[Federal Register: August 6, 2004 (Volume 69, Number 151)]
[Notices]
[Page 47887-47891]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au04-45]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-847]
Persulfates From the People's Republic of China: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on persulfates from the People's
Republic of China in response to a request by the Petitioner, FMC
Corporation. The period
[[Page 47888]]
of review is July 1, 2002, through June 30, 2003.
We have preliminarily determined that U.S. sales have been made at
not less than normal value. If these preliminary results are adopted in
our final results, we will instruct U.S. Customs and Border Protection
(``CBP'') to assess no antidumping duties on the exports subject to
this review.
EFFECTIVE DATE: August 6, 2004.
FOR FURTHER INFORMATION CONTACT: John D. A. LaRose or Christopher C.
Welty, AD/CVD Enforcement, Group III, Office 9, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-3794 or (202) 482-0186 respectively.
SUPPLEMENTARY INFORMATION:
Background
On July 2, 2003, the Department published in the Federal Register a
notice of ``Opportunity to Request an Administrative Review'' of the
antidumping duty order on persulfates from the People's Republic of
China (PRC) covering the period July 1, 2002, through June 30, 2003.
See Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation; Opportunity to Request Administrative Review, 68 FR
39511 (July 2, 2003).
On July 31, 2003, in accordance with 19 CFR 351.213(b), the
Petitioner, FMC Corporation, requested an administrative review of
Shanghai AJ Import & Export Corporation (Ai Jian) and Degussa-AJ
(Shanghai) Initiators Co. (Degussa-AJ). We published a notice of
initiation of this review on August 22, 2003. See Initiation of
Antidumping and Countervailing Duty Administrative Reviews and Requests
for Revocation in Part, 68 FR 50750 (August 22, 2003).
On August 13, 2003, we issued an antidumping questionnaire to Ai
Jian and Degussa-AJ. Ai Jian and Degussa-AJ jointly submitted a timely
response to sections A, C and D of the questionnaire on October 27,
2003. On December 15, 2003, the Petitioners submitted comments on this
response.
We issued a supplemental questionnaire to Ai Jian and Degussa-AJ on
February 13, 2004. We received the response to this questionnaire on
March 17, 2004.
On March 5, 2004, Ai Jian submitted publicly available information
for consideration in valuing the factors of production. The Petitioner
submitted information for this purpose on March 10, 2004.
On June 17, 2004, we issued a supplemental questionnaire to Ai
Jian. We received a response to this questionnaire on June 28, 2004.
Scope of Review
The products covered by this review are persulfates, including
ammonium, potassium, and sodium persulfates. The chemical formula for
these persulfates are, respectively,
(NH4)2S2O8,
K2S2O8, and
Na2S2O8. Potassium persulfates are
currently classifiable under subheading 2833.40.10 of the Harmonized
Tariff Schedule of the United States (HTSUS). Sodium persulfates are
classifiable under HTSUS subheading 2833.40.20. Ammonium and other
persulfates are classifiable under HTSUS subheadings 2833.40.50 and
2833.40.60. Although the HTSUS subheadings are provided for convenience
and customs purposes, the written description of the scope of this
review is dispositive.
Separate Rates
It is the Department's policy to assign all exporters of the
merchandise subject to review in non-market-economy (NME) countries a
single rate, unless an exporter can demonstrate an absence of
government control, both in law and in fact, with respect to exports.
To establish whether an exporter is sufficiently independent of
government control to be entitled to a separate rate, the Department
analyzes the exporter in light of the criteria established in the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991) (Sparklers), as
adapted and amplified in the Final Determination of Sales at Less Than
Fair Value: Silicon Carbide from the People's Republic of China, 59 FR
22585 (May 2, 1994) (Silicon Carbide). Evidence supporting, though not
requiring, a finding of de jure absence of government control over
export activities includes: (1) An absence of restrictive stipulations
associated with an individual exporter's business and export licenses;
(2) any legislative enactments decentralizing control of companies; and
(3) any other formal measures by the government decentralizing control
of companies. With respect to evidence of a de facto absence of
government control, the Department considers the following four
factors: (1) Whether the respondent sets its own export prices
independently from the government and other exporters; (2) whether the
respondent can retain the proceeds from its export sales; (3) whether
the respondent has the authority to negotiate and sign contracts; and
(4) whether the respondent has autonomy from the government regarding
the selection of management. See Silicon Carbide, 59 FR at 22587; see
also Sparklers, 56 FR at 20589.
With respect to Ai Jian, for purposes of our final results covering
the period of review (POR) July 1, 2001, through June 30, 2002, the
Department found an absence of de jure and de facto government control
of its export activities and determined that it warranted a company-
specific dumping margin. See Persulfates From the People's Republic of
China: Final Results of Antidumping Duty Administrative Review, 68 FR
68030, (Dec. 5, 2003) (Persulfates Fifth Review Final). For purposes of
this POR, Ai Jian has responded to the Department's request for
information regarding separate rates. We have found that the evidence
on the record is consistent with the final results in Persulfates Fifth
Review Final and continues to demonstrate an absence of government
control, both in law and in fact, with respect to Ai Jian's exports, in
accordance with the criteria identified in Sparklers and Silicon
Carbide. Therefore, for the same reasons as in the Persulfates Fifth
Review Final, we have granted Ai Jian a separate rate for purposes of
this administrative review.
Export Price
We calculated export price (EP) in accordance with section 772(a)
of the Tariff Act of 1930, as amended (the Act), because the subject
merchandise was sold directly to the first unaffiliated purchaser in
the United States prior to importation and constructed export price
methodology was not otherwise warranted given the facts on record. We
calculated EP based on packed, cost-insurance-freight (CIF) U.S.-port,
or free-on-board, PRC-port prices to unaffiliated purchasers in the
United States, as appropriate. We made deductions from the starting
price, where appropriate, for ocean freight services, which were
provided by market economy suppliers. We also deducted from the
starting price, where appropriate, an amount for foreign inland
freight, foreign brokerage and handling, and marine insurance expenses.
As these movement services were provided by NME suppliers, we valued
them using Indian rates. For further discussion of our use of surrogate
data in an NME proceeding, as well as selection of India as the
appropriate surrogate country, see the ``Normal Value'' section of this
notice, below.
For foreign inland freight, we obtained publicly-available
information which was published in the October 2002 through March 2003
editions of Chemical Weekly. For foreign brokerage
[[Page 47889]]
and handling expenses, we used a publicly summarized version of the
average value for brokerage and handling expenses reported in Final
Determination of Sales at Less Than Fair Value: Certain Hot-Rolled
Carbon Steel Flat Products from India, 67 FR 50406 (Oct. 3, 2001), and
used in the 2000-2001 administrative review of freshwater crawfish tail
meat from the PRC. See the memorandum to the file from Mathew Renkey
and Adina Teodorescu dated September 30, 2002, and entitled
``Administrative Review of Freshwater Crawfish Tail Meat from the
People's Republic of China: Factor Values Memorandum,'' which is on
file in the Central Records Unit (CRU), Room B-099 of the main Commerce
building. We inflated the per kilogram price (in rupees) to the POR
using wholesale price index (WPI) data from the International Monetary
Fund (IMF). For marine insurance, we used a price quote obtained from
Roanoke Trade Services, Inc., a provider of marine insurance. See the
memorandum to the File from Greg Kalbaugh entitled ``Marine Insurance
Rates,'' in the administrative review of sebacic acid from the PRC,
dated July 9, 2002, and the memorandum to the File from Christopher C.
Welty entitled ``Preliminary Valuation of Factors of Production'' for
the preliminary results of the 2002-2003 administrative review of
persulfates from the People's Republic of China, dated July 30, 2004
(FOP Memo), which are on file in the CRU. We inflated this value to the
POR using WPI data from the IMF.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine the normal value (NV) using a factors-of-production
methodology if: (1) The merchandise is exported from an NME country;
and (2) the information does not permit the calculation of NV using
home-market prices, third-country prices, or constructed value (CV)
under section 773(a) of the Act.
The Department has treated the PRC as an NME country in all
previous antidumping cases. Furthermore, available information does not
permit the calculation of NV using home market prices, third country
prices, or CV under section 773(a) of the Act. 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. None of the parties to this proceeding has
contested such treatment in this review. Therefore, we treated the PRC
as an NME country for purposes of this review and calculated NV by
valuing the factors of production in a surrogate country.
A. Surrogate Country
Section 773(c)(4) of the Act requires the Department to value an
NME producer's factors of production, to the extent possible, in one or
more market-economy countries that: (1) Are at a level of economic
development comparable to that of the NME country, and (2) are
significant producers of comparable merchandise.
India has been identified as a country that is at a level of
economic development comparable to that of the PRC. See the February
12, 2004, memorandum from Ronald Lorentzen to Louis Apple entitled
``Surrogate Country Selection,'' which is on file in the CRU. Moreover,
for purposes of the most recent segment of this proceeding, we found
that India is a significant producer of persulfates. See Persulfates
Fifth Review Final. For these preliminary results, we continue to find
that India is a significant producer of persulfates. Accordingly, we
find that India fulfills both statutory requirements for use as a
surrogate country and have continued to use India as the surrogate
country in this administrative review. We have therefore calculated NV
using Indian values for the PRC producers' factors of production. We
have obtained and relied upon publicly available information wherever
possible.
B. Factors of Production
In accordance with 19 CFR 351.408(c)(1), the Department will
normally use publicly available information to value factors of
production. However, the Department's regulations also provide that
where a producer sources an input from a market economy and pays for it
in market economy currency, the Department employs the actual price
paid for the input to calculate the factors-based NV. Id.; see also
Lasko Metal Products v. United States, 43 F. 3d 1442, 1445-1446 (Fed.
Cir. 1994).
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by Ai Jian for the POR. To
calculate NV, the reported per-unit factor quantities were multiplied
by publicly available Indian surrogate values. Factors of production
include, but are not limited to: (1) Hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital cost, including
depreciation. In examining surrogate values, we selected, where
possible, the publicly available value which was: (1) An average non-
export value; (2) representative of a range of prices within the POR or
most contemporaneous with the POR; (3) product-specific; and (4) tax-
exclusive. For a more detailed explanation of the methodology used in
calculating various surrogate values, see the FOP Memo.
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. Where appropriate, we
adjusted surrogate values to reflect inflation up to the POR using the
WPI published by the IMF. In accordance with this methodology, we
valued the factors of production as follows:
To value ammonium sulfate, caustic soda, and sulfuric acid, we used
public information from the Indian publication Chemical Weekly. For
caustic soda and sulfuric acid, because price quotes reported in
Chemical Weekly are for chemicals with a 100 percent concentration
level, we made chemical purity adjustments according to the particular
concentration levels of caustic soda and sulfuric acid used by Degussa-
AJ, Ai Jian's PRC supplier. Where necessary, we adjusted the values
reported in Chemical Weekly to exclude sales and excise taxes. For
potassium sulfate and anhydrous ammonia, we relied on import prices
reported in the Monthly Statistics of the Foreign Trade of India
(MSFTI), and contained in the World Trade Atlas. All values were
contemporaneous with the POR; therefore, it was not necessary to adjust
for inflation.
During the POR, Degussa-AJ self-produced ammonium persulfates,
which is a material input in the production of potassium persulfates
and sodium persulfates. In order to value ammonium persulfates, we
calculated the sum of the materials, labor, and energy costs based on
the usage factors submitted by Degussa-AJ in its questionnaire
responses. Consistent with our methodology used in Persulfates Fifth
Review Final, we then applied this value to the reported consumption
amounts of ammonium persulfates used in the production of potassium and
sodium persulfates.
We valued labor based on a regression-based wage rate, in
accordance with 19 CFR 351.408(c)(3).
To value electricity, we used data from the International Energy
Agency's Key World Energy Statistics 2003 report. For further
discussion, see the FOP Memo.
To value water, we relied on public information reported in the
October 1997 publication of Second Water Utilities Data Book: Asian and
Pacific
[[Page 47890]]
Region. We adjusted this value to reflect inflation up to the POR using
the WPI published by the IMF. To value coal, we relied on import prices
reported in the MSFTI, and contained in the World Trade Atlas.
For the reported packing materials--polyethylene bags, woven bags,
polyethylene sheet/film and liner, fiberboard, paper bags, and wood
pallets--we relied on import prices reported in the MSFTI, and
contained in the World Trade Atlas.
As appropriate, we adjusted input prices by including freight costs
to make them delivered prices. We made adjustments to account for
freight costs between the suppliers and Degussa-AJ's manufacturing
facilities for each of the factors of production identified above. In
accordance with our practice, for inputs for which we used CIF import
values from India, we calculated a surrogate freight cost using the
shorter of the reported distances either from the closest PRC ocean
port to the factory or from the domestic supplier to the factory. See
Final Determination of Sales at Less Than Fair Value: Certain Cut-to-
Length Carbon Steel Plate From the People's Republic of China, 62 FR
61964, 61977 (Nov. 20, 1997) and the Court of Appeals for the Federal
Circuit's decision in Sigma Corp. v. United States, 117 F.3d 1401 (Fed.
Cir. 1997).
For factory overhead, selling, general, and administrative expenses
(SG&A), and profit, we relied on the experience of a producer of
identical merchandise, Gujarat Persalts (P) Ltd. (``Gujarat''), as
reflected in its March 31, 2002, annual report. See the Preliminary
Valuation of Factors of Production Memorandum, dated July 30, 2004, at
pages 7 and 8 (``Factors of Production Memorandum''). Because we
believe that SG&A labor is not classified as part of the SG&A costs
reflected on Gujarat's financial statements, we have accounted for SG&A
labor hours by calculating the number of labor hours per MT of
production and adding this amount to the total labor figure. For
further discussion, see the July 30, 2004, memorandum from the Team,
entitled U.S. Price and Factors of Production Adjustments for the
Preliminary Results. We calculated factory overhead as a percentage of
the total raw materials, labor, and energy costs for subject
merchandise. See the Factors of Production Memorandum, at pages 7 and
8.
The Department did not rely on the financial statements of two
producers of comparable merchandise, National Peroxide Ltd. (for the
surrogate profit ratio) and Asian Peroxides Limited (for the surrogate
factory overhead and SG&A ratios), as requested by the Petitioner,
because these producers did not produce persulfates during their
respective fiscal years. See Issues and Decision Memorandum for the
2001--2002 Antidumping Duty Administrative Review of Persulfates from
the People's Republic of China, at Comment 1 (December 5, 2003); see
also, Persulfates from the People's Republic of China: Final Results of
Antidumping Duty Administrative Review, 68 FR 6712 (Feb. 10, 2003) and
accompanying decision memorandum at Comments 9 and 10. The Department's
NME practice establishes a preference for selecting surrogate value
sources that are producers of identical merchandise, provided that the
surrogate value data is not distorted or otherwise unreliable. See id;
see also, Persulfates from the People's Republic of China: Preliminary
Results of Antidumping Duty Administrative Review (July 31, 2003).
Based upon the Department's analysis for the preliminary results, we do
not believe we have a sufficient basis at this time to reach the
conclusion that the surrogate data from Gujarat is distorted.
On March 10, 2004, and on June 4, 2004, the Petitioner submitted
information on the record for the purpose of demonstrating that the use
of surrogate financial information from Gujarat would distort the
production experience of respondent Degussa-AJ, specifically pointing
to differences in size and scale between the Indian persulfates
producer and the respondent that would distort the factory overhead and
SG&A ratios applied to the respondent. The Petitioner also submitted
information to support the use of data from Asian Peroxides Limited, a
producer of comparable merchandise, as a source of surrogate values for
factory overhead and SG&A ratios, and the use of data from National
Peroxides, Ltd. as a source for the surrogate value for profit. On July
26, 2004, and July 27, 2004, the Petitioner made additional submissions
addressing the differences between batch and continuous chemical
production processes, the types of equipment used in batch and
continuous chemical production processes, and the nature of Gujarat's
chemical production processes. On July 30, the Respondent responded to
the Petitioner's filings. In a number of respects, the information the
Petitioner has provided is different from and expands upon the
information submitted in prior reviews that the Department has
addressed. Moreover, we note that the Department had limited time to
examine the July 26, 2004, and July 27, 2004 submissions by the
Petitioner. The information presented by the Petitioner warrants
further clarification and development prior to the final results. This
clarification and development will entail an examination of: (1) The
difference between batch and continuous processes in the production of
persulfates; (2) the equipment and capital investments required by
these processes; (3) the impact of scale and size on the production
process; and (4) the usage and costs of raw material inputs, the
overhead structure, and the use of a sales labor force. Therefore, the
Department will open the record of this proceeding subsequent to the
publication of this notice in the Federal Register to collect
additional information. In particular, the Department intends to issue
a set of questions to the Petitioner requesting certain clarifications
and additional information regarding the Petitioner's claims that
Gujarat's financial ratios are distortive. All interested parties are
encouraged to comment on the current and additional information on the
record regarding this issue. In the event that the Department
determines that the surrogate financial ratios should be revised from
the ones used in these preliminary results, parties will be afforded a
meaningful opportunity to comment on the new valuation methodology and
margin calculations. Taking these comments into consideration, the
Department will then reach the final results of this administrative
review.
Preliminary Results of Review
We preliminarily determine that the following margins exist for the
period July 1, 2002, through June 30, 2003:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Shanghai Ai Jian Import & Export Corporation................ 0.00
------------------------------------------------------------------------
The Department will disclose to parties the calculations performed
in connection with these preliminary results within five days of the
date of publication of this notice. Interested parties may request a
hearing within 30 days of the publication. Any hearing, if requested,
will be held 44 days after the publication of this notice, or the first
workday thereafter. Interested parties may submit case briefs not later
than 30 days after the date of publication of this notice. Rebuttal
briefs, limited to issues raised in the case briefs, may be filed not
later than 35 days after the date of publication of this notice. The
Department will publish a notice of the
[[Page 47891]]
final results of this administrative review, which will include the
results of its analysis of issues raised in any such written briefs,
within 120 days of the publication of these preliminary results.
The Department will determine and CBP shall assess antidumping
duties on all appropriate entries. The Department will issue
appropriate appraisement instructions directly to CBP upon completion
of this review. The final results of this review will be the basis for
the assessment of antidumping duties on entries of merchandise covered
by this review and for future deposits of estimated duties.
For assessment purposes in this case, we do not have the
information to calculate entered value. Therefore, we have calculated
importer-specific duty assessment rates for the merchandise by
aggregating the dumping margins calculated for all U.S. sales and
dividing this amount by the total quantity of those sales. To determine
whether the duty assessment rates were de minimis (i.e. less than 0.50
percent), in accordance with the requirement set forth in 19 CFR
351.106(c)(2), we calculated importer-specific ad valorem ratios based
on the EPs.
Furthermore, the following deposit requirements will be effective
upon publication of the final results of this administrative review for
all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(1) of the Act: (1) The cash deposit rate for
Ai Jian will be that established in the final results of this
administrative review; (2) for any company previously found to be
entitled to a separate rate and for which no review was requested, the
cash deposit rate will be the rate established in the most recent
review of that company; (3) the cash deposit rate for all other PRC
exporters will be 119.02 percent, the PRC-wide rate established in the
less than fair value investigation; and (4) for all other non-PRC
exporters of subject merchandise from the PRC to the United States, the
cash deposit rate will be the rate applicable to the PRC exporter that
supplied that non-PRC exporter. These requirements, when imposed, shall
remain in effect until publication of the final results of the next
administrative review.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under 19 CFR 351.402(f) to file a certificate regarding
the reimbursement of antidumping duties prior to liquidation of the
relevant entries during this review period. Failure to comply with this
requirement could result in the Department's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review is issued and published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18035 Filed 8-5-04; 8:45 am]