[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]


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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.

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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