E8-20919. Polyethylene Retail Carrier Bags From the People’s Republic of China: Preliminary Results of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to requests from interested parties, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on polyethylene retail carrier bags (PRCBs) from the People’s Republic of China (PRC). The review covers various exporters. The period of review (POR) is August 1, 2006, through July 31, 2007.

We have preliminarily determined that sales have been made at prices below normal value by companies subject to this review. If these preliminary results are adopted in our final results of administrative review, we will instruct U.S. Customs and Border Protection to assess antidumping duties on all appropriate entries.

We invite interested parties to comment on these preliminary results. Parties who submit comments in this review are requested to submit with each argument (1) a statement of the issue and (2) a brief summary of the argument.

EFFECTIVE DATE:

September 9, 2008.

FOR FURTHER INFORMATION CONTACT:

Kristin Case (Nozawa), George Callen (Rally), or Minoo Hatten, AD/CVD Operations, Office 5, 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 August 9, 2004, the Department published the antidumping duty order on PRCBs from the PRC. See Antidumping Duty Order: Polyethylene Retail Carrier Bags From the People's Republic of China, 69 FR 48201 (August 9, 2004). In accordance with 19 CFR 351.213(b), the Department received requests for review for the following producers/exporters: Crown Polyethylene Products International Limited (Crown), Dongguan Qiatou Samson Plastic Manufactory Co. (Samson), Everfaith International (Shanghai) Ltd. (Everfaith), Sea Lake Polyethylene Enterprises, Ltd. (Sea Lake), Shanghai Glopack, Inc. (Glopack), Shanghai Hua Yue Packaging Products (Hua Yue), Shanghai Yafu Plastics Industry Co., Ltd. (Yafu), Dongguan Nozawa Plastics Products Co., Ltd., and United Power Packaging, Ltd. (collectively, Nozawa), and Rally Plastics Co., Ltd. (Rally). In accordance with 19 CFR 351.213(g) and 19 CFR 351.221(b) we published a notice of initiation of administrative review of these companies. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 72 FR 54428 (September 25, 2007) (Initiation Notice).

On September 28, 2007, Crown withdrew its request for review. On October 22, 2007, Everfaith and Hua Yue withdrew their requests for review. On December 26, 2007, Sea Lake and Glopack withdrew their requests for review. Also, on January 17, 2008, Asia Dynamics, Inc., withdrew its request for review of Yafu. In accordance with 19 CFR 351.213(d)(1), we rescinded this administrative review with respect to Crown, Everfaith, Hua Yue, Sea Lake, Glopack, and Yafu. See Polyethylene Retail Carrier Bags from the People’s Republic of China: Notice of Partial Rescission of Antidumping Duty Administrative Review, 73 FR 8031 (February 12, 2008).

Since initiation of the review, we extended the due date for completion of these preliminary results from May 2, 2008, to September 2, 2008. See Polyethylene Retail Carrier Bags from the People’s Republic of China; Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 73 FR 22337 (April 25, 2008).

The POR is August 1, 2006, through July 31, 2007. We are conducting this review in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act).

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 order 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.

As a result of changes to the Harmonized Tariff Schedule of the United States (HTSUS), imports of the subject merchandise are currently classifiable under statistical category 3923.21.0085 of the HTSUS. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, the written description of the scope of this order is dispositive.

Selection of Respondents

Due to the large number of firms requested for this administrative review and the resulting administrative burden to review each company for which a request has been made, the Department is exercising its authority to limit the number of respondents selected for individual examination. Where it is not practicable to examine all known exporters/producers of subject merchandise because of the large number of such companies, section 777A(c)(2) of the Act, permits the Department to limit its examination to either a sample of exporters, producers, or types of products that is statistically valid based on the information available at the time of selection or exporters and producers accounting for the largest volume of subject merchandise from the exporting country that can be examined reasonably. Accordingly, on September 18, 2007, we requested information concerning the quantity and value of sales to the United States from the nine exporters/producers listed in the Initiation Notice. Based upon responses to the Q&V questionnaires, the Department selected Nozawa and Rally for individual examination in this administrative review on October 31, 2007. See Memorandum to Abdelali Elouradia entitled “Antidumping Duty Administrative Review of Polyethylene Retail Carrier Bags from the People’s Republic of China: Selection of Mandatory Respondents” dated October 31, 2007.

Verification

As provided in section 782(i) of the Act, we have verified information provided by Nozawa using standard verification procedures, including on-site inspection of the manufacturer’s facilities, the examination of relevant sales and financial records, and the examination of records pertaining to further-manufacturing operations. Our verification results are outlined in the public versions of the verification reports, which are on file in the Central Records Unit, Room 1117 of the main Department building.

NME Country Status

In every case conducted by the Department involving the PRC, the PRC has been treated as a non-market-economy (NME) country. 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. See Brake Rotors From the People’s Republic of China: Final Results and Partial Rescission of the 2004/2005 Administrative Review and Notice of Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14, 2006). None of the parties to this proceeding has contested such treatment. Accordingly, we have calculated normal value in accordance with section 773(c) of the Act, which applies to NME countries.

Separate Rates

As explained above, a designation of a country as an NME remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act. Accordingly, there is a rebuttable presumption that all companies within the PRC are subject to government control and, thus, should be assessed a single antidumping duty rate. It is the Department’s standard policy to assign all exporters of the merchandise subject to review in NME countries a single rate unless an exporter can affirmatively demonstrate an absence of government control, both in law (de jure) and in fact (de facto), with respect to exports. To establish whether a company is sufficiently independent to be entitled to a separate, company-specific rate, the Department analyzes each exporting entity in an NME country under the test 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), as amplified by the 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).

The Department’s separate-rate test determines whether the exporters are independent from government control and does not consider, in general, macroeconomic or border-type controls, e.g., export licenses, quotas, and minimum export prices, particularly if these controls are imposed to prevent dumping. The test focuses, rather, on controls over the investment, pricing, and output decision-making process at the individual firm level. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From Ukraine, 62 FR 61754, 61757 (November 19, 1997), and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People’s Republic of China; Final Results of Antidumping Administrative Review, 62 FR 61276, 61279 (November 17, 1997).

Firms that were assigned a separate rate in the most recent segment of this proceeding in which they participated can provide certification that they continue to meet the criteria for obtaining a separate rate. Nozawa and Rally participated in the 2005-2006 administrative review of the order on PRCBs from the PRC and received separate rates. For this review Nozawa and Rally provided certifications that they continue to meet the criteria for obtaining a separate rate. See Nozawa's and Rally's October 15, 2007, separate-rate certifications.

On September 18, 2007, the Department issued a separate-rate certification/application to Samson. See 2006-2007 Administrative Review of the Antidumping Duty Order on Polyethylene Retail Carrier Bags from the People’s Republic of China, dated September 18, 2007 (separate-rate letter). On October 16, 2007, the Department received a separate-rate application from Samson. The Department issued a supplemental questionnaire to Samson concerning its separate-rate application on March 25, 2008. The due date for responding to the supplemental questionnaire was April 8, 2008. Samson did not respond to the supplemental questionnaire. In our September 18, 2007, letter, we notified applicants that incomplete applications may demonstrate that the applicant does not qualify for a separate rate. See separate-rate letter, Attachment 2, at 5. Because Samson did not respond to the supplemental questionnaire, we have preliminarily determined that Samson is not separate from the PRC-wide entity and thus will receive the PRC-wide rate.

Surrogate Country

When the Department analyzes imports from an NME country, section 773(c)(1) of the Act directs it to base normal value, in most circumstances, on the NME producer’s factors of production (FOP), valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the FOPs, the Department shall use, to the extent possible, the prices or costs of FOPs in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and significant producers of comparable merchandise. On March 18, 2008, the Department’s Office of Policy issued a memorandum identifying India as being at a level of economic development comparable to the PRC for the POR. See Memorandum entitled “Administrative Review of Polyethylene Retail Carrier Bags from the People’s Republic of China: Request for a List of Surrogate Countries,” dated March 18, 2008.

In the Department’s March 26, 2008, letter to interested parties requesting surrogate-country and surrogate-value comments, the Department indicated that India is among the countries comparable to the PRC in terms of overall economic development. In addition, based on publicly available information placed on the record (i.e., export data), India is a significant producer of the subject merchandise. See Memorandum entitled “Polyethylene Retail Carrier Bags from the People’s Republic of China: Selection of a Surrogate Country,” dated August 28, 2008.

Furthermore, India has been the primary surrogate country in determinations for past segments of this proceeding and both Nozawa and the Polyethylene Retail Carrier Bag Committee¹ submitted surrogate values based on Indian data that are contemporaneous to the POR, giving further credence to the use of India as a surrogate country. See, e.g., 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 (September 10, 2007). The sources of the surrogate factor values are discussed under the “Normal Value” section below and in the Memorandum entitled “Polyethylene Retail Carrier Bags from the People’s Republic of China: Surrogate-Values Memorandum,” dated September 2, 2008 (Surrogate-Value Memorandum).

U.S. Price

A.Export Price

In accordance with section 772(a) of the Act, we based U.S. price on the export price (EP) for sales to the United States by Rally and certain sales by Nozawa because the first sale to an unaffiliated party was made before the date of importation and the use of constructed EP (CEP) was not otherwise warranted. We calculated EP for Nozawa and Rally based on the prices to unaffiliated purchasers in the United States.

For Nozawa, in accordance with section 772(c) of the Act, we first added gross unit price adjustments and then deducted from the price to unaffiliated purchasers, where appropriate, foreign inland freight, brokerage and handling, international freight, and marine insurance. See Memorandum from Kristin Case to the File, “Administrative Review of Polyethylene Retail Carrier Bags from the People’s Republic of China: Preliminary Results Analysis Memorandum for Dongguan Nozawa Plastic Products Co., Ltd. and United Power Packaging Ltd.,” dated September 2, 2008 (Nozawa Preliminary Analysis Memorandum).

For Rally, also in accordance with section 772(c) of the Act, we first added gross unit price adjustments and then deducted from the price to unaffiliated purchasers, where appropriate, foreign inland freight, brokerage and handling, international freight, and marine insurance. See Memorandum from George Callen to the File, “Administrative Review of Polyethylene Retail Carrier Bags from the People’s Republic of China: Preliminary Results Analysis Memorandum for Rally Plastics Co., Ltd.,” dated September 2, 2008. Consistent with Certain Orange Juice from Brazil: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 73 FR 46584 (August 11, 2008) (OJ Brazil Final), and accompanying Issues and Decision Memorandum at Comment 7, we have incorporated freight-related revenues as offsets to movement expenses because they relate to the movement and transportation of subject merchandise. We also incorporated packing-related revenue as an offset to packing expenses because these items relate to the packing of subject merchandise (see OJ Brazil Final).

B. Constructed Export Price

In accordance with section 772(b) of the Act, CEP is the price at which the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter to a purchaser not affiliated with the producer or exporter, as adjusted under sections 772(c) and (d) of the Act. In accordance with section 772(b) of the Act, we used CEP for certain of Nozawa's sales because Nozawa sold its subject merchandise to its affiliated companies in the United States, Kal Pac Corporation (Kal Pac) and Packaging Solutions, Inc. (PSI), which, in turn, made the first sales of subject merchandise to unaffiliated U.S. customers. In addition, Nozawa reported that PSI made sales of subject merchandise which it further manufactured in the United States.

We added various revenue items to the gross unit price. See Nozawa Preliminary Analysis Memorandum at 2. Consistent with OJ Brazil Final, we have incorporated freight-related revenues as offsets to movement expenses because they relate to the movement and transportation of subject merchandise. In accordance with section 772(c)(2) of the Act, we made deductions from Nozawa's starting price for early-payment discounts, rebates, foreign inland freight from the plant to the port of exportation, international freight, marine insurance, brokerage and handling, U.S. devanning expense, U.S. duty, inland freight from the warehouse to the unaffiliated U.S. customer, commissions, warranties, and return adjustments. Where foreign movement expenses or international movement expenses were provided by NME service providers or for which Nozawa paid in an NME currency, we valued these services using surrogate values. See Surrogate-Value Memorandum. For those expenses that were provided by a market-economy provider and for which Nozawa paid in market-economy currency, we deducted the actual expenses incurred. See Nozawa Preliminary Analysis Memorandum. In accordance with section 772(d)(1) of the Act, the Department deducted credit expenses, inventory carrying costs, and U.S. indirect selling expenses from the U.S. price, all of which relate to commercial activity in the United States. We calculated Nozawa's credit expenses and inventory carrying costs based on the Federal Reserve short-term rate because Nozawa reported that neither Kal Pac nor PSI had short-term borrowings during the POR.

We also deducted an amount for further-manufacturing costs, where applicable, in accordance with section 772(d)(2) of the Act. To calculate the cost of further manufacturing in the United States, we relied on PSI’s reported cost of materials, labor, overhead, general and administrative expenses, and financial expenses of the further-manufactured materials. In addition, we deducted CEP profit in accordance with sections 772(d)(3) and 772(f) of the Act.

C. Surrogate Values for Expenses Incurred in the PRC for U.S. Sales

Nozawa and Rally reported that, for certain U.S. sales, foreign inland freight was provided by an NME vendor or they paid for freight using an NME currency. In such instances, we based the deduction of these charges on surrogate values. We valued foreign inland freight with the surrogate value for truck freight. For foreign brokerage and handling, marine insurance, and international freight, Nozawa and Rally reported using market-economy vendors and stated that they paid these expenses in a market-economy currency. Where movement services were provided by a market-economy vendor and the respondents paid in a market-economy currency, we deducted the actual cost per kilogram of the freight. See Surrogate-Value Memorandum.

Normal Value

A. Methodology

Section 773(c)(1)(B) of the Act provides that the Department shall determine the normal value using an FOP methodology if the merchandise is exported from a NME country and the information does not permit the calculation of normal value using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. The Department bases normal value on the FOPs because the presence of government controls on various aspects of NME countries renders price comparisons and the calculation of production costs invalid under the Department’s normal methodologies. 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 Intent to Rescind in Part, 70 FR 39744 (July 11, 2005) (unchanged in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, from the People's Republic of China: Final Results of 2003-2004 Administrative Review and Partial Rescission of Review, 71 FR 2517 (January 16, 2006)) (Tapered Roller Bearings).

The FOPs for PRCBs include the following elements: (1) quantities of raw materials employed; (2) hours of labor required; (3) amounts of energy and other utilities consumed; (4) representative capital and selling costs; (5) packing materials. We used the FOPs reported by the respondents for materials, labor, energy, by-products, and packing.

In accordance with 19 CFR 351.408(c)(1), when a producer sources an input from a market-economy country and pays for it in a market-economy currency, the Department will normally value the factor using the actual price paid for the input. See 19 CFR 351.408(c)(1); see also Lasko Metal Products v. United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994) (affirming the Department’s use of market-based prices to value certain FOPs). Where a portion of the input is purchased from a market-economy supplier and the remainder from an NME supplier, the Department will normally use the price paid for the inputs sourced from market-economy suppliers to value all of the input, provided the volume of the market-economy inputs as a share of total purchases from all sources is “meaningful.” See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27366 (May 19, 1997), and Shakeproof v. United States, 268 F.3d 1376, 1382 (Fed. Cir. 2001). See also 19 CFR 351.408(c)(1).

B. Factor Methodology

During the POR, Nozawa did not produce certain types of merchandise that it sold during the POR. Consequently, the original FOP database Nozawa submitted did not contain FOPs for those models sold but not produced by Nozawa during this POR. Because the vast majority of the models Nozawa sold were produced during this POR or the prior POR, Nozawa also submitted on the record of this review the FOP database from the prior review (i.e., the 2005/2006 review). In addition, Nozawa submitted an FOP database incorporating the FOPs for all models sold during the POR, using both production data from this and the prior POR. Therefore, for purposes of factor valuation, the Department has used the FOP database incorporating all models sold during the POR. Nozawa based certain FOP data on similar models where it did not produce the model in either this or the prior POR.

The Department reviewed Nozawa's identification of the most similar matches for the models it sold but did not produce during the previous or this POR. In doing so, we determined the product characteristics which have the most significant impact on the cost of materials and then compared all product characteristics of the actual models to the product characteristics of the proposed matching models. We found that Nozawa's proposed matches were identical in the most significant product characteristics and had some insignificant differences in other characteristics. Therefore, we accepted Nozawa's assignment of the most similar model designations for those products it sold but did not produce during the POR. See Nozawa Preliminary Analysis Memorandum.

C. FOP Valuation

In accordance with section 773(c) of the Act, we calculated normal value based on the FOPs reported by respondents for the POR. To calculate normal value, we multiplied the reported per-unit factor-consumption rates by publicly available surrogate values. In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data.

It is the Department’s practice to calculate price-index adjustors to inflate or deflate, as appropriate, surrogate values that are not contemporaneous with the POR using the wholesale price index for the subject country. See Certain Preserved Mushrooms from the People’s Republic of China: Final Results of the Antidumping Duty New Shipper Review, 71 FR 66910 (November 17, 2006). Therefore, where we could not obtain publicly available information contemporaneous with the POR, we adjusted surrogate values using the Wholesale Price Index (WPI) for India, as published in the International Financial Statistics of the International Monetary Fund.

Except as indicated below, we valued raw material inputs using the weighted-average unit import values derived from the Monthly Statistics of the Foreign Trade of India, as published by the Directorate General of Commercial Intelligence and Statistics of the Ministry of Commerce and Industry, Government of India in the World Trade Atlas (WTA), available at http://www.gtis.com/​wta.htm. For those surrogate values based upon Indian import statistics, we disregarded prices which we have reason to believe or suspect may be subsidized. We have reason to believe or suspect that prices of inputs from Indonesia, South Korea, and Thailand may have been subsidized. We have found in other proceedings that these countries maintain broadly available, non-industry-specific export subsidies and, therefore, it is reasonable to infer that all exports to all markets from these countries may be subsidized. See Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China, 69 FR 20594 (April 16, 2004), and accompanying Issues and Decision Memorandum at Comment 7; see also Certain Cut-to-Length Carbon Steel Plate from Romania: Notice of Final Results and Final Partial Rescission of Antidumping Duty Administrative Review, 70 FR 12651 (March 15, 2005), and accompanying Issues and Decision Memorandum at Comment 4. The legislative history reflects the Department’s practice that, in making its determination as to whether input values may be subsidized, the Department does not conduct a formal investigation; rather, the Department bases its decision on information that is available to it at the time it makes its determination. See H.R. Rep. 100-576, at 590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24. Therefore, based on the information currently available, we have not used prices from these countries in calculating the surrogate values based on Indian import data.

We have also disregarded Indian import data concerning raw materials from countries that we have previously determined to be NME countries as well as imports originating from “unspecified” countries because we could not be certain that they were not from either an NME or a country with generally available export subsidies. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Chlorinated Isocyanurates From the People's Republic of China, 69 FR 75294, 75300 (December 16, 2004), and Notice of Final Determination of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the People's Republic of China, 70 FR 24502 (May 10, 2005) (unchanged in the final results). For a comprehensive list of the sources and data we used to determine the surrogate vales for the FOPs, by-products, and the surrogate financial ratios for factory overhead, selling, general and administrative expenses (SG&A), and profit, see Surrogate-Value Memorandum.

Where appropriate, we adjusted the Indian import prices by including freight costs to make them delivered prices. Specifically, we added to the Indian import prices a surrogate freight cost using the shorter of the reported distance from the domestic supplier to the factory of production or the distance from the nearest seaport to the factory of production where appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit’s decision in Sigma Corp. v. United States, 117 F.3d 1401, 1407-1408 (Fed. Cir. 1997). Where we did not use Indian import data as the basis of the surrogate value, we calculated inland freight based on the reported distance from the supplier to the factory. We valued truck freight expenses using a per-unit average rate calculated from data on the following Web site: http://www.infobanc.com/​logistics/​logtruck.htm. See Surrogate-Value Memorandum.

The logistics section of this Web site contains inland-freight truck rates between many large Indian cities. Because this value is not contemporaneous with the POR, we deflated the rate using WPI. See Surrogate-Value Memorandum.

We valued electricity using price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication titled Electricity Tariff&Duty and Average Rates of Electricity Supply in India, dated July 2006. These electricity rates represent actual country-wide, publicly available information on tax-exclusive electricity rates charged to industries in India. Because the rates are not contemporaneous with the POR, we deflated the values using the WPI. See Surrogate-Value Memorandum.

For direct labor, indirect labor, and packing labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as reported on Import Administration’s web site. See Corrected 2007 Calculation of Expected Non-Market Economy Wages, 73 FR 27795, 27796 (May 14, 2008) (available at http://ia.ita.doc.gov/​wages). The source of these wage-rate data on the Import Administration’s website is the Yearbook of Labour Statistics 2003, ILO (Geneva: 2003), Chapter 5B: Wages in Manufacturing. The years of the reported wage rates range from 2003 through 2004. Because this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by each respondent. See Surrogate-Value Memorandum.

To value factory overhead, SG&A, and profit values, we used information from M/S Synthetic Packers Private Ltd. for the fiscal year ending March 31, 2007. From this information, we were able to determine factory overhead as a percentage of the total raw materials, labor and energy (ML&E) costs, SG&A as a percentage of ML&E plus overhead (i.e., cost of manufacture), and profit as a percentage of the cost of manufacture plus SG&A. See Surrogate-Value Memorandum.

For packing materials, we used the per-kilogram values obtained from the WTA and made adjustments to account for freight costs incurred between the PRC suppliers and the respondents’ production facilities. See Surrogate-Value Memorandum.

Preliminary Results of the Review

As a result of our review, we preliminarily determine that the following percentage weighted-average dumping margins exist for the period August 1, 2006, through July 31, 2007:

Manufacturer/Exporter	Percent Margin
Dongguan Nozawa Plastics Products Co., Ltd., and United Power Packaging, Ltd.	2.30
Rally Plastics Co., Ltd.	18.11
PRC-wide Entity	77.57
2 The PRC-wide entity includes Samson.

Comments

We will disclose the calculations used in our analysis to parties in this review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b). Interested parties may submit publicly available information to value factors no later than 20 days after the date of publication of these preliminary results of review. See 19 CFR 351.301(c)(3)(ii). Any interested party may request a hearing within 30 days of the date of publication of this notice. See 19 CFR 351.310. Interested parties who wish to request a hearing or to participate in a hearing if a hearing is requested must submit a written request to the Assistant Secretary for Import Administration within 30 days of the date of publication of this notice. Requests should contain the following: (1) the party's name, address, and telephone number; (2) the number of participants; (3) a list of issues to be discussed. See 19 CFR 351.310(c).

Issues raised in the hearing will be limited to those raised in the case and rebuttal briefs. See 19 CFR 351.310(c). Case briefs from interested parties may be submitted not later than 30 days after the date of publication of this notice of preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal briefs from interested parties, limited to the issues raised in the case briefs, may be submitted not later than five days after the time limit for filing the case briefs or comments. See 19 CFR 351.309(d)(1). If requested, any hearing will be held two days after the scheduled date for submission of rebuttal briefs. See 19 CFR 351.310(d). Parties who submit case briefs or rebuttal briefs in this proceeding are requested to submit with each argument a statement of the issue, a summary of the arguments not exceeding five pages, and a table of statutes, regulations, and cases cited. See 19 CFR 351.309(c)(2).

The Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs or at the hearing, if held, not later than 120 days after the date of publication of this notice. See section 751(a)(3)(A) of the Act.

Assessment Rates

The Department shall determine, and U.S. Customs and Border Protection (CBP) shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated importer-specific (or customer-specific) assessment rates for merchandise subject to this review.

With respect to sales by Rally and certain sales by Nozawa, for these preliminary results, we divided the total dumping margins (calculated as the difference between normal value and EP) for each exporter’s importer or customer by the total number of units the exporter sold to that importer or customer. We will direct CBP to assess the resulting per-unit dollar amount against each unit of merchandise in each of that importer’s/customer’s entries during the review period.

In accordance with 19 CFR 351.212(b)(1), for Nozawa's CEP sales, we have calculated an importer-specific assessment rate by dividing the total dumping duties due by the entered value of CEP sales we analyzed. We will direct CBP to liquidate the appropriate entries at this rate.

We will instruct CBP to liquidate entries containing merchandise from the PRC-wide entity at the PRC-wide rate we determine in the final results of review.

We will issue assessment instructions to CBP 15 days after the date of publication of the final results of review.

Cash-Deposit Requirements

The following cash deposit requirements will be effective upon publication of the notice of final results of the administrative review for all shipments of PRCBs 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) for subject merchandise exported by Nozawa and Rally, the cash-deposit rate will be that established in the final results of review; (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, 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 preliminary 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 administrative review and this notice are in accordance with sections 751(a)(1) and 777(i) of the Act.

Dated: September 2, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

Footnotes

1.  Consisting of Hilex Poly Company, LLC, and the Superbag Corporation (collectively, the petitioners).