01-27857. Creatine Monohydrate 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 currently conducting an administrative review of the antidumping duty order on creatine monohydrate from the People's Republic of China. The period of review is July 30, 1999 through January 31, 2001. This review covers imports of subject merchandise from one producer/exporter.

We have preliminarily determined that sales have been made below normal value. If these preliminary results are adopted in our final results of review, we will instruct the Customs Service to assess antidumping duties based on the difference between the U.S. price and normal value.

We invite interested parties to comment on these preliminary results. We will issue the final results no later than 120 days from the date of publication of this notice.

EFFECTIVE DATE:

November 6, 2001.

FOR FURTHER INFORMATION CONTACT:

Blanche Ziv or Annika O'Hara, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone], respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (“the Act”), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act (“URAA”). In addition, unless otherwise indicated, all citations to the Department of Commerce (“Department”) regulations are 19 CFR part 351 (April 2001).

Background

On February 4, 2000, the Department published an antidumping order on creatine monohydrate from the People's Republic of China (“PRC”). See Notice of Antidumping Duty Order: Creatine Monohydrate from the People's Republic of China, 65 FR 5583 (February 4, 2000). On February 14, 2001, the Department published in the Federal Register an Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 66 FR 10269 (February 14, 2001).

On February 23, 2001, in accordance with 19 CFR 351.213(b), a manufacturer/exporter of the subject merchandise, Blue Science International Trading (Shanghai) Co., Ltd. (“Blue Science”), requested that the Department conduct an administrative review of this order. On March 22, 2001, we published a notice of initiation of this review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocations in Part, 66 FR 16037 (March 22, 2001). The period of this review (“POR”) is July 30, 1999 through January 31, 2001.

On March 27, 2001, we issued a questionnaire to Blue Science. We issued a supplemental questionnaire on July 19, 2001. We received responses to the original and supplemental questionnaires on May 24 and August 24, 2001, respectively.

Scope of the Review

Imports covered by this review are creatine monohydrate, which is commonly referred to as “creatine.” The chemical name for creatine monohydrate is N-(aminoiminomethyl)-N-methylgycine monohydrate. The Chemical Abstracts Service (“CAS”) registry number for this product is 6020-87-7. Creatine monohydrate in its pure form is a white, tasteless, odorless powder, that is a naturally occurring metabolite found in muscle tissue. Creatine monohydrate is provided for in subheading 2925.20.90 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading and the CAS registry number are provided for convenience and customs purposes, the written description of the merchandise under review is dispositive.

Separate Rates

It is the Department's standard policy to assign all exporters of the merchandise subject to review in nonmarket 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 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, 1944) (“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. See Sparklers, 56 FR at 20589.

A de facto analysis of absence of government control over exports is based on four factors—whether the respondent: (1) Sets its own export prices independent of the government and other exporters; (2) retains the proceeds from its export sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) has the authority to negotiate and sign contracts and other agreements; and (4) has autonomy from the government regarding the selection of management. See Silicon Carbide, 59 FR at 22587; see also Sparklers, 56 FR at 20589.

In the Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate from the People's Republic of China 64 FR 71104 (December 20, 1999) (“LTFV Investigation”), we determined that there was de jure and de facto absence of government control of each company's export activities and determined that each company warranted a company-specific dumping margin. For the POR, Blue Science 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 determination in the LTFV Investigation and Blue Science continues to demonstrate an absence of government control, both in law and in fact, with respect to its exports, in accordance with the criteria identified in Sparklers and Silicon Carbide.

Export Price

For U.S. sales made by Blue Science, we calculated an export price, in accordance with section 772(a) of the Act, because the subject merchandise was sold to unaffiliated purchasers in the United States prior to importation into the United States and the facts did not otherwise warrant use of constructed value export price.

For these sales, we calculated export price based on the price to unaffiliated purchasers.

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. The party in this proceeding has not 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.

Section 773(c)(4) of the Act requires the Department to value the 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, and (2) are significant producers of comparable merchandise. The Department has determined that India, Pakistan, Indonesia, Sri Lanka, and the Philippines are countries comparable to the PRC in terms of overall economic development (see Memorandum from Jeff May, Director, Office of Policy, to Susan Kuhbach, Senior Director, AD/CVD Enforcement, Office 1, July 30, 2001). According to the available information on the record, we have determined that India is a significant producer of comparable merchandise. Although we have no information to indicate that India produces creatine, it does produce other products within the same customs heading, and it produces other fine chemicals with nutritional characteristics. Accordingly, we have calculated NV using Indian values for the PRC producer's factors of production. We have obtained and relied upon publicly available information wherever possible.

Factors of Production

In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by the companies in the PRC which produced creatine for Blue Science during the POR. To calculate NV, the reported unit factor quantities were multiplied by publicly available Indian values.

In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices to make them delivered prices. For the distances reported, we added to Indian CIF surrogate values a surrogate freight cost using the reported distances from the PRC port to the PRC factory, or from the domestic supplier to the factory. This adjustment is in accordance with the United States Court of Appeals for the Federal Circuit's (“CAFC”) decision in Sigma Corp. v. United States, 117 F. 3d 1401, 1807-1908 (Fed. Cir. 1997). For those values not contemporaneous with the POR and quoted in a foreign currency, we adjusted for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics.

Many of the inputs in the production of creatine are considered business proprietary data by the respondent. Due to the proprietary nature of this data, we are unable to discuss many of the inputs in this preliminary results notice. For a complete analysis of surrogate values, see the memorandum from the Team to the file (“Factors of Production Memorandum”), dated October 31, 2001.

We valued labor using the method described in 19 CFR 351.408(c)(3).

Consistent with our approach in Manganese Metal from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 66 FR 15076 (March 15, 2001) (“Manganese Metal”), we calculated our surrogate value for electricity based on electricity rate data from the Energy Data Directory & Yearbook, (1999/2000) published by Tata Energy Research Institute. We based the value of diesel on prices reported by the International Energy Agency (“IEA”), 1st quarter 2000.

We based our calculation of factory overhead, SG&A, and profit on the financial statements of Sanderson Industries, Ltd. (“Sanderson”), an Indian chemical producer. The products produced by Sanderson appear to be manufactured using bulk chemical processes, similar to the processes used by the PRC creatine producers. These were the same values used in the LTFV Investigation.

To value truck freight rates, we used a 2000 rate from a quote from an Indian trucking company.

For packing materials we used import values from the Monthly Foreign Trade Statistics of India; Volume II Imports.

Preliminary Results of the Review

We preliminarily find the weighted average dumping margin for Blue Science for the period July 30, 1999, through January 31, 2001 to be 8.13 percent.

Parties to the proceeding may request disclosure within five days of the date of publication of this notice. Any interested party may request a hearing within 30 days of publication of this notice. See 19 CFR 351.310(c). Any hearing, if requested, will be held approximately 44 days after the date of publication of this notice, or the first working day thereafter. Interested parties may submit case briefs and/or written comments no later than 30 days after the date of publication of this notice. Rebuttal briefs and rebuttals to written comments, which must be limited to issues raised in such briefs or comments, may be filed not later than 37 days after the date of publication. Parties who submit arguments are requested to submit with the argument (1) a statement of the issue, (2) a brief summary of the argument, and (3) a table of authorities. The Department will issue a notice of final results of this administrative review, including the results of its analysis of issues raised in any such written comments, within 120 days of publication of these preliminary results.

Assessment Rates

Pursuant to 19 CFR 351.212(b), the Department calculates an assessment rate for each importer of the subject merchandise. Upon issuance of the final results of this administrative review, if any importer-specific assessment rates calculated in the final results are above de minimis (i.e., at or above 0.5 percent), the Department will issue appraisement instructions directly to the Customs Service to assess antidumping duties on appropriate entries by applying the assessment rate to the entered value of the merchandise. For assessment purposes, we calculate importer-specific assessment rates for the subject merchandise by aggregating the dumping duties due for all U.S. sales to each importer and dividing the amount by the total entered value of the sales to that importer.

Cash Deposit Requirements

To calculate the cash-deposit rate for the company included in this administrative review, we divided the total dumping margins for the company by the total net value of the company's sales during the review period.

Furthermore, the following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of creatine entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rate for Blue Science will be the rate established in the final results of this administrative review; (2) for a 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 153.70 percent, the PRC-wide rate established in the LTFV investigation; and (4) the cash deposit rate for a non-PRC exporter of subject merchandise from the PRC will be the rate applicable to the PRC supplier of that exporter. These cash requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

Notification to Importers

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

We are issuing and publishing this determination in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: October 31, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.