[Federal Register Volume 65, Number 127 (Friday, June 30, 2000)]
[Notices]
[Pages 40609-40612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16510]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-851]


Preliminary Results of Antidumping Duty Administrative Review for 
Two Manufacturers/Exporters: Certain Preserved Mushrooms From the 
People's Republic of China

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review.

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SUMMARY: In response to a timely request from two manufacturer/
exporters and the petitioners, \1\ on March 30, 2000, the Department of 
Commerce published a notice of initiation of an administrative review 
of the antidumping duty order on certain preserved mushrooms from the 
People's Republic of China with respect to China Processed Food Import 
& Export Co., Gerber Food (Yunnan) Co., Ltd., Mei Wei Food Industry 
Co., Ltd., and Tak Fat Trading Co. The periods of review are August 5, 
1998, through January 31, 2000, for China Processed Food Import & 
Export Co. and Gerber Food (Yunnan) Co., Ltd., and May 7, 1998 through 
January 31, 2000, for Mei Wei Food Industry Co., Ltd. and Tak Fat 
Trading Co.\2\. See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, 65 FR 16875, March 30, 2000. As a result of the 
review, the Department of Commerce has preliminarily determined that 
dumping margins exist for the exports of the subject merchandise by Mei 
Wei Food Industry Co., Ltd. and Tak Fat Trading Co. for the covered 
period. The Department will issue separate preliminary results no later 
than October 31, 2000, for the other two respondents.
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    \1\ The petitioners are the Coalition for Fair Preserved 
Mushroom Trade which includes the American Mushroom Institute and 
the following domestic companies: L.K. Bowman, Inc., Nottingham, PA; 
Modern Mushrooms Farms, Inc., Toughkernamon, PA; Monterrey 
Mushrooms, Inc., Watsonville, CA; Mount Laurel Canning Corp., 
Temple, PA; Mushrooms Canning Company, Kennett Square, PA; Southwood 
Farms, Hockessin, DE; Sunny Dell Foods, Inc., Oxford, PA; United 
Canning Corp., North Lima, OH.
    \2\ Because of an affirmative critical circumstance finding, 
liquidation was suspended 90 days prior to publication of the 
preliminary less-than-fair-value (LTFV)investigation for these 
companies.
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    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in this proceeding are requested 
to submit with the argument (1) a statement of the issue and (2) a 
brief summary of the argument.

EFFECTIVE DATE: June 30, 2000.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Rebecca 
Trainor, Import Administration, International Trade Administration, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-4136 or (202) 482-4007, 
respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Act), are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the Act 
by the Uruguay Round Agreements Act. In addition, unless otherwise 
indicated, all citations to the Department of Commerce's regulations 
are to 19 CFR part 351 (1999).

Background

    On February 19, 1999, the Department of Commerce (the Department) 
published in the Federal Register (64 FR 8308) an antidumping duty 
order on certain preserved mushrooms from the People's Republic of 
China (PRC). On February 14, 2000, the Department published in the 
Federal Register (65 FR 7348) a notice of opportunity to request an 
administrative review of the antidumping duty order on certain 
preserved mushrooms from the PRC covering the period August 5, 1998, 
through January 31, 2000. On February 29, 2000, the petitioners 
requested, in accordance with 19 CFR 351.213, that we conduct an 
administrative review of exports to the United States by China 
Processed Food Import & Export Co. (CPF), Gerber Food (Yunnan) Co. 
(Gerber), Mei Wei Food Industry Co., Ltd. (Mei Wei), and Tak Fat 
Trading Co. (Tak Fat) of certain preserved mushrooms from the PRC. CPF 
and Gerber also requested on February 28, 2000, that we conduct 
administrative reviews of their respective exports. On March 29, 2000, 
the Department issued the antidumping questionnaire to CPF, Gerber, Mei 
Wei and Tak Fat. On March 30, 2000, the Department published a notice 
of initiation of an administrative review of the antidumping duty order 
on certain preserved mushrooms from the PRC with respect to CPF, 
Gerber, Mei Wei and Tak Fat (65 FR 16875). The Department is now 
conducting that review in accordance with section 751 of the Act.
    The Department received timely questionnaire responses from CPF and 
Gerber and is currently analyzing their information. We will issue 
preliminary results based on these responses by the statutory due date. 
However, on May 5, 2000, Mei Wei and Tak Fat submitted a letter to the 
Department advising that they would not respond to the antidumping duty 
questionnaire because they claimed that the merchandise they exported 
to the United States during the period of review (POR) was 
``marinated'' mushrooms which are outside the scope of the antidumping 
duty order.
    In a separate scope proceeding, the Department determined that 
certain preserved mushrooms produced, exported, or imported by Mei Wei, 
Tak Fat, Leung Mi International, Tak Yeun Corp., and the U.S. Importer 
Genex International Corp. and identified as ``marinated'' or 
``acidified'' are within the scope of the antidumping duty order. This 
determination was based on the acetic acid content level of the 
merchandise in question. See Recommendation Memorandum--Final Ruling of 
Request by Tak Fat, et al. for Exclusion of Certain Marinated, 
Acidified Mushrooms from the Scope of the Antidumping Duty Order on 
Certain Preserved Mushrooms from the People's Republic of China, dated 
June 19, 2000. As a result of the scope proceeding, the Department 
learned that a large number of entries of the merchandise at issue in 
the scope inquiry produced/exported by Mei Wei and Tak Fat during the 
POR have not been liquidated. See ``U.S. Customs Data on Imports of 
Acidified Mushrooms,'' Memorandum to the File dated June 19, 2000. This 
merchandise incorrectly entered the U.S. Customs territory without the 
payment of cash deposits or the posting of a special dumping bond by 
the U.S. Importer. In order to insure the proper final collection of 
antidumping duties on these preserved mushroom entries, and

[[Page 40610]]

given Tak Fat's and Mei Wei's refusal to cooperate in this review, we 
are issuing the preliminary results of this administrative review with 
respect to Mei Wei and Tak Fat on an expedited basis. See ``Separate 
Rates Determination'' and ``PRC-Wide Rate and Use of Facts Otherwise 
Available'' sections below.

Scope of the Review

    The products covered by this review are certain preserved mushrooms 
whether imported whole, sliced, diced, or as stems and pieces. The 
preserved mushrooms covered under this review are the species Agaricus 
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to 
mushrooms that have been prepared or preserved by cleaning, blanching, 
and sometimes slicing or cutting. These mushrooms are then packed and 
heated in containers including but not limited to cans or glass jars in 
a suitable liquid medium, including but not limited to water, brine, 
butter or butter sauce. Preserved mushrooms may be imported whole, 
sliced, diced, or as stems and pieces. Included within the scope of 
this review are ``brined'' mushrooms, which are presalted and packed in 
a heavy salt solution to provisionally preserve them for further 
processing.
    Excluded from the scope of this review are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms'; (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.\3\
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    \3\ On June 19, 2000, the Department affirmed that 
``marinated,'' ``acidified,'' or ``pickled'' mushrooms containing 
less than 0.5 percent acetic acid are within the scope of the 
antidumping duty order.
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    The merchandise subject to this review is classifiable under 
subheadings 2003.1000.27, 2003.1000.31, 2003.1000.37, 2003.1000.43, 
2003.1000.47, 2003.1000.53, and 0711.90.4000 of the Harmonized Tariff 
Schedule of the United States (``HTS''). Although the HTS subheadings 
are provided for convenience and Customs purposes, our written 
description of the scope of this review is dispositive.

Separate Rates Determination

    In previous antidumping duty proceedings, the Department has 
treated the PRC as a non-market economy (NME) country. We have no 
evidence suggesting that this determination should be changed. 
Accordingly, the Department has determined that NME treatment is 
appropriate in this review. See section 771(18)(c)(i) of the Act.
    To establish whether a company operating in a NME is sufficiently 
independent to be entitled to a separate rate, the Department analyzes 
each exporting entity under the test established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588, May 6, 1991 (Sparklers), as 
amplified by the Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide from the People's Republic of China, 59 FR 22585, May 
2, 1994 (Silicon Carbide). Under this test, companies operating in a 
NME are entitled to separate, company-specific margins when they can 
demonstrate an absence of government control, both in law and in fact, 
with respect to export activities (Sparklers, 56 FR 20589). Evidence 
supporting, though not requiring, a finding of de jure absence of 
government control over export activities includes: (1) An absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; (2) any legislative enactments 
decentralizing control of companies; and (3) any other formal measures 
by the government decentralizing control of companies (id.). De facto 
absence of government control over exports is based on four factors: 
(1) Whether each exporter sets its own export prices independent of the 
government and without the approval of a government authority; (2) 
whether each exporter retains the proceeds from its sales and makes 
independent decisions regarding the disposition of profits or financing 
of losses; (3) whether each exporter has the authority to negotiate and 
sign contracts and other agreements; and (4) whether each exporter has 
autonomy from the government regarding the selection of management (see 
Silicon Carbide, 59 FR 22587).
    In the instant review, neither Mei Wei nor Tak Fat submitted 
responses to the Department's antidumping duty questionnaire, including 
the separate rates section. We therefore preliminarily determine that 
these companies did not establish their entitlement to a separate rate 
in this review and, therefore, are presumed to be part of the PRC NME 
entity and, as such, are subject to the PRC country-wide rate.\4\. 
Accordingly, exports by these companies are preliminarily assigned the 
PRC-wide rate, which is the highest margin in the LTFV petition.
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    \4\ In the LTFV investigation, Tak Fat was identified as a Hong 
Kong company. There is no information about Tak Fat's location, 
ownership, or corporate structure on the record of this review that 
would establish Tak Fat's eligibility for a separate rate.
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PRC-Wide Rate and Use of Facts Otherwise Available

    As noted above, Mei Wei and Tak Fat submitted a letter to the 
record stating that they would not participate in this review. Because 
of their refusal to cooperate in this review and their failure to 
establish their entitlement to a separate rate, we determine that the 
application of the PRC-wide rate, which is based on facts available, is 
appropriate, pursuant to section 776(a)(2) of the Act.
    Section 776(a)(2) of the Act provides that ``if an interested party 
or any other person (A) withholds information that has been requested 
by the administering authority; (B) fails to provide such information 
by the deadlines for the submission of the information or in the form 
and manner requested, subject to subsections (c)(1) and (e) of section 
782; (C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.''
    Because Mei Wei and Tak Fat have refused to participate in this 
administrative review, we find that, in accordance with sections 
776(a)(2)(A) and (C) of the Act, the use of total facts available is 
appropriate (see, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Persulfates from The People's Republic of China, 62 FR 
27222, 27224, May 19, 1997; and Certain Grain-Oriented Electrical Steel 
From Italy: Final Results of Antidumping Duty Administrative Review, 62 
FR 2655, Jan. 17, 1997 (for a more detailed discussion, see Preliminary 
Results of Antidumping Duty Administrative Review: Certain Grain-
Oriented Electrical Steel From Italy, 61 FR 36551, 36552, July 4, 
1996)). Because these respondents have provided no information, 
sections 782(d) and (e) are not relevant to our analysis.
    Section 776(b) of the Act provides that, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of the 
party as facts otherwise available. Adverse inferences are appropriate 
``to ensure that the party does not obtain a

[[Page 40611]]

more favorable result by failing to cooperate than if it had cooperated 
fully.'' See Statement of Administrative Action (SAA) accompanying the 
URAA, H.R. Doc. No. 103-316, at 870 (1994). Furthermore, ``an 
affirmative finding of bad faith on the part of the respondent is not 
required before the Department may make an adverse inference.'' See 
Antidumping Duties; Countervailing Duties: Final Rule, 62 FR 27296, 
27340, May 19, 1997.
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available information derived from the petition, the 
final determination from the LTFV investigation, a previous 
administrative review, or any other information placed on the record. 
Under section 782(c) of the Act, a respondent has a responsibility not 
only to notify the Department if it is unable to provide requested 
information, but also to provide a ``full explanation and suggested 
alternative forms.'' Mei Wei's and Tak Fat's March 5, 2000, letter 
documented for the record their refusal to provide this information and 
they have otherwise failed to respond to our requests for information, 
thereby failing to comply with this provision of the statute. 
Therefore, we determine that respondents failed to cooperate to the 
best of their ability, making the use of an adverse inference 
appropriate.
    In this proceeding, in accordance with Department practice (see, 
e.g., Rescission of Second New Shipper Review and Final Results and 
Partial Rescission of First Antidumping Duty Administrative Review 
Brake Rotors From the People's Republic of China, 64 FR 61581, 61584, 
November 12, 1999; and Preliminary Results of Antidumping Duty 
Administrative Review: Fresh Garlic From the People's Republic of 
China, 64 FR 39115, July 21, 1999), as adverse facts available, we have 
preliminarily assigned to exports of subject merchandise by Mei Wei and 
Tak Fat the PRC-wide rate which is 198.63 percent, the rate established 
in the LTFV investigation, and the highest dumping margin determined in 
any segment of this proceeding. The Department's practice when 
selecting an adverse rate from among the possible sources of 
information is to ensure that the margin is sufficiently adverse ``as 
to effectuate the purpose of the facts available rule to induce 
respondents to provide the Department with complete and accurate 
information in a timely manner.'' See Final Determination of Sales at 
Less than Fair Value: Static Random Access Memory Semiconductors from 
Taiwan, 63 FR 8909, 8932, February 23, 1998.
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``{i}nformation derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value (id.). To corroborate secondary information, 
the Department will, to the extent practicable, examine the reliability 
and relevance of the information to be used. To examine the reliability 
of margins in the petition, we examine whether, based on available 
evidence, those margins reasonably reflect a level of dumping that may 
have occurred during the period of investigation by any firm, including 
those that did not provide us with usable information. This procedure 
generally consists of examining, to the extent practicable, whether the 
significant elements used to derive the petition margins, or the 
resulting margins, are supported by independent sources. With respect 
to the relevance aspect of corroboration, the Department will consider 
information reasonably at its disposal as to whether there are 
circumstances that would render a margin not relevant. Where 
circumstances indicate that the selected margin may not be relevant, 
the Department will attempt to find a more appropriate basis for facts 
available. See, e.g., Final Results of Antidumping Duty Administrative 
Review: Fresh Cut Flowers from Mexico, 61 FR 6812, 6814, February 22, 
1996 (where the Department disregarded the highest margin as best 
information available because the margin was based on another company's 
uncharacteristic business expense resulting in an unusually high 
margin).
    In the underlying LTFV investigation, we established the 
reliability of the petition margin (see, Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Certain Preserved Mushrooms From the People's 
Republic of China, 63 FR 41794, 41798, August 5, 1998; and Notice of 
Final Determination of Sales at Less Than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255, December 
31, 1998). As there is no information on the record of this review that 
demonstrates that this rate is not an appropriate adverse facts 
available rate for the PRC-wide rate, we determine that this rate has 
probative value and, therefore, is an appropriate basis for the PRC-
wide rate to be applied in this review to exports of subject 
merchandise by Mei Wei and Tak Fat as facts otherwise available.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following margin applies for the period May 7, 1998, through January 
31, 2000, for those imports where the exporter is Mei Wei or Tak Fat:

------------------------------------------------------------------------
                                                                Margin
                   Exporter/manufacturer                      percentage
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PRC-wide Rate..............................................       198.63
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    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions directly to the Customs Service. 
Upon publication of the final results of this administrative review, 
the cash deposit rate for all shipments by Mei Wei or Tak Fat of the 
subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after the publication date, will be the PRC-wide rate 
stated in the final results of this administrative review, as provided 
for by section 751(a)(1) of the Act. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.
    Pursuant to 19 CFR 351.309, interested parties may submit written 
comments in response to these preliminary results. Case briefs must be 
submitted within 10 days after the date of publication of this notice, 
and rebuttal briefs, limited to arguments raised in case briefs, must 
be submitted no later than five days after the time limit for filing 
case briefs. Parties who submit argument in this proceeding are 
requested to submit with the argument: (1) A statement of the issue, 
and (2) a brief summary of the argument. Case and rebuttal briefs must 
be served on interested parties in accordance with 19 CFR 351.303(f). 
In addition, pursuant to 19 CFR 351.310, within 10 days of the date of 
publication of this notice, interested parties may request a public 
hearing on arguments raised in the case and rebuttal briefs. Any 
hearing, if requested, will be held two days after the date for 
submission of rebuttal

[[Page 40612]]

briefs, that is, 17 days after the date of publication of these 
preliminary results. The Department will publish the final results of 
this administrative review with respect to subject merchandise exports 
by Mei Wei and Tak Fat, including the results of its analysis of issues 
raised in any case or rebuttal brief or at a hearing, not later than 
120 days after the date of publication of these preliminary results, 
unless this time period is extended.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: June 23, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-16510 Filed 6-29-00; 8:45 am]
BILLING CODE 3510-DS-P