[Federal Register: August 21, 2008 (Volume 73, Number 163)]
[Notices]
[Page 49408-49418]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21au08-29]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-929]
Small Diameter Graphite Electrodes From the People's Republic of
China: Preliminary Determination of Sales at Less Than Fair Value,
Postponement of Final Determination, and Affirmative Preliminary
Determination of Critical Circumstances, in Part
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
Effective Date: August 21, 2008.
SUMMARY: The Department of Commerce (``Department'') preliminarily
determines that small diameter graphite electrodes (``graphite
electrodes'') from the People's Republic of China (``PRC'') are being,
or are likely to be, sold in the United States at less than fair value
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as
amended (``Act''). The estimated dumping margins are shown in the
``Preliminary Determination'' section of this notice.
FOR FURTHER INFORMATION CONTACT: Magd Zalok or Drew Jackson, 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-
4162 or (202) 482-4406, respectively.
SUPPLEMENTARY INFORMATION:
Background
On January 17, 2008, the Department received a petition concerning
imports of graphite electrodes from the PRC filed in proper form by SGL
Carbon LLC and Superior Graphite Co. (collectively ``petitioners'').
The Department initiated an antidumping duty investigation of graphite
electrodes from the PRC on
[[Page 49409]]
February 6, 2008. See Small Diameter Graphite Electrodes from the
People's Republic of China: Initiation of Antidumping Duty
Investigation, 73 FR 8287 (February 13, 2008) (``Initiation Notice'').
On February 13, 2008, the Department provided interested parties with
U.S. Customs and Border Protection (``CBP'') data on U.S. imports of
graphite electrodes from the PRC during the period of investigation
(``POI''). Between February 19, 2008, and February 21, 2008, the
Department requested quantity and value (``Q&V'') information from 81
of the 102 companies identified by the petitioners as potential
exporters and/or producers of graphite electrodes from the PRC.\1\ See
Petition for the Imposition of Antidumping Duties Against Small
Diameter Graphite Electrodes from the People's Republic of China,
Exhibit General 3, Volume I (January 17, 2008) (``Petition'').
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\1\ The Department did not send Q&V questionnaires to 21
companies listed in the petition due to incomplete addresses.
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On March 3, 2008, the International Trade Commission (``ITC'')
notified the Department that it had preliminarily determined that there
is a reasonable indication that an industry in the United States is
materially injured by reason of imports of graphite electrodes from the
PRC. See Small Diameter Graphite Electrodes From China, Investigation
No. 731-TA-1143 (Preliminary), 73 FR 12461 (March 7, 2008).
Between March 7, 2008, and March 13, 2008, the Department received
timely responses to its Q&V questionnaire from the following 13
companies: Fushun Jinly Petrochemical Carbon Co., Ltd. (``Fushun
Jinly''); Fushun Carbon Co. Ltd. (``Fushun Carbon''); Shanghai Jinneng
International Trade Co., Ltd.; Dalian Thrive Metallurgy Import and
Export Co., Ltd.; GES (China) Co., Ltd.; Brilliant Charter Limited;
Qingdao Haosheng Metals & Minerals Imp & Exp Co., Ltd.; Nantong River-
East Carbon Joint Stock Co., Ltd.; Jilin Carbon Import and Export
Company (``Jilin Carbon''); Xinghe County Muzi Carbon Co., Ltd.;
Guangham Shida Carbon Co., Ltd.; Shenyang Jinli Metals & Minerals Imp &
Exp Co., Ltd.; and Shijiazhuang Huanan Carbon Factory. On April 4,
2008, the Department selected Fushun Jinly and Fushun Carbon as
mandatory respondents. See Memorandum to Stephen Claeys, Deputy
Assistant Secretary for Import Administration, through Abdelali
Elouaradia, Director, Office 4, and Howard Smith, Program Manager,
Office 4, from Magd Zalok and Rebecca Pandolph, International Trade
Analysts, ``Selection of Respondents in the Antidumping Investigation
of Small Diameter Graphite Electrodes from the People's Republic of
China,'' dated April 4, 2008 (``Respondent Selection Memorandum'').
On April 14, 2008, the Department received separate-rate
applications from Jilin Carbon; Guangham Shida Carbon Co., Ltd.;
Nantong River-East Carbon Joint Stock Co., Ltd.; Xinghe County Muzi
Carbon Co. Ltd.; Brilliant Charter Limited; Shijiazhuang Huanan Carbon
Factory; Shenyang Jinli Metals & Minerals Imp & Exp Co., Ltd.; Shanghai
Jinneng International Trade Co., Ltd.; Dalian Thrive Metallurgy Import
and Export Co., Ltd.; GES (China) Co., Ltd.; and Qingdao Haosheng
Metals & Minerals Imp & Exp Co., Ltd. (the mandatory respondents filed
separate-rate applications in their responses to section A of the
Department's questionnaire). The Department rejected an untimely filed
separate-rate application from Shanxi Xinrong International Trade Co.
On April 7, 2008, the Department issued its antidumping
questionnaire to the mandatory respondents. Fushun Jinly and the Fushun
Carbon submitted timely responses to all sections of the Department's
questionnaire during April and May 2008. Fushun Carbon, along with its
affiliated companies, Fangda Carbon New Material Co., Ltd. (``Fangda
Carbon''), Beijing Fangda Carbon Tech Co., Ltd. (``Beijing Fangda''),
and Chengdu Rongguang Carbon Co., Ltd. (``Chengdu Rongguang'')
(collectively ``Fangda Group'') submitted a consolidated response to
the Department's questionnaire. See ``Affiliation'' and ``Single
Entity'' sections below. The Department issued supplemental
questionnaires to, and received responses from, Fushun Jinly, the
Fangda Group, and the separate rate respondents in May, June, and July
2008. The petitioners submitted comments to the Department regarding
Fushun Jinly and the Fangda Group's questionnaire and supplemental
questionnaire responses, and the separate rates response of Jilin
Carbon in May, June, and July 2008.
On May 30, 2008, the Department released to interested parties a
memorandum which listed potential surrogate countries and invited
interested parties to comment on surrogate country and factor value
selection. See Letter to All Interested Parties from Howard Smith,
Program Manager, Office 4, concerning ``Antidumping Duty Investigation
of Small Diameter Graphite Electrodes from the People's Republic of
China,'' dated May 30, 2008. No party responded to the Department's
invitation to comment on surrogate country selection. However, in June
and July 2008, both the petitioners and the respondents submitted
surrogate values for use in this investigation. All of the submitted
surrogate data are from India.
On July 15, 2008, the petitioners alleged targeted dumping by
Fushun Jinly.
On July 23, 2008, the petitioners requested that the Department
make a finding that critical circumstances exist with respect to
imports of graphite electrodes from the PRC. The Department issued
questionnaires regarding critical circumstances to Fushun Jinly and the
Fangda Group on July 24, 2008. Fushun Jinly and the Fangda Group
submitted their responses to those questionnaires on July 30, 2008. See
the ``Critical Circumstances'' section of this notice for additional
information.
Period of Investigation
The POI is July 1, 2007, through December 31, 2007. This period
comprises the two most recently completed fiscal quarters as of the
month preceding the month in which the petition was filed (i.e.,
January 2008). See 19 CFR 351.204(b)(1).
Scope of the Investigation
The merchandise covered by this investigation includes all small
diameter graphite electrodes of any length, whether or not finished, of
a kind used in furnaces, with a nominal or actual diameter of 400
millimeters (16 inches) or less, and whether or not attached to a
graphite pin joining system or any other type of joining system or
hardware. Small diameter graphite electrodes are most commonly used in
primary melting, ladle metallurgy, and specialty furnace applications
in industries including foundries, smelters, and steel refining
operations. Small diameter graphite electrodes subject to this
investigation are currently classified under the Harmonized Tariff
Schedule of the United States (``HTSUS'') subheading 8545.11.0000. The
HTSUS number is provided for convenience and customs purposes, but the
written description of the scope is dispositive.
Scope Comments
In accordance with the preamble to the Department's regulations, we
set aside a period of time in our Initiation Notice for parties to
raise issues regarding product coverage, and encouraged all parties to
submit comments within 20 calendar days of
[[Page 49410]]
publication of that notice. See Antidumping Duties; Countervailing
Duties, 62 FR 27296, 27323 (May 19, 1997); see also Initiation Notice.
The Department received no comments concerning the scope of the
graphite electrodes antidumping duty investigation during the 20 day
period set aside for such comments.
However, in response to a request from the Department for comments
on whether graphite pin joining systems (connecting pins) are within
the scope of the investigation, on July 25, 2008, and July 30, 2008,
parties submitted direct and rebuttal comments, respectively. On August
6, 2008, the petitioners submitted additional comments regarding
connecting pins and revised language to clarify the scope of the
investigation.
According to the respondents, connecting pins are within the scope
of the investigation when they are sold with electrodes (either
attached to the electrode or unattached), but not when they are sold
separately from the electrodes (i.e., listed separately on an invoice).
When there are more connecting pins than electrodes in a sale, the
respondents believe the additional connecting pins are within the scope
of the investigation if the connecting pins are part of the electrode
sale and not listed as a separate line item on the invoice.
In contrast, the petitioners maintain that connecting pins are
covered by the scope of the investigation, regardless of whether they
are attached to, shipped with, or sold separately from, electrodes.
According to the petitioners, the word ``attached'' in the scope
language is to be read as ``sold with,'' and should not be interpreted
as requiring the connecting pin to be physically attached to the
electrode to be covered by the scope. Additionally, the petitioners
maintain that the HTSUS number listed in the scope includes connecting
pins and the U.S. domestic industry included connecting pin sales in
the sales data reported to the Department and the ITC. Lastly, the
petitioners note that if the Department does not include connecting
pins in the scope of the investigation, foreign producers will begin
selling electrodes at artificially high prices (to avoid dumping
duties) while separately selling connecting pins at very low prices.
After reviewing the parties' comments, we have preliminarily
determined that all connecting pins are outside of the scope of the
investigation. The description of the scope identifies only small
diameter graphite electrodes as subject merchandise; it does not state
that both electrodes and connecting pins are subject merchandise.
Furthermore, we do not agree that the word ``attached'' in the scope
language conveys the meaning ``sold with.'' Even if the word
``attached'' is read as ``sold with,'' such a reading simply means that
electrodes are covered by the scope whether or not they are sold with
connecting pins; it does not indicate that connecting pins are subject
merchandise. Furthermore, although the Petition notes that finished
electrodes may be fitted with a threaded graphite pin joining system,
the Petition consistently describes subject merchandise as small
diameter graphite electrodes regardless of the type of joining system
to which they are attached. The Petition does not state that connecting
pins are also subject merchandise. Given the foregoing, we find that
all connecting pins are outside the scope of the investigation,
regardless of whether the connecting pin is sold or shipped with an
electrode (either attached to the electrode or unattached), or sold or
shipped separately from the electrode. Therefore, we have not
considered sales of connecting pins in calculating the preliminary
dumping margins.
Targeted Dumping
Pursuant to section 777A(d)(1) of the Act, in calculating dumping
margins in investigations, the Department normally will compare U.S.
prices and normal values using a weighted average-to-average or
transaction-to-transaction comparison methodology. However, section
777A(d)(1)(B) of the Act allows the Department to compare transaction-
specific export or constructed export prices to weighted-average normal
values if there is a pattern of export or constructed export prices for
comparable merchandise that differ significantly among purchasers,
regions, or periods of time, and the Department explains why such
differences cannot be taken into account using the weighted average-to-
average or transaction-to-transaction methods. See sections
777A(d)(1)(B)(i)-(ii) of the Act. Section 351.414(f)(1)(i) of the
Department's regulations allows the Department to apply a average-to-
transaction method if ``through the use of, among other things,
standard and appropriate statistical techniques'' there is a pattern of
export or constructed export prices for comparable merchandise that
differ significantly among purchasers, regions, or periods of time
(``targeted dumping''). The regulations further state that targeted
dumping allegations ``must include all supporting factual information,
and an explanation as to why the average-to-average or transaction-to-
transaction method could not take into account any alleged price
differences.'' 19 CFR 351.414(f)(3).
On July 15, 2008, the petitioners alleged that Fushun Jinly
targeted certain sales of graphite electrodes for dumping. On July 28,
2008, the petitioners submitted additional information regarding
targeted dumping in response to the Department's July 22, 2008
supplemental questionnaire. According to the petitioners, targeted
dumping is evidenced by differing export prices for comparable
merchandise among U.S. purchasers. Specifically, in their July 15,
2008, allegation, the petitioners argued that, in most instances, the
average net price of subject merchandise sold by Fushun Jinly to a
particular customer in a particular month of the POI differed by more
than two percent from the average net price of all sales of that
merchandise in the same month to all other customers. The petitioners
explain that they used the two-percent price difference as the
threshold for a significant price difference based on: (1) The
Department's use of plus/minus two percent as the basis for determining
whether sales to affiliated parties are at arm's length prices; (2) the
fact that a dumping margin of two percent is used as the threshold for
a finding of dumping, and (3) the pricing pattern of Fushun Jinly's
sales to a particular customer compared to its other sales of the
subject merchandise. The petitioners therefore argue that Fushun Jinly
engaged in targeted dumping with respect to a particular customer.
The petitioners note that the Department has recently relied on a
different methodology for purposes of determining whether targeted
dumping has occurred. See Certain New Pneumatic Off-The-Road Tires from
the People's Republic of China; Final Affirmative Determination of
Sales at Less Than Fair Value and Partial Affirmative Determination of
Critical Circumstances, 73 FR 40485, 40487 (July 15, 2008) (``Off-The-
Road Tires''). The petitioners also note that in Off-The-Road Tires,
although the Department relied on a different methodology for
calculating the final margin for purposes of initiating an
investigation regarding targeted dumping, the Department accepted the
petitioners' allegation of targeted dumping in that case based on the
methodology relied on by petitioners in the instant case. See Off-The-
Road Tires, and accompanying Issues and Decision Memorandum at Comment
23.A. Accordingly, the petitioners maintain that the information
submitted in
[[Page 49411]]
support of their targeted dumping allegation is, at a minimum,
sufficient to initiate a targeted dumping analysis by the Department.
The petitioners point out that they disagree with the methodology
used in Off-The-Road Tires to determine whether there is targeted
dumping. Specifically, the petitioners claim that the methodology used
in Off-The-Road Tires does not appropriately measure whether targeted
dumping is occurring because it cannot detect obvious patterns of
targeting and does not rely on an appropriate statistical technique to
determine whether targeted dumping exists. Thus, the petitioners argue
that the Department's method is inconsistent with the express statutory
directive and regulatory requirement. Additionally, the petitioners
contend that the Department's methodology is complex, redundant and
difficult to satisfy, thereby limiting domestic industries' ability to
obtain relief from unfair trading practices, in contravention of
legislative intent. Nevertheless, in support of their allegation, the
petitioners submitted a targeted dumping analysis based on the
methodology used by the Department in the final determination of Off-
The-Road Tires.
The Department has determined that the petitioners' analysis
provides a basis for accepting their targeted dumping allegation and
performing a targeted dumping analysis. After performing such an
analysis, we have determined that targeted dumping was occurring with
respect to the particular customer identified by the petitioners.
However, because there are no negative transaction-specific dumping
margins in this preliminary determination, it is not possible that the
targeted dumping of sales is being masked by our normal calculation
methodology. See Memorandum to the File from Magd Zalok, regarding
``Transaction-specific Margins'' dated August 14, 2008. Thus, the
petitioners' claim that the observed price differences can only be
taken into account using an average-to-transaction comparison is not
supported. See id. As mentioned above, Section 777A(d)(1)(B)(ii) of the
Act requires that, in order to use the average-to-transaction
comparison methodology, the Department must explain why the average-to-
average or transaction-to-transaction methodology cannot account for
the price differences. See also Statement of Administrative Action,
accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316,
Vol. I at 843 (1994) (``SAA''), reprinted in 1994 U.S.C.C.A.N. 4040
(``{b{time} efore relying on {the average-to-transaction
comparison{time} methodology, however, Commerce must establish and
provide an explanation why it cannot account for such differences
through the use of an average-to-average or transaction-to-transaction
comparison.''). Hence, the Department preliminarily determines that the
average-to-average comparison methodology does account for price
differences and, therefore, finds that petitioners' allegation does not
warrant the use of the average-to-transaction comparison methodology.
Critical Circumstances
After reviewing record information, the Department preliminarily
finds that there is reason to believe or suspect that critical
circumstances exist for imports of subject merchandise from the Fangda
Group and the separate rate companies because: (A) In accordance with
section 733(e)(1)(A)(ii) of the Act, the person by whom, or for whose
account, the merchandise was imported knew or should have known that
the exporter was selling the subject merchandise at less than its fair
value and that there was likely to be material injury by reason of such
sales; and (B) in accordance with section 733(e)(1)(B) of the Act, the
Fangda Group and the separate rate companies had massive imports during
a relatively short period. However, record evidence does not indicate
that critical circumstances exist with respect to imports of subject
merchandise from Fushun Jinly or the PRC wide entity. See Memorandum to
Stephen J. Claeys, Deputy Assistant Secretary for Import Administration
from Abdelali Elouaradia, Director, Office 4, ``Preliminary Affirmative
Determination of Critical Circumstances,'' dated August 14, 2008.
Single Entity Treatment
Pursuant to 19 CFR 351.401(f)(1), the Department will treat
producers as a single entity, or ``collapse'' them, where: (1) Those
producers are affiliated; (2) the producers have production facilities
for producing similar or identical products that would not require
substantial retooling of either facility in order to restructure
manufacturing priorities; and (3) there is a significant potential for
manipulation of price or production.\2\ In determining whether a
significant potential for manipulation exists, 19 CFR 351.401(f)(2)
states that the Department may consider various factors, including: (1)
The level of common ownership; (2) the extent to which managerial
employees or board members of one firm sit on the board of directors of
an affiliated firm; and (3) whether the operations of the affiliated
firms are intertwined through the sharing of sales information,
involvement in production and pricing decisions, the sharing of
facilities or employees, or significant transactions between the
affiliated producers.\3\
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\2\ See, e.g., Gray Portland Cement and Clinker From Mexico:
Final Results of Antidumping Duty Administrative Review, 63 FR
12764, 12774 (March 16, 1998).
\3\ See Notice of Final Determination of Sales at Less Than Fair
Value: Collated Roofing Nails From Taiwan, 62 FR 51427, 51436
(October 1, 1997).
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In proceedings involving non-market economy (``NME'') countries,
the Department begins with the rebuttable presumption that all
companies within the country are subject to government control.\4\
Companies subject to government control are treated as part of the NME
entity and assigned the same dumping rate.\5\ The Department, however,
recognizes that NME companies may also be connected by means other than
government control. Hence, even if certain companies are not part of
the NME entity, it may be appropriate to treat the companies as a
single entity and to determine a single dumping margin for the
entity.\6\ Therefore, to the extent that the Department's practice does
not conflict with section 773(c) of the Act, the Department has, in
prior cases, treated certain NME exporters and/or producers as a single
entity if the facts of the case supported such treatment.\7\
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\4\ See, e.g., Off-The-Road Tires (citing Final Determination of
Sales at Less Than Fair Value: Sparklers from the People's Republic
of China, 56 FR 20588 (May 6, 1991)(``Sparklers''), as amplified by
Notice of Final Determination of Sales at Less Than Fair Value:
Silicon Carbide from the People's Republic of China, 59 FR 22585
(May 2, 1994) (``Silicon Carbide''), and 19 CFR 351.107(d)).
\5\ See id.
\6\ See Certain Steel Nails From the People's Republic of China:
Preliminary Determination of Sales at Less Than Fair Value and
Partial Affirmative Determination of Critical Circumstances and
Postponement of Final Determination, 73 FR 3928 (January 23, 2008)
(unchanged in final determination, Certain Steel Nails From the
People's Republic of China: Final Determination of Sales at Less
Than Fair Value and Partial Affirmative Determination of Critical
Circumstances, 73 FR 33977 (June 16, 2008), and amended final
determination, Certain Steel Nails From the People's Republic of
China: Amended Preliminary Determination of Sales at Less Than Fair
Value, 73 FR 7254 (February 7, 2008)).
\7\ See id.
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Moreover, the Department has determined that the factors listed in
19 CFR 351.401(f)(2) are not exhaustive and, in the context of an NME
proceeding, other factors unique to the relationships between business
entities within the NME country may lead the Department to determine
that collapsing is warranted. The Court of International Trade has
upheld the Department's practice of taking into account one such
[[Page 49412]]
unique factor, namely export decisions, in applying the collapsing
provisions in NME proceedings.\8\ Thus, although the Department's
regulations do not address the treatment of non-producing entities
(e.g., exporters), where non-producing entities are affiliated, and
there exists a significant potential for manipulation of prices and/or
export decisions, the Department has considered such entities, as well
as any other affiliated entities (where appropriate), as a single
entity.\9\
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\8\ See Hontex Enterprises v. United States, 342 F. Supp. 2d
1225, 1230-34 (CIT 2004).
\9\ See, e.g., Certain Cold-Rolled Flat-Rolled Carbon-Quality
Steel Products from Brazil; Notice of Final Determination at Sales
at Less Than Fair Value, 65 FR 5554 (February 4, 2000); Certain
Welded Carbon Steel Pipes and Tubes from Thailand: Final Results of
Antidumping Duty Administrative Review, 63 FR 55578 (October 16,
1998) and accompanying Issues and Decision Memorandum at Comment 2;
Automotive Replacement Glass Windshields from the People's Republic
of China; Preliminary Results of Antidumping Duty Administrative
Review, 69 FR 25545 (May 7, 2004); Automotive Replacement Glass
Windshields from the People's Republic of China; Final Results of
Antidumping Duty Administrative Review, 69 FR 61790 (October 21,
2004); Certain Preserved Mushrooms From the People's Republic of
China: Final Results of Sixth Antidumping Duty New Shipper Review
and Final Results and Partial Rescission of the Fourth Antidumping
Duty Administrative Review, 69 FR 54635 (September 9, 2004) and
accompanying Issues and Decision Memorandum at Comment 1. See also
Hontex Enterprises v. United States, 248 F. Supp. 2d 1323, 1343 (CIT
2003).
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We have preliminarily determined that the exporters and producers
of the Fangda Group (i.e., Beijing Fangda, Fangda Carbon, Fushun
Carbon, Chengdu Rongguang, and Hefei Carbon) are affiliated pursuant to
sections 771(33)(F) and (G) of the Act and that these companies should
be treated as a single entity for the purposes of the antidumping duty
investigation of graphite electrodes from the PRC. These companies have
common ownership and are under common control, and therefore, are
affiliated in accordance sections 771(33)(F) and (G) of the Act (which
states that affiliated persons include two or more persons directly or
indirectly controlling, controlled by, or under common control with,
any person (subsection F); and any person who controls any other person
and such other person (subsection G)).
Further, we find that the member companies of the Fangda Group that
operate production facilities (specifically, Fushun Carbon, Fangda
Carbon, and Chengdu Rongguang) \10\ produce similar or identical
products that would not require substantial retooling of their
facilities in order to restructure manufacturing priorities. We have
also determined that there is a significant potential for the
manipulation of price or production among these companies as evidenced
by the level of common ownership, the degree of management overlap, and
the intertwined nature of the operations of these companies. See
Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import
Administration, through Abdelali Elouaradia, Director, Office 4, and
Howard Smith, Program Manager, Office 4, from Drew Jackson,
International Trade Analyst, concerning ``Small Diameter Graphite
Electrodes from the People's Republic of China: Affiliation and Single
Entity Status of Beijing Fangda Carbon Tech Co., Ltd.; Fangda Carbon
New Material Co., Ltd.; Fushun Carbon Co., Ltd.; Chengdu Rongguang
Carbon Co., Ltd.; and Hefei Carbon Co., Ltd.,'' dated August 11, 2008.
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\10\ The Fangda Group reported that Beijing Fangda is a sales
entity, and does not produce subject merchandise.
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Non-Market Economy Treatment
The Department considers the PRC to be an NME country. In
accordance with section 771(18)(c)(i) of the Act, any determination
that a country is an NME country shall remain in effect until revoked
by the administering authority. See Tapered Roller Bearings and Parts
Thereof, Finished and Unfinished, From the People's Republic of China:
Preliminary Results of 2001-2002 Administrative Review and Partial
Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
from the People's Republic of China: Final Results of 2001-2002
Administrative Review and Partial Rescission of Review, 68 FR 70488
(December 18, 2003). The Department has not revoked the PRC's status as
an NME country. Therefore, in this preliminary determination, we have
treated the PRC as an NME country and applied our current NME
methodology.
Selection of a Surrogate Country
In antidumping proceedings involving NME countries, the Department,
pursuant to section 773(c)(1) of the Act, will generally base normal
value (``NV'') on the value of the NME producer's factors of
production. In accordance with section 773(c)(4) of the Act, in valuing
the factors of production, the Department shall utilize, to the extent
possible, the prices or costs of factors of production in one or more
market economy countries that are at a level of economic development
comparable to that of the NME country and are significant producers of
merchandise comparable to the subject merchandise.
The Department has determined that India, Indonesia, Sri Lanka, the
Philippines, and Egypt are countries that are at a level of economic
development comparable to that of the PRC. See Memorandum from Carol
Showers, Acting Director, Office of Policy to Howard Smith, Program
Manager, AD/CVD Operations, Office 4, concerning ``Antidumping Duty
Investigation of Small Diameter Graphite Electrodes (SDGE) from the
People's Republic of China (PRC): Request for a List of Surrogate
Countries,'' dated May 22, 2008. From among these economically
comparable countries, the Department has preliminarily selected India
as the surrogate country for this investigation because it determined
that: 1) India is a significant producer of merchandise comparable to
the subject merchandise; and 2) reliable Indian data for valuing the
factors of production are readily available. See Memorandum to the File
through Abdelali Elouaradia, Director, Office 4, and Howard Smith,
Program Manager, Office 4, from Magd Zalok, International Trade
Analyst, concerning ``Antidumping Duty Investigation of Small Diameter
Graphite Electrodes from the People's Republic of China: Selection of a
Surrogate Country,'' dated June 25, 2008.
Separate Rates
In the Initiation Notice, the Department notified parties of the
recent application process by which exporters and producers may obtain
separate-rate status in NME investigations. See Initiation Notice.
Pursuant to the Department's practice, exporters and producers are
required to submit a separate-rate status application. See also Policy
Bulletin 05.1: Separate-Rates Practice and Application of Combination
Rates in Antidumping Investigations involving Non-Market Economy
Countries, (April 5, 2005) (``Policy Bulletin 05.1''), available at
http://ia.ita.doc.gov.\11\ However, the
[[Page 49413]]
standard for eligibility for a separate rate, which is whether a firm
can demonstrate an absence of both de jure and de facto governmental
control over its export activities, has not changed. Id., at
``Background.''
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\11\ Policy Bulletin 05.1 states: ``while continuing the
practice of assigning separate rates only to exporters, all separate
rates that the Department will now assign in its NME investigations
will be specific to those producers that supplied the exporter
during the period of investigation. Note, however, that one rate is
calculated for the exporter and all of the producers which supplied
subject merchandise to it during the period of investigation. This
practice applied both to mandatory respondents receiving an
individually calculated separate rate as well as the pool of non-
investigated firms receiving the weighted-average of the
individually calculated rates. This practice is referred to as the
application of ``combination rates'' because such rates apply to
specific combinations of exporters and one or more producers. The
cash-deposit rate assigned to an exporter will apply only to
merchandise both exported by the firm in question and produced by a
firm that supplied the exporter during the period of
investigation.'' See Policy Bulletin 05.1 at 6.
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In proceedings involving NME countries, the Department has a
rebuttable presumption that all companies within the country are
subject to government control and thus should be assessed a single
antidumping duty rate. It is the Department's policy to assign all
exporters of merchandise subject to investigation in an NME country
this single rate unless an exporter can demonstrate that it is
sufficiently independent so as to be entitled to a separate rate.
Exporters can demonstrate this independence through the absence of both
de jure and de facto governmental control over export activities. The
Department analyzes each entity exporting the subject merchandise under
a test arising from Sparklers, as further developed in Silicon Carbide.
However, if the Department determines that a company is wholly foreign-
owned or located in a market economy, then a separate rate analysis is
not necessary to determine whether it is independent from government
control.
A. Separate Rate Applicants
All of the separate rate applicants, including the mandatory
respondents Fushun Jinly and the Fangda Group, stated that they are
either joint ventures between Chinese and foreign companies or are
wholly Chinese-owned companies (collectively ``PRC SR Applicants'').
For one applicant, mandatory respondent Fushun Jinly, there is
conflicting information on the record regarding its ownership status
during the POI.
Fushun Jinly reported that it was established in 1987 as a
collectively-owned enterprise (i.e. owned by Nianpan Township), known
as the Fushun Carbon Products Plant, but that the plant was sold to the
Factory Director in 2002. Despite the sale, Fushun Jinly reported that
it did not change its legal status as a collectively-owned enterprise
since suppliers were more willing to extend credit to a collectively-
owned entity. However, according to Fushun Jinly, by 2007 most of the
township's collectively-owned enterprises had been sold and, thus, it
decided it was time to officially change its status to a limited
liability company. Thus, in June 2007, the Factory Director began the
process of changing the company's legal status from a collectively-
owned entity to a limited liability company. In order to make the
transition, Fushun Jinly reported that it obtained contracts from the
township, dated in June 2007, showing the sale of the plant. Fushun
Jinly obtained a new business license identifying it as a limited
liability company on November 1, 2007.
Given the above information, we have preliminarily determined that
Fushun Jinly continued to be a collectively-owned enterprise until
October 31, 2007, four months into the POI. Record evidence, namely
Fushun Jinly's business license, shows that the company legally
remained a collectively-owned enterprise until October 31, 2007.
Additionally, Fushun Jinly has provided conflicting information as to
when the township sold the factory's assets. Thus, we have considered
Fushun Jinly to be a ``collectively-owned enterprise'' until October
31, 2007, and a limited liability company thereafter.
Since none of the separate rate or mandatory respondents are wholly
foreign-owned (with no PRC control) or located in a market economy with
no PRC ownership, we must analyze whether these respondents can
demonstrate the absence of both de jure and de facto governmental
control over export activities.
a. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) An absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers, 56 FR 20589.
The evidence provided by the PRC SR Applicants supports a
preliminary finding of de jure absence of governmental control based on
the following: (1) An absence of restrictive stipulations associated
with the individual exporters' business and export licenses; (2)
applicable legislative enactments decentralizing control of the
companies; and (3) and formal measures by the government decentralizing
control of these companies.\12\
---------------------------------------------------------------------------
\12\ See e.g., Shijiazhuang Huanan Carbon Factory's April 15,
2008, submission at Exhibit 4, and Fushun Jinly's July 8, 2008,
submission at Appendices A-6 and A-11.
---------------------------------------------------------------------------
With respect to Fushun Jinly, the record indicates that while the
company was collectively owned, it was subject to the ``Regulations on
Rural Collectively-Owned Enterprises of the People's Republic of
China'' (``Collectively-Owned Enterprise Regulations''), Order No. 59
of the State Council, Implemented on July 1st 1990.\13\ The Department
has cited the Collectively-Owned Enterprise Regulations, together with
a number of other laws, as a basis for finding an absence of de jure
government control of respondents in a number of proceedings. See e.g.,
Brake Rotors from the People's Republic of China: Preliminary Results
and Partial Rescission of the Sixth Administrative Review and
Preliminary Results and Final Partial Rescission of the Ninth New
Shipper Review, 69 FR 10402 (March 5, 2004). Thus, our preliminary
finding of an absence of de jure government control with respect to
Fushun Jinly is consistent with the Department's findings in prior
determinations. Id.
---------------------------------------------------------------------------
\13\ See Fushun Jinly's July 8, 2008, submission at 4 and
Appendix A-11.
---------------------------------------------------------------------------
b. Absence of De Facto Control
Typically the Department considers four factors in evaluating
whether each respondent is subject to de facto governmental control of
its export functions: (1) Whether the export prices are set by or are
subject to the approval of a governmental agency; (2) whether the
respondent has authority to negotiate and sign contracts and other
agreements; (3) whether the respondent has autonomy from the government
in making decisions regarding the selection of management; and (4)
whether the respondent retains the proceeds of its export sales and
makes independent decisions regarding disposition of profits or
financing of losses. See Silicon Carbide, 59 FR at 22586-22587; see
also Notice of Final Determination of Sales at Less Than Fair Value:
Furfuryl Alcohol From the People's Republic of China, 60 FR 22544,
22545 (May 8, 1995). The Department has determined that an analysis of
de facto control is critical in determining whether respondents are, in
fact, subject to a degree of governmental control which would preclude
the Department from assigning separate rates.
The evidence placed on the record of this investigation by the PRC
SR Applicants demonstrate an absence of de facto government control
with respect to each of the exporters' exports of the merchandise under
investigation, in accordance with the criteria identified in Sparklers
and Silicon
[[Page 49414]]
Carbide. Thus, there is an absence of both de jure and de facto
government control with respect to each of the PRC SR Applicants.
Therefore, the Department has preliminarily granted separate rate
status to the following companies: Fushun Jinly, Fushun Carbon, Fangda
Carbon, Beijing Fangda Chengdu Rongguang, Jilin Carbon, Guangham Shida
Carbon Co., Ltd., Nantong River-East Carbon Joint Stock Co., Ltd.,
Xinghe County Muzi Carbon Co. Ltd., Brilliant Charter Limited,
Shijiazhuang Huanan Carbon Factory, Shenyang Jinli Metals & Minerals
Imp & Exp Co., Ltd., Shanghai Jinneng International Trade Co., Ltd.,
Dalian Thrive Metallurgy Import and Export Co., Ltd., GES (China) Co.,
Ltd., and Qingdao Haosheng Metals & Minerals Imp & Exp Co., Ltd. The
Department has calculated company-specific dumping margins for the two
mandatory respondents, Fushun Jinly and the Fangda Group (i.e., Fushun
Carbon, Fangda Carbon, Beijing Fangda, and Chengdu Rongguang) and
assigned the other companies that have been granted a separate rate a
dumping margin equal to a simple average of the dumping margins
calculated for the two mandatory respondents.
B. Companies Not Receiving a Separate Rate
The Department has determined that all parties applying for a
separate rate in this segment of the proceeding have demonstrated an
absence of government control both in law and in fact (see discussion
above), and is, therefore, not denying separate rate status to any
applicants.
The PRC-Wide Entity
Although PRC exporters of subject merchandise to the United States
were given an opportunity to provide Q&V information to the Department,
not all exporters responded to the Department's request for Q&V
information.\14\ Based upon our knowledge of the volume of imports of
subject merchandise from the PRC, we have concluded that the companies
that responded to the Q&V questionnaire do not account for all U.S.
imports of subject merchandise from the PRC made during the POI. We
have treated the non-responsive PRC producers/exporters as part of the
PRC-wide entity because they did not qualify for a separate rate.
---------------------------------------------------------------------------
\14\ The Department received only 13 timely responses to the
requests for Q&V information that it sent to 81 potential exporters
identified in the petition. With a few exceptions, the record
indicates the questionnaires were received by the exporters. See
Respondent Selection Memorandum.
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Section 776(a)(2) of the Act provides that the Department shall,
subject to subsection 782(d) of the Act, use facts otherwise available
in reaching the applicable determination if an interested party: (A)
Withholds information that has been requested by the Department; (B)
fails to provide such information in a timely manner or in the form or
manner requested, subject to subsections 782(c)(1) and (e) of the Act;
(C) significantly impedes a proceeding under the antidumping statute;
or (D) provides such information but the information cannot be
verified.
As noted above, the PRC-wide entity withheld information requested
by the Department. As a result, pursuant to section 776(a)(2)(A) of the
Act, we find it appropriate to base the PRC-wide dumping margin on
facts available. See Notice of Preliminary Determination of Sales at
Less Than Fair Value, Affirmative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain Frozen
Fish Fillets From the Socialist Republic of Vietnam, 68 FR 4986
(January 31, 2003), unchanged in Notice of Final Antidumping Duty
Determination of Sales at Less Than Fair Value and Affirmative Critical
Circumstances: Certain Frozen Fish Fillets from the Socialist Republic
of Vietnam, 68 FR 37116 (June 23, 2003).
Section 776(b) of the Act provides that, in selecting from among
the facts otherwise available, the Department may employ an adverse
inference if an interested party fails to cooperate by not acting to
the best of its ability to comply with requests for information. See
Notice of Final Determination of Sales at Less Than Fair Value: Certain
Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian
Federation, 65 FR 5510, 5518 (February 4, 2000); see also ``Statement
of Administrative Action,'' accompanying the URAA, H.R. Rep. No. 103-
316, 870 (1994) (``SAA'') at 870. Since the PRC-wide entity did not
respond to the Department's request for information, the Department has
concluded that the PRC-wide entity has failed to cooperate to the best
of its ability. Therefore, the Department preliminarily finds that, in
selecting from among the facts available, an adverse inference is
appropriate.
Section 776(b) of the Act authorizes the Department to use, as
adverse facts available (``AFA''): (1) Information derived from the
petition; (2) the final determination from the LTFV investigation; (3)
a previous administrative review; or (4) any other information placed
on the record. In selecting a rate for AFA, the Department selects one
that is sufficiently adverse ``as to effectuate the purpose of the
facts available rule to induce respondents to provide the Department
with complete and accurate information in a timely manner.'' See Notice
of Final Determination of Sales at Less Than Fair Value: Static Random
Access Memory Semiconductors From Taiwan, 63 FR 8909 (February 23,
1998). It is the Department's practice to select, as AFA, the higher
of: (a) The highest margin alleged in the petition or (b) the highest
calculated rate for any respondent in the investigation. See Final
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled
Flat-Rolled Carbon Quality Steel Products From the People's Republic of
China, 65 FR 34660 (May 31, 2000) and accompanying Issues and Decisions
Memorandum at Facts Available. The highest margin alleged in the
petition is 159.34 percent. Since the dumping margin derived from the
Petition is higher than the calculated weighted-average margins for the
mandatory respondents, we examined whether it was appropriate to base
the PRC-wide dumping margin on the secondary information in the
Petition.
When the Department relies on secondary information, rather than
information obtained in the course of an investigation, section 776(c)
of the Act requires it to, to the extent practicable, corroborate that
information from independent sources reasonably at its disposal.\15\
The SAA also states that the independent sources may include published
price lists, official import statistics and customs data, and
information obtained from interested parties during the particular
investigation. See SAA at 870.
---------------------------------------------------------------------------
\15\ Secondary information is described in the SAA as
``information dervied from the petition that gave rise to the
investigation or review, the final determination concerning subject
merchandise, or any previous review under section 751 concerning the
subject merchandise.'' See SAA at 870.
---------------------------------------------------------------------------
The SAA also clarifies that ``corroborate'' means that the
Department will satisfy itself that the secondary information to be
used has probative value. See SAA at 870. To corroborate secondary
information, the Department will, to the extent practicable, examine
the reliability and relevance of the information used. See Tapered
Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan,
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter,
and Components Thereof, From Japan; Preliminary Results of Antidumping
Duty Administrative Reviews and Partial Termination of Administrative
Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in Tapered
Roller Bearings and Parts
[[Page 49415]]
Thereof, Finished and Unfinished, From Japan, and Tapered Roller
Bearings, Four Inches or Less in Outside Diameter, and Components
Thereof, From Japan: Final Results of Antidumping Duty Administrative
Reviews and Termination in Part, 62 FR 11825 (March 13, 1997).
To corroborate the Petition margin, we compared the range of
control number-specific preliminary dumping margins calculated for the
mandatory respondents to the dumping margin alleged in the Petition.
Based on this comparison, we have preliminarily corroborated the 159.34
percent dumping from the Petition, which is within the range of control
number-specific dumping margins calculated for the mandatory
respondents. See Memorandum regarding ``Corroboration of the PRC-Wide
Facts Available Rate for the Preliminary Determination in the
Antidumping Duty Investigation of Small Diameter Graphite Electrodes
from the People's Republic of China,'' dated concurrently with this
notice. The dumping margin for the PRC-wide entity applies to all
entries of the merchandise under investigation except for entries of
subject merchandise from Fushun Jinly, the Fangda Group, Jilin Carbon,
Guangham Shida Carbon Co., Ltd., Nantong River-East Carbon Joint Stock
Co., Ltd., Xinghe County Muzi Carbon Co. Ltd., Brilliant Charter
Limited, Shijiazhuang Huanan Carbon Factory, Shenyang Jinli Metals &
Minerals Imp & Exp Co., Ltd., Shanghai Jinneng International Trade Co.,
Ltd., Dalian Thrive Metallurgy Import and Export Co., Ltd., GES (China)
Co., Ltd., and Qingdao Haosheng Metals & Minerals Imp & Exp Co., Ltd.
Fair Value Comparisons
To determine whether Fushun Jinly or the Fangda Group sold graphite
electrodes to the United States at LTFV, we compared the weighted-
average export price of the graphite electrodes to the normal value of
the graphite electrodes, as described in the ``U.S. Price'' and
``Normal Value'' sections of this notice.
U.S. Price
Export Price
In accordance with section 772(a) of the Act, we based U.S. price
on export price (``EP'') because the first sale to an unaffiliated
purchaser was made prior to importation and the use of constructed
export price was not otherwise warranted. In accordance with section
772(c) of the Act, we calculated EP by deducting, where applicable, the
following expenses from the starting price (gross unit price) charged
to the first unaffiliated customer in the United States: Foreign
movement expenses, marine insurance, international freight, and foreign
brokerage and handling expenses.
We based these movement expenses on surrogate values where a PRC
company provided the service and was paid in Renminbi. If market
economy service providers, who were paid in a market economy currency,
provided movement services for over 33 percent of subject merchandise
shipments, by volume, we based the movement expenses on the actual
price charged by the service provider. If market economy service
providers, who were paid in a market economy currency, provided
movement services for less than 33 percent of subject merchandise
shipments, by volume, we calculated the movement expenses by weight-
averaging surrogate values with the actual price charged by the service
provider. See Antidumping Methodologies: Market Economy Inputs,
Expected Non-Market Economy Wages, Duty Drawback; and Request for
Comments, 71 FR 61716, 61717-18 (October 19, 2006).
For details regarding our EP calculation, see Memorandum to the
File, through, Howard Smith, Program Manager, Office 4, from Drew
Jackson, International Trade Analyst, ``Investigation of Small Diameter
Graphite Electrodes from the People's Republic of China: Analysis
Memorandum for Beijing Fangda Carbon Tech Co., Ltd., Fushun Carbon Co.
Ltd., and Chengdu Rongguang Carbon Co., Ltd.,'' dated August 14, 2008,
and Memorandum to the File, through, Howard Smith, Program Manager,
Office 4, from Magd Zalok, International Trade Analyst, ``Investigation
of Small Diameter Graphite Electrodes from the People's Republic of
China: Analysis Memorandum for Fushun Jinly Petrochemical Carbon Co.,
Ltd.,'' dated August 14, 2008 (collectively, ``Analysis Memoranda'').
Normal Value
In accordance with section 773(c) of the Act, we constructed normal
value (``NV'') from the factors of production employed by the
respondents to manufacture subject merchandise during the POI.
Specifically, we calculated NV by adding together the values of the
factors of production, general expenses, profit, and packing costs. We
valued the factors of production using prices and financial statements
from the surrogate country, India. In selecting surrogate values, we
followed, to the extent practicable, the Department's practice of
choosing values which are non-export average values, contemporaneous
with, or closest in time to, the POI, product-specific, and tax-
exclusive. See, e.g., Notice of Preliminary Determination of Sales at
Less Than Fair Value, Negative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain Frozen
and Canned Warmwater Shrimp From the Socialist Republic of Vietnam, 69
FR 42672, 42682 (July 16, 2004), unchanged in Final Determination of
Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater
Shrimp from the Socialist Republic of Vietnam, 69 FR 71005 (December 8,
2004). We also considered the quality of the source of surrogate
information in selecting surrogate values.
We valued material inputs and packing materials by multiplying the
amount of the factor consumed in producing subject merchandise by the
average unit value of the factor. We derived the average unit value of
the factor from Indian import statistics. In addition, we added freight
costs to the surrogate costs that we calculated for material inputs. We
calculated freight costs by multiplying surrogate freight rates by the
shorter of the reported distance from the domestic supplier to the
factory that produced the subject merchandise or the distance from the
nearest seaport to the factory that produced the subject merchandise,
as appropriate. 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, 1407-08 (Fed. Cir. 1997). Where we could only
obtain surrogate values that were not contemporaneous with the POI, we
inflated (or deflated) the surrogate values using the Indian Wholesale
Price Index (``WPI'') as published in the International Financial
Statistics of the International Monetary Fund.
Further, in calculating surrogate values from Indian imports, we
disregarded imports from Indonesia, the Republic of South Korea, and
Thailand because in other proceedings the Department found that these
countries maintain broadly available, non-industry-specific export
subsidies. Therefore, it is reasonable to infer that all exports to all
markets from these countries may be subsidized. See, e.g., 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
[[Page 49416]]
accompanying Issues and Decision Memorandum at Comment 7.\16\ Thus, we
have not used prices from these countries in calculating the Indian
import-based surrogate values.
---------------------------------------------------------------------------
\16\ In addition, we note that legislative history explains that
the Department is not required to conduct a formal investigation to
ensure that such prices are not subsidized. See H.R. Rep. 100-576 at
590 (1988). As such, it is the Department's practice to base its
decision on information that is available to it at the time it makes
its determination.
---------------------------------------------------------------------------
We valued electricity using price data for small, medium, and large
industries, as published by the Central Electricity Authority of the
Government of India in its publication titled Electricity Tariff & Duty
and Average Rates of Electricity Supply in India, dated July 2006.
These electricity rates represent actual country-wide, publicly-
available information on tax-exclusive electricity rates charged to
industries in India. Since the rates are not contemporaneous with the
POI, we inflated the values using the WPI. See Memorandum to the File
regarding ``Investigation of Small Diameter Graphite Electrodes from
the People's Republic of China: Surrogate Values Selected'' for Fushun
Jinly and the Fangda Group, dated August 14, 2008 (``Factor Value
Memorandum'').
We valued natural gas using a value obtained from the Gas Authority
of India Ltd.'s Web site, a supplier of natural gas in India. See
http://www.gailonline.com/gailnewsite/index.html. The value relates to
the period January through June 2002. Therefore, we inflated the value
using the WPI. In addition, we added transportation charges to the
value. See Surrogate Value Memorandum and Polyvinyl Alcohol From the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 71 FR 27991 (May 15, 2006), and accompanying
Issues and Decision Memorandum at Comment 2.
For direct labor, indirect labor and packing labor, consistent with
19 CFR 351.408(c)(3), we used the most recently calculated regression-
based wage rate, which relies on 2005 data. This wage rate can be found
on the Department's Web site on Import Administration's home page. See
Expected Wages of Selected NME Countries (revised May 2008) (available
at http://ia.ita.doc.gov/wages/index.html). The source of these wage
rate data on the Import Administration's Web site is the International
Labour Organization, Geneva, Labour Statistics Database Chapter 5B:
Wages in Manufacturing. Since 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 Fushun Jinly and the Fangda Group. See Factor Value
Memorandum.
We valued truck freight expenses using a per-unit average rate
calculated from data on the following Web site: http://
www.infobanc.com/logistics/logtruck.htm. The logistics section of this
Web site contains inland freight truck rates between many large Indian
cities. Since this value is not contemporaneous with the POI, we
deflated the rate using the WPI. See Factor Value Memorandum.
We valued rail freight expenses using a per-unit average rate from
data obtained from the Web site of the Indian Ministry of Railways and
distance data obtained from an Indian transportation company, InFreight
Technologies India Limited. See http://www.indianrailways.gov.in/ and
http://www.infreight.com/. See Factor Value Memorandum.
We valued brokerage and handling using a simple average of the
brokerage and handling costs that were reported in public submissions
that were filed in three antidumping duty cases. Specifically, we
averaged the public brokerage and handling expenses reported by Agro
Dutch Industries Ltd. in the antidumping duty administrative review of
certain preserved mushrooms from India, Kejirwal Paper Ltd. in the LTFV
investigation of certain lined paper products from India, and Essar
Steel in the antidumping duty administrative review of hot-rolled
carbon steel flat products from India. See Certain Preserved Mushrooms
From India: Final Results of Antidumping Duty Administrative Review, 71
FR 10646 (March 2, 2006); see also Notice of Preliminary Determination
of Sales at Less Than Fair Value, Postponement of Final Determination,
and Affirmative Preliminary Determination of Critical Circumstances in
Part: Certain Lined Paper Products From India, 71 FR 19706 (April 17,
2006), unchanged in Notice of Final Determination of Sales at Less Than
Fair Value, and Negative Determination of Critical Circumstances:
Certain Lined Paper Products from India, 71 FR 45012 (August 8, 2006)
and Certain hot-Rolled Carbon Steel Flat Products From India:
Preliminary Results of Antidumping Duty Administrative Review, 71 FR
2018, 2021 (January 12, 2006) (unchanged in Certain Hot-Rolled Carbon
Steel Flat Products From India: Final Results of Antidumping
Administrative Review, 71 FR 40694 (July 18, 2006). Since the resulting
value is not contemporaneous with the POI, we inflated the rate using
the WPI. See Factor Value Memorandum.
We valued marine insurance using a publicly available price quote
from a marine insurance provider at http://www.rjgconsultants.com/
insurance.html.
We valued factory overhead, selling, general, and administrative
expenses, and profit, using the 2007-2008 audited financial statements
of Graphite India Limited. Record evidence indicates that Graphite
India Limited is an Indian company that produces subject merchandise.
The financial statements of Graphite India Limited were placed on the
record by both the petitioners and the respondents and are the only
surrogate financial statements on the record. See Factor Value
Memorandum.
In accordance with 19 CFR 351.301(c)(3)(i), interested parties may
submit publicly available information with which to value factors of
production in the final determination within 40 days after the date of
publication of the preliminary determination.
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 of
the United States.
Verification
As provided in section 782(i)(1) of the Act, we intend to verify
the information upon which we will rely in making our final
determination.
Combination Rates
In the Initiation Notice, the Department stated that it would
calculate combination rates for certain respondents that are eligible
for a separate rate in this investigation. See Initiation Notice. This
change in practice is described in Policy Bulletin 05.1:
(W)hile continuing the practice of assigning separate rates only
to exporters, all separate rates that the Department will now assign
in its NME investigations will be specific to those producers that
supplied the exporter during the period of investigation. Note,
however, that one rate is calculated for the exporter and all of the
producers which supplied subject merchandise to it during the period
of investigation. This practice applies both to mandatory
respondents receiving an individually calculated separate rate as
well as the pool of non-investigated firms receiving the weighted-
average of the individually calculated rates. This practice is
referred to as the application of ``combination rates'' because such
rates apply to specific combinations of exporters and one or more
[[Page 49417]]
producers. The cash-deposit rate assigned to an exporter will apply
only to merchandise both exported by the firm in question and
produced by a firm that supplied the exporter during the period of
investigation.
Preliminary Determination
The weighted-average dumping margins are as follows:
------------------------------------------------------------------------
Weighted-
average
Exporter & producer margin
(percent)
------------------------------------------------------------------------
Fushun Jinly Petrochemical Carbon Co., Ltd.................. 132.80
Produced by: Fushun Jinly Petrochemical Carbon Co., Ltd.
Fushun Carbon Co., Ltd...................................... 147.80
Produced by: Fushun Carbon Co., Ltd.
Fangda Carbon New Material Co., Ltd......................... 147.80
Produced by: Fangda Carbon New Material Co., Ltd.
Beijing Fangda Carbon Tech Co., Ltd......................... 147.80
Produced by: Chengdu Rongguang Carbon Co., Ltd.; Fangda
Carbon New Material Co., Ltd.; or Fushun Carbon Co.,
Ltd.
Chengdu Rongguang Carbon Co., Ltd........................... 147.80
Produced by: Chengdu Rongguang Carbon Co., Ltd.
Jilin Carbon Import and Export Company...................... 140.30
Produced by: Sinosteel Jilin Carbon Co., Ltd.
Guangham Shida Carbon Co., Ltd.............................. 140.30
Produced by: Guangham Shida Carbon Co., Ltd.
Nantong River--East Carbon Joint Stock Co., Ltd............. 140.30
Produced by: Nantong River--East Carbon Co., Ltd.; or
Nantong Yangzi Carbon Co., Ltd.
Xinghe County Muzi Carbon Co. Ltd........................... 140.30
Produced by: Xinghe County Muzi Carbon Co., Ltd.
Brilliant Charter Limited................................... 140.30
Produced by: Nantong Falter New Energy Co., Ltd.; or
Shanxi Jinneng Group Co., Ltd.
Shijiazhuang Huanan Carbon Factory.......................... 140.30
Produced by: Shijiazhuang Huanan Carbon Factory
Shenyang Jinli Metals & Minerals Imp & Exp Co., Ltd......... 140.30
Produced by: Shenyang Jinli Metals & Minerals Imp. &
Exp. Co., Ltd.
Shanghai Jinneng International Trade Co., Ltd............... 140.30
Produced by: Shanxi Jinneng Group Datong Energy
Development Co., Ltd.
Dalian Thrive Metallurgy Import and Export Co., Ltd......... 140.30
Produced by: Linghai Hongfeng Carbon Products Co., Ltd.;
Tianzhen Jintian Graphite Electrodes Co., Ltd.; Jiaozuo
Zhongzhou Carbon Products Co., Ltd.; Heilongjiang
Xinyuan Carbon Products Co., Ltd.; Xuzhou Jianglong
Carbon Manufacture Co., Ltd.; or Xinghe Xinyuan Carbon
Products Co., Ltd.
GES (China) Co., Ltd........................................ 140.30
Produced by: Shanghai GC Co., Ltd.; Fushun Jinli
Petrochemical Carbon Co., Ltd.; Xinghe County Muzi
Carbon Plant and Linyi County Lubei Carbon Co., Ltd.
Shandong Province
Qingdao Haosheng Metals & Minerals Imp & Exp Co., Ltd....... 140.30
Produced by: Sinosteel Jilin Carbon Co., Ltd.
PRC-Wide Entity............................................. 159.34
------------------------------------------------------------------------
Disclosure
We will disclose the calculations performed to parties in this
proceeding within five days of the date of the public announcement of
the preliminary determination in accordance with 19 CFR 351.224(b).
Suspension of Liquidation
As noted above, the Department has found that critical
circumstances exist with respect to imports of subject merchandise from
the Fangda Group and the separate rate companies. Therefore, in
accordance with section 733(d) of the Act, we will instruct CBP to
suspend liquidation of all entries of graphite electrodes from the
Fangda Group and the separate rate applicants \17\ entered, or
withdrawn from warehouse, for consumption on or after 90 days prior to
the date of publication of this notice in the Federal Register. For
Fushun Jinly and the PRC wide entity, we will instruct CBP to suspend
liquidation of all entries of graphite electrodes entered, or withdrawn
from warehouse, for consumption upon the date of publication of this
notice in the Federal Register. We will instruct CBP to require a cash
deposit or the posting of a bond equal to the weighted-average amount
by which the NV exceeds U.S. price, as indicated above. The suspension
of liquidation will remain in effect until further notice.
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\17\ As noted above, the separate rate applicants are Jilin
Carbon; Guangham Shida Carbon Co., Ltd; Nantong River East Carbon
Co. Ltd.; Xinghe County Muzi Carbon Co. Ltd.; Brilliant Charter
Limited; Shijiazhuang Huanan Carbon Factory; Shenyang Jinli Metals &
Minerals Imp & Exp Co., Ltd.; Shanghai Jinneng International Trade
Co., Ltd.; Dalian Thrive Metallurgy Import and Export Co., Ltd.; GES
(China) Co., Ltd.; and Qingdao Haosheng Metals & Minerals Imp & Exp
Co., Ltd.
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International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the
ITC of our preliminary affirmative determination of sales at LTFV.
Section 735(b)(2) of the Act requires the ITC to make its final
determination as to whether the domestic industry in the United States
is materially injured, or threatened with material injury, by reason of
imports of graphite electrodes, or sales (or the likelihood of sales)
for importation, of the subject merchandise within 45 days of our final
determination.
Public Comment
Case briefs or other written comments may be submitted to the
Assistant Secretary for Import Administration no later than seven days
after the date the final verification report is issued in this
proceeding and rebuttal briefs, limited to issues raised in case
briefs, no later than five days after the deadline for
[[Page 49418]]
submitting case briefs. See 19 CFR 351.309(c)(1)(i) and 19 CFR
351.309(d)(1). A list of authorities used and an executive summary of
issues should accompany any briefs submitted to the Department. This
summary should be limited to five pages total, including footnotes.
In accordance with section 774 of the Act, we will hold a public
hearing, if requested, to afford interested parties an opportunity to
comment on arguments raised in case or rebuttal briefs. If a request
for a hearing is made, we intend to hold the hearing three days after
the deadline of submission of rebuttal briefs at the U.S. Department of
Commerce, 14th Street and Constitution Ave, NW., Washington, DC 20230,
time and room to be determined. Parties should confirm by telephone the
date, time, and room location of the hearing two days before the
scheduled hearing date.
Interested parties that wish to request a hearing, or to
participate in a hearing if one is requested, must submit a written
request to the Assistant Secretary for Import Administration, U.S.
Department of Commerce, Room 1870, within 30 days after the date of
publication of this notice. See 19 CFR 351.310(c). Requests should
contain the party's name, address, and telephone number, the number of
hearing participants, and a list of the issues to be discussed in the
hearing. At the hearing, each party may make an affirmative
presentation only on issues raised in that party's case brief and may
make rebuttal presentations only on arguments included in that party's
rebuttal brief.
Postponement of Final Determination and Extension of Provisional
Measures
Pursuant to section 735(a)(2) of the Act, on July 30, 2008, Fushun
Jinly and the Fangda Group, respectively, requested that in the event
of an affirmative preliminary determination in this investigation, the
Department postpone its final determination by 60 days. At the same
time, Fushun Jinly and the Fangda Group agreed that the Department may
extend the application of the provisional measures prescribed under 19
CFR 351.210(e)(2) from a 4-month period to a 6-month period. In
accordance with section 733(d) of the Act and 19 CFR 351.210(b), we are
granting the request and are postponing the final determination until
no later than 135 days after the publication of this notice in the
Federal Register because (1) our preliminary determination is
affirmative, (2) the requesting exporters account for a significant
proportion of exports of the subject merchandise, and (3) no compelling
reasons for denial exist. Suspension of liquidation will be extended
accordingly.
This determination is issued and published in accordance with
sections 733(f) and 777(i)(1) of the Act.
Dated: August 14, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-19412 Filed 8-20-08; 8:45 am]
BILLING CODE 3510-DS-P