[Federal Register Volume 74, Number 61 (Wednesday, April 1, 2009)]
[Notices]
[Pages 14772-14779]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-7290]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-851]


Certain Preserved Mushrooms from the People's Republic of China: 
Preliminary Results of Antidumping Duty New Shipper Reviews

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

EFFECTIVE DATE: April 1, 2009.
SUMMARY: The Department of Commerce (the Department) is currently 
conducting new shipper reviews (NSRs) of the antidumping duty order on 
certain preserved mushrooms from the People's Republic of China 
(PRC)\1\ covering the period of review February 1, 2008, through July 
31, 2008. We preliminarily determine that the sales made by Zhangzhou 
Gangchang Canned Foods Co., Ltd., Fujian (Zhangzhou Gangchang)\2\ and 
by Zhejiang Iceman Group Co., Ltd. (Zhejiang Iceman), were not made 
below normal value (NV). If these preliminary results are adopted in 
our final results of this review, we will instruct U.S. Customs and 
Border Protection (CBP) to assess antidumping duties on entries of 
subject merchandise during the period of review (POR) for any importer-
specific assessment rates that are above de minimis.
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    \1\ See Notice of Amendment of Final Determination of Sales at 
Less Than Fair Value and Antidumping Duty Order: Certain Preserved 
Mushrooms From the People's Republic of China, 64 FR 8308 (February 
19, 1999).
    \2\ Based on the name by which Zhangzhou Gangchang identified 
itself in its request for new shipper review, the Department 
initiated the review for this company under the name Zhangzhou 
Gangchang Canned Foods Co., Ltd. See Certain Preserved Mushrooms 
from the People's Republic of China: Notice of Initiation of 
Antidumping Duty New Shipper Reviews, 73 FR 57333 (October 2, 2008). 
However, Zhangzhou Gangchang subsequently stated that its name is 
actually Zhangzhou Gangchang Canned Foods Co., Ltd., Fujian. See 
Zhangzhou Gangchang's January 16, 2009, submission at 8. Record 
evidence supports Zhangzhou Gangchang's contention. See Zhangzhou 
Gangchang's November 6, 2008, submission at Exhibit A-4. Therefore 
in this and subsequent notices we refer to Zhangzhou Gangchang by 
its correct name.

FOR FURTHER INFORMATION CONTACT: Fred Baker or Robert James, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
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2924 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On August 21, 2008, pursuant to section 751(a)(2)(B)(i) of the 
Tariff Act of 1930, as amended (the Tariff Act), and 19 CFR 351.214(c), 
the Department received a NSR request from Zhejiang Iceman. On August 
22, 2008, we received a NSR request from Zhangzhou Gangchang, also 
pursuant to 751(a)(2)(B)(i) of the Tariff Act the 19 CFR 351.214(c). 
The Department determined that both of these requests had not been 
properly filed, and therefore returned them on August 26, 2008. On 
August 29, 2008, both companies resubmitted their requests. They both 
certified that they are the producers and exporters of the subject 
merchandise upon which the requests were based.
    On October 2, 2008, the Department initiated antidumping duty NSRs 
on certain preserved mushrooms from the PRC covering the two companies. 
See Certain Preserved Mushrooms from the People's Republic of China: 
Notice of Initiation of Antidumping Duty New Shipper Reviews, 73 FR 
57333 (October 2, 2008) (Initiation Notice).
    On October 8, 2008, the Department issued its standard antidumping 
questionnaire to both Zhejiang Iceman and Zhangzhou Gangchang. Between 
November 2008 and February 2009, Zhejiang Iceman and Zhangzhou 
Gangchang submitted responses to the original sections A, C, and D 
questionnaires and supplemental sections A, C, and D questionnaires.
    On November 3, 2008, the Department sent interested parties a 
letter requesting comments on surrogate country selection and 
information pertaining to valuing factors of production (FOP). On 
February 17, 2009, Zhejiang Iceman and Zhangzhou Gangchang submitted 
surrogate value data. No other party submitted surrogate country or 
surrogate value data.

Scope of the Order

    The products covered by this order are certain preserved mushrooms, 
whether imported whole, sliced, diced, or as stems and pieces. The 
certain preserved mushrooms covered under this order are the species 
Agaricus bisporus and Agaricus bitorquis. ``Certain Preserved 
Mushrooms'' refers to mushrooms that have been prepared or preserved by 
cleaning, blanching, and sometimes slicing or cutting. These

[[Page 14773]]

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. Certain 
preserved mushrooms may be imported whole, sliced, diced, or as stems 
and pieces. Included within the scope of this order are ``brined'' 
mushrooms, which are presalted and packed in a heavy salt solution to 
provisionally preserve them for further processing.\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. 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,<gr-thn-eq> dated June 19, 2000. On February 9, 2005, the 
United States Court of Appeals for the Federal Circuit upheld this 
decision. See Tak Fat v. United States, 396 F.3d 1378 (Fed. Cir. 
2005).
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    Excluded from the scope of this order 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.
    The merchandise subject to this order is classifiable under 
subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 2003.10.0143, 
2003.10.0147, 2003.10.0153 and 0711.51.0000 of the Harmonized Tariff 
Schedule of the United States (HTSUS). Although the HTSUS subheadings 
are provided for convenience and Customs purposes, the written 
description of the scope of this order is dispositive.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, we 
have treated the PRC as a non-market economy (NME) country. In 
accordance with section 771(18)(C)(i) of the Tariff Act, any 
determination that a foreign country is an NME country shall remain in 
effect until revoked by the administering authority. See Brake Rotors 
From the People's Republic of China: Final Results and Partial 
Rescission of the 2004/2005 Administrative Review and Notice of 
Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 
2006). None of the parties to this proceeding have contested such 
treatment. Accordingly, we calculated normal value (NV) in accordance 
with section 773(c) of the Tariff Act, which applies to NME countries.

Affiliation

    Section 771(33) the Tariff Act provides that the following persons 
shall be considered to be ``affiliated'' or ``affiliated 
persons<gr-thn-eq>: (A) Members of a family, including brothers and 
sisters (whether by the whole or half blood), spouse, ancestors, and 
lineal descendants; (B) Any officer or director of an organization and 
such organization; (C) Partners; (D) Employer and employee; (E) Any 
person directly or indirectly owning, controlling, or holding with 
power to vote, 5 percent or more of the outstanding voting stock or 
shares of any organization and such organization; (F) Two or more 
persons directly or indirectly controlling, controlled by, or under 
common control with, any person; or (G) Any person who controls any 
other person and such other person. The Act further provides that ``a 
person shall be considered to control another person if the person is 
legally or operationally in a position to exercise restraint or 
direction over the other person.'' Id.
    The Statement of Administrative Action (SAA) to the Uruguay Round 
Agreements Act states the following: the traditional focus on control 
through stock ownership fails to address adequately modern business 
arrangements, which often find one firm ``operationally in a position 
to exercise restraint or direction'' over another even in the absence 
of an equity relationship. A company may be in a position to exercise 
restraint or direction, for example, through corporate or family 
groupings, franchises or joint venture agreements, debt financing, or 
close supplier relationships in which the supplier or buyer becomes 
reliant upon the other.\4\
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    \4\ See SAA, H.R. Doc. 103-316, vol. 1 at 838 (1994).
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    Section 351.102(b)(3) of the Department's regulations defines 
affiliated persons and affiliated parties as having the same meaning as 
in section 771(33) of the Act and states that: ``In determining whether 
control over another person exists, within the meaning of section 
771(33) of the Act, the Secretary will consider the following factors, 
among others: corporate or family groupings; franchise or joint venture 
agreements; debt financing; and close supplier relationships. The 
Secretary will not find that control exists on the basis of these 
factors unless the relationship has the potential to impact decisions 
concerning the production, pricing, or cost of the subject merchandise 
or foreign like product. The Secretary will consider the temporal 
aspect of a relationship in determining whether control exists; 
normally, temporary circumstances will not suffice as evidence of 
control.''
    To the extent that section 771(33) of the Tariff Act does not 
conflict with the Department's application of separate rates and 
enforcement of the non-market economy provision, pursuant to section 
773(c) of the Tariff Act, the Department will determine that exporters 
and/or producers are affiliated if the facts of the case support such a 
finding. For the reasons discussed below, we find that this condition 
has not prevented us from examining whether certain producers are 
affiliated with Zhejiang Iceman in this administrative review.
    The record of this NSR demonstrates that Zhejiang Iceman Group Co. 
Ltd. (Zhejiang Iceman) and Dangshan Xincheng Foods Co. Ltd. (Dangshan) 
are affiliated, pursuant to section 771(33)(E) of the Act. See 
Memorandum from Robert James, Program Manager, to Richard Weible, 
Office Director, entitled ``Certain Preserved Mushrooms from the 
People's Republic of China: Affiliation and Collapsing of Zhejiang 
Iceman Group Co. Ltd. and Dangshan Xincheng Foods Co., Ltd.,'' dated 
March 25, 2009 (Collapsing Memorandum). Zhejiang Iceman directly owns 
greater than 5 percent of the voting shares of Dangshan. See Collapsing 
Memorandum at pages 3 and 4. Also, both of Zhejiang Iceman's owners, 
Mr. Shen Ronglu, and his wife, Mrs. Xiang Ping, collectively own 100 
percent of the shares of Zhejiang Iceman, and directly own greater than 
5 percent of the voting shares of Dangshan. Id. Record evidence also 
shows Zhejiang Iceman and Dangshan are under the common control of Mr. 
Shen Ronglu, and are, therefore affiliated under section 771(33)(F) of 
the Tariff act. Id. Zhejiang Iceman also claims it is controlled by its 
owner, Mr. Shen Ronglu, who is also the general manager of Zhejiang 
Iceman. Id. Zhejiang Iceman also claims Shen Ronglu has sole authority 
to bind both Zhejiang Icemen and Dangshan in agreements. Id. Further, 
record evidence shows that both Mr. Shen Ronglu, and his wife, Mrs. 
Xiang Ping, are affiliated as members of a family under section 
771(33)(A) of the Tariff Act. Id.
    Based on our analysis, we preliminarily find that, during the POR, 
producer/exporter Zhejiang Iceman and Dangshan were, in fact, 
affiliated through the common ownership and control of Zhejiang 
Iceman's and Dangshan's joint owners (who are

[[Page 14774]]

affiliated as family members under 771(33)(A)) and pursuant to sections 
771(33)(E) and (F) of the Tariff Act. For further discussion on this 
matter, see Collapsing Memorandum.

Collapsing

    Pursuant to 19 CFR 351.401(f), the Department will collapse 
producers and treat them as a single entity where (1) those producers 
are affiliated, (2) the producers have production facilities for 
producing similar or identical products that would not require 
substantial retooling of either facility in order to restructure 
manufacturing priorities, and (3) there is a significant potential for 
manipulation of price or production.
    To the extent that this provision does not conflict with the 
Department's application of separate rates and enforcement of the NME 
provision, section 773(c) of the Tariff Act, the Department will 
collapse two or more affiliated entities in a case involving an NME 
country if the facts of the case warrant such treatment. Furthermore, 
we note the factors listed in 19 CFR 351.401(f)(2) are not exhaustive, 
and in the context of an NME investigation or administrative review, 
other factors unique to the relationship of business entities within 
the NME may lead the Department to determine that collapsing is either 
warranted or unwarranted, depending on the facts of the case. See 
Hontex Enterprises, Inc. v. United States, 248 F. Supp. 2d 1323, 1342 
(CIT 2003) (noting that the application of collapsing in the NME 
context may differ from the standard factors listed in the regulation).
    In summary, if there is evidence of significant potential for 
manipulation between or among affiliates which produce and/or export 
similar or identical merchandise, whether or not all such merchandise 
is exported to the United States, the Department may find such evidence 
sufficient to apply the collapsing criteria in an NME context in order 
to determine whether all or some of those affiliates should be treated 
as one entity (see Certain Hot-Rolled Carbon Steel Flat Products from 
the People's Republic of China, Preliminary Determination of Sales at 
Less Than Fair Value, 66 FR 22183 (May 3, 2001); Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled 
Carbon Steel Flat Products from the People's Republic of China, 66 FR 
49632 (September 28, 2001) (Certain Hot-Rolled Carbon Steel Flat 
Products); and Anshan Iron & Steel Co. v. United States, 27 C.I.T. 
1234, 1246-47 (CIT 2003) (Anshan)).
    The decision of whether to collapse two or more affiliated 
companies is specific to the facts presented in the proceeding and is 
based on several considerations, including the structure of the 
collapsed entity, the level of control between and among affiliates, 
and the level of participation by each affiliate in the proceeding. 
Given the unique relationships which arise in NMEs between individual 
companies and the government, a separate rate will be granted to the 
collapsed entity only if the facts, taken as a whole, support such a 
finding (see ``Separate Rates'' section below for further discussion).
    We find that the first and second collapsing criteria are met with 
respect to Zhejiang Icemen and Dangshan because these producers are (1) 
affiliated under sections 771(33)(A), 771(33)(E), and 771(33)(F) of the 
Tariff Act, and (2) have production facilities for producing similar or 
identical products, such that no retooling at either of the three 
facilities would be required in order to restructure manufacturing 
priorities. Evidence on the record shows Zhejiang Iceman and Dangshan 
have production facilities which were suitable for producing the type 
of merchandise under consideration during the POR. Both Zhejiang Iceman 
and Dangshan did, in fact, produce the merchandise under consideration 
at these facilities during the POR. See Collapsing Memorandum at pages 
4 and 5.
    We find the third collapsing criterion is also met with respect to 
Zhejiang Icemen and Dangshan because a significant potential for 
manipulation of prices or production exists. In identifying a 
significant potential for the manipulation of price or production, the 
factors the Secretary may consider include: (i) the level of common 
ownership; (ii) the extent to which managerial employees or board 
members of one firm sit on the board of directors of an affiliated 
firm; (iii) and whether operations are intertwined, such as through the 
sharing of sales information, involvement in production and pricing 
decisions, the sharing of facilities or employees, or significant 
transactions between the affiliated producers. See 19 CFR 
351.401(f)(2).
    With regard to the criteria enumerated in 19 CFR 351.401(f)(2), 
there is common ownership and control of Zhejiang Iceman and Dangshan 
by both Mr. Shen Ronglu and Mrs. Xiang Ping. Because the individuals 
who collectively own and control Zhejaing Iceman also collectively own 
and control Dangshan, we can preliminarily collapse these affiliated 
producers. Additionally, Mr. Shen Ronglu is the executive director and 
general manager of Zhejiang Iceman and has sole authority to bind both 
Zhejiang Iceman and Dangshan in agreements and, as a result, can 
manipulate prices and production. For these reasons, we find there is 
significant potential for manipulation of prices or production and, 
therefore, collapsing of Zhejiang Icemen and Dangshan is appropriate.
    Based on the reasons explained fully in the Collapsing Memorandum 
and pursuant to 19 CFR 351.401(f), we have preliminarily collapsed 
Zhejiang Iceman and Dangshan because they are affiliated producers of 
the merchandise under consideration, and because there is a significant 
potential for manipulation of prices and production decisions between 
these parties. For all relevant purposes, all subsequent references in 
this notice to Zhejiang Iceman will be to the collapsed entity that 
includes Dangshan.
    This decision is specific to the facts presented in this review and 
is based on several considerations, including the structure of the 
collapsed entity, the level of control between and among affiliates, 
and the level of participation by each affiliate in the proceeding. 
Given the unique relationships which arise in NMEs between individual 
companies and the government, a separate rate will be granted to the 
collapsed entity only if the facts, taken as a whole, support such a 
finding (see ``Separate Rates'' section below for further discussion).

Separate Rates Determination

    A designation of a country as an NME remains in effect until it is 
revoked by the Department. See section 771(18)(C) of the Tariff Act. 
Accordingly, there is a rebuttable presumption that all companies 
within the PRC are subject to government control, and thus should be 
assessed a single antidumping duty rate. It is the Department's policy 
to assign all exporters of the merchandise subject to review in NME 
countries a single rate unless an exporter can affirmatively 
demonstrate an absence of government control, both in law (de jure) and 
in fact (de facto), with respect to exports. To establish whether a 
company is sufficiently independent to be entitled to a separate, 
company-specific rate, the Department analyzes each exporting entity in 
an NME country 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 
Notice of Final Determination of Sales at Less Than Fair Value: Silicon 
Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) 
(Silicon Carbide).

[[Page 14775]]

Absence of De Jure Control

    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. See Sparklers, 
56 FR at 20589. In this new shipper review, Zhejiang Iceman and 
Zhangzhou Gangchang submitted complete responses to the separate rates 
section of the Department's questionnaire. The evidence submitted in 
the instant review by Zhejiang Iceman and Zhangzhou Gangchang includes 
government laws and regulations on corporate ownership and control 
(i.e., the Company Law and the Foreign Trade Law of the People's 
Republic of China), individual business licenses, and narrative 
information regarding the companies' operations and selection of 
management. The evidence provided by Zhejiang Iceman and Zhangzhou 
Gangchang supports a preliminary finding of a de jure absence of 
government control over its export activities because: (1) there are no 
controls on exports of subject merchandise, such as quotas applied to, 
or licenses required for, exports of the subject merchandise to the 
United States; and (2) the government of the PRC has passed legislation 
decentralizing control of companies. See Zhejiang Iceman's November 6, 
2008, submission at pages 2-10 and Exhibit A-4; Zhejiang Iceman's 
January 13, 2009, submission at pages 4-5; and Zhangzhou Gangchang's 
November 6, 2008, submission at pages 6-10 and Exhibit A-2.

Absence of De Facto Control

    The absence of de facto government control over exports generally 
is based on whether the respondent: (1) sets its own export prices 
independent of the government and other exporters; (2) retains the 
proceeds from its export sales and makes independent decisions 
regarding the disposition of profits or financing of losses; (3) has 
the authority to negotiate and sign contracts and other agreements; and 
(4) has autonomy from the government regarding the selection of 
management. See Silicon Carbide, 59 FR at 22586-87; Sparklers, 56 FR at 
20589; and Final Determination of Sales at Less Than Fair Value: 
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544, 
22545 (May 8, 1995).
    In its November 6, 2008, submission, Zhangzhou Gangchang submitted 
evidence demonstrating an absence of de facto government control over 
its export activities. Specifically, this evidence indicates: (1) the 
company sets its own export prices independent of the government and 
without the approval of a government authority; (2) the company retains 
the proceeds from its sales and makes independent decisions regarding 
the disposition of profits or financing of losses; (3) the company has 
a general manager and a sales manager with the authority to negotiate 
and bind the company in an agreement; (4) the general manager is 
selected by the board of directors, and the general manager appoints 
the manager of each department; and (5) there is no restriction on the 
company's use of export revenues. Therefore, we preliminarily find that 
Zhangzhou Gangchang has established prima facie that it qualifies for a 
separate rate under the criteria established by Silicon Carbide and 
Sparklers.
    Similarly, in its November 6, 2008, January 13, 2009, and February 
17, 2009 submissions, Zhejiang Iceman also submitted evidence 
demonstrating an absence of de facto government control over its export 
activities. Specifically, this evidence indicates: (1) the company sets 
its own export prices independent of the government and without the 
approval of a government authority; (2) the company retains the 
proceeds from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) the company has an 
executive director who is also the general manager and who has the 
authority to negotiate and bind the company in an agreement; (4) the 
executive director and general manager and his wife collectively own 
all of the shares of company, and are self-appointed; (5) the executive 
director and general manager appoint all of the managers of the 
company; and (6) there is no restriction on the company's use of export 
revenues. Therefore, we preliminarily find that Zhejiang Iceman has 
established prima facie that it qualifies for a separate rate under the 
criteria established by Silicon Carbide and Sparklers.

Bona Fide Analysis

    Consistent with the Department's practice, we investigated the bona 
fide nature of the sales made by Zhejiang Iceman and Zhangzhou 
Gangchang for these NSRs. We found the new shipper sales by Zhejiang 
Iceman and Zhangzhou Gangchang were made on a bona fide basis. Based on 
our investigation into the bona fide nature of the sales and the 
questionnaire responses submitted by Zhejiang Iceman and Zhangzhou 
Gangchang, as well as the companies' eligibility for separate rates 
(see ``Separate Rates Determination'' section (above)), we 
preliminarily determine that Zhejiang Iceman and Zhangzhou Gangchang 
have met the requirements to qualify as new shippers during this POR. 
Therefore, for purposes of these preliminary results of review, we are 
treating Zhejiang Iceman's and Zhangzhou Gangchang's sales of subject 
merchandise to the United States as appropriate transactions for these 
NSRs.\5\
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    \5\ For more detailed discussion of this issue, please see 
Memoranda to Richard Weible, Office Director, ``Bona Fide Sales 
Analysis for Zhangzhou Gangchang Canned Foods Co., Ltd., Fujian'' 
and ``Bona Fide Sales Analysis for Zhejiang Iceman Group Co., 
Ltd.,'' both dated March 25, 2009.
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Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Tariff Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production (FOPs), 
valued in a surrogate market economy country or countries considered to 
be appropriate by the Department. In accordance with section 773(c)(4) 
of the Tariff Act, in valuing the FOPs, the Department shall utilize, 
to the extent possible, the prices or costs of FOPs in one or more 
market economy countries that are: (1) at a level of economic 
development comparable to that of the NME country; and (2) significant 
producers of comparable merchandise.
    The Department determined that India, Philippines, Colombia, 
Thailand, and Indonesia are countries comparable to the PRC in terms of 
economic development.\6\ Moreover, it is the Department's practice to 
select an appropriate surrogate country based on the availability and 
reliability of data from the countries. See Department Policy Bulletin 
No. 04.1: Non-Market Economy Surrogate Country Selection Process (March 
1, 2004) (Surrogate Country Policy Bulletin). Since the less-than-fair-
value investigation, we have determined that India is comparable to the 
PRC in terms of economic development and has surrogate value data that 
are available and reliable. In this proceeding, we received no comments 
regarding surrogate country selection. Since no information has been

[[Page 14776]]

provided in this review that would warrant a change in the Department's 
selection of India from prior segments of this proceeding, we continue 
to find that India is the appropriate surrogate country here because it 
is at a similar level of economic development pursuant to section 
773(c)(4) of the Tariff Act, is a significant producer of comparable 
merchandise, and has reliable, publicly available data representing a 
broad-market average. See Memorandum to the File, through Richard 
Weible, Office Director, and Robert James, Program manager, from Fred 
Baker, Analyst, Subject: Antidumping Duty New Shipper Review of Certain 
Preserved Mushrooms from the People's Republic of China: Selection of a 
Surrogate Country, dated March 25, 2009.
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    \6\ See Memorandum from Carole Showers, Acting Director, Office 
of Policy, to Richard Weible, Director, Office 7; Subject: Request 
for a List of Surrogate Countries for a 2008 New Shipper Review of 
the Antidumping Duty Order on Certain Preserved Mushrooms from the 
People's Republic of China, dated October 16, 2008.
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    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in a new shipper review, interested parties may submit publicly 
available information to value FOPs within 20 days after the date of 
publication of these preliminary results.

U.S. Price

    In accordance with section 772(a) of the Tariff Act, we based U.S. 
prices on the export prices (EP) of the sales to the United States by 
Zhejiang Iceman and Zhangzhou Gangchang because their first sales to an 
unaffiliated party were made before the date of importation and the use 
of constructed export price was not otherwise warranted. We calculated 
EP based on the free-on-board (FOB) price to the first unaffiliated 
purchaser in the United States. We deducted foreign inland freight and 
foreign brokerage and handling from the starting price (or gross unit 
price), in accordance with section 772(c) of the Tariff Act. Both of 
these services were provided by NME vendors for both Zhejiang Iceman's 
and Zhangzhou Gangchang's U.S. sales. Therefore, we based the deduction 
of these movement charges on surrogate values.
    We valued foreign inland freight (which consisted of truck freight) 
using a per-unit average rate calculated from data on the following 
website: http://www.infobanc.com/logistics/logtruck.htm. The logistics 
section of this web site contains inland freight truck rates between 
many large Indian cities. Since this value is not contemporaneous with 
the POR, we deflated the rate using the wholesale price index (WPI). 
See Memoranda to the File, ``New Shipper Review of Certain Preserved 
Mushroom from the People's Republic of China: Surrogate Values for the 
Preliminary Results'' (Zhangzhou Gangchang Surrogate Values Memorandum) 
at Exhibit 7, and ``New Shipper Review of Certain Preserved Mushroom 
from the People's Republic of China: Surrogate Values for the 
Preliminary Results'' (Zhejiang Iceman Surrogate Values Memorandum) at 
Exhibit X.
    We valued foreign brokerage and handling with the publicly 
summarized brokerage and handling expense reported in the U.S. sales 
listing of Indian mushroom producer, Agro Dutch Industries, Ltd. (Agro 
Dutch), in the 2004-2005 administrative review of Certain Preserved 
Mushrooms from India. See Zhangzhou Gangchang Surrogate Values 
Memorandum at Exhibit 8 and Zhejiang Iceman Surrogate Values Memorandum 
at Exhibit XI.

Normal Value

1. Methodology

    Section 773(c)(1)(B) of the Tariff Act provides that the Department 
shall determine the NV using an FOP methodology if the merchandise is 
exported from an NME and the information does not permit the 
calculation of NV using home-market prices, third-country prices, or 
constructed value under section 773(a) of the Tariff Act. The 
Department bases NV on FOPs because the presence of government controls 
on various aspects of NMEs renders price comparisons and the 
calculation of production costs invalid under the Department's normal 
methodologies. See Tapered Roller Bearings and Parts Thereof, Finished 
or Unfinished, From the People's Republic of China: Preliminary Results 
of Antidumping Duty Administrative Review and Notice of Intent to 
Rescind in Part, 70 FR 39744 (July 11, 2005), unchanged in Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from the 
People's Republic of China: Final Results of 2003-2004 Administrative 
Review and Partial Rescission of Review, 71 FR 2517 (January 17, 2006).
    We calculated NV by adding the value of the FOPs, general expenses, 
profit, and packing costs. The FOPs for subject merchandise include: 
(1) quantities of raw materials employed; (2) hours of labor required; 
(3) amounts of energy and other utilities consumed; (4) representative 
capital and selling costs; and (5) packing materials. We used the FOPs 
reported by Zhejiang Iceman and Zhangzhou Gangchang for materials, 
energy, labor, and packing, and valued those FOPs by multiplying the 
amount of the factor consumed in producing subject merchandise by the 
average unit surrogate value of the factor.
    In addition, we added freight costs to the surrogate costs that we 
calculated for material inputs. We calculated freight costs by 
multiplying surrogate freight rates by the shorter of the reported 
distance from the domestic supplier to the factory that produced the 
subject merchandise or the distance from the nearest seaport to the 
factory that produced the subject merchandise, as appropriate. Where 
there were multiple domestic suppliers of a material input, we 
calculated a weighted-average distance after limiting each supplier's 
distance to no more than the distance from the nearest seaport to 
Zhejiang Iceman and Zhangzhou Gangchang. This adjustment is in 
accordance with the decision by the Court of Appeals for the Federal 
Circuit in Sigma Corp. v. United States, 117 F.3d 1401, 1407-1408 (Fed. 
Cir. 1997). We increased the calculated costs of the FOPs for surrogate 
general expenses and profit. See Zhangzhou Gangchang Surrogate Values 
Memorandum at Exhibit 8 and Zhejiang Iceman Surrogate Values Memorandum 
at Exhibit XII.

2. Selection of Surrogate Values

    In selecting surrogate values, we followed, to the extent 
practicable, the Department's practice of choosing public values which 
are non-export averages, representative of a range of prices in effect 
during the POR, or over a period as close as possible in time to the 
POR, product-specific, and tax-exclusive. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value, Negative 
Preliminary Determination of Critical Circumstances and Postponement of 
Final Determination: Certain Frozen and Canned Warmwater Shrimp From 
the Socialist Republic of Vietnam, 69 FR 42672, 42682 (July 16, 2004), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic 
of Vietnam, 69 FR 71005 (December 8, 2004). We also considered the 
quality of the source of surrogate information in selecting surrogate 
values. See Manganese Metal From the People's Republic of China; Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 63 FR 12440 (March 13, 1998). Where we could obtain only 
surrogate values that were not contemporaneous with the POR, we 
inflated (or deflated) the surrogate values using, where appropriate, 
the Indian WPI as published in International Financial Statistics by 
the International Monetary Fund. See Zhangzhou Gangchang Surrogate 
Values Memorandum at

[[Page 14777]]

Exhibit 2 and Zhejiang Iceman Surrogate Values Memorandum at Exhibit 
III.
    In calculating surrogate values from import statistics, in 
accordance with the Department's practice, we disregarded statistics 
for imports from NME countries and countries deemed to maintain broadly 
available, non-industry-specific subsidies which may benefit all 
exporters to all export markets (e.g., Indonesia, South Korea, and 
Thailand). See, e.g., Final Determination of Sales at Less Than Fair 
Value: Certain Automotive Replacement Glass Windshields From The 
People's Republic of China, 67 FR 6482 (February 12, 2002) and 
accompanying Issues and Decision Memorandum at Comment 1. See also 
Notice of Preliminary Determination of Sales at Less Than Fair Value, 
Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances: Certain Color Television 
Receivers From the People's Republic of China, 68 FR 66800, 66808 
(November 28, 2003), unchanged in Notice of Final Determination of 
Sales at Less Than Fair Value and Negative Final Determination of 
Critical Circumstances: Certain Color Television Receivers From the 
People's Republic of China, 69 FR 20594 (April 16, 2004). Additionally, 
we excluded from our calculations imports that were labeled as 
originating from an unspecified country because we could not determine 
whether they were from an NME country.
    We valued production material inputs of mushroom spawn, rice straw, 
and manure using the financial statements of Agro Dutch or Flex Foods 
Ltd. (Flex Foods), Indian producers of mushrooms and vegetables, as 
follows. To value the input of mushroom spawn, we used data from the 
fiscal year (FY) 2004-2005 financial statement of Agro Dutch because 
Agro Dutch's mushroom spawn value is specific to the species Agaricus 
bisporous, which is the species used to produce subject merchandise. To 
value the input of rice straw, we used the straw value from the FY 
2006-2007 financial statement of Flex Foods because this value is 
specific to the input. To value the input of purchased mushrooms, we 
used the FY 2006-07 financial statement of Agro Dutch because the value 
is specific to the input. Similarly, to value the input of manure, we 
used the manure value from the FY 2004-2005 financial statement of Agro 
Dutch because this value is specific to the input. See Zhangzhou 
Gangchang Surrogate Values Memorandum at Exhibits 3 and 4 and Zhejiang 
Iceman Surrogate Values Memorandum at Exhibit V. We valued super 
calcium phosphate (another production input) using weighted-average 
Indian import values derived from the World Trade Atlas online (WTA), 
for the period February 2008 through July 2008.
    We valued processing and canning material inputs (salt, citric 
acid, lime, and cans) using weighted-average Indian import values 
derived from the World Trade Atlas online (WTA), for the period 
February 2008 through July 2008. See Zhangzhou Gangchang Surrogate 
Values Memorandum at Exhibit 4 and Zhejiang Iceman Surrogate Values 
Memorandum at Exhibit II. In addition, we valued packing material 
inputs (cardboard cartons, labels, packing tape, and glue) using 
weighted-average Indian import values derived from the WTA for the 
period February 2008 through July 2008. See Zhangzhou Gangchang 
Surrogate Values Memorandum at Exhibit 6 and Zhejiang Iceman Surrogate 
Values Memorandum at Exhibit II. The Indian import statistics obtained 
from the WTA were published by the Indian Directorate General of 
Commercial Intelligence and Statistics, Ministry of Commerce of India 
and are contemporaneous with the POR. As the Indian surrogate values 
were denominated in rupees, in accordance with section 773A(a) of the 
Tariff Act, we converted them to U.S. dollars using the official 
exchange rate for India recorded on the date of sale of subject 
merchandise in this case. See http://www.ia.ita.doc.gov/exchange/index.html.
    We valued electricity using price data for small, medium, and large 
industries, as published by the Central Electricity Authority of the 
Government of India in its publication titled Electricity Tariff & Duty 
and Average Rates of Electricity Supply in India, dated July 2006. 
These electricity rates represent actual country-wide publicly-
available information on tax-exclusive electricity rates charged to 
industries in India. Since the rates are not contemporaneous with the 
POR, we inflated the values using the WPI. See Zhangzhou Gangchang 
Surrogate Values Memorandum at Exhibit 5 and Zhejiang Iceman Surrogate 
Values Memorandum at Exhibit VII.
    To value water, the Department used data from the Maharastra 
Industrial Development Corporation (www.midcindia.org) for June 2003, 
which we found to be the best available information since it includes a 
wide range of industrial water rates. Since the water rates were not 
contemporaneous with the POR, the Department adjusted the value for 
inflation. See Zhangzhou Gangchang Surrogate Values Memorandum at 
Exhibit 5 and Zhejiang Iceman Surrogate Values Memorandum at Exhibit 
VIII.
    We valued coal using weighted-average Indian import values derived 
from the WTA for the period February 2008 through July 2008. See 
Zhangzhou Gangchang Surrogate Values Memorandum at Exhibit 5 and 
Zhejiang Iceman Surrogate Values Memorandum at Exhibit II.
    We valued steam as 14.52 percent of the value of natural gas. To 
value natural gas, we used a value reported in the May 2005 issue of 
the Indian publication Financial Express. Since this value is not 
contemporaneous with the POR, we inflated it using the WPI. For details 
of our calculation, see the Zhejiang Iceman Surrogate Values Memorandum 
at Exhibit IX.
    We valued truck freight expenses for inputs using the same 
surrogate data we used for valuing domestic inland freight for Zhejiang 
Iceman and Zhangzhou Gangchang's U.S. sale as described above (i.e., we 
used data from the website http://www.infobanc.com/logistics/logtruck.htm, which contains inland freight truck rates between many 
large Indian cities). Since these values are not contemporaneous with 
the POR, we deflated the rate using the WPI. See Zhangzhou Gangchang 
Surrogate Values Memorandum at Exhibit 7 and Zhejiang Iceman Surrogate 
Values Memorandum at Exhibit X.
    The Department's regulations require the use of a regression-based 
wage rate. See 19 CFR 351.408(c)(3). Therefore, to value labor, the 
Department used the regression-based wage rate for the PRC published on 
the Import Administration website. See the IA website: http://ia.ita.doc.gov/wages/05wages/05wages-041608.html, and see Corrected 
2007 Calculation of Expected Non-Market Economy Wages, 73 FR 27795 (May 
14, 2008).
    To value the surrogate financial ratios for factory overhead (OH), 
selling, general & administrative (SG&A) expenses, and profit, the 
Department used the 2006-2007 financial statements of Agro Dutch and 
Flex Foods. The Department notes that Agro Dutch is a producer of 
mushrooms, and Flex Foods is a producer of mushrooms and vegetable 
products. Therefore, Agro Dutch's and Flex Foods' financial ratios for 
OH and SG&A are comparable to Zhejiang Iceman's and Zhangzhou 
Gangchang's financial ratios by virtue of their production of the 
merchandise under consideration. Moreover, an average of the financial 
statements of Agro Dutch and Flex Foods represents

[[Page 14778]]

a broader spectrum of the Indian mushroom industry than the financial 
statement of a single mushroom producer. See Zhangzhou Gangchang 
Surrogate Values Memorandum at Exhibit 8 and Zhejiang Iceman Surrogate 
Values Memorandum at Exhibit XII.

Preliminary Results of the Review

    The Department has determined that the following preliminary 
dumping margins exist for the period February 1, 2008, through July 31, 
2008:

                Certain Preserved Mushrooms from the PRC
------------------------------------------------------------------------
                                                       Weighted-Average
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
Zhejiang Iceman.....................................                0.00
Zhangzhou Gangchang.................................                0.00
------------------------------------------------------------------------

Public Comment

    The Department will disclose to parties to this proceeding the 
calculations performed in reaching the preliminary results within five 
days of the date of publication of these preliminary results. See 19 
CFR 351.224(b). Interested parties may submit written comments (case 
briefs) within 30 days of publication of the preliminary results and 
rebuttal comments (rebuttal briefs) within five days after the time 
limit for filing case briefs. See 19 CFR 351.309(c)(1)(ii) and 
351.309(d)(1). Pursuant to 19 CFR 351.309(d)(2), rebuttal briefs must 
be limited to issues raised in the case briefs. Parties who submit 
arguments are requested to submit with the argument: (1) a statement of 
the issue; (2) a brief summary of the argument; and (3) a table of 
authorities. Further, the Department requests that parties submitting 
written comments provide the Department with a diskette containing the 
public version of those comments.
    Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). Interested parties 
who wish to request a hearing or to participate if one is requested, 
must submit a written request to the Assistant Secretary for Import 
Administration within 30 days of publication of this notice. Requests 
should contain: (1) the party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of issues to be 
discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be 
limited to those raised in the briefs.
    Unless the deadline is extended pursuant to section 
751(a)(2)(B)(iv) of the Tariff Act, the Department will issue the final 
results of these NSRs, including the results of our analysis of the 
issues raised by the parties in their comments, within 90 days after 
issuance of these preliminary results.

Deadline for Submission of Publicly Available Surrogate Value 
Information

    In accordance with 19 CFR 351.301(c)(3), the deadline for 
submission of publicly available information to value factors of 
production under 19 CFR 351.408(c) is 20 days after the date of 
publication of the preliminary determination. In accordance with 19 CFR 
351.301(c)(1), if an interested party submits factual information less 
than ten days before, on, or after (if the Department has extended the 
deadline), the applicable deadline for submission of such factual 
information, an interested party has ten days to submit factual 
information to rebut, clarify, or correct the factual information no 
later than ten days after such factual information is served on the 
interested party. However, the Department notes that 19 CFR 
351.301(c)(1), permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. See 
Glycine from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review and Final Rescission, in Part, 
72 FR 58809 (October 17, 2007) and accompanying Issues and Decision 
Memorandum at Comment 2. Furthermore, the Department generally will not 
accept business proprietary information in either the surrogate value 
submissions or the rebuttals thereto, as the regulation regarding the 
submission of surrogate values allows only for the submission of 
publicly available information.

Assessment Rates

    Upon issuing the final results of the review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. The Department intends to issue assessment instructions to CBP 
15 days after the date of publication of the final results of review. 
Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-specific 
ad valorem duty assessment rates based on the ratio of the total amount 
of the dumping margins calculated for the examined sales to the total 
entered value of those same sales. We will instruct CBP to assess 
antidumping duties on all appropriate entries covered by this review if 
any importer-specific assessment rate calculated in the final results 
of this review is above de minimis. However, the final results of this 
review shall be the basis for the assessment of antidumping duties on 
entries of merchandise covered by the final results of these reviews 
and for future deposits of estimated duties, where applicable.

Cash Deposit Requirements

    The following cash deposit requirements, when imposed, will be 
effective upon publication of the final results of this new shipper 
review for all shipments of subject merchandise exported by Zhejiang 
Iceman or Zhangzhou Gangchang and entered, or withdrawn from warehouse, 
for consumption on or after the publication date, as provided by 
section 751(a)(2)(C) of the Tariff Act: (1) for subject merchandise 
manufactured and exported by Zhejiang Iceman or manufactured and 
exported by Zhangzhou Gangchang, the cash-deposit rate will be that 
established in the final results of this review; (2) for subject 
merchandise exported by Zhejiang Iceman or Zhangzhou Gangchang but not 
manufactured by Zhejiang Iceman or Zhangzhou Gangchang, respectively, 
the cash deposit rate will continue to be the PRC-wide rate (i.e., 
198.63 percent); and (3) for subject merchandise manufactured by 
Zhejiang Iceman or Zhangzhou Gangchang, but exported by any other 
party, the cash deposit rate will be the rate applicable to the 
exporter. If the cash deposit rates calculated for Zhejiang Iceman or 
Zhangzhou Gangchang in the final results is zero or de minimis, a zero 
cash deposit will be required for entries of subject merchandise both 
produced and exported by Zhejiang Iceman or Zhangzhou Gangchang. These 
cash deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Importers

    This notice serves as a preliminary reminder to importers of their 
responsibility under 19 CFR 351.402(f)(2) 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 new shipper review and notice are in accordance with sections 
751(a)(2)(B) and 777(i) of the Tariff Act and 19 CFR 351.214(i).


[[Page 14779]]


    Dated: March 25, 2009.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. E9-7290 Filed 3-31-09; 8:45 am]
BILLING CODE 3510-DS-S