E6-16395. Sebacic Acid from the People's Republic of China: Notice of Court Decision Not in Harmony with Final Results of Administrative Review

AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

On September 18, 2006, the United States Court of International Trade (“the Court”) sustained the Department of Commerce's (“the Department”) final remand redetermination on its entirety. See Guangdong Chemicals Import & Export Corporation v. United States, Ct. No. 05-00023, Slip Op. 06-142 (Ct. Int'l Trade September 18, 2006) (“Guangdong II”). This case arises out of the Department's final determination of Sebacic Acid from the People's Republic of China: Final Results of Antidumping Duty Administrative Review, 69 FR 75303 (December 16, 2004) (“Final Results”). The final judgment in this case was not in harmony with the Department's Final Results.

EFFECTIVE DATE:

October 4, 2006.

FOR FURTHER INFORMATION CONTACT:

Jennifer Moats, AD/CVD Operations, Office 8, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington DC 20230; telephone [phone].

SUPPLEMENTARY INFORMATION:

Background

In the Final Results, the Department selected a surrogate value for sebacic acid in order to determine the portion of the factors of production attributable to sebacic acid and its co-product, capryl alcohol. See section 773(c) of the Tariff Act of 1930, as amended (“the Act”). To obtain a surrogate value for sebacic acid, the Department used information from Indian import statistics rather than the use of data maintained by the publication Chemical Weekly in its Chemicals Import and Export trade database index (“ChemImpEx”) placed on the record and proposed by Guangdong Chemicals Import & Export Corporation (“Guangdong”). Additionally, the Department changed its methodology between the Preliminary Results (see Sebacic Acid from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Notice of Partial Recision, 69 FR 47409 (August 5, 2004) (“Preliminary Results”)) and the Final Results, and applied a by-product offset to reflect Guangdong's sale of fatty acid and glycerine made in the production process.

Before the Court, Guangdong challenged the Department's selection of Indian import statistics as the surrogate to value sebacic acid, and its determination to apply the by-product offset after the application of the surrogate financial ratio to manufacturing costs in the Final Results. On January 25, 2006, the Court issued a remand in Guangdong Chemicals Import & Export Corporation v. United States, Ct. No. 05-00023 Slip Op. 06-13 (January 25, 2006). The Court stated that the Department did not justify its decision to abandon a more product-specific data source. See id. at 19. The Court specifically pointed out that a remand was necessary because the Department did not address the data Guangdong used to corroborate its ChemImpEx data, and the Department did not explain why the Department's use of the Indian import statistics was not aberrational given that the data was comprised of a basket category. See id. at 19 and 20. The Court concluded that the Department failed to present substantial evidence supporting its surrogate value for sebacic acid. See id. at 22.

Additionally, the Court granted the Department's request for a voluntary remand to give interested parties an opportunity to comment on the application of the by-product offset which was changed between the Preliminary Results and the Final Results without allowing parties the opportunity to comment on this change. See id. at 22.

In order to comply with the Court's remand order, the Department reviewed its choice of surrogate value for sebacic acid and made changes to the Indian import statistics to eliminate a value that the Department determined to be aberrational. Also, the Department provided additional explanation of its by-product methodology and provided interested parties an opportunity to comment on its methodology for the redetermination on remand. On May 3, 2006, the Department issued its Final Redetermination Pursuant to Court Remand (“Final Redetermination”).

Guangdong continued to challenge the Department's determination in the Final Redetermination. On September 18, 2006, the Court found that the Department duly complied with the Court's remand order and sustained the Final Redetermination. See Guangdong II, Slip Op. 06-142 (September 18, 2006). The Court found that the Department's elimination of aberrational values constituted a reasonable step to compensate for some weaknesses in the Indian import statistics. See id. at 10. Therefore, the Court found that the Department's selection of surrogate value for sebacic acid is supported by substantial evidence. See id. at 12. Also, the Court found that the Department's analysis of the reliability of the Indian import statistics in view of the corroborating evidence submitted by Guangdong was reasonable. See id. at 15. Additionally, the Court upheld the Department's decision to account for separable costs associated with by-product sales by applying a by-product credit after the application of financial ratios to manufacturing costs. See id. at 21. Therefore, the Department's Final Redetermination was sustained in its entirety by the Court. Consequently, the antidumping duty rate for Guangdong will be 19.82 percent.

Timken Notice

In its decision in Timken Co., v. United States, 893 F.2d 337, 341 (Fed. Cir. 1990) (“Timken”), the United States Court of Appeals for the Federal Circuit held that, pursuant to section 516A(e) of the Act of 1930, the Department must publish a notice of a court decision that is not “in harmony” with a Department determination, and must suspend liquidation of entries pending a “conclusive” court decision. The Court's decision in Guangdong II on September 18, 2006, constitutes a final decision of that court that is not in harmony with the Department's final results of administrative review. This notice is published in fulfillment of the publication requirements of Timken. Accordingly, the Department will continue the suspension of liquidation of the subject merchandise pending the expiration of the period of appeal, or, if appealed, upon a final and conclusive court decision.

This notice is issued and published in accordance with section 516A(c)(1) of the Act.

Dated: September 28, 2006.

Stephen J. Claeys,

Acting Assistant Secretary for Import Administration.