[Federal Register Volume 64, Number 173 (Wednesday, September 8, 1999)]
[Notices]
[Pages 48788-48793]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-23324]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-815]
Sulfanilic Acid From the People's Republic of China; Preliminary
Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
-----------------------------------------------------------------------
SUMMARY: The Department of Commerce (``the Department'') is conducting
an administrative review of the antidumping duty order on sulfanilic
acid from the People's Republic of China. The review covers exports of
this merchandise to the United States for the period August 1, 1997,
through July 31, 1998, and thirteen firms: China National Chemical
Import and Export Corporation, Hebei Branch (Sinochem Hebei); China
National Chemical Construction Corporation, Beijing Branch; China
National Chemical Construction Corporation, Qingdao Branch; Sinochem
Qingdao; Sinochem Shandong; Baoding No. 3 Chemical Factory; Jinxing
Chemical Factory; Zhenxing Chemical Factory; Mancheng Zinyu Chemical
Factory, Shijiazhuang; Mancheng Xinyu Chemical Factory, Bejing; Hainan
Garden Trading Company; Yude Chemical Company; and Shunping Lile. The
preliminary results of this review indicate that there were dumping
margins for the two responding parties: Yude Chemical Company/Xinyu
Chemical Factory (``Yude/Xinyu'') and Zhenxing Chemical Factory/
Mancheng Zhenxing Chemical Factory (``Zhenxing/Mancheng'') as well as
for the ``PRC enterprise.'' The rates assigned to each company are
listed below in the ``Preliminary Results of the Review'' section of
this notice.
EFFECTIVE DATE: September 8, 1999.
FOR FURTHER INFORMATION CONTACT: Nithya Nagarajan, Linda Smiroldo
Checchia or Sean Carey, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue N.W., Washington, DC 20230 at (202) 482-4243, (202)
482-6412, or (202) 482-3964, respectively.
SUPPLEMENTARY INFORMATION:
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 Round Agreements Act (URAA). In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
regulations codified at 19 CFR Part 351 (1998).
Background
On August 11, 1998, the Department published in the Federal
Register (63 FR 42821) a notice of ``Opportunity to Request
Administrative Review'' for the August 1, 1997, through July 31, 1998,
period of review (POR) of the antidumping duty order on Sulfanilic Acid
from the People's Republic of China, 57 FR 37524 (August 19, 1992). In
accordance with 19 CFR 351.213, Zhenxing, Yude, PHT International, Inc.
(``PHT''), and the petitioners, Nation Ford Chemical Company, requested
a review for the aforementioned period. On September 29, 1998, we
published a notice of ``Initiation of Antidumping Review.'' See 63 FR
51893. The Department is now conducting this administrative review
pursuant to section 751(a) of the Act. On October 29, 1998, Zhenxing
and Yude, two companies which are described as joint ventures between
Chinese companies--namely, Mancheng and Xinyu, respectively--and a
U.S.-based company named PHT, reported that they each had made sales of
subject merchandise to the United States during the POR in their
responses to Section A (Organization, Accounting Practices, Markets and
Merchandise) of the Department's questionnaire. Zhenxing and Yude
submitted responses to Sections C and D (Sales to the United States and
Factors of Production, respectively) on November 25, 1998. Responses to
two supplemental questionnaires by Zhenxing and Yude were received on
January 25, 1999, and July 23, 1999.
Scope of Review
Imports covered by this review are all grades of sulfanilic acid,
which include technical (or crude) sulfanilic acid, refined (or
purified) sulfanilic acid and sodium salt of sulfanilic acid.
Sulfanilic acid is a synthetic organic chemical produced from the
direct sulfonation of aniline with sulfuric acid. Sulfanilic acid is
used as a raw material in the production of optical brighteners, food
colors, specialty dyes, and concrete additives. The principal
differences between the grades are the undesirable quantities of
residual aniline and alkali insoluble materials present in the
sulfanilic acid. All grades are available as dry, free flowing powders.
Technical sulfanilic acid, classifiable under the subheading
2921.42.24 of the Harmonized Tariff Schedule (HTS), contains 96 percent
minimum sulfanilic acid, 1.0 percent maximum aniline, and 1.0 percent
maximum alkali insoluble materials. Refined sulfanilic acid, also
classifiable under the subheading 2921.42.24 of the HTS, contains 98
percent minimum sulfanilic acid, 0.5 percent maximum aniline and 0.25
percent maximum alkali insoluble materials.
Sodium salt (sodium sulfanilate), classifiable under the HTS
subheading 2921.42.79, is a powder, granular or crystalline material
which contains 75 percent minimum equivalent sulfanilic acid, 0.5
percent maximum aniline based on the equivalent sulfanilic acid
content, and 0.25 percent maximum alkali insoluble materials based on
the equivalent sulfanilic acid content.
Although the HTS subheadings are provided for convenience and
customs purposes, our written description of the scope of this
proceeding is dispositive.
Period of Review
The review period is August 1, 1997 through July 31, 1998.
Verification
Due to administrative constraints, verification prior to the
issuance of this notice of preliminary results was not conducted.
Section 351.307 of the Department's regulations stipulate that the
Department must verify prior to issuing final results in an
administrative review if (1) a domestic interested party, not later
than 100 days after the date of publication of the notice of initiation
of review, submits a written request for verification; and (2) no
verification during either of the two immediately preceding
administrative reviews was conducted. In this review, no such written
request from a domestic interested party was received and verification
was conducted during the immediately preceding 1996-1997 administrative
review. However, for reasons stated below, the Department intends to
conduct verification prior to
[[Page 48789]]
the issuance of the final results in this administrative review.
Determination of Producers
Based on the respondents' supplemental questionnaire responses of
July 23, 1999, the Department preliminarily determines that the Yude
and Xinyu firms constitute a single entity, and that the Zhenxing and
Mancheng firms constitute a single entity. Record evidence shows that
each producer pair did not maintain separate facilities for
manufacturing subject merchandise, that each producer pair shares
common majority ownership and that each producer pair shares common
officers. See Collapsing Decision Memorandum for Joseph A. Spetrini,
Deputy Assistant Secretary for AD/CVD Enforcement Group III from
Barbara Tillman, Director, Office of AD/CVD Enforcement VII, dated
August 31, 1999. A public version of this memorandum is on file in the
Central Records Unit (room B-099 of the Main Commerce Building) (CRU).
Collapsing
We have determined, after examining the relevant criteria, that
Yude/Xinyu and Zhenxing/Mancheng are affiliated parties within the
meaning of section 771(33)(F). We have further determined that PHT (the
U.S. reseller of sulfanilic acid) is also affiliated with these
producers/exporters and that these companies should be treated as a
single entity (i.e., ``collapsed'') for purposes of calculating and
assigning an antidumping margin in this review. Section 351.401(f) of
the Department's antidumping regulations provides that the Department
``will treat two or more affiliated producers as a single entity where
those producers have production facilities for similar or identical
products that would not require substantial retooling of either
facility in order to restructure manufacturing priorities and the
Secretary concludes that there is a significant potential for the
manipulation of price or production.'' See 19 CFR 351.401(f). In
identifying the potential for manipulation of price or production,
section 351.401(f)(2) provides, inter alia, that the Department may
consider the following factors: level of common ownership; the extent
to which managerial employees or board members of one firm sit on the
board of directors of an affiliated firm; and whether operations are
intertwined, such as through the sharing of facilities or employees, or
significant transactions between the affiliated parties. A full
discussion of our conclusions, requiring reference to proprietary
information, is contained in the Department's memorandum in the
official file for this case (a public version of this memorandum is on
file in the CRU). Generally, however, we have found that: Yude/Xinyu
and Zhenxing/Mancheng are affiliated parties; Yude/Xinyu and PHT are
affiliated parties; Zhenxing/Mancheng and PHT are affiliated parties;
substantial retooling would not be necessary to restructure
manufacturing priorities; and, there is significant potential for
manipulating price and production between the producers and the
exporter. As a result we are collapsing Yude/Xinyu; Zhenxing/Mancheng;
and PHT for purposes of conducting the 1997/1998 administrative review.
Separate Rates
It is the Department's standard policy to assign all exporters of
the merchandise subject to review in non-market economy countries a
single rate, unless an exporter can affirmatively demonstrate an
absence of government control, both in law (de jure) and in fact (de
facto), with respect to exports. See Mitsubishi Heavy Industries, Ltd.,
v. U.S., __ CIT __, Slip Op. 99-46 (May 26, 1999). To establish whether
a company is sufficiently independent to be entitled to a separate,
company-specific rate, the Department analyzes each exporting entity in
a non-market economy (``NME'') country under the test established in
the Final Determination of Sales at Less Than Fair Value: Sparklers
from the People's Republic of China, 56 FR 20588 (May 6, 1991)
(Sparklers), as amplified by the Final Determination of Sales at Less
Than Fair Value: Silicon Carbide from the People's Republic of China,
59 FR 22585 (May 2, 1994) (Silicon Carbide). Evidence supporting,
though not requiring, a finding of de jure absence of government
control includes: (1) An absence of restrictive stipulations associated
with an individual exporter's business and export licenses; (2) any
legislative enactments decentralizing control of companies; or (3) any
other formal measures by the government decentralizing control of
companies. De facto absence of government control with respect to
exports is based on four criteria: (1) Whether the export prices are
set by or subject to the approval of a government authority; (2)
whether each exporter retains the proceeds from its sales and makes
independent decisions regarding the disposition of profits and
financing of losses; (3) whether each exporter has autonomy in making
decisions regarding the selection of management; and (4) whether each
exporter has the authority to sign contracts and other agreements.
The Department did not require the respondents to answer certain
questions concerning separate rates. This is due to the fact that
specific issues pertaining to Xinyu and Mancheng did not surface until
the review of the Yude and Zhenxing supplemental questionnaire
responses of July 23, 1999. Accordingly, the record evidence on which
to conduct a separate rates analysis for purposes of these preliminary
results may be incomplete. We have found that the evidence on the
record affirmatively demonstrates an absence of direct government
control, both in law and in fact, with respect to Yude's and Zhenxing's
exports according to the criteria identified in Sparklers and Silicon
Carbide for this period of review, and have assigned to these companies
a rate separate from the China-wide rate (``PRC rate''). Even though
Yude failed to affirmatively demonstrate, in fact, that it exercised
independent decision-making authority regarding disposition of profits
and financing of losses during the POR, the overall balance of evidence
affirmatively demonstrates an absence of government control. Together
with Zhenxing, it will be granted a rate separate from all the others,
``PRC rate.''
As discussed above, because issues pertaining to Xinyu and Mancheng
did not arise until late in the review process, we intend to examine
further the issue of separate rates. We will request additional
information prior to verification. Accordingly, even though for these
preliminary results we are assigning a separate rate to Mancheng/
Zhenxing and Xinyu/Yude, this preliminary separate rates determination
is subject to the receipt and verification of further information.
Before the issuance of the final results in this administrative review,
we will be re-assessing whether separate rates are justified.
For further discussion of the Department's preliminary
determination regarding the issuance of separate rates, see Separate
Rates Decision Memorandum for Barbara Tillman, Director, Office of AD/
CVD Enforcement VII, dated August 31, 1999. A public version memorandum
is on file in the Central Records Unit (room B-099 of the Main Commerce
Building) (CRU); see also ``Collapsing'' section of this notice.
Use of Facts Otherwise Available
All firms that have not affirmatively demonstrated that they
qualify for a separate rate are presumed to be part of a single
enterprise under the common control of the government (the ``PRC
[[Page 48790]]
enterprise''). See Sigma Corp. v. U.S., 117 F.3d 1401 (Fed. Cir. 1997).
Therefore, all such entities receive a single margin, the ``PRC rate.''
We preliminarily determine, in accordance with section 776(a) of the
Act, that resorting to the facts otherwise available is appropriate in
arriving at the PRC rate because companies, presumed to be part of the
PRC enterprise, did not respond to the Department's antidumping
questionnaire.
Where the Department must resort to the facts otherwise available
because a respondent fails to cooperate by not acting to the best of
its ability to comply with a request for information, section 776(b) of
the Act authorizes the Department to use an inference adverse to the
interests of that respondent in choosing from the facts available.
Section 776(b) also authorizes the Department to use, as adverse facts
available, information derived from the petition, the final
determination, a previous administrative review, or other information
placed on the record. The Statement of Administrative Action (``SAA'')
accompanying the URAA clarifies that information from the petition and
prior segments of the proceeding is ``secondary information.'' See
H.Doc. 3216, 103rd Cong. 2d Sess. 870 (1996). If the Department relies
on secondary information as facts available, section 776(c) provides
that the Department shall, to the extent practicable, corroborate such
information using independent sources reasonably at its disposal. The
SAA further provides that ``corroborate'' means simply that the
Department will satisfy itself that the secondary information to be
used has probative value. See id. The SAA also states that independent
sources used for corroboration may include, for example, published
price lists, official import statistics and customs data, and
information obtained from interested parties during the particular
investigation. See id. However, where corroboration is not practicable,
that fact will not prevent the Department from applying an adverse
inference and using the secondary information in question. See 19 CFR
351.308(d).
The Department issued its standard non-market economy (NME)
questionnaires to thirteen firms on September 29, 1998. These thirteen
firms are: Sinochem Hebei; China National Chemical Construction
Corporation, Beijing Branch; China National Chemical Construction
Corporation, Qingdao Branch; Sinochem Qingdao; Sinochem Shandong;
Baoding No. 3 Chemical Factory; Jinxing Chemical Factory; Zhenxing
Chemical Industry Company; Mancheng Zinyu Chemical Factory,
Shijiazhuang; Mancheng Xinyu Chemical Factory, Beijing; Hainan Garden
Trading Company; Yude Chemical Industry Company; and Shunping Lile. The
Department received responses from only two companies: Yude and
Zhenxing. Yude and Zhenxing responded to Section A (Organization,
Accounting Practices, Markets and Merchandise) of the Department's
questionnaire on October 29, 1998. Yude and Zhenxing submitted
responses to Sections C and D (Sales to the United States and Factors
of Production, respectively) of the Department's questionnaire on
November 25, 1998. Responses to two supplemental questionnaires by Yude
and Zhenxing were received on January 25, 1999, and July 23, 1999. The
Department did not receive any responses from any other firms. Such
non-response supports the Department's preliminary determination to
apply adverse facts available.
As noted above, some of the companies which were issued
questionnaires in this review did not respond. Therefore, we find that
the PRC-wide entity failed to cooperate by not acting to the best of
its ability to comply with the Department's requests for information.
Consequently, we have preliminarily decided to use adverse facts
available with respect to the PRC-wide entity in accordance with
section 776(b) of the Act.
When making adverse inferences, the Statement of Administrative
Action (SAA) authorizes the Department to consider the extent to which
a party may benefit from its own lack of cooperation (SAA at 870).
Because the ``all others'' PRC rate that was applicable during the POR
and that is applicable to current imports is 85.2 percent, the
Department believes that assigning a 85.2 percent rate will prevent
non-responding firms from benefitting from their failure to respond to
the Department's requests for information. Anything less than the
current cash deposit rate would effectively reward non-responding firms
for not cooperating to the best of their ability.
The 85.2 percent rate is based on the less than fair value (LTFV)
final determination, which in turn was based on information in the
petition. Section 776(b) of the Act authorizes the Department to use as
adverse facts available information derived from, among other places,
the petition or the final determination from the LTFV investigation.
This type of information is considered secondary information. See SAA
at 870; 19 CFR 351.308(c)(1).
In accordance with the law, the Department, to the extent
practicable, will examine the reliability and relevance of the
information used. However, in an administrative review the Department
will not engage in updating the petition to reflect the prices and
costs that are found during the current review. Rather, corroboration
consists of determining that the significant elements used to derive a
margin in a petition are reliable for the conditions upon which the
petition is based. With respect to the relevance aspect of
corroboration, the Department will consider the information reasonably
at its disposal as to whether there are circumstances that would render
a margin not relevant.
To corroborate the LTFV rate of 85.2 percent, we examined the basis
of the rates contained in the petition of October 8, 1991. The U.S.
price in the petition was based on actual prices from customer purchase
orders, invoices and price quotations for refined sulfanilic acid from
the PRC. This U.S. price covers delivery to the customer's point of
usage. We were able to corroborate the average unit values listed in
the petition by comparing those values to publicly available
information compiled by the U.S. Census Bureau and made available by
the International Trade Commission (ITC). The ITC reports quantity and
value by HTS numbers. Using the same HTS numbers as listed in the
petition (HTS 2921.42.24, 2921.42.79, and 2921.42.79), we divided the
total quantity by the total value for the period referenced in the
petition and noted the average unit values were very similar to those
reported in the original petition.
The petition also states that due to the non-market economy status
of the PRC, the foreign market value was calculated using a factors of
production methodology. Based on the production experience of the
petitioners, the petition identified actual factors of production for
subject merchandise. Such factors include: labor, raw material, energy,
overhead, and general selling and administrative expenses. To value
these factors of production, the petition used published costs in India
for the above-mentioned factors as surrogate values for those in the
PRC. See Antidumping Petition on Sulfanilic Acid from the People's
Republic of China dated October 2, 1991, and found in CRU. Because
petitioners used published, publicly available data for valuing the
major inputs, we consider this data to be probative and relevant.
[[Page 48791]]
The SAA at 870 specifically states that where ``corroboration may
not be practicable in a given circumstance,'' the Department may
nevertheless apply an adverse inference. The SAA at 869 emphasizes that
the Department need not prove that the facts available are the best
alternative information. Therefore, based on our efforts, described
above, to corroborate information contained in the petition, and
mindful of the legislative history discussing facts available and
corroboration, we consider the petition margin we are assigning to non-
responding firms in this review as adverse facts available to be
corroborated to the extent practicable.
Finally, we note that where circumstances indicate that the
selected margin is not appropriate as adverse facts available, the
Department will disregard the margin and determine an appropriate
margin. See Fresh Cut Flowers from Mexico; Preliminary Results of
Antidumping Duty Administrative Review, 60 FR 49567 (September 26,
1995). We have determined that there is no evidence on the record that
would indicate that the margin from the petition is not appropriate.
Nothing on the record of this administrative review supports a
determination that the highest margin rate from the petition in the
underlying investigation does not represent reliable and relevant
information for purposes of adverse facts available. This rate has been
used as the PRC-wide, all others rate since the Department's Final
Determination of Sales at Less Than Fair Value: Sulfanilic Acid from
the People's Republic of China, 57 FR 29705 (July 6, 1992).
United States Price
Respondents reported U.S. sales as constructed export price
(``CEP'') sales made by PHT on behalf of Yude/Xinyu and Zhenxing/
Mancheng. We calculated CEP based on FOB prices to unaffiliated
purchasers in the United States. We made deductions for foreign inland
freight, foreign brokerage and handling, ocean freight, marine
insurance, U.S. customs duties, U.S. transportation, credit,
warehousing, repacking in the United States, indirect selling expenses,
including inventory carrying costs, and constructed export price
profit, as appropriate, in accordance with sections 772(c) and (d) of
the Act.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine normal value (``NV'') using a factors of production
methodology if (1) the merchandise is exported from a non-market
economy (NME) country, and (2) the available information does not
permit the calculation of NV using home-market prices, third-country
prices, or constructed value under section 773(a) of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. Pursuant to section
771(18)(C)(i), any determination that a foreign country is an NME
country shall remain in effect until revoked by the administering
authority. None of the parties to this proceeding has contested such
treatment in this review. Accordingly, we treated the PRC as an NME
country for purposes of this review and calculated NV by valuing the
factors of production as set forth in section 773(c)(3) of the Act in a
comparable market economy country which is a significant producer of
comparable merchandise. Pursuant to section 773(c)(4) of the Act, we
determined that India is comparable to the PRC in terms of per capita
gross national product (``GNP''), the growth rate in per capita GNP,
and the national distribution of labor; and that India is a significant
producer of comparable merchandise. For further discussion of the
Department's selection of India as the primary surrogate country, see
Memorandum from Jeffrey May, Director, Office of Policy, to Barbara
Tillman, Director, Office of AD/CVD Enforcement VII, dated June 30,
1999, entitled ``Sulfanilic Acid from the People's Republic of China
(``PRC''): Nonmarket Economy Status and Surrogate Country Selection'';
``Selection of Significant Producer Memo'' dated August 31, 1999;
``Surrogate Values Memorandum'' dated August 31, 1999; and Preliminary
Analysis Memorandum dated August 31, 1999, which are on file in the
CRU.
For purposes of calculating NV, we valued PRC factors of production
in accordance with section 773(c)(1) of the Act. In examining surrogate
values, we selected, where possible, the publicly available value which
was: (1) An average non-export value; (2) representative of a range of
prices within the POR or most contemporaneous with the POR; (3)
product-specific; and (4) tax-exclusive. For those surrogate values not
contemporaneous with the POR, we adjusted for inflation using the
wholesale price indices published in the IMF's International Financial
Statistics. When necessary, we adjusted the values for certain inputs
reported in Chemical Weekly to exclude sales and excise taxes. In
accordance with our practice, we added to CIF import values from India
a surrogate inland freight cost using a simple average of the reported
distances from either the closest PRC port to the factory, or from the
domestic supplier to the factory. See Final Determination of Sales at
Less that Fair Value: Certain Cut-to-Length Carbon Steel Plate from the
People's Republic of China, 62 FR 61977 (Nov. 20, 1997). In accordance
with this methodology, we valued the factors of production as follows:
To value aniline used in the production of sulfanilic acid, we used
the rupee per kilogram value of imports into India during April 1997-
March 1998, obtained from the March 1998, Monthly Statistics of the
Foreign Trade of India, Volume II--Imports (Indian Import Statistics.)
Using the Indian rupee wholesale price indices (``WPI'') obtained from
the International Financial Statistics, published by the International
Monetary Fund (IMF), we adjusted this value for inflation in India
during the POR. We made adjustments to include costs incurred for
freight between the Chinese aniline suppliers and Zhenxing/Mancheng's
and Yude/Xinyu's factories using the average of (1) the distance from
the factory to the supplier or (2) the distance from the factory to the
port. The surrogate freight rates were based on truck freight rates
from The Times of India, April 20, 1994, consistent with the
Department's practice. See Certain Helical Spring Lock Washers from the
People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 64 FR 13401 (Mar. 18, 1999) (Lock Washers). Rail
freight rates were from the December 22, 1989, embassy cable for the
Final Results of Antidumping Duty Administrative Review: Shop Towels of
Cotton from the People's Republic of China, 56 FR 4040 (Feb. 1, 1991).
These rates were adjusted for inflation to be concurrent with the
period of review and have been placed on the record of this review.
To value sulfuric acid used in the production of sulfanilic acid,
we used the rupee per kilogram value for sales in India during December
1996-July 1997 as reported in Chemical Weekly. We have adjusted this
value for inflation in India during the POR, and have excluded the
Central Excise Tariff of India and the Bombay Sales Tax. We made
additional adjustments to include costs incurred for freight between
the Chinese sulfuric acid supplier and Zhenxing/Mancheng's and Yude/
Xinyu's factories in the PRC.
To value sodium bicarbonate used in the production of sodium
sulfanilate, we used the rupee per kilogram value for sales in India
during December
[[Page 48792]]
1996-July 1997 as reported in Chemical Weekly. We have adjusted this
value for inflation in India during the POR, and have excluded the
Central Excise Tariff of India and the Bombay Sales Tax. We made
additional adjustments to include costs incurred for freight between
the Chinese sodium bicarbonate supplier and Zhenxing/Mancheng factory
in the PRC.
Consistent with our final determination in the 1996-1997
administrative review, we have used the public price quotes, in this
case those submitted by the respondents on July 14, 1999, which are
specific to the type and grade of activated carbon used in the
production of sulfanilic acid, as reported in the Chinese sulfanilic
acid producers' factors of production. We made adjustments to account
for inflation in India during the POR, and to include costs incurred
for inland freight between the Chinese activated carbon supplier and
Zhenxing/Mancheng's and Yude/Xinyu's factories in the PRC.
The Department's regulations, at 19 CFR 351.408(c)(3), state that
``[f]or labor, the Secretary will use regression-based wage rates
reflective of the observed relationship between wages and national
income in market economy countries. The Secretary will calculate the
wage rate to be applied in nonmarket economy proceedings each year. The
calculation will be based on current data, and will be made available
to the public.'' To value the factor inputs for labor, we used the wage
rates calculated for the PRC in the Department's ``Expected Wages of
Selected Non-Market Economy Countries--1997 Income Data'' as updated in
May 1999, and published by the Department in the world-wide web site
for Import Administration.
Following our practice from prior administrative reviews of
sulfanilic acid from the PRC, for factory overhead, we used information
reported in the January 1997 Reserve Bank of India Bulletin
(``Bulletin''). From this information, we were able to determine
factory overhead as a percentage of total cost of manufacturing.
Similarly, for selling, general and administrative (SG&A) expenses,
we used information obtained from the January 1997 Bulletin. We
calculated an SG&A rate by dividing SG&A expenses as reported in the
Bulletin by the cost of manufacturing.
Finally, to calculate a profit rate, we used information obtained
from the January 1997 Bulletin. We calculated a profit rate by dividing
the before-tax profit by the sum of those components pertaining to the
cost of manufacturing plus SG&A as reported in the Bulletin.
To value the inner and outer bags used as packing materials, we
used import information from Indian Import Statistics for the period
April 1997-March 1998. Using the Indian rupee WPI data obtained from
International Financial Statistics, we adjusted these values to account
for inflation in India during the POR. We adjusted these values to
include freight costs incurred between the Chinese plastic bag
suppliers and Zhenxing/Mancheng's and Yude/Xinyu's factories in the
PRC.
To value coal, we used the price of steam coal in 1996 for
industries in India as reported in Energy, Prices and Taxes, First
Quarter 1999 published by the International Energy Agency. This price
was adjusted for inflation to be concurrent with the POR and has been
placed on the record of this review.
To value electricity, we used the price of industrial electricity
in India in 1997 reported in Energy, Prices, and Taxes, First Quarter
1999 published by the International Energy Agency. This price was
adjusted for inflation to be concurrent with the POR and has been
placed on the record of this review.
To value truck freight for input materials, we used the rate
reported in The Times of India, April 20, 1994. We adjusted the truck
freight rates for inflation during the POR using Indian rupee WPI data
published by the IMF. See Lock Washers.
To value rail freight for input materials, we used the price
reported in a December 1989 cable from the U.S. Embassy in India
submitted for the Final Results of Antidumping Duty Administrative
Review: Shop Towels of Cotton from the People's Republic of China, 56
FR 4040 (Feb. 1, 1991) and added to the record of this review. We
adjusted the rail freight rates for inflation during the POR using
Indian rupee WPI data published by the IMF.
To value brokerage and handling, we used the brokerage and handling
rate used in the Determination of Sales at Less Than Fair Value:
Stainless Steel Bar from India, 59 FR 66915 (1994). See April 1997
Memorandum to All Reviewers from Richard W. Moreland, Acting Deputy
Assistant Secretary ``Index of Factor Values for Use in Antidumping
Duty Investigations Involving Products from the People's Republic of
China,'' found on Import Administration's web site. We adjusted the
value for brokerage and handling for inflation during the POR using
Indian rupee WPI data published by the IMF.
To value marine insurance, we used information from a publicly
summarized version of a questionnaire response in Investigation of
Sales at Less than Fair Value: Sulphur Vat Dyes from India (62 FR
42758). See ``Index of Factor Values for Use in Antidumping Duty
Investigations Involving Products from the People's Republic of
China,'' found on Import Administration's web site. We adjusted the
value for marine insurance for inflation during the POR using Indian
rupee WPI data published by the IMF.
To value ocean freight, we used a value for ocean freight provided
by the Federal Maritime Commission used in the Final Determination of
the Antidumping Administrative Review of Sebacic Acid from the PRC, 62
FR 65674 (1997). We adjusted the value for ocean freight for inflation
during the POR using Indian rupee WPI data published by the IMF.
Preliminary Results of the Review
We preliminarily determine the weighted average dumping margin for
Yude/Xinyu and Zhenxing/Mancheng for the period August 1, 1997 through
July 31, 1998 to be 1.62 percent. The rate for all other firms which
have not demonstrated that they are entitled to separate rates is 85.20
percent. This rate will be applied to all firms other than Yude/Xinyu
and Zhenxing/Mancheng.
Pursuant to 19 CFR 351.224(b), the Department will disclose to
parties to the proceeding any calculations performed in connection with
these preliminary results within five (5) days after the date of
publication of this notice. Pursuant to 19 CFR 351.309, interested
parties may submit written comments in response to these preliminary
results. Case briefs are currently scheduled for submission within 30
days after the date of publication of this notice, and rebuttal briefs,
limited to arguments raised in case briefs, must be submitted no later
than five (5) days after the time limit for filing case briefs. Parties
who submit argument in this proceeding are requested to submit with the
argument: (1) A statement of the issue, and (2) a brief summary of the
argument. Case and rebuttal briefs must be served on interested parties
in accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310,
within 30 days of the date of publication of this notice, interested
parties may request a public hearing on arguments to be raised in the
case and rebuttal briefs. Unless the Secretary specifies otherwise, the
hearing, if requested, will be held two days after the deadline for
submission of rebuttal briefs. The Department will issue the final
results of this administrative review, including its analysis of issues
raised in any case or rebuttal brief or at
[[Page 48793]]
a hearing, not later than 120 days after the date of publication of
this notice.
The Department shall determine, and the Customs Service shall
assess, antidumping duties on all appropriate entries. Upon completion
of this review, the Department will issue appraisement instructions
directly to the Customs Service.
Furthermore, the following deposit rates will be effective with
respect to all shipments of sulfanilic acid from the PRC entered, or
withdrawn from warehouse, for consumption on or after the publication
date of the final results of this review, as provided for by section
751(a)(2)(c) of the Act: (1) The cash deposit rate for reviewed
companies listed above will be the rates for those firms established in
the final results of this review; (2) for companies previously found to
be entitled to a separate rate and for which no review was requested,
the cash deposit rate will be the rate established in the most recent
review of that company; (3) for all other PRC exporters of subject
merchandise, the cash deposit rate will be the China-wide rate of 85.20
percent; 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 requirements, when imposed,
shall remain in effect until publication of the final results of the
next administrative review.
Notification of Interested Parties
This notice serves as a preliminary reminder to importers of their
responsibility under section 351.402 of the Department's regulations 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
sections 751(a)(1) and 771 (i)(1) of the Act.
Dated: August 31, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-23324 Filed 9-7-99; 8:45 am]
BILLING CODE 3510-DS-P