2011-6450. Laminated Woven Sacks From the People's Republic of China: Final Results of First Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On September 13, 2010, the Department of Commerce (“Department”) published in the Federal Register the preliminary results of the first administrative review of the antidumping duty order on laminated woven sacks (“Sacks”) from the People's Republic of China (“PRC”). See Laminated Woven Sacks From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 75 FR 55568 (September 13, 2010) (“Preliminary Results”). We gave interested parties an opportunity to comment on the Preliminary Results. Based upon our analysis of the comments and information received, we made changes to the margin calculations for the final results. We continue to find that the mandatory respondent has sold subject merchandise at less than normal value during the period of review (“POR”), January 31, 2008, through July 31, 2009.

DATES:

Effective Date: March 18, 2011.

FOR FURTHER INFORMATION CONTACT:

Jamie Blair-Walker, AD/CVD Operations, Office 9, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On September 22, 2009, the Department initiated this review with respect to two companies upon which an administrative review was requested. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 74 FR 48224, 48228 (September 22, 2009). The review was initiated with respect to Zibo Aifudi Plastic Packaging Co., Ltd. (“Zibo Aifudi”) and Changshu Xinsheng Bags Producing Company Ltd. (“Changshu Xinsheng”). On November 6, 2009, Changshu Xinsheng submitted to the Department a timely letter withdrawing its request for review from the ongoing administrative review. On December 17, 2009, the Department rescinded the review with respect to Changshu Xinsheng.^[1]

On May 25, 2010, the Department issued a preliminary determination regarding the country of origin of Sacks made from fabric woven in third countries.^[2] Following this determination by the Department, which stated that the PRC is the country of origin of Sacks produced in the PRC from imported fabric, the Department has coordinated with U.S. Customs and Border Protection (“CBP”) to resolve issues arising from differences between the Department's and CBP's respective country-of-origin classifications and from technical restrictions in CBP's electronic filing systems. As a result, the Department has added several case numbers to the Case Reference file within the Automated Commercial Environment to ensure that requisite entries are and can be properly claimed as scope merchandise.^[3] We sent instructions to CBP on November 23, 2010, providing parties with notice of these new case reference files.^[4]

We hereby finalize our preliminary decision presented in the Country of Origin Memo of Sacks made from fabric woven in third countries.^[5] The Department has determined that the PRC is the country of origin of Sacks produced in the PRC from imported fabric, as discussed in detail in the “Laminated Woven Sacks from the People's Republic of China: Issues and Decision Memorandum for the Final Results of the First Antidumping Duty Administrative Review,” which is dated concurrently with this notice (“Issues and Decision Memorandum”).^[6]

On September 20, 2010, Zibo Aifudi notified the Department of its withdrawal and refusal to participate in this ongoing administrative review.^[7] Additionally, Zibo Aifudi requested that the Department destroy all business proprietary submissions placed on the record by Zibo Aifudi. On September 30, 2010, the Department notified Zibo Aifudi that it had complied with its request and asked all interested parties to do so as well. On October 6, 2010, the Department received from all interested parties the confirmation of the destruction of the business proprietary submissions placed on the record by Zibo Aifudi.

At the Preliminary Results, we set the deadline for interested parties to submit case briefs and rebuttal briefs to October 13, 2010, and October 18, 2010, respectively. On October 12, 2010, we extended the deadlines for case and rebuttal briefs submissions by one day to October 14, 2010, and October 19, 2010, respectively. On October 14, 2010, Petitioners,^[8] AMS Associates, Inc., operating as Shapiro Packaging (“AMS”), and Commercial Bag Company, doing business as Commercial Packaging (“Commercial Packaging”) filed case briefs. On October 19, 2010, Petitioners and AMS filed rebuttal briefs. The Department did not hold a public hearing pursuant to 19 CFR 351.310(d), as all hearing requests made by interested parties were withdrawn.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to these reviews are addressed in the Issues and Decision Memorandum. 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, Main Commerce Building, Room 7046, and is accessible on the Department's Web site at http://www.trade.gov/​ia. The paper copy and electronic version of the memorandum are identical in content.

Scope of the Order

The merchandise covered by the order is laminated woven sacks. Laminated woven sacks are bags or sacks consisting of one or more plies of fabric consisting of woven polypropylene strip and/or woven polyethylene strip, regardless of the width of the strip; with or without an extrusion coating of polypropylene and/or polyethylene on one or both sides of the fabric; laminated by any method either to an exterior ply of plastic film such as biaxially-oriented polypropylene (“BOPP”) or to an exterior ply of paper that is suitable for high quality print graphics; ^[9] printed with three colors or more in register; with or without lining; whether or not closed on one end; whether or not in roll form (including sheets, lay-flat tubing, and sleeves); with or without handles; with or without special closing features; not exceeding one kilogram in weight. Laminated woven sacks are typically used for retail packaging of consumer goods such as pet foods and bird seed.

Effective July 1, 2007, laminated woven sacks are classifiable under Harmonized Tariff Schedule of the United States (“HTSUS”) subheadings 6305.33.0050 and 6305.33.0080. Laminated woven sacks were previously classifiable under HTSUS subheading 6305.33.0020. If entered with plastic coating on both sides of the fabric consisting of woven polypropylene strip and/or woven polyethylene strip, laminated woven sacks may be classifiable under HTSUS subheadings 3923.21.0080, 3923.21.0095, and 3923.29.0000. If entered not closed on one end or in roll form (including sheets, lay-flat tubing, and sleeves), laminated woven sacks may be classifiable under other HTSUS subheadings including 3917.39.0050, 3921.90.1100, 3921.90.1500, and 5903.90.2500. If the polypropylene strips and/or polyethylene strips making up the fabric measure more than 5 millimeters in width, laminated woven sacks may be classifiable under other HTSUS subheadings including 4601.99.0500, 4601.99.9000, and 4602.90.0000. Although HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of the order is dispositive.

Changes Since the Preliminary Results

In the Preliminary Results, we found that the one mandatory respondent (i.e., Zibo Aifudi) demonstrated its eligibility for separate-rate status. However, we no longer find Zibo Aifudi eligible for separate rate status as it has significantly impeded the Department's ability to conduct this proceeding and, by withdrawing from the review, prevented the verification of the information it had earlier provided.

Facts Available

Section 776(a)(2) of the Tariff Act of 1930, as amended (“Act”) provides that, if an interested party or any other person: (A) Withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782 of the Act; (C) significantly impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i) of the Act, the Department shall, subject to section 782(d) of the Act, use the facts otherwise available in reaching the applicable determination under this title. Where the Department determines that a response to a request for information does not comply with the request, section 782(d) of the Act provides that the Department shall promptly inform the party submitting the response of the nature of the deficiency and shall, to the extent practicable, provide that party with an opportunity to remedy or explain the deficiency. Section 782(d) of the Act further states that, if the party submits further information that is unsatisfactory or untimely, the administering authority may, subject to subsection (e), disregard all or part of the original and subsequent responses. Section 782(e) of the Act provides that the Department shall not decline to consider information that is submitted by an interested party and is necessary to the determination but does not meet all the applicable requirements established by the administering authority if (1) the information is submitted by the deadline established for its submission, (2) the information can be verified, (3) the information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination, (4) the interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the administering authority with respect to the information, and (5) the information can be used without undue difficulties.

Zibo Aifudi

Zibo Aifudi responded to the Department's original questionnaire and several supplemental questionnaires, and the Department calculated a company-specific margin for Zibo Aifudi in the Preliminary Results. After the issuance of the Preliminary Results, the Department received a letter from Zibo Aifudi withdrawing from this administrative review and requesting that all business proprietary information be destroyed.^[10] The Department therefore finds that, pursuant to sections 776(a)(2)(A), (B), (C), and (D) of the Act, Zibo Aifudi has significantly impeded the Department's ability to conduct this administrative review and, by withdrawing from the review and requesting the removal of information from the record, prevented the verification of the information it had earlier provided. Therefore, the application of facts available is warranted with respect to Zibo Aifudi.

Application of an Adverse Inference

Section 776(b) of the Act provides that, in selecting from among the facts available, the Department may use an inference that is adverse to the interests of the respondent if it determines that a party has failed to cooperate to the best of its ability. Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” ^[11] In determining whether a respondent has failed to cooperate to the best of its ability, the Department need not make a determination regarding the willfulness of a respondent's conduct.^[12] Furthermore, “affirmative evidence of bad faith on the part of the respondent is not required before the Department may make an adverse inference.”^[13]

In determining whether a party failed to cooperate to the best of its ability, the Department considers whether a party could comply with the request for information, and whether a party paid insufficient attention to its statutory duties.^[14] Furthermore, the Department also considers the accuracy and completeness of submitted information, and whether the respondent has hindered the calculation of accurate dumping margins.^[15]

In Nippon Steel the Federal Circuit explained that,

if a respondent “fails to provide requested information by the deadlines for submission,” Commerce shall fill in the gaps with “facts otherwise available.” The focus of {section 776(a) of the Act} is respondent's failure to provide information. The reason for the failure is of no moment. As a separate matter, {section 776(b) of the Act} permits Commerce to “use an inference that is adverse to the interests of a respondent in selecting from among the facts otherwise available,” only if Commerce makes the separate determination that the respondent “has failed to cooperate by not acting to the best of its ability to comply.” The focus of {section 776(b) of the Act} is respondent's failure to cooperate to the best of its ability, not its failure to provide requested information.

See Nippon Steel, 337 F.3d at 1381. The Federal Circuit also held that “the statutory mandate that a respondent act to the ‘best of its ability’ requires the respondent to do the maximum it is able to do.” ^[16]

An adverse inference may include reliance on information derived from the petition, the final determination in the investigation, any previous review, or any other information placed on the record. See section 776(b) of the Act. It is the Department's practice to assign the highest rate from any segment of a proceeding as total adverse facts available (“AFA”) when a respondent fails to cooperate to the best of its ability.^[17]

Zibo Aifudi/PRC-Wide Entity

As discussed above, Zibo Aifudi withdrew from participation in this segment of the proceeding and requested that all of its business proprietary submissions be destroyed. Because of this, the Department does not have any record evidence upon which to determine whether Zibo Aifudi is eligible for a separate rate for this review period. Thus, pursuant to Department practice, as Zibo Aifudi has not demonstrated its entitlement to a separate rate, we consider it to be part of the PRC-entity and subject to the PRC-wide rate.^[18] Furthermore, because Zibo Aifudi is part of the PRC-wide entity and the only mandatory respondent in this administrative review, it is necessary that we review the PRC-wide entity. In doing so, we note that section 776(a)(1) of the Act mandates that the Department use the facts available if necessary information is not available on the record of an antidumping proceeding. In addition, we find that an element of the PRC-wide entity (Zibo Aifudi) did not respond to our requests for information, the necessary information was not provided, and the information that was provided was unable to be verified. Therefore, we find it necessary, under section 776(a)(2) of the Act, to continue to use facts otherwise available as the basis for the final results of this review for the PRC-wide entity.

Pursuant to section 776(b) of the Act, we find that the PRC-wide entity failed to cooperate by not acting to the best of its ability to comply with requests for information. As noted above, an element of the PRC-wide entity (Zibo Aifudi) informed the Department that it would not participate further in this review. Thus, because the PRC-wide entity refused to participate fully in this proceeding, we find it appropriate to use an inference that is adverse to the interests of the PRC-wide entity in selecting from among the facts otherwise available. By doing so, we ensure that the companies that are part of the PRC-wide entity will not obtain a more favorable result by failing to cooperate than had they cooperated fully in this review.

As stated above, the PRC-wide entity (including Zibo Aifudi) withdrew from this administrative review. Because of this, we find it necessary, under sections 776(a)(2) and 776(b) of the Act, to use AFA as the basis for these final results of review for the PRC-wide entity. In accordance with the Department's practice, as AFA, we have assigned to the PRC-wide entity the rate of 91.73 percent, which is the highest rate assigned in any segment of this proceeding. See Laminated Woven Sacks from the People's Republic of China: Final Determination of Sales at Less Than Fair Value and Partial Affirmative Determination of Critical Circumstances, 73 FR 35646, 35648 (June 24, 2008) (“LTFV Final Determination”).^[19] In selecting a rate as AFA, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” ^[20]

Corroboration of AFA Rate for PRC-Wide Entity, Including Zibo Aifudi

Section 776(c) of the Act provides that, when the Department relies on secondary information rather than on information obtained in the course of an investigation or review, it shall, to the extent practicable, corroborate that information from independent sources that are reasonably at its disposal. As described in the SAA, it is the Department's practice to use secondary information from the petition, the final determination, or any previous review under section 751 of the Act concerning the subject merchandise. See SAA at 870. Further, the Department will satisfy itself that the secondary information has probative value and, to the extent practicable, will examine the reliability and relevance of the information to be used.

In this case, the AFA rate we are assigning to the PRC-wide entity, including Zibo Aifudi, is the highest rate from any segment of this proceeding, and is the petition rate in the less-than-fair-value investigation. See LTFV Final Determination, 73 FR at 35648. This rate was corroborated in the LTFV Final Determination, finding that the petition margin of 91.73 percent had probative value because it was within the range of CONNUM margins for Zibo Aifudi. See id. Furthermore, no information has been presented by interested parties challenging the reliability of the 91.73 percent AFA rate. We note that this is the highest rate from any segment of the proceeding and the rate is less than four years old. Thus, the Department finds that the information continues to be reliable.

With respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. Where circumstances indicate that the selected margin is not appropriate as AFA, the Department will disregard the margin and determine an appropriate margin.^[21] Similarly, the Department does not apply a margin that has been discredited.^[22] None of these unusual circumstances are present with respect to the rate being used here.^[23] Moreover, the rate selected is the rate currently applicable to the PRC-wide entity and was corroborated in the LTFV Final Determination, using Zibo Aifudi's CONNUM margins. See LTFV Final Determination, 73 FR at 35648. The Department assumes that if an uncooperative respondent could have obtained a lower rate, it would have cooperated.^[24] Consequently, as there is no information on the record of this review that demonstrates that this rate is not appropriate for use as AFA, we determine that this rate continues to have relevance.

Based on our analysis as described above, we find that the margin of 91.73 percent is reliable and has relevance. As the 91.73 percent rate is both reliable and relevant, we determine that it has probative value. Accordingly, we determine that the calculated rate of 91.73 percent, which is the current PRC-wide rate, is in accordance with the requirement of section 776(c) of the Act that secondary information be corroborated to the extent practicable (i.e., that it have probative value). Consequently, we have assigned this AFA rate to exports of the subject merchandise from the PRC-wide entity, including Zibo Aifudi.

Final Results of Review

The weighted-average dumping margins for the POR are as follows:

Exporter	Weighted Average Percent Margin
PRC-Wide Rate 25	91.73

Assessment

Pursuant to section 751(a)(2)(A) of the Act and 19 CFR 351.212(b), the Department will determine, and CBP shall assess, antidumping duties on all appropriate entries of subject merchandise in accordance with the final results of this review. For assessment purposes, we calculated importer (or customer)-specific assessment rates for merchandise subject to this review. Where appropriate, we calculated an ad valorem rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total entered values associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting ad valorem rate against the entered customs values for the subject merchandise. Where appropriate, we calculated a per-unit rate for each importer (or customer) by dividing the total dumping margins for reviewed sales to that party by the total sales quantity associated with those transactions. For duty-assessment rates calculated on this basis, we will direct CBP to assess the resulting per-unit rate against the entered quantity of the subject merchandise. Where an importer (or customer)-specific assessment rate is de minimis (i.e., less than 0.50 percent), the Department will instruct CBP to assess that importer (or customer's) entries of subject merchandise without regard to antidumping duties, in accordance with 19 CFR 351.106(c)(2). The Department intends to issue assessment instructions to CBP 15 days after the date of publication of these final results of review.

Cash Deposit Requirements

The following cash-deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit rate for each of the reviewed companies that received a separate rate in this review will be the rate listed in the final results of review (except that if the rate for a particular company is de minimis, i.e., less than 0.5 percent, no cash deposit will be required for that company); (2) for previously investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent POR; (3) if the exporter is not a firm covered in this review, a prior review, or the original less than fair value investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers or exporters will be the PRC-wide rate of 91.73 percent. These deposit requirements, when imposed, shall remain in effect until further notice.

Reimbursement of Duties

This notice also serves as a final 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 POR. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties has occurred and the subsequent assessment of doubled antidumping duties.

Administrative Protective Orders

This notice also serves as a reminder to parties subject to administrative protective order (“APO”) 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 which is subject to sanction.

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

Dated: March 14, 2011.

Kim Glas,

Acting Deputy Assistant Secretary for Import Administration.

Appendix I—Issues and Decision Memorandum

Comment 1: Preliminary Decision Regarding Country of Origin

1a. Procedures in Determining Country of Origin

1b. Department's Decision of Country of Origin of Sacks

1c. Authority to Issue Clarification Instruction to CBP

1d. Finalizing the Country-of-Origin Memorandum

Comment 2: Liquidation Instructions

Footnotes

1.  See Laminated Woven Sacks from the People's Republic of China: Partial Rescission of Antidumping Duty Administrative Review, 74 FR 66954 (December 17, 2009).

2.  See “Memorandum to Abdelali Elouaradia from Zhulieta Willbrand through Robert Bolling re: Preliminary Decision Regarding the Country of Origin of Laminated Woven Sacks Exported by Zibo Aifudi Plastic Packaging Co., Ltd.—Laminated Woven Sacks from the People's Republic of China,” dated May 25, 2010 (“Country of Origin Memo”).

3.  See “Memorandum to the File from Catherine Bertrand re: Case Reference Files,” dated November 12, 2010; see also CBP Message No. 0327303 dated November 23, 2010, regarding the clarification of the order.

4.  See id.

5.  See Preliminary Results, 75 FR at 55569.

6.  See accompanying Issues and Decision Memorandum at Comment 1d.

7.  See Letter from Zibo Aifudi Regarding “Withdrawal from Administrative Review,” dated September 20, 2010.

8.  Petitioners are the Laminated Woven Sacks Committee and its individual members, Coating Excellence International, LLC and Polytex Fibers Corporation.

9.  “Paper suitable for high quality print graphics,” as used herein, means paper having an ISO brightness of 82 or higher and a Sheffield Smoothness of 250 or less. Coated free sheet is an example of a paper suitable for high quality print graphics.

10.  See Letter from Zibo Aifudi Regarding “Withdrawal from Administrative Review,” dated September 20, 2010.

11.  See Statement of Administrative Action (“SAA”) accompanying the Uruguay Round Agreements Act, H. Doc. No. 316, 103d Cong., 2d Session at 870 (1994).

12.  See Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382-1383 (Fed. Cir. 2003) (“Nippon Steel”).

13.  See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27340 (May 19, 1997).

14.  See Pacific Giant, Inc. v. United States, 223 F. Supp. 2d 1336, 1342 (August 6, 2002).

15.  See Certain Welded Carbon Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty Administrative Review, 62 FR 53808, 53819-53820 (October 16, 1997).

16.  See Nippon Steel, 337 F.3d at 1382.

17.  See, e.g., Stainless Steel Plate in Coils From Taiwan; Preliminary Results and Rescission in Part of Antidumping Duty Administrative Review, 67 FR 5789, 5790 (February 7, 2002) (“Consistent with Department practice in cases where a respondent fails to cooperate to the best of its ability, and in keeping with section 776(b)(3) of the Act, as adverse facts available, we have applied a margin based on the highest margin from any prior segment of the proceeding.”).

18.  See Wooden Bedroom Furniture From the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, Preliminary Results of New Shipper Review and Partial Rescission of Administrative Review, 73 FR 8273, 8279 (February 13, 2008) unchanged in Wooden Bedroom Furniture from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and New Shipper Review, 73 FR 49162 (August 20, 2008) (“WBF 2008”).

19.  See, e.g., Brake Rotors From the People's Republic of China: Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review, 64 FR 61581, 61584 (November 12, 1999).

20.  See Notice of Final Determination of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors From Taiwan, 63 FR 8909, 8932 (February 23, 1998).

21.  See WBF 2008, 73 FR at 49166; see also Fresh Cut Flowers From Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 1996) (where the Department disregarded the highest margin in that case as adverse best information available {the predecessor to facts available} because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin).

22.  See D&L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated).

23.  See e.g., Fresh Garlic from the People's Republic of China: Final Results and Partial Rescission of the 14th Antidumping Duty Administrative Review, 75 FR 34976, 34979 (June 21, 2010); Certain Frozen Warmwater Shrimp from the Socialist Republic of Vietnam: Preliminary Results, Preliminary Partial Rescission and Final Partial Rescission of the Second Administrative Review, 73 FR 12127, 12131-12132 (March 6, 2008) unchanged in Certain Frozen Warmwater Shrimp From the Socialist Republic of Vietnam: Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 73 FR 52273 (September 9, 2008).

24.  See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190-91 (Fed. Cir. 1990); Ta Chen Stainless Steel Pipe, Inc. v. United States, 24 CIT 841, 848 (2000) (respondents should not benefit from failure to cooperate).

25.  The PRC-Wide entity, including Zibo Aifudi Plastic Packaging Co., Ltd.