[Federal Register Volume 62, Number 240 (Monday, December 15, 1997)]
[Notices]
[Pages 65674-65679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32632]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-825]


Sebacic Acid From the People's Republic of China; Final Results 
of Antidumping Duty Administrative Review

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

ACTION: Notice of final results of antidumping duty administrative 
review of sebacic acid from the People's Republic of China.

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SUMMARY: On August 8, 1997, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on sebacic acid from the People's Republic of 
China (PRC) (62 FR 42755). This review covers shipments of this 
merchandise to the United States during the period of July 1, 1995, 
through June 30, 1996. We gave interested parties an opportunity to 
comment on our preliminary results. Based upon our analysis of the 
comments received we have changed the results from those presented in 
the preliminary results of the review. In accordance with the decision 
in Sigma Corp. v. the United States, 117 F.3d 1401 (Fed. Cir. 1997), we 
revised our calculations of source-to-factory surrogate freight for 
those material inputs that are based in CIF import values in the 
surrogate country. We have added to CIF surrogate values from India, a 
surrogate freight cost using the shorter of the reported distances from 
either the closest PRC port to the factory, or from the domestic 
supplier to the factory. See Notice of Final Determination of Sales at 
Less Than Fair Value: Collated Roofing Nails from the People's Republic 
of China, 62 FR 51415, 51410 (October 1, 1997); Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from the People's Republic of China 62 FR 61964, 
61977 (November 20, 1997).

EFFECTIVE DATE: December 15, 1997.

FOR FURTHER INFORMATION CONTACT: Doreen Chen or Stephen Jacques, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th and Constitution Avenue, N.W., Washington, D.C. 20230; 
telephone: (202) 482-0413 or (202) 482-1391, respectively.
    Applicable Statute and Regulations: Unless otherwise indicated, all 
citations to the statute are references to the provisions effective 
January 1, 1995, the effective date of the amendments made to the 
Tariff Act of 1930 (the Act) by the Uruguay Rounds Agreements Act 
(URAA). In addition, unless otherwise indicated, all citations to the 
Department's regulations are in reference to the regulations, codified 
at 19 CFR 353 (April 1, 1996).

Supplementary Information:

Background

    The Department published in the Federal Register an antidumping 
duty order on sebacic acid from the PRC on July 14, 1995 (59 FR 35909). 
On August 8, 1997, the Department of Commerce (the Department) 
published the preliminary results of its administrative review of the 
antidumping duty order on sebacic acid from the PRC (62 FR 42755 August 
8, 1997) for the period July 1, 1995 through June 30, 1996. We received 
written comments from Tianjin Chemicals Import and Export Corporation 
(Tianjin), Guangdong Chemicals Import and Export Corporation 
(Guangdong), and Sinochem International Chemicals

[[Page 65675]]

Company, Ltd. (SICC) (collectively, respondents); and from the 
petitioner, Union Camp Corporation. On November 24, 1997, the 
Department informed parties that certain information in respondents' 
September 15, 1997 rebuttal brief and petitioner's September 8, 1997 
case brief contained untimely new information that should be stricken 
from the record of this review. The Department is conducting this 
administrative review in accordance with section 751 of the Act.

Scope of Review

    The products covered by this order are all grades of sebacic acid, 
a dicarboxylic acid with the formula (CH2)8(COOH)2, which 
include but are not limited to CP Grade (500ppm maximum ash, 25 maximum 
APHA color), Purified Grade (1000ppm maximum ash, 50 maximum APHA 
color), and Nylon Grade (500ppm maximum ash, 70 maximum ICV color). The 
principal difference between the grades is the quantity of ash and 
color. Sebacic acid contains a minimum of 85 percent dibasic acids of 
which the predominant species is the C10 dibasic acid. 
Sebacic acid is sold generally as a free-flowing powder/flake.
    Sebacic acid has numerous industrial uses, including the production 
of nylon 6/10 (a polymer used for paintbrush and toothbrush bristles 
and paper machine felts), plasticizers, esters, automotive coolants, 
polyamides, polyester castings and films, inks and adhesives, 
lubricants, and polyurethane castings and coatings.
    Sebacic acid is currently classifiable under subheading 
2917.13.00.00 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheading is provided for convenience and 
customs purposes, our written description of the scope of this 
proceeding remains dispositive.
    This review covers the period July 1, 1995, through June 30, 1996, 
and four exporters of Chinese sebacic acid.

Analysis of Comments Received

    Comment 1: surrogate country: Petitioner asserts that India should 
not be used as the surrogate country for the PRC because they claim 
there is no sebacic acid production in India. Petitioner contends that 
it would be inconsistent with the statute to use India as a surrogate 
because: (1) India is not a producer of sebacic acid; and (2) oxalic 
acid is not commercially or chemically comparable to sebacic acid. See 
19 U.S.C. Sec. 1677b(c)(1). Petitioner argues that while it is true 
that both oxalic and sebacic acid are dicarboxylic acids, oxalic acid 
has two carbon atoms (C2H2O4) and 
sebacic acid has ten carbon atoms 
(C10H18O4), giving the two acids 
completely different properties and uses. Petitioner contends that the 
production process inputs for the two acids are very different. 
Additionally, petitioner argues that the commercial value of sebacic 
acid is nearly 5 times greater than the U.S. value for oxalic acid.
    Petitioner suggests that the Department should value the factors of 
production based on either U.S. or Japanese values, the only two market 
economies where sebacic acid is produced using the caustic fusion 
process. Petitioner contends that there is no known sebacic acid 
production in India. Petitioner maintains that they did not find any 
Indian chemicals companies which produced sebacic acid during the 
period of review and that the absence of the price for sebacic acid in 
the Indian Chemical Weekly publication suggests further evidence of the 
lack of sebacic acid production in India. Because sebacic acid is not 
produced in India, petitioner argues that pursuant to 19 CFR 353.52(c), 
the United States is the appropriate surrogate country for this 
administrative review.
    Respondents maintain that there is now evidence on the record of 
this review that sebacic acid is produced in India. Respondents note 
that on January 6, 1997, they submitted a letter dated September 25, 
1996 from an Indian chemical company, Siris Limited, stating that 
sebacic acid is now produced in India. Consequently, respondents urge 
the Department to reject petitioner's argument for using Japan or the 
United States as the surrogate country and instead, continue to use 
India as the surrogate country.
    Respondents argue that 19 U.S.C. Sec. 1677b(c)(4) provides that 
``[t]he administering authority, in valuing factors of production under 
paragraph (1), shall utilize, to the extent possible, the prices or 
cost of factors of production in one or more market economy countries 
that are--(A) at a level of economic development comparable to that of 
the nonmarket economy country, and (B) significant producers of 
comparable merchandise.'' (Respondent Rebuttal Brief at p. 2) (emphasis 
in original). Respondents argue that the words ``to the extent 
possible'' give the Commerce Department the option to choose, as a 
surrogate country, a country that does not produce the same merchandise 
or even comparable merchandise, if no country meets both criteria set 
forth in the statute. Respondents argue that petitioner's asserted 
definition of ``comparable'' merchandise requires that products have 
identical characteristics, including identical chemical formula and 
uses. Respondents also note that under petitioner's definition of 
``comparable'' merchandise, there is no country that would meet both 
aspects of the statute. Respondents maintain that such a narrow 
definition defeats the Congressional purpose in giving the Department 
the discretion to determine what constitutes a comparable product. 
Respondents also note that the statute suggests that it was Congress' 
intent to give to the Department substantial discretion in determining 
what are comparable products and choosing surrogate countries.
    In addition, respondents contend that the values of oxalic and 
sebacic acid are different should have no bearing on the choice of a 
surrogate country since in this review, the Department is not using the 
value of oxalic acid to value sebacic acid. Respondents also maintain 
that there is substantial evidence on the record of this investigation 
that India is a substantial producer of castor oil, the primary input 
for sebacic acid. Furthermore, respondents point out that the 
Department verified that Tianjin Zhonghe, the Chinese sebacic acid 
producer, used imported castor oil from India to produce sebacic acid.
    Respondents disagree with petitioner that the absence of a price 
for sebacic acid from Indian Chemical Weekly and Chemical Business 
suggests that the chemical is not produced in India. Respondents note 
that the Department has in the past been forced to rely on Indian 
import statistics because neither the Chemical Weekly nor the Chemical 
Business report a certain price for a chemical.
    Department's Position: In valuing factors of production, the 
Department used surrogate values from India. In accordance with 19 
U.S.C. Sec. 1677b(c)(4), the Department chose India as its surrogate 
because it was most comparable to the PRC in terms of overall economic 
development based on per capita gross national product (GNP), the 
national distribution of labor, and growth rate in per capita GNP, and 
because it was a significant producer of comparable merchandise (oxalic 
acid).
    The statute and the regulations instruct the Department to value 
factors of production in an appropriate surrogate country. The 
Department rarely departs from use of a surrogate value from a country 
comparable to the NME in terms of overall economic development. See 
Final Determination of Sales at Less Than Fair Value: Beryllium Metal 
and High Beryllium Alloys from the Republic of Kazakstan, 62 FR 2648 
(January 17, 1997).

[[Page 65676]]

Surrogate values from countries at a similar level of development are 
considered to be the most appropriate and comparable for valuation of 
the factors of production used in the similarly situated nonmarket 
economy country. While the Department may use values from the United 
States or other countries not at a comparable level of development for 
individual factors, its practice is to do so only if it cannot find 
those values in a comparable economy that produce comparable 
merchandise. Use of the United States, Japan or another country not on 
the list of recommended surrogate countries proposed by the 
Department's Office of Policy is less desirable specifically because 
surrogate values from countries not at a level of economic development 
comparable to that of the nonmarket economy are not considered to be as 
representative of the nonmarket economy country's costs and prices. See 
Memorandum from Director, Office of Policy to Office Director, AD/CVD 
Group II/OIX, Sebacic Acid from the People's Republic of China: 
Nonmarket Economy Status and Surrogate Country Selection, June 24, 
1997.
    The fact that sebacic acid is produced in the United States or 
Japan does not make either country an appropriate surrogate. Neither 
the United States nor Japan are at a level of economic development 
comparable to the that of the PRC. Moreover, the Department has 
concluded that using values from India is appropriate because India is 
at a comparable level of development and, based on U.S. import 
statistics for the POR, is a significant producer of comparable 
merchandise--oxalic acid. See Analysis Memorandum for the Preliminary 
Results of the 1995/1996 Review. (Preliminary Analysis Memorandum).
    We disagree with petitioner that oxalic acid is not comparable to 
sebacic acid. The statute does not define ``comparable merchandise'' 
and the relevant legislative history evidences Congress' intent to 
allow the agency to select from a wide category of merchandise in 
identifying comparable merchandise. See H.R. Conf. Rep. No. 100-576 
(1988), reprinted in 1988 U.S.C.C.A.N. 1547. Thus, to impose a 
requirement that merchandise must be produced by the same process and 
share the same end uses to be considered comparable would be contrary 
to the intent of the statute. Therefore, in the final determination for 
the 1994-1995 review, we determined that oxalic acid and sebacic acid 
were comparable products. See Sebacic Acid from the People's Republic 
of China: Final Results of Antidumping Duty Administrative Review, 62 
FR 10530, 10533 (March 7, 1997). In that review, the Department found 
that although the chemicals may have different production processes, 
oxalic acid and sebacic acid are comparable products since both are 
dicarboxylic acids and have similar end uses as they are both used in 
the rubber industry. Id.
    Finally, we determine that the documents submitted by interested 
parties on January 3, 1997 and January 6, 1997 do not conclusively 
demonstrate that sebacic acid was produced in India during the period 
of review (POR). Therefore, we have not relied on these documents as a 
basis for our decision to use India as the surrogate country for this 
review.
    Comment 2: Petitioner argues that the Department should value 
capryl alcohol consistent with the CIT's decision in Union Camp Corp. 
v. United States, 941 F. Supp. 108 (Ct. Int'l Trade, 1996). 
Specifically, petitioner asserts that the CIT ordered the Department to 
value capryl alcohol (octanol-2) based on an appropriate cost of crude 
octanol-2 rather than the Indian selling price for refined octanol-1 
listed in Chemical Weekly. Id. at 119.
    Petitioner questions the letter from the editor of Chemical Weekly 
submitted by respondents and relied upon by the Department for the 
preliminary results, which states that ``the octanol price referred by 
you corresponds to the more common 2-octanol (2 ethylhexanol).'' See 
Preliminary Results of Antidumping Duty Administrative Review; Sebacic 
Acid from the PRC 62 FR 42,758 (August 8, 1997); (Preliminary Analysis 
Memorandum at 6); Letter from Williams Mullen Christian & Dobbins, Jan. 
3, 1997, at Attachment 4. Petitioner contends that because respondents 
failed to provide the original letter to the editor of Chemical Weekly, 
there is no evidence to indicate whether the octanol price referred to 
in the original letter to the editor corresponds to the octanol price 
in the Chemical Weekly. In addition, petitioner argues that there is no 
evidence on the record to indicate that the Chemical Weekly editor is 
sufficiently familiar with the chemical composition of the octanol 
product published in the Chemical Weekly to declare that it is octanol-
2 (2-ethylhexanol). Petitioner argues because octanol-1 is not 
comparable to octanol-2, the Department should not use the Chemical 
Weekly price for octanol-1 to value crude octanol-2.
    Petitioner contends that Union Camp and respondents Tianjin Zhong 
He and Hengshui Dongfeng Chemical Factory all treat capryl alcohol as a 
by-product. Therefore, petitioner argues that Department should treat 
capryl alcohol as a by-product and not a co-product. Petitioner claims 
that because the Department used the high Indian value of octanol-1 to 
value octanol-2, the Department incorrectly determined octanol-2 to be 
a co-product rather than a by-product of the sebacic acid process.
    Petitioner argues that because octanol-2 is only produced during 
the sebacic acid production process and because there is no sebacic 
acid production in India, octanol-2 is not sold in India. Petitioner 
points out that there is a large value difference between the U.S. 
octanol-1 price and the U.S. capryl alcohol price. Moreover, petitioner 
rejects respondents' surrogate price for capryl alcohol, $0.68/lb., 
from the Chemical Marketing Reporter, because it is the same as Union 
Camp's offering price for refined capryl alcohol. According to 
petitioner, crude capryl alcohol, the subsidiary product of the sebacic 
acid process, must be further processed to achieve a 98 percent pure 
refined product. The Chemical Marketing Reporter reported the market 
value of octanol-1 at $0.925/lb during the POR. Petitioner argues that 
the U.S. value of octanol-1 during the POR was 36 percent higher than 
the U.S. value of refined capryl alcohol and that the value difference 
between octanol-1 and crude capryl alcohol is even larger. Therefore, 
petitioner concludes that because octanol-1 is not comparable to 
octanol-2 either chemically or commercially, the Department should not 
use octanol-1 as a surrogate value for octanol-2.
    Petitioner offers its own by-product credit value for crude capryl 
alcohol, $0.15/lb., as the best available surrogate price for the 
subsidiary product. However, petitioner states that if the Department 
chooses to use the $0.68/lb price, it should make adjustments for input 
costs in converting crude capryl alcohol to refined capryl alcohol. 
Petitioner supplies such a calculation where the resulting value is 
$0.1544/lb.
    Respondents argue that the Department should continue to use a 
surrogate value for octanol from India. Respondents maintain that the 
evidence on the record supports that the octanol price in Chemical 
Weekly is equivalent to the Indian price for octanol-2, not the 
octanol-1 as argued by the petitioner. Respondents submitted a letter 
from the Indian Chemical Weekly, which states that the ``octanol'' 
price in the Indian Chemical Weekly ``corresponds to the more common 
octanol-2 (ethylhexanol-2).'' See Submission, January 6, 1997. 
Respondents argue that according to Hawley's Condensed Chemical 
Dictionary, ethylhexanol-2 is another

[[Page 65677]]

form of octanol. Id. Respondents also submitted additional information 
from the U.S. chemical company, Ivanhoe Industries, which stated that 
``octanol'' is a generic term which can include octanol-1, octanol-2, 
octanol-3, ethyl hexanol-2 and other products. In addition, respondents 
argue that all octyl alcohols can be used interchangeably to produce 
plastercizers for vinyl resins and as esters for lube oils and 
therefore are comparable products.
    Respondents disagree with petitioner's claims that the octanol 
price in the Indian Chemical Weekly significantly overstates the price 
of capryl alcohol. Respondents claim they provided prices from the U.S. 
Chemical Marketing Reporter in their January 6, 1997 PAPI submission, 
which they argue, demonstrates that ethyl hexanol-2 is less expensive 
than octanol-2. Moreover, respondents maintain that the Indian Chemical 
Weekly price of octanol of $1520 per metric ton is within a reasonable 
range of the $1450 price quote respondents obtained for capryl alcohol 
from SIRIS, a chemical company in India. Respondents argue that Union 
Camp's internal price for octanol-2 at 15 cents a pound is a less 
reasonable price to value Chinese capryl alcohol in comparison to the 
Indian prices for octanol quoted by SIRIS and reported by Chemical 
Weekly.
    In addition, respondents maintain that Tianjin Zhonghe cannot break 
out the additional costs for refining capryl alcohol, which respondents 
claim, merely amount to additional electricity to distill the product. 
Therefore, respondents argue for valuing capryl alcohol, the Department 
should not use Union Camp's unverified internal costs for production of 
capryl alcohol, since Union Camp uses an entirely different production 
process from the Chinese production process.
    If, in the alternative, the Department decides to use a U.S. 
surrogate value for octanol-2, respondents urge that we use a surrogate 
value from the U.S. Chemical Marketing Reporter for the price of capryl 
alcohol in the United States because it is publicly available 
information rather than Union Camp's internal price.
    Department's Position: The petitioner's argument that to be 
consistent with the CIT's decision Union Camp Corp. v. United States, 
941 F. Supp. 108, 112 (Ct. Int'l Trade, 1996), the Department should 
value capryl alcohol based on the cost of octanol-2 is unpersuasive. 
First, the Department is not bound by the decision in Union Camp 
because the CIT's decision was rendered moot by the issuance of the 
results of the first administrative review. See Sebacic Acid From the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review, 62 FR 10530 (March 7, 1997).
    Second, use of the value of octanol-1 as a surrogate value is 
consistent with the statute and Department practice. In valuing factors 
of production, the Department's practice is to rely, to the extent 
possible, on publicly available information. The Department prefers to 
use publicly available information because: (1) It alleviates 
difficulties in obtaining, and concerns about the quality of, cable 
data from embassies and consulates (previously often used as sources 
for surrogate values); (2) it allows interested parties an opportunity 
to actively submit and comment on surrogate value data; (3) the 
establishment of a clear surrogate values hierarchy, with a preference 
for surrogate values from a single country based on publicly available 
information, increases the certainty and predictability of the outcome 
of the Department's factor valuations; (4) the methodological framework 
helps to focus comments made by petitioner and respondent in the case 
and rebuttal briefs and reduces miscellaneous submissions throughout 
the course of proceedings regarding the appropriateness of various 
surrogate values; and (5) it alleviates the administrative burden on 
U.S. embassies and consulates caused by requests for large amounts of 
data. See Final Determination of Sales at Less Than Fair Value: Certain 
Carbon Steel Butt-Weld Pipe Fittings from the People's Republic of 
China, 57 FR 21058, 21062 (May 18, 1992). In determining which 
surrogate value to use for valuing each factor of production, 
therefore, the Department selects, where possible, publicly available 
information which is: (1) An average non-export value; (2) 
representative of a range of prices within the period of review, if 
submitted by an interested party, or most contemporaneous with the POR; 
(3) product-specific; and (4) tax-exclusive.
    In this review, the Department was unable to locate an Indian value 
for octanol-2. In addition, the Department specifically asked 
interested parties to submit any publicly available, published values 
for octanol-2. Neither the petitioner, Union Camp, nor the respondents 
were able to locate a specific Indian value for octanol-2. As a result, 
the Department used an Indian price for octanol-1 as a surrogate value 
for octanol-2 as the best available information. The Department 
concluded that, for purposes of factor valuation, octanol-1 was 
comparable to octanol-2. We find that octanol-1 and capryl alcohol 
(octanol-2) share very similar molecular formula though they are not 
identical products. Since product-specific price information is not 
available from our preferred surrogate countries, we have relied on the 
price of the most physically similar product for which we could obtain 
value information.
    We disagree with petitioner's argument that we should not use the 
octanol price from the Indian Chemical Weekly because octanol-1 and 
octanol-2 are not commercially comparable. In support of their 
argument, petitioner relies on the publication Chemical Marketing 
Reporter which, petitioner claims, indicates that there is a 
significant difference in value between capryl alcohol and octanol-1. 
However, prices from Chemical Marketing Reporter are prices from the 
United States, which is not the surrogate country in this case. On the 
other hand, respondents have provided sufficient evidence from India, 
which is the surrogate country in this case, to support the conclusion 
that octanol-1 and octanol-2 are commercially comparable. Respondents 
provided evidence demonstrating that the octanol price reported in the 
Indian Chemical Weekly is comparable to the octanol-2 price obtained 
from SIRIS, a chemical company in India. Since India is the surrogate 
country in this case and the price for octanol reported in Chemical 
Weekly is commercially comparable to the Indian price for octanol-2 
from another source, we used the octanol price for Chemical Weekly in 
our surrogate value analysis.
    Moreover, Union Camp's statements that octanol-1 is derived from a 
process entirely unrelated to the sebacic acid process and that 
octanol-1 is a high-priced petrochemical are not dispositive on the 
issue of the comparability of octanol-1 and octanol-2 for purposes of 
factor valuation. In a nonmarket economy case, the Department may need 
to value anywhere from a few to hundreds of factors of production; in 
this case we needed to value approximately 25. Although we strive to 
locate exact surrogate matches in our preferred surrogate country, we 
often are unable to do so. In those instances, the Department's 
practice is to use the most comparable surrogate match that meets our 
publicly available information criteria in an appropriate surrogate 
country.
    There is no basis in the statute or legislative history to suggest 
that the Department is required to research or

[[Page 65678]]

consider the production process or use for each factor so as to locate 
a surrogate match with an identical or even similar production process 
or use. In valuing factors of production, the Department is attempting 
to assign a market-economy value, i.e., a price or a cost, to some non-
market economy factor, e.g., 50 kilograms of chemical ``x'', 12 nuts 
and bolts, 3 plastic bags, 7 hours of labor. The Department does not 
delve into intricacies of the production and use of every potential 
surrogate factors of production precisely because production and use 
are not necessarily relevant to valuation of these factors. The 
Department is foremost concerned about assigning an appropriate 
surrogate value to a specific factor of production. As a result, the 
Department will consider rejecting a potential surrogate where it has 
evidence that a possible surrogate value does not reasonably reflect 
the ``value'' of the factor. For example, if the Department had 
evidence that a surrogate price was significantly higher than other 
potential surrogate prices for a particular factor, the Department 
might find that it was not reasonable to use that particular price as a 
surrogate value.
    Similarly, the Department is not required to consider 
interchangeability in determining whether to use a particular surrogate 
to value a factor of production and we disagree with the Court's 
suggestion to the contrary in Union Camp. If interchangeability were a 
prerequisite, the Department would have extreme difficulty in valuing 
factors of production. The Department would be required to locate 
precise matches between surrogates and factors--an impracticable if not 
virtually impossible task given the amount of data the Department would 
have to collect and analyze for each factor. The very nature of 
chemicals, in particular, is such that a small difference in grade or a 
change in molecular structure would preclude ever finding two different 
chemicals comparable for purposes of factor valuation. In this case, 
for example, the Department recognizes that octanol-1 and octanol-2 are 
two different products, and, hence not interchangeable. Nevertheless, 
octanol-1 and octanol-2 are sufficiently similar, physically and 
commercially, for octanol-1 to serve as a reasonable surrogate for 
octanol-2.
    The statute and the regulations instruct the Department to value 
factors of production, to the extent practicable, in an appropriate 
surrogate country. Using an internal price from the United States for 
an input, as suggested by petitioner, would be inappropriate. First, 
the evidence on the record of this review establishes that respondents' 
octanol-1 value, which is from a publicly available publication, is a 
reasonable substitute for octanol-2 in our calculations, given the 
limited public and published data from India available to the 
Department. In contrast, the petitioner's cost is neither a value from 
one of the selected surrogate countries nor is it a public or published 
figure. As explained above, the Department's practice is to use 
publically available figures because, among other reasons, it increases 
the certainty and predictability of the outcome of the Department's 
factor valuations in NME cases, and it affords all interested parties 
an opportunity to submit and comment on surrogate value data. Thus, 
based on the facts of this case, use of an unpublished, internal cost 
from a country not on the list of preferred surrogates is contrary to 
the Department's established practice. See Magnesium Corp. of America 
v. United States, 938 F. Supp. 885 (Ct. Intl' Trade, 1996) (``It is 
Commerce's standard practice to disregard petitioner's costs because 
they are not `an appropriate benchmark by which to test the accuracy of 
surrogate country values.' '') Furthermore, because preference is for 
values from the selected surrogate country, we did not use the U.S. 
price for octanol-2 from Chemical Marketing Reporter submitted by 
respondents. Therefore, we have used the 76 rupees/kg value from the 
Indian Chemical Weekly as a surrogate value for capryl alcohol as the 
best information available to the Department.
    We also disagree with petitioner's argument that capryl alcohol 
should be treated as a by-product rather than a co-product. Consistent 
with the methodology employed in the final determination in the less-
than-fair-value investigation, we have determined that capryl alcohol 
is a co-product. Therefore, we have allocated the factor inputs, based 
on the relative quantity of output of this product and sebacic acid. 
Additionally, we have used the production times necessary to complete 
each production stage of sebacic acid as a basis for allocating the 
amount of labor, energy usage, and factory overhead among the products. 
This treatment of co-products is consistent with generally accepted 
accounting principles. (See Cost Accounting: A Managerial Emphasis 
(1991) at pages 528-533). See Final Results Analysis Memorandum, at 
Attachment I and II.
    Comment 3: Petitioner argues that the Department was incorrect in 
making tax adjustments to prices from the Economic Times used to value 
inputs castor oil, castor seed and castor seed cake. Petitioner argues 
that there is no evidence on the record to support the assumption that 
price information from the Economic Times is tax inclusive. Petitioner 
notes that there is evidence on the record that at least one price for 
castor seed oil is tax exclusive, that is the price for Madras which 
indicates ``tax extra.'' Analysis Memorandum, at Attachment XII. 
Petitioner notes that it is the Department's policy to rely first on 
tax-exclusive prices in the surrogate market. Preliminary Determination 
of Sales at Less than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from the PRC, 62 FR 31,972, 31,977 (June 11, 1997).
    Respondents had no comment on this issue.
    Department's Position: We agree with petitioner. We have not 
adjusted prices derived from the Economic Times for taxes because there 
is not substantial evidence on the record to indicate that the prices 
from the Economic Times were tax inclusive.
    Comment 4: Petitioner maintains that the Department should correct 
certain ministerial errors discussed in the Department's August 13, 
1997 Memorandum to the File from Lyn A. Baranowski, namely: (1) Include 
a freight expense for SICC's transportation of coal; (2) include a 
freight expense for Tianjin's transportation of castor seed; (3) adjust 
sodium chloride, coal, plastic bags, middle bags, woven bags, and 
castor seed in Tianjin's freight calculation worksheet; and (4) include 
a freight expense for Tianjin's purchased castor oil and adjust the 
expense for coal.
    Respondents had no comment on these errors.
    Department's Position: We agree with petitioner. We revised 
calculations accordingly to correct the aforementioned ministerial 
errors raised by the Department in the August 13, 1997 Memorandum.
    Comment 5: Respondents contend that the Department used the 
incorrect weights for plastic bags in the preliminary results. 
Respondents maintains that the Department should use the weights stated 
in verification report. In addition, respondents argue that the 
Department should not use a surrogate value for plastic bags which are 
abberrational.
    Petitioner had no comment on this issue.
    Department's Position: We agree with respondents. We have used the 
correct weights for the bags as reported at verification. In addition, 
we have continued to use Import Statistics from India to value bags as 
the price information from Import Statistics is a

[[Page 65679]]

publicly available publication and has been used to value plastic bags 
in past determinations. See Notice of the Preliminary Determination of 
the Sales of Less than Fair Value: Bicycles from the PRC 60 FR 56567, 
56573 (November 9, 1995).

Final Results of Review

    For Jiangsu, which failed to respond to the questionnaire, we have 
not granted a separate rate and the country-wide rate will apply to all 
of its sales. For Guangdong, which reported that it had no sales during 
the POR, its company-specific rate from the previous administrative 
review remains unchanged.
    As a result of our review of the comments received, we have changed 
the results from those presented in our preliminary results of the 
review. Therefore, we determine that the following margins exists as a 
result of our review:

------------------------------------------------------------------------
                                                                 Margin 
           Manufacturer/exporter               Time period     (percent)
------------------------------------------------------------------------
Tianjin Chemicals I/E Corp................    7/01/95-6/30/96      0.00 
Sinochem International Chemicals Corp.....    7/01/95-6/30/96      1.78 
Guangdong Chemicals I/E Corp..............    7/01/95-6/30/96     13.54 
Country-Wide Rate.........................    7/01/95-6/30/96    243.40 
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between USP and NV may vary from the percentages stated 
above. The Department will issue appraisement instructions directly to 
the Customs Service.
    Furthermore, the following cash deposit requirements will be 
effective upon publication of the final results of this administrative 
review for all shipments of the subject merchandise entered, or 
withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(1) of the Act: (1) For the 
reviewed companies named above which have separate rates (SICC and 
Tianjin), the cash deposit rates will be the rates for those firms 
indicated above; (2) for companies previously found to be entitled to a 
separate rate and for which no review was requested, the cash deposit 
rates will be the rate established in the most recent review of that 
company; (3) for all other PRC exporters of subject merchandise from 
the PRC, the cash deposit rates will be the PRC country-wide rate 
indicated above; and (4) the cash deposit rate for non-PRC exporters of 
subject merchandise from the PRC will be the rate applicable to the PRC 
supplier of that exporter. These deposit rates, when imposed, shall 
remain in effect until publication of the final results of the next 
administrative review.

Notification of Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 
of the Department's regulations.

    Dated: December 8, 1997.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-32632 Filed 12-12-97; 8:45 am]
BILLING CODE 3510-DS-P