66 FR 20634, April 24, 2001
                                                              A-570-848
                                                  ARP: 9/1/98 - 8/31/99
                                                        Public Document
                                            DAS III (7): AE, EB, TG, MH


MEMORANDUM TO: Bernard T. Carreau, fulfilling the duties of
               Assistant Secretary for Import Administration 

FROM:          Joseph A. Spetrini
               Deputy Assistant Secretary
               AD/CVD Enforcement Group III 


SUBJECT:       Issues and Decision Memo for the Final Results of the
               Antidumping Duty Administrative Review and the Antidumping 
               New Shipper Reviews of Freshwater Crawfish Tail Meat from 
               the People's Republic of China

Summary

We have analyzed the comments and rebuttals of interested parties in the
1998-1999 administrative review and new shipper reviews of the antidumping
duty order covering freshwater crawfish tail meat from the People's
Republic of China (PRC). As a result of our analysis, we have made
changes, including corrections of certain ministerial errors, in the
margin calculations. We recommend that you approve the positions we have
developed in the "Discussion of the Issues" section of this memorandum.
Below is the complete list of the issues in this administrative review for
which we received comments and rebuttals by parties:




1.  Use of Spanish Import Data as Surrogate Value for Live Crawfish

2.  Use of Mexican Data as Surrogate Value for Live Crawfish

3.  Use of Spanish Export Data as Surrogate Value for Live Crawfish

4.  Calculation of Byproduct Value based on India Import Statistics

5.  Power and Fuel Expenses as Part of Surrogate Overhead 

6.  Use of Annual vs. Monthly Average Exchange Rate

7.  Water as a Separate Cost

8.  Fujian Pelagic's Sales to Pacific Coast: EP vs CEP

9.  Baolong Biochemical Rescission

10. Use of the Facts on the Record to Calculate Baolong Biochemical's
    Dumping Margin 

11. Yancheng FTC/Ocean Harvest: Calculation of Packing Material Costs

12. Ningbo/Huaiyin(5): Marine Insurance

13. Huaiyin 30: Partial Adverse Facts Available



Background

On October 11, 2000, the Department of Commerce (the Department)
published the preliminary results of administrative and new shipper
reviews of the antidumping duty order on freshwater crawfish tail meat
from the PRC. See Preliminary Results of Antidumping Duty Administrative
Review and New Shipper Reviews, Partial Rescission of the Antidumping Duty
Administrative Review, and Rescission of a New Shipper Review: Freshwater
Crawfish Tail Meat From the People's Republic of China, 65 FR 60399
(October 11, 2000) (Preliminary Results). The merchandise covered by this
order consists of freshwater crawfish tail meat as described in the "Scope
of Reviews" section of the Federal Register notice. The period of review
(POR) is September 1, 1998 through August 31, 1999. We invited parties to
comment on our Preliminary Results of review and received the following
comments.


Discussion of the Issues

Comment 1: Use of Spanish Import Data as Surrogate Value for Live Crawfish

Ningbo Nanlian Frozen Foods Corporation, Ltd. (Ningbo Nanlian), Yancheng
Haiteng Aquatic Products & Foods Company, Ltd. (Yancheng Haiteng), Suqian
Foreign Trade Company, Ltd. (Suqian FTC), Shantou SEZ Yangfeng Marine
Products Company (Shantou SEZ), Yancheng Baolong Biochemical Products Co.,
Ltd. (Baolong Biochemical), Yancheng Foreign Trade Corporation (Yancheng
FTC), Ocean Harvest Wholesale Inc. (Ocean Harvest) and Nantong Delu
Aquatic Food., Ltd. (Nantong Delu) argue that if the Department uses
Spanish import data for a surrogate value for live crawfish, then the
Department should use the updated data from Agencia Tributaria, a Spanish
government agency. Respondents note that on September 18, 2000, petitioner
submitted to the Department what it referred to as: "updated data from the
Spanish Ministry of Customs on Spanish imports of freshwater crawfish from
Portugal under tariff item 0306.29.10." However, the information was
obtained by Petitioner from a commercial entity called "Global Trade
Information Services, Inc" (GTIS). Respondents assert that petitioner
itself agrees that this information is not publicly available, as it is a
fee-based Internet service. Respondents also state that, pursuant to
section 351.408(c)(1) of the Department's regulations, the Department
prefers to use publicly available information (PAI) to calculate surrogate
values in non-market economy antidumping cases. Respondents further
explain that PAI means that any interested party may independently verify
the authenticity of such information by obtaining it from public sources
such as a public library. In this case, GTIS is a paid information-
gathering service, its publication is not readily available, and the
publication can be obtained only through payment. Respondents state that
petitioner provides no evidence on the record 1) supporting GTIS's claim
that the data is Eurostat Data; 2) regarding GTIS's data collection
process and selection process; 3) showing the integrity of GTIS's data; 4)
establishing GTIS's pricing structure; or 5) laying out statistical
evidence from GTIS on the accuracy of its past data. Respondents argue
that, without such information, the Department should not trust the
accuracy, objectivity, or integrity of GTIS's data. Also, respondents note
that, contrary to footnote 1 of petitioner's letter dated September 18,
2000, the information submitted on the record does not appear to have been
compiled from the official trade data of Spain. Since the issuance of the
Preliminary Results, official Spanish government import data has been
placed on the record, and it conflicts with the GTIS data. For example,
the GTIS data shows a January 1999 per pound cost of $ 0.99; however, the
official January 1999 Spanish import data shows a per pound cost of $ 0.71
per pound.

Moreover, respondents explain that, as set forth in the submission of
several respondents on October 31, 2000, the Spanish government has
amended its 1999 (more specifically, July 1999) import data. Respondents
argue that the Department should use the most updated data. In addition,
respondents argue that in the original investigation, and in every
administrative review since, the Department has valued this key factor
using official Spanish government import data obtained from Agencia
Tributaria, the office responsible for collecting and disseminating
Spanish import data. As stated by the Department in the new shipper review
for Ningbo Nanlian, "[w]hen using imports as the basis of factor
valuation, it is our normal practice to use official import statistics,
unless evidence demonstrates that such data are unreliable." See
Freshwater Crawfish Tail Meat From the People's Republic of China; Final
Results of New Shipper Review, 64 FR 27961, 27963 (May 24, 1999) (New
Shipper Review for Ningbo Nanlian).

Respondents also rebut petitioner's claim that a printout submitted by
respondents appears to be dated September 6, 2000, and therefore that the
data therein predates the "updated" website information of October 24,
2000. They argue that the printout is titled "cierre prov. 1999" or
"provisional closing." The "final closing" is dated October 26, 2000.
Thus, respondents claim, the Agencia Tributaria's certification of the
July 1999 data amendment is very clear, and is simply not contradicted by
the "provisional closing" printout dated September 6, 2000. Moreover,
respondents rebut petitioner's claim that the Ministry of Economy, which
petitioner claims to be the "parent agency," has repudiated the Agencia
Tributaria's certification, and state that there is no evidence at all
that Ms. Monje, an official from the Ministry of Economy who signed the
letter provided as such repudiation, is in a position of authority which
would allow her to "repudiate" the certification of Agencia Tributaria.

In addition, respondents rebut petitioner's assertion that the amended
data is aberrational. Respondents argue that the amended data appear
aberrational only because Spanish imports in July 1997 and 1998 were
rather small in comparison, and state that the Department itself has noted
the inherent fluctuations in agricultural products such as crawfish. See
New Shipper Review for Ningbo Nanlian. Furthermore, respondents state that
petitioner asserts that the quantities in the website data differ from
those submitted by respondents in only two of twelve months and the only
meaningful change was in July 1999. According to respondents, this change
was certified on October 26, 2000, and represents the "final closing" of
1999 data. 

Moreover, respondents argue that the petitioner's portrayal that: 1) the
European Union (E.U.) is an independent body which meticulously collects
intrastat data and makes its own trade statistics independent of the trade
data supplied to it by the member countries (e.g., Spain); and 2) the data
released by Eurostat is inherently more reliable or accurate than that
currently available from the statistical offices of individual E.U. member
states is incorrect. Respondents explain that the E.U. and Eurostat are
entirely reliant upon individual state governments to provide them with
trade statistics. This is by design, as detailed in Council Regulation
(EEC) No 3330/91 of 7 November 1991 ("Member States shall transmit to the
Commission their monthly statistics on trade between Member States,"
Article 26 No.1); and it is also necessary, because of the inherent
shortcomings in the ability of the E.U. as an overriding body to monitor
and independently verify such a tremendous volume of trade data.

Respondents argue that the GTIS data is always rounded down to the
nearest 100 kilograms, which means that there is a systematic
understatement of quantities in the GTIS data statistics, which in turn
leads to higher average prices. Therefore, respondents argue, the GTIS
data is unusable on its face, and should not even be used as part of an
average with Agencia Tributaria data. 

Petitioner asserts that since the accuracy of the GTIS Eurostat series
has not been challenged by any party (apart from the claim that it differs
from early Agencia Tributaria advance sheets), and since the Agencia
Tributaria data have exhibited unusually large swings through various
revisions and may do so again before being finalized, the best course for
the Department is to base the final results on the GTIS Eurostat series.
If, on the other hand, the Department does not find adequate grounds to
reject data from Agencia Tributaria, petitioner argues that the final
results must be based on an average of the GTIS Eurostat series and the
October 24, 2000 revision from Agencia Tributaria, which it claims is the
most recent statement of Agencia Tributaria data on the record. 

Petitioner also explained that on September 19, 2000, Ningbo Nanlian
submitted the advance sheet for just a single month (January 1999) in an
effort to rebut the POR-wide monthly GTIS data submitted by the domestic
parties. At that point, all of the advance sheets for September 1998
through December 1999 had been in respondents' hands for at least four
months, based on dates stated on the fax identification line. Petitioner
further explains that on September 20, 2000, prior to the decision date
for the Preliminary Results, the Department asked respondents to provide
the remaining months' data. Instead of providing the data, counsel for
Ningbo Nanlian and Huaiyin Foreign Trade Corporation (5) (Huaiyin(5))
submitted a letter on September 25, 2000, urging the Department to base
the Preliminary Results on the Spanish data submitted for the final
results of the 1997-98 administrative review. Moreover, petitioner states
that on October 31, 2000, respondents provided the advance sheets for the
remaining 11 months to the Department for the first time -- on the last
possible day, exactly 180 days (six months) after they had first obtained
complete data for each month of the POR. On November 9, 2000, Ningbo
Nanlian urged the Department to deny the domestic parties any opportunity
to submit information that would "rebut, clarify, or correct" the advance
sheets. On November 20, 2000, the domestic parties submitted factual
information (including the Agencia Tributaria website data and information
regarding the manner in which the GTIS figures were obtained) in order to
"rebut, clarify, or correct" the information submitted by respondents on
October 31, 2000, pursuant to 19 C.F.R. § 351.301(c). 

In addition, petitioner argues that the signed statement of D. Salvador
Senet Diez, Department Chief at Agencia Tributaria, stating that July 1999
data has been updated, was signed on October 26, 2000, but it does not
identify the closing date for the data on which the statement is based.
Petitioner asserts that the September 6, 2000 revisions predate the
October 24, 2000 website revision, submitted by petitioner, and that the
September 6, 2000 revisions are not in fact definitive. Moreover,
petitioner argues that the figures reported by Mr. Senet Diez represent a
radical departure from historical norms. In addition, the statement is not
public since there is no information on the record to demonstrate that it
is publicly available.

Petitioner further states that the record of these reviews includes
detailed information about the manner in which both Agencia Tributaria and
Eurostat collect their import data. There are no customs formalities, and
therefore no customs declarations, associated with trade between two E.U.
members such as Spain and Portugal. For such transactions, known as
"intracommunitarian" trade, the primary source document is the Intrastat
Declaration. Petitioner also asserts that Agencia Tributaria, on its
website, states that "the processing of the statistic of foreign trade
adapts to the corresponding communitarian norms" and that "[t]he data of
Outer Comercio of Spain published in the national territory and the
published ones on Spain by the Office of Statistic of European Communidad
(Eurostat) are obtained from the same source."

Petitioner further explains that it has submitted copies of all relevant
Council Regulations from the E.U. governing the collection of Intrastat
data by Eurostat. In the regulation establishing the Intrastat system,
Council Regulation (EEC) No. 3330/91 of November 7, 1991, the Council of
European Communities finds that "it will consequently be necessary to
collect directly from the consignors and consignees the data necessary to
compile statistics relating to the trading of goods between Member States,
using methods and techniques which will ensure that they are exhaustive,
reliable and up to date." Article 8 of that Regulation provides that "the
obligation to supply the information required by the Intrastat system
shall be incumbent on any natural or legal person who is involved in the
trading of goods between Member States." Article 13 of the Regulation
provides that "[t]he statistical information required by the Intrastat
system shall be covered in periodic declarations to be sent by the party
responsible for providing the information to the competent national
departments." However, although the "competent national departments" may
act as clearinghouses for receipt of the declarations, Eurostat does not
rely on the national departments for further processing of the data.
Instead, Article 25 provides that "[t]he Community and the Member States
shall compile statistics on trade between Member States from the data
referred to in Article 23(1)" (i.e., the Intrastat declarations).
Therefore, petitioner asserts, the sources discussed above demonstrate
that the GTIS Eurostat data series submitted by the domestic parties on
September 18, 2000 is not merely derivative of Agencia Tributaria work,
but is instead the result of an independent compilation of the same
underlying primary data. Consequently, there is no reason to favor Agencia
Tributaria over Eurostat as the source of information about the underlying
primary data.

Petitioner states that the Commission Regulation (EEC) No. 2256/92 of
July 31, 1992 provides detailed numerical guidelines to ensure the
statistical quality of information compiled by Eurostat from the Intrastat
declarations. Taken as a whole, the Commission Regulations furnished by
the domestic parties demonstrate a commitment by the E.U. to develop
accurate and reliable information from the Intrastat declarations that it
collects. The E.U., whose Member States are among the wealthiest countries
in the world, surely has the resources and organizational skills to
accomplish this result. Moreover, it is plainly in the E.U.'s own interest
to ensure that its statistics on intracommunitarian trade are accurate,
since it has determined that "matters such as trade policy sectoral
analyses, competition rules, the management and guidance of agriculture
and fisheries, regional development, energy projections and the
organization of transport must... be based on statistical documentation
providing the most up-to-date, accurate and detailed view of the internal
market."

Then petitioner argues that although the GTIS data set was placed on the
record on September 18, 2000, more than a month before the October 31
deadline for new submissions of PAI, no party has submitted information to
demonstrate that the GTIS series is flawed or has subsequently been
revised. Although respondents were provided a full opportunity to
investigate the source of the GTIS data and to "rebut, clarify, or
correct" it, their only response was to (a) point out that it differed
from the Agencia Tributaria advance sheets that they had obtained months
earlier, and (b) allege that the GTIS figures are not "publicly available"
because they were obtained from a fee-based service. Petitioner asserts
that neither of these objections is adequate to support rejection of the
data. Petitioner states that it is aware of no requirement that PAI must
be made available free of charge, and that books, newspapers, and even
government statistics routinely are provided only in exchange for money,
but this does not render them unusable as PAI.

Moreover, petitioner argues that although the October 24, 2000 website
release is the most recent, and thus the most authoritative, version of
the facts according to Agencia Tributaria, there is no assurance that the
October 24, 2000 release is the final definitive word of the agency. In
addition, petitioner notes that in Exhibit 7 of the domestic parties'
submission of November 20, 2000, the table provides both annual and
monthly 
data for various periods from 1995 through 1999. A footnote states that
the 
annual data are definitive (except as otherwise specified), but the
monthly,
quarterly, and cumulative (year-to-date) data are still provisional
(preliminary). The table shows that the Agency's data totals for CY1998
were definitive, but the data for CY1999 and each individual month and
quarter of 1999 were still provisional, as of the date the report was
prepared. Thus, none of the Agencia Tributaria data on the record can be
regarded as that agency's final word on imports from Portugal under
0306.29.10, and there is no basis for preferring the current Agencia
Tributaria version of the facts over the unchallenged GTIS/Eurostat
version of the same facts.

Petitioner further explains that both Agencia Tributaria and Eurostat
acknowledge that, apart from the sort of minor differences that might
arise from any two independent compilations of the same data, the results
under both data sets ought to be generally similar. Yet, in this instance,
there are significant differences that cannot reasonably be attributed to
rounding or currency conversion. Based on the GTIS/Eurostat series, the
average unit value of imports during the POR was 317 pesetas per kilogram;
based on the Agencia Tributaria release of October 24, 2000, the average
unit value for the same period was 256 pesetas per kilogram.

Petitioner asserts that the wide variations from one revision to the
next, coupled with a lack of definitiveness, warrant rejection of Agencia
Tributaria data and exclusive use of the GTIS Eurostat data. However, if
the Department does not find Agencia Tributaria data unreliable, and
because there is no evidence on the record that undermines the GTIS data,
then, petitioner argues, the final results should be based on an average
of the GTIS Eurostat series and the latest Agency Tributaria data on
record.

Department's Position: For these final results, pursuant to section
773(c) of the Tariff Act of 1930 (the Act), and for the reasons listed
below, we valued whole live crawfish by using the POR average Spanish
import price for freshwater whole live crawfish from Portugal, as issued
by the Agencia Tributaria, the government agency in Spain responsible for
trade statistics. This is the same data source we used in the
investigation and prior reviews. See Notice of Final Determination of
Sales at Less Than Fair Value: Freshwater Crawfish Tail Meat From the
People's Republic of China, 62 FR41347 (August 1, 1997) (Final LTFV); and
New Shipper Review for Ningbo Nanlian. However, the Department is using
the Spanish import data for these final results only because it is the
best data available on the record. As we stated in our Notice of
Preliminary Results of Antidumping Duty New Shipper Administrative
Reviews: Freshwater Crawfish Tail Meat from the People's Republic of
China, signed March 21, 2001, Spanish imports from Portugal have declined
consistently and drastically, and were heavily weighted towards one month.
These small import volumes as a whole seem to indicate that crawfish is no
longer a product that is regularly traded between Portugal and Spain. For
future determinations, the Department will seek other sources of data for
establishing the surrogate value for whole live crawfish.

For the Preliminary Results of these reviews, we used the monthly data
for the POR submitted by petitioner from the GTIS because respondents
refused to submit for the record the monthly Agencia Tributaria data (See
Memorandum to the File, Freshwater Crawfish Tail Meat from the PRC:
Request for Monthly Spanish Import Data for Whole Crawfish, dated 
September 21, 2000.) It was not until after the Preliminary Results, and
after the Agencia Tributaria data had been updated to reflect changes that
lowered the POR average import price, that respondents placed it on the
record of these reviews. 

While we do not disagree that it is the Department's practice to rely on
official import statistics when using imports as the basis for factor
valuation, we do not agree that the GTIS data, which are taken from the
official trade statistics of the E.U. (i.e., the Eurostat data), cannot
serve as the basis for the valuation of an input. In this case, however,
after the Preliminary Results, we had data from the GTIS and the data from
the Spanish trade statistics agency, the Agencia Tributaria, on the
record. Under such circumstances, the Department must determine which set
of data is more complete and accurate. 

On February 22, 2001, the Department, through the U.S. Embassy in Spain,
sent a letter to Agencia Tributaria requesting clarification for: 1) why
it updated the July 1999 volume and value statistics; and 2) why its data
was different from the Eurostat data. In its March 13, 2001, response,
Agencia Tributaria explained that the July 1999 data was modified
retroactively by the appropriate importer, who provided a rectified
declaration. Agencia Tributaria also sent to the Department the definitive
POR monthly import statistics. In addition, Agencia Tributaria stated that
it forwarded its amendments to Eurostat in October 2000. See Memorandum to
the File from Abdelali Elouaradia: Communication with Agencia Tributaria
Regarding Import Stats of Live Crawfish from Portugal to Spain, March 26,
2001. 

The information supplied by the Agencia Tributaria sufficiently explains
why the import statistics for July 1999 were updated, and why Eurostat
statistics, and hence GTIS statistics, might not yet be updated since
Eurostat did not receive the amended data until October 2000, after the
Preliminary Results. This also explains why the Eurostat data used for the
Preliminary Results do not match the Agencia Tributaria data reported by
respondents on October 31, 2000. 

Thus, it is the Agencia Tributaria data which appears to be the more
complete and accurate. Therefore, with respect to petitioner's argument
that we should weight average the GTIS data and the Agencia Tributaria
data, we do not think such an approach is warranted, given the information
supplied by the Agencia Tributaria, that its updated information reflects
the most accurate and complete data for imports into Spain of freshwater
crawfish from Portugal. 

With regard to petitioner's argument that Agencia Tributaria data from
the month of July 1999 should be excluded because it reflects
aberrationally low import prices and may be distortive, we disagree for
purposes of these reviews. As explained above, it is clear that the
quantities of imports into Spain from Portugal of crawfish have declined
consistently and drastically, and as such, there is a question of whether
there is still a market for this product. During the month of July 1999,
there was a massive one-month increase of imports (from an average of 130
tons per month to 1,567 tons in July), and a significant decrease in the
per unit price (from 244 to 128 pesetas). On their face, the July
statistics do appear aberrational; however, as petitioner pointed out in
the New Shipper Review for Ningbo Nanlian and as the Department explained
in the same review, price fluctuations are not unusual for agricultural
products with specific growing seasons. Moreover, given that the Agencia
Tributaria has stated that the data for July are correct, we do not
consider that we can exclude the July data absent other evidence that
these data are unreliable. 


Comment 2: Use of Mexican Data as Surrogate Value for Live Crawfish

Huaiyin Foreign Trade Corporation(30) (Huaiyin30), Qingdao, and Fujian
Pelagic (collectively Huaiyin(30)) argue that the Department's surrogate
value selection in the Preliminary Results is flawed, stating that the
Mexican data they have submitted is far more appropriate and reliable.
Their submission was supported by arguments from Ningbo Nanlian, Louisiana
Packing Company (Louisiana Packing), and Huaiyin Foreign Trade Corporation
(5) (Huaiyin5) (collectively Ningbo Nanlian), and Yancheng FTC. In their
October 31, 2000 surrogate value submission, Huaiyin(30) submitted data
from the Mexican government for whole, live crawfish from Mexico. Also
included in their submission was: (1) evidence purported to show that the
term in Spanish for "crawfish" is "acocil," that the term "acocil"
includes procambarus clarkii, the crawfish supposedly produced in
Louisiana, China, and, they claim, in Mexico; (2) an affidavit from one of
the importer's employees regarding her discussions with the Mexican
government and her investigation into the Mexican crawfish industry; (3)
excerpts from the World Bank Report to prove that Mexico's economy is much
more comparable to China's than is Spain's; and, (4) scholarly articles
discussing the existence and production of crawfish in Mexico.

According to Huaiyin(30), the proffered data is published and publicly
available from SEMARNAP, an agency of the Mexican government charged with
administering matters of environmental resources, including those of
fisheries. Respondents state that the data show the price of such whole,
live crawfish during this period ranged from approximately $0.27 to $0.38
per pound. Respondents submit that Mexico is a significant producer of
crawfish, that the price data is for more metric tons than the Spanish
import data, and that it is more representative of the price of whole,
live crawfish than the Spanish import data. They support their claims by
reliance on the affidavit and articles submitted along with the SEMARNAP
data, as well as the SEMARNAP data itself. The affidavit of Ms. Naomi
Manabe, an employee of an American importer of Chinese crawfish, states
that she witnessed locals in Mexico actively engaged in catching,
processing and selling crawfish, and that the Mexican word for crawfish is
"acocil," the same term used in the SEMARNAP data. Respondents claim the
articles show that the dominant North American commercial crawfish is
procambarus clarkii and that it has been widely introduced throughout
Mexico. Therefore, claim respondents, there is ample evidence that Mexico
is a significant producer of comparable merchandise.

Respondents state that the Spanish data submitted by petitioner
represents only 5 metric tons of whole, live crawfish. The Mexican
"national" data for whole, live crawfish, according to respondents,
represents over 14 tons, which is more than twice the Spanish volume.
Respondents contend that the larger the volume, the more representative
the surrogate value will be, and the more likely it will closely
approximate the price of whole, live crawfish in China if the price were
set by market forces. Respondents also contend that the SEMARNAP data is
exclusively for whole, live crawfish, while the Spanish import data, which
Huaiyin(30) claims is from a "basket" tariff category, may contain other
products in addition to whole, live crawfish.

Huaiyin(30) also argues that Mexico is a more comparable economy country
than Spain. Therefore, respondents argue, the Department cannot reasonably
substitute price data for whole, live crawfish from Spain for price data
for whole, live crawfish from Mexico. Respondents conclude that because
the economy of Mexico is clearly more comparable to China than is Spain's
economy, section 351.408(b) of the Department's regulations mandates the
Department's use of the data from the Government of Mexico. 

Yancheng FTC supports Huaiyin(30)'s argument that the Mexican data would
be more appropriate. Yancheng FTC states that the surrogate value for live
whole crawfish used in the Preliminary Results, and based on information
provided by petitioner, was obtained from a private source, inaccurate,
and grossly inflated. Like Huaiyin(30), Yancheng FTC claims the Department
is required to use Mexican data because section 773(c)(4)(B) of the Act
instructs the Department to use a surrogate country which is at a level of
economic development comparable to that of the non-market economy and
which is a significant producer of comparable merchandise. Yancheng FTC
continues that Spain, in contrast to Mexico, does not meet either of these
two requirements. Yancheng FTC claims that, in the original investigation,
the Department acknowledged that Spain is not at a comparable level of
economic development with China. Yancheng FTC further asserts that Spain
cannot be considered to be a significant producer of crawfish any longer,
claiming that data on the record for this review indicates that only about
18 tons of crawfish had been imported. By contrast, the Department noted
in the investigation that Spain had exported over 704 tons and imported
over 345 tons of crawfish in 1996. According to Huaiyin(30) and Yancheng
FTC, while the Department may use values from the United States or other
countries not at a comparable level of development for individual factors,
its practice is to do so only if it cannot find those values in a
comparable economy that produces comparable merchandise. They claim the
Department has abused its discretion in this case, because data is
available from a country more comparable to China than is Spain. Ningbo
Nanlian argues that the Mexican data is more appropriate on the basis of
its level of economic development.

Respondents deny petitioner's claim that the Mexican data is actually
based on sales of procambarus acanthophorus, and not procambarus clarkii,
and argue that the distinction is irrelevant. Huaiyin(30) and Ningbo
Nanlian argue that procambarus acanthophorus and procambarus clarkii are
both commercial crawfish, and, thus, that any differences between the two
species is insignificant for purposes of antidumping analysis. Ningbo
Nanlian claims that all crawfish cost the same to collect, and that
collection costs are the exclusive basis for the value of whole, live
crawfish. Respondents also claim that it is not clear that the Spanish
import data are only for procambarus clarkii. 

Petitioner argues that the Mexican data submitted by respondents are for
a different species, procambarus acanthophorus, than the species exported
from China, procambarus clarkii, and that neither is produced or processed
on a commercial scale in Mexico. Petitioner submitted a "Technical
Opinion" from Ms. Rosa Ma. Loran Nunez, a biologist with the SEMARNAP
Regional Center of Fisheries Research in Veracruz, which states that the
creatures being caught and sold in Veracruz are procambarus acanthophorus,
not procambarus clarkii. See Petitioner's Rebuttal Brief at Exhibit 1.
Petitioner also relies on an affidavit from Ms. Carmen Arjona Gomez
Portugal, who discussed the SEMARNAP data with Ms. Loran. See
Petitioners's Rebuttal Brief at Exhibit 2. Petitioner emphasizes that the
record contains no information about procambarus acanthophorus - nothing
about its size, weight, habits, life cycle, flavor, texture, suitability
for use as crawfish tail meat, ease of peeling, or any other
characteristic that would allow the Department to assess whether it is, in
any relevant way, comparable to procambarus clarkii. Petitioner argues
that the fact that two living things are in the same genus is not
particularly informative, because organisms of the same genus often have
very different characteristics from one another. Petitioner asserts that a
demonstration of comparability has not been made, and cannot be made,
because there is no information on the record regarding the physical
characteristics of "acocil" and no evidence to demonstrate that "acosiles"
are used in Mexico to produce crawfish tail meat. Similarly, petitioner
argues that even if there were a showing that Mexico is a significant
producer of comparable merchandise, the Department could not use the
SEMARNAP data unless there were a showing that the value of "acosiles" is
a reasonable surrogate for the value of the live crawfish inputs used by
respondents. Petitioner contends that this showing also has not been made.
To the contrary, petitioner states that the record shows that the "acocil"
is a different species that is not ordinarily traded in live form and is
not ordinarily consumed as crawfish tail meat.

Petitioner states that the Technical Opinion is the only statement on the
record from SEMARNAP to identify what SEMARNAP means by "acocil," and
absent evidence to the contrary, it is reasonable to assume that
SEMARNAP's own biologist in Veracruz can reliably identify the species for
which the Veracruz office of SEMARNAP has been collecting data. Petitioner
contends that respondents apparently expect the Department to ignore the
SEMARNAP Technical Opinion and to rely instead on other statements on the
record for identification of the species represented by "acocil."
Petitioner argues that a statement that "acocil" are "crawfish" is not
very probative of the meaning of the SEMARNAP data.

Ningbo Nanlian argues that the Technical Opinion is suspect because it
appears to be based on limited and outdated data and that the reason for
its production is unclear, as are the questions it was supposed to answer
at petitioner's request. It also emphasizes that Ms. Arjona is an employee
of petitioner. Huaiyin(30) argues that the Technical Opinion is suspect
because it refers to the Alvarado and Tlacotalpan "zone" of Veracruz,
whereas the SEMARNAP data comes from different towns in Veracruz with
access to different waterways, and because it is in contradiction to the
evidence it placed on the record, described above.

Petitioner contends that the mere presence of the species in a country
does not mean that it is commercially produced or sold there. Petitioner
adds that a 1995 article by Professor Huner, a professor at the University
of Southwestern Louisiana and the director of the Crawfish Research
Center, which is relied on by both petitioner and respondents, mentions
the United States, China, and Spain, but not Mexico, as significant
commercial producers of procambarus clarkii. In his 1997 article,
Professor Huner states only that "[a]rtisanal fisheries for dwarf
crayfishes (Cambarellus spp.) and some larger procambarid crayfishes
(Procambarus spp.) exist in Mexico, but no documentation of production
levels exists." Petitioner states that these "artisanal" fisheries are
perhaps the same as the "rustic" production of procambarus acanthophorus
in Veracruz, which is the characterization of the Technical Opinion.
Ningbo Nanlian replies that much of petitioner's discussion assumes that a
lack of crawfish cultivation or farming in Mexico is evidence of a lack of
a commercial industry, whereas there is no such cultivation or farming in
China either.

Department's Position: We agree with petitioner. As indicated by the
parties to this review, the Department considers several factors in
choosing surrogate values, and prefers data with the following
characteristics:

   1. Data from a comparable economy that is a significant producer of
   comparable merchandise (See section 773(c)(4) of the Act);

   2. Official and "public, published data" (See Final Determination of
   Sales at Less Than Fair Value: Certain Carbon Steel Butt-Weld Pipe
   Fittings From the People's Republic of China, 57 FR 21058, 21062 (May
18,
   1992) (Butt-Weld Pipe Fittings); 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 in Part, 63 FR 63842,
63844
   (Nov. 17 1998); and Preliminary Results of Antidumping Duty
Administrative
   Review and New Shipper Reviews, Partial Rescission of the Antidumping
Duty
   Administrative Review, and Rescission of the New Shipper Review for
   Yancheng Baolong Biochemical Products, Co. Ltd.:  Freshwater Crawfish 
   Tail Meat From the People's Republic of China 64 FR at 55236, 241-242 
   (Oct. 12, 1999) (Crawfish Prelim 97/98);

   3. Import data, as opposed to export data (See Butt-Weld Pipe Fittings,
   57 FR at 21058, 21062; and Heavy Forged Hand Tools, Finished or
   Unfinished, With or Without Handles, From the People's Republic of
China;
   Final Results of Antidumping Duty Administrative Reviews, 63 FR 16758,
   16759 (April 6, 1998) (Hand Tools) (stating preference for an "average
non-
   export value"));

   4. Data from a single country, or "primary surrogate" (See 19 CFR §
   351.408(c)(2); Butt-Weld Pipe Fittings, 57 FR at 21058, 21062); and

   5. Data from well-defined tariff classifications, as opposed to "basket
   categories," (See Crawfish Prelim 97/98, 64 FR at 55241-42), or
otherwise
   well-defined data (Hand Tools, 63 FR at 16759).

In addition, the Department prefers consistency in its choice of
surrogate values. Because the Department will not always be able to find
surrogate value information that satisfies all of our preferences, the
Department has to choose between various surrogate options, each of which
may satisfy only a few of these preferences. For example, in Final
Determination of Sales at Less Than Fair Value: Certain Cased Pencils From
the People's Republic of China, 59 FR 55625, 55630 (Nov. 8, 1994), we
chose to use surrogate value information from the United States, even
though surrogate value information was available from less developed
countries with economies closer to China's, because the U.S. information
was for a product more closely matching the input we were trying to value.
We stated:

   Since the preliminary determination, both respondents and petitioner
   have provided information on the price and quality of basswood, the 
   most similar wood to lindenwood. The prices are those charged by U.S. 
   producers to U.S. customers. Despite extensive research, no surrogate 
   market or world prices for basswood have been found.

   Having determined that basswood is most similar to lindenwood, we have
   used U.S. basswood prices to value the wood input. Although section
   773(c)(4) directs the Department to value the NME factors of production 
   in a comparable surrogate country that is a significant producer of
   comparable merchandise, this is required only to the extent possible. 
   In this case, where wood is such a significant input and where the 
   only alternative to the basswood price, a price for jelutong, is so 
   much higher than the most comparable wood, we have determined that 
   it is appropriate to use the most comparable wood even though we can 
   only find prices for this input in the United States.

See also Writing Instruments Manufacturers Association v. United States,
984 F. Supp. 629, 639 (CIT 1997) (affirming the Department's decision to
use U.S. basswood prices). We are faced with a similar problem regarding
the valuation of crawfish. Respondents are correct in their assertion that
Mexico is a more comparable economy to China than is Spain. However, this
fact cannot overcome the fact that the price data offered by respondents
apparently is for pulp rather than whole, live crawfish. In short, the
record does not contain sufficient evidence for us to conclude that the
Mexican data is a better match to our preferences listed above than the
Spanish data in any respect other than coming from an economy closer in
per capita GDP to China's. Therefore, we have determined not to use the
Mexican surrogate value data in our final calculations.

This decision is based primarily on information placed on the record
regarding the Mexican data from Mexican officials (i.e., the affidavit by
Ms. Arjona, and the "Technical Opinion" of Ms. Loran). The Technical
Opinion of Ms. Loran, a biologist with SEMARNAP, the Mexican government
entity which produced the data submitted by Huaiyin(30), states that the
commercial form of these crustaceans is pulp, which is used in a
bouillabaisse consumed locally in the Veracruz region. Those portions of
the Aronja affidavit which are said to be of a conversation with Ms.
Loran, confirm that Ms. Loran told Ms. Arjona that "acocil," the term used
in the SEMARNAP data, is "not considered a commercial species," but that
it is used in the bouillabaisse, and typically sold by local fisherman to
local markets and restaurants.

As described above, Huaiyin(30) provided information supporting
respondents' position that there is a significant crawfish industry in
Mexico. This information consisted of scholarly research stating that
procambarus clarkii, the crawfish allegedly exported by Chinese
exporters/manufacturers to the United States, exists in northeastern
Mexico, and the affidavit from Ms. Manabe, who attests to the fact that
she witnessed the active catching and processing of crawfish, crawfish
being sold in fish markets, the price of crawfish at those markets, and
other details of her investigation into the Mexican crawfish industry.
Ningbo Nanlian criticizes the affidavit of Ms. Arjona and the Technical
Opinion of Ms. Loran. It notes: 1) that Ms. Arjona is an employee of
petitioner; 2) that the Technical Opinion refers to only one work in its
bibliography, which is from 1989; 3) that the basis for the Technical
Opinion is not explained (i.e., why was it drafted and exactly what
questions it was in response to); and, 4) that the Technical Opinion
refers only to the Alvarado and Tlacotalpan zone. We cannot agree that
these problems with the statements of Ms. Loran, either through her own
Technical Opinion, or through the affidavit of Ms. Arjona, undermine the
underlying conclusion of her statements. In weighing the statements of Ms.
Loran against the statements of Ms. Manabe, we are compelled to give more
weight to Ms. Loran's statements, because she is an employee of the very
agency that collected the data under scrutiny. By contrast, Ms. Manabe was
a visitor to the region, who was not involved in the collection of the
data, nor involved directly with the production or sale of Mexican
crawfish. Moreover, we note that Ms. Manabe's affidavit does not appear to
us to be in direct conflict with the Technical Opinion of Ms. Loran on the
question of the significance of the crawfish industry in Mexico. For
example, Ms. Manabe states that a local woman in Veracruz told her that
"locals catch the crawfish by using cages or jars and that once the
crawfish is caught, it is cooked, peeled, and the meat is sold to buyers
in town . . . ." The affidavit also describes how Ms. Manabe visited fish
markets in two towns in Veracruz where she was informed crawfish meat was
sold. She found it being sold in one, and in the other was told that it
was normally bought and sold there, but none was there at the time. The
remainder of the affidavit describes Ms. Manabe's verification of the
existence of crawfish in Mexico and terms used by Mexicans to refer to it.
This information does not help us to understand the nature of the SEMARNAP
data.

Finally, although Ms. Manabe contacted both the central and Veracruz
offices of SEMARNAP during her investigation in Mexico, she does not
provide in her affidavit any indication that she questioned SEMARNAP
officials regarding the data they collected. Therefore, even if Ms.
Manabe's affidavit demonstrates that there is a crawfish industry in
Mexico, it could not prove that the SEMARNAP data reflects that industry,
as opposed to simply sales of pulp to local markets and restaurants, which
is the information provided by Ms. Loran. Similarly, the scholarly
articles placed on the record by Huaiyin(30) only indicate the existence
of particular varieties of crawfish in Mexico; they do not describe the
extent or quality of crawfish collection or processing in Mexico, and do
not shed light on whether the SEMARNAP data is suitable for use in this
antidumping proceeding. We note in this regard that SEMARNAP data was
submitted to us without sufficient context. The data covers several non-
contiguous months in 1999. Respondents did not explain why data for
certain months was missing. Moreover, respondents have not provided an
explanation of the purpose behind SEMARNAP's collection of the data.
Similarly, respondents did not demonstrate whether the price data are
actual sales data, or SEMARNAP's estimate of value. (The Technical Opinion
states that the data are from "notices of arrival," which suggests the
data are not actual sales data.)

Respondents make numerous objections to the arguments made by petitioner
regarding the variety of crawfish collected in Mexico and the means of
collecting and processing crawfish in Mexico. Respondents argue that
"crawfish is crawfish" and thus it is irrelevant if the species of
crawfish sold in Mexico is different from the species sold in China, and
that the species imported by Spain has not been established Ningbo Nanlian
claims that because the crawfish collected for processing, both in Mexico
and China, is wild and free, its value comes from the labor put into
capturing it and processing it, and that evidence on the record indicates
this process is similar in Mexico and China. We disagree. While the cost
to the fisherman who collects the crawfish may be only his labor, the
sales value of the crawfish to the processor likely would vary according
to the quality and demand for the particular variety of crawfish. We also
disagree with Huaiyin(30) that it matters that the scope of subject
merchandise is not limited to any particular variety of crawfish. We do
not, however, find it necessary to determine whether the crawfish sold in
Mexico is procambarus acanthophorus, as petitioner and Ms. Loran contend,
or procambarus clarkii, as respondents contend, or the extent to which
procambarus acanthophorus is comparable to procambarus clarkii. As in any
antidumping proceeding, whether involving a non-market economy or a market
economy, price comparisons or constructed values, our goal is to calculate
a normal value that closely corresponds to the particular merchandise
actually sold in the United States during the POR. Therefore, we consider
it significant that the crawfish sold in Mexico, according to Ms. Loran,
is pulp with a limited consumer use. Even assuming ad arguendo that it is
procambarus clarkii, for the reasons already discussed, it does not appear
to provide a better surrogate value than the Spanish import data.

Finally, we agree with petitioner that what Huaiyin(30) refers to as a
"test that was given in 1986 and continues to be given today on the
production of procambarus clarkii," and which it relies on to support its
assertion that there is a Mexican procambarus clarkii industry, is not
actually a test but a scholastic thesis submitted by someone trying to
obtain the title of "engineer in fishery and acuaculture [sic]," by
discussing the use of three diets in the growth of procambarus clarkii. As
already stated, however, we do not find the existence of procambarus
clarkii in Mexico to be determinative of this issue. The excerpts from the
thesis supplied do not discuss the Mexican crawfish industry. We also
agree with petitioner that, contrary to Huaiyin(30)'s assertion, the
SEMARNAP data on the record is not both national and local. It all appears
to be data from Veracruz.

While we do not assert that the Spanish import data provides a perfect
surrogate for the value of whole, live crawfish in China, it appears, when
considering the several factors outlined above, to be preferable to the
Mexican data placed on the record by respondents. In particular,
respondents have not shown that the data reflect the value of whole, live
crawfish in Mexico. Therefore, for these final results, we continue to use
Spain as our surrogate country for purposes of whole, live crawfish
valuation.

Comment 3: Use of Spanish Export Data as Surrogate Value for Live Crawfish

Ningbo Nanlian, Fujian Pelagic Fishery Group Co. (Fujian Pelagic), and
Qingdao Zhengri Seafood Co., Ltd. (Qingdao Zhengri) argue that data on
Spanish exports of crawfish to the E.U. is not a suitable basis for
valuing the raw crawfish input for several reasons. First, the Spanish
tariff classification suggested by the Department in its Memorandum of
March 22, 2001 covers a wide variety of crawfish products, including
crawfish which is fresh, refrigerated, peeled, cooked, or steamed, and
makes no distinction between the end uses of the crawfish, whether it be
for immediate consumption, peeling, or the whole, live market. Respondents
further assert that in the New Shipper Review for Ningbo Nanlian, the
Department was clearly cognizant that this Spanish tariff classification,
which is also the basis of import statistics used in prior segments of
this proceeding, was a basket category, but held that there was proof that
all exports from Portugal were of live crawfish because Portugal did not
have processing facilities. In contrast, in these 1998-99 reviews, there
is absolutely nothing on the record that could possibly show that Spanish
exports of crawfish were necessarily only of live crawfish. 

Moreover, respondents explain that it is illegal to import live
procambarus crawfish into France, one of the major destinations for export
under the relevant HTS number. They state that the French law prohibits
the importation of live crawfish of the procambarus genus, and submitted a
letter from the Direction General de l'Alimentation ("General Directorate
for Food") of the French Ministry of Agriculture and Fisheries that states
that importation of live procambarus crawfish is forbidden. Therefore,
respondents argue that all of the French imports under HTS 0306.29.10 must
be of processed crawfish. Furthermore, respondents assert that the
proposed Spanish export prices are absurd on their face. When compared to
statistics on either imports of live crawfish or exports of frozen
crawfish, the prices show that the export data reflect value-added
product. Respondents explain that the price of alleged live crawfish is
higher than frozen crawfish in every month of 1999 except two. Moreover,
respondents argue that use of Spanish export data is improper because
there is no proof that the countries which imported the Spanish crawfish
are processors of crawfish tail meat, or that Spain shipped them live
crawfish. The exception, respondents claim, is Morocco, where there is
crawfish processing.

Respondents also argued that the Department's preference for using import
statistics over export statistics directs the use of import statistics in
this administrative review. They further explain that the rationale behind
the Department's preference of using imports, which is that the import
prices represent the price available to domestic producers in the
surrogate country, and the precedents of the Department in determining the
value of the factor within the surrogate country direct the Department to
use import prices in the current situation. Additionally, in the few cases
where the Department has decided to use export prices instead of import
prices to value a factor, the reason has been because the import prices
were somehow flawed. That is not the case in the current review. In fact,
respondents claim, it is the export prices that are flawed.

Moreover, respondents argue that if the Department were to use Spanish
export prices to E.U. countries to value live crawfish, those prices would
reflect the price of crawfish products in those other E.U. countries, and
not the price within Spain. In addition, the respondents argue that the
import statistics are not flawed. They assert that the issue of negligible
quantities has been reviewed before by the Department.

Finally, respondents rebut the argument by petitioner that exports to
Morocco should be excluded from the calculation if the export statistics
are used. Respondents claim that the Moroccan data is not aberrational,
and the exports to Morocco were in months that demonstrate that the
crawfish shipped was crawfish to be processed. Respondents also rebut
petitioner claims that Australian prices are comparable to the export
prices (see below), stating that there is no evidence that Australian
prices are for live crawfish only, and the Australian crawfish are not
comparable to Chinese crawfish. 

Petitioner asserts that the export data released by the Department
erroneously include exports to Morocco, which is not a member of the E.U.
In addition, the value of Spain's exports to Morocco are aberrational when
compared to all other Spanish exports. Moreover, petitioner argues that
Australian crawfish production statistics demonstrate that the value of
Spanish exports to the EU under 0306.29.10 is not an aberrationally high
price for freshwater crawfish. Furthermore, petitioner argues that
Australian crawfish are comparable to the Spanish crawfish, the Australian 
statistics provide a suitably large sample for comparison and that, 
therefore, this price comparison is appropriate.

However, petitioner states that it agrees with respondents that Spanish
exports are not the most appropriate surrogate value for live crawfish.
Petitioner states that, although the average unit value of Spanish exports
to the EU is not aberrationally high, the HTS number used for the export
statistics includes both live and processed crawfish. Petitioner further
argues that exports to Morocco are not an appropriate surrogate, because
there is no evidence on the record that shows that the exports are of live
crawfish only, and the quantities involved cover only two months and do
not provide an adequate sample.

Department's Position: The Department placed the Spanish export
statistics on the record of this review because we were concerned that the
Spanish import data from Portugal no longer represented a viable market.
See the Department's March 22, 2001 letter to "All Interested Parties." As
set forth in Comment 1 above, both respondents and petitioner identified
problems with the Spanish export data. Of the problems they have
identified with this data, the most significant is that it likely includes
products other than live crawfish and, as such, may not be indicative of
live crawfish values. Thus, even though we have identified problems with
the Spanish import data, we have concluded that the problems with the
Spanish export data outweigh the problems with the Spanish import data,
and have decided that we will not use Spanish export data for the final
results of these reviews. We have not addressed the suitability of
Australian data to value the live crawfish input, because that data was
submitted to demonstrate the suitability of Spanish export statistics, and
was not placed on the record in a timely fashion for consideration as a
surrogate value.

Comment 4: Calculation of Byproduct Value based on India Import Statistics

Ningbo Nanlian, Louisiana Packing, and Huaiyin(5) argue that the
Department should calculate its final results using values for crawfish
shells (i.e., scrap) taken from Indian import statistics, instead of the
Canadian seller's data used in our preliminary calculations. They make
three claims in support of their argument: 1) the Department has a
preference for valuing factors using published information (see, e.g.,
Butt-Weld Pipe Fittings, 57 FR at 21062); 2) the Department has a
preference under section 351.408(c)(2) of its regulations to value all
factors in a single country (see, e.g., Butt-Weld Pipe Fittings, 57 FR at
21062); and 3) the Department has used such Indian import statistics in
the past to value crawfish scrap. See New Shipper Review for Ningbo
Nanlian, 64 FR at 27964-64.

Petitioner argues that the Department determined not to use such Indian
data in the last (1997-98) administrative review after much argument and
factual evidence had been placed on the record. Petitioner notes that the
factual basis upon which the determination on this issue was made was much
more extensive in the previous review (i.e., 1997-1998) than in the Ningbo
Nanlian new shipper review cited by respondents. Petitioner emphasizes
that in the previous review the Department found the Indian tariff
classification suggested by respondents contained decorative items and
shells that do not contain chitin, which gives crustacean scrap its value. 

Department's Position: We agree with petitioner. We must consider
available factor data in the context of the facts on the record in
individual proceedings. We decided in the last administrative review that
Indian import data were not the best data available for valuing crawfish
shells. See 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 at 20948 (April
19, 2000) (1997-1998 Crawfish Tail Meat Final). That administrative review
postdates the new shipper review cited by respondents. Moreover, while we
used Indian import statistics to value crawfish scrap in that new shipper
review, we noted some misgivings: "We attempted to determine the
composition of Indian imports under the HTS category used to value the by-
product during the period in which we valued factors of production. We
were unable to obtain such information." New Shipper Review for Ningbo
Nanlian, 64 FR at 27964-65. In Crawfish Prelim 97/98, however, we did
examine such information: 

   [P]etitioner has placed on the record information demonstrating that
   the resulting Indian import price of 56 cents per pound for crawfish 
   shells is highly exaggerated, including: (1) an offer to sell dried, 
   crushed crab shells from an electronic bulletin board, (2) a delivered 
   price for wet crustacean shells reported in a study on marine
biopolymers, 
   and (3) a price for crustacean scrap sold in India, calculated from a 
   report detailing chitin and chitosan exports using established yields 
   from crawfish shells for the production of chitosan. All of these items 
   show significantly lower prices for shells of crustacean than the 55 
   cents per pound used in the Ningbo New Shipper Review. In addition, we 
   know that the price of the Spanish whole, live, crawfish is 59 cents
per 
   pound. Finally, we received from the U.S. Embassy in Sri Lanka
information 
   indicating that Sri Lankan exports consist of conch shells and chanks
for 
   decorative purposes. See Memorandum to the File; Cables from U.S.
Embassies 
   in Sri Lanka and Switzerland regarding Crustacean Shells, September 30, 
   1999. Based on this information taken as a whole, we determine that the 
   Indian import statistics are an inappropriate surrogate value for
crawfish 
   shells.

64 FR at 55241-42. There is no information on the record of the current
review suggesting that the Indian import classification scheme has
changed, or that the products actually imported under that scheme has
changed, in such a way as to negate our concerns expressed in the 1997/98
administrative review, i.e., that decorative products not containing
chitin were imported under the same Indian tariff heading as crawfish
shells.

Comment 5: Power and Fuel Expenses as Part of Surrogate Overhead 

Ningbo Nanlian, Louisiana Packing, and Huaiyin(5) argue that the
Department double-counted the costs of coal, water, and electricity in
calculating normal value. They contend that, although they reported
factors for these inputs, which we used in our preliminary calculations,
we also used an overhead rate which included these costs. Respondents cite
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, 63852 (Nov. 17, 1998), where the
Department stated:

   [W]here certain costs have been separately calculated elsewhere 
   in the FOP calculations, they should not be included in overhead 
   or SG&A. Consequently, where it was possible to distinguish expenses 
   directly related to packing, freight, discounts and rebates, and 
   brokerage from other expense categories in the Indian producers' 
   financial statements, we have excluded those expense items for the 
   overhead and SG&A calculations for the final results.

Specifically, respondents contend that electricity and coal are included
under the "power and fuel" entry on the surrogate financial statements,
and that water is included under either the "power and fuel" entry or the
"other manufacturing expenses" entry. They contend that this error should
be corrected by reducing the overhead rate by the amount of the "power and
fuel" entry, and that, because water cannot be broken out of the "other
manufacturing expenses" entry, we should not include a value based on the
reported water factor in our calculation of normal value.

Petitioner contends that the "power and fuel" entry on the financial
statements refers to incidental expenditures that cannot be directly tied
to production.

Department's Position: The factors provided by respondents, and the
surrogate values we apply to them, are intended to account for direct
costs. The financial statements containing the line items for "power and
fuel," "other manufacturing expenses," and "raw materials consumed,"
however, do not indicate whether these items refer to direct or indirect
costs. Given the lack of detail in the financial statements, it would be
inappropriate to delete from the overhead rate amounts to offset
respondents' coal, electricity, and water. Nor could we simply omit from
our calculations respondents' coal, electricity, and water factors, since
we do not know if the cost of these inputs is included in the financial
statement entries we used to calculate factory overhead (i.e., "power and
fuel" and "other manufacturing expenses") or to what extent they may be
included. For example, coal, if used exclusively to cook crawfish, might
be included in "raw materials consumed," in which case it would not be
part of our overhead rate at all. On the other hand, if it is used for
functions in addition to cooking crawfish, such as providing heat to the
factory, it might be included in "raw materials consumed" and "power and
fuel." Therefore, consistent with the investigation and prior reviews of
this proceeding (see page 7 of memorandum to Maureen Flannery from Scott
Lindsay "Administrative and New Shipper Review of Freshwater Crawfish Tail
Meat from the People's Republic of China: Factor Values Memorandum," dated
September 29, 2000 (Factor Values Memorandum)), we have not made the
suggested adjustment to the surrogate values used.




Comment 6: Use of Annual vs. Monthly Average Exchange Rate 

Ningbo Nanlian/Huaiyin(5) and Louisiana Packing argue that the exchange
rate used by the Department is improper, as the exchange rate in effect
when most crawfish were imported into Spain (July 1999) was significantly
lower. They also state that the Spanish Peseta declined steadily (14
percent) from November 1, 1998 to July 31, 1999. The July 1999 rate was
also more than 10% lower than the average rate.

Moreover, respondents argue that the Department has the legal obligation
to review the proposed surrogate values to ensure that they are accurate.
In addition, respondents point out that the Statement of Administrative
Action (SAA) at 841 states that the Department's practice is to ensure
that the process of currency conversion does not distort dumping margins.
Respondents contend that the use of an average annual rate in the current
situation does not lead to accuracy and distorts the dumping margin. They
state that the use of a yearly average improperly increases raw materials
costs by $0.17/kg of crawfish tail meat. Therefore, respondents conclude,
it cannot be disputed that the use of monthly data is more accurate. 

Finally, respondents assert that the use of a monthly exchange rate
average is logical given that the Department is relying on monthly import
data. Respondents also state that, although there is no regulation which
requires the Department to use annual averages or monthly averages, the
Department's Policy Bulletin 96.1: Change in Policy Regarding Currency
Conversions (Policy Bulletin) shows that the Department recognizes the
need to use even daily rates where necessary. By analogy, if the Spanish
peseta is declining in a significant fashion and the import data is
heavily weighed toward the end of the POR, respondents argue, then the
Department must use a currency conversion methodology which takes into
account the decline in the Spanish peseta. 

Petitioner argues that respondents failed to demonstrate any basis for
departure from the Department's established practice. In previous reviews,
the Department has applied a POR-average exchange rate to the monthly
Spanish import data to obtain a dollar-denominated POR-wide surrogate
value for live crawfish inputs. See New Shipper Review for Ningbo Nanlian
at Comment 10, 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, 63 FR 63,842 (Nov. 17, 1998) (Chinese TRBs). 

Petitioner also asserts that in the Tapered Roller Bearings decision
cited by the Department in the New Shipper Review for Ningbo Nanlian, the
Department plainly stated that, both prior to and since the implementation
of the Uruguay Round Agreements Act (URAA), it has been the Department's
practice to convert POR/period of investigation (POI)-contemporaneous
foreign currency surrogate values to U.S. dollars using the average
POR/POI exchange rate. Moreover, petitioner claims that the 1996 Policy
Bulletin cited by respondents expressly states that its purpose is to
promulgate regulations required to comply with amendments to section 773A
of the Act which were imposed by the URAA. Those provisions, petitioner
states, are not relevant to the calculation of surrogate values in non-
market economy cases under section 773(c) of the Act, as the Department
subsequently observed in Chinese TRBs.

Petitioner also argues that respondents' calculations are incorrect
because they are based on the wrong revision of the Spanish import data;
nonetheless, based on respondents' own calculations, the difference
between the two exchange rate methodologies is less than three percent.
Petitioner further asserts that this does not provide evidence that the
decline in the value of a foreign currency is so precipitous and large as
to reasonably preclude the possibility that it is only fluctuating, even
under the standard advocated by respondents.




Department's Position: We agree with petitioner. Although in a few cases
the Department has used less than a full annual average in response to a
currency devaluation, it has only done so as part of its overall response
to a devaluation which is so precipitous and large as to reasonably
preclude the possibility that the currency is only fluctuating. The facts
do not support such a finding with respect to the Spanish peseta.
Respondents have shown only a fourteen percent decline over a period of
eight months, far less than in cases where we have found the devaluation
to be precipitous and large.

Moreover, in this case, respondents have relied on an arbitrary
comparison of two daily exchange rates eight months apart. Finally, in
Stainless Steel Wire Rod from Spain; Final Results of Antidumping Duty
Administrative Review, 66 FR 10988 (February 21, 2001), with a POR
(03/05/1998 to 08/31/1999) that encompasses the POR for our current
proceeding, the Department used its regular methodology to calculate the
appropriate Spanish exchange rates, without any special adjustment.
Therefore, we have continued to use an annual exchange rate to convert
pesetas to U.S. dollars for these final results. 




Comment 7: Water as a Separate Cost

Huaiyin(30), Qingdao Zhengri, and Fujian Pelagic argue that the
Department should not separately value water in the final results, because
in numerous past Chinese antidumping investigations and administrative
reviews, the Department has not included water as a direct cost since the
Department determined water to be a factory overhead item. However,
respondents argue, if the Department continues to value water as a
separate material input in the final results, it should not value water
that was pumped from crawfish processors' wells.

Respondents explain that the Department currently applies two groups of
precedents in valuing water: 1) the Department has valued water as a
direct material cost and thus separately valued water using a surrogate
factor of production; and 2) the Department conversely determined that
water expenses were appropriately included as a component of factory
overhead. See Final Results of Antidumping Duty Administrative Review;
Sebacic Acid from the People's Republic of China, 65 FR 49537 (Aug. 14,
2000) at Comment 3 (Sebacic Acid); Notice of Final Determination of Sales
at Less Than Fair Value; Polyvinyl Alcohol from the People's Republic of
China, 61 FR 14057, 14063 (March 29, 1996) (Polyvinyl Alcohol). 

Moreover, respondents argue that from the Department's prior decisions,
they can identify three discrete "rules:" 1) if the Department knows that
the cost of water is included in the fixed overhead (FOH), the Department
must use the FOH without separately valuing water; 2) if the Department
does not know whether the cost of water is included in the FOH, the
Department must assume that it is included, and use the FOH without
separately valuing water; and 3) if the Department knows that the cost of
water is not included in the FOH, the Department may separately value
water.

Furthermore, respondents argue that if the Department no longer wishes to
follow its own precedent, and determines that it will value water
separately, the Department should not value the water crawfish processors
pump from their wells as a cost because crawfish processors do not incur a
cost for the well water. Respondents note that Huaiyin Freezing Factory,
Baoying Freezing Factory (Baoying), and Qingdao Zhengri obtain their water
from wells. Respondents also state that they do not incur a cost for the
well water, but, rather a cost for the electricity they use to pump the
water from their wells, and electricity has been reported in the factors
submission. Respondents further argue that in the initial investigation in
Final Determination of Sales at Less Than Fair Value: Sulfanilic Acid from
the People's Republic of China, 57 FR 29705, 29707 (July 6, 1992), the
Department specifically did not value water from the factory's wells
because at verification, we found that the two factories we chose to
verify did not incur costs for water used in the production process for
the subject merchandise. Similarly, the Department treated water as FOH in
its 1996 administrative review, stating "Yude and Zhenxing have their own
wells from which they pump water for use in the production process; the
water is then recirculated." Final Results of Antidumping Duty
Administrative Review; Sulfanilic Acid from the People's Republic of
China, 61 FR 53711, 53716 (Oct. 15, 1996). Respondents also cite Notice of
Final Determination of Sales at Less Than Fair Value: Saccharin from the
People's Republic of China, 59 FR 58818, 58823-24 (Nov. 15, 1994), where
the Department concluded that water and ice should be included in FOH
after it verified that "Suzhou obtains its water from a nearby river and
uses electricity to pump the water for use in the production process." See
Notice of Final Determination of Sales at Less Than Fair Value: Sebacic
Acid from the People's Republic of China, 59 FR 28053, 28055 (May 31,
1994) and Final Determination of Sales at Less Than Fair Value: Sulfur
Dyes, Including Sulfur Vat Dyes, from the People's Republic of China, 58
FR 7537, 7545 (Feb. 8, 1993), where the Department concluded that water
should be included in FOH since no cost could be attributed to water where
the water was pumped from the factories' own wells. 

Respondents also state that in making this determination, if the
Department decides to rule against crawfish processors and affirm its
decision in the Preliminary Results, the Department will be departing from
its own precedent and practice. Respondents argue that the Department must
sufficiently explain the basis for its departure using a reasoned analysis
of the relevant data. 

Moreover, respondents state that they disagree with petitioner that the
Department's factors of production system is not a cost-based system, but
an input-based system, i.e., that the Department is simply valuing inputs
so as to estimate a cost. Respondents argue that the Department uses the
factors of production methodology to construct, as accurately as possible,
a normal value which is the cost of the product in the non-market economy
country. Respondents claim that well water is not a cost to the crawfish
processors. Baoying, for example, does not even keep track of the well
water. Respondents claim that the Department used Baoying's failure to
keep track of the water from its own well as one reason for using an
adverse inference against Baoying. Because the well water is not a cost to
these crawfish processors, respondents argue, the Department should not
value the water and add the well water to their cost of production.
Instead, it should add the electricity used to pump the water from the
well, because, they claim, that is the actual cost for the crawfish
processors. 

Petitioner states that respondents' argument is the same argument
propounded by respondent Qingdao Rirong in its new shipper review.
Respondents explain that Qingdao Rirong argued that since it only paid
wages to laborers who collected the crawfish, and did not actually buy the
crawfish, the Department should not assign a surrogate value to the live
crawfish input. Respondents further state that the Department properly
rejected Qingdao Rirong's argument. 

Petitioner argues that the same approach is required here, because the
production of crawfish tail meat requires the consumption of large
quantities of water for cooking, and these quantities are distinguishable
from the incidental water consumption that is typically included as part
of overhead in a company's annual report. Since water is an essential
input in the production of crawfish tail meat, petitioner asserts, it must
be assigned a surrogate value regardless of whether it is deemed a "cost"
in the non-market economy. 




Department's Position: We agree with petitioner. In accordance with
section 773(c)(3) of the Act, the factors of production utilized in
producing subject merchandise include, but are not limited to, (a) hours
of labor required, (b) quantities of raw materials employed, (c) amounts
of energy and other utilities consumed, and (d) representative capital
cost, including depreciation. The statute clearly specifies that, for the
purposes of constructing normal value in a non-market economy case, the
Department builds up its factors of production based on the quantities of
the inputs, not the costs associated with those inputs. Thus, whether
respondents purchased or collected water, the Department still utilizes
the quantities of raw materials employed in its calculation of constructed
value. 

Moreover, the evidence on the record shows that water usage is a direct
factor in the production of crawfish tail meat. The process of cleaning
and boiling live crawfish to produce subject merchandise requires large
quantities of water, and this is clearly different from water used by a
company for incidental purposes. Therefore, for these final results, we
have continued to value respondents' water as a factor of production.

Finally, the Department has stated that for those situations in which it
does not know whether the cost of water is included in the surrogate value
for factory overhead the Department must determine on a case-by-case basis
whether it will value water separately in accordance with section
773(c)(1). See Sebacic Acid at Comment 3. The Department has treated water
as a direct cost in previous segments of this proceeding, unlike in
Sebacic Acid and Polyvinyl Alcohol, where the precedent had been to
include water as FOH. Neither petitioner nor respondents have put any new
evidence on the record for the Department to deviate from its practice of
water valuation in the instant reviews. Therefore, we continue to value
water as a direct cost for these final results.




Comment 8: Fujian Pelagic's Sales to Pacific Coast: EP vs CEP

During the administrative review, Fujian Pelagic (a PRC exporter) and
Pacific Coast Fisheries Corp. (Pacific Coast) (a U.S. importer) claimed
that they were affiliated parties pursuant to section 771(33)(E) of the
Act and that the Fujian Pelagic's sales to Pacific Coast should be treated
as constructed export price (CEP) sales. In the Preliminary Results, the
Department determined that Fujian Pelagic and Pacific Coast were not
affiliated parties pursuant to section 771(33)(E) of the Act.
Consequently, pursuant to section 351.402 of the Department's regulations,
we treated the sales between Fujian Pelagic and Pacific Coast as export
price (EP) sales. In its case brief, Fujian Pelagic argued that it and
Pacific Coast were affiliated under sections 771(33)(E) and (G) of the
Act. The arguments pertaining to each section of the Act are addressed
separately below. 




a. Fujian Pelagic asserts that it owns more than five percent of Pacific
Coast's outstanding shares. Fujian Pelagic argues, therefore, that it and
Pacific Coast are affiliated parties pursuant to section 771(33)(E) of the
Act and that the Department should treat its sales to Pacific Coast as CEP
sales.

Fujian Pelagic asserts that, under the affiliated persons provision in
771(33)(E) of the Act, "[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
maintains that it holds more than five percent of the shares of Pacific
Coast common stock with full voting rights.

While Fujian Pelagic concedes that it did not invest any financial or
physical assets (e.g., cash, equipment, or real estate) in Pacific Coast,
it asserts that its investment in Pacific Coast was in the form of a
promissory note presented to Pacific Coast. Fujian Pelagic claims that,
under Washington state law, a promissory note is adequate consideration
for stock. Fujian Pelagic contends that, pursuant to this promissory note,
it is obligated to make investments through shipments of merchandise in
the favor of Pacific Coast. Fujian Pelagic further maintains that, in 




consideration of this promissory note, Fujian Pelagic presently holds and
has the right to vote its shares and exercise control over Pacific Coast.

Petitioner contends that Washington state law on the adequacy of a
promissory note as consideration for a stock transfer is not determinative
of the question of whether Fujian Pelagic's sales should be treated as EP
sales. Petitioner argues that the state law is directed toward purposes
that are not necessarily relevant to an antidumping determination.
Petitioner also argues that the actual present value of a promissory note
from a Chinese corporation is much lower than its face value due to the
substantial risks and costs associated with enforcement of the repayment
obligation. Petitioner maintains that acceptance of Fujian Pelagic's
arguments would create a mechanism for subversion of the antidumping laws
through the use of promissory notes.

Petitioner maintains that the accounts of the investment provided by
Fujian Pelagic and Pacific Coast have been contradictory and inconsistent
during the course of the review, and these inconsistencies have never been
adequately explained. Petitioner contends that the investment vehicles
cited by Fujian Pelagic "are notoriously manipulable and would, if
accepted by the Department in this case, provide an open invitation for
antidumping respondents to create meaningless affiliations with their U.S.
customers by providing promises to ship goods or to pay money at some
later date so that their antidumping duties may be reduced." 

Petitioner argues that the promissory note described by Fujian Pelagic
"is worth much less than its face value." Petitioner contends that if "a
promissory note from a Chinese company were as good as cash in the United
States, there would be no need for irrevocable letters of credit."
Petitioner maintains that, in the event of nonpayment on a promissory
note, the only recourse is a laborious legal process involving an attempt
to enforce a U.S. court's judgment in the courts of the PRC. Petitioner
contends that, because of the likely expense associated with this effort
and the high likelihood of non-collection, the actual present value of the
promissory note at issue requires deep discounting from its face value.




Department's Position: We agree with the petitioner that Fujian Pelagic's
and Pacific Coast's accounts of Fujian Pelagic's investment in Pacific
Coast have been contradictory and inconsistent. The percentage of Pacific
Coast's outstanding stock that Fujian Pelagic has claimed to own has
varied greatly. Also, the total number of shareholders in Pacific Coast,
as reported by Fujian Pelagic and Pacific Coast, has varied.

Moreover, it is unclear whether the "agreement" between Fujian Pelagic
and Pacific Coast can be considered a promissory note. The Encarta Concise
Encyclopedia describes a promissory note as:

   "a written instrument containing an unconditional promise by a 
   party, called the maker, who signs the instrument, to pay to 
   another, called the payee, a definite sum of money either on 
   demand or at a specified or ascertainable future date. The note
   may be made payable to the bearer, to a party named in the note, 
   or to the order of the party named in the note."

The original copy of the agreement was signed in the PRC and is kept at
Fujian Pelagic. The translated copy of this agreement does not contain an
unconditional promise by Fujian Pelagic to pay Pacific Coast a certain
amount at specified date. Rather, it states vaguely that Fujian Pelagic's
"investment" in Pacific Coast may not be paid in cash and may be realized
within two years. As such, it is not clear that the agreement proffered by
Fujian Pelagic can even be considered a promissory note. Therefore, the
question as to whether promissory notes are adequate consideration for
stock under Washington state law is not relevant. 

Moreover, no party to the review disputes that Fujian Pelagic did not
invest any financial or physical assets in Pacific Coast through the POR.
Nor is there any other evidence of actual investment made by Fujian
Pelagic. As such, the validity of Fujian Pelagic's claim that it owned or
controlled more than five percent of Pacific Coast's stock during the POR
has not been established. 

b. In addition to claiming that it owns more than five percent of Pacific
Coast's shares, Fujian Pelagic asserts that it is legally and
operationally in a position to control Pacific Coast and that, therefore,
Fujian Pelagic and Pacific Coast are affiliated parties pursuant to
section 771(33)(G) of the Act.

Fujian Pelagic states that its general manager is a member of the board
of directors of Pacific Coast. Fujian Pelagic further states that, as a
board member, Fujian Pelagic's general manager is involved in all key
decisions of Pacific Coast. Fujian Pelagic argues that its membership on
Pacific Coast's board of directors and its holding of more than five
percent of Pacific Coast's voting stock "legally and operationally places
Fujian Pelagic in a position to exercise direction and control over
Pacific Coast."

Fujian Pelagic claims 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. Fujian Pelagic argues that under the
statute, there is sufficient evidence of affiliation between the two
companies and that, therefore, Fujian Pelagic's U.S. sales to Pacific
Coast should be treated as CEP sales.




Department's Position: We disagree with Fujian Pelagic. Fujian Pelagic's
and Pacific Coast's accounts of Fujian Pelagic's investment in Pacific
Coast have been contradictory and inconsistent. 

The Department has stated that merely identifying the presence of one or
more of the indicia of control (as per Section 771(33) of the Act) "does
not end our {the Department's} task." See Antidumping Duties;
Countervailing Duties; Notice of Proposed Rulemaking and Request for
Public Comments, 61 FR 7308, 7310 (February 27, 1996). The Department is
compelled to examine all indicia, in light of business and economic
reality, to determine whether they are evidence of control. In determining
whether control over another person exists, within the meaning of section
771 (33) of the Act, the Department will consider factors such as
corporate or family groupings; franchise or joint venture agreements; debt
financing; and close supplier relationships.

The Department has found PRC crawfish companies and U.S. importers to be
affiliated parties in the past. However, in each case where the Department
has found affiliation between PRC and U.S. crawfish companies, either one
of the parties involved had made an investment into the other party or
both parties had made an investment into a third party. (See, e.g.,
Preliminary Results and New Shipper Review for Ningbo Nanlian.) The
relevant investment took place either prior to or during the relevant POR.
Moreover, in each instance, it was clear that either one party controlled
another or that both controlled the third party.

Neither Fujian Pelagic nor Pacific Coast claim that they each control
such a third party. Rather, Fujian Pelagic claims that it has made an
investment in Pacific Coast and that it has a direct control relationship
with Pacific Coast. However, an examination of facts on the record of the
instant review demonstrates that Fujian Pelagic does not control Pacific
Coast. 

The record shows that Mr. Zhang Wei, president and chairman of Pacific
Coast, approached Fujian Pelagic and encouraged Fujian Pelagic to request
the instant review. (See "Sales Verification of Pacific Coast Fisheries;
New Shipper Review of Freshwater Crawfish Tail Meat from the People's
Republic of China," dated September 29, 2000 (Pacific Coast Verification
Report).) Pacific Coast has the business expertise and customer contacts
in the United States. Pacific Coast's president was the sole investor in
Pacific Coast during the POR. (See "Pacific Coast Verification Report" and
"Fujian Pelagic Verification Report.") Further, while Fujian Pelagic
claims to have one of the seats on the Pacific Coast's board of directors,
Mr. Zhang Wei and his three personal friends control the remaining seats.
(For a full discussion of the makeup of Pacific Coast's board of
directors, see the business proprietary version of the memorandum from
Thomas Gilgunn to the file " Freshwater Crawfish Tail Meat from the PRC:
Fujian Pelagic Fishery Groups Company (Fujian Pelagic)," dated April 9,
2001.) Thus, while some indicia of affiliation between Fujian Pelagic and
Pacific Coast may be present, the facts clearly show that Fujian Pelagic
does not control Pacific Coast. As such, we will continue to treat Fujian
Pelagic's sales to Pacific Coast as EP sales.




Comment 9: Baolong Biochemical Rescission 

Baolong Biochemical in its Response to the Department's Supplemental
Questionnaire, dated July 11, 2000, (Supplemental Response), informed the
Department that, effective July 25, 1999, it entered into a management
agreement with Yancheng Asia Europe Seafoods, Co., Ltd. (Asia Europe). At
verification the Department reviewed the management agreement, as well as
documentation indicating that Baolong Biochemical was a member of the
Baolong Group, which is the same as Asia Europe. This documentation
obtained from Baolong Group was dated February 25, 1999. The agreement
indicates that Asia Europe controls Baolong Biochemical's sales of subject
merchandise to the United States. 

Baolong Biochemical contests the Department's preliminary determination
that it did not make any sales to the United States during the POR.
Baolong Biochemical argues that all documentation between China and the
United States regarding sales within the POR were between Baolong
Biochemical and the U.S. customer. Baolong Biochemical contends that the
Chinese export declaration and currency document which are made out to
Asia Europe (formerly Yancheng Baolong Aquatics Products Co., Ltd.), and
cited by the Department, show that Asia Europe was the exporter of the
subject merchandise and not that it was the seller. Baolong Biochemical
states that customers signed contracts only with itself, and not with Asia
Europe. 

Further, Baolong Biochemical argues that, if the Department insists that
Asia Europe is the seller of subject merchandise to the United States,
then the Department should collapse Asia Europe and Baolong Biochemical
into one entity, since they were affiliated during the POR. Since the
Department has stated in its memorandum on rescission of review that Asia
Europe's management control of Baolong Biochemical actually began in
February 1999, i.e., before the first sale occurred, and not in July,
1999, as stated by Baolong Biochemical, the Department should treat the
two companies as one entity. See Decision Memorandum for Troy H. Cribb
through Joseph A. Spetrini from Barbara E. Tillman: Yancheng Baolong
Biochemical Products (Baolong Biochemical): Intent to Rescind
Administrative Review, dated September 29, 2000 (Rescission Memorandum).
To support its argument that the Department should collapse these two
companies into one entity, Baolong Biochemical refers to Ferro Union V.
U.S., 44 F.Supp.2d 1310 (March 23, 1999) (Ferro Union), Queen's Flowers de
Columbia v. U.S., 981 F. Supp.617 (August 25, 1997) (Queen's Flowers), FAG
Kugelfischer v. United States, 932 F. Supp. 315 (1996) (FAG), and the SAA
of the URAA. See SAA, H.Doc. 103-316, Vol. 1 at 838. Baolong Biochemical
argues that "[it] is also clear that both Asia Europe and Baolong have a
history of producing and selling crawfish tail meat and each could
manipulate the antidumping law to subvert the goals of the Commerce
Department if they were not collapsed." See Case Brief Yancheng
Biochemical Products Co. Ltd., of November 27, 2000 (Case Brief), at 7.
Baolong Biochemical contends that, if the parties are collapsed, it is
irrelevant which party requested the review. In addition, Baolong
Biochemical asserts that, by rescinding its review, the Department




was unable to determine accurately its dumping margins, and instead
assigned Baolong Biochemical a rate based on total adverse FA. 

Petitioners contend that the facts alleged by Baolong Biochemical were
fully considered in the Department's Preliminary Results, and Baolong
Biochemical did not provide any new information for the Department to draw
a different conclusion in these final results. Furthermore, petitioners
state that, if the Department were to treat Baolong Biochemical and Asia
Europe as one entity, the Department would have to assign that entity the
China-wide rate, since the Department found that Asia Europe failed to
respond to the Department's questionnaire. 




Department's Position: We disagree with Baolong Biochemical that it had
any sales during the POR. First, the Rescission Memorandum clearly
describes the evidence with respect to the sales traces which Department
officials found at verification, indicating that Asia Europe, and not
Baolong Biochemical, was the seller of subject merchandise to the United
States. See Rescission Memorandum at 3. Further, we stated in our
verification report that "[a]lthough Baolong Biochemical requested the
review for the current POR and claimed that it had made the sales of
subject merchandise prior to the "management agreement".Asia [sic]
Europe's worksheets and accounting records for the POR indicated that it
was Asia Europe who had actually made the sales under review." See
Memorandum for File through Maureen Flannery from Jacqueline Arrowsmith
and Jonathan Lyons: Verification of Yancheng Baolong Biochemical and Asia
Europe in the Second Administrative Review of Freshwater Crawfish Tail
Meat from the People's Republic of China (PRC) (Verification Report),
dated September 29, 2000, at 6. In addition, the documentation submitted
in exhibit 26 of the Questionnaire Response of Baolong Biochemical, 

dated March 8, 2000, (Supplemental Response), and reviewed at
verification contains information that contradicts respondent's claim that
Asia Europe was only the exporter and not the seller of subject
merchandise, as stated in the Department's Rescission Memorandum. See
Rescission Memorandum, at 3 and the proprietary Memorandum to File through
Maureen Flannery from Elfi Blum: Freshwater Crawfish Tail Meat from the
People's Republic of China: Sales Documentation of Baolong Biochemical,
dated April 9, 2001. Based on the facts on the record, as determined at
verification and outlined in the memorandum on the sales documentation, it
was Asia Europe, and not Baolong Biochemical, which made the sales to the
United States reported by Baolong Biochemical.

Moreover, we found at verification that a certain joint management
agreement between Baolong Biochemical and Asia Europe actually took effect
in February 1999, i.e., before the first sale was made (see Verification
Report, at 3), and not in July 1999, as reported by Baolong Biochemical.
See Supplemental Response, at 8. According to this management agreement,
Baolong Biochemical's sales contracts were transferred to Asia Europe,
using Baolong Biochemical's name to clear subject merchandise at U.S.
customs. For more detailed information pertaining to the management
agreement, please refer to Rescission Memorandum, at 3. Based on its
management agreement with Asia Europe, Baolong Biochemical did not make
the sales to the United States reported for the POR. 

Further, we disagree with Baolong Biochemical that the Department should
treat Baolong Biochemical and Asia Europe as one entity for this
antidumping administrative review. If (1) Baolong Biochemical had reported
to the Department, prior to verification, the nature of its relationship
with Asia Europe throughout the POR, and (2) Asia Europe had been
responsive to the Department's request for information, then we would have
been able to both determine whether to collapse the two companies, and, if
appropriate, calculate a single antidumping rate for a combined entity.
These two companies failed to provide information regarding this
relationship to the Department either voluntarily or when so requested by
the Department in the standard antidumping questionnaire. Only in response
to the Department's supplemental questionnaire, which the Department
received immediately preceding verification, did Baolong Biochemical
indicate that it instituted a joint management contract with Asia Europe.
See Supplemental Response, at 2. Pertinent information regarding this
contract was either presented, or discovered at verification, too late in
the course of the proceeding for the Department to ask follow-up questions
or to perform any meaningful analysis. Thus, the Department was precluded
from requesting additional information or submitting supplemental
questionnaires relevant to the issue of these companies' relationship and
collapsing these two parties. Further, Baolong Biochemical had previously
responded to the Department's question concerning the company's
relationship with other producers or exporters of the subject merchandise,
and whether they shared any managers or owners, by stating that "Baolong
has no relationship with other producers or exporters of the subject
merchandise. It does not share any managers or owners." See Supplemental
Response, at 3, section A. In its supplemental response, Baolong
Biochemical first claimed to the Department that it had failed to report
its main processor, with which "it instituted a joint management contract
on July 25, 1999." See Supplemental Response, at 2. Only at verification
did the Department discover that this management agreement was in effect
when the POR sales were made, and Asia Europe was listed on the sales
documentation as the Chinese seller. Moreover, Asia Europe did not respond
to the Department's questionnaire, making it impossible for the Department
to analyze completely the company and its relationship with Baolong
Biochemical. By failing to respond to the Department's questionnaire, Asia
Europe did not place any information on the record demonstrating that it
is an entity independent from government control, and, as such, it cannot
qualify for a rate separate from the PRC-wide rate, as stated in the
Preliminary Results. Having determined that Asia Europe made the sales in
this POR, and that the parties failed to timely submit information on the
record that Asia Europe and Baolong Biochemical should be collapsed for
this administrative review, we leave the issue of the relationship between
these parties for another review. Accordingly, we are issuing a final
rescission of review for Baolong Biochemical, and a final determination to
continue to apply adverse FA available to Asia Europe.




Comment 10: Use of the Facts on the Record to Calculate Baolong
Biochemical's Dumping Margin 

Baolong Biochemical states that the Department verified all factors of
one of its suppliers, and materials and labor factors for Asia Europe, but
was unable to complete the factors verification at Asia Europe for the
remaining factors. Baolong Biochemical argues that, for the factors not
verified, the Department should follow its own precedent set in Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From the
People's Republic of China: Preliminary Results of 1998-1999
Administrative Review, Partial Rescission of Review, and Notice of Intent
to Revoke Order in Part, 65 FR 41944 (July 7, 2000), where the Department
used the average factor rate of the suppliers in that review that did not
supply the respondent company in lieu of the factors of suppliers not
verified.




Department's Position: Because we rescinded the review on Baolong
Biochemical (see Comment 9 above) and applied adverse FA to Asia Europe
because it was non-responsive (see Comment 9 above), this issue is moot. 




Comment 11: Yancheng FTC/Ocean Harvest: Calculation of Packing Material
Costs

Ocean Harvest and respondents Yancheng FTC and Nantong Delu state that
the Department wrongly calculated total packing cost for bags and boxes
for both of their suppliers based on weight instead of quantity, as
provided in the factor data. Respondents further state that the factor
data in the questionnaire response reflects the per kilogram usage of
plastic bags and boxes, i.e., the number of bags and boxes used to pack
one kilogram of subject merchandise. Further, respondents state that the
Chinese producers complied with the Department's instructions by reporting
the quantity used to pack one unit of subject merchandise, citing
Department's questionnaire, at D-7). Respondents also point out that the
Department did not ask respondents in the supplemental questionnaire to
change the reporting from a quantity unit basis to a weight unit basis
instead, and that the Department verified respondents' method for deriving
the reported factor usage. See Memorandum to the File through Maureen
Flannery from Jacqueline Arrowsmith and Jonathan Lyons: Factors of
Production Verification for Nantong Delu Aquatic Food Co., Ltd. (Nantong
Delu) in the Second Administrative Review of Freshwater Crawfish Tail Meat
from the People's Republic of China, dated September 29, 2000, at 8, and
Memorandum to the File through Maureen Flannery from Jacqueline Arrowsmith
and Jonathan Lyons: Factors of Production Verification for Yancheng Fubao
Aquatic Food Co., Ltd. (Yancheng Fubao) in the Second Administrative
Review of Freshwater Crawfish Tail Meat from the People's Republic of
China, dated September 29, 2000, at 8. Further, respondents note that the
Department inadvertently switched the factors for bags and boxes in its
calculations. With respect to tape, respondents conceded that they failed
to report a factor. Finally, respondents suggest that, if the Department
is unable to calculate packing based on the factors data provided, the
Department should revert to the reported factor data of another Chinese
producer in this review. 




Department's Position: We agree with respondents that we misread the
denotation of units for the factor data used for boxes and bags, as
provided in the factor table of the section D response. We interpreted the
reported factor usage on a weight unit basis instead of a quantity unit
basis, as explained in the narrative section D response. We further agree
with respondents that the Department's questionnaire, as issued, does not
specify the unit basis on which packing materials should be reported. It
is the Department's practice in this case to calculate packing on a weight
unit basis; however, since the appropriate information is not available on
the record for these respondents we substituted the values on a weight
unit basis for boxes and bags by taking an average of the usage reported
by the other respondents, to calculate packing costs. The inadvertent
switching of factors for bags and boxes becomes irrelevant at this point.
Finally, we continued to use facts available for tape, as we did in the
Preliminary Results, since respondent did not report a factor for tape. 




Comment 12: Ningbo/Huaiyin(5): Marine Insurance

Ningbo Nanlian, Louisiana Packing, and Huaiyin(5) contend that the
Department incorrectly deducted marine insurance from the U.S. sales price
for certain transactions. Respondents contend that they had reported no
marine insurance charges for CEP transactions, and that only four of
Huaiyin(5)'s sales used marine insurance. In addition, respondents contend
that the Department mistakenly applied the insurance rate to gross unit
price instead of entered value for CEP sales.

The petitioner did not respond to these contentions.




Department's Position: We agree with respondents. After reviewing their
submissions, we find that we incorrectly deducted marine insurance from
all U.S. sales. Respondents reported in their response "Louisiana Packing
has a marine insurance policy. However, it did not use this policy for the
subject merchandise. With respect to Huaiyin(5), if the terms of sale
required it to incur insurance charges, it paid in RMB. In such instances,
'Yes' is reported." A review of the sales file used in our preliminary
calculations confirms that "Yes" was reported for only four sales. See
Huaiyin(5)'s Section C Response at 16 and Field 19 of the U.S. Sales
Database. We have corrected our calculations to deduct marine insurance
only in these four instances. Because we agree with respondents that
marine insurance should not be deducted from CEP sales, the issue of
whether to use gross unit price or entry value in calculating marine
insurance for CEP sales is moot.




Comment 13: Huaiyin (30): Partial Adverse Facts Available

Based on information obtained at verification, in the Preliminary Results
the Department determined that Huaiyin(30) had two channels of sales. In
the first channel, Huaiyin(30) acted as a principal. In the second channel
Huaiyin(30) assisted certain U.S. importers who purchased crawfish tail
meat from PRC processors. We verified a supplier from each sales channel.
The Department applied an adverse FA rate to Huaiyin(30)'s second channel
sales. The adverse FA rate was based on the highest rate for any segment
of this proceeding. In the Preliminary Results, the highest rate was
derived from the margin calculated on Huaiyin(30)'s direct sales from the
instant review. However, due the use of updated Spanish import data to
value whole crawfish in these Final Results, the highest rate for any
segment of the proceeding is the PRC-wide rate from the investigation of
sales at less than fair value (LTFV) investigation. This issue can be
distilled into four distinct sets of comments: a) the Department has not
met the statutory requirement for the application of adverse FA and should
not apply adverse FA to all of Huaiyin(30)'s second channel sales; b). the
Department should use information currently on the record to calculate
normal value for Huaiyin(30)'s second channel sales; c) if the Department
applies partial adverse FA, it should use the 201.63 percent rate from the
LTFV; and d) the Department should not apply adverse FA to the labor
factors for Huaiyin Freezing and the other processors which supplied
crawfish tail meat for Huaiyin(30)'s direct sales. These comments are
addressed separately below.




a.. Huaiyin(30) claims the Department has not met the statutory
requirement for the application of adverse FA and should not apply adverse
FA to all of Huaiyin(30)'s second channel sales.

According to Huaiyin(30), under section 776(b) of the Act, the Department
must determine that the interested parties have "failed to cooperate by
not acting to the best of (their) ability in complying with a request for
information" prior to applying adverse FA. Huaiyin(30) also cites Article
6.8 and Annex II, 5 of the Agreement on Implementation of Article VI of
the General Agreement on Tariffs and Trade 1994 (Antidumping Agreement) to
support its claim that the Department did not properly apply adverse FA in
the instant case.

Huaiyin(30) further argues that a simple assertion by the Department that
an interested party failed "to act to the best of their ability" is not
sufficient. Huaiyin(30) claims that the statute now requires that the
Department find that "the interested party must refuse to provide the
necessary information or significantly impede the final determination" and
that "simple mistakes" do not meet this standard.

Huaiyin(30) maintains that in Ferro Union, 44 F. Supp. 2d 1310, 1331 (CIT
1999), the U.S. Court of International Trade (CIT) instructed the
Department that, prior to applying adverse FA, it must determine that the
respondent had deliberately withheld information requested by the
Department. Huaiyin(30) also maintains that in Nippon Steel Corp. v.
United States, 118 F. Supp. 2d 1366 (CIT 2000) (Nippon) the CIT instructed
the Department that, prior to applying adverse FA, the Department must
undertake a separate, reasoned analysis based on substantial evidence on
the record why it has determined that respondents did not act to the best
of their ability.

Huaiyin(30) asserts that in Mannesmannrohren-Werke AG v. United States,
77 F. Supp. 2d 1302, 1325 (CIT 1999) (Mannesman), the CIT issued the
following instructions to the Department. The Department's analysis of why
a respondent has not acted to the best of its ability must be supported by
substantial evidence and explain why the absence of this information is
significant. In addition, the CIT stated that it would be difficult to
draw such an inference from a simple mistake. Huaiyin(30) also argues that
since the purpose of the antidumping law is remedial, not penal, it is
Commerce's duty to determine dumping margins as accurately as possible,
and that adverse FA rates should have some reasonable relationship with
the respondent's actual dumping margin.

Huaiyin(30) contends that the use of an adverse FA rate for Huaiyin(30)'s
sales based on verification findings at Huaiyin(30) and Baoying is
contrary to statutory requirements. Huaiyin(30) asserts that Baoying,
Huaiyin(30), and Huaiyin(30)'s customer for sales produced by Baoying, all
cooperated with the Department to the best of their ability. Huaiyin(30)
further claims that at no time did Baoying deliberately withhold
information from the Department and impede this review. Huaiyin(30)
describes the errors in its and Baoying's factors response as merely
"simple mistakes." Huaiyin(30) claims that it and Baoying are small
companies with limited resources which cannot be held to the same
standards as a large multinational company with substantial resources to
reply to all the Department's requests for information. Huaiyin(30)
emphasizes that the difference between the reported quantity for whole
crawfish, the most important factor in the constructed value of crawfish
tail meat, and the actual quantity was minor 




and that the Department should calculate a rate based on the factors that
the Department found at verification.

Petitioner maintains that virtually all of Huaiyin(30)'s arguments were
addressed by the Department in the Preliminary Results and supporting
Departmental memoranda. The rest of Huaiyin(30)'s arguments, petitioner
claims, are based on non-record assertions about the events that allegedly
transpired at verification. The case brief is not the proper forum for
attempting to change the factual record. Accordingly, petitioner states,
Huaiyin(30)'s arguments on these issues must be rejected, and the final
results should be calculated in the same manner as the Preliminary Results.




Department's Position: We disagree with Huaiyin(30). The Department has
met the statutory threshold for the use of adverse FA. As such, we find no
basis for changing our decision in the Preliminary Results that the use of
adverse facts available is warranted for Huaiyin(30)'s second channel
sales.

Section 776(a)(2)(d) provides that: if an interested party or any other
person provides 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.

No party to the instant review disputes that the Department could not
verify the following information which Huaiyin(30) reported to the
Department: 1) the names of all Huaiyin(30)'s reported crawfish tail meat
suppliers (see the business proprietary version of "Antidumping Duty
Administrative Review of Freshwater Crawfish Tail Meat from the People's
Republic of China (PRC) (A-570-848): Sales Verification Report for Huaiyin
Foreign Trade Corporation (30) (Huaiyin(30)," dated September 29, 2000);
and 2) any of the factors of production information that Huaiyin(30)
reported for Baoying Freezing (see the business proprietary version of "AD
Review of Freshwater Crawfish Tail Meat from the People's Republic of
China (PRC) (A-570-848): Factors Verification Report for Baoying Freezing
Factory (Baoying Freezing)," dated September 29, 2000). The record of this
review demonstrates that Huaiyin(30) provided supplier and factors of
production information which were incomplete, inaccurate, and
unverifiable. Moreover, the extent of the errors and omissions in these
responses was of such scope and magnitude that they were clearly more than
simple mistakes.

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 draw
an inference that is adverse to the interests of that party in selecting
from among the facts otherwise available. In the business proprietary
version of "Determination of Partial Facts Available for Huaiyin Foreign
Trade Corporation (30) in the Administrative Review of Freshwater Crawfish
Tail Meat from the People's Republic of China," dated September 29, 2000,
the Department analyzed how Huaiyin(30) failed to cooperate to the best of
its ability.

   Moreover, in Nippon, the CIT stated:

   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. See 118 F.Supp. 2d at 1379.

In the instant review, the Department requested that Huaiyin(30) provide
complete supplier information (e.g., company name and quantity supplied,
etc.) for each company that supplied the respondent with subject
merchandise. Such basic information is fundamental to the antidumping duty
margin calculation process and is readily available only to respondents.
Considering that Huaiyin(30)'s main business is selling crawfish tail meat
and the limited number of suppliers from which it purchased crawfish tail
meat, providing the names and quantity purchased from all its suppliers
should have been accomplished with relative ease. Huaiyin(30)'s failure to
use minimal due diligence in complying with the Department's request for
information is evidence of insufficient attention to statutory duties and
an unwillingness to abide by compliance standards. As such, it clearly
demonstrates Huaiyin(30)'s failure to cooperate to the best of its ability.

Huaiyin(30)'s failure to cooperate to the best of its ability is further
demonstrated by the inability of Huaiyin(30) and Baoying to demonstrate
how they calculated any of the factors of production reported for this
crawfish tail meat supplier. Huaiyin(30) management submitted a
certification to the accuracy of Baoying's factors response. Huaiyin(30)
management was present at Baoying during verification and had access to
Baoying's factor information. However, as the record demonstrates,
Huaiyin(30) and Baoying were unable to demonstrate how they calculated any
of the ten factors of production which they reported to the Department.
Significantly, each error in their response favored the respondents and
the net effect of these errors would have significantly reduced
Huaiyin(30)'s margin on the relevant sales. Again, Huaiyin(30)'s
inaccurate factors information is evidence of insufficient attention to
statutory duties and an unwillingness to abide by compliance standards.
(See Nippon 118 F. Supp. 2d at 1379.) Thus, the application of partial FA
to Huaiyin(30)'s second channel sales is appropriate in this case.

Huaiyin(30)'s argument that its and its suppliers' small size and limited
resources somehow entitles them to provide inaccurate and unverifiable
information in response to the Department's requests for information is
without merit. It is axiomatic that respondents in antidumping
administrative reviews have a responsibility to ensure that they respond
to the Department's requests for information in a timely manner with
accurate information. The accuracy of information provided to the
Department is integral to the administrative review process. At
verification of Huaiyin(30) and Baoying, we found that major portions of
the relevant responses were inaccurate and unverifiable. (See the
proprietary versions of "Antidumping Duty Administrative Review of
Freshwater Crawfish Tail Meat from the People's Republic of China (PRC) (A-
570-848): Sales Verification Report for Huaiyin Foreign Trade Corporation
(30) (Huaiyin(30))" dated September 29, 2000 and "AD Review of Freshwater
Crawfish Tail Meat from the People's Republic of China (PRC) (A-570-848):
Factors Verification Report for Baoying Freezing Factory (Baoying)," dated
September 29, 2000.)

Furthermore, at no time during the questionnaire response period did
Huaiyin(30) or its suppliers inform the Department that they were unable
to accurately answer particular portions of the questionnaire due to their
limited resources. The Department granted Huaiyin(30) additional time to
provide their supplier information after the questionnaire due date. In
addition, we allowed Huaiyin(30) to significantly revise its supplier
information prior to verification. Accordingly, there is no basis for
Huaiyin(30)'s arguments that the application of adverse FA is not
warranted.

b. Huaiyin(30) argues the Department should use information currently on
the record to calculate normal value for Huaiyin(30)'s second channel
sales.

Huaiyin(30) maintains the following. The antidumping law is not a penal
statute but a remedial statute. Since the purpose of the antidumping law
is remedial, it is the Department's duty to determine dumping margins as
accurately as possible. Since the Department has factors of production for
Huaiyin(30)'s suppliers presently on the record of this review, it should
use those factors to calculate the cost of Huaiyin(30)'s crawfish tail
meat. Citing F.Lli De Cecco Di Filippo Fara S. Martino v. United States,
216 F.3d 1027, 1032 (Fed. Cir. 2000) (De Cecco), Huaiyin(30) asserts that
the use of adverse FA for Huaiyin(30) is punitive and that the rate has no
basis in reality. Huaiyin(30) contends that the Department has verified
data for most of Baoying's factors of production on the record of this
review and that, therefore, the Department's use of adverse FA for
Baoying's factors and Huaiyin(30)'s sales was punitive. 

Department's Position: We disagree with Huaiyin(30). In the Preliminary
Results, we calculated Huaiyin(30)'s rate by weight averaging the margin
for Huaiyin(30)'s direct sales with an adverse FA rate for Huaiyin(30)'s
second channel sales. 

This methodology is consistent with the Department's practice in other
cases where the Department has determined that one or more of an NME
exporter's suppliers is uncooperative. The Department resorts to adverse
FA for the margin on sales of the uncooperative supplier's merchandise by
the exporter and "blends" this adverse FA margin with the calculated
margin on the sales sourced from the cooperative suppliers. (See e.g.,
Ferro Vanadium and Nitrided Vanadium From the Russian Federation: Notice
of Final Results of Antidumping Duty Administrative Review, 62 FR 65657
(December 15, 1997).)

For a discussion of Baoying's factors of production and Huaiyin(30)'s
failure to report any factors of production for the processor which also
supplied crawfish tail meat for Huaiyin(30)'s second channel U.S. exports,
see the business proprietary version of memorandum from Thomas Gilgunn to
Barbara E. Tillman "Determination of Partial Adverse Facts Available for
Huaiyin Foreign Trade Corporation (30) (Huaiyin30) in the Administrative
Review of Freshwater Crawfish Tail Meat from the People's Republic of
China," dated April 9, 2001. Under these circumstances, it is
inappropriate to allow Baoying, the other processor, or Huaiyin(30) to
benefit for not cooperating in a proceeding. 

While the respondents cite to De Cecco in support of their argument that
the adverse FA available rate applied to Huaiyin(30) in this review is
punitive, De Cecco is inapposite to the facts in the instant case. In De
Cecco, the Court of Appeals for the Federal Circuit (CAFC) held that the
Department's application of a discredited and uncorroborated petition rate
to an uncooperative respondent was "unjustifiably high" and "punitive."
See De Cecco, 216 F.3d at 1033. The instant case can be distinguished from
De Cecco in that the rate applied to Huaiyin(30) in the Preliminary
Results as adverse FA was not punitive and was based on a calculated
margin for Huaiyin(30)'s direct sales. In these final results, we
determined to apply the 201.63 percent rate from the LTFV investigation so
that Huaiyin(30) could not expect to benefit by its failure to cooperate
with the Department's requests for information. Moreover, the rate has
been corroborated; see 1997-1998 Crawfish Tail Meat Final, and this rate
has not been judicially invalidated. Therefore, as discussed in our
adverse FA memo, we continue to find that the use of adverse FA is
appropriate for Huaiyin(30)'s second channel sales and will apply the
201.63 percent rate to those sales.

c. Huaiyin(30) argues that if the Department applies partial adverse FA,
it should use the 201.63 percent rate from the LTFV.

Huaiyin(30) contends that the facts on the record do not justify the
application of a 240.63 percent rate to all of Huaiyin(30)'s second
channel sales. Huaiyin(30) states that, in F.Lli De Cecco Di Filippo Fara
S. Martino v. United States, 216 F.3d 1027, 1032 (Fed. Cir. 2000), the
CAFC instructed the Department that the requirement for corroboration of
an adverse FA rate indicates that the adverse FA rate is intended 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.

However, Huaiyin(30) argues that if the Department determines that it
should apply an adverse FA rate to certain sales by Huaiyin(30), then the
Department should not use the 240.34 percent rate preliminarily calculated
for Huaiyin(30)'s direct sales in this review. Huaiyin(30) contends that
the Department should use a rate no higher than 201.63 percent rate from
the investigation.

Huaiyin(30) asserts that 240.34 percent rate is based on using a very
high and erroneous value for imported crawfish from Portugal into Spain.
Huaiyin(30) asserts that rate has no basis in reality because it was based
on a mistake in Spanish Customs data for whole crawfish imports. 

Department's Position: For both the preliminary and final results, we
have applied the highest of any rate in any segment of this proceeding to
Huaiyn30's second channel sales. For the Preliminary Results this rate was
based on the margin calculated for Huaiyin(30)'s direct sales in the POR.
However, the surrogate value for the live crawfish input used in the
normal value calculation has changed for these final results. (See Comment
1 above.) As such, the normal value for Huaiyin(30)'s direct U.S. sales
has decreased. As a result, the highest rate found in any segment of the
proceeding is the 201.63 percent rate from the LTFV investigation.
Therefore, the Department used this rate as the basis for adverse FA for
Huaiyin(30)'s second channel sales.

d. Huaiyin(30) argues the Department should not apply adverse FA to the
labor factors for Huaiyin Freezing and the other processors which supplied
crawfish tail meat for Huaiyin(30)'s direct sales.

In the Preliminary Results, the Department used partial adverse facts
available for the labor factors of crawfish tail meat processors which
supplied subject merchandise for Huaiyin(30)'s direct sales based on the
highest labor factors reported in this administrative review. Huaiyin(30)
asserts that there is no evidence on the record that these other
processors reported incorrect labor factors and that the Department should
not make an adverse inference and use partial facts available for their
labor factors.

Huaiyin(30) maintains that, prior to the implementation of the URAA, in
the Final Determination of Sales at Less Than Fair Value: Sulfanilic Acid
from the People's Republic of China, 57 FR 29705 (July 6, 1992)
(Sulfanilic Acid LTFV), the Department discovered problems at
verification. Huaiyin(30) asserts that in that investigation, the
Department chose to verify two out of four producers. Petitioner in that
case argued that the Department should apply the best 

information available calls for two of the verified factories to the
other two factories that were not verified. The Department refused,
stating:

   At verification, we found that each factory is unique in its 
   factors of production. We found no major discrepancies in the 
   factors verified that would warrant disregarding the response 
   for any of the four factories. However, we have adjusted our 
   calculation to account for any unique factors that may be 
   applicable to each of the factories. 57 Fed. Reg. 29705, 29708
   -29709 (July 6, 1992).

Huaiyin(30) asserts that, since the Sulfanilic Acid LTFV, the statute has
changed: now, before the Department can take an adverse inference, it must
provide a reasoned analysis based on substantial evidence on the record
why it has determined that respondents did not act to the best of their
ability.

Department's Position: We disagree with Huaiyin(30) that partial adverse
FA is not warranted for Huaiyin(30)'s sales. It is undisputed that
Huaiyin(30) and Huaiyin Freezing, a supplier for Huaiyin(30)'s direct
sales, submitted labor factors of production information which were not
verifiable. (See "AD Review of Freshwater Crawfish Tail Meat from the
People's Republic of China (PRC) (A-570-848): Factors Verification Report
for Huaiyin County Freezing Factory (Huaiyin Freezing)," dated September
29, 2000.) As such, pursuant to section 776 (a)(2)(d) of the Act, the use
of facts available is warranted.

We disagree with Huaiyin(30)'s argument that there is no evidence on the
record that these other processors reported incorrect labor factors and
that the Department should not make an adverse inference and use partial
FA for the labor factors for other processors of Huaiyin(30)'s direct
sales. In contrast to the producers in the Sulfanilic Acid LTFV,
Huaiyin(30)'s suppliers do not have unique factors of production. Rather,
each of Huaiyin(30)'s suppliers reported the same ten factors of
production. Bearing in mind that Baoying's reported labor factors were
also unverifiable, it is reasonable for the Department to assume that the
labor factors for Huaiyin(30)'s other processors contained similar
problems with accuracy. Moreover, since Huaiyin(30) submitted factors of
production data for its suppliers to the Department, it is reasonable to
assume that Huaiyin(30) exercised the same level of care in ensuring the
accuracy of its other suppliers' factor information as it did with the two
processors we selected for verification. For further details, see the
proprietary version of memo to the file "Determination of Partial Adverse
Facts Available for Huaiyin Foreign Trade Corporation(30) (Huaiyin30) in
the Administrative Review of Freshwater Crawfish Tail Meat from the
People's Republic of China," dated April 9, 2001.

Despite other problems with Huaiyin Freezing's response, and even though
we found that Huaiyin(30) did not act to the best of its ability with
respect to certain information, the Department used Huaiyin(30)'s
information, where possible, to calculate a margin for Huaiyin(30)'s
direct sales. We used only partial adverse FA for Huaiyin30's direct
sales, where necessary. Thus, the Department was reasonable in its
application of adverse FA to Huaiyin(30). 

Recommendation: 

Based on our analysis of the comments received, we recommend adopting all
of the above positions and adjusting all related margin calculations
accordingly. If these recommendations are accepted, we will publish the
final results of review and the final weighted-average dumping margins for
all reviewed firms in the Federal Register.





________________ _________________
Agree            Disagree



Bernard T. Carreau, fulfilling the duties of 
Assistant Secretary for Import Administration


Date