E6-7358. Polyvinyl Alcohol From the People's Republic of China: Final Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

The Department of Commerce (“the Department”) published its preliminary results of administrative review of the antidumping duty order on polyvinyl alcohol (“PVA”) from the People's Republic of China (“PRC”) on November 7, 2005. See Polyvinyl Alcohol from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 70 FR 67434 (November 7, 2005) (“Preliminary Results”). The period of review (“POR”) is August 11, 2003, through September 30, 2004. We invited interested parties to comment on our preliminary results. Based on our analysis of the comments received, we have made certain changes to our calculations. The final dumping margins for this review are listed in the “Final Results of Review” section below.

EFFECTIVE DATE:

May 15, 2006.

FOR FURTHER INFORMATION CONTACT:

Lilit Astvatsatrian, 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

We invited parties to comment on our Preliminary Results. On December 7, 2005, the Department received case briefs from Petitioners ¹ and the respondent, Sinopec Sichuan Vinylon Works (“SVW”). On December 16, 2005, we received rebuttal comments from Petitioners, SVW, and Solutia, Inc. (“Solutia”), a domestic producer of PVA. On February 7, 2006, the Department issued a fifth Section D supplemental questionnaire to SVW, to which SVW responded on February 14, 2006. In addition, on February 7, 2006, we issued a memorandum to all interested parties requesting comments regarding a change in the Department's calculated regression-based wage rate methodology and in the allocation of the labor benefits in the financial ratio calculation. See Letter from Wendy Frankel, Director, Office 8, to All Interested Parties, dated February 7, 2006. Petitioners provided comments on February 14, 2006. No other interested party provided comments. We have conducted this administrative review in accordance with Section 751 of the Tariff Act of 1930, as amended (“the Act”), and 19 CFR 351.213.

Period of Review

The POR is August 11, 2003, through September 30, 2004.

Scope of the Order

The merchandise covered by this order is PVA. This product consists of all PVA hydrolyzed in excess of 80 percent, whether or not mixed or diluted with commercial levels of defoamer or boric acid, except as noted below.

The following products are specifically excluded from the scope of this investigation:

1) PVA in fiber form.

2) PVA with hydrolysis less than 83 mole percent and certified not for use in the production of textiles.

3) PVA with hydrolysis greater than 85 percent and viscosity greater than or equal to 90 cps.

4) PVA with a hydrolysis greater than 85 percent, viscosity greater than or equal to 80 cps but less than 90 cps, certified for use in an ink jet application.

5) PVA for use in the manufacture of an excipient or as an excipient in the manufacture of film coating systems which are components of a drug or dietary supplement, and accompanied by an end-use certification.

6) PVA covalently bonded with cationic monomer uniformly present on all polymer chains in a concentration equal to or greater than one mole percent.

7) PVA covalently bonded with carboxylic acid uniformly present on all polymer chains in a concentration equal to or greater than two mole percent, certified for use in a paper application.

8) PVA covalently bonded with thiol uniformly present on all polymer chains, certified for use in emulsion polymerization of non-vinyl acetic material.

9) PVA covalently bonded with paraffin uniformly present on all polymer chains in a concentration equal to or greater than one mole percent.

10) PVA covalently bonded with silan uniformly present on all polymer chains certified for use in paper coating applications.

11) PVA covalently bonded with sulfonic acid uniformly present on all polymer chains in a concentration level equal to or greater than one mole percent.

12) PVA covalently bonded with acetoacetylate uniformly present on all polymer chains in a concentration level equal to or greater than one mole percent.

13) PVA covalently bonded with polyethylene oxide uniformly present on all polymer chains in a concentration level equal to or greater than one mole percent.

14) PVA covalently bonded with quaternary amine uniformly present on all polymer chains in a concentration level equal to or greater than one mole percent.

15) PVA covalently bonded with diacetoneacrylamide uniformly present on all polymer chains in a concentration level greater than three mole percent, certified for use in a paper application.

The merchandise subject to this order is currently classifiable under subheading 3905.30.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

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 of the First Administrative Review of the Antidumping Duty Order on Polyvinyl Alcohol from the People's Republic of China,” dated May 8, 2006 (“Issues and Decision Memorandum”), which is hereby adopted by this notice. A list of the issues which 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 which is on file in the Central Records Unit (“CRU”) in room B-099 in the main Department building, and is 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 changes in the margin calculations for SVW.

• We changed our surrogate value labor rate to the rate issued by the Department in November 2005. See Issues and Decision Memorandum at Comment 9.
• We moved employee benefits of the surrogate company from the direct labor calculation into manufacturing overhead. See Issues and Decision Memorandum at Comment 8.
• For the preliminary results, we did not value freon. However, for the final results, we valued freon for our margin calculations. See Issues and Decision Memorandum at Comment 6.
• In the preliminary results, we used a heat-of-combustion methodology to allocate costs to acetylene and acetylene tail gas. For the final results, we utilized a value-based allocation methodology. See Issues and Decision Memorandum at Comment 1.
• In the preliminary results, we inadvertently added the value of the steam by-product to acetylene and acetylene tail gas. For the final results, we revised the surrogate value for steam to apply the intended by-product credit. See Issues and Decision Memorandum at Comment 1.
• For the preliminary results, we inadvertently included a waterway supplier distance in calculating the weighted-average supplier distance for coal. For the final results, we removed this distance. See Final Results of Administrative Review of the Order on Polyvinyl Alcohol from the People's Republic of China: Sinopec Sichuan Vinylon Works Program Analysis for the Final Results of Review from Lilit Astvatsatrian, Case Analyst, through Robert Bolling, Program Manager, to the File, dated May 8, 2006 (“Final Analysis Memorandum.”).
• We adjusted the calculation of self-produced electricity as an input into self-produced tap water, steam and compressed air, and the calculation of self-produced steam as an input into self-produced 12 degree circulation water, power generation boiler water, de-oxygen water, methanol, vinyl acetate monomer, and acetylene/acetylene tail gas. See Issues and Decision Memorandum at Comments 12 - 14.
• In the preliminary results, we inadvertently applied the surrogate value of pure water to the factor of 33 degree circulation water. For the final results, we applied the surrogate value of 33 degree circulation water to the factor of 33 degree circulation water. See Issues and Decision Memorandum at Comment 15.
• In the preliminary results, we intended to increase SVW's direct labor hours to account for unreported engineering and production management but inadvertently applied the increase only to the last stage of PVA production: the production of finished PVA. For the final results, we increased the direct labor hours for the full PVA production cycle. See Attachment 6 of Preliminary Results of Review of the Order on Polyvinyl Alcohol from the People's Republic of China: Sinopec Sichuan Vinylon Works Program Analysis for the Preliminary Results of Review from Lilit Astvatsatrian, Case Analyst, through Robert Bolling, Program Manager, to the File, dated October 31, 2005, and Exhibit 1 of Final Analysis Memorandum at page 4.

Surrogate Country

In the Preliminary Results, we stated that we treat the PRC as a non-market economy (“NME”) country, and, therefore, we calculated normal value in accordance with section 773(c) of the Act, which applies to NME countries. Also, we stated that we had selected India as the appropriate surrogate country to use in this review for the following reasons: (1) it is a significant producer of comparable merchandise; and (2) it is at a similar level of economic development, pursuant to 773(c)(4) of the Act. See Preliminary Results, 70 FR 67436. For the final results, we made no changes to our findings with respect to the selection of a surrogate country.

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 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 SVW demonstrated its eligibility for separate-rate status. For the final results, we continue to find that the evidence placed on the record of this review by SVW demonstrates an absence of government control, both in law and in fact, with respect to its exports of the merchandise under review, and, thus determine SVW is eligible for separate-rate status.

Weighted-Average Dumping Margin

The weighted-average dumping margin is as follows:

Polyvinyl Alcohol from the PRC

Producer/Manufacturer/Exporter	Weighted-Average Margin (Percent)
SVW*	0.04 %
* This rate is de minimis.

Assessment Rates

The Department will issue appraisement instructions directly to U.S. Customs and Border Protection (“CBP”) within 15 days of publication of these final results of administrative review. In accordance with 19 CFR 351.212(b)(1), we have calculated importer-specific assessment rates for merchandise subject to this review. For SVW, we divided the total dumping margins of its reviewed sales by the total entered value of its reviewed sales for each applicable importer to calculate ad valorem assessment rates. We will direct CBP to assess the resulting assessment rates against the entered customs values for the subject merchandise on SVW's entries under the relevant order during the POR.

To determine whether the duty assessment rates were de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad valorem rates. For SVW, we aggregated the dumping margins calculated for all U.S. sales to each importer and divided this amount by the entered value of the sales to each importer. For further details see Final Analysis Memorandum. Where an importer-specific ad valorem rate is de minimis, we will order CBP to liquidate appropriate entries without regard to antidumping duties.

Cash-Deposit Requirements

The following deposit requirements will be effective upon publication of this notice of final results of administrative review for all shipments of PVA from the PRC entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) Because the cash deposit rates for SVW is de minimis, no cash deposit shall be required for SVW; (2) for previously reviewed or investigated companies not listed above that have a separate rate, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) the cash deposit rate for all other PRC exporters will be 97.86 percent, the current PRC-wide rate; and (4) the cash deposit rate for all non-PRC exporters will be the rate applicable to the PRC exporter that supplied that exporter. These deposit 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 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 the 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. 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 determination and notice in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: May 8, 2006.

David M. Spooner,

Assistant Secretary for Import Administration.

Appendix

List of Comments and Issues in the Decision Memorandum

Comment 1: Cost Allocation Methodology of Acetylene and Acetylene Tail Gas Co-Products

Comment 2: Surrogate Value for Natural Gas

Comment 3: Surrogate Value for Coal

Comment 4: Surrogate Value Purity Adjustment for Purchased Inputs Sourced from Chemical Weekly

Comment 5: Surrogate Value for Methanol

Comment 6: Valuation of Surrogate Value for Freon

Comment 7: Inclusion of Excise Duty in Surrogate Company's Profit

Comment 8: Inclusion of Labor Benefits in Factory Overhead

Comment 9: Surrogate Value for Wages

Comment 10: Treatment of By-Product Offsets

Comment 11: Surrogate Value for Brokerage and Handling

Comment 12: Use of Self-Produced Electricity in the Production of Certain Self-Produced Inputs

Comment 13: Use of Different Value of Self-Produced Steam as an Input to Other Self-Produced Inputs

Comment 14: Use of Self-Produced Electricity in Calculation of the Cost of 33 Degree Circulation Water

Comment 15: Calculation of 33 Degree Circulation Water in Margin Calculation Program

Comment 16: Correction of the Calculation of Train Freight

Footnotes

1.  Celanese Chemicals, Ltd. and E.I. DuPont de Nemours and Co. (collectively “Petitioners”).