[Federal Register: September 10, 2007 (Volume 72, Number 174)]
[Notices]
[Page 51588-51595]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr10se07-15]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-886
Polyethylene Retail Carrier Bags from the People's Republic of
China: Preliminary Results of Antidumping Duty Administrative Review
and Partial Rescission of Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: In response to a request from the Polyethylene Retail Carrier
Bag Committee,\1\ which represents domestic producers of polyethylene
retail carrier bags, and individual requests from certain
manufacturers/exporters of subject merchandise located in the People's
Republic of China (``PRC''), the Department of Commerce (``the
Department'') is conducting an administrative review of the antidumping
duty order on polyethylene retail carrier bags (``PRCBs'') from the
PRC. The
[[Page 51589]]
Department has reviewed shipments of subject merchandise made by
Dongguan Nozawa Plastics Products Co., Ltd. and United Power Packaging,
Ltd. (collectively, ``Nozawa''), and Rally Plastics Co., Ltd.
(``Rally''), during the period August 1, 2005, through July 31, 2006.
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\1\ Consisting of Hilex Poly Company, LLC and the Superbag
Corporation (collectively, ``the petitioners'').
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We preliminarily find that Nozawa and Rally made U.S. sales below
normal value (``NV'') during the period of review (``POR''). The
preliminary results are listed below in the section entitled
``Preliminary Results of Review.'' If these preliminary results are
adopted in our final results, we will instruct U.S. Customs and Border
Protection (``CBP'') to assess the ad valorem margins against the
entered value of each entry of the subject merchandise during the POR.
EFFECTIVE DATE: September 10, 2007.
FOR FURTHER INFORMATION CONTACT: Maisha Cryor, Zev Primor or Karine
Gziryan, AD/CVD Operations, Office 4, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230; telephone:
(202) 482-5831, (202) 482-4114, and (202) 482-4081, respectively.
SUPPLEMENTARY INFORMATION:
Background
On August 9, 2004, the Department published the antidumping duty
order on PRCBs from the PRC. See Antidumping Duty Order: Polyethylene
Retail Carrier Bags From the People's Republic of China, 69 FR 48201
(August 9, 2004). On August 1, 2006, the Department notified interested
parties of the opportunity to request an administrative review of this
antidumping duty order. See Antidumping or Countervailing Duty Order,
Finding, or Suspended Investigation; Opportunity to Request an
Administrative Review; 71 FR 43441 (August 1, 2006). In accordance with
19 CFR 351.213(b), from August 11, 2006, through August 29, 2006, the
Department received letters from the following companies in which each
company requested that the Department conduct an administrative review
of its sales to the United States made during the POR: Chun Hing
Plastic Packaging Mfy. Ltd. and Chun Yip Plastic Bag Factory
(collectively, ``Chun Hing''); Crown Polyethylene Products (Int'l) Ltd.
(``Crown''); Heng Rong Plastic Products Co., Ltd. (``Heng Rong'');
Nozawa; Rally; and Samson Plastic Manufactory Co., Ltd. (``Samson'').
On August 31, 2006, in accordance with 19 CFR 351.213(b), the
petitioners requested that the Department conduct an administrative
review of Rally's sales of subject merchandise to the United States
made during the POR. On September 29, 2006, the Department initiated an
antidumping duty administrative review covering Chun Hing, Crown, Heng
Rong, Nozawa, Rally, and Samson. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 71 FR 57465 (September 29,
2006) (``Initiation Notice'').
The petitioners, on October 30, 2006, requested that the Department
determine whether antidumping duties have been absorbed by the
companies subject to the review. On November 20, 2006, Heng Rong
notified the Department that it was withdrawing its request for
administrative review. On November 20, 2006, the Department issued a
quantity and value (``Q&V'') questionnaire, and a separate rate
application/certification, to all of the manufacturers/exporters noted
above. Crown withdrew its request for review on November 28, 2006. The
Department received responses to the Q&V questionnaire from Chun Hing,
Samson, and Rally on December 4, 2007, and from Nozawa on December 8,
2007. Based upon these responses, the Department selected Nozawa and
Rally as mandatory respondents in this administrative review on
December 19, 2006. On that same day, the Department issued the standard
non-market economy (``NME'') antidumping duty questionnaire to Nozawa
and Rally. On January 19, 2007, the Department received separate rate
applications from Chun Hing and Samson. The Department issued a
supplemental questionnaire to Chun Hing and Samson concerning their
separate rate applications on February 15, 2007. Between January and
July 2007, Nozawa and Rally submitted responses to the Department's
original and supplemental questionnaires covering sections A, C, D, and
E of the standard NME antidumping duty questionnaire.\2\ The
petitioners submitted comments on Rally's methodology for allocating
its consumption of inputs on August 13, 2007, and Rally submitted
rebuttal comments on August 20, 2007.
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\2\ Section A of the NME questionnaire requests general
information concerning a company's corporate structure and business
practices, the merchandise under investigation that it sells, and
the manner in which it sells that merchandise in all of its markets.
Section C requests a complete listing of U.S. sales. Section D
requests information on the factors of production of the merchandise
sold in or to the United States. Section E requests information on
further manufacturing.
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Period of Review
The POR for this administrative review is August 1, 2005, through
July 31, 2006.
Scope of the Order
The merchandise subject to this antidumping duty order is PRCBs,
which may be referred to as t-shirt sacks, merchandise bags, grocery
bags, or checkout bags. The subject merchandise is defined as non-
sealable sacks and bags with handles (including drawstrings), without
zippers or integral extruded closures, with or without gussets, with or
without printing, of polyethylene film having a thickness no greater
than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm),
and with no length or width shorter than 6 inches (15.24 cm) or longer
than 40 inches (101.6 cm). The depth of the bag may be shorter than 6
inches but not longer than 40 inches (101.6 cm).
PRCBs are typically provided without any consumer packaging and
free of charge by retail establishments, e.g., grocery, drug,
convenience, department, specialty retail, discount stores, and
restaurants, to their customers to package and carry their purchased
products. The scope of the investigation excludes (1) polyethylene bags
that are not printed with logos or store names and that are closeable
with drawstrings made of polyethylene film and (2) polyethylene bags
that are packed in consumer packaging with printing that refers to
specific end-uses other than packaging and carrying merchandise from
retail establishments, e.g., garbage bags, lawn bags, trash-can liners.
Imports of the subject merchandise are currently classifiable under
statistical category 3923.21.0085 of the Harmonized Tariff Schedule of
the United States (``HTSUS'').\3\ This subheading may also cover
products that are outside the scope of this investigation. Furthermore,
although the HTSUS subheading is provided for convenience and customs
purposes, our written description of the scope of this order is
dispositive.
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\3\ Until July 1, 2005, these products were classifiable under
HTSUS 3923.21.0090 (Sacks and bags of polymers of ethylene, other).
See Harmonized Tariff Schedule of the United States (2005)--
Supplement 1 Annotated for Statistical Reporting Purposes Change
Record--17th Edition--Supplement 1, available at http://hotdocs.usitc.gov/docs/tata/hts/bychapter/0510/0510chgs.pdf
.
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Partial Rescission of Review
In accordance with 19 CFR 351.213(d)(1), we are rescinding this
administrative review with respect to Heng Rong and Crown. As noted
above, on November 20 and 28, 2006, Heng
[[Page 51590]]
Rong and Crown, respectively, withdrew their requests for an
administrative review. Since these requests to withdraw from the review
were filed within 90 days of the Initiation Notice, and no other party
requested an administrative review of U.S. sales made by either
company, the Department is rescinding the review with respect to Heng
Rong and Crown.
Partial Preliminary Rescission of Review
Samson reported that it had three sales during the POR. However,
according to the entry summary information provided by Samson, all of
these sales entered the United States after the POR. See Samson's
January 19, 2007, separate rate application response at page 4 and
Exhibit 1. The Department confirmed with Samson that it had no sales of
subject merchandise that entered the United States during the POR. See
Memorandum from Mark Manning, Program Manager, to the File, ``Entries
Of Subject Merchandise Made by Samson,'' dated August 30, 2007.
The Department's practice, supported by substantial precedent,
requires that there be entries during the POR upon which to assess
antidumping duties, to conduct an administrative review. See, e.g.,
Certain Cut-To-Length Carbon-Quality Steel Plate Products From Italy:
Preliminary Results and Partial Rescission of Antidumping Duty
Administrative Review, 71 FR 11178 (March 6, 2006) and Certain Cut-to-
Length Carbon-Quality Steel Plate Products From Italy: Final Results
and Partial Rescission of Antidumping Duty Administrative Review, 71 FR
39299 (July 12, 2006) (unchanged in final results). Pursuant to 19 CFR
351.213(d)(3), the Department will rescind an administrative review in
whole or only with respect to a particular exporter or producer if we
conclude that during the period of review there were ``no entries,
exports, or sales of the subject merchandise.'' Since Samson confirmed
that it did not enter subject merchandise into the United States during
the POR, there are no entries to assess. Therefore, in accordance with
19 CFR 351.213(d)(3), we are preliminarily rescinding the
administrative review with respect to Samson.
Duty Absorption
On October 30, 2006, the petitioners requested that the Department
determine whether antidumping duties had been absorbed for U.S. sales
of PRCBs made during the POR by Chun Hing, Crown, Nozawa, Heng Rong,
Rally, and Samson. Section 751(a)(4) of the Tariff Act of 1930, as
amended (``the Act''), provides for the Department, if requested, to
determine during an administrative review initiated two or four years
after publication of the order, whether antidumping duties have been
absorbed by a foreign producer or exporter, if the subject merchandise
is sold in the United States through an affiliated importer. As noted
above, we have rescinded the review for Crown and Heng Rong, and
preliminarily rescinded for Samson, thus making the petitioner's
request with respect to these companies moot. In addition, Rally and
Chun Hing did not sell subject merchandise in the United States through
an affiliated importer. Thus, according to section 751(a)(4) of the
Act, we did not investigate whether Rally and Chun Hing absorbed
duties. In this case, only Nozawa sold subject merchandise in the
United States through an affiliated importer. Because the antidumping
duty order underlying this review was issued in 2004, and this review
was initiated in 2006, we are conducting a duty absorption
investigation in this segment of the proceeding.
In determining whether the antidumping duties have been absorbed by
the respondent, we presume the duties will be absorbed for those sales
that have been made at less than NV. This presumption can be rebutted
with evidence (e.g., an agreement between the affiliated importer and
unaffiliated purchaser) that the unaffiliated purchaser will pay the
full duty ultimately assessed on the subject merchandise. See, e.g.,
Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan:
Preliminary Results of Antidumping Duty Administrative Review and
Notice of Intent to Rescind in Part, 70 FR 39735, 39737 (July 11,
2005), Notice of Final Results and Final Rescission in Part of
Antidumping Duty Administrative Review: Certain Stainless Steel Butt-
Weld Pipe Fittings From Taiwan, 70 FR 73727 (December 13, 2005)
(unchanged in final results). Prior to these preliminary results, the
Department asked Nozawa to provide evidence to demonstrate that its
unaffiliated U.S. purchasers will pay any antidumping duties ultimately
assessed on entries of subject merchandise. Nozawa did not respond to
the Department's request. See Memorandum from Mark Manning, Program
Manager, Ad/CVD Operations, Office 4, to the File, regarding ``Nozawa's
Response to Request for Duty Absorption Information,'' dated August 16,
2007. Accordingly, based on the information on the record, we cannot
conclude that the unaffiliated purchasers in the United States will pay
the ultimately assessed duties. Because Nozawa did not rebut the duty-
absorption presumption with evidence that its unaffiliated U.S.
purchasers will pay the full duty ultimately assessed on the subject
merchandise, we preliminarily find that antidumping duties have been
absorbed by Nozawa on all U.S. sales made through its affiliated
importers.
NME Country Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. In accordance with section
771(18)(C)(i) of the Act, any determination that a foreign country is
an NME country shall remain in effect until revoked by the
administering authority. See Brake Rotors From the People's Republic of
China: Final Results and Partial Rescission of the 2004/2005
Administrative Review and Notice of Rescission of 2004/2005 New Shipper
Review, 71 FR 66304 (November 14, 2006). None of the parties to this
proceeding have contested such treatment. Accordingly, we calculated NV
in accordance with section 773(c) of the Act, which applies to NME
countries.
Separate Rates
A designation of a country as an NME remains in effect until it is
revoked by the Department. See section 771(18)(C) of the Act.
Accordingly, there is a rebuttable presumption that all companies
within the PRC are subject to government control and, thus, should be
assessed a single antidumping duty rate. It is the Department's
standard policy to assign all exporters of the merchandise subject to
review in NME countries a single rate unless an exporter can
affirmatively demonstrate an absence of government control, both in law
(de jure) and in fact (de facto), with respect to exports. To establish
whether a company is sufficiently independent to be entitled to a
separate, company-specific rate, the Department analyzes each exporting
entity in an NME country under the test established in the Final
Determination of Sales at Less than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified by
the Notice of Final Determination of Sales at Less Than Fair Value:
Silicon Carbide from the People's Republic of China, 59 FR 22585 (May
2, 1994).
The Department's separate-rate test determines whether the
exporters are independent from government control and does not
consider, in general,
[[Page 51591]]
macroeconomic/border-type controls, e.g., export licenses, quotas, and
minimum export prices, particularly if these controls are imposed to
prevent dumping. The test focuses, rather, on controls over the
investment, pricing, and output decision-making process at the
individual firm level. See, e.g., Notice of Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
From Ukraine, 62 FR 61754, 61757 (November 19, 1997); and Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From the
People's Republic of China; Final Results of Antidumping Administrative
Review, 62 FR 61276, 61279 (November 17, 1997).
Chun Hing, Nozawa, and Rally provided company-specific separate-
rate information and stated that the standards for the assignment of
separate rates have been met because they are privately-owned trading
companies incorporated and based in Hong Kong. See Chun Hing's January
19, 2007, separate-rate application response at 17; Nozawa's March 16,
2007, response at A2; Rally's March 12, 2007, response at A2-A3.
Because each of these companies is foreign owned, it is not necessary
to undertake additional separate-rates analysis for the Department to
determine that the export activities of Chun Hing, Nozawa, and Rally
are independent from the PRC government's control. Accordingly, Chun
Hing, Nozawa, and Rally are eligible for a separate rate. See, e.g.,
Brake Rotors From the People's Republic of China: Preliminary Results
of the Tenth New Shipper Review, 69 FR 30875, 30876 (June 1, 2004),
Brake Rotors From the People's Republic of China: Final Results of the
Tenth New Shipper Review, 69 FR 52228 (August 25, 2004) (unchanged in
the final results) (``Brake Rotors 10\th\ NSR''); Notice of Final
Determination of Sales at Less Than Fair Value: Creatine Monohydrate
From the People's Republic of China, 64 FR 71104 (December 20, 1999);
and Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People's Republic of China, 61 FR 19026, 19027 (April
30, 1996). The Department calculated company-specific dumping margins
for Nozawa and Rally, and assigned Chun Hing a dumping margin equal to
the weighted-average of the dumping margins calculated for Nozawa and
Rally.
Surrogate Country and Factors
On March 6, 2007, we issued to interested parties a list of
possible surrogate market economy countries and invited parties to (1)
comment on the suitability of the countries for use in this
administrative review and the level of PRCBs production in those
countries, and (2) submit publicly available information from those
countries to use in valuing the factors of production (``FOPs'') used
by the respondents to produce PRCBs. On April 3, 2007, the petitioners
submitted information for the Department to consider in valuing the
FOPs. Also on April 3, 2007, and June 18, 2007, Rally submitted
information for the Department to consider in valuing the FOPs. All
surrogate value data submitted by interested parties were from Indian
sources. On May 31, 2007, the Department selected India as the
surrogate market economy country for this administrative review.
Surrogate Country
When the Department analyzes imports from an NME country, section
773(c)(1) of the Act directs it to base NV, in most circumstances, on
the NME producer's FOPs, valued in a surrogate market economy country
or countries considered to be appropriate by the Department. In
accordance with section 773(c)(4) of the Act, in valuing the FOPs, the
Department shall utilize, to the extent possible, the prices or costs
of FOPs in one or more market economy countries that are: (1) at a
level of economic development comparable to that of the NME country;
and (2) significant producers of comparable merchandise. On December
21, 2006, the Office of Policy issued a memorandum identifying India as
being at a level of economic development comparable to the PRC for the
POR. See Memorandum from Ron Lorentzen, Director, Office of Policy to
Mark Manning, Program Manager, AD/CVD Operations, Office 4,
``Administrative Review of Polyethylene Retail Carrier Bags from the
People's Republic of China: Request for a List of Surrogate
Countries,'' dated December 21, 2006.
In the Department's March 6, 2007, letter to interested parties
requesting surrogate country and surrogate value comments, the
Department noted that India is among the countries comparable to the
PRC in terms of overall economic development. In addition, based on
publicly available information placed on the record (i.e., export
data), India is a significant producer of the subject merchandise. See
Memorandum from Zev Primor, Senior International Trade Compliance
Analyst, through Mark Manning, Program Manager, to Abdelali Elouaradia,
Office Director, ``Antidumping Administrative Review of Polyethylene
Retail Carrier Bags from the People's Republic of China: Selection of a
Surrogate Country,'' dated May 31, 2007. Furthermore, we note that
India has been the primary surrogate country in past segments of this
case, and both Rally and the petitioners submitted surrogate values
based on Indian data that are contemporaneous to the POR, which gives
further credence to the use of India as a surrogate country. The
sources of the surrogate factor values are discussed under the ``Normal
Value'' section below and in the Memorandum from Zev Primor, Senior
International Trade Compliance Analyst, through Mark Manning, Program
Manager, to the File, ``Surrogate Values for the Preliminary Results,''
dated August 31, 2007 (``Surrogate Values Memorandum'').
Normal Value Comparisons
To determine whether Nozawa's and Rally's sales of the subject
merchandise to the United States were made at a price below NV, we
compared their U.S. price to NV, as described in the ``U.S. Price'' and
``Normal Value'' sections of this notice.
U.S. Price
A. Export Price
In accordance with section 772(a) of the Act, we calculated the
export price (``EP'') for sales to the United States by Rally and
certain sales by Nozawa because the first sale to an unaffiliated party
was made before the date of importation and the use of constructed EP
(``CEP'') was not otherwise warranted. We calculated EP for Nozawa and
Rally based on the prices to unaffiliated purchasers in the United
States. For Nozawa, in accordance with section 772(c) of the Act, we
first added gross unit price adjustments and then deducted from the
price to unaffiliated purchasers, where appropriate, foreign inland
freight, brokerage and handling, international freight, and marine
insurance. See Memorandum from Zev Primor, Senior International Trade
Compliance Analyst, to the File, ``Analysis for the Preliminary Results
of the 2005-2006 Administrative Review of Polyethylene Retail Carrier
Bags from the People's Republic of China: Dongguan Nozawa Plastic
Products Co., Ltd., and United Power Packaging Ltd.,'' dated August 31,
2007 (``Nozawa Preliminary Analysis Memorandum''). For Rally, also in
accordance with section 772(c) of the Act, we first added gross unit
price adjustments and then deducted from the price to unaffiliated
purchasers, where appropriate, foreign inland freight, brokerage and
handling, international freight, and marine
[[Page 51592]]
insurance. See Memorandum from Maisha Cryor, Senior International Trade
Compliance Analyst, to the File, regarding ``Analysis Memorandum for
the Preliminary Results of Rally Plastics Co., Ltd.,'' dated August 31,
2007 (``Rally Preliminary Analysis Memorandum'').
B. Constructed Export Price
In accordance with section 772(b) of the Act, CEP is the price at
which the subject merchandise is first sold (or agreed to be sold) in
the United States before or after the date of importation by or for the
account of the producer or exporter of such merchandise or by a seller
affiliated with the producer or exporter, to a purchaser not affiliated
with the producer or exporter, as adjusted under sections 772(c) and
(d) of the Act. In accordance with section 772(b) of the Act, we used
CEP for certain of Nozawa's sales because Nozawa sold its subject
merchandise to its affiliated companies in the United States Kal Pac
Corporation (``Kal Pac'') and Packaging Solutions, Inc. (``PSI''),
which, in turn, made the first sales of subject merchandise to
unaffiliated U.S. customers. In addition, Nozawa reported that PSI made
sales of subject merchandise which it further manufactured in the
United States.
We added twelve types of miscellaneous revenue to the gross unit
price. See Nozawa Preliminary Analysis Memorandum at 2. In accordance
with section 772(c)(2) of the Act, we made deductions from Nozawa's
starting price for early payment discounts, rebates, foreign inland
freight from the plant to the port of exportation, international
freight, marine insurance, brokerage and handling, U.S. devanning
expense, U.S. duty, inland freight from the warehouse to the
unaffiliated U.S. customer, and commissions. Where foreign movement
expenses or international movement expenses were provided by NME
service providers or paid for in an NME currency, we valued these
services using surrogate values. See Surrogate Values Memorandum at
Attachment VII.. For those expenses that were provided by a market
economy provider and paid for in market economy currency, we deducted
the actual expenses incurred. See Nozawa Preliminary Analysis
Memorandum at 2. In accordance with section 772(d)(1) of the Act, the
Department additionally deducted credit expenses, inventory carrying
costs, and U.S. indirect selling expenses from the U.S. price, all of
which relate to commercial activity in the United States. We calculated
Nozawa's credit expenses and inventory carrying costs based on the
Federal Reserve short-term rate because Nozawa reported that neither
Kal Pac nor PSI had short-term borrowings during the POR.
We also deducted an amount for further-manufacturing costs, where
applicable, in accordance with section 772(d)(2) of the Act. To
calculate the cost of further manufacturing in the United States, we
relied on PSI's reported cost of materials, labor, overhead, general
and administrative expenses, and financial expenses of the further
manufactured materials. In addition, we deducted CEP profit in
accordance with sections 772(d)(3) and 772(f) of the Act.
C. Surrogate Values for Expenses Incurred in the PRC for U.S. Sales
Nozawa and Rally reported that for certain U.S. sales, foreign
inland freight was provided by an NME vendor or paid for using an NME
currency. In such instances, we based the deduction of these charges on
surrogate values. We valued foreign inland freight with the surrogate
value for truck freight. For foreign brokerage and handling as well as
international freight, Nozawa and Rally reported using market economy
vendors and stated that these expenses were paid for in a market
economy currency. Where movement services were provided by a market
economy vendor and paid for in a market economy currency, we deducted
the actual cost per kilogram of the freight. See Surrogate Values
Memorandum at Attachment IX.
Normal Value
1. Methodology
Section 773(c)(1)(B) of the Act provides that the Department shall
determine the NV using an FOP methodology if the merchandise is
exported from an NME and the information does not permit the
calculation of NV using home-market prices, third-country prices, or
constructed value under section 773(a) of the Act. The Department bases
NV on the FOPs because the presence of government controls on various
aspects of NMEs renders price comparisons and the calculation of
production costs invalid under the Department's normal methodologies.
The FOPs for PRCBs include: (1) quantities of raw materials
employed; (2) hours of labor required; (3) amounts of energy and other
utilities consumed; (4) representative capital and selling costs; and
(5) packing materials. We used the FOPs reported by respondents for
materials, energy, labor, by-products, and packing.
In accordance with 19 CFR 351.408(c)(1), when a producer sources an
input from a market-economy country and pays for it in a market-economy
currency, the Department will normally value the factor using the
actual price paid for the input. See 19 CFR 351.408(c)(1); see also
Lasko Metal Products v. United States, 43 F.3d 1442, 1445-1446 (Fed.
Cir. 1994) (affirming the Department's use of market-based prices to
value certain FOPs). Where a portion of the input is purchased from a
market-economy supplier and the remainder from an NME supplier, the
Department will normally use the price paid for the inputs sourced from
market-economy suppliers to value all of the input, provided the volume
of the market-economy inputs as a share of total purchases from all
sources is ``meaningful.'' See Antidumping Duties; Countervailing
Duties; Final rule, 62 FR 27296, 27366 (May 19, 1997); Shakeproof v.
United States, 268 F.3d 1376, 1382 (Fed. Cir. 2001). See also 19 CFR
351.408(c)(1).
2. Factor Methodology
During the POR, Nozawa did not produce certain types of merchandise
that were sold during the POR. Consequently, the original FOP database
filed by Nozawa did not contain factors of production for those control
numbers (``CONNUMs'') sold but not produced by Nozawa during this POR.
Because the vast majority of the CONNUMs sold by Nozawa were produced
during this POR or the prior POR, Nozawa also submitted on the record
of this review the FOP database from the prior review (i.e., the first
administrative review). In addition, Nozawa submitted an FOP database
incorporating the FOPs for all CONNUMs sold during the POR, using both
production data from this and the prior POR. Therefore, for purposes of
factor valuation, the Department is using the FOP database
incorporating all CONNUMs sold during the POR. We note that certain FOP
data were based on similar CONNUMs where the product was not produced
in either this or the prior POR. The Department reviewed Nozawa's
identification of the most similar matches for the CONNUMs sold but not
produced during the first or second POR. In doing so, we determined the
product characteristics which have the most significant impact on the
cost of materials and then compared all product characteristics of the
actual CONNUMS to the product characteristics of the proposed matching
CONNUMs. We found that Nozawa's proposed matches were identical in the
most significant product characteristics and had some insignificant
differences
[[Page 51593]]
in other characteristics. Therefore, we accepted Nozawa's assignment of
the most similar CONNUMs for those products sold but not produced
during the POR. See Nozawa Preliminary Analysis Memorandum, at 3.
With respect to Rally, we note that certain bag types produced by
Rally contain certain attachments (e.g., plastic handles, plastic
drawstring). Rally asserts that it reported its FOPs using an
allocation methodology that assigns the consumption of the materials
used to produce the attachments equally across all products. In a
supplemental questionnaire, the Department asked Rally to allocate its
consumption of materials used to produce these attachments to those
CONNUMs that actually incorporate these items. See the Department's May
27, 2007, section D supplemental questionnaire, at question 54.d. Rally
replied that its accounting system does not track costs at this level
and they could not report the FOPs in the manner requested by the
Department. However, Rally claims that its material FOPs are based on a
reasonable allocation methodology. See Rally's June 6, 2007,
supplemental section D response at 23.
The Department has analyzed Rally's reported sales and consumption
data and has made the following determinations. We find that, on an
aggregate basis, as would be expected, Rally's total quantity of inputs
consumed to produce all subject merchandise sold in the U.S. market
during the POR is greater than the total weight of all finished subject
merchandise sold in the U.S. market during the POR. See Rally
Preliminary Analysis Memorandum. However, on a CONNUM-specific level,
we find that the total quantity of inputs consumed is less than the
total finished weight for many CONNUMs, the vast majority of which have
attachments. Id. Thus, Rally's inability to allocate the materials
consumed for the attachments to the CONNUMs that actually have
attachments has distorted the reported FOPs. In order to correct this
distortion for the relevant CONNUMs, the Department increased the total
reported materials weight by the appropriate percentage so that the
revised input material weight is equal to the finished weight of the
CONNUM, plus Rally's average yield loss percentage. Id. The Department
will continue to examine this issue for the final results and will
allow Rally one last opportunity to provide alternative methods of
allocating its FOPs.
2. Factors of Production Valuation
In accordance with section 773(c) of the Act, we calculated NV
based on the FOPs reported by respondents for the POR. To calculate NV,
we multiplied the reported per-unit factor-consumption rates by
publicly available surrogate values. In selecting the surrogate values,
we considered the quality, specificity, and contemporaneity of the
data.
Except as noted below, we valued raw material inputs using the
weighted-average unit import values derived from the Monthly Statistics
of the Foreign Trade of India, as published by the Directorate General
of Commercial Intelligence and Statistics of the Ministry of Commerce
and Industry, Government of India in the World Trade Atlas, available
at http://www.gtis.com/wta.htm (``WTA''). For those surrogate values
based upon Indian import statistics, we disregarded prices which we
have reason to believe or suspect may be subsidized. We have reason to
believe or suspect that prices of inputs from Indonesia, South Korea,
and Thailand may have been subsidized. We have found in other
proceedings that these countries maintain broadly available, non-
industry-specific export subsidies and, therefore, it is reasonable to
infer that all exports to all markets from these countries may be
subsidized. See Notice of Final Determination of Sales at Less Than
Fair Value and Negative Final Determination of Critical Circumstances:
Certain Color Television Receivers From the People's Republic of China,
69 FR 20594 (April 16, 2004) and accompanying Issues and Decision
Memorandum at Comment 7; see also Certain Cut-to-Length Carbon Steel
Plate from Romania: Notice of Final Results and Final Partial
Rescission of Antidumping Duty Administrative Review, 70 FR 12651
(March 15, 2005) and accompanying Issues and Decision Memorandum at
Comment 4. The legislative history provides that in making its
determination as to whether input values may be subsidized, the
Department is not required to conduct a formal investigation; rather,
Congress directed the Department to base its decision on information
that is available to it at the time it makes its determination. See
H.R. Rep. 100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547,
1623-24. Therefore, based on the information currently available, we
have not used prices from these countries in calculating the surrogate
values based on Indian import data. We have also disregarded Indian
import data from countries that the Department has previously
determined to be NME countries, as well as imports originating from
``unspecified'' countries because the Department could not be certain
that they were not from either an NME or a country with generally
available export subsidies. See Notice of Preliminary Determination of
Sales at Less Than Fair Value and Postponement of Final Determination:
Chlorinated Isocyanurates From the People's Republic of China, 69 FR
75294, 75300 (December 16, 2004), Notice of Final Determination of
Sales at Less Than Fair Value: Chlorinated Isocyanurates From the
People's Republic of China, 70 FR 24502 (May 10, 2005) (unchanged in
the final results). For a comprehensive list of the sources and data
used to determine the surrogate vales for the FOPs, by-products, and
the surrogate financial ratios for factory overhead, selling, general
and administrative expenses (``SG&A''), and profit, see Surrogate
Values Memorandum at Attachments I and IX.
Where appropriate, we adjusted the Indian import prices by
including freight costs to make them delivered prices. Specifically, we
added to the Indian import prices a surrogate freight cost using the
shorter of the reported distance from the domestic supplier to the
factory of production or the distance from the nearest seaport to the
factory of production where appropriate. This adjustment is in
accordance with the Court of Appeals for the Federal Circuit's decision
in Sigma Corp. v. United States, 117 F.3d 1401, 1407-1408 (Fed. Cir.
1997). Where we did not use Indian import data as the basis of the
surrogate value, we calculated inland freight based on the reported
distance from the supplier to the factory. We used the freight rates
obtained from http://www.infreight.com to value truck freight. See Surrogate
Values Memorandum at Attachment VIII.
It is the Department's practice to calculate price index adjustors
to inflate or deflate, as appropriate, surrogate values that are not
contemporaneous with the POR using the wholesale price index for the
subject country. See Certain Preserved Mushrooms from the People's
Republic of China: Final Results of the Antidumping Duty New Shipper
Review, 71 FR 66910 (November 17, 2006). Therefore, where publicly
available information contemporaneous with the POR could not be
obtained, surrogate values were adjusted using the Wholesale Price
Index for India, as published in the International Financial Statistics
of the International Monetary Fund.
To value electricity, we used the 2000 electricity price data from
International
[[Page 51594]]
Energy Agency, Energy Prices and Taxes--Quarterly Statistics (First
Quarter 2003), adjusted for inflation. See Surrogate Values Memorandum
at Attachment V.
For direct labor, indirect labor, and packing labor, consistent
with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate
as reported on Import Administration's web site. See Expected Wages of
Selected NME Countries (revised November 2005) (available at http://ia.ita.doc.gov/wages
). The source of these wage rate data on the Import
Administration's website is the Yearbook of Labour Statistics 2003,
ILO, (Geneva: 2003), Chapter 5B: Wages in Manufacturing. The years of
the reported wage rates range from 2003 through 2004. Because this
regression-based wage rate does not separate the labor rates into
different skill levels or types of labor, we have applied the same wage
rate to all skill levels and types of labor reported by each
respondent. See Surrogate Value Memorandum at Attachment VI.
To value factory overhead, SG&A, and profit values, we used
information from Smitabh Intercon Limited; M/S Carry Print (India)
Private Limited; Kuloday Plastomers Private Limited; Sangeeta Poly Pack
Private Limited; and A.P. Polyplast Private Limited for the fiscal year
ending March 31, 2006. From this information, we were able to determine
factory overhead as a percentage of the total raw materials, labor and
energy (``ML&E'') costs; SG&A as a percentage of ML&E plus overhead
(i.e., cost of manufacture); and profit as a percentage of the cost of
manufacture plus SG&A. See Surrogate Values Memorandum at Attachment
VII.
For packing materials, we used the per-kilogram values obtained
from the WTA and made adjustments to account for freight costs incurred
between the PRC supplier and Rally's plant. See Surrogate Values
Memorandum at Attachment II.
Currency Conversion
We made currency conversions into U.S. dollars, in accordance with
section 773A(a) of the Act, based on the exchange rates in effect on
the dates of the U.S. sales, as certified by the Federal Reserve Bank.
Preliminary Results of the Review
The Department has determined that the following preliminary
dumping margins exist for the period August 1, 2005, through July 31,
2006:
Polyethylene Retail Carrier Bags from the PRC
------------------------------------------------------------------------
Weighted-
Manufacturer/Exporter Average Margin
(Percent)
------------------------------------------------------------------------
Chun Hing Plastic Packaging Mfy. Ltd. and Chun Yip 13.35
Plastic Bag Factory...................................
Dongguan Nozawa Plastics Products Co., Ltd. and United 2.54
Power Packaging, Ltd..................................
Rally Plastics Co., Ltd................................ 31.71
------------------------------------------------------------------------
Disclosure
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b).
Interested parties may submit case briefs and/or written comments no
later than 30 days after the date of publication of these preliminary
results of review. See 19 CFR 351.309(c)(1)(ii). Interested parties may
submit publicly available information to value factors no later than 20
days after the date of publication of these preliminary results of
review. See 19 CFR 351.301(c)(3)(ii). Rebuttal briefs and rebuttals to
written comments, limited to issues raised in such briefs or comments,
may be filed no later than five days after the time limit for filing
the case briefs. See 19 CFR 351.309(d). The Department requests that
parties submitting written comments also provide the Department with an
additional copy of those comments on diskette.
Any interested party may request a hearing within 30 days of
publication of these preliminary results. See 19 CFR 351.310(c).
Requests should contain the following information: (1) the party's
name, address, and telephone number; (2) the number of participants;
and (3) a list of the issues to be discussed. Oral presentations will
be limited to issues raised in the briefs. If we receive a request for
a hearing, we intend to hold the hearing seven days after the deadline
for submission of the rebuttal briefs at the U.S. Department of
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC
20230. The Department intends to issue the final results of this
administrative review, which will include the results of its analysis
of issues raised in any such comments, within 120 days of publication
of these preliminary results, pursuant to section 751(a)(3)(A) of the
Act.
Assessment Rates
Upon issuance of the final results, the Department will determine,
and U.S. Customs and Border Protection (``CBP'') shall assess,
antidumping duties on all appropriate entries. The Department intends
to issue assessment instructions to CBP 15 days after the date of
publication of the final results of review. If these preliminary
results are adopted in our final results of review, the Department
shall determine, and CBP shall assess, antidumping duties on all
appropriate entries. Pursuant to 19 CFR 351.212(b)(1), we will
calculate importer-specific (or customer-specific) ad valorem or, where
the entered value was not known by the respondent, per-unit duty
assessment rates based on the ratio of the total amount of the dumping
margins calculated for the examined sales to the total entered value,
or total quantity, of those same sales. We will instruct CBP to assess
antidumping duties on all appropriate entries covered by this review if
any importer-specific or customer-specific assessment rate calculated
in the final results of this review is above de minimis.
Cash Deposit Requirements
The following cash deposit requirements will be effective upon
publication of the final results of the administrative review for
shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of the
final results, as provided by section 751(a)(2)(C) of the Act: (1) for
subject merchandise exported by Chun Hing, Nozawa, and Rally, the cash-
deposit rate will be that established in the final results of review
(except, if the rate is zero or de minimis, no cash deposit will be
required); (2) for previously reviewed or investigated companies not
listed above that have separate rates, the cash-deposit rate will
continue to be the company-specific rate published for the most recent
period; (3) for all other PRC exporters of subject merchandise, which
have not been found to be entitled to a separate rate, the cash-deposit
rate will be PRC-wide rate of 77.57 percent; (4) for all non-PRC
exporters of subject merchandise, the cash-deposit rate will be the
rate applicable to the PRC exporter that supplied that exporter. These
deposit requirements, when imposed, shall remain in effect until
further notice.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR
[[Page 51595]]
351.402(f)(2) to file a certificate regarding the reimbursement of
antidumping duties prior to liquidation of the relevant entries during
this review period. Failure to comply with this requirement could
result in the Secretary's presumption that reimbursement of antidumping
duties occurred and the subsequent assessment of double antidumping
duties.
This administrative review and this notice are in accordance with
sections 751(a)(1) and 777(i) of the Act, 19 CFR 351.213, and 19 CFR
351.221(b)(4).
Dated: August 31, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E7-17751 Filed 9-7-07; 8:45 am]
BILLING CODE 3510-DS-S