[Federal Register Volume 62, Number 96 (Monday, May 19, 1997)]
[Notices]
[Pages 27222-27235]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13060]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-847]


Notice of Final Determination of Sales at Less Than Fair Value: 
Persulfates From the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce

EFFECTIVE DATE: May 19, 1997.

FOR FURTHER INFORMATION CONTACT: James Maeder, Barbara Wojcik-
Betancourt, or Howard Smith, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 
482-3330, (202) 482-0629, or (202) 482-5193, respectively.

THE APPLICABLE STATUTE: 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 Rounds Agreements Act 
(``URAA'').

FINAL DETERMINATION: We determine that persulfates from the People's 
Republic of China (``PRC'') are being, or are likely to be, sold in the 
United States Sales at Less Than Fair Value (``LTFV''), as provided in 
section 735 of the Act.

Case History

    FMC Corporation (``FMC'') is the petitioner in this investigation. 
The respondents in this investigation are, Shanghai Ai Jian Import & 
Export Corporation (``AJ''), Sinochem Jiangsu Wuxi Import & Export 
Corporation (``Wuxi'') (exporters), Shanghai Ai Jian Reagant Works 
(``AJ Works'') (producer for AJ and Wuxi), Guangdong Petroleum Chemical 
Import & Export Trade Corporation (``Guangdong'') (exporter), Guangzhou 
City Zhujiang Electrochemical Factory (``Zhujiang'') (producer for 
Guangdong), ICC Chemical Corporation (``ICC'') 1. Since the 
preliminary determination in this investigation (Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Persulfates From the PRC 61 FR 68232, (December 
27, 1996), the following events have occurred:
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    \1\  ICC is Guangdong's U.S. customer. ICC submitted responses 
in this investigation because it claimed that U.S. price (``USP'') 
should be based on its sales to U.S. customers. We have determined 
that USP should be based on Guangdong's price to ICC (see Comment 
25).
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    In December 1996, and January 1997, FMC, AJ Works, AJ and Wuxi 
alleged that the Department made a ministerial error in its preliminary 
determination (see Comment 8 below). The Department found that there 
was an error made in the preliminary determination; however, this error 
did not result in a change of at least five absolute percentage points 
in, but no less than 25 percent of, the weighted-average dumping margin 
calculated in the preliminary determination. Accordingly, no revision 
to the preliminary determination was made. (see Ministerial Error 
Memorandum from the Team to Jeffrey P. Bialos dated January 17, 1997).
    On March 25, 1997, petitioner submitted the Chinese Communist Party 
(``CCP'') Circular and requested that the

[[Page 27223]]

Department revisit its policy regarding separate rates (see Comments 1, 
2, and 3 in the General Comments section below).
    In February and March 1997 we verified the respondents' 
questionnaire responses. Additional publicly available information on 
surrogate values was submitted by petitioner and respondents on April 
4, 1997. Petitioner and respondents submitted case briefs on April 4, 
1997, and rebuttal briefs on April 9, 1997 2. A public 
hearing was held on April 11, 1997.
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    \2\  Counsel for ICC, Zhujiang, and Guangdong did not submit 
case briefs, but did submit rebuttal briefs.
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Scope of the Investigation

    The products covered by this investigation are persulfates, 
including ammonium, potassium, and sodium persulfates. The chemical 
formula for these persulfates are, respectively, 
(NH4)2S2O8, 
K2S2O8, and 
Na2S2O8. Ammonium and potassium 
persulfates are currently classified under subheading 2833.40.60 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). Sodium 
persulfate is classified under HTSUS subheading 2833.40.20. Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this investigation is 
dispositive.

Period of Investigation

    The period of this investigation (``POI'') comprises each 
exporter's two most recent fiscal quarters prior to the filing of the 
petition (i.e., January through June 1996).

Separate Rates

    Each of the participating respondent exporters has requested a 
separate, company-specific antidumping rate. The claimed ownership 
structure of the respondents is as follows: (1) Wuxi and Guangdong are 
owned by all the people; (2) AJ is a publicly-held company.
    As stated in Silicon Carbide and Furfuryl Alcohol, ownership of a 
company by all the people does not require the application of a single 
rate. Accordingly, all three are eligible for consideration for a 
separate rate. (See 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) (``Silicon Carbide''), and Notice of Final 
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From 
the People's Republic of China, 60 FR 22544 (May 8, 1995) (``Furfuryl 
Alcohol'').
    To establish whether a firm is sufficiently independent from 
government control to be entitled to a separate rate, the Department 
analyzes each exporting entity under a test stated in of the Notice of 
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 Silicon Carbide. Under the separate 
rates criteria, the Department assigns separate rates in nonmarket 
economy cases only if respondents can demonstrate the absence of both 
de jure and de facto governmental control over export activities.

1. Absence of De Jure Control

    Respondents have placed on the administrative record a number of 
documents to demonstrate absence of de jure control. These documents 
include laws, regulations and provisions enacted by the central 
government of the PRC, describing the deregulation of Chinese 
enterprises as well as the deregulation of the Chinese export trade, 
(but for a list of products that may be subject to central government 
export constraints which the respondents claim does not involve the 
subject merchandise). Specifically, the respondents provided English 
translations of the laws and regulations governing their enterprises 
(see Comment 3). These laws and regulations authorize these companies 
to make their own operational and managerial decisions.
    In prior cases, the Department has analyzed the laws which the 
respondents have submitted in this record and found that they establish 
an absence of de jure control. (See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Partial-Extension Steel Drawer 
Slides With Rollers From the People's Republic of China, 60 FR 54472 
(October 24, 1995) (``Steel Drawer Slides''); and see also Furfuryl 
Alcohol). We have no new information in this proceeding which would 
cause us to reconsider this determination (see Comment 1 below).
    However, as in previous cases, there is some evidence that the PRC 
central government enactments have not been implemented uniformly among 
different sectors and/or jurisdictions in the PRC. (See Silicon Carbide 
and Furfuryl Alcohol.) Therefore, the Department has determined that an 
analysis of de facto control is critical in determining whether 
respondents are, in fact, subject to a degree of governmental control 
which would preclude the Department from assigning separate rates.

2. Absence of De Facto Control

    The Department typically considers four factors in evaluating 
whether each respondent is subject to de facto governmental control of 
its export functions: (1) whether the export prices (``EP'') are set by 
or subject to the approval of a governmental authority; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses (see Silicon Carbide and Furfuryl Alcohol).
    Each company asserted, and we verified, the following: (1) it 
establishes its own export prices; (2) it negotiates contracts, without 
guidance from any governmental entities or organizations; (3) it makes 
its own personnel decisions; and (4) it retains the proceeds of its 
export sales, uses profits according to its business needs and has the 
authority to sell its assets and to obtain loans. In addition, 
questionnaire responses on the record indicate that pricing was 
company-specific during the POI, which does not suggest coordination 
among or common control of exporters. During verification proceedings, 
Department officials viewed such evidence as sales documents, company 
correspondence, and bank statements. This information supports a 
finding that there is a de facto absence of governmental control of 
export functions. We determined that both Wuxi and AJ had autonomy from 
the central government in making decisions regarding the selection of 
management. In the case of Wuxi, the general manager was elected by an 
employee assembly. We found no involvement by any government entity in 
AJ's selection of management. With respect to Guangdong, we found that 
the general manager was appointed by the local administering authority, 
the Guangdong Heavy and Chemical Industrial Bureau (``GHCIB''). While 
this may indicate that Guangdong is subject to the control of the 
GHCIB, there is no evidence that any other exporter of the subject 
merchandise is currently under the control of the GHCIB, which could 
raise the issue of manipulation of the export function to evade 
antidumping duties. Therefore, we have concluded that Guangdong is 
entitled to a separate

[[Page 27224]]

rate 3. This determination is consistent with our recent 
decision in Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From the People's Republic of China: Final Results and 
Partial Termination of Antidumping Duty Administrative Review, 62 FR 
6173, 6174 (February 11, 1997) (``Tapered Roller Bearings''). 
Consequently, we have determined that Wuxi, AJ, and Guangdong have met 
the criteria for the application of separate rates.
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    \3\ All non-responding exporters are presumed to be under the 
control of the central government. However, there is no basis on 
which to conclude that any non-responding exporter is controlled by 
the GHCIB.
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China-Wide Rate

    U.S. import statistics indicate that the total quantity and value 
of U.S. imports of persulfates from the PRC is greater than the total 
quantity and value of persulfates reported by all PRC companies that 
submitted responses. Furthermore, after sending antidumping 
questionnaires to 18 companies identified as potential respondents in 
the petition, we received responses from only two producers and three 
exporters. Thus, we have concluded that not all exporters of PRC 
persulfates responded to our questionnaire. Accordingly, we are 
applying a single antidumping deposit rate--the China-Wide rate--to all 
exporters in the PRC, other than Wuxi, AJ and Guangdong (Zhujiang, and 
AJ Works are producers), based on our presumption that those 
respondents who failed to respond constitute a single enterprise under 
the common control of the PRC government. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Bicycles from the 
People's Republic of China, 61 FR 19026 (April 30, 1996) 
(``Bicycles'').
    This China-wide antidumping rate is based on adverse facts 
available. Section 776(a)(2) of the 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; (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), the administering 
authority * * * shall, subject to section 782(d), use the facts 
otherwise available in reaching the applicable determination under this 
title.''
    In addition, section 776(b) of the Act provides that, if the 
Department finds that an interested party has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information, the Department may use information that is adverse to the 
interests of that party as the facts otherwise available. The statute 
also provides that such an adverse inference may be based on secondary 
information, including information drawn from the petition.
    Consistent with section 776(b)(1) of the Act, we have applied, as 
total facts available, the higher of the average margin from the 
petition or the highest rate calculated for a respondent in this 
proceeding. In the present case, based on our comparison of the 
calculated margins for the respondents in this proceeding to the 
average margin in the petition, we have concluded that the petition is 
the most appropriate record information to base the dumping 
calculations in this investigation. Accordingly, the Department has 
based the China-wide rate on information in the petition. In this case, 
the average petition rate is 134.00 percent. Section 776(c) of the Act 
provides that where the Department relies on ``secondary information,'' 
the Department shall, to the extent practicable, corroborate that 
information from independent sources reasonably at the Department's 
disposal. The Statement of Administrative Action (SAA), accompanying 
the URAA clarifies that the petition is ``secondary information.'' See 
SAA at 870. The SAA also clarifies that ``corroborate'' means to 
determine that the information used has probative value. Id. However, 
where corroboration is not practicable, the Department may use 
uncorroborated information.
    In accordance with section 776(c) of the Act, we corroborated the 
margins in the petition to the extent practicable. The petitioner based 
EPs on price quotes obtained from U.S. importers, reduced by estimated 
importer mark-ups and movement charges. We compared the starting prices 
used by petitioner less the importer mark-ups against prices derived 
from U.S. import statistics and found that the two sets of prices are 
consistent. We also compared the movement charges used in the petition 
with the surrogate values used by the Department in its margin 
calculations and found them to be consistent.
    Regarding normal value (``NV''), petitioner used publicly available 
information from India to value the factors of production. Petitioner 
based factory overhead, selling, general and administrative (``SG&A'') 
and profit surrogates on data from an annual report of National 
Peroxide Limited (``National Peroxide''), an Indian producer of 
hydrogen peroxide. Based on the information on the record regarding 
similarities in the production process for hydrogen peroxide and 
persulfates, we have determined that it is appropriate to base 
surrogate factory overhead, SG&A and profit on National Peroxide's 
financial data (see Comment 3). Although we found in the preliminary 
determination that the financial data for Sanderson Industries Ltd. 
(``Sanderson''), the surrogate company proposed by one respondent, was 
more consistent with the financial data we obtained for other Indian 
chemical producers, in the final determination we have concentrated our 
analysis on product comparability, including similarities in the 
production process. Based on our analysis, we have accepted the factory 
overhead, SG&A and profit percentages in the petition for the final 
determination.
    With respect to all other elements of the NV calculation in the 
petition (i.e., materials, labor, energy and packing), the Department 
corroborated the values used in the petition by comparing them with 
values obtained from publicly available information collected in this 
and previous nonmarket economy investigations.
    Accordingly, we have corroborated, to the extent practicable, the 
data contained in the petition.

Fair Value Comparisons

    To determine whether respondents' sales of the subject merchandise 
to the United States were made at less than fair value, we compared EP 
to NV, as described in the ``United States Price'' and ``Normal Value'' 
sections of this notice.

United States Price

    We based USP on EP in accordance with section 772(a) of the Act, 
because the persulfates were sold directly to the first unaffiliated 
purchaser in the United States prior to importation and constructed 
export price methodology was not otherwise indicated by the facts in 
this case. In accordance with section 777A(d)(1)(A)(i) of the Act, we 
compared POI-wide NVs to POI-wide weighted-average EPs.
    We corrected the respondents' data for errors and minor omissions 
submitted to the Department and found at verification. We made company-
specific adjustments as follows:

1. Wuxi

    We calculated EP in accordance with our preliminary calculations, 
except

[[Page 27225]]

that we corrected inland freight expenses, control numbers in the 
company's sales listing, and international freight expenses, based on 
findings at verification.

2. AJ

    We calculated EP in accordance with our preliminary calculations 
except that we corrected inland and international freight expenses, 
based on findings at verification.

3. Guangdong

    We calculated EP based on packed, ex-factory PRC prices to an 
unaffiliated purchaser in the United States (see Comment 25). Insofar 
as Guangdong claimed that all the movement expenses were paid by the 
purchaser, we did not make any adjustments to the starting price for 
such expenses.

Normal Value

Factors of Production

    We calculated NV based on factors of production cited in the 
preliminary determination, making adjustments for specific verification 
findings (see Final Valuation Memorandum from the Team to Louis Apple, 
Acting Office Director dated May 12, 1997) (``Final Valuation 
Memorandum''). To calculate NV, the verified amounts for the factors of 
production were multiplied by the appropriate surrogate values for the 
different inputs. We have used the same surrogate sources as in the 
preliminary determination with the exception of the source for 
overhead, SG&A and profit. For the final determination we based the 
percentages for overhead, SG&A and profit on the detailed public 
version of National Peroxide's financial statement that was placed on 
the record of this investigation by the petitioner.
    Because Zhujiang, one of the producers in this investigation, 
failed to cooperate by not acting to the best of its ability to provide 
the weight of packing materials, we have used as the weight of each 
type of packing material the greatest weight reported for the material 
in the petition or in the public versions of the other respondent 
producer's submissions in this investigation. Where the weight for a 
particular type of packing material is not on the record, we have 
estimated the weight for these materials (see Final Valuation 
Memorandum). Also, because Zhujiang failed to provide supplier 
distances for packing materials we have used the greatest supplier 
distance reported by Zhujiang for any material input as the distance 
between the factory and the supplier of each type of packing material.
    In addition, AJ Works, the other producer in this investigation, 
failed to report certain packing materials. Therefore, we have 
estimated the weight for these materials in our calculations for the 
final determination (see Final Valuation Memorandum). Also because AJ 
Works failed to provide supplier distances for the unreported packing 
materials we have used the greatest supplier distance reported by AJ 
Works for any packing material as the distance between the factory and 
the supplier of each type of unreported packing material.

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by respondents for use in our final 
determination. We used standard verification procedures, including 
examination of relevant accounting and production records and original 
source documents provided by respondents.

General Comments

Comment 1: Assigning a Country-Wide Rate to all Respondents

    Petitioner alleges that the Notice of the Communist Party of China 
Central Committee on Reinforcing and Improving Party Building in State-
Owned Enterprises (``the Circular'') issued by the CCP in January 1997 
requires the Department to abandon its entire separate rates analysis 
and establish an irrebuttable presumption that all exporters of a 
particular product comprise a single exporter under government control. 
Petitioner argues that the Circular reasserts complete centralized 
state control over state-owned enterprises. Petitioner points out that 
the Circular requires generally that an enterprise's activities should 
be conducted under the guidance of state planning. Also, petitioner 
notes that the Circular imposes central control over decisions 
regarding the selection of management and ``capital utilization.'' 
Based on this Circular, petitioner argues that the CCP has reasserted 
both de jure and de facto control over state-owned enterprises and, 
thus, the Department should not allow any exporter to rebut the 
presumption of state control.
    Respondents claim the Circular is hortatory and aspirational and 
does not constitute a change either in the legal status or in the de 
facto operations of companies in China. Furthermore, respondents claim 
the Circular does not apply to the instant investigation because it was 
issued six months after the close of the POI. Finally, respondents 
argue it would be an error for the Department to ignore the company-
specific information on the record pertaining to independence and rely 
on petitioner's speculations regarding the future effect of the 
Circular.

DOC Position

    We have examined the Circular closely and have carefully considered 
the implications in may have for our separate rates analysis. While we 
agree with the petitioner that some of the language can be interpreted 
to indicate heightened government involvement in SOEs, it is not clear 
that the circular nullifies or amends any laws or regulations that 
grant operational independence to exporters, or that it will result in 
de facto government control over export activities of SOEs at some 
time. Moreover, we note that the Circular was issued on January 14, 
1997, and submitted to the Department on March 25, 1997. Thus, it was 
not before the Department during verification. At verification, we 
found that the companies subject to investigation operate independently 
with respect to exports and thus qualified for separate rates. 
Therefore, on the basis of all of the information in the record, we 
cannot conclude that the companies are not entitled to separate rates. 
However, we will continue to closely examine the effect, in fact and in 
law, of the circular with respect to any reassertion of central 
government control of export activities of SOEs. If, in any future 
investigation or review, we find that the new party circular results in 
government control of export activities, we will not grant companies 
separate rates.

Comment 2: Assigning a Country-Wide Rate Based on Affiliation

    Petitioner argues that if the Department continues its separate 
rates analysis in nonmarket economy cases despite the Circular, it 
should assign a single country-wide rate in accordance with its 
methodology for evaluating whether affiliated parties should be 
collapsed into one entity. Petitioner notes that the Department 
considers entities under common control to be affiliated. In such 
situations, petitioner alleges, if there is a strong possibility of 
price manipulation, the Department will collapse the entities and 
assign a single antidumping margin. In light of the Circular 
reasserting government control over SOEs, petitioner alleges that it is 
clear the respondents are under common control and that the Chinese 
government has the authority to control exports and pricing activities. 
Thus, in accordance with the Department's affiliated parties 
methodology, all respondents should be collapsed into

[[Page 27226]]

one entity and assigned a single country-wide rate.
    Respondents claim that Departmental practice shows that the 
affiliated party methodology does not apply to the issue of separate 
rates (see Tapered Roller Bearings). Also, according to respondents, 
the Department's proposed regulations state that the affiliated party 
methodology does not address the issue of whether a producer or 
exporter in a nonmarket economy country is entitled to an individual 
antidumping rate (see the Department's Proposed Regulations, 61 FR 7330 
(February 27, 1996)). Therefore, respondents contend the affiliated 
party methodology should not be used in the instant case.

DOC Position

    We agree with respondents. The Department has a long-standing 
methodology for determining whether companies in a nonmarket economy 
are entitled to a separate rate. That methodology is separate and 
distinct from the ``collapsing'' methodology in both focus and 
function. On the one hand, the separate rates test focuses specifically 
on whether there is government control of a nonmarket company's export 
activities. On the other hand, the ``collapsing'' methodology focuses 
on the relationship between two or more affiliated companies, not their 
relationship vis-a-vis the government or other entities. There is no 
basis for applying a ``collapsing'' analysis in this case.

Comment 3: Assigning a Country-Wide Rate Based on De Jure and De Facto 
Control Wuxi and AJ

    Petitioner contends that Wuxi failed to place evidence on the 
record showing that it was not subject to de jure government control. 
Although Wuxi placed on the record certain PRC laws stating that the 
responsibility for managing companies ``owned by all the people'' has 
been transferred from the government to the companies themselves, it 
failed, according to petitioner, to provide documentation showing how 
these laws are implemented in Jiangsu Province, and how Wuxi is 
affected by them. In addition, petitioner notes that Wuxi failed to 
provide documentation demonstrating the absence of export controls on 
subject merchandise. Petitioner also points out that Wuxi's charter 
states that the company is to carry out the policy of the state and 
comply with the provisions of an institute that allegedly is an 
instrument of the Chinese government. Further, petitioner states that 
Wuxi has failed to demonstrate the absence of de facto government 
control. Specifically, petitioner contends that Wuxi failed to: (a) 
show that it independently negotiated and signed business contracts; 
(b) demonstrate that it had autonomy in selecting management; (c) 
demonstrate that it had the authority to borrow freely; and (d) show 
how foreign currency and company profits were used. Thus, petitioner 
claims Wuxi failed to demonstrate the absence of de facto government 
control. Therefore, petitioner maintains that the Department should 
assign Wuxi a country-wide rate.
    Petitioner claims AJ failed to provide any evidence to support its 
assertion that there are no controls on exports of the subject 
merchandise to the United States. Petitioner notes that AJ's charter 
states that the company should follow state rules which, when read in 
conjunction with the Circular, indicates that AJ is subject to de jure 
government control.
    Petitioner contends that AJ did not establish the absence of de 
facto control regarding management selection because the company failed 
to identify the shareholders of its parent corporation whose board of 
directors appoints and approves AJ's top managers. Because shareholders 
of the parent corporation were not identified, petitioner claims the 
Department has no way of knowing whether a government entity, as a 
shareholder of the parent corporation, has control over the selection 
of AJ's top managers. On the basis of de jure and de facto control over 
AJ by the PRC government, petitioner maintains the Department should 
assign AJ a country-wide rate.
    Wuxi and AJ maintain that they established the lack of de jure 
government control by submitting copies of various laws and regulations 
that were used to establish the absence of such control in past cases. 
Specifically, respondents note that they submitted the April 13, 1988, 
regulations on industrial enterprises ``owned by all the people,'' the 
August 23, 1992, regulations regarding deregulation of state-owned 
industrial enterprises, and the December 29, 1993, law governing 
publicly held companies. Respondents argue that the implementation of 
such laws at the provincial level was established by the absence of de 
facto government control. Further, respondents assert that their 
charter provisions, which require the companies to comply with state 
policies, simply means that the companies must follow the law. 
Respondents also assert that the Department found no evidence of export 
controls during verification. AJ further claims that the lack of de 
jure government control is evidenced by the fact that its parent 
company is a publicly traded company. According to AJ, the absence of a 
list of its shareholders does not overcome this finding. Regarding de 
facto control, respondents claim the Department examined the 
disposition of foreign currency and profits and reviewed documentation 
relating to sales negotiations, contracts, loans, and management 
selection, and found no evidence of government control.

Guangdong and ICC

    Petitioner argues that the Department should assign, as adverse 
facts available, a single country-wide antidumping duty rate to 
Guangdong because Guangdong is owned by the Chinese provincial 
government and the company failed to provide evidence demonstrating the 
absence of de jure and de facto government control. Regarding de jure 
control, petitioner maintains the interim procedures 4 on 
export licensing that Guangdong placed on the record merely address the 
issuance of export licenses, not the decentralization of government 
control of export activities. Petitioner also maintains that Guangdong 
failed to provide documentation showing how the ``Company Law of the 
People's Republic of China'' and the ``Temporary Provisions for 
Administration of Export Commodities'' are implemented in the province 
where Guangdong is located. Regarding de facto control, petitioner 
claims that the documents Guangdong submitted to prove that it 
independently sets prices and negotiates contracts are merely 
correspondence between ICC and ICC (Hong Kong) Ltd. (ICC is a customer 
of Guangdong) regarding persulfate purchases and do not support a 
finding that Guangdong acts independently. Petitioner points out that 
Guangdong has absolutely no autonomy in selecting managers because the 
Chinese provincial government appoints the general manager who, in 
turn, selects all the other managers. According to petitioner, the fact 
that the provincial government selects Guangdong's general manager is 
enough to require the Department to assign a country-wide antidumping 
duty rate to Guangdong (see Notice of Preliminary Determination of 
Sales at Less Than Fair Value: Natural Bristle Paint Brushes and Brush 
Heads From the People's Republic of China, 61 FR 15037, 15038 (April 
14, 1996) (``Natural

[[Page 27227]]

Bristle Paint Brushes and Brush Heads'')). Finally, petitioner claims 
Guangdong did not demonstrate its independence from government control 
with respect to financial management of the company. Petitioner notes 
that the general manager, who is appointed by the Chinese provincial 
government, is the only individual who decides how to use company 
profits and has access to the company's bank account. Hence, petitioner 
urges the Department to apply a country-wide antidumping duty rate to 
Guangdong.
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    \4\ ``Interim Procedures of the State Import-Export Commission 
and the Ministry of Foreign Trade of the People's Republic of China 
Concerning the System of Export Licensing''
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    ICC and Guangdong maintain that petitioner's arguments for a single 
antidumping duty rate fail for several reasons. First, according to ICC 
and Guangdong, the separate rates test does not apply to them because 
USP should be based on ICC's prices and ICC is an American-owned 
company located in the United States (see Comment 27). Second, even if 
the Department bases USP on Guangdong's sales to ICC, Guangdong and ICC 
claim petitioner's argument for a single antidumping duty rate fails 
because the Department verified the absence of both de jure and de 
facto government control of Guangdong. Regarding de jure control, 
Guangdong and ICC maintain that the laws they placed on the record 
establish the absence of such control. Regarding de facto control, 
respondents contend that the record shows that Guangdong sets prices 
and negotiates contracts independently of the central and provincial 
government. While Guangdong and ICC acknowledge that the Chinese 
provincial government owns Guangdong and appoints the company's top 
managers, respondents claim the record shows that the provincial 
government is not involved in the day-to-day management of Guangdong 
and the government's appointment of top managers did not adversely 
affect the company's independence in export activities. In addition, 
respondents maintain that Natural Bristle Paint Brushes and Brush Heads 
did not address the appointment of top management by the provincial 
government and, thus, the case does not support petitioner's argument 
for a country-wide rate based on the provincial government's 
appointment of Guangdong's top managers. Respondents also note that the 
Department reversed its position in the preliminary determination of 
Natural Bristle Paint Brushes and Brush Heads, cited by petitioner, and 
found, in the final determination, that a separate rate was appropriate 
because the general manager was selected through a poll of the 
employees that was ratified by the provincial government. Thus, that 
case is not relevant to this determination. Lastly, Guangdong and ICC 
contend that the question before the Department is whether Guangdong is 
sufficiently independent from the central government, not the 
provincial government. According to respondents, the record shows 
Guangdong operates completely independent of the central government.

DOC Position

AJ and Wuxi

    We have found that AJ is a publicly held company and Wuxi is 
``owned by all the people.'' AJ and Wuxi submitted to the Department 
copies of the 1988, 1992, and 1993 laws under which they were 
organized. Each of these laws establishes the absence of de jure 
control in that they grant these companies the right to negotiate 
prices and sell products, make production decisions, make investment 
decisions and form joint ventures. Further, the information on the 
record relating to provincial and local governments shows that their 
activities with regard to AJ, Wuxi, and AJ Works are limited to such 
functions as taxation, business licensing, and the collection of export 
statistics. During verification, we found no evidence that the 
government controlled export prices or interfered with other aspects of 
conducting business with the United States.
    We analyze below the issue of de facto control based on the 
criteria set forth in Silicon Carbide.
    In the course of verification, we confirmed that AJ's and Wuxi's 
prices are not set, or subject to approval, by any government 
authority. This point was supported by the companies' sales 
documentation and correspondence. Through an examination of sales 
documents pertaining to U.S. persulfates sales, we noted that both AJ 
and Wuxi have the authority to negotiate contracts, including price, 
with its customers without government interference.
    We confirmed, through an examination of bank and financial 
documents, that both AJ and Wuxi have the authority to borrow funds and 
to distribute the proceeds from the export sales freely, independent of 
government authority. Further, we have determined that both AJ and Wuxi 
have autonomy from the central government in making decisions regarding 
the selection of management.
    AJ's general manager is selected by the board of directors of AJ's 
parent corporation whose shares are publicly traded and widely held. We 
found no evidence of government involvement in the selection of 
management.
    Based on an analysis of all these factors, we have determined that 
AJ and Wuxi are not subject to de facto control by governmental 
authorities.

Guangdong

    Respondent placed copies of laws on the record that established the 
absence of de jure control by the central government. The general 
manager is appointed by a bureau of the provincial government, not the 
central government. As noted above, there are no other exporters under 
the control of the provincial government. Thus, we have concluded that 
Guangdong is entitled to a separate rate (see Silicon Carbide).

Comment 4: Assigning a Country-Wide Rate to AJ

    Petitioner contends the Department should, as adverse facts 
available, assign AJ a China-wide rate because, during verification, AJ 
did not provide the Department with copies of the long-term contracts 
for its sales to the United States. According to petitioner, AJ's 
failure to provide the contracts prevented the Department from 
verifying the completeness of the company's sales response. Because the 
company's failure to cooperate prevented the Department from completing 
a critical component of the verification, petitioner argues that the 
Department should apply the China-wide rate to AJ.
    AJ maintains that the sales confirmations it provided the 
Department at verification are the long-term contracts referred to in 
its questionnaire responses. In addition, AJ maintains the Department 
compared the total quantity and value of its sales with sales reported 
in the company's audited financial statement and sales ledger and noted 
no discrepancies. AJ also maintains that the Department verified that 
during 1996 there were no more sales or shipments to the United States 
subsequent to the last reported sale. Thus, AJ claims the Department 
verified the completeness of AJ's sales response.

DOC Position

    We agree with AJ. Although AJ reported that it sold the subject 
merchandise pursuant to long-term contracts, at verification we found 
AJ's sales confirmations for each sale to be contracts. To verify sales 
completeness we examined sales confirmations, traced the reported sales 
to invoices, sales ledgers, and the audited financial statement, and 
looked for unreported sales in AJ's 1996 accounting records. We noted 
no discrepancies. Therefore,

[[Page 27228]]

the use of adverse facts available for AJ is not warranted.

Comment 5: Assigning Antidumping Duty Rates to Manufacturers

    If the Department assigns separate antidumping duty rates in this 
investigation, petitioner contends the rates should apply not only to 
the exporters but also to the manufacturers whose factors of production 
formed the basis for the separate rate. Petitioner maintains that this 
approach is appropriate because: (a) it is a logical approach which 
avoids the inaccurate assessment of cash deposits when the exporter 
enters subject merchandise into the United States that was produced by 
other manufacturers; and (b) it prevents other manufacturers from 
selling subject merchandise through an exporter with a low antidumping 
duty margin. Although petitioner acknowledges that the Department's 
recent practice as noted in Coumarin and Lighters has been to assign 
antidumping rates only to exporters, petitioner urges the Department to 
return to its policy outlined in Sulfur Dyes (see Notice of Final 
Determination of Sales at Less Than Fair Value: Coumarin From the 
Peoples Republic of China, 59 FR 66895 (December 28, 1994); Notice of 
Final Determination of Sales at Less Than Fair Value: Disposable Pocket 
Lighters From the People's Republic of China, 60 FR 22359 (May 5, 
1995); and Notice of Final Determination of Sales at Less Than Fair 
Value: Sulfur Dyes, Including Sulfur Vat Dyes From the People's 
Republic of China, 58 FR 7537 (February 8, 1993)). Specifically, 
petitioner notes that in Sulfur Dyes the Department determined that any 
margin calculated using data from a specific producer and exporter 
``would only be representative of transactions involving these two 
parties and are only to be applied to imports of the listed 
manufacturer or producer which are exported by the listed exporter.'' 
Petitioner also notes that in Certain Cased Pencils the Department 
assigned a zero margin only to imports of subject merchandise that are 
sold by the exporter and manufactured by the producers whose factors 
formed the basis for the zero margin (see Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cased Pencils From the 
People's Republic of China 59 FR 55625 (November 8, 1994)). 
Furthermore, petitioner claims that assigning antidumping duty rates to 
manufacturers participating in the investigation prevents non-
participating manufacturers from selling through exporters with 
separate rates that are normally lower than the country-wide rates 
assigned to non-participants. Petitioner argues that administrative 
reviews do not provide an effective remedy to the problem of 
manufacturers selling through exporters with a low duty rate because 
the first administrative review is not concluded until at least two 
years after the final determination in the investigation. During this 
time, petitioner contends that the manufacturer can export to the 
United States using the lowest rate available. In addition, petitioner 
claims it should not bear the burden of assessing whether an exporter 
has become a conduit for new manufacturers. Thus, if the Department 
assigns separate rates, petitioner requests that the Department assign 
an antidumping rate to both the exporter and the manufacturer.
    Respondents contend that the Department should assign antidumping 
duty rates to the exporters and not the producers in this investigation 
because the provision for administrative reviews will prevent the 
exporters from selling the merchandise of producers that may have 
yielded greater antidumping duty margins than the producers 
participating in the investigation. Respondents point out that the 
Department's practice is to assign antidumping duty rates only to 
exporters.

DOC Position

    We agree with respondents. The Department's practice in cases 
involving NME countries is to assign rates to exporters rather than 
producers because the exporters actually determine the price at which 
the subject merchandise is sold to the United States. The Department 
does not ``pair'' exporters with producers in our instructions to 
Customs except where a company is excluded from an antidumping order 
(see, e.g., Pencils,5, Notice of Final Determination of 
Sales at Less Than Fair Value: Polyvinyl Alcohol From the People's 
Republic of China, 61 FR 14057 (March 29, 1996) (``PVA''), and Notice 
of Final Determination of Sales at Less Than Fair Value: Brake Drums 
and Brake Rotors From the People's Republic of China, 62 FR 9160, 
(February 28, 1997) (``Brake Drums'')). Thus, if ``low-margin'' 
exporters source from less efficient producers and fail to adjust 
prices accordingly, this will be reflected in the assessment and future 
cash deposits.
---------------------------------------------------------------------------

    \5\ In Pencils, the Department did distinguish between suppliers 
for one exporter, and identified separate pairings of suppliers for 
that exporter, because the exporter had a zero margin on sales of 
merchandise from one supplier.
---------------------------------------------------------------------------

Comment 6: Selecting the Surrogate Producer for Overhead, SG&A and 
Profit

    Because none of the parties in this investigation, nor the 
Department, could obtain financial data for Indian persulfate 
producers, petitioner contends the Department should base surrogate 
factory overhead, SG&A and profit on the financial data of a hydrogen 
peroxide producer because the production processes for hydrogen 
peroxide and persulfates are comparable. Specifically, petitioner 
proposes valuing surrogate overhead, SG&A and profit using the data of 
the Indian company; National Peroxide.
    Petitioner claims that most persulfate producers also manufacture 
hydrogen peroxide because persulfates are manufactured using the same 
electrolytic process by which hydrogen peroxide has historically been 
manufactured. According to petitioner, much of the persulfate 
production capacity results from conversion of older catalytic hydrogen 
peroxide production facilities. Thus, petitioner maintains that many of 
the existing persulfate producers have business units which are 
organized around peroxygen chemistry and have shared management, sales, 
and distribution resources dedicated to both hydrogen peroxide and 
persulfates.
    Petitioner notes that ``comparable'' merchandise, as defined by the 
Department, encompasses a larger set of products than ``such or 
similar'' merchandise, and in past cases, the Department has identified 
comparable merchandise on the basis of similarities in production 
factors (physical and non-physical) and factor intensities. (See Notice 
of Final Determination of Sales at Less Than Fair Value: Pure Magnesium 
and Alloy Magnesium From the People's Republic of China, 59 Fed. Reg. 
55424 (Nov. 7, 1994) (``Pure Magnesium''), and Bicycles).
    Petitioner argues that none of the production processes used by the 
surrogate company proposed by respondents (Sanderson) have any 
similarity to the electrolytic process technology common to hydrogen 
peroxide and persulfates. According to petitioner, the production 
processes for the products manufactured by Sanderson involve simple 
chemical reactions based on the production of sulfuric acid. Further, 
petitioner maintains that Sanderson's production processes require very 
little, if any, technical support. On the other hand, petitioner notes 
that hydrogen peroxide and persulfates have oxidative functions that 
require application and process

[[Page 27229]]

technology support to ensure product safety. Accordingly, petitioner 
advocates using the data of National Peroxide as a better source of 
SG&A, overhead and profit.
    AJ Works argues that the Department should base surrogate factory 
overhead, SG&A, and profit on data for the Indian metals and chemicals 
industry because none of the companies proposed as surrogates actually 
produce the subject merchandise. Because the proposed surrogate 
companies do not produce the subject merchandise, AJ Works contends 
their financial data may not be representative of the industry of which 
AJ Works is a part. Moreover, AJ Works maintains that recent 
Departmental practice in PRC cases is to value factory overhead, SG&A, 
and profit using the metals and chemicals industry data from the 
Reserve Bank of India Bulletin (``RBI''). (see e.g. Coumarin, Notice of 
Final Determination of Sales at Less Than Fair Value: Saccharin from 
the People's Republic of China (``Saccharin''), Notice of Final 
Determination of Sales at Less Than Fair Value: Sebacic Acid from the 
People's Republic of China (``Sebacic Acid''), and Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Paper Clips 
from the People's Republic of China, (``Paper Clips'')). However, AJ 
Works argues that if the Department decides to base surrogate overhead, 
SG&A, and profit rates on the data of a single company, the Department 
should continue to use Sanderson's financial data, because Sanderson 
uses a production process similar to the one used to produce 
persulfates. AJ Works claims there is no justification for using 
National Peroxide's financial data because there are significant 
differences between the production process of hydrogen peroxide and 
persulfates. Zhujiang argues that the Department should continue to 
base surrogate factory overhead, SG&A, and profit on Sanderson's 
financial statements rather than National Peroxide's data because 
Sanderson's and Zhujiang's operations are comparable. Further, Zhujiang 
contends that its operation is quite lean compared to petitioner's 
description of persulfate producers with business units organized 
around peroxygen chemistry and shared management, sales, and 
distribution resources dedicated to hydrogen peroxide. Therefore, 
Zhujiang claims it would be inappropriate to base its factory overhead, 
SG&A and profit on values derived from the National Peroxide hydrogen 
peroxide. Finally, Zhujiang argues that the Department would double-
count SG&A if it bases its SG&A on National Peroxide's financial data 
because, unlike Zhujiang, National Peroxide has a huge array of sales 
and distribution staff. Specifically, Zhujiang notes that it relies on 
ICC for sales and distribution services and the Department has already 
accounted for ICC's SG&A in its analysis of U.S. price. Hence, Zhujiang 
argues the Department will double-count SG&A if surrogate values are 
obtained from a producer that does not conduct business in a manner 
similar to Zhujiang.

DOC Position

    Based on the submitted information, verification findings, and the 
Department's own research, we agree with petitioner that the financial 
data from National Peroxide's Annual Report for the fiscal year-ending 
March 31, 1995, is the most appropriate surrogate information available 
to use for our final determination. The record indicates that the 
production process for hydrogen peroxide most closely resembles the 
production process for persulfates. Both products require large capital 
outlays for production, storage, technical support and special safety 
requirements. Although we found in the preliminary determination that 
National Peroxide's financial information, particularly SG&A expenses, 
were inconsistent with that of certain other Indian chemical producers, 
we have no information showing that the production processes of those 
producers resemble the production process for persulfates. Thus, we 
have determined that inconsistencies between the financial data for 
National Peroxide and these other Indian producers does not provide a 
basis for rejecting National Peroxide's financial data. In addition, we 
have no information showing that National Peroxide's financial data is 
inconsistent with that of other producers of hydrogen peroxide. 
Further, because both production processes have similar characteristics 
(e.g., large capital outlays, special safety requirements) which may 
impact SG&A, it is reasonable to conclude that National Peroxide's SG&A 
is comparable to that of a company producing persulfates (see Final 
Valuation Memorandum for further discussion regarding the similarities 
of the production process for hydrogen peroxide and persulfates). In 
addition, the product line of the respondents resembles the product 
line of National Peroxide. As in the preliminary determination, the 
Department made an extensive attempt in the final determination to 
obtain the financial statements for an Indian persulfates producer. 
However, the only known, existing persulfates producers are privately 
held. Consequently, they do not issue public financial data about their 
operations. We did not use data for the Indian metals and chemicals 
industry from the RBI to value factory overhead and SG&A because the 
more industry-specific data (i.e., National Peroxide) is preferable to 
a broad RBI data, which includes metals as well as chemicals producers. 
Thus, following, the Department's past practice of valuing factory 
overhead, SG&A and profit using surrogate values for the industry-
specific experience closest to that of the subject merchandise, we used 
National Peroxide's financial data in the final determination because 
we concluded that National Peroxide's production is closer to that of 
the subject merchandise than Sanderson's production. (See e.g., Notice 
of Final Determination of Sales at Less Than Fair Value: Ferrovanadium 
and Nitrided Vanadium From the Russian Federation, 60 FR 27957, (May 
20, 1995) (``Ferrovanadium''); and Notice of Final Determination of 
Sales at Less Than Fair Value: Magnesium from Ukraine 60 FR 16432, 
(March 30, 1995) (``Magnesium from Ukraine'')).

Comment 7: Using Skill-Specific Labor Rates

    Petitioner maintains that the Department should not have used 
skill-specific labor rates from Coumarin in the preliminary 
determination because the Department's current practice is to assign to 
skilled, semi-skilled, and unskilled workers the single labor rate 
reported in the Yearbook of Labor Statistics (``YLS''). Petitioner 
contends a single labor rate has been used for different skill levels 
in every PRC investigation and administrative review since PVA. 
Furthermore, petitioner argues for the use of a single labor rate 
because the two producers in this investigation classified laborers at 
different skill levels. Petitioner contends this inconsistency between 
the producers calls into question the skill levels reported by 
respondents. Thus, petitioner urges the Department to use a single 
labor rate for all skill levels rather than the separate rates used in 
the preliminary determination.
    Zhujiang, which reported that all its workers were skilled, did not 
comment on this issue.
    AJ Works maintains that it reported different skill levels for its 
workers and the Department should use this information in its analysis.

DOC Position

    We agree with petitioner. Although we used the skill-specific rates 
derived in Coumarin in the preliminary

[[Page 27230]]

determination, recent Departmental practice has been to apply the labor 
rate from the YLS to all reported labor skill levels because skill 
levels are not identified in the YLS. (see Brake Drums). In Coumarin 
the Department followed the methodology adopted in the Final 
Determination of Sales at Less Than Fair Value: Certain Helical Spring 
Lock Washers From the People's Republic of China (``Helical Spring Lock 
Washers'') (58 FR 48833 (September 20, 1993)) . In the Helical Spring 
Lock Washers investigation the parties agreed to treat the labor rate 
from the YLS as a semi-skilled rate which was then adjusted to derive a 
skilled and unskilled rates. However, in the instant case there is no 
agreement among the parties to assume that YLS's labor rate is 
representative of any particular skill level. Therefore, there is no 
basis on which to calculate the skilled and unskilled labor rate. 
Therefore, for the final determination, we have used one labor rate for 
all reported skill levels.

Comment 8: Additional Packing Materials

AJ
    Petitioner requests that the Department include all additional 
packing material identified at verification in the factors of 
production for AJ Works.
    AJ Works maintains its factors of production should include only 
the additional packing materials that were identified in the company's 
revisions presented at verification, not the additional ``unreported'' 
packing materials identified in the Department's verification report. 
AJ Works claims it does not use the ``unreported'' packing materials 
and thus, these materials should not be added to the factors of 
production.
Zhujiang
    Petitioner maintains the factors of production should include the 
unreported packing material discovered at verification.
    Zhujiang did not comment on this issue.

DOC Position

    We agree with petitioner. Section D of the Department's 
questionnaire concerning the factors of production request for 
information requires the respondent to report ``each type of packing 
material * * * used to pack the subject merchandise for export to the 
United States''.
    Because AJ Works and Zhujiang failed to report all the packing 
materials as requested by the Department, for the final determination, 
we have included the unreported packing material in the factors of 
production (see the Final Valuation Memorandum; also see the Memorandum 
to the File reporting the results of the verification of AJ Works dated 
March 31, 1997).

Company Specific Comments

AJ Works

Comment 9: Recalculating Factors of Production for Sodium Persulfate

    Petitioner asserts that AJ Works' reported incorrect factors of 
production for sodium persulfate because the reported factors were only 
for the production of sodium persulfate exported to the United States 
rather than for the total production of sodium persulfate. Petitioner 
claims that reporting factors solely for exported subject merchandise 
is contrary to the instructions in the Department's questionnaire and, 
in the instant case, has resulted in inaccurate reporting. 
Specifically, petitioner claims that the Departments' questionnaire 
contemplates that the supplier will base per-unit factor amounts on 
total production. Petitioner claims this intent is evidenced by the 
questionnaire requirement that producers with multiple production 
facilities must report factors for each facility even if the exported 
subject merchandise is only produced in one facility.
    Petitioner also claims that AJ Works' reporting methodology 
resulted in inaccuracies because the company reported the factors of 
production for export grade sodium persulfate without having the 
capability to ensure that only export grade sodium persulfates were 
shipped to the United States during the POI. Elaborating on this claim, 
petitioner notes that AJ Works' export and domestic grade sodium 
persulfates differ in that AJ Works used internally-produced ammonium 
persulfate to produce export grade sodium persulfate and purchased 
ammonium persulfate to produce domestic grade sodium persulfate. 
Although the Department found that AJ Works' differentiated between 
export and domestic grade sodium persulfate in its production records, 
petitioner maintains that the company demonstrated no method for 
physically distinguishing between export and domestic grade sodium 
persulfate. In fact, petitioner claims export and domestic grade sodium 
persulfates were commingled in AJ Works' finished goods warehouse. 
Because the type of ammonium persulfate used to produce sodium 
persulfate has a significant impact on margin calculations and AJ Works 
cannot ensure that only sodium persulfates produced with internally-
produced ammonium persulfate were shipped to the United States, 
petitioner claims that it would be incorrect to base NV for sodium 
persuflate solely on factors for export grade subject merchandise. 
Thus, petitioner recommends calculating per-unit factors of production 
for sodium persulfate using the factor and production quantities for 
total production.
    In calculating NV for sodium persulfate from total production 
amounts, petitioner recommends, as adverse facts available, that the 
Department value both purchased and internally-produced ammonium 
persulfate using the Indian surrogate price. In the alternative, 
petitioner recommends calculating a weighted-average NV for sodium 
persulfate based on the percentage of sodium persulfate produced using 
purchased ammonium persulfate and the percentage produced using 
internally-produced ammonium persulfate. If the Department uses 
petitioner's alternative recommendation, petitioner urges the 
Department to include the factor of production, the packing material, 
and the labor required to pack and transport internally-produced 
ammonium persulfates within AJ Work's factory.
    AJ Works argues that it maintains an excellent method, which was 
verified by Department officials, for keeping track of the products 
produced using internally-produced ammonium persulfate and purchased 
ammonium persulfate in both its accounting system and at the production 
site. Further, AJ Works states that because it uses internally-produced 
ammonium persulfate to produce sodium persulfates for the export market 
and purchased ammonium persulfate to produce sodium persulfate for the 
domestic market, it must separately track the amounts produced for each 
market. Thus, it is not necessary to resort to a surrogate value to 
value the internally-produced ammonium persulfate used to produce 
sodium persulfate for export. Rather, the Department should continue to 
calculate the NV for sodium persulfate based on AJ Works' factors of 
production for internally-produced ammonium persulfate.

DOC Position

    We agree with petitioner and applied the same methodology used in 
past Department cases (see e.g., Coumarin) for the final determination. 
We determined that the weighted-average cost is more representative of 
the company's cost of production during the

[[Page 27231]]

POI than to assume that it produced all of the input material. Because 
the reported data for the persulfates sold in the PRC includes inputs 
which have a different cost than the input for exported subject 
merchandise, the reported data for the factors of production used to 
calculate the margin would be skewed if only factors for exported 
merchandise were used. Further, since AJ Works tracks its use of 
internally produced ammonium persulfate in its accounting system but 
not in its production system, there is no way to prove which ammonium 
persulfate, the internally-produced or purchased, was used in the 
production of the sodium persulfate exported to the United States.
    Accordingly, to calculate the antidumping margin we used the 
weighted-average cost of factors of production for subject merchandise.

Comment 10: Surrogate value for purchased ammonium persulfate

    Petitioner requests that, in order to calculate the NV for subject 
merchandise, the Department should continue to value purchased ammonium 
pursulfate using the ammonium persulfate value provided to the 
Department by the petitioner in its July 11, 1996, submission because 
it is a publicly available quote of the domestic price from an Indian 
producer of ammonium persulfate in India (Rajendra Chemicals (P) Ltd.) 
Insofar as petitioner points out that it did not solicit this price 
quote, petitioner claims that this source is both reliable and 
contemporaneous with the POI. (See Memorandum from Dave Muller, Office 
of Policy to Louis Apple dated August 1, 1996).
    AJ Works argues that the Department should not use the surrogate 
value information from India to value a raw material input such as 
ammonium persulfate used to produce potassium persulfate because the 
value submitted from the Chemical Weekly by petitioner is an export 
price and is artificially high. AJ Works contends that, according to 
the Department's past practice, see, e.g., Furfuryl Alcohol, and 
Coumarin, the Department's first preference in determining normal value 
in a nonmarket economy investigation is the calculation of the value of 
factors of production. Since the Department has verified the actual 
factor inputs used to produce ammonium persulfates, surrogate values 
for those inputs is the most accurate way to value ammonium persulfate 
to calculate normal value for all three products under investigation.

DOC Position

    We agree with petitioner. In accordance with the statute's 
direction to measure and value ``the factors of production utilized in 
the production of the merchandise'' (see Section 773(c)(1) of the Act) 
and the Department's practice to value inputs which were purchased in a 
non-market economy using surrogate values from a market economy at a 
similar stage of development (see, e.g., Coumarin, and Brake Drums), we 
continued to treat the purchased ammonium persulfate used in the 
production of potassium persulfates as a completed input and we valued 
it on the basis of a surrogate. Further, the Department has made 
significant independent efforts throughout the investigation to obtain 
publicly available information for ammonium persulfate and was unable 
to obtain such information. Thus, for both the preliminary and final 
determinations, our selection of surrogate values was based on the only 
information on the record, which was a price quote from an Indian 
producer of persulfates (see Final Valuation Memo).

Comment 11: Normal Value for Sodium Persulfate

    Petitioner contends that the Department should value sodium 
persulfate using the constructed value in the petition because Zhujiang 
failed to demonstrate at verification that it used internally-produced, 
rather than purchased, ammonium persulfate in the production of sodium 
persulfate. Because the verifiers noted Chinese-labeled bags of 
ammonium persulfate at the sodium persulfate production facility, 
petitioner concludes that some of the ammonium persulfate used to 
produce sodium persulfate was purchased from other persulfate factories 
in China. Thus, as adverse facts available, petitioner urges the 
Department to value sodium persulfate using the constructed value in 
the petition. However, if the Department uses Zhujiang's factors of 
production to value sodium persulfate, petitioner requests that the 
Department include as factors the packing material and labor required 
to transport ammonium persulfate within Zhujiang's factory.
    Zhujiang maintains that there is no record evidence showing it 
produced sodium persulfate using ammonium persulfate purchased from 
outside companies. According to Zhujiang, it used Chinese-labeled bags 
for production that was either consumed within the factory or sold in 
the domestic market. Thus, Zhujiang states there was no need to label 
the bags in English. Zhujiang argues that Chinese labels provide no 
indication that it purchased ammonium persulfate from another factory. 
Moreover, Zhujiang maintains that the Department thoroughly examined 
factory records and found no evidence of purchases of ammonium 
persulfate. Lastly, Zhujiang points out that the petitioner's 
affidavit, indicating Zhujiang used purchased ammonium persulfate to 
produce sodium persulfate, referred to production that occurred well 
before the POI.

DOC Position

    We agree with Zhujiang. At verification we found that the labeling 
on the Chinese-labeled bags in question was the same as the labeling on 
bags used to pack internally produced ammonium persulfate. Moreover, we 
found no evidence of ammonium persulfate purchases in Zhujiang's 
accounting records. Therefore, for the final determination, we valued 
sodium persulfate using surrogate values.
    However, we agree with petitioner that Zhujiang failed to report 
factors of production for the materials used to pack the internally 
produced ammonium persulfate used in sodium persulfate production. 
Therefore, for the final determination, we have included these packing 
materials in the factors of production for sodium persulfate. We did 
not include additional factors for the labor required to transport 
internally produced within Zhujiang's factory because this labor is 
already included in the reported labor factors.

Comment 12: Average Surrogate Prices

    Respondents argue that, in the preliminary determination, the 
average surrogate values that the Department calculated from Indian 
prices were simply a function of the Chemical Weekly issues the 
Department happened to have on hand and they did not reflect the 
average price during the POI. Respondents recommend that the Department 
calculate average POI surrogate prices by dividing monthly prices for 
the POI by the number of months in the POI.
    Petitioner contends that, contrary to respondents' assertion, in 
the preliminary determination, the Department correctly derived average 
surrogate values by dividing monthly prices by the number of months for 
which the prices were provided. Because this methodology eliminates 
distortions and is precisely the methodology recommended by 
respondents, petitioner urges the Department to continue using this 
methodology in the final determination.

[[Page 27232]]

DOC Position

    We agree with petitioner. In the preliminary determination the 
Department calculated average surrogate prices for certain factors 
using prices from all of the Chemical Weekly issues on the record, 
which were provided by both parties and acquired through the 
Department's research. Although respondents claim the Department's 
calculation of average surrogate values is skewed because the Chemical 
Weekly issues used in the average may be issues from months with the 
highest prices, respondents failed to place Chemical Weekly issues on 
the record which supported their assertion. Further, the average price 
the respondents calculated from Indian Chemical Weekly prices did not 
differ materially from the prices the Department calculated from 
information on the record. Therefore, in the final determination, we 
will rely on the information on the record.

Comment 13: Correction of a ministerial error

    AJ requests that, for the final determination, the Department 
include one U.S. transaction that the Department inadvertently omitted 
from the calculation of average U.S. price when making its preliminary 
determination.
    Petitioner did not comment on this issue.

DOC Position

    We agree with respondent. As noted in the Ministerial Error 
Memorandum, the Department inadvertently omitted one transaction when 
calculating the average U.S. price for the preliminary determination. 
We have corrected for this error in the final determination.

Comment 14: Electricity Consumption

    As adverse facts available, petitioner urges the Department to base 
electricity consumption for AJ Works on amounts contained in the 
petition rather than the amounts AJ Works reported to the Department 
because the company failed to support the accuracy of the reported 
consumption. Petitioner notes that AJ Work's electricity meter readings 
had to be multiplied by an adjustment factor of either 120, 360, or 30 
to derive the actual amount of electricity consumed because the 
capacity of the meters prevented the full amount of electricity used by 
the factory to flow through the meters. Petitioner claims AJ Works 
failed to demonstrate the reasonableness of the adjustment factors and, 
thus, the Department should base electricity consumption on information 
contained in the petition.
    AJ Works claims the Department should use the reported and verified 
factors of production to calculate electricity costs. AJ Works points 
out that it is common practice in the electricity industry to use a 
multiplier to calculate total electricity consumption from electricity 
meter readings. Thus, AJ Works maintains the use of the adjustment 
factor was reasonable, accurate, and resulted in a verified consumption 
figure.

DOC Position

    We agree with respondent. The Department verified the total amount 
of the electricity consumed. Further, the Department contacted an 
independent energy specialist, who confirmed that an adjustment factor 
is commonly used in the electrical industry (see Memorandum to the File 
dated April 18, 1996, for further discussion of this subject). 
Therefore, in our final determination, we included the verified amount 
of electricity consumed in the factors of production and used the 
adjustment factor.

Comment 15: Adjusting Caustic Soda Prices

    AJ Works contends that, in the preliminary determination, the 
Department incorrectly adjusted the surrogate price for caustic soda 
because it incorrectly assumed that the surrogate price was for a 
caustic soda solution with a 48 percent concentration. AJ Works 
contends the surrogate price, which was from India's Chemical Weekly, 
is the price per kilogram of caustic soda, not the price of a caustic 
soda solution. AJ Works claims that if the price was for a solution, it 
would be critical for Chemical Weekly to identify the concentration of 
the solution. However, AJ Works notes that the publication did not do 
so. In keeping with past Departmental practice, AJ Works maintains the 
Department should not assume the surrogate price was for anything less 
than a 100 percent concentration (see page 2 of the Factor Values 
Memorandum in Antidumping Investigation of Polyvinyl Alcohol From 
China) (``PVA Factors Values Memorandum''). Thus, AJ Works recommends 
calculating the surrogate cost for caustic soda by multiplying the 
surrogate unit price by the reported consumption and the actual 
concentration used in production.
    Petitioner did not comment on this issue.

DOC Position

    We agree with respondent. We adjusted the concentration level of 
the caustic soda priced in Chemical Weekly in the preliminary 
determination calculation. Based on further analysis, and in accordance 
with Departmental practice, for the final determination we assumed that 
the chemical concentration is 100 percent, because there is no 
information on the record specifying the chemical concentration. 
Therefore, we derived chemical input values by multiplying the 
surrogate price by the concentration and amount used in production. 
(See PVA Factors Values Memorandum).

Comment 16: Correcting Control Numbers

    Wuxi requests that for the final determination, the Department 
correct control numbers in the company's sales listing, which were 
inadvertently reversed through its own clerical error.
    Petitioner did not comment on this issue.

DOC Position

    We agree with respondent. Verification findings confirmed that Wuxi 
inadvertently reversed control numbers in its sales listing, and we 
have corrected for this error in the final determination.

AJ

Comment 17: International Freight Expenses

    Petitioner maintains that the Department should use, as adverse 
facts available, the highest international freight expense incurred by 
AJ during the POI to value international freight expenses for several 
invoices because AJ was unable to explain the methodology used to 
determine the freight expenses for those invoices. According to 
petitioner the Department was unable to verify the international 
freight expenses for the invoices in question.
    Respondents argue that, other than the invoices cited by 
petitioner, the Department verified international freight expenses for 
all of the invoices examined. Consequently, the Department should 
accept the reported international freight amounts for all transactions. 
Respondents also argue that, even though company officials could not 
explain how international freight was allocated to the invoices in 
question, the allocation was performed in the ordinary course of 
business and, thus, it should be accepted. However, respondents suggest 
that if the Department rejects the allocation methodology presented 
during the verification, it has in its verification exhibits the total 
freight expense and the total tonnage for the invoices in question, 
which it can use to allocate the international freight expenses

[[Page 27233]]

among the invoices on a strict per-ton basis.

DOC Position

    We agree with respondents that there is no need to resort to 
adverse facts available to value international freight for the invoices 
in question. Section 776(b) of the Act provides that the Department may 
use an inference that is adverse to the interests of a party in 
selecting among facts otherwise available if the party failed to 
cooperate by not acting to the best of its ability to comply with 
requests for information. In the instant case AJ attempted, to the best 
of its ability, to explain how international freight was allocated to 
the invoices in question; however it was unable to support its 
explanation. Therefore, for the final determination, the Department 
allocated the freight among the invoices in question on a per-ton 
basis.

Comment 18: Inland Freight, Brokerage and Handling

    Petitioner notes that although Wuxi reported freight and handling 
charges two days before the preliminary determination, the Department 
made no adjustments to Wuxi's U.S. sales for those charges. Petitioner 
contends that although the Department did not adjust U.S. price for 
those charges in the preliminary determination, the Department should 
make an adjustment to U.S. price for inland freight and brokerage and 
handling in the final determination because the Department verified 
that Wuxi incurred such charges. Petitioner notes that the Department's 
policy as outlined in Brake Drums is to strip all movement charges, 
including foreign inland freight, from the U.S. price being compared to 
normal value. In addition, petitioner claims the Department should use 
adverse facts available to value the charges Wuxi reported for 
emergency loading, and highway and bridge fees which are separate fees 
from brokerage and handling charges.
    Respondent states that the Department should make adjustments to 
U.S. price for inland freight and brokerage and handling based on the 
factors submitted by Wuxi and verified by the Department. Wuxi 
maintains the use of adverse facts available with regard to emergency 
loading and highway and bridge fees is not called for because such fees 
are included in inland freight fees.

DOC Position

    We agree with petitioner and respondent, in part. Petitioner is 
correct that the Department should make an adjustment to U.S. price for 
inland freight and brokerage and handling. Further, due to the fact 
that these amounts were reported in PRC currency and were based on an 
NME service provider, in accordance with the Department practice in an 
NME case, for the final determination, we used a surrogate value for 
inland freight transportation and brokerage and handling for certain 
fees reported by Wuxi. We agree with respondent that the emergency 
loading expense is included in inland freight fees (see Final Valuation 
Memo).

Comment 19: Value for Ammonia

    Petitioner requests that the Department reject the Indian ammonia 
pricing information submitted to the Department by the respondents ICC, 
Zhujian and Guangdong in their April 4, 1997, submission. Petitioner 
points out that this pricing information is not representative of 
prices during the POI because it only covers three weeks and, as the 
respondents stated in their April 4, 1997 letter, ammonia prices 
fluctuate substantially. Thus, as petitioner maintains, given that the 
price for ammonia fluctuates substantially, three weeks is not an 
accurate indicator of the average value for ammonia during the six-
month POI. Therefore, petitioner requests that the Department use 
petitioner's information because it's the most representative of prices 
during the POI.
    Respondents did not comment on this issue.

DOC Position

    We agree with petitioner. The Department used the Indian values 
provided by the petitioner because these values are most representative 
of surrogate prices for ammonia during the POI.

Comment 20: Ammonium Persulfate Spoilage

    Petitioner maintains that spoilage of ammonium persulfate used in 
the production of sodium persulfate should have been included in the 
reported production factors for sodium persulfate. Petitioner notes 
that, at verification, the Department identified unreported amounts for 
ammonium persulfate spoilage in Zhujiang's overhead expense accounts. 
Because this was spoilage of ammonium persulfate used to produce sodium 
persulfate, petitioner requests that the Department include the amount 
of the spoilage in the total amount of ammonium persulfate consumed to 
produce sodium persulfate.
    Respondents did not comment on this issue.

DOC Position

    We agree with petitioner. Ammonium persulfate is a direct material 
used to produce sodium persulfate. Thus, spoilage of this product 
should be included in the cost of production of sodium persulfate. 
Hence, for the final determination, we included the amount of ammonium 
persulfate spoilage in the factors of production for sodium persulfate.

Comment 21: Adjustments for By-Products

    According to petitioner, the Department should not adjust 
persulfate factors of production to account for by-products because the 
by-products are discarded. Petitioner notes that at verification the 
Department found that all the by-products generated from producing the 
subject merchandise are waste that are neither sold nor used in further 
production. Because the by-products are not sold, petitioner claims 
that the Department should not adjust the factors of production to 
account for by-products.
    Respondents did not comment on this issue.

DOC Position

    We agree with petitioner. The record shows that Zhujiang did not 
use or sell the by-products it generated from producing persulfates. 
Thus, there is no economic benefit associated with the by-products. 
Therefore, in accordance with past practice, for the final 
determination we did not adjust factors of production for by-products 
(see Notice of Final Determination of Sales at Less Than Fair Value: 
Pure Magnesium From Ukraine 60 FR 16432, 16435 (March 30, 1995), and 
Coumarin).

Comment 22: Sulfuric Acid Used in Sodium Persulfate Production

    Petitioner asserts that sulfuric acid should have been reported in 
Zhujian's response as a factor of production for sodium persulfate 
because it is an input in the sodium persulfate production process. 
Petitioner bases its assertion on company officials' statement at 
verification that sulfuric acid is used to absorb ammonia gas (a by-
product) generated from producing sodium persulfate. Thus, petitioner 
contends sulfuric acid is a material input in the sodium persulfate 
production process.
    Zhujiang claims it reported sulfuric acid as a factor of production 
and the Department verified the amount reported.



[[Page 27234]]

DOC Position

    We agree with Zhujiang. Zhujiang reported sulfuric acid as one of 
the inputs used in sodium persulfate production and we included the 
amount reported in our NV calculation in the final determination.

Comment 23: Water Used in Sodium and Ammonium Persulfate Production

    Petitioner requests that the Department base the quantity of water 
consumed in production on adverse facts available because Zhujiang 
failed to report water consumption in its submissions and did not 
provide water consumption figures in response to Department officials' 
request at verification.
    Zhujiang states that the Department's well-established practice is 
to consider water consumption part of factory overhead (see Coumarin 
Comment 9 and Saccharin). In the instant case, Zhujiang urges the 
Department not to divert from its normal treatment of water 
consumption.

DOC Position

    The Department's normal practice is to presume, absent evidence to 
the contrary, that the surrogate value for factory overhead includes 
water consumption (see Sulfanilic Acid From the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review 61 FR 
53711, 53716 (October 15, 1996)). However, in the instant case, the 
record shows that the cost of water was not included in the expenses 
used to compute surrogate factory overhead. Therefore, we have included 
a factor for water in Zhujiang's factors of production. In addition, 
because Zhujiang failed to provide the requested water consumption 
figures, and Section 776(b) of the Act provides that adverse inferences 
may be used against a party that has failed to cooperate, as adverse 
facts available, we have based the amount of water consumption on the 
greatest reported POI per-unit water consumption figures in the 
petition or in the public versions of the other respondent producers 
submissions in this investigation.

Comment 24: Supplier Distances

    According to petitioner, during verification Zhujiang failed to 
support the percentage of inputs purchased from each supplier. Thus, 
petitioner argues that the Department cannot use the reported distances 
between suppliers and the factory because the Department does not know 
what percentage of the input came from each supplier. Petitioner 
therefore urges the Department to use as adverse facts available for 
Zhujiang, the greatest reported distance between the factory and a 
supplier of an input as the distance between the factory and all 
suppliers of that input.
    Respondents did not comment on this issue.

DOC Position

    We agree with petitioner. Section 776(a)(2)(D) of the Act provides 
that if an interested party provides information that cannot be 
verified, the Department shall, subject to Section 782(d) of the Act, 
use facts otherwise available in reaching the applicable determination. 
In addition, Section 776(b) of the Act provides that adverse inferences 
may be used against a party that has failed to cooperate by not acting 
to the best of its ability to comply with requests for information. 
Department officials made numerous requests over the course of the 
verification for documentation supporting the reported percentage of 
inputs purchased from each supplier. Despite the requests, Zhujiang 
failed to provide supporting documentation. Therefore, for the final 
determination, we have used the greatest reported distance between the 
factory and a supplier of an input as the distance between the factory 
and all suppliers of that input.

Guangdong

Comment 25: Identifying the Appropriate Sales for USP--Knowledge of 
Destination

    Petitioner claims Guangdong's sales to ICC must serve as the basis 
for calculating USP because the sales meet the definition of export 
price sales. Specifically, petitioner notes that the transaction 
between Guangdong and ICC constitutes the first sale of subject 
merchandise to an unaffiliated purchaser in the United States. In 
addition, petitioner notes that most of the persulfates that Guangdong 
sold to ICC were shipped to the United States entered the customs 
territory of the United States. According to petitioner, merchandise 
within the scope of a proceeding that is entered into the customs 
territory of the United States is subject to antidumping duties. Thus, 
petitioner asserts that Guangdong cannot claim its sales to ICC are not 
U.S. sales simply because ICC resold some of the merchandise to 
customers outside the United States. Moreover, petitioner maintains 
that the ultimate destination of the merchandise in question is 
irrelevant in the instant case because the merchandise first entered 
the customs territory of the United States. Alternatively, petitioner 
argues that there is ample evidence that Guangdong knew the destination 
of the merchandise it sold to ICC.
    ICC argues that the entry into the customs territory of the United 
States is not sufficient to create a U.S. sale. ICC argues that it is 
in the same position as a third-country reseller of merchandise 
purchased from Guangdong and that the Department's reseller methodology 
should apply. ICC argues that it imports the merchandise into its 
warehouse in New Jersey, but then resells the merchandise. It may 
resell it to a customer in the United States, or it may resell the 
merchandise to a customer outside the United States. ICC argues that 
because it functions as a reseller in this manner, the Department 
should determine who had knowledge that the merchandise was destined 
for customers in the United States. Because Guangdong had no knowledge 
of the ultimate destination of the merchandise, ICC asserts, the 
Department should use ICC's prices to its customers in the United 
States as the U.S. price.

DOC Position

    We disagree with ICC that it is in the same position as a third-
country reseller. EP is based on the first sale, prior to importation, 
to an unaffiliated purchaser in or for exportation to the United 
States. Because ICC is an unaffiliated purchaser in the United States, 
whether the merchandise is resold by ICC to a U.S. customer or to a 
customer outside the United States is immaterial. The Department cannot 
disregard U.S. sales based on the destination of merchandise after it 
is sold to an unaffiliated purchaser in the United States. Therefore, 
we will use as EP the price ICC paid Guangdong for merchandise entering 
the United States for consumption. Where there is a direct sale to an 
unaffiliated purchaser in the United States there is no issue of 
knowledge. Guangdong sold the merchandise directly to an unaffiliated 
purchaser (ICC) in the United States. Thus we have determined that 
Guangdong is the appropriate respondent in this investigation. Because 
sales from Guangdong to ICC are the relevant transactions, we did not 
summarize or address issues raised regarding ICC's U.S. sales.
    We also note that entry into the Customs territory is not 
sufficient to constitute a U.S. sale; merchandise must be entered for 
consumption before it may considered a U.S. sale (see Titanium Metals 
Corporation v. United States, 901 F. Supp. 362 (CIT 1995). According to 
ICC, it would have to pay cash deposits when its merchandise enters the 
United States; under this

[[Page 27235]]

condition it is being entered for consumption and being re-exported 
later.

Comment 26: Adjusting USP for Transportation Expenses

    Petitioner contends that the Department should reduce USP by the 
expenses the Zhujiang factory incurs to transport persulfates from the 
plant to the factory's warehouse where ICC takes possession of the 
merchandise. Petitioner claims that reducing USP by these 
transportation expenses is in accordance with the Department's policy 
outlined in Brake Drums. Because Zhujiang did not submit factors for 
these expenses, petitioner requests that the Department use, as facts 
available, the greatest amounts incurred by any respondent in this 
investigation for inland freight and brokerage and handling.
    Respondents argue that USP should not be adjusted by intra-factory 
transportation expenses because these expenses are part of factory 
overhead. Respondents maintain that intra-factory transportation costs 
are inherently part of factory overhead and it would be very unusual 
for the Department to reduce USP by such costs, particularly without 
determining whether the costs have been excluded from the surrogate 
value for factory overhead. Further, respondents claim Brake Drums does 
not support petitioner's position because in that case the Department 
reduced factory overhead by the surrogate cost of transportation 
expenses before deducting foreign inland freight costs from USP. 
Respondents also note that the facts in the instant case are similar to 
the facts in Titanium Sponge From Russia where the Department did not 
reduce USP by foreign inland freight expenses (see Titanium Sponge From 
the Russian Federation: Notice of Final Results of Antidumping Duty 
Administrative Review FR 61 58525, 58529 (November 15, 1996) 
(``Titanium Sponge From Russia'')). Specifically, respondents note that 
like the instant case, in Titanium Sponge From Russia, the non-market 
economy producer, who did not know the ultimate destination of the 
subject merchandise, incurred foreign inland freight expense selling 
the subject merchandise to a market economy exporter who took physical 
possession of the merchandise. Thus, respondents contend the Department 
should not reduce USP by intra-factory transportation expenses.

DOC Position

    We agree with respondents that USP should not be reduced by intra-
factory transportation expenses. Section 772 (c)(2)(A) of the Act 
states that USP should be reduced by expenses which are included in USP 
and ``incident to bringing the subject merchandise from the original 
place of shipment in the exporting country to the place of delivery in 
the United States'' (emphasis added). When a reseller is the exporter 
rather than the producer, it is the Department's practice to consider 
the place from which the reseller shipped the merchandise as the 
``original place of shipment'' (see Titanium Sponge From Russia). 
Hence, in the instant case the ``original place of shipment'' is 
Zhujiang's warehouse because the reseller/exporter, Guangdong, shipped 
the subject merchandise from that point. Thus, transportation costs 
incurred to bring the merchandise from the plant to the factory's 
warehouse should not be deducted from USP.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1) of the Act, we are directing 
the Customs Service to continue to suspend liquidation of all entries 
of persulfates from the PRC that are entered, or withdrawn from 
warehouse, for consumption on or after the date of publication of our 
notice of the preliminary determination in the Federal Register. We 
will instruct the Customs Service to require a cash deposit or posting 
of bond equal to the weighted-average amount by which the NV exceeds EP 
as indicated in the chart below. This suspension of liquidation will 
remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                                Weight- 
                                                                average 
               Manufacturer/producer/exporter                   margin  
                                                              percentage
------------------------------------------------------------------------
Sinochem Jiangsu Wuxi Import & Export Corporation...........      40.97 
Shanghai Ai Jian Import & Export Corporation................      42.18 
Guangdong Petroleum Chemical Import & Export Trade                      
 Corporation................................................      43.93 
China-wide Rate.............................................     134.00 
------------------------------------------------------------------------

    The China-wide rate applies to all entries of subject merchandise 
except for entries from exporters that are identified individually 
above.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our determination. As our final determination is affirmative, 
the ITC will determine, within 45 days, whether these imports are 
causing material injury, or threat of material injury, to an industry 
in the United States. If the ITC determines that material injury, or 
threat of material injury, does not exist, the proceeding will be 
terminated and all securities posted will be refunded or canceled. If 
the ITC determines that such injury does exist, the Department will 
issue an antidumping duty order directing Customs officials to assess 
antidumping duties on all imports of the subject merchandise entered, 
or withdrawn from warehouse, for consumption on or after the effective 
date of the suspension of liquidation.
    This determination is published pursuant to section 735(d) of the 
Act.

    Dated: May 12, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-13060 Filed 5-16-97; 8:45 am]
BILLING CODE 3510-DS-P