E8-5300. Polyethylene Retail Carrier Bags from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Partial Rescission of Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (the “Department”) is conducting an administrative review of the antidumping duty order on polyethylene retail carrier bags (“PRCB”) from the People's Republic of China (“PRC”) covering the period August 1, 2005, through July 30, 2006. On September 10, 2007, we published our preliminary results. See Polyethylene Retail Carrier Bags from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Review, 72 FR 51588 (“Preliminary Results”). We invited interested parties to comment on these preliminary results. Based on our analysis of the comments received, we have made changes to our margin calculations. Therefore, the final results differ from the preliminary results.

EFFECTIVE DATE:

March 17, 2008.

FOR FURTHER INFORMATION CONTACT:

Zev Primor or Maisha Cryor, 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] or [phone], respectively.

SUPPLEMENTARY INFORMATION:

Background

On September 10, 2007, the Department published the Preliminary Results. The mandatory respondents in this case are Dongguan Nozawa Plastics Products Co., Ltd., and United Power Packaging, Ltd. (collectively, “Nozawa”), and Rally Plastics Co., Ltd. (“Rally”). Additionally, this review covers a PRC exporter and its wholly-owned producer that are requesting a separate rate, Chun Hing Plastic Packaging Mfy. Ltd., and Chun Yip Plastic Bag Factory (collectively, “Chun Hing”). On September 4, 2007, the Department issued a supplemental questionnaire to Rally requesting that it address deficiencies in its factors of production (“FOP”) allocation methodology. Rally submitted a response to this questionnaire on October 1, 2007. Nozawa, Rally, and the petitioners ¹ submitted case briefs on November 1, 2007, and rebuttal briefs on November 7, 2007. In addition, Rally submitted a request for a hearing on October 10, 2007, but withdrew the request on November 13, 2007.

Period of Review

The period of review (“POR”) for this administrative review is August 1, 2005, through July 31, 2006.

Scope of the Order

The merchandise subject to this antidumping duty order is PRCBs, which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than 0.035 inch (0.889 mm) and no less than 0.00035 inch (0.00889 mm), and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm).

PRCBs are typically provided without any consumer packaging and free of charge by retail establishments, e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants, to their customers to package and carry their purchased products. The scope of the investigation excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments, e.g., garbage bags, lawn bags, trash-can liners.

Imports of the subject merchandise are currently classifiable under statistical category 3923.21.0085 of the Harmonized Tariff Schedule of the United States (“HTSUS”).² This subheading may also cover products that are outside the scope of this investigation. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this order is dispositive.

Partial Rescission of Review

In accordance with 19 CFR 351.213(d)(3), the Department preliminarily rescinded this administrative review with respect to Crown Polyethylene Products (Int'l) Ltd. (“Crown”); Heng Rong Plastic Products Co., Ltd. (“Heng Rong”); and Samson Plastic Manufactory Co., Ltd. (“Samson”). See Preliminary Results, 72 FR at 51589-90. No additional comments were received regarding the preliminary rescission of these companies. Therefore, in accordance with 19 CFR 351.213(d)(3), we have rescinded the administrative review with respect to Crown, Heng Rong, and Samson.

Duty Absorption

As noted above, we have rescinded the review for Crown Heng Rong and Samson, thus making the petitioner's request for calculating duty absorption with respect to these companies moot. In addition, Rally did not sell subject merchandise in the United States through an affiliated importer. Thus, according to section 751(a)(4) of the Tariff Act of 1930, as amended (the “Act”), we did not investigate whether Rally absorbed duties. In this case, only Nozawa sold subject merchandise in the United States through an affiliated importer.

Prior to the issuance of the Preliminary Results, the Department asked Nozawa to provide evidence to demonstrate that its unaffiliated U.S. purchasers will pay any antidumping duties ultimately assessed on entries of subject merchandise. Nozawa did not respond to the Department's request. See Memorandum from Mark Manning, Program Manager, AD/CVD Operations, Office 4, to the File, regarding “Nozawa's Response to Request for Duty Absorption Information,” dated August 16, 2007. Accordingly, absent such information on the record, the Department found in the Preliminary Results that it cannot conclude that the unaffiliated purchasers in the United States will pay the assessed duties. We received no comments from interested parties on our duty absorption finding. Therefore, because Nozawa did not rebut the duty-absorption presumption with evidence that its unaffiliated U.S. purchasers will pay the full duty ultimately assessed on the subject merchandise, we continue to find that antidumping duties have been absorbed by Nozawa on all U.S. sales made through its affiliated importers. See Notice of Final Results and Final Rescission in Part of Antidumping Duty Administrative Review: Certain Stainless Steel Butt-Weld Pipe Fittings From Taiwan, 70 FR 73727 (December 13, 2005).

Separate Rates

In proceedings involving non-market economy (“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 review 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.

In the Preliminary Results, we found that Chun Hing, Nozawa, and Rally demonstrated their eligibility for separate-rate status. We received no comments from interested parties regarding the separate rate status of these companies. Therefore, in these final results of review, we continue to find that the evidence placed on the record of this review by the above-referenced companies demonstrates an absence of government control, both in law and in fact, with respect to their exports of the merchandise under review. Thus, we have determined that Chun Hing, Nozawa, and Rally are eligible to receive separate rates.

Surrogate Country

In the Preliminary Results, we treated the PRC as a NME country and, therefore, we calculated normal value in accordance with section 773(c) of the Act. Also, we stated that we selected India as the appropriate surrogate country to use in this review for the following reasons: (1) it is a significant producer of merchandise comparable to subject merchandise; and (2) it is at a level of economic development comparable to the PRC, pursuant to section 773(c)(4) of the Act. See Preliminary Results, 72 FR at 51591. No interested party commented on our designation of the PRC as an NME country, nor the selection of India as the surrogate country. Therefore, for the final results of review, we have continued to treat the PRC as an NME country and have used the same surrogate country, India, for these final results.

Analysis of Comments Received

All issues raised in the post-preliminary comments by parties in this review are addressed in the memorandum from Stephen J. Claeys, Deputy Assistant Secretary for Import Administration, to David M. Spooner, Assistant Secretary for Import Administration, “Issues and Decision Memorandum for the Final Results on Polyethylene Retail Carrier Bags from the People's Republic of China,” dated March 10, 2008 (“Issues and Decision Memorandum”), which is hereby adopted by this notice. A list of the issues that parties raised and to which we responded 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”) in room 1117 in the main Commerce Department building, and is also accessible on the Web at http://ia.ita.doc.gov/​frn. The paper copy and electronic version of the memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of comments received, we have made the following changes in the margin calculations for PCRBs: (1) in surrogate financial ratios we included “rates and taxes” in the SG&A calculation, (2) material costs were adjusted for changes in raw material inventories, (3) the appropriate profit amount was used and (4) we revised the calculation of the total value of direct materials to include the value of upper polyvinylchloride (“PVC”) inputs.

Final Results of the Review

The Department has determined that the following preliminary dumping margins exist for the period August 1, 2005, through July 31, 2006:

Polyethylene Retail Carrier Bags from the PRC

Manufacturer/Exporter	Weighted-Average Margin (Percent)
Chun Hing Plastic Packaging Mfy. Ltd. and Chun Yip Plastic Bag Factory	17.30
Dongguan Nozawa Plastics Products Co., Ltd. and United Power Packaging, Ltd.	2.58
Rally Plastics Co., Ltd.	32.02

Assessment Rates

The Department intends to issue assessment instructions to U.S. Customs and Border Protection (“CBP”) 15 days after the date of publication of these final results of review. In accordance with 19 CFR 351.212(b)(1), we have calculated importer or customer-specific assessment rates for merchandise subject to this review.

Cash Deposit Requirements

The following cash deposit requirements will be effective upon publication of the final results of the administrative review for shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results, as provided by section 751(a)(2)(C) of the Act: (1) for subject merchandise exported by Chun Hing, Nozawa, and Rally, the cash-deposit rate will be that established in the final results of review (except, if the rate is zero or de minimis, no cash deposit will be required); (2) for previously reviewed or investigated companies not listed above that have separate rates, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) for all other PRC exporters of subject merchandise, which have not been found to be entitled to a separate rate, the cash-deposit rate will be PRC-wide rate of 77.57 percent; (4) for all non-PRC exporters of subject merchandise that have not received their own rate, the cash-deposit rate will be the rate applicable to the PRC exporter that supplied that exporter. These deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

This notice also serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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.

This notice also serves as a reminder to parties subject to administrative protective orders (“APOs”) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested.

Failure to comply with the regulations and terms of an APO is a violation that is subject to sanction.

This administrative review and this notice are in accordance with sections 751(a)(1) and 777(i) of the Act, 19 CFR 351.213, and 19 CFR 351.221(b)(4).

Dated: March 10, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

APPENDIX

List of Comments and Issues in the Issues and Decision Memorandum

Comments with Respect to Surrogate Financial Ratios

Comment 1: Offset of Selling, General, and Administrative (“SG&A”) by Interest Income

Comment 2: “Rates and Taxes” in the SG&A Calculation

Comment 3: Adjustment to Material Costs by the Amount of Changes in Raw Material and Work-In-Progress Inventories

Comment 4: Correction to the Profit Amount

Comments with Respect to Nozawa

Comment 5: Cash Deposit and Liquidation Instructions

Comments with Respect to Rally

Comment 6: Appropriate Surrogate Value for Ink

Comment 7: Valuation of Recycled Scrap and Scrap By-Product

Comment 8: Revised Allocation Methodology

Footnotes

1.  The petitioners are Hilex Poly Co., LLC, and the Superbag Corporation.

2.  “Until July 1, 2005, these products were classifiable under HTSUS 3923.21.0090 (Sacks and bags of polymers of ethylene, other). See Harmonized Tariff Schedule of the United States (2005) - Supplement 1 Annotated for Statistical Reporting Purposes Change Record - 17th Edition - Supplement 1, available at http://hotdocs.usitc.gov/​docs/​tata/​hts/​bychapter/​0510/​0510chgs.pdf.