproduct, i.e., crawfish shell,
which has a value and, thus, should be treated as an offset to the normal
value of crawfish tail meat. See 1997-98 Final Results and accompanying
decision memorandum. In previous reviews, the Department has determined
that the byproduct is a result of the production process and that through
the sale of crawfish shells an economic benefit has accrued to Lakebest et
al. See, e.g., Freshwater Crawfish Tail Meat From the People's Republic of
China: Final Results of Administrative Antidumping Duty and New Shipper
Reviews, and Final Rescission of New Shipper Review, 65 FR 20948 (April
19, 2000). In the Preliminary Results of this review, the Department used
a September 1999 free-on-board (FOB) factory price quote for crab and
shrimp shells to value the by-product of shells. Because the surrogate
value was on a dry-weight basis, where shells were sold wet by the Chinese
exporter, we incorporated a 30 percent wet-dry conversion factor, based on
an article titled "The Development of Crustacean and Mollusc Industries
for Chitin and Chitosan Resources," published by S. Subasinghe, page 33.
This article identifies wet-dry conversion ratios for crab and shrimp
shells on a global basis. 

Petitioner argues that the wet-dry weight conversion factor for scrap
should be 13.3 percent based on information they provided that was
published by an Indian Chitosan Producer; Mahtani Chitosan Pvt. Ltd.
(Mahtani Chitosan). Petitioner claims its November 1, 2001, surrogate
value submission describes a different yield experience in India based on
published information obtained from Mahtani Chitosan. Furthermore,
petitioner states that since India has been identified as the primary
surrogate country for this review, the Department should use the 13.3
percent wet-dry conversion factor as indicated by Mahtani Chitosan instead
of the 30 percent shown in the S. Subasinghe article. 

Petitioner claims that Mahtani Chitosan states that its yield of chitin
(a product made from crawfish shells) extraction is 15 percent from dried
shells or 2 percent from fresh shells. From this, petitioner has
calculated a wet-to-dry weight conversion ratio of 13.3 percent, which it
urges the Department to use in the final results. 

NN/LP, on the other hand, argue that petitioner's suggestion that the
Department utilize a wet-dry weight conversion ratio of 13.3 percent is
incomprehensible. Instead, these respondents state that the Department
should use information they provided because it clearly demonstrates that
the actual conversion factor is 50 percent. See Comment 12, below.

Lakebest et al. argue that the Department must reject petitioner's
request to utilize a 13.3 percent conversion factor for scrap in this
administrative review. Lakebest et al. state that petitioner argues for
the Department to abandon the 30 percent wet-dry conversion factor applied
to the scrap price quote because it has acquired a more favorable
conversion factor from published information by Indian Chitosan producer,
Mahtani Chitosan Pvt. Ltd (Mahtani Chitosan), which would yield higher
dumping margins in this proceeding. 

Lakebest et al. claim that the Mahtani Chitosan conversion factor is
inappropriate because Mahtani Chitosan employs sophisticated techniques in
drying seafood shell scrap and extracting chitosan from the waste shells.
Lakebest et al. argue that Chinese crawfish producers, on the other hand,
simply dry their shell scrap by exposure to sunlight. Lakebest et al.
argue that petitioner's suggestion for the Department to ignore the
production experience of Chinese crawfish producers and to reduce the wet-
dry conversion ratio for shell scrap based on the production practices of
Mahtani Chitosan is inappropriate.

Department Position: The Department disagrees with petitioner that
information regarding Mahtani Chitosan provides a more appropriate wet-dry
conversion factor than the article by S. Subasinghe used in the
Preliminary Results. While India is at a level of development more
comparable to China than is the country from which we obtained the price
quote for shell scrap, we have concerns about the applicability of the
surrogate information provided by petitioner. Although we have attempted
to contact Mahtani Chitosan to obtain more information, we have not been
successful. See "Memorandum from Mark Hoadley to the File: Attempts to
Contact Mahtani Chitosan Pvt. Ltd.," dated December 6, 2001. Thus, we are
unable to judge the applicability of relative chitin extraction ratios for
wet and dry shells to the drying of shells independent of chitin
production. Without further information, we find that we cannot use the
conversion factor submitted by petitioner. Therefore, for the final
results of review, we continued to use the same source as in the
Preliminary Results, that is, an article published by S. Subasinghe, "The
Development of Crustacean and Mollusc Industries for Chitin and Chitosan
Resources," page 33. 

Comment 11: The Appropriate Factor for Use in Calculating a Wet-dry
Conversion Factor

Petitioner argues the price quote used by the Department in the
Preliminary Results to value crawfish scrap is for dried shells for both
shrimp and crab, whereas the wet-dry conversion factor of 30 percent used
by the Department in the Preliminary Results was based only on crab data.
The article, however, also provides a conversion factor of 25 percent for
shrimp. Thus, petitioner argues, if the Department continues to utilize
the same source for the final results, an average of the wet-dry
conversion factor for crab and shrimp shells, 27.5 percent, should be
used. 

Lakebest et al. argue that petitioner has ignored the fact that Lakebest,
Qingdao Rirong, Haiteng and Suqian have established that they each dry
their shell scrap and, therefore, that the application of any wet-dry
conversion ratio is inappropriate. 

Department Position: The Department agrees with petitioner's arguments
that the wet-dry conversion factor should include both crab and shrimp
shells, because the price quote for shells is in fact for both shrimp and
crab shells. See Final Results NSR (9/99-9/00). The surrogate value and
the conversion factor should ideally be on the same basis, because the
values of various types of wet shells could be affected by their relative
moisture content (i.e., wet crab shells could dry differently than wet
shrimp shells). Therefore, for these final results, we have used the
average of the conversion rates for crab and shrimp shells, 27.5 percent,
to convert the dry-weight value of crab and shrimp shells to a wet-weight
value.

We disagree with Lakebest et al.'s argument that the application of any
wet-dry conversion ratio is inappropriate for these four respondents. At
most, Lakebest et al. dried their scrap only to the extent of leaving it
out in the sun. See our position in Comment 13, below.

Comment 12: Suggested Wet-Dry Weight Conversion Ratio of 50 Percent for
Crawfish Scrap

NN/LP argue that, for the final results, the Department should use a wet-
dry conversion ratio of 50 percent, based on their November 1, 2001,
submission. 

Petitioner argues that the 50 percent wet-dry weight conversion ratio for
crawfish scrap suggested by NN/LP is not suitable because it is based on a
patent for a process that is not typically used in chitosan production.
The patent states that the normal methodology for producing chitosan
involves "a process of grinding and demineralization with different acid
solutions." However, the patent methodology used involves producing chitin
through a mechanical process via an air classification procedure rather
than through the normal chemical methodology used in the industry. Thus,
petitioner argues, when the patent states that scrap is dried to a
suitable moisture by removing 50 percent of the wet weight, it means a
moisture suitable for this patented process, not the process normally
employed in chitosan production. Petitioner contends that NN/LP's
suggested ratio of 50 percent also does not represent the best available
information on the record because it is limited to the United States.
Petitioner concludes that it has provided evidence demonstrating that the
wet-dry ratio experienced by a chitosan producer in India is 13.3 percent
and because India is the primary 

surrogate country, the ratio it provided is more appropriate in this
review. 

Department Position: NN/LP's suggested weight conversion factor is based
on a statement in a website of Vincent Corporation, a designer and
manufacturer of screw presses. A page from Vincent Corporation's website,
included in Louisiana Packing Company's November 1, 2001, PAI submission,
indicates that shrimp shells are comprised of 50 percent to 70 percent
moisture; this would translate to a wet-dry conversion ratio of 30 percent
to 50 percent for shrimp shells. While NN/LP advocate using the higher end
of this ratio, 50 percent, the lower end, 30 percent, is close to the
ratio for shrimp given in the S. Subasinghe article (see Comment 10,
above)-i.e., 25 percent. However, the information submitted by
respondents, unlike the S. Subasinghe article, does not include a wet-dry
conversion ratio for crab shells. Because the scrap data are based on a
combination of crab and shrimp shells, a wet-dry ratio on that same basis
is preferable, as wet crab shells could dry differently than wet shrimp
shells. Therefore, the Department applied an average conversion factor of
27.5 percent for these final results. 

Comment 13: Incorporation of a Wet-Dry Weight Conversion for Scrap for
Lakebest

Petitioner points out that the Department did not apply a wet-dry scrap
conversion to Lakebest in the Preliminary Results because Lakebest's
crawfish shells were dried in the sun; the Department instead deducted the
entire by-product credit. See "Memorandum to File from Brett L. Royce;
Analysis for the Preliminary Results of Review of Freshwater Crawfish Tail
Meat from the People's Republic of China: Yangzhou Lakebest Co., Ltd.,"
dated October 1, 2001, at 2. Petitioner claims that the surrogate price
quote, which is stated on a dry-weight basis, reflects a process more
advanced than sun-drying, and that, therefore, a wet-dry conversion ratio
must be applied to Lakebest's scrap in order to make an apples-to-apples
comparison with the price quote for dried shell. Petitioner cites the
"Memorandum to File from Doug Campau Re: Analysis for the Preliminary
Results of Review of Freshwater Crawfish Tail Meat from the People's
Republic of China: Qingdao Rirong Foodstuff Co., Ltd.," dated October 1,
2001 at 2, in which, petitioner claims, the Department expressly endorsed
the application of a conversion ratio where shells were dried in the sun.

Lakebest et al. argue that the Department's long-standing surrogate value
methodology seeks to calculate a normal value for the NME respondents as
if the NME were a market-economy country and the fact that Lakebest does
not have a sophisticated drying process as the surrogate producer is
irrelevant and contrary to Department practice. Lakebest et al. also state
that the Department has specifically acknowledged that it is inappropriate
to attempt to "customize the {surrogate} values to match the circumstances
of the PRC producer." See Persulfates from the People's Republic of China:
Final Results of Antidumping Duty Administrative Review, 64 FR 69494
(December 13, 1999) and accompanying Decision Memorandum at Comment 1
(citing Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, From the People's Republic of China; Final Results of 1996-
1997 Antidumping Duty Administrative Review and New Shipper Review and
Determination Not To Revoke Order in Part, 63 FR 63842, 63853 (November
17, 1998); and Certain Helical Spring Lock Washers From The People's
Republic of China; Final Results of Antidumping Administrative Review, 61
FR 41994, 41999 (August 13, 1996)). Lakebest et al. claim that in the
preamble to the Department's regulations, the Department stated that "we
do not believe that it is appropriate to check surrogate value against the
NME respondents' experience." Antidumping Duties; Countervailing Duties;
Final Rule, 62 FR 27296, 27366 (May 19, 1997). Lakebest et al. argue the
Department should continue to deduct the full by-product credit for
Lakebest because the Department has determined that Lakebest's shells were
dried. In addition, Lakebest submitted affidavits attesting to the fact
that its shells were sold on a dry basis. 

Department Position: We agree, in part, with petitioner. The surrogate
value for crawfish scrap is for scrap that has been dried through an
industrial drying process, whereas Lakebest has stated that it dried its
shells in the sun. The surrogate value represents dried and cleaned
shells, which cannot be considered comparable to shells that are simply
dried in the sun. We further note that, although another company reported
that its scrap was dried naturally through exposure to sunlight, at
verification we found that dripping wet shells were dumped into a
courtyard, from where they were picked up daily. See "Administrative
Review of Freshwater Crawfish Tail Meat from the People's Republic of
China (A-570-848): Sales and Factors Verification of Qingdao Rirong
Foodstuff Co., Ltd." at 11. Consequently, we concluded that Qingdao
Rirong's scrap was sold on a wet basis, and applied a wet-to-dry
conversion factor. 

Therefore, for the final results of review, the Department incorporated a
wet-dry conversion factor for Lakebest, as well as for Suqian, Yancheng
Haiteng and Qingdao Rirong; none of which dried their shells further than
by leaving them in the sun. 

Comment 14: Suqian's Wet-Dry Conversion

Petitioner alleges that the Department did not actually apply the wet-dry
conversion ratio to the crawfish scrap credit as stated in the preliminary
analysis memorandum. Petitioner states that this error should be corrected
in the final results by applying the same wet-dry conversion ratio used
for other respondents.

Department's Position: We agree and have corrected this clerical error
for these final results.

Comment 15: Suqian and Yancheng Haiteng's Coal Freight Expense

Suqian states that the Department failed in its Preliminary Results to
convert from Indian rupees to U.S. dollars the per-unit surrogate trucking
freight rate for the coal component of normal value as outlined in
Suqian's analysis memorandum. As a result, Suqian argues, freight costs
for transporting coal from Suqian's suppliers to its processing facility
were overstated. Suqian argues that the Department should correct this
error for the final results by applying the Indian rupees exchange rate to
the freight cost for coal transport from Suqian's suppliers to its
company's processing facility. 

Department's Position: We agree and we have corrected this clerical error
for these final results. We have made this same correction for Yancheng
Haiteng.

Comment 16: Rescission of Review for Yancheng Foreign Trade, Ltd. (YFT)

Fujian Pelagic et al. contend that, in the Preliminary Results, the
Department improperly concluded that the absence of exports of subject
merchandise during the POR would be a sufficient basis under the
Department's regulations to rescind the review, as it does not address the
issue of sales made before the POR but entered for consumption into the
United States within the POR. Citing the Department's regulations at 19
CFR 351.213(d)(3), Fujian Pelagic et al. assert that the Department
improperly interpreted the conditions of " . . . no entries, exports, or
sales of subject merchandise" in the regulations as conjunctive, namely as
"no entries, exports, and sales of subject merchandise." Fujian Pelagic et
al. contend that, if this were the intended purpose of the Department's
regulations that all three conditions were to be met to avoid a
rescission, the regulations would explicitly state so. In addition, Fujian
Pelagic et al. argue that the Department's interpretation is unreasonable,
considering the long process involved in the sales transaction from
production, shipment and receipt of the merchandise. 

Fujian Pelagic et al. state that the statute at section 751(a)(2)(A)
requires the Department to "determine normal value and export price (or
constructed export price) of each entry, and . . . the dumping margin for
each such entry." Further, citing Helmerich & Payne, Inc., v. United
States, 24 F Supp. 2d 304, 310 (1998) (Helmerich & Payne, Inc. v. United
States), Fujian Pelagic et al. insist that the Department's policy and
practice is to calculate dumping margins and assess duties on the entries
of subject merchandise during the POR, and that "the Department is not
time-limited in its election of a specific period for determining export
price." Therefore, Fujian Pelagic et al. argue, the Department should not
have rescinded the review. In addition, Fujian Pelagic et al. cite to
Freshwater Crawfish Tail Meat From the People's Republic of China: Final
Rescission of Antidumping Duty New Shipper Reviews, 66 FR 41831, 41831
(August 9, 2001) (Final Rescission New Shipper Review), in which the
Department referred to the preamble to the Department's regulations, which
states that "both the entry and the sale should occur during the POR, and
that only under "appropriate" circumstances should the POR be extended
when an entry is made after the POR." See Antidumping Duties;
Countervailing Duties; Final rule, 62 FR 27296, 27319 (May 19, 1997)
(Final Rule). Fujian Pelagic et al. conclude that the Department should
apply the same principle to this review and calculate an antidumping
margin for YFT based upon the sales it reported that entered during the
current review period, even though those sales were already reported and
reviewed in the prior POR. Fujian Pelagic et al. request clarification on
the dumping margin applicable to these sales, i.e., whether the Department
will apply the dumping margin it calculated for the previous review, or
the PRC-wide rate for the current review.

Petitioner disputes the claim of Fujian Pelagic et al. that the
Department penalizes exporters which make sales in one period, but which
enter the merchandise into the United States in another period, and points
out that the Department reviews sales where invoice date and entry date
are in different review periods. In addition, petitioner points out that
none of the authorities cited by Fujian Pelagic et al. would require the
Department to review the same sales twice.

Department's Position: We disagree with Fujian Pelagic et al.'s assertion
that we improperly rescinded the review with respect to YFT. In the
Preliminary Results, the Department determined that YFT reported sales
which the company had already reported, and the Department reviewed,
during the previous POR. See "Memorandum to Barbara E. Tillman through
Maureen Flannery from Elfi Blum: Freshwater Crawfish Tail Meat from the
People's Republic of China (PRC): Yancheng Foreign Trade, Ltd. (YFT),
formerly Yancheng Foreign Trade Corporation (YFTC): Intent to Rescind
Administrative Review," dated September 24, 2001. Therefore, in the
present administrative review, the Department had no sales upon which to
calculate a dumping margin. Fujian Pelagic et al.'s argument, that its
sales entered the United States in the current review period, does not
change the fact that those sales were reported by YFT in the previous
review period and, in the absence of entry dates,(1) included in the
Department's calculation of YFT's dumping margin during the previous
administrative review. Further, we agree with petitioner that neither the
Act nor the Department's regulations require the Department to review the
same sales in two consecutive reporting periods. If it were the
Department's practice to review sales twice, then respondents could skew
the dumping margin calculated by concentrating sales with lower-than-
average margins on the cusps of two review periods, so they would be
counted in the Department's calculations for two separate PORs.

While the Department attempts to calculate weighted-average margins based
on export price sales of merchandise entered during the POR (see Helmerich
& Payne, Inc. v. United States, 24 F Supp. 2d 304, 310 (1998) where the
Court of International Trade affirmed the Department's conclusion that
respondent refused to report for the Department's margin calculation those
sales which were made prior to the POR, but which entered the United
States during the POR in question, and resorted to best information
available), when there are no entry dates available, the Department
reviews sales or shipments made during the POR, and applies the resultant
margins to entries made during the POR for liquidation purposes. For a
discussion on the issues of linking specific sales to entries of subject
merchandise, please refer to the preamble to the Department's regulations.
See Final Rule; see also American Silicon Technologies v. United States,
1999 Ct. Intl. Trade LEXIS 38 (April 9, 1999) (American Silicon
Technologies v. United States) (affirming the Department's discretion of
calculating a margin on sales made during the POR).

Our regulations state that "on a case-by-case basis, the Department may
consider whether the ability to link sales with entries should cause the
Department to base a review on sales of merchandise entered during the
period of review, rather than on sales that occurred during the period of
review. . . . Because of the inability to tie entries to sales, the
Department normally must base its review on sales made during the period
of review." Moreover, the Court of International Trade has recognized in
upholding the Department's assessment rate method that a review of sales,
rather than entries, "appears not to be biased in favor of, or against,
respondents." FAG Kugelfischer Georg Schafer KgaA v. United States, 1995
Ct. Int'l. Trade LEXIS 209, *10 (1995) aff'd ,1996 U.S. App. LEXIS 11544
(Fed. Cir. 1996); See also American Silicon Technologies v. United States,
1999 Ct. Intl. Trade LEXIS 38, *15 (1999) (affirming the Department's
discretion in calculating a margin on sales made during the POR). Further,
neither the Act nor the Department's regulations require the Department to
review the same sales in two consecutive reporting periods. 

Concerning the liquidation of the entries previously reviewed, the unique
circumstances of the situation allow the Department to liquidate the
entries disregarded for this review's margin calculation based on the
exporter/importer's most recently calculated margin. See 19 CFR
351.212(b)(1). For further details, see "Memorandum to File through
Maureen Flannery from Elfi Blum: Freshwater Crawfish Tail Meat from the
People's Republic of China: Yancheng Foreign Trade, Ltd. (YFT)-Liquidation
of Entries During the September 1, 1999 through August 31, 2000 period,"
dated April 10, 2002.

Comment 17: The Department's refusal to review certain sales of Huaiyin
Foreign Trade Corporation (30) (Huaiyin 30)

In its case brief of November 27, 2001, Fujian Pelagic et al. state that
the Department refused to consider certain sales of subject merchandise
because the sales were made in the prior review period, but did not enter
until the current review period. Further, Fujian Pelagic et al. request
clarification on whether the importer-specific margin of the previous
review covering the period September 1, 1998, through August 31, 1999, or
of the current review covering the period September 1, 1999, through
August 31, 2000, will be applied to those sales. Fujian Pelagic et al.
point out that, for its sales of subject merchandise in the current review
period, it reported the factors of production from the previous review
period. 

Fujian Pelagic et al. argue that, of the six total sales reported for the
current review period, Huaiyin 30 reported four sales in the previous POR
because it expected those four sales to enter the United States within the
1998-1999 POR, and not, as they actually did, in the current period.
Fujian Pelagic et al. argue that it expected the remaining two sales to
enter the United States in the subsequent period of review, and therefore
did not report them in the 1998-1999 period. 

Fujian Pelagic et al. state that the Department disregarded the four
sales in the preliminary results of this review and based its margin
calculation solely on the two sales it did not report in the previous
review period. Therefore, Fujian Pelagic et al. request clarification
regarding the importer-specific margin for assessment of duties on its
four sales. 

Petitioner disputes the claim of Fujian Pelagic et al. that the
Department penalizes exporters which make sales in one period, but which
enter the merchandise into the United States in another period, and points
out that the Department reviews sales where invoice date and entry date
are in different review periods. In addition, petitioner points out that
none of the authorities cited by Fujian Pelagic et al. would require the
Department to review the same sales twice.

Department's Position: In the Preliminary Results, the Department
determined that four of the total six sales that Huaiyin 30 reported for
the current POR had already been reported by the company, and reviewed by
the Department in the preceding administrative review. The other four
sales were made by Huaiyin 30 during the previous review period, and the
merchandise entered the United States during the current review period.
Since Huaiyin 30 did not report the entry dates for those sales, we
calculated a margin for those sales in our previous administrative review.
Therefore, the Department used only the remaining two sales that Huaiyin
30 reported to calculate a dumping margin for the current review. Further,
we agree with petitioner that neither the Act nor the Department's
regulations require the Department to review the same sales in two
consecutive reporting periods. If it were the Department's practice to
review sales twice, then respondents could skew the dumping margin
calculated by concentrating sales with lower-than-average margins on the
cusps of two review periods, so they would be counted in the Department's
calculations for two separate PORs.

While the Department attempts to calculate weighted average margins on
export price sales of merchandise entered during the POR (see Helmerich &
Payne, Inc. v. United States, 24 F Supp. 2d 304, 310 (1998) where the
Court of International Trade affirmed the Department's conclusion that
respondent refused to report those sales for the Department's margin
calculation, which were made prior to the POR, but which entered the
United States during the POR in question, and resorted to best information
available), when there are no entry dates available, the Department
reviews sales or shipments made during the POR, and applies the resultant
margins to entries made during the POR for liquidation purposes. For a
discussion on the issues of linking specific sales to entries of subject
merchandise, please refer to the preamble to the Department's regulations.
See (Final Rule); see also American Silicon Technologies v. United States,
1999 Ct. Intl. Trade LEXIS 38 (April 9, 1999) (American Silicon
Technologies v. United States) (affirming the Department's discretion of
calculating a margin on sales made during the POR). 

Our regulations state that "on a case-by-case basis, the Department may
consider whether the ability to link sales with entries should cause the
Department to base a review on sales of merchandise entered during the
period of review, rather than on sales that occurred during the period of
review. . . . Because of the inability to tie entries to sales, the
Department normally must base its review on sales made during the period
of review." Moreover, the Court of International Trade has recognized in
upholding the Department's assessment rate method that a review of sales,
rather than entries, "appears not to be biased in favor of, or against,
respondents." FAG Kugelfischer Georg Schafer KgaA v. United States, 1995
Ct. Int'l. Trade LEXIS 209, *10 (1995) aff'd ,1996 U.S. App. LEXIS 11544
(Fed. Cir. 1996); See also American Silicon Technologies v. United States,
1999 Ct. Intl. Trade LEXIS 38, *15 (1999) (affirming the Department's
discretion in calculating a margin on sales made during the POR). Further,
neither the Act nor the Department's regulations require the Department to
review the same sales in two consecutive reporting periods. 

As we stated above, if Commerce were to review sales twice, that could
skew the weighted-average dumping margins. Therefore, for these final
results, we have calculated a margin based upon sales of subject
merchandise that were sold the to United States during the current POR and
which Huaiyin 30 did not previously report to the Department. 

When liquidating POR entries on an exporter/importer specific basis, we
will liquidate the entries disregarded for this review's margin
calculation based on the exporter/importer's most recently calculated
margin. See 19 CFR 351.212(b)(1). For further details, see "Memorandum to
File through Maureen Flannery from Elfi Blum: Freshwater Crawfish Tail
Meat from the People's Republic of China: Huaiyin Foreign Trade
Corporation (30) (Huaiyin 30)-Liquidation of Entries During the September
1, 1999 through August 31, 2000 period," dated April 10, 2002.

Comment 18: Whether the Department improperly determined that Fujian
Pelagic Fishery Group Co. (Fujian Pelagic) and Pacific Coast Fisheries
Corp. (Pacific Coast) are not affiliated parties

In its response to the Department's questionnaire, Fujian Pelagic
reported that it was affiliated with a U.S. importer of the subject
merchandise, Pacific Coast. In the preliminary results of this review, we
found that evidence on the record did not support this claim of
affiliation.

Fujian Pelagic et al. argue that the Department has failed to adequately
consider the record evidence with respect to whether Fujian Pelagic and
Pacific Coast are affiliated parties. Fujian Pelagic et al. maintain that
they submitted documentary evidence to support their claim that Fujian
Pelagic and Pacific Coast are affiliated, including a memorandum of
understanding between Fujian Pelagic and Pacific Coast which outlines the
specifics of Fujian Pelagic's investment. Fujian Pelagic et al. maintain
that Fujian Pelagic has fulfilled its equity obligations per this
memorandum of understanding, and that there is irrefutable evidence on the
record of this review that Fujian Pelagic's investment in Pacific Coast
actually occurred. See Fujian Pelagic's July 23, 2001, submission at
Exhibit S-2. 

Fujian Pelagic et al. note that in section A of its questionnaire
response, Fujian Pelagic submitted documentation regarding the formation
of Pacific Coast, including the initial percentages of ownership for each
of the investors (Mr. Zhang Wei, Fujian Pelagic, and three of Mr. Wei's
personal friends). As later explained by Fujian Pelagic and Pacific Coast
in a supplemental questionnaire response, Mr. Wei has since taken control
of additional shares, while Fujian Pelagic still retains a percentage of
ownership. See Fujian Pelagic's July 23, 2001, submission at 4 and Exhibit
S-3. Fujian Pelagic et al. also explain that Pacific Coast also amended
its articles of incorporation to reduce the par value of each share of its
stock. See Fujian Pelagic's July 23, 2001, submission at Exhibit S-3.
Fujian Pelagic et al. state that this amendment effectively halved the
dollar amount required for any investor to own one share of stock. Fujian
Pelagic et al. contend that the fact that Fujian Pelagic holds a certain
percentage of Pacific Coast's voting stock places Fujian Pelagic legally
and operationally in a position to exercise direction and control over
Pacific Coast. Fujian Pelagic et al. maintain that under the statute, this
is sufficient evidence of affiliation between the two companies.
Additionally, Fujian Pelagic et al. state that Fujian Pelagic has a member
on the Board of Directors of Pacific Coast, and that, in such capacity,
Fujian Pelagic is involved in all key decision making matters of Pacific
Coast. Fujian Pelagic et al. note that Fujian Pelagic's president and
general manager serves as the vice president of Pacific Coast. Thus,
Fujian Pelagic et al. argue, Fujian Pelagic is legally and operationally
in a position to exercise direction and control over Pacific Coast.

Fujian Pelagic et al. also argue that the record reflects the unique
nature of Fujian Pelagic's investment in Pacific Coast, stating that while
Fujian Pelagic has never made a cash investment in Pacific Coast, it has
endorsed a promissory note in favor of Pacific Coast for its equity stake
in the company. Fujian Pelagic et al. further claim that Fujian Pelagic
delivered merchandise to Pacific Coast in partial settlement of its equity
stake in Pacific Coast. See Fujian Pelagic's July 23, 2001, submission at
Exhibit S-2. Fujian Pelagic et al. state that this merchandise was sold,
and the proceeds of such sale were deposited in Pacific Coast's account as
payment pursuant to the promissory note for Fujian Pelagic's shares in
Pacific Coast. Fujian Pelagic et al. claim that such payment, by itself,
meets the affiliated persons provision of section 771(33)(E) of the Act
(i.e., "[a]ny person directly or indirectly owning,  or holding with
power to vote, 5 percent or more of the outstanding voting stock  of any
organization and such organization" "shall be considered to be
'affiliated' or 'affiliated persons'."). Fujian Pelagic et al. argue that
Fujian Pelagic has already met this requirement, and the record shows that
it is entitled to a certain percentage of Pacific Coast's equity. Pursuant
to this promissory note, Fujian Pelagic et al. note, Fujian Pelagic is
obligated to make further payment on its indebtedness by means of
shipments of merchandise to Pacific Coast.

In consideration of this promissory note in favor of Pacific Coast,
Fujian Pelagic et al. state that Fujian Pelagic presently holds and has
the right to vote its shares and exercise certain control over the sales
and business activities of Pacific Coast. Moreover, Fujian Pelagic et al.
note, under Washington state law, a promissory note itself can serve as
adequate consideration for stock ownership. 

Fujian Pelagic et al. maintain that the facts on the record should be
sufficient to evidence affiliation between Fujian Pelagic and Pacific
Coast under the statute. However, Fujian Pelagic et al. state that, in
response to the Department's further inquiry as to whether Fujian Pelagic
had actually paid in capital prior to or during the POR, Fujian Pelagic
submitted documentation on the record demonstrating that it had arranged
for a trade in goods with Pacific Coast during the period of review.
Fujian Pelagic et al. state that this documentary evidence includes a
memorandum of understanding between Fujian Pelagic and Pacific Coast,
wherein Fujian Pelagic agreed to deliver to Pacific Coast some merchandise
in partial settlement of its full equity position in the company. 

Fujian Pelagic and Pacific Coast also submitted a copy of the purchase
order taken by Pacific Coast from its U.S. customer for the purchase of
the merchandise purportedly provided by Fujian Pelagic. Moreover, Fujian
Pelagic et al. add that the record also includes copies of the
invoice/packing list from Pacific Coast's customer for this merchandise,
the check made payable to Pacific Coast from its U.S. customer for this
merchandise, and Pacific Coast's bank statement indicating a deposit of
such funds in its account. Fujian Pelagic et al. state that both the
purchase order and the invoice/packing list provided by these parties
reflect the shipment of the merchandise at issue. See Fujian Pelagic's
July 23, 2001, submission at Exhibit S-2. For the record, Fujian Pelagic
et al. note that the volume of the trade-in-kind shipment from Fujian
Pelagic evidenced by the memorandum of understanding is virtually the same
amount of merchandise sold thereafter by Pacific Coast to its U.S.
customer. Fujian Pelagic et al. add that the amounts differ by only one
percent, and any slight difference in the amounts shipped can reasonably
be attributed to packing or other mechanical variations.

Fujian Pelagic et al. argue that the Department offers no evidence
whatsoever to contradict the parties' certified representations and
documentary evidence on the issue of affiliation and common control. In
fact, Fujian Pelagic et al. argue that the Department chose not to verify
Pacific Coast during this review period and, therefore, has no basis to
contradict the factual evidence and certified statements in Fujian
Pelagic's/Pacific Coast's questionnaire responses. Fujian Pelagic et al.
state that while they have submitted such certified and direct evidence,
the Department simply stated that it was unable to accept the response of
the parties and offers no further explanation of its decision. Fujian
Pelagic et al. contend that this is manifestly unfair, especially in light
of the failure to verify the questionnaire responses of Fujian Pelagic or
Pacific Coast.

Regarding the issue the Department raised concerning the remainder of the
equity position in Pacific Coast by Fujian Pelagic, Fujian Pelagic et al.
note that the terms of the promissory note permit a two-year period for
Fujian Pelagic to complete the terms of its indebtedness to Pacific Coast.
Since the period of this review is September 1, 1999, through August 31,
2000, Fujian Pelagic et al. note that this left nearly an entire year
outside the period of review, or until August 18, 2001, for Fujian Pelagic
to complete its debt payment to Pacific Coast. Fujian Pelagic et al. state
that since the Department never asked for documentation to demonstrate
Fujian Pelagic's further installment payments at any point following the
period of review, the record naturally lacks information regarding the
remainder of Fujian Pelagic's investment. 

Fujian Pelagic et al. state that the Department itself concedes that
affiliation is established by the statute at a certain level of equity
ownership without regard to considerations of control. Thus, Fujian
Pelagic et al. contend, Fujian Pelagic's documented trade-in-merchandise
as partial payment for its equity investment in Pacific Coast is
sufficient to establish affiliation under the statute. Fujian Pelagic et
al. also argue that Fujian Pelagic is affiliated with Pacific Coast by
virtue of company control under section 771(33)(G) of the Act. In this
regard, Fujian Pelagic et al. note that Congress amended the "affiliated
persons" provision of the statute to add new subparagraph (G), which
provides that "any person who controls any other person and such other
person" will be considered affiliated persons. Statement of Administrative
Action (SAA) accompanying the Uruguay Round Agreements Act (URAA), H.R.
Rep. No. 103-316 at 838 (1994). 

Fujian Pelagic et al. maintain that in the preliminary results, the
Department suggests that only cash can satisfy an investment in a company
and that cash is the only reason that shares are given to stockholders.
However, Fujian Pelagic et al. state, in many cases shares of a
corporation are given for reasons other than cash investment: technical
"know-how," managerial ability, cash financing, and promissory notes may
serve as proper consideration for shares in a company. Fujian Pelagic et
al. conclude that although "cash may be king," it is not the only way that
an owner obtains and "holds" shares and exercises direction over a
corporation. 

Petitioners contend that Fujian Pelagic et al. have failed to demonstrate
that the Department's decision to treat Fujian Pelagic and Pacific Coast
as unrelated parties was improper. Petitioners state that the issue is not
whether "cash is king," but whether or not Fujian Pelagic actually
acquired some portion of Pacific Coast's equity at some point during, or
prior to, the POR. Petitioner argues that the Department has acted
properly in looking for actual, meaningful transactions within the
relevant period, and that Fujian Pelagic et al. do not satisfy this
requirement by alleging in their case brief that they could have, if
asked, provided evidence of further transactions occurring after the end
of the POR.

Department's Position: As we noted in the Department's October 1, 2001,
memorandum entitled "Analysis of the Relationship between Fujian Pelagic
Fishery Group Co. (Fujian Pelagic) and Pacific Coast Fisheries (Pacific
Coast)," there is no documentary evidence on the record showing that
Fujian Pelagic made an equity investment of any type in Pacific Coast, or
that Fujian Pelagic and Pacific Coast are under common control by virtue
of a shared board member.

In our supplemental questionnaire, we specifically asked Fujian Pelagic
to provide any documentation to demonstrate that it had actually paid in
capital to Pacific Coast prior to or during the POR. See question 3a.(1)
of the Department's July 9, 2001, supplemental questionnaire. The only
documentation submitted by Fujian Pelagic et al. that relates to Fujian
Pelagic's claimed investment in Pacific Coast is for the sale from Pacific
Coast to a seafood broker in the United States. That documentation
consisted of the following: the invoice/packing list from Pacific Coast to
the seafood broker, a purchase order from the seafood broker, and proof of
payment from the seafood broker to Pacific Coast. See Fujian Pelagic's
July 23, 2001, submission at Exhibit S-2. This document trace represents
only the U.S. portion of the purported investment via merchandise from
Fujian Pelagic to Pacific Coast. There is no documentation on the record
showing that the merchandise originated from Fujian Pelagic (i.e., packing
list, bill of lading, export/entry documentation, etc.). Fujian Pelagic et
al.'s contention that the volume and value of the sale from Pacific Coast
to the seafood broker is similar to the amount referenced in the
memorandum of understanding between Fujian Pelagic and Pacific Coast
offers no proof of any investment by Fujian Pelagic in Pacific Coast.
Additionally, the documentary evidence submitted by Fujian Pelagic et al.
does not indicate when the merchandise at issue entered into the United
States. For further discussion of this issue involving business
proprietary information, refer to the April 10, 2002, memorandum entitled
"Analysis of Evidence on the Record Regarding the Relationship between
Fujian Pelagic Fishery Group Co. (Fujian Pelagic) and Pacific Coast
Fisheries (Pacific Coast)" (Fujian Pelagic-Pacific Coast Memo).

Contrary to Fujian Pelagic et al.'s claim, we are not suggesting that an
investment must necessarily be made in cash. Rather, we are making a
specific determination that the facts on the record of this case do not
indicate that an investment has been made. We disagree with Fujian Pelagic
et al.'s claim that, having chosen not to verify Fujian Pelagic or Pacific
Coast, the Department has no basis to contradict the factual evidence and
certified statements in the questionnaire responses submitted to the
Department by Fujian Pelagic and Pacific Coast. A decision not to verify
does not obligate the Department to agree with every statement or argument
of a respondent without question. Furthermore, we are not refuting the
accuracy or authenticity of the documentation submitted by Fujian
Pelagic/Pacific Coast. However, we do find that the evidence does not
support the claim of affiliation between Fujian Pelagic and Pacific Coast.
For example, we are not questioning the documented sale from Pacific Coast
to a seafood broker. Rather, there is no documented connection which ties
that sale to the shipment from Fujian Pelagic that purportedly represents
Fujian Pelagic's investment in Pacific Coast. We find that there is no
evidence on the record to support Fujian Pelagic's contention that it made
an investment in Pacific Coast either in cash or in merchandise.

Furthermore, it should be noted that even if we were to reach the
conclusion that Fujian Pelagic did acquire a portion of Pacific Coast's
equity during the POR through the purported shipment of merchandise, the
amount of such investment would be insufficient to meet the five percent
threshold under section 771(33)(E) of the Act. See Fujian Pelagic-Pacific
Coast Memo. As to respondent's contention that Fujian Pelagic is in a
position to exercise control over Pacific Coast because its president and
general manager serves as vice president of Pacific Coast, for the reasons
discussed in the Fujian Pelagic-Pacific Coast Memo, we find that this fact
does not provide a sufficient basis to conclude that Fujian Pelagic and
Pacific Coast are under common control. Absent any other evidence on the
record, we cannot conclude that there is any sort of control relationship,
or potential for control, between Fujian Pelagic and Pacific Coast.
Therefore, we continue to find that Fujian Pelagic and Pacific Coast are
not affiliated parties for these final results of administrative review.

Comment 19: Whether the Department improperly applied facts available to
Yancheng Yaou Seafood Co., Ltd. (Yancheng Yaou)

In their January 22, 2001, responses to section A of the Department's
questionnaire, Qingdao Zhengri Seafood Co., Ltd. (Qingdao Zhengri) and
Yancheng Yaou reported that they shared a common owner, and consolidated
their volume and value information in Yancheng Yaou's response. The
companies then submitted a consolidated response to sections C and D of
the Department's questionnaire on June 7, 2001. On August 3, 2001, Qingdao
Zhengri stated that it would not participate in verification. For the
preliminary results, we determined that Qingdao Zhengri and Yancheng Yaou
constituted a single entity, and applied adverse facts available to the
combined entity since a portion of the consolidated response could not be
thoroughly verified.

Fujian Pelagic et al. contend that the Department did not have a
sufficient basis upon which to apply adverse facts available to Yancheng
Yaou. Fujian Pelagic et al. state that Qingdao Zhengri is a Chinese
exporter of subject merchandise, and Yancheng Yaou is a Chinese exporter
and producer of the subject merchandise. Fujian Pelagic et al. note that
Qingdao Zhengri and Yancheng Yaou submitted a consolidated response to
sections C and D of the Department's questionnaire because Yancheng Yaou
and Qingdao Zhengri had a common owner. See, e.g., Yancheng Yaou's January
23, 2001, section A submission.

On August 3, 2001, respondent Qingdao Zhengri informed the Department
that it would not participate in a verification of its questionnaire
responses. See Qingdao Zhengri's and Yancheng Yaou's August 3, 2001,
letter to the Department. However, Fujian Pelagic et al. argue that
Yancheng Yaou made very clear that it would participate in the
Department's verification. Id.

Fujian Pelagic et al. state that the Department preliminarily determined
that because QingdaoZhengri would not permit verification of its
questionnaire responses, the whole consolidated response submitted by
these parties was "unverifiable." Therefore, Fujian Pelagic et al. state,
the Department applied facts available to both Qingdao Zhengri and
Yancheng Yaou. Fujian Pelagic et al. note that certain of Yancheng Yaou's
sales were also sourced from three other processors that were not
verified. Fujian Pelagic et al. contend that Yancheng Yaou acted to the
best of its ability to cooperate with the Department's information
requests. Fujian Pelagic et al. argue that Yancheng Yaou never willfully
withheld any information from the Department, responded to all the
questionnaires and information requests of the Department, and offered to
make available all of the company books and records to the Department at
verification. Fujian Pelagic et al. contend that at no point in time did
Yancheng Yaou deliberately withhold information from the Department or
impede its investigation. Fujian Pelagic et al. argue that the statute
requires the Department to meet a very high standard before it can make an
adverse inference. That principle, state Fujian Pelagic et al.,
incorporated in section 776(b) of the Act, directs the Department to take
an adverse inference only where it can determine that an interested party
has "failed to cooperate by not acting to the best of its ability to
comply with a request for information" from the Department. Fujian Pelagic
et al. argue that the Department's simple assertion that Yancheng Yaou
"did not cooperate by acting to the best of its ability in complying with
the Department's requests for information" is an insufficient basis to
apply adverse facts available. Fujian Pelagic et al. argue that the law
requires that the interested party must refuse to provide the necessary
information or significantly impede the final determination, and that
Yancheng Yaou's conduct does not meet this standard. Fujian Pelagic et al.
contend that the Department must provide a reasoned analysis based on
substantial evidence on the record as to why it has determined that
Yancheng Yaou did not act to the best of its ability. Moreover, Fujian
Pelagic et al. state that the Department must establish a willful decision
on the part of an interested party to not comply with the Department's
requests for information. Fujian Pelagic et al. note this principle was
discussed at length in a recent opinion from the Court of International
Trade in Nippon Steel Corp. v. U.S., Slip Op. 00-137 (Oct. 26, 2000): 

     Commerce must reach its finding through a reasoned inquiry 
     into the facts. "{I}t is not sufficient for Commerce to 
     simply assert this legal standard {not acting to the best 
     of ability} as its conclusion or repeat its finding concerning 
     the need for facts available." Mannesmann, 77 F. Supp. 2d at 
     1313. Accord Ferro Union, 44 F. Supp. 2d at 1330 ("{M}ere 
     recitation of the relevant standard is not enough for Commerce 
     to satisfy its obligation under the statute.") (citations 
     omitted). Nor may Commerce rest its finding on mere suspicions 
     or "vague hints." Mannesmann, 77 F. Supp. 2d at 1317 (quoting 
     Borden, 4 F. Supp. 2d at 1246-47).

     In order for its finding to be supported by substantial evidence,
     "Commerce needs to articulate why it concluded that a party failed 
     to act to the best of its ability, and explain why the absence 
     of this information is of significance to the progress of its 
     investigation." Mannesmann, 77 F. Supp. 2d at 1313-14 (citation 
     omitted). Accord Ferro Union, 44 F. Supp. 2d at 1331 (remanding 
     because "Commerce ha{d} not pointed to substantial evidence" to 
     show that respondent's failure to provide requested information 
     "was a failure by {respondent} to comply to the best of its 
     ability").

     Commerce must also find either a willful decision not to comply 
     or behavior below the standard for a reasonable respondent. 
     Insufficient attention to statutory duties under the unfair 
     trade laws is sufficient to warrant adverse treatment. It 
     implies an unwillingness to comply or reckless disregard of 
     compliance standards.

Id. at 25, 26, and 29.

Fujian Pelagic et al. note that Chinese crawfish processors like Yancheng
Yaou are small, unsophisticated companies, and argue that these companies
should not be measured by the same standards applied to large
multinational corporations, especially where such companies have not
willfully withheld data from the Department and have attempted to the best
of their ability to provide the information requested by the Department.

As indicated above, Fujian Pelagic et al. note that the the Department is
required to find a willful failure to disobey a request for information
before the Department may apply an adverse inference. In support of their
argument, Fujian Pelagic et al. quote from Borden Inc. v. U.S., 4 F. Supp.
1221, 1245 (CIT 1998):

     Under the new statutory scheme, 19 U.S.C.  1677m is designed 
     to prevent the unrestrained use of facts available as to a firm 
     which makes its best effort to cooperate with the Department. 
     This section was enacted, as part of the URAA, Pub.L. 103-465 
      231, to implement portions of Annex II to the AD Agreement, 
     which provides, in part, that information which "may not be 
     ideal" should not be disregarded if the party "has acted to 
     the best of its ability."

Fujian Pelagic et al. argue that since the purpose of the antidumping law
is remedial in nature, it is the Department's duty to determine a dumping
margin as accurately as possible. NTN Bearing Corp. v. United States, 74
F.3d 1204 (Fed. Cir. 1995) (citing Rhone Poulenc, Inc. v. United States,
899 F.2d 1185, 1191 (Fed. Cir. 1990), and Chaparral Steel Co. v. United
States, 901 F.2d 1097, 1103-1104 (Fed. Cir. 1990)). 

Fujian Pelagic et al. contend that Yancheng Yaou acted to the best of its
ability in cooperating with the Department's information requests and made
very clear that it would fully participate in the Department's
verification process, and conclude that the Department should not apply an
adverse inference. Fujian Pelagic et al. argue that the evidence on the
record does not justify the application of a punitive "PRC-wide Rate" rate
to all Yancheng Yaou's sales of subject merchandise. In support of their
argument, Fujian Pelagic quotes a statement from the Federal Circuit in
F.Lli De Cecco Di Filippo Fara S. Martino v. United States, 216 F.3d 1027,
1032 (Fed. Cir. 2000) (De Cecco):

     It is clear from Congress's imposition of the corroboration 
     requirement in 19 U.S.C.  1677e(c) that it intended for an 
     adverse facts available rate to be a reasonably accurate 
     estimate of the respondent's actual rate, albeit with a built-in 
     increase intended as a deterrent to non-compliance. Congress 
     could not have intended for Commerce's discretion to include the
     ability to select unreasonably high rates with no relationship 
     to the respondent's actual dumping margin.

Thus, Fujian Pelagic et al. argue that the Department failed to
corroborate the PRC-wide rate as it applies to Qingdao Zhengri/Yancheng
Yaou. 

Petitioner contends that since they withdrew their request for review
with respect to Yancheng Yaou, and since Yancheng Yaou did not file its
own request for review of its entries during the POR, the Department
correctly applied the PRC-wide rate. Department's Position: We disagree
with Fujian Pelagic et al. We also note that, contrary to petitioner's
claim, Yancheng Yaou did in fact request a review of its entries of
subject merchandise for this POR. 

Fujian Pelagic et al. do not contest the Department's determination that
Yancheng Yaou and Qingdao Zhengri should be treated as one entity.
Yancheng Yaou and Qingdao Zhengri submitted a consolidated response to
sections C and D of the Department's questionnaire. Thus, these companies
reported themselves to the Department as a single entity, and there is
clear evidence on the record thay they should be considered a single
entity. Since Yancheng Yaou and Qingdao Zhengri constitute a single
entity, we cannot calculate a separate dumping margin for a portion of a
respondent's sales. After the Department received a letter from Qingdao
Zhengri on August 3, 2001, indicating that it would not submit to
verification, the Department issued Qingdao Zhengri/Yancheng Yaou a letter
indicating that it would not be possible for the Department to verify only
part of the companies' consolidated response. See Letter to Qingdao
Zhengri and Yancheng Yaou dated August 7, 2001, at 1. The Department
pointed out in the August 7, 2001, letter, in response to Qingdao
Zhengri's refusal to submit to verification, that if a company objects to
verification, the Department will not conduct verification and may
disregard any or all information submitted by the company in favor of the
use of the facts available, in accordance with section 776(a)(2)(D) of the
Act. Qingdao Zhengri/Yancheng Yaou never responded to the Department's
letter, and made no subsequent efforts to contact or arrange verification
with the Department. Since 

Qingdao Zhengri did not allow Commerce to verify its questionnaire
responses, we resorted to the use of facts otherwise available.

Moreover, the Department found that Qingdao Zhengri/Yancheng Yaou failed
to cooperate to the best of its ability pursuant to section 776(b) of the
Act. See Preliminary Results, 66 FR at 52103. Because Qingdao
Zhengri/Yancheng Yaou refused to submit to verification, a significant
portion of the information, including sales and production data, that was
in the sole possession of Qingdao Zhengri could not be verified. Thus, in
resorting to the use of facts otherwise available, the Department applied
adverse facts available because respondent Qingdao Zhengri/Yancheng Yaou
failed to cooperate to the best of its ability. 

Fujian Pelagic et al. argue that because the Department chose not to
verify Yancheng Yaou, the Department has no basis for rejecting the
information it submitted and relying on adverse facts available. Their
argument is not supported by evidence on the record, as discussed above.
Further, we note a significant inconsistency between information contained
in Fujian Pelagic et al.'s case brief and in Yancheng Yaou/Qingdao
Zhengri's responses to section A of the Department's questionnaire. On
page 17 of their case brief, Fujian Pelagic et al. state that certain of
Yancheng Yaou's sales which were sourced from three other processors were
not verified. That statement stands in stark contrast to both Qingdao
Zhengri's and Yancheng Yaou's answer to question 9.a. from section A of
the Department's questionnaire, which asks respondents to provide the
names, addresses, and facsimile numbers of those companies that supplied
them with the merchandise under administrative review that they sold to
the United States. See the Department's December 5, 2000, Questionnaire.
The response we received was, "the crawfish was produced by either Yaou or
Qingdao Zhengri." See Yancheng Yaou's January 22, 2001 section A response
at 17 and Qingdao Zhengri's January 22, 2001, section A response at 15.
Because the information was within the control of Qingdao Zhengri/Yancheng
Yaou, and Qingdao Zhengri/Yancheng Yaou refused verification, the
Department could not ascertain the veracity of their submitted
questionnaire responses. Thus, we continue to find that the Qingdao
Zhengri/Yancheng Yaou entity did not cooperate by acting to the best of
its ability in complying with the Department's requests for information,
and that the application of adverse facts available is therefore warranted
for Qingdao Zhengri/Yancheng Yaou for these final results.

We do not agree with Fujian Pelagic et al.'s argument that the PRC-wide
rate was not corroborated with respect to Qingdao Zhengri/Yancheng Yaou's
sales of subject merchandise during the POR. In support of its argument
that the PRC-wide rate is not corroborated, Fujian Pelagic et al. cite to
De Cecco, but that case is inapposite. De Cecco does not substantiate
Fujian Pelagic et al.'s claim that the highest calculated dumping margin
on the record of the administrative review must be corroborated with
respect to individual respondents. In De Cecco, the Department conceded
that the petition rate was not properly corroborated in the original
determination, but argued that the trial court erred in not remanding the
case to the Department under instructions that would allow it to
corroborate the petition rate with further evidence or to select any other
proper rate. In addition, the Department argued that the trial court erred
in refusing to reconsider the petition rate in light of the corroborating
evidence cited in the Department's remand determination. De Cecco, 216
F.3d at 1031. The appellate court's reference to the corroboration
requirement was made in the context of explaining that the Department's
discretion in selecting adverse facts that will create the proper
deterrent to non-cooperation with its investigations and assure a
reasonable margin is not unbounded. De Cecco 216 F.3d at 1032. Here, the
Department determined the rate used for adverse facts available based upon
information obtained in the course of the review. Therefore, the rate need
not be corroborated. See, e.g., section 776(c) of the Act. Given that
Qingdao Zhengri/Yancheng Yaou failed to allow verification of its
consolidated response, we determine that the application of the PRC-wide
rate as adverse facts available is warranted. 

Thus, for these final results, we continue to find that Yancheng Yaou and
Qingdao Zhengri constitute a single entity. Qingdao Zhengri's refusal to
participate in verification demonstrates an unwillingness to fully
cooperate with the Department, pursuant to section 776(b) of the Act, as
discussed above. As such, we have no other option but to apply adverse
facts available to the Yancheng Yaou/Qingdao Zhengri entity. Comment 20:
Single Rate for Huaiyin 5 and Ningbo Nanlian

Huaiyin Foreign Trade Corporation (5) (Huaiyin 5) (known as Jiangsu
Hilong International Trading Company Ltd., as of January 10, 2001) argues
that the Department incorrectly determined that it and NN/LP should
receive a single antidumping rate. Huaiyin 5 contends that the test that
served as the basis of the Department's prior decision on this issue is
not met in this review. In past administrative reviews, the Department has
stated the following: "In the 1997/1998 administrative review, the
Department determined that the export operations of NN/LP and Huaiyin 5
were intertwined such that the two companies appeared to be under common
control and should receive a single antidumping duty rate. . . .
Specifically, the Department found that the nature of the relationships
between Huaiyin 5 and NN/LP constituted a web of control relationships
such that prices and exports were subject to significant manipulation."
Preliminary Results, 66 FR at 52102. According to Huaiyin 5, though the
Department found what it deemed to be "continuing relationships" in the
current segment of the proceeding, those "relationships" cannot reasonably
be interpreted to be "web of control relationships" such that "prices and
exports were subject to significant manipulation." 

According to Huaiyin 5, in the current segment, the Department stated the
following with respect to "continuing relationships": "Furthermore, as
noted in the verification report concerning these entities, while
conducting verification, the Department found evidence of a continuing
commercial relationship between NN/LP and Huaiyin 5, as well as evidence
of a continuing business relationship between Mr. Wei Wei and both Huaiyin
5 and NN/LP (by virtue of Mr. Wei Wei's dealings with Louisiana Packing
Company, which is the U.S. owner in the Ningbo Nanlian joint-venture)."
Preliminary Results, 66 FR at 52102. According to Huaiyin 5, the
Department found that Mr. Wei Wei has a continuing "business relationship"
with both NN/LP and Huaiyin 5. However, Huaiyin 5 states that it is
perplexed as to how these relationships have anything to do with finding
these two entities under common control. According to Huaiyin 5, there is
no basis in law for the Department to determine that a business
relationship is sufficient for finding a control relationship. In Huaiyin
5's opinion, one would expect that the related activities would have to
have some connection to the subject merchandise. According to Huaiyin 5, a
relationship must have some impact (potential or real) to influence the
parties. Thus, Huaiyin 5 argues, it is crucial to understand exactly what
Mr. Wei Wei's referenced relationships were. 

Huaiyin 5 notes that in the Preliminary Results, the Department
references the "Memorandum from Edward C. Yang to Joseph A. Spetrini:
Relationship of Ningbo Nanlian Frozen Foods Company, Ltd. and Huaiyin
Foreign Trade Corporation (5)," ("NN/H5 Memorandum") dated April 7, 2000,
and states that the verification report entitled "Antidumping Review of
Freshwater Crawfish Tail Meat (tail meat) from the People's Republic of
China (PRC) (A-570-848): Sales and Factors Verification Report for Ningbo
Nanlian Frozen Foods Co., Ltd. and Huaiyin 5," dated September 28, 2001
("NN/H5 Verification Report"), discusses Mr. Wei Wei's involvement with
NN/LP and Huaiyin 5, up to and including the 1997-1998 administrative
review period, in detail. According to Huaiyin 5, there is nothing on the
record with respect to Mr. Wei Wei's involvement with either company
during the 1998-1999 review. 

With respect to NN/LP, Huaiyin 5 asserts, the "NN/H5 Verification Report"
issued in the current proceeding segment clearly reflects that Mr. Wei Wei
had absolutely nothing to do with NN/LP during the POR: he is not on its
business license, he is not an officer or employee of NN/LP, and he had no
interaction with NN/LP with respect to the subject merchandise. In Huaiyin
5's opinion, the only connection that Mr. Wei Wei had with NN/LP is very
circuitous. According to Huaiyin 5, during the POR, Mr. Wei Wei assisted
the owner of Louisiana Packing with shrimp-but there was no connection
with the subject merchandise. Huaiyin 5 argues that the assistance with
non-subject merchandise afforded to the minority owner of NN/LP by Mr. Wei
Wei does not constitute a relevant business relationship providing Mr. Wei
Wei with the potential ability to manipulate prices or exports of the
subject merchandise. 

Huaiyin 5 also notes that, with respect to its own participation in
verification, the "NN/H5 Verification Report" reflects that during the
period of review, Huaiyin 5 paid certain hotel expenses of Mr. Wei Wei.
However, Huaiyin 5 also notes that the "NN/H5 Verification Report"
reflects the fact that Huaiyin 5 had no sales of crawfish during the
period of review. Therefore, Huaiyin 5 argues, regardless of the reasons
why Huaiyin 5 was paying certain expenses of Mr. Wei Wei, they could not
have reflected activities related to the sale and/or export of subject
merchandise to the U.S., and that, consequently, any such activity is
legally irrelevant.

According to Huaiyin 5, during the POR, the only connection between
Ningbo Nanlian and Huaiyin 5 was tenuous at best. In Huaiyin 5's opinion,
the "NN/H5 Verification Report" confirms that there were no monies or
goods transferred between theses two entities. Huaiyin 5 argues that,
given the fact that there were no business transactions, it is unlawful to
find a web of controlling relationships, or even a strand.

Huaiyin 5 points out that in the Preliminary Results, the Department
states the following with respect to information on the record of the
current proceeding: "On May 22, 2001, Huaiyin 5 submitted a letter to the
Department stating, in part, that Huaiyin 5 "is entitled to a separate
rate." However, again the Department has not been provided with new
information or evidence of circumstances in the current review that differ
sufficiently from circumstances in the prior reviews to warrant any
reconsideration of the relationship between NN/LP and Huaiyin 5."
Preliminary Results, 66 FR at 52102. Huaiyin 5 asserts that the
questionnaire responses and verifications evidence that there is no
relationship between NN/LP and Huaiyin 5 such that they should not be
entitled to separate rates from one another. Huaiyin 5 also states that
during verification, the Department examined its management, facilities,
and legal responsibility. 

According to Huaiyin 5, the Department's idea that NN/LP and Huaiyin 5
should share a rate was based on the idea that their export operations
were intertwined and that there was a web of control relationships such
that prices and exports were subject to significant manipulation. Huaiyin
5 argues that it appears that both entities are being required to prove a
negative-that is, that there is no web of control relationship such that
prices and exports were subject to manipulation. In Huaiyin 5's view, the
Department has thus impermissibly switched the burden to the respondents
in that the parties are being presumed affiliated unless they can prove
otherwise. Nonetheless, Huaiyin 5 asserts, during verification, it was
affirmatively shown that there is no web of control relationships.
According to Huaiyin 5, the following facts were proven during
verification: 1-Mr. Wei Wei is not on the Board of Directors of NN/LP; 2-
Mr. Wei Wei is not an employee at NN/LP; 3-Mr. Wei Wei was not on the
payroll of NN/LP; 4-Mr. Wei Wei is not a manager at NN/LP, and all of
NN/LP's business decisions are made by its managers; 5-Mr. Wei Wei had no
interaction with NN/LP during the period of review; 6-Mr. Wei Wei had
nothing to do with price negotiations for NN/LP during the period of
review; 7-Mr. Wei Wei is not on the Board of Directors of Huaiyin 5; 8-Mr.
Wei Wei is not a manager at Huaiyin 5; and 9-Mr. Wei Wei is not an
employee at Huaiyin 5. According to Huaiyin 5, the Department's conclusion
that there is a web of relationships consists of three discrete facts: 1-
Huaiyin 5 paid some of Mr. Wei Wei's expenses during the POR, a period
during which it was conclusively shown that Huaiyin 5 made no sales to the
United States of the subject merchandise (thus making it factually and
legally impossible for Huaiyin 5's sales/exports to the U.S. to be
influenced by Mr. Wei Wei); 2-Mr. Wei Wei assisted the president of the
minority owner of NN/LP during the POR with non-subject merchandise; and 3-
Huaiyin 5 introduced NN/LP to two crawfish tail meat suppliers from whom
NN/LP purchased tail meat (for which Huaiyin 5 has indicated that no
remuneration was received). According to Huaiyin 5, the above is all of
the information on the record. It is Huaiyin 5's position that for the
Department to take from the above that there is a web of control
relationships is without legal basis. According to petitioner, for the
reasons stated in the Preliminary Results, the Department acted
appropriately in finding that "there is no new information or evidence of
circumstances in the current review... to warrant any reconsideration of
the relationship between Ningbo Nanlian and Huaiyin 5." 66 FR at 52102.
According to petitioner, it is impossible for Jiangsu Hilong to obtain its
own separate assessment rate or deposit rate as a result of this review,
regardless of the Department's finding on the question of affiliation, as
according to its letter submitted to the Department on May 22, 2001, it
sold no subject merchandise to the U.S. during the POR. 

According to petitioner, if the Department agrees with Jiangsu Hilong
that it is inappropriate to issue a combined HFTC5-NN/LP rate in this
review, the Department may issue a separate rate for NN/LP, but not for
HFTC5 or Jiangsu Hilong. In that event, petitioner argues, the Department
should also clarify that the deposit rate applicable to future entries by
Jiangsu Hilong is not the 2.75% rate found for the combined HFTC5-Ningbo
Nanlian entity in the final results of the 1998-99 review, since that rate
applies only to the combined entity. Instead, petitioner asserts, if
Jiangsu Hilong is indeed the successor in interest of HFTC5, the deposit
rate must be the last rate found for HFTC5 individually-that is, the 90.5%
rate in effect prior to the 1997-98 final results. Petitioner argues that,
alternatively, if Jiangsu Hilong is not the successor of HFTC5, deposits
must be collected at the China-wide rate until actual entries by Jiangsu
Hilong can be evaluated in a subsequent administrative review, or until 
Jiangsu Hilong's status as successor can be evaluated in a subsequent 
changed circumstances review. 

Department's Position: As noted in the Preliminary Results, in the
1997/1998 administrative review, the Department determined that the export
operations of NN/LP and Huaiyin 5 were intertwined such that the two
companies appeared to be under common control and should receive a single
antidumping duty rate. See Freshwater Crawfish Tail Meat from the People's
Republic of China: Final Results of Administrative Antidumping Duty and
New Shipper Reviews, and Final Recission of New Shipper Review, 65 FR
20948 (April 19, 2000) (Final Results ADR & NSR (3/97-8/98). Specifically,
the Department found that the nature of the relationships between Huaiyin
5 and NN/LP constituted a web of control relationships such that prices
and exports were subject to significant manipulation. See "NN/H5
Memorandum"; and Final Results ADR & NSR (3/97-8/98), and accompanying
Decision Memorandum at Comments 13-17, both of which have been placed on
the record of this review. NN/LP and Huaiyin 5 were given a single rate in
the 1998/1999 administrative review as well, as the Department was not
provided with new information or evidence of circumstances in the
1998/1999 review that differed sufficiently from the circumstances in the
1997/1998 review to warrant any reconsideration of the relationship
between NN/LP and Huaiyin 5. See Final Results ADR & NSR (9/98-8/99).
Again, in this review, the Department has not been provided with new
information or evidence of circumstances in the current review that differ
sufficiently from circumstances in the prior reviews to warrant any
reconsideration of the relationship between NN/LP and Huaiyin 5.
Furthermore, as noted in the verification report concerning these
entities, while conducting verification, the Department found evidence of
a continuing commercial relationship between NN/LP and Huaiyin 5 with
respect to crawfish, as well as evidence of a continuing business
relationship between Mr. Wei Wei and both Huaiyin 5 and NN/LP (by virtue
of Mr. Wei Wei's dealings with Louisiana Packing Company, which is the
U.S. owner in the Ningbo Nanlian joint-venture). See "NN/H5 Verification
Report" at 16-17. 

With respect to the continuing commercial relationship between Huaiyin 5
and NN/LP, officials of both entities explained to the verification team
that in 1999, during the last POR, Huaiyin 5 assisted NN/LP in locating
sources of tail meat, in product inspections, etc. Id. However, while
verifying Huaiyin 5, the team discovered invoices to Louisiana Packing
(the U.S.-based part-owner of joint venture NN/LP) from Huaiyin 5,
indicating payment of a commission of 60 cents per pound for 24 containers
of crawfish that NN/LP purchased during the POR. Id. 

With respect to the continuing business relationship between Mr. Wei Wei
and both Huaiyin 5 and NN/LP, verification in the current review revealed
several pertinent facts. First, during the Huaiyin 5 verification, in
response to the team's request that Huaiyin 5 explain its relationship
with Mr. Wei Wei during the POR, Huaiyin 5's general manager, Mr. Yang Yi
Xiang, explained that Mr. Wei Wei worked for Huaiyin 5 from 1988 to 1997,
but that he quit the company in 1997, and that the company had no business
or informal dealings, nor any other type of relationship with him during
the POR. However, in reviewing Huaiyin 5's accounting records, the
verification team discovered three hotel bills which Huaiyin 5 paid for
Mr. Wei Wei during the POR. The first such bill was for Mr. Wei Wei's stay
in Shanghai, China, in December, 1999 (i.e., during the current POR).
According to Mr. Yang, the other two bills were for Mr. Wei Wei's stays-
during the POR-at two different hotels in Lianyungang, China. Mr. Yang
then clarified that he will still sometimes ask Mr. Wei Wei to do things
for the company. According to Mr. Yang, he and Mr. Wei Wei will also
sometimes help maintain relationships with one another's customers. During
the verification of NN/LP, Mr. Edward Lee, owner of Louisiana Packing
(again, the U.S.-based part-owner of NN/LP) explained that he also still
sometimes asks Mr. Wei Wei for help on business matters. 

In light of the information discussed above, we continue to find that
NN/LP and Huaiyin 5 should receive a single antidumping duty rate for
purposes of these final results. Comment 21: Yancheng Haiteng's Indirect
Selling Expense Ratio 

Yancheng Haiteng argues that, in our preliminary results Preliminary
Results, we calculated its indirect selling expense ratio in a different
manner than in previous reviews. Yancheng Haiteng asserts that the
worksheet it provided in its questionnaire response was consistent with
the methodology used by the Department in previous reviews. Yancheng
Haiteng states that, in the preliminary results of this review, we revised
its indirect selling expense ratio by dividing the reported crawfish-
related expenses of Haiteng's affiliated importer by the total income from
period of review crawfish expenses. Yancheng Haiteng claims that, in the
previous administrative review and in its new shipper review, the
Department calculated Yancheng Haiteng's indirect selling expense ratio by
dividing crawfish-related expenses by total income from all sales by the
affiliated importer. 

Yancheng Haiteng argues that for these final results, the Department
should recalculate the ratio by allocating the total indirect selling
expenses by a ratio of income from the crawfish sales over total income.
Yancheng Haiteng states that this would be consistent with the
Department's methodology, citing Notice of Final Determinations of Sales
at Less Than Fair Value: Steel Wire Rope from India and the People's
Republic of China; Notice of Final Determination of Sales at Not Less Than
Fair Value: Steel Wire Rope from Malaysia, 66 FR 12759 (February 28,
2001). 

Yancheng Haiteng states that the Department verified its affiliated
importer in the 1998-1999 review and found that certain indirect selling
expenses (e.g., salary and payroll) were not related to crawfish sales in
any way. Department's Position: In the preliminary results, we allocated
all selling expenses to crawfish sales. For these final results, we have
applied our standard allocation methodology for indirect selling expenses.
That is, we have allocated indirect selling expenses by a ratio of
crawfish income to total income. Comment 22: Yancheng Haiteng's Marine
Insurance Factor

Yancheng Haiteng states that in our preliminary results, we attempted to
calculate a net constructed export price by deducting certain movement
expenses, including marine insurance incurred on shipments of subject
merchandise. Yancheng Haiteng argues that the Department deducted the
'marine insurance factor' rather than a per unit marine insurance amount.
Yancheng Haiteng argues that we should correct this clerical error for the
final results. Department's Position: We agree, and we have corrected this
clerical error for these final results. Comment 23: Certain Domestic
Parties' Status as Interested Parties

Lakebest, Qingdao Rirong, Yancheng Haiteng, and Suqian argue that the
LDA&F and Bob Odom, Commissioner, do not have standing as interested
parties in this proceeding, and that filings should be made solely on
behalf of the CPA. These respondents note that while the investigation
petition listed the CPA, the LDA&F and Bob Odom, Commissioner, as
petitioners, the Department, in both its initiation notice and final
determination in the original investigation, identified the CPA as sole
petitioner. 

According to these respondents, the Act defines "interested parties" to
include "a manufacturer, producer, or wholesaler in the United States of a
domestic like product," and "a trade or business association a majority of
whose members manufacture, produce, or wholesale a domestic like product
in the United States." See section 771(9)(C) & (E) of the Act. However,
according to these respondents, the Act does not provide any grounds for a
state administrative agency-or its head-to have legal standing as an
interested party to participate in antidumping proceedings. 

These respondents note that only counsel for interested parties are
eligible for access to business proprietary information under
Administrative Protective Order (APO), and further argue that if counsel
were acting on behalf of LDAF and Bob Odom, Commissioner, such counsel
would not be eligible to have access to business proprietary information
(BPI) released under the APO of this proceeding. According to these
respondents, any comments submitted by counsel for both the CPA, and the
LDA&F and Bob Odom, Commissioner, that pertain to BPI of any respondent to
this proceeding raises concerns of potential APO violations arising from
improper release of BPI information to non-interested parties. These
respondents assert that the presence of a state agency, and an official of
that agency, taints these proceedings because each are political entities
to whom the Act does not grant standing. They therefore request that
filings made in this proceeding on behalf of the LDA&F and Bob Odom be
rejected. 

According to petitioner, respondents' arguments regarding the standing of
LDA&F and Commissioner Odom are moot. Petitioner asserts that it is not
disputed that the CPA has standing as an interested party. Accordingly,
petitioners argue, since all filings by the domestic parties were made on
behalf of the CPA, in addition to LDA&F and Commissioner Odom, there is no
basis for respondents' claim that the filings should be rejected.
According to petitioner, the antidumping statute does not prohibit the
Department from accepting information from persons who are not interested
parties. Petitioner also notes that information received under APO can
never be disclosed to one's own clients, whether they are interested
parties or not. Since, petitioner argues, there is no question that the
CPA is an interested party, there can also be no question that release of
APO information to the lawyers who represent the CPA is proper. According
to petitioners, joint representation of other persons in this review,
regardless of whether they are interested parties, does not raise concerns
of potential APO violations. Thus, petitioner argues, respondents'
arguments regarding the standing of LDA&F and Commissioner Odom should be
dismissed as moot.

Department's Position: We agree with petitioner. The Act does not
prohibit the Department from accepting information from persons who are
not interested parties. Furthermore, it is not disputed that the CPA-an
association of crawfish processors that is also the petitioner in this
case-has standing as an interested party. See Final Determination. As all
filings by the domestic parties were made on behalf of the CPA, in
addition to LDA&F and Commissioner Odom, there is no basis for
respondents' claim that the filings should be rejected. As for the
respondents' concern over potential APO violations arising from the
improper release of BPI information to non-interested parties, the
Department has procedures for addressing any situation in which an
improper release of BPI information is alleged to have occurred. 

Comment 24: Application of the Continued Dumping and Subsidy Offset Act
of 2000 (Byrd Amendment)

Fujian Pelagic et al. argue that U.S. respondent interested parties
imported and/or sourced subject merchandise from various Chinese export
companies and that as U.S. entities these importers are entitled to full
due process rights under the U.S. constitution. Antidumping duties have
been held to be within constitutional limits precisely because they are
not penalties. See C.J. Tower & Sons, 21 CCPA 417, 71 F.d 438 (1934) (C.J.
Tower). 

Fujian Pelagic et al. state that the new amendments made by this new law
apply to all antidumping and countervailing duty assessments made on or
after October 1, 2000. Fujian Pelagic et al. further state that when the
collected duties are distributed to the domestic industry, this alters the
antidumping law into a civil action, which contrasts with C.J. Tower, and
this makes the amount collected a "penalty." 

Fujian Pelagic et al. also argues that with the passage of the Byrd
Amendment, the essential purpose of the antidumping statute has been
transformed from a remedial statute into a penal statute, because the
duties no longer equalize competitive conditions, but instead shift
revenue from the importers to the domestic industry.

Fujian Pelagic et al. state that a change in the remedy changes the law.
Fujian Pelagic et al. also argue that the term "duties" is associated with
government collection for revenue purposes. Fujian Pelagic asserts that
the Department's actions in this investigation and its failure to provide
respondent parties with a full complement of due process rights, violates
the U.S. Constitution because such parties are entitled to application of
a remedial statute as provided by Congress. Although the majority of
procedural due process cases involve the judicial process, the principles
are fully applicable to any executive or administrative forum entrusted
with determinations of significant rights. Thompson v. Washington, 497
F.2d 626, 634 (D.C. Cir. 1973) (citing Londoner v. City and County of
Denver, 210 U.S. 373, 52 L. Ed. 1103, 28 S. Ct. 708 (1908)). 

Fujian Pelagic et al. state that the imposition of an antidumping duty
without full due process protections for importers, including a hearing
before a neutral judge, has been held to be within constitutional limits
only because the antidumping duty is a tax not a penalty. Fujian Pelagic
et al. further state that the Byrd Amendment obliterates the remedy for
violation of the antidumping laws in place before the Byrd Amendment and
replaces it with a drastic measure that alters the rights of the
respondents in an antidumping proceeding. 

According to petitioner, the new section 754 to the Act, provides that
"[d]uties assessed pursuant to a countervailing duty order, an antidumping
duty order, or a finding under the Antidumping Act of 1921 shall be
distributed on an annual basis under this section to the affected domestic
producers for qualifying expenditures" pursuant to procedures prescribed
by the Commissioner of Customs. In petitioner's opinion, the amendment
provided no new authority to the Commerce Department and did not alter the
Department's responsibilities or procedures in any way. Furthermore,
petitioner argues, the amendment is irrelevant to the decisions that must
be made by the Department in this review. See Final Results NSR (9/99-
9/00), and accompanying Decision Memorandum at Comment 7 (rejecting
virtually identical arguments against the Byrd Amendment by the same
counsel). According to petitioner, respondents' claim that the amendment
transmogrifies the antidumping statute from a remedial measure into a
compensatory or punitive one betrays a fundamental misunderstanding about
the meaning of these terms. Petitioner states that a compensatory measure
is one that will compensate the injured party for the injury sustained,
whereas a punitive measure is calculated as the amount thought necessary
to punish and to deter future violations. In petitioner's view, the Byrd
Amendment does not allow domestic parties to obtain a recovery based on
the amount of their economic loss, nor does it provide for the imposition
of antidumping duties in an amount deemed necessary to punish those who
sell at dumped prices or to deter future dumping. Instead, petitioner
argues, antidumping duties are remedial in the sense that, at least in
theory, they simply remove the price benefit that has arisen as the result
of dumping or subsidization. Petitioner states that this was the measure
of establishing antidumping duties before the Byrd Amendment, and it
remains the measure applied by the Department today. Petitioner further
states that these proceedings remain subject to 19 U.S.C.  1677c(a) and
(b), which provide that the Administrative Procedure Act does not apply to
antidumping proceedings. See also, GSA, S.R.L. v. United States, 77 F.
Supp.2d 1349, 1359 (CIT 1999). According to petitioner, the Byrd Amendment
did not change this, and therefore, respondents have exactly the same
procedural due process rights today that they had before the Byrd
Amendment was enacted. See American Ass'n of Exporters and Importers v.
United States, 751 F.2d 1239, 1250 (Fed. Cir. 1985) (describing such
rights).

Department's Position: The Byrd Amendment provides that antidumping and
countervailing duties will be distributed by the U.S. Customs Service on
an annual basis to the affected producers. This law has no impact on how
the Department administers the antidumping duty laws. In addition, the
Department is not responsible for administering this law. 

Moreover, it is well established that the antidumping law is remedial.
See C.J. Tower; see also Chaparral Steel Co. v. United States, 901 F.2d
1097, 1103-04 (Fed. Cir. 1990). The mere provision for the distribution of
antidumping duties to the domestic producers affected by dumped imports
does not turn the antidumping law into a punitive one. 

Recommendation

Based on our analysis of the comments received, we recommend adopting all
of the above positions. If these recommendations are accepted, we will
publish the final results and the final weighted-average dumping margins
in the Federal Register.

Agree________ Disagree ________

_______________________________

Faryar Shirzad
Assistant Secretary
  for Import Administration

_______________________________
Date

_______________________________________________________________________
footnote:

1. In its response to the Department's first supplemental questionnaire
   of the administrative review period 1998-1999, dated July 7 2000, 
   page 11, YFT stated that, except for sales to Ocean Harvest, the 
   entry dates are not available to the company, as it does not act 
   as the importer.