E7-20349. Certain Tissue Paper Products from the People's Republic of China: Final Results and Final Rescission, In Part, of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On April 9, 2007, the U.S. Department of Commerce (the Department) published the preliminary results of the first administrative review of the antidumping duty order on certain tissue paper products (tissue paper) from the People's Republic of China (PRC). See Certain Tissue Paper Products from the People's Republic of China: Preliminary Results and Preliminary Rescission, In Part, of Antidumping Duty Administrative Review, 72 FR 17477, (April 9, 2007) (Preliminary Results). This review covers the following exporters and/or producer/exporters: (1) Max Fortune Industrial Limited and Max Fortune (FETDE) Paper Products Co., Ltd. (collectively, Max Fortune); (2) Samsam Productions Ltd. and Guangzhou Baxi Printing Products Co., Ltd. (Guangzhou Baxi) (collectively, Samsam); (3) Foshan Sansico Co., Ltd., PT Grafitecindo Ciptaprima, PT Printec Perkasa, PT Printec Perkasa II, PT Sansico Utama, Sansico Asia Pacific Limited (collectively, the Sansico Group); (4) Vietnam Quijiang Paper Co., Ltd. (Quijiang); (5) China National Aero-Technology Import & Export Xiamen Corp. (China National); (6) Putian City Hong Ye Paper Products Co., Ltd. (Hong Ye); (7) Putian City Chengxiang Qu Li Feng (Chengxiang); (8) Kepsco, Inc. (Kepsco); and (9) Giftworld Enterprise Co., Ltd. (Giftworld). The period of review (POR) is September 21, 2004, through February 28, 2006. Based on our analysis of the comments received and verification findings, we have made changes to certain surrogate values and to Max Fortune's margin. In addition, we have determined to rescind this review with respect to Samsam. Therefore, the final results differ from the Preliminary Results. We are also rescinding this review with respect to the Sansico Group and Quijiang.

EFFECTIVE DATE:

October 16, 2007.

FOR FURTHER INFORMATION CONTACT:

Kristina Horgan or Bobby Wong, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

We published the preliminary results of the first administrative review on April 9, 2007, in the Federal Register. See Preliminary Results. Since the Preliminary Results, the following events have occurred:

On April 11, 2007, Seaman Paper Company of Massachusetts (petitioner) submitted comments on the Department's April 2, 2007, memorandum concerning telephone conversations with U.S. representatives of two producers of papermaking machines. On April 19, 2007, we issued a memorandum stating that the Department would postpone the briefing schedule for the final results until verification reports were issued for Max Fortune and Samsam. On April 23, 2007, the Sansico Group filed comments responding to petitioner's April 11, 2007, submission. On May 2, 2007, the Department issued a second supplemental questionnaire to the Sansico Group. On May 3, 2007, petitioner submitted comments on the Sansico Group's April 23, 2007, submission. On May 9, 2007, both petitioner and the Sansico Group requested a hearing.

From May 7 through May 9, 2007, the Department conducted a verification of Max Fortune's factors of production information at its facilities in Fujian, Fuzhou, PRC, while on May 11 and May 14, 2007, the Department conducted a verification of Max Fortune's sales information at its facilities in Hong Kong. See Memorandum to the File, regarding Verification of the Factors Responses of Max Fortune (FETDE) Paper Products Co., Ltd. (MFPP) in the Antidumping Duty Review of Certain Tissue Paper from the People's Republic of China, dated July 12, 2007. See also Memorandum to the File, regarding Verification of the Sales Responses of Max Fortune Industrial Limited in the Antidumping Duty Review of Certain Tissue Paper from the People's Republic of China, dated July 12, 2007 (Max Fortune Sales Verification Report).

On May 15, 2007, the Department verified the sales responses of Samsam at its facilities in Hong Kong. From May 16 to May 18, 2007, the Department verified the factors of production responses of Guangzhou Baxi at its facilities in Guangzhou, PRC, and on May 19, 2007, the Department verified the factors of production responses of Guilin Samsam Paper Products Ltd. (Guilin Samsam) at its facilities in Guilin, PRC. On May 21, 2007, the Department verified the sales responses of Samsam Premiums Ltd. (St. Clair Pakwell) at its facilities in Orange, CA. See Memorandum to the File, regarding Verification of the Sales & Factors Responses of Samsam Productions Limited in the Antidumping Duty Review of Certain Tissue Paper Products from the People's Republic of China, dated July 12, 2007. See also Memorandum to the File, regarding Verification of the Factors Responses of Guangzhou Baxi Productions Limited and Guilin Samsam Paper Products Ltd. in the Antidumping Duty Review of Certain Tissue Paper Products from the People's Republic of China, dated July 12, 2007. See also Memorandum to the File, regarding Verification of the Sales Responses of Samsam Premiums Ltd. (d.b.a. St. Clair Pakwell) in the Antidumping Duty Review of Certain Tissue Paper Products from the People's Republic of China, dated July 12, 2007.

On May 18, 2007, the Sansico Group responded to the comments submitted by petitioner on May 3, 2007, while on May 22, 2007, we received the supplemental questionnaire response from the Sansico Group. On June 22, 2007, the Department spoke via telephone with counsel for the Sansico Group about the verification of its unaffiliated supplier, scheduled for June 27, 2007. In this conversation, counsel for the Sansico Group informed the Department that the Sansico Group's unaffiliated supplier would not permit verification of all the information and sources of information listed in the Department's June 15, 2007, verification outline. The Sansico Group also placed a letter on the record, dated June 22, 2007, outlining the limited procedures to which its unaffiliated supplier would agree, if the Department's verifiers wished to visit the supplier's facilities. On June 22, 2007, the Department informed the Sansico Group that it would proceed with verification of the Sansico Group but would not visit the facilities of its unaffiliated supplier if the Department would not be allowed to verify the supplier's books and records for the POR.¹

On June 25, 2007, the Department verified the “no shipment” responses of the Sansico Group in Jakarta, Indonesia, at the production facilities of PT Printec Perkasa. See Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, regarding Verification of Sales Response of The Sansico Group in the Antidumping Duty Administrative Review of Certain Tissue Paper From the People's Republic of China, dated July 13, 2007.

On July 13, 2007, we invited parties to comment on our Preliminary Results. On July 20, 2007, the Sansico Group requested a seven-day extension of the deadline to submit rebuttal briefs, and on July 25, 2007, the Department granted that request. On July 31, 2007, the Department requested that the Sansico Group place on the record the Indonesian law stating that special permission is needed to audit the financial records of state-owned companies, as described in the Sansico Group's letter to the Department dated July 30, 2007.² On August 1, 2007, the Sansico Group placed this information on the record.

On August 3, 2007, we received case briefs from Max Fortune, the Sansico Group, and Target Corporation, an interested party to this proceeding. On August 6, 2007, we received case briefs from petitioner and Samsam. On August 16, 2007, Max Fortune requested a one-day extension of the deadline to submit rebuttal briefs, and on August 16, 2007, the Department granted that request. We received rebuttal briefs from petitioner, Max Fortune, and Samsam on August 20, 2007. On August 21, 2007, we received one additional rebuttal brief from petitioner and a rebuttal brief from the Sansico Group. On August 22, 2007, both petitioner and the Sansico Group submitted letters withdrawing their separate requests for a hearing.

Scope of the Antidumping Duty Order

The tissue paper products subject to this order are cut-to-length sheets of tissue paper having a basis weight not exceeding 29 grams per square meter. Tissue paper products subject to this order may or may not be bleached, dye-colored, surface-colored, glazed, surface decorated or printed, sequined, crinkled, embossed, and/or die cut. The tissue paper subject to this order is in the form of cut-to-length sheets of tissue paper with a width equal to or greater than one-half (0.5) inch. Subject tissue paper may be flat or folded, and may be packaged by banding or wrapping with paper or film, by placing in plastic or film bags, and/or by placing in boxes for distribution and use by the ultimate consumer. Packages of tissue paper subject to this order may consist solely of tissue paper of one color and/or style, or may contain multiple colors and/or styles.

The merchandise subject to this order does not have specific classification numbers assigned to them under the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may be under one or more of several different subheadings, including: 4802.30; 4802.54; 4802.61; 4802.62; 4802.69; 4804.31.1000; 4804.31.2000; 4804.31.4020; 4804.31.4040; 4804.31.6000; 4804.39; 4805.91.1090; 4805.91.5000; 4805.91.7000; 4806.40; 4808.30; 4808.90; 4811.90; 4823.90; 4820.50.00; 4802.90.00; 4805.91.90; 9505.90.40. The tariff classifications are provided for convenience and customs purposes; however, the written description of the scope of this order is dispositive.³

Excluded from the scope of this order are the following tissue paper products: (1) Tissue paper products that are coated in wax, paraffin, or polymers, of a kind used in floral and food service applications; (2) tissue paper products that have been perforated, embossed, or die-cut to the shape of a toilet seat, i.e., disposable sanitary covers for toilet seats; (3) toilet or facial tissue stock, towel or napkin stock, paper of a kind used for household or sanitary purposes, cellulose wadding, and webs of cellulose fibers (HTSUS 4803.00.20.00 and 4803.00.40.00).

Analysis of Comments Received

All issues raised in the briefs are addressed in the Memorandum to David M. Spooner, Assistant Secretary for Import Administration, regarding Issues and Decision Memorandum for the Final Results in the First Administrative Review of Certain Tissue Paper Products from the People's Republic of China, dated October 9, 2007 (Issues and Decision Memorandum), which is hereby adopted by this notice. A list of the issues raised, all of which are in the Issues and Decision Memorandum, is attached to this notice as Appendix I. Parties can find a complete discussion of all issues raised in the briefs and the corresponding recommendations in this public memorandum, which is on file in the Central Records Unit (CRU), room B-099 of the Department of Commerce. In addition, a complete version of the Issues and Decision Memorandum can be accessed directly on the Internet at http://ia.ita.doc.gov/​. The paper copy and electronic version of the Issues and Decision Memorandum are identical in content.

Partial Rescission of Administrative Review

In the Preliminary Results, the Department issued a notice of intent to rescind this administrative review with respect to the Sansico Group and Quijiang. We stated in the Preliminary Results that we would solicit additional information prior to the final results of this review from the Sansico Group to confirm the veracity of its no shipment claims. See Preliminary Results, 72 FR at 17480. Based on our analysis of information and comments received from interested parties on this issue, including a verification of the Sansico Group, the Department has determined to rescind this review with regard to the Sansico Group. See Issues and Decision Memorandum at Comment 3 for further discussion on this issue.

The Department did not receive comments on the preliminary decision to rescind this review with regard to Quijiang. See Preliminary Results, 72 FR at 17480. As the Department has no evidence to challenge this finding, the Department is rescinding this administrative review with respect to Quijiang.⁴

Finally, due to information discovered at verification and our analysis of information and comments received from interested parties on this issue, the Department has made a final determination to rescind this review with regard to Samsam. The Department has concluded that the single sale made by Samsam during the POR was not a bona fide commercial transaction. Specifically, the price, quantity, and timing of the sale, taken into consideration with the unique circumstances of the transaction, have led the Department to conclude that this was not a legitimate commercial transaction. Accordingly, the Department is rescinding the review with respect to Samsam. For an in-depth discussion on this issue, see Comment 4 of the Issues and Decision Memorandum; see also Memorandum to James C. Doyle, Director, AD/CVD Operations, Office 9, regarding The Bona Fides Analysis of Samsam Productions, Ltd.; Guangzhou Baxi Printing Products, Ltd.; Guilin Samsam Paper Products, Ltd.; and St. Clair Pakwell (collectively “Samsam”) in the First Administrative of Certain Tissue Paper Products from the People's Republic of China, dated October 9, 2007.

Separate Rates

Max Fortune requested a separate, company-specific antidumping duty rate. In the Preliminary Results, we found that Max Fortune met the criteria for the application of a separate antidumping duty rate. See Preliminary Results, 72 FR at 17480. The Department did not receive comments on this issue prior to these final results. Moreover, we have not received any information since the Preliminary Results with respect to Max Fortune that would warrant reconsideration of our separate-rates determination with respect to this company. Therefore, we have assigned an individual dumping margin to Max Fortune for this review period.

Use of Facts Otherwise Available and the PRC-Wide Rate

In the Preliminary Results, we found that China National, Hong Ye, Chengxiang, Kepsco, and Giftworld did not respond in a complete and timely manner to the Department's requests for information, and hence do not qualify for separate rates. Rather, we found that China National, Hong Ye, Chengxiang, Kepsco, and Giftworld are appropriately considered to be part of the PRC-wide entity, subject to the PRC-wide rate. See Preliminary Results, 72 FR at 17480-17481. The Department did not receive comments on this issue prior to these final results.

The Department also did not receive comments on its preliminary determination to apply adverse facts available (AFA) to the PRC-wide entity (including China National, Hong Ye, Chengxiang, Kepsco, and Giftworld) and has no evidence to challenge this finding. Therefore, we have not altered our decision to apply total AFA to the PRC-wide entity (including China National, Hong Ye, Chengxiang, Kepsco, and Giftworld) for these final results, in accordance with sections 776(a)(2)(A) and (B) and section 776(b) of the Tariff Act of 1930, as amended (the Act). See id. for a complete discussion of the Department's decision to apply total AFA to the PRC-wide entity (including China National, Hong Ye, Chengxiang, Kepsco, and Giftworld).

Changes since the Preliminary Results

Based on comments received from the interested parties and findings at verification, we have made the following company-specific changes to Max Fortune's margin calculation. 1) The Department revised certain of Max Fortune's freight and insurance expenses. See Max Fortune Sales Verification Report at 2 and 20. 2) The Department did not deduct domestic insurance expenses from Max Fortune's sales. See Max Fortune Sales Verification Report at 2 and 20. 3) The Department subtracted certain billing adjustments from Max Fortune's U.S. sales. See Issues and Decision Memorandum, at Comment 7, and Max Fortune Sales Verification Report at 2 and 16-17.

Section 776(a)(2) of the Act provides that 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 782(e) of the Act; (C) significantly impedes a determination under the antidumping statute; or (D) provides such information but the information cannot be verified, the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination.

Section 776(b) of the Act states that if the administering authority finds that an interested party has not acted to the best of its ability to comply with a request for information, the administering authority may, in reaching its determination, use an inference that is adverse to that party. The adverse inference may be based upon: (1) The petition, (2) a final determination in the investigation under this title, (3) any previous review under section 751 or determination under section 753, or (4) any other information placed on the record.

For the final results, in accordance with sections 776(a)(2) and 776(b) of the Act, the Department has determined that Max Fortune did not act to the best of its ability in providing necessary information involving missing sale(s) and certain sale(s) discounts, as found at verification, with respect to Max Fortune's U.S. sales database. See Issues and Decision Memorandum, at Comment 7, and Max Fortune Sales Verification Report at 2 and 14 and 18-19. Thus, as partial AFA the Department has applied the PRC-wide rate of 112.64 percent to the missing sale and incorporated the sale into Max Fortune's margin calculation. See Memorandum to the File, regarding Certain Tissue Paper from the People's Republic of China (PRC): Max Fortune Industrial Limited and Max Fortune (FETDE) Paper Products Co., Ltd. (collectively, Max Fortune) Analysis Memorandum for the Final Results of Review, dated October 9, 2007 (Max Fortune Analysis Memo). Because the Department used secondary information in this partial AFA determination, the Department corroborated the secondary information in accordance with section 776(c) of the Act and determined the PRC wide rate to be both reliable and relevant. See Issues and Decision Memorandum, at Comment 7.

Also, as facts available, the Department has used information on the record to apply one sales discount to all of Max Fortune's sales of subject merchandise to a certain U.S. customer. As partial AFA, the Department has calculated a second discount using an adverse value and also applied the discount to all of Max Fortune's sales of subject merchandise to a certain U.S. customer, regardless of whether each sale was subject to the discount. See Max Fortune Analysis Memo. Because the Department used information gathered in the course of the instant review for the facts available and the partial AFA discount determinations, there was no need for the Department to corroborate the information used, pursuant to section 776(c) of the Act. See Issues and Decision Memorandum, at Comment 7.

For the final results, we also revised our calculation of surrogate financial ratios for factory overhead, and used the revised ratio in our margin calculation. See Issues and Decision Memorandum, at Comment 2. See also Memorandum to the File, regarding Factors of Production Valuation Memorandum for the Final Results of Antidumping Administrative Review of Certain Tissue Paper Products from the People's Republic of China, dated October 9, 2007.

Final Results of Review

We determine that the following antidumping duty margins exist:

Certain Tissue Paper from the PRC

Individually Reviewed Exporters

Max Fortune Industrial Ltd.	0.07%
PRC-Wide Rate
PRC-Wide Rate (including China National, Hong Ye, Chengxiang, Kepsco, and Giftworld)	112.64%

For details on the calculation of the antidumping duty weighted-average margin for Max Fortune, see Max Fortune Analysis Memo. A public version of this memorandum is on file in the CRU.

Assessment Rates

Pursuant to section 751(a)(2)(A) of the Act and 19 CFR 351.212(b), the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of these final results of review. For assessment purposes, where possible, we calculated importer-specific assessment rates for tissue paper from the PRC via ad valorem duty assessment rates based on the ratio of the total amount of the dumping margins calculated for the examined sales to the total entered value of those same sales. We will instruct CBP to assess antidumping duties on all appropriate entries covered by this review.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of these 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 for by section 751(a)(2)(C) of the Act: (1) For Max Fortune, the Department has calculated a de minimus margin for these final results, and therefore no cash deposit will be required for this company; (2) for previously investigated or reviewed PRC and non-PRC exporters not listed above that have separate rates, the cash deposit rate will continue to be the exporter-specific rate published for the most recent period; (3) for all PRC exporters of subject merchandise that have not been found to be entitled to a separate rate, including those companies for which this review has been rescinded, the cash deposit rate will be the PRC-wide rate of 112.64 percent; and (4) for all non-PRC exporters of subject merchandise which have not received their own rate, the cash deposit rate will be the rate applicable to the PRC exporters that supplied that non-PRC exporter. These deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Interested Parties

This notice also serves as the final 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 Secretary's presumption that reimbursement of antidumping duties occurred and in the subsequent assessment of double antidumping duties.

This notice also serves as the only reminder to parties subject to administrative protective order (APO) of their responsibility concerning the return/destruction or conversion to judicial protective order of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Failure to comply is a violation of the APO.

This administrative review and this notice are published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: October 9, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

APPENDIX I

General Issues

Comment 1: Zeroing

Comment 2: Classification of Expenses in Financial Ratios

Company-Specific Issues

Sansico Group-Related Issues

Comment 3: Rescission of The Sansico Group

Samsam-Related Issues

Comment 4a: Application of Adverse Facts Available based on Verification Findings

Comment 4b: Verification Findings

Comment 5: Other Verification Findings

Comment 6: Clerical Errors in Preliminary Results

Max Fortune-Related Issues

Comment 7: Application of Adverse Facts Available based on Verification Findings

Footnotes

1.  See Memorandum to the File, regarding Telephone Call Regarding Verification of Sansico Group's Indonesian Supplier, dated June 25, 2007.

2.  See Letter to the Secretary from the Sansico Group, regarding Response to Department's Request During the Verification of Sansico Group in Certain Tissue Paper Products from the People's Republic of China (July 30, 2007).

3.  On January 30, 2007, at the direction of U.S. Customs and Border Protection (CBP), the Department added the following HTSUS classifications to the AD/CVD module for tissue paper: 4802.54.3100, 4802.54.6100, and 4823.90.6700. However, we note that the six-digit classifications for these numbers were already listed in the scope.

4.  The Department notes that Quijiang is currently subject to an anti-circumvention inquiry in tissue paper from the PRC. See Certain Tissue Paper Products from the People's Republic of China: Initiation of Anti-circumvention Inquiry, 71 FR 53662 (September 12, 2006).