E9-5237. 1-Hydroxyethylidene-1, 1-Diphosphonic Acid from the People's Republic of China: Final Determination of Sales at Less Than Fair Value

AGENCY:

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

EFFECTIVE DATE:

March 11, 2009.

SUMMARY:

The Department of Commerce (the “Department”) has determined that 1-hydroxyethylidene-1, 1-diphosphonic acid (“HEDP”) from the People's Republic of China (“PRC”) is being, or is likely to be, sold in the United States at less than fair value (“LTFV”), as provided in section 733 of the Tariff Act of 1930, as amended (“the Act”). The final dumping margins for this investigation are listed in the “Final Determination Margins” section of this notice.

FOR FURTHER INFORMATION CONTACT:

Maisha Cryor or Shawn Higgins, AD/CVD Operations, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone] and [phone], respectively.

SUPPLEMENTARY INFORMATION:

Case History

On October 21, 2008, the Department published its preliminary determination that HEDP from the PRC is being, or is likely to be, sold in the United States at LTFV, as provided in the Act. See 1-Hydroxyethylidene-1, 1-Diphosphonic Acid From the People's Republic of China: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination, 73 FR 62470 (October 21, 2008) (“Preliminary Determination”). For the Preliminary Determination, the Department calculated a 24.30 percent dumping margin for Nanjing University of Chemical Technology Changzhou Wujin Water Quality Stabilizer Factory Ltd. (“Wujin Water”). The Department assigned a 72.42 percent dumping margin to the PRC-wide entity including Changzhou Kewei Fine Chemical Factory (“Kewei”) and a 24.30 percent dumping margin to separate rate applicants Changzhou Wujin Fine Chemical Factory Co., Ltd. (“Wujin Fine Chemical”) and Jiangsu Jianghai Chemical Group Co., Ltd. (“Jiangsu Jianghai”). On December 3, 2008, Wujin Water provided the Department with its final submission of surrogate values. In December 2008, Compass Chemical International LLC (“Petitioner”), Wujin Water, Wujin Fine Chemical, and Jiangsu Jianghai submitted case briefs and rebuttal briefs.¹ On January 14, 2009, the Department held a public hearing.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by the parties to this investigation are addressed in the “Issues and Decision Memorandum for the Final Determination in the Less-Than-Fair-Value Investigation of 1-Hydroxyethylidene-1, 1-Diphosphonic Acid from the People's Republic of China” (“Issues and Decision Memorandum”), dated concurrently with this notice, which is hereby adopted by this notice in its entirety. A list of the issues which parties raised and to which we respond in the Issues and Decision Memorandum is attached to this notice as an Appendix. The Issues and Decision Memorandum is a public document and is on file in the Central Records Unit (“CRU”), Main Commerce Building, Room 1117, and is accessible on the internet at http://www.trade.gov/​ia. The paper copy and electronic version of the memorandum are identical in content.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by Wujin Water for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondent.

Changes Since the Preliminary Determination

Based on our analysis of comments received, we have made certain adjustments to the margin calculations used in the Preliminary Determination. These adjustments are discussed in detail in the Issues and Decision Memorandum and are listed below:

1. We recalculated the financial ratios using the April 2005 through March 2006 financial statement of Rencal Chemicals (India) Limited (“Rencal Chemicals”).

2. We recalculated the surrogate value for phosphorus trichloride using the April 2004 through March 2005 and April 2005 through March 2006 financial statements of Rencal Chemicals.

3. We recalculated the surrogate value for steam using the April 2007 through March 2008 financial statement of Hindalco Industries Ltd.

4. We revised the transportation distance of chemical drums.

Period of Investigation

The period of investigation (“POI”) is July 1, 2007, through December 31, 2007. This period corresponds to the two most recent fiscal quarters prior to the month of the filing of the petition, i.e., March 2008. See 19 CFR 351.204(b)(1).

Scope of the Investigation

The merchandise covered by this investigation includes all grades of aqueous, acidic (non-neutralized) concentrations of 1-hydroxyethylidene-1, 1-diphosphonic acid², also referred to as hydroxethlylidenediphosphonic acid, hydroxyethanediphosphonic acid, acetodiphosphonic acid, and etidronic acid. The CAS (Chemical Abstract Service) registry number for HEDP is 2809-21-4. The merchandise subject to this investigation is currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) at subheading 2931.00.9043. It may also enter under HTSUS subheading 2811.19.6090. While HTSUS subheadings are provided for convenience and customs purposes only, the written description of the scope of this investigation is dispositive.

Scope Comments

The Department received no comments regarding the scope of this investigation.

Non-Market Economy Treatment

In the Preliminary Determination, the Department considered the PRC to be a non-market economy (“NME”) country. In accordance with section 771(18)(C)(i) of the Act, any determination that a country is an NME country shall remain in effect until revoked by the administering authority. See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Preliminary Results of 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 7500 (February 14, 2003), unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2001-2002 Administrative Review and Partial Rescission of Review, 68 FR 70488 (December 18, 2003). No party has commented on the Department's classification of the PRC as an NME. Therefore, for the final determination, we continue to consider the PRC to be an NME.

Separate Rates

In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to an investigation in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. See Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified by Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994), and 19 CFR 351.107(d).

In the Preliminary Determination, we found that Wujin Fine Chemical and Jiangsu Jianghai demonstrated eligibility for separate-rate status. Since the publication of the Preliminary Determination, no party has commented on the eligibility of Wujin Fine Chemical and Jiangsu Jianghai for separate-rate status. For the final determination, we continue to find that the evidence placed on the record of this investigation by Wujin Fine Chemical and Jiangsu Jianghai demonstrates both de jure and de facto absence of government control with respect to each company's respective exports of the merchandise under investigation. Thus, we continue to find that Wujin Fine Chemical and Jiangsu Jianghai are eligible for separate-rate status. Normally the separate rate is determined based on the estimated weighted-average dumping margins established for exporters and producers individually investigated, excluding zero and de minimis margins or margins based entirely on adverse facts available (“AFA”). See section 735(c)(5)(A) of the Act. In this case, because there are no rates other than de minimis or those based on AFA, we have determined to take a simple average of the AFA and the de minimis rate calculated for Wujin Water as a reasonable method for purposes of determining the rate assigned to Wujin Fine Chemical and Jiangsu Jianghai. See section 735(c)(5)(B) of the Act. We note that this methodology is consistent with the Department's past practice. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination; Light-Walled Rectangular Pipe and Tube From the Republic of Korea, 73 FR 5794, 5800 (January 31, 2008) (“Preliminary Determination of Light-Walled Pipe”), unchanged in Final Determination of Sales at Less Than Fair Value: Light-Walled Rectangular Pipe and Tube from the Republic of Korea, 73 FR 35655 (June 24, 2008) (“Final Determination of Light-Walled Pipe”); see also “Corroboration” section below.

We determined in the Preliminary Determination that because Kewei withdrew from the investigation, thus preventing the Department from asking additional questions on its separate rate status and preventing the Department from verifying its responses, the Department has no basis upon which to grant Kewei a separate rate. We received no comments on this denial of a separate rate. Although Kewei remains a mandatory respondent, the Department will continue to consider Kewei part of the PRC-wide entity because it failed to demonstrate that it qualifies for a separate rate.

The PRC-Wide Rate

In the Preliminary Determination, the Department found that certain companies did not respond to our requests for information. See Preliminary Determination, 73 FR at 62473-74. We treated these PRC producers/exporters as part of the PRC-wide entity because they did not demonstrate that they operate free of government control over their export activities. Id. In addition, in the Preliminary Determination, the Department applied total AFA to Kewei. We determined, as AFA, that Kewei was not eligible for a separate rate and we would treat Kewei as part of the PRC-wide entity. Id. No additional information was placed on the record with respect to any of these companies after the Preliminary Determination. Therefore, pursuant to section 776(a)(2)(A) of the Act, the Department continues to find that the use of facts available is appropriate to determine the PRC-wide rate.

Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an adverse inference if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. See Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Notice of Rescission in Part and Intent to Rescind in Part, 72 FR 14078, 14079 (March 26, 2007) (“Preliminary Results of TRBs”), unchanged in Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Final Results of 2005-2006 Administrative Review and Partial Rescission of Review, 72 FR 56724 (October 4, 2007) and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Amended Final Results of 2005-2006 Administrative Review, 72 FR 70302 (December 11, 2007) (“Final Results of TRBs”). See also Statement of Administrative Action accompanying the Uruguay Round Agreements Act (“SAA”), H.R. Doc. No. 103-316, Vol. 1 (1994), at 870. We determine that, because the PRC-wide entity, including Kewei, did not respond to our requests for information, the PRC-wide entity has failed to cooperate to the best of its ability. See id. Therefore, the Department finds that, in selecting from among the facts otherwise available, an adverse inference is appropriate for the PRC-wide entity.

Because we begin with the presumption that all companies within an NME country are subject to government control, and because only Wujin Water, Wujin Fine Chemical, and Jiangsu Jianghai have overcome that presumption, we are applying a single antidumping rate (i.e., the PRC-wide entity rate) to all other exporters of subject merchandise from the PRC. Such companies did not demonstrate entitlement to a separate rate. See, e.g., Synthetic Indigo From the People's Republic of China; Notice of Final Determination of Sales at Less Than Fair Value, 65 FR 25706 (May 3, 2000). The PRC-wide entity rate applies to all entries of subject merchandise except for entries from Wujin Water, Wujin Fine Chemical, and Jiangsu Jianghai.

In the Preliminary Determination, we assigned to the PRC-wide entity the margin alleged in the petition, i.e., 72.42 percent. See Preliminary Determination, 73 FR at 22331. For the final determination, we have continued to assign to the PRC-wide entity the rate of 72.42 percent.

Corroboration

Section 776(c) of the Act provides that, when the Department relies on secondary information in using the facts otherwise available, it must, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. We have interpreted “corroborate” to mean that we will, to the extent practicable, examine the reliability and relevance of the information submitted. See Preliminary Determination of TRBs, 72 FR at 14080 (unchanged in Final Results of TRBs).

Because there are no respondents receiving rates other than de minimis or those based on AFA, we relied upon our pre-initiation analysis of the adequacy and accuracy of the information in the petition to corroborate the 72.42 percent petition margin selected as AFA for the PRC-wide entity. This corroborated margin was then used in the calculation of the rate assigned to Wujin Fine Chemical and Jiangsu Jianghai pursuant to section 735(c)(5)(B) of the Act. See “Import Administration Antidumping Investigation Initiation Checklist: 1-Hydroxyethylidene-1, 1-Diphosphonic Acid from the People's Republic of China,” (April 8, 2008). We note that this practice is consistent with the Department's past practice in instances where the only rates on the record are either de minimis or based entirely upon AFA. See Preliminary Determination of Light-Walled Pipe, 73 FR at 5797 (unchanged in Final Determination of Light-Walled Pipe). During the initiation stage, we examined evidence supporting the calculations in the petition and the supplemental information provided by Petitioner to determine the probative value of the margins alleged in the petition. During our pre-initiation analysis, we examined the information used as the basis of export price (“EP”) and normal value (“NV”) in the petition, and the calculations used to derive the alleged margins. Also during our pre-initiation analysis, we examined information from various independent sources provided either in the petition or, based on our requests, in supplements to the petition, which corroborated key elements of the EP and NV calculations. Id. Therefore, for the final determination, the Department finds that the rate derived from the petition for purposes of initiation has probative value for the purpose of being selected as the AFA rate assigned to the PRC-wide entity, including Kewei, and used in the calculation of the rate assigned to Wujin Fine Chemical and Jiangsu Jianghai pursuant to 735(c)(5)(B) of the Act.

Final Determination Margins

We determine that the following percentage dumping margins exist for the POI:

Manufacturer/Exporter	Weighted-Average Margin (Percent)
Nanjing University of Chemical Technology	0.00
Changzhou Wujin Water Quality Stabilizer Factory Ltd.3
Changzhou Wujin Fine Chemical Factory Co., Ltd.4	36.21
Jiangsu Jianghai Chemical Group Co., Ltd.5	36.21
PRC-wide Entity (including Kewei)	72.42
3 Nanjing University of Chemical Technology Changzhou Wujin Water Quality Stabilizer Factory Ltd. manufactures and exports subject merchandise.
4 Changzhou Wujin Fine Chemical Factory Co., Ltd. manufactures and exports subject merchandise.
5 Jiangsu Jianghai Chemical Group Co., Ltd. manufactures and exports subject merchandise.

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).

Continuation of Suspension of Liquidation

In accordance with section 735(c)(1)(B) of the Act, we will instruct U.S. Customs and Border Protection (“CBP”) to continue to suspend liquidation of all entries of HEDP from the PRC, except those produced and exported by Wujin Water, as described in the “Scope of Investigation” section, entered, or withdrawn from warehouse, for consumption on or after October 21, 2008, the date of publication of the Preliminary Determination in the Federal Register. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average dumping margin amount by which the NV exceeds U.S. price, as follows: (1) The rate for the manufacturer/exporter combinations listed in the chart above will be the rate we have determined in this final determination; (2) for all PRC exporters of subject merchandise which have not received their own rate, the cash-deposit rate will be the PRC-wide entity rate; and (3) 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 exporter/producer combination that supplied that non-PRC exporter. We are directing CBP not to suspend liquidation of imports of HEDP from the PRC produced and exported by Wujin Water, and entered, or withdrawn from warehouse, for consumption on or after October 21, 2008, the date of publication of the Preliminary Determination in the Federal Register. CBP shall not require a cash deposit or the posting of a bond for Wujin Water because we have calculated a margin of zero percent for Wujin Water. These suspension-of-liquidation instructions will remain in effect until further notice.

International Trade Commission Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (“ITC”) of our final determination of sales at LTFV. As our final determination is affirmative, in accordance with section 735(b)(2) of the Act, within 45 days the ITC will determine whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports or sales (or the likelihood of sales) for importation of the subject merchandise. If the ITC determines that material injury or threat of material 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, upon further instruction by the Department, 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.

Notification Regarding APO

This notice also serves as a reminder to the parties subject to administrative protective order (“APO”) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305. Timely notification of return or 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.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: March 5, 2009.

Ronald K. Lorentzen,

Acting Assistant Secretary for Import Administration.

Appendix:

Issues in Decision Memorandum

Comment 1: Financial Ratios

Comment 2: Surrogate Value for Phosphorus Trichloride

Comment 3: Surrogate Value for Chemical Drums

Comment 4: Surrogate Value for Steam

Comment 5: Treatment of Acetyl Chloride

Comment 6: Separate Rates for Wujin Fine Chemical and Jiangsu Jianghai

Comment 7: Combination Rate for Hong Kong Exporter

Footnotes

1.  Wujin Water, Wujin Fine Chemical, and Jiangsu Jianghai submitted case briefs and rebuttal briefs jointly.

2.  C2H8O7P2 or C(CH3)(OH)(PO3H2)2.