E7-21042. Notice of Final Determination of Sales at Less Than Fair Value: Coated Free Sheet Paper from Indonesia

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

We determine that imports of coated free sheet paper (“CFS paper”) are being, or are likely to be, sold in the United States at less than fair value (“LTFV”), as provided in section 735 of the Tariff Act of 1930, as amended (“the Act”). The estimated margins of sales at LTFV are shown in the “Final Determination” section of this notice.

EFFECTIVE DATE:

October 25, 2007.

FOR FURTHER INFORMATION CONTACT:

Brian C. Smith or Gemal Brangman, AD/CVD Operations, Office 2, Import Administration-Room B-099, 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

On June 4, 2007, the Department published in the Federal Register the Preliminary Determination of sales at LTFV in the antidumping duty investigation of CFS paper from Indonesia. See Coated Free Sheet Paper from Indonesia: Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 72 FR 30753 (June 4, 2007) (“Preliminary Determination”).

On June 13, 2007,^[1] PT. Pindo Deli Pulp & Paper Mills (“PD”), PT. Pabrik Kertas Tjiwi Kimia, Tbk (“TK”), and their affiliates PT. Cakrawala Mega Indah (“CMI”), PT Indah Kiat Pulp & Paper Tbk (“IK”), PT. Lontar Papyrus Pulp & Paper Industries (“Lontar”), PT Arara Abadi (“AA”) and PT. Wirakarya Sakti (“WKS”) (hereafter collectively referred to as “the Indonesian Respondents”) ² submitted a revised cost of production (“COP”) database for TK which incorporated corrections found prior to the start of verification. On June 27, 2007, the Indonesian Respondents submitted a revised COP database for PD which incorporated corrections submitted at the start of PD's cost verification on June 22, 2007.

From June 20 through July 20, 2007, we verified the sales and cost questionnaire responses of the Indonesian Respondents. On August 20, 27, and 28, 2007, the Department issued its verification reports. We provided the interested parties an opportunity to comment on the Preliminary Determination and the Department's verification findings.

On June 29, 2007, the petitioner ³ requested a hearing to discuss issues addressed by the interested parties in their case and rebuttal briefs.

On August 28, 2007, the petitioner requested that the Department clarify the scope of the investigation of CFS paper from Indonesia and placed on the record of this review information to support its request.

On September 5, 2007, the petitioner and the Indonesian Respondents submitted case briefs. On September 6, 2007, the petitioner withdrew its request for a hearing. Because the petitioner was the only interested party to request a hearing and it subsequently withdrew its request, no hearing was held on issues raised in the September 5, 2007, case briefs. On September 10, 2007, both the petitioner and the Indonesian Respondents submitted rebuttal briefs.

Also on September 10, 2007, the Department rejected the petitioner's August 28, 2007, scope clarification submission because it contained untimely filed new factual information. The petitioner refiled its submission with the new factual information redacted on September 10, 2007.

On September 12, 2007, the petitioner and Indonesian Respondents filed case briefs on the scope issue. On September 14, 2007, the Department rejected the Indonesian Respondents' case brief on the scope issue because it contained untimely filed new factual information. The Indonesian Respondents refiled this case brief with the new factual information redacted on September 17, 2007.

On September 17, 2007, the Department rejected the Indonesian Respondents' September 10, 2007, rebuttal brief because it contained untimely filed new argument. The Indonesian Respondents refiled their rebuttal brief with the new argument redacted on September 18, 2007.

On September 20, 2007, the petitioner and Indonesian Respondents filed rebuttal briefs on the scope issue. A hearing on the scope issue was held on September 26, 2007.

Period of Investigation

The period of investigation is October 1, 2005, through September 30, 2006. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs submitted by the parties to this investigation are addressed in the “Issues and Decision Memorandum” (“Decision Memo”) from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, dated October 17, 2007, which is hereby adopted by this notice. A list of the issues that parties have raised and to which we have responded, all of which are in the Decision Memo, is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099 of the main Department building. In addition, a complete version of the Decision Memo can be accessed directly on the Web at http://ia.ita.doc.gov/​frn. The paper copy and electronic version of the Decision Memo are identical in content.

Scope of Investigation

The merchandise covered by this investigation includes coated free sheet paper and paperboard of a kind used for writing, printing or other graphic purposes. Coated free sheet paper is produced from not-more-than 10 percent by weight mechanical or combined chemical/mechanical fibers. Coated free sheet paper is coated with kaolin (China clay) or other inorganic substances, with or without a binder, and with no other coating. Coated free sheet paper may be surface-colored, surface-decorated, printed (except as described below), embossed, or perforated. The subject merchandise includes single- and double-side-coated free sheet paper; coated free sheet paper in both sheet or roll form; and is inclusive of all weights, brightness levels, and finishes. The terms “wood free” or “art” paper may also be used to describe the imported product.

Excluded from the scope are: (1) coated free sheet paper that is imported printed with final content printed text or graphics; (2) base paper to be sensitized for use in photography; and (3) paper containing by weight 25 percent or more cotton fiber.

Coated free sheet paper is classifiable under subheadings 4810.13.1900, 4810.13.2010, 4810.13.2090, 4810.13.5000, 4810.13.7040, 4810.14.1900, 4810.14.2010, 4810.14.2090, 4810.14.5000, 4810.14.7040, 4810.19.1900, 4810.19.2010, and 4810.19.2090 of the Harmonized Tariff Schedule of the United States (“HTSUS”). While HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.

Scope Comments

On August 20, August 28, and September 10, 2007, the petitioner requested that the Department clarify the scope of the antidumping and countervailing duty investigations of CFS paper from Indonesia, Korea and the People's Republic of China. Specifically, the petitioner asked the Department to “clarify that the scope of the investigation includes coated free sheet paper containing hardwood BCTMP.”

Because this was a general issue pertaining to all six investigations, the Department set up a general issues file to handle this scope request. A hearing on the scope request was held on September 26, 2007. The hearing comprised a public session, a closed session for the antidumping investigation from Korea, and a closed session for the countervailing duty investigation from the PRC. After considering the comments submitted by the parties to these investigations, we have determined not to adopt the scope clarification sought by the petitioner. See Memorandum to Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, entitled “Scope Clarification Request: NewPage Corporation” dated concurrently with this notice, which is appended to “Issues and Decision Memorandum for the Final Determination in the Countervailing Duty Investigation of Coated Free Sheet Paper from the People's Republic of China.”

Changes Since the Preliminary Determination

Based on our analysis of the comments received and our findings at verification, we have made certain changes to the margin calculations for the Indonesian Respondents. For a discussion of these changes, see the “Margin Calculations” section of the Decision Memo.

Verification

As provided in section 782(i) of the Act, we verified the sales and cost information submitted by the Indonesian Respondents for use in our final determination. We used standard verification procedures including an examination of relevant accounting and production records, and original source documents provided by the Indonesian Respondents. Our sales and cost verification results are outlined in separate verification reports. See August 20, 2007, cost verification report, and August 27 and 28, 2007, sales verification reports for the Indonesian Respondents.

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we are directing U.S. Customs and Border Protection (“CBP”) to continue to suspend liquidation of all imports of subject merchandise that are entered or withdrawn from warehouse, for consumption on or after June 4, 2007, the date of publication of the Preliminary Determination in the Federal Register. We will instruct CBP to continue to require a cash deposit or the posting of a bond for all companies based on the estimated weighted-average dumping margins shown below. The suspension of liquidation instructions will remain in effect until further notice.

Final Determination Margins

We determine that the following weighted-average dumping margins exist for the period October 1, 2005, through September 30, 2006:

Manufacturer/Exporter	Weighted Average Margin (percent)
PT. Pabrik Kertas Tjiwi Kimia Tbk, PT. Pindo Deli Pulp and Paper Mills, and PT. Indah Kiat Pulp and Paper Tbk (collectively, PD/TK/IK)	8.63
All Others	8.63

Section 735(c)(5)(A) of the Act provides that the estimated “All Others” rate shall be an amount equal to the weighted average of the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding any zero and de minimis margins, and any margins determined entirely under section 776 of the Act. The collapsed entity PD/TK/IK⁴ is the only respondent in this investigation for which the Department has calculated a company-specific rate. Therefore, for purposes of determining the “All Others” rate and pursuant to section 735(c)(5)(A) of the Act, we are using the weighted-average dumping margin calculated for PD/TK/IK, as referenced above.

Disclosure

We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b).

ITC Notification

In accordance with section 735(d) of the Act, we have notified the ITC of our final determination. As our final determination is affirmative, the ITC will determine within 45 days whether imports of the subject merchandise are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping duty order directing CBP to assess antidumping duties on all imports of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the effective date of the suspension of liquidation.

Return or Destruction of Proprietary Information

This notice will serve as the only reminder to parties subject to administrative protective order (“APO”) of their responsibility concerning the destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and the terms of an APO is a sanctionable violation.

We are issuing and publishing this determination and notice in accordance with sections 735(d) and 777(i) of the Act.

Dated: October 17, 2007.

David M. Spooner,

Assistant Secretary for Import Administration.

Appendix—Issues in Decision Memo

Comments

Issue 1: Whether to Adjust Export Price for Amounts Paid by TK to an Unaffiliated Company

Issue 2: Application of Major Input Rule to Logs Used to Produce Pulp by IK

Issue 3: Application of Major Input Rule to Pulp Produced by Lontar

Issue 4: Selection of Market Price Used for Testing of Purchases of Pulp from Lontar

Issue 5: Application of Transactions Disregarded Rule for Purchases of Electricity

Issue 6: Treatment of Miscellaneous Expenses in Financial Expense Calculation

Footnotes

1.  June 13, 2007, is seven days prior to the start of the cost verification.

2.  PD and TK are CFS paper producers, whereas CMI is a reseller of paper products produced by PD and TK. IK and Lontar are pulp producers, whereas AA and WKS are forestry companies.

3.  The petitioner in this investigation is NewPage Corporation.

4.  In the Preliminary Determination, we determined it appropriate to treat PD, TK and IK as one entity for margin calculation purposes because they met the regulatory criteria for collapsing. See May 29, 2007, Memorandum from the Team to Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, entitled "Treatment of Data Reported by Affiliated Parties in the Antidumping Duty Investigation of Coated Free Sheet Paper from Indonesia" No party commented on this preliminary determination and we found nothing at verification that would otherwise compel us to reverse this determination. Therefore, we have continued to treat these affiliated companies as one entity in the final determination.