[Federal Register Volume 64, Number 151 (Friday, August 6, 1999)]
[Notices]
[Pages 42916-42920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20338]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-825]
Sebacic Acid From the People's Republic of China: Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review of Sebacic Acid from the People's Republic of
China.
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SUMMARY: The Department of Commerce is conducting an administrative
review of the antidumping duty order on sebacic acid from the People's
Republic of China in response to requests from the petitioner, Union
Camp Corporation, and the following three respondents: Tianjin
Chemicals Import and Export Corporation, Guangdong Chemicals Import and
Export Corporation, and Sinochem International Chemicals Company, Ltd.
In addition to these three respondents, the petitioner also requested a
review of Sinochem Jiangsu Import and Export Corporation. This review
covers four exporters of the subject merchandise. The period of review
is July 1, 1997, through June 30, 1998.
We preliminarily determine that sales have been made below normal
value. Interested parties are invited to
[[Page 42917]]
comment on these preliminary results. If these preliminary results are
adopted in our final results of administrative review, we will instruct
the Customs Service to assess antidumping duties on entries subject to
this review.
EFFECTIVE DATE: August 6, 1999.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or Christopher Priddy,
Office 2, AD/CVD Enforcement Group I, Import Administration'Room B099,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington, D.C. 20230;
telephone: (202) 482-2613 or (202) 482-1130, respectively.
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's (the Department's) regulations are to the
current regulations at 19 CFR part 351 (April 1998).
SUPPLEMENTARY INFORMATION:
Background
On July 21, 1998, the Department published in the Federal Register
at 63 FR 35909 a notice of ``Opportunity to Request an Administrative
Review'' of the antidumping duty order on sebacic acid from the
People's Republic of China (PRC) covering the period July 1, 1997,
through June 30, 1998.
On July 30, 1998, in accordance with 19 CFR 351.213(b), the
petitioner requested that we conduct an administrative review of
Tianjin Chemicals Import and Export Corporation (Tianjin), Guangdong
Chemicals Import and Export Corporation (Guangdong), Sinochem
International Chemicals Company, Ltd. (SICC) and Sinochem Jiangsu
Import and Export Corporation (Jiangsu). On July 29, 1998, Tianjin,
Guangdong, and SICC also requested that we conduct an administrative
review. We published a notice of initiation of this antidumping duty
administrative review on August 27, 1998, at 63 FR 45796. On September
1, 1998, we issued questionnaires to the four respondents. Tianjin,
SICC, and Guangdong submitted responses to sections A, C, and D of the
antidumping questionnaire on October 9, 1998, and November 2, 1998. The
Department issued its supplemental questionnaires on January 8, 1999,
and received responses to the questionnaires in February and March
1999. Jiangsu did not respond to the Department's questionnaire.
On December 29, 1998, the Department invited interested parties to
provide publicly available information (PAI) for valuing the factors of
production and for surrogate country selection. We received responses
from the interested parties on January 25, 1999, and February 18, 1999,
and additional comments on March 1, 1999. On March 12, 1999, in
accordance with section 751(a)(3)(A) of the Act, the Department
postponed the deadline for issuing the preliminary results of this
review. See Sebacic Acid from the People's Republic of China:
Postponement of Preliminary Results of Antidumping Duty Administrative
Review, 64 FR 13771 (March 22, 1999).
The Department is conducting this administrative review in
accordance with section 751 of the Act.
Scope of Review
The products covered by this order are all grades of sebacic acid,
a dicarboxylic acid with the formula (CH2)8(COOH)2, which include but
are not limited to CP Grade (500ppm maximum ash, 25 maximum APHA
color), Purified Grade (1000ppm maximum ash, 50 maximum APHA color),
and Nylon Grade (500ppm maximum ash, 70 maximum ICV color). The
principal difference between the grades is the quantity of ash and
color. Sebacic acid contains a minimum of 85 percent dibasic acids of
which the predominant species is the C10 dibasic acid. Sebacic acid is
sold generally as a free-flowing powder/flake.
Sebacic acid has numerous industrial uses, including the production
of nylon 6/10 (a polymer used for paintbrush and toothbrush bristles
and paper machine felts), plasticizers, esters, automotive coolants,
polyamides, polyester castings and films, inks and adhesives,
lubricants, and polyurethane castings and coatings.
Sebacic acid is currently classifiable under subheading
2917.13.00.30 of the Harmonized Tariff Schedule of the United States
(HTSUS). Although the HTSUS subheading is provided for convenience and
customs purposes, our written description of the scope of this
proceeding remains dispositive.
Separate Rates
It is the Department's standard policy to assign all exporters of
the merchandise subject to review in non-market-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), and
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, 1994) (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. Evidence relevant to a de facto absence of government
control with respect to exports is based on the four factors of whether
the respondent: (1) Sets its own export prices independently from the
government and other exporters; (2) can retain the proceeds from its
export sales; (3) has the authority to negotiate and sign contracts;
and (4) has autonomy from the government regarding the selection of
management. See Silicon Carbide at 22587 and Sparklers at 20589.
With respect to SICC, Tianjin, and Guangdong, in our final results
for the period of review (POR) covering July 1, 1996, through June 30,
1997, the Department determined there was both 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. See Final Results of Antidumping Administrative Review: Sebacic
Acid From the People's Republic of China, 63 FR 43373 (August 13, 1998)
(Sebacic Acid Third Review). For this review, SICC, Tianjin, and
Guangdong have 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 results in the previous administrative
review and continues to demonstrate an absence of both de jure and de
facto government control with respect to their exports in accordance
with the criteria identified in Sparklers and Silicon Carbide.
With respect to Jiangsu, which did not respond to the
questionnaire, we preliminarily determine that this company does not
merit a separate rate. Because the Department assigns a single
[[Page 42918]]
rate to companies in an NME country unless an exporter can demonstrate
absence of government control, we preliminarily determine that Jiangsu
is subject to the country-wide rate for this case.
Export Price
For SICC, Tianjin, and Guangdong, we calculated export price (EP),
in accordance with section 772(a) of the Act, because the subject
merchandise was sold directly to unaffiliated customers in the United
States prior to importation and because constructed export price (CEP)
methodology was not otherwise warranted based on the facts of record.
We calculated EP based on packed CIF prices to the first unaffiliated
purchaser in the United States. Where appropriate, we made deductions
from the starting price for foreign inland freight, foreign brokerage
and handling, ocean freight, and marine insurance. Because all reported
movement services were provided by NME companies, we based the charges
associated with these services on surrogate rates from India. See
``Normal Value'' section for further discussion.
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. None of the parties to this proceeding has
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 comparable market economy
country which is a significant producer of comparable merchandise.
Section 773(c)(4) of the Act and 19 CFR 351.408 direct us to select
a surrogate country that is economically comparable to the PRC. On the
basis of per capita gross domestic product (GDP), the growth rate in
per capita GDP, and the national distribution of labor, we find that
India is a comparable economy to the PRC. See ``Memorandum from
Director, Office of Policy, to Office Director, AD/CVD Group I, Office
2,'' dated December 21, 1998.
Section 773(c)(4) of the Act also requires that, to the extent
possible, the Department use a surrogate country that is a significant
producer of merchandise comparable to sebacic acid. Although we do not
have information about the quantity of sebacic acid produced in India,
we found that information contained in the respondents' February 18,
1999, submission indicates that India was a producer of sebacic acid
during the POR. In addition, we determined in prior reviews of this
order that India was a significant producer of comparable merchandise
(i.e., oxalic acid). See Sebacic Acid Third Review. We find that India
fulfills both statutory requirements for use of a surrogate country and
continue to use India as the surrogate country in this administrative
review. We have used publicly available information relating to India,
unless otherwise noted, to value the various factors of production.
For purposes of calculating NV, we valued PRC factors of production
in accordance with section 773(c)(1) of the Act. Factors of production
include, but are not limited to: (1) Hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital cost, including
depreciation. In examining surrogate values, we selected, where
possible, the publicly available value which was: (1) an average non-
export value; (2) representative of a range of prices either within the
POR or most contemporaneous with the POR; (3) product-specific; and (4)
tax-exclusive. For a more detailed explanation of the methodology used
in calculating the various surrogate values, see ``Memorandum to the
File from Case Analyst: Calculations for the Preliminary Results,''
dated August 2, 1999. In accordance with this methodology, we valued
the factors of production as follows:
We valued castor oil and castor seed using 1998 price data from the
Solvent Extractors Association of India provided by the petitioner in
its January 25, 1999, submission. For the castor oil that Hengshui
Dongfeng Chemical Factory purchased from a market economy and paid for
in market economy currency, we used the actual price paid for the input
to calculate the factors-based NV in accordance with 19 CFR
351.408(a)(1). Handan Fuyang Sebacic Acid Factory (Handan) claimed it
obtained castor oil from a market economy source and paid market
economy prices for this factor, but Handan did not provide the
necessary price data. Therefore, we have valued Handan's castor oil
consumption based on the Indian surrogate value for castor oil.
For macropore resin, we used the value for activated carbon.
Consistent with our methodology used in the third review of this
proceeding, we valued activated carbon using export prices as quoted in
the Chemical Weekly. For caustic soda, cresol, phenol, sulfuric acid,
and zinc oxide, we used published market prices reported in the
Chemical Weekly. For caustic soda and sulfuric acid, because price
quotes reported in the Chemical Weekly are for chemicals with a 100
percent concentration level, we made chemical purity adjustments
according to the particular concentration levels of caustic soda and
sulfuric acid used by the respondents. For sodium chloride (also
referred to as sodium chlorite or vacuum salt), we used Indian import
values from the Monthly Statistics of the Foreign Trade of India
(Monthly Statistics) for the period April 1996 though February 1997.
Where appropriate, we adjusted the values reported in the Chemical
Weekly to exclude sales and excise taxes. For those values not
contemporaneous with the POR, we adjusted for inflation using the
wholesale price indices (WPI) published by the International Monetary
Fund (IMF). We made further adjustments to account for freight costs
between the suppliers' buildings and the respondents' sebacic acid
manufacturing facilities.
In accordance with our practice, we added to CIF import values from
India a surrogate freight cost using the shorter of the reported
distances from either the closest PRC port to the factory or from the
domestic supplier to the factory. See Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From the
People's Republic of China, 62 FR 61964, 61977 (November 20, 1997).
We valued labor based on a regression-based wage rate in accordance
with 19 CFR 351.408(c)(3).
To value electricity, we used the average rate applicable to medium
industrial users throughout India as obtained from the ``Our India''
website compiled by the Indian Industrial and Management Services. We
adjusted the values to reflect inflation up to the POR using the WPI
factors published by the IMF. We based the value of steam coal on April
1996 through February 1997
[[Page 42919]]
import values from the Monthly Statistics. We adjusted the steam coal
values for inflation using the WPI factors published by the IMF.
We based our calculation of factory overhead, selling, general and
administrative (SG&A) expenses, and profit on data contained in the
April 1995 Reserve Bank of India Bulletin for the Indian metals and
chemicals industries. To value factory overhead, we summed those
components which pertain to overhead expenses and divided them by the
sum of those components pertaining to the cost of manufacturing. We
multiplied this factory overhead rate by the cost of manufacture
divided by one minus the factory overhead rate. Using the same source,
we also calculated the SG&A rate as a percentage of the cost of
manufacturing. We calculated profit as a percentage of the cost of
production (i.e., materials, energy, labor, factory overhead, and
SG&A).
To value plastic and woven bags, we used import values from the
Monthly Statistics. For jumbo bag valuation, we used a value from
Monthly Statistics as found in the Department's Index of Factor Values
for Use in Antidumping Duty Investigations Involving Products from the
People's Republic of China (Index of Factor Values). We adjusted these
three values to reflect inflation up to the POR using the WPI published
by the IMF. Additionally, we adjusted these values to account for
freight costs incurred between the suppliers and sebacic acid
producers.
In valuing foreign inland trucking freight, the Department relied
upon data from the Times of India as found in the Department's Index of
Factor Values; for foreign inland rail rates the Department relied upon
data from Certain Helical Spring Lock Washers from the People's
Republic of China: Final Results of Antidumping Duty Administrative
Review, 64 FR 13401 (March 18, 1999). To value ocean freight, we used a
price quote from Sealand Shipping, Inc., for merchandise comparable to
sebacic acid (i.e., oxalic acid). For marine insurance and foreign
brokerage and handling expenses, we used public information reported in
the antidumping duty investigations of sulfur dyes and stainless steel
bar from India, respectively. See Final Determination of Sales at Less
Than Fair Value: Sulfur Dyes, Including Vat Dyes from India, 58 FR
11835 (March 1, 1993); Final Determination of Sales at Less Than Fair
Value: Stainless Steel Bar from India, 59 FR 66915 (December 28, 1994).
Consistent with the methodology employed in the previous
administrative review for sebacic acid, we have determined that fatty
acid, glycerine, and castor seed cake (when castor oil is self-
produced) are by-products. Because they are by-products, we subtracted
the sales revenue of fatty acid, glycerine, and, where applicable,
castor seed cake, from the estimated production costs of sebacic acid.
This treatment of by-products is also consistent with generally
accepted accounting principles. See Cost Accounting: A Managerial
Emphasis (1991) at pages 539-544. To value fatty acid and glycerine, we
used prices published in Chemical Weekly. We valued castor seed cake
using market prices quoted in The Economic Times of India (Mumbai) for
certain months within the POR.
We also allocated a by-product credit for glycerine to the
production cost for the co-product capryl alcohol. We deducted a by-
product credit for glycerine from both sebacic acid and capryl alcohol
based on the ratio of the value of sebacic acid to the total value of
both sebacic acid and capryl alcohol.
Consistent with the methodology employed in the previous
administrative review, we have determined that capryl alcohol is a co-
product and have allocated the factor inputs based on the relative
quantity of output of this product and sebacic acid. Additionally, we
have used the production times necessary to complete each production
stage of sebacic acid as a basis for allocating the amount of labor,
energy usage, and factory overhead among the co-product(s). This
treatment of co-products is consistent with generally accepted
accounting principles. See Cost Accounting: A Managerial Emphasis
(1991) at pages 528-533. To value capryl alcohol, consistent with our
methodology from the previous administrative review, we used market
prices reported in the Chemical Weekly for November 1997 and January
1998 and adjusted the prices for sales and excise taxes.
Preliminary Results of Review
We preliminarily determine that the following dumping margins exist
for the period July 1, 1997, through June 30, 1998:
------------------------------------------------------------------------
Margin
Manufacturer/Exporter (percent)
------------------------------------------------------------------------
Tianjin Chemicals I/E Corp................................. 6.16
Sinochem International Chemicals Corp...................... 0.00
Guangdong Chemicals I/E Corp............................... 15.01
Country-Wide Rate.......................................... 243.40
------------------------------------------------------------------------
Interested parties may request a hearing within 30 days of the
publication of this notice. See 19 CFR 351.310(c). Any hearing, if
requested, will be held 44 days after the date of the publication of
this notice or the first workday thereafter. Interested parties may
submit case briefs within 30 days of publication. Rebuttal briefs,
limited to issues raised in the case briefs, may be filed no later than
35 days after the date of publication. Parties who submit case briefs
or rebuttal briefs in this proceeding are requested to submit with each
argument (1) a statement of the issue and (2) a brief summary of the
argument. Parties are also encouraged to provide a summary of the
arguments not to exceed five pages and a table of statutes,
regulations, and cases cited.
The Department will subsequently issue a notice of the final
results of this administrative review which will include the results of
its analysis of issues raised in any such written briefs no later than
120 days after the date of publication of this notice.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. We have
calculated an importer-specific assessment rate based on the ratio of
the total amount of antidumping duties calculated for the examined
sales to the total entered value of the examined sales. This rate will
be assessed uniformly on all entries of that particular importer made
during the POR. The Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, 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 by section 751(a)(1) of the Act: (1) For the reviewed
companies named above which have separate rates (SICC, Tianjin, and
Guangdong), the cash deposit rates will be the rates for those firms
established in the final results of this administrative review; (2) for
companies previously found to be entitled to a separate rate and for
which no review was requested, the cash deposit rates will be the rate
established in the most recent review of that company; (3) for all
other PRC exporters of subject merchandise, the cash deposit rates will
be the PRC country-wide rate indicated above; and (4) the cash deposit
rate for non-PRC exporters of subject merchandise from the PRC will be
the rate applicable to the PRC supplier of that exporter. These deposit
rates, when imposed, shall remain in effect until publication of the
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final results of the next administrative review.
Notification of Interested Parties
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.
This determination is issued and published in accordance with
sections 751(a)(1) and 777(i)(1) of the Act.
Dated: July 30, 1999.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-20338 Filed 8-5-99; 8:45 am]
BILLING CODE 3510-DS-P
