[Federal Register Volume 64, Number 238 (Monday, December 13, 1999)]
[Notices]
[Pages 69503-69509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32224]
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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.
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SUMMARY: On Friday, August 6, 1999, the Department of Commerce
published in the Federal Register the preliminary results of the
administrative review of the antidumping duty order on sebacic acid
from the People's Republic of China. See Sebacic Acid from the People's
Republic of China: Preliminary Results of Antidumping Duty
Administrative Review, 65 F.R. 42916 (Aug. 6, 1999). The administrative
review covers four exporters of the subject merchandise to the United
States: Tianjin Chemicals Import and Export Corporation; Guangdong
Chemicals Import and Export Corporation; Sinochem International
Chemicals Company, Ltd.; and Sinochem Jiangsu Import and Export
Corporation. The period of review is July 1, 1997, through June 30,
1998.
We gave interested parties an opportunity to comment on our
preliminary results. Based on our analysis of the comments received and
the correction of certain clerical errors, we have changed our results
from those presented in our preliminary results as described below in
the ``Analysis of Comments Received'' section of this notice. The final
results are listed below in the section ``Final Results of the
Review.''
EFFECTIVE DATE: December 13, 1999.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or Christopher Priddy, AD/
CVD Enforcement Group I, Office II, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW, Washington, DC 20230; telephone:
(202) 482-2613 or (202) 482-1130, respectively.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all
citations to the Tariff Act of 1930, as amended (the Act), are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Act by the Uruguay Round Agreements
Act. In addition, unless otherwise indicated, all citations to the
Department's regulations are to the regulations at 19 CFR part 351
(April 1998).
SUPPLEMENTARY INFORMATION:
Background
On August 6, 1999, the Department of Commerce (the Department)
published in the Federal Register the preliminary results of the 1997-
1998 administrative review of the antidumping duty order on sebacic
acid from the People's Republic of China (PRC). See Sebacic Acid from
the PRC: Preliminary Results of Antidumping Duty Administrative Review,
64 Fed. Reg. 42916 (August 6, 1999) (Preliminary Results). On August
26, 1999, Tianjin Chemicals Import and Export Corporation (Tianjin
Chemicals), Guangdong Chemicals Import and Export Corporation
(Guangdong Chemicals), and Sinochem International Chemicals Company,
Ltd. (SICC) (collectively comprising the respondents) submitted
additional surrogate value data. The petitioner and successor in
interest to Union Camp Corporation, Arizona Chemical Company, filed a
response to the respondents' submission on September 7, 1999. The
petitioner and three of the four respondents submitted case briefs on
September 7, 1999, and rebuttal briefs on September 13, 1999. The
Department held a public hearing on October 27, 1999. The fourth
respondent, Sinochem Jiangsu Import and Export Corporation, did not
participate in this administrative review. Accordingly, the Department
has continued to base the margin for this respondent on facts available
for purposes of the final results.
The Department has now completed this administrative review in
accordance with section 751(a) 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 or flake.
Sebacic acid has numerous industrial uses, including the production
of nylon 6/10 which is 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
2917.13.00.30 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 controlling.
Export Price
For Guangdong, SICC, and Tianjin we calculated export price (EP) in
accordance with section 772(a) of the Act because the subject
merchandise was sold directly to unaffiliated customers in the United
States prior to importation and constructed export price (CEP)
methodology was not otherwise warranted based on the facts of record.
We calculated EP based on the same methodology used for purposes of the
preliminary results with the exception that we used a different
surrogate value for all respondents' ocean freight expenses. See
Comment 7.
Normal Value
Section 773(c)(4) of the Act requires the Department to value the
non-market economy (NME) producer's factors of production, to the
extent possible, in one or more market economy countries that: (1) Are
at a level of economic development comparable to that of the NME, and
(2) Are significant producers of comparable merchandise. As stated in
the Preliminary Results, the Department has determined in this case
that India meets both statutory requirements for an appropriate
surrogate country. In the final results, we have continued to rely on
India as the surrogate country. Accordingly, we have calculated normal
value (NV) using Indian surrogate values for the PRC producers' factors
of production.
We calculated NV based on the same methodology used in the
preliminary results with the following exceptions: (1) We adjusted the
surrogate values of the by-product fatty acid and the co-
[[Page 69504]]
product capryl alcohol to reflect differences in concentration levels
between these subsidiary products and their respective surrogate
values; (2) We revised the foreign trucking surrogate value based on
Financial Express price quotes (see Comment 3); (3) We included
indirect labor amounts in our normal value calculations (see Comment
4); (4) We based the octanol surrogate value on the average of twelve
Chemical Weekly price quotes reflecting each month of the POR submitted
by the editor of Chemical Weekly; (5) We based the activated carbon
surrogate value on price quotes obtained from Indian companies (see
Comment 6); (6) We valued Hengshui Dongfeng Chemical Factory's
(Hengshui's) and Zhong He Chemical Factory's (Zhong He's) refined
glycerine, as well as Handan Fuyang Sebacic Acid Factory's (Handan's)
by-product crude glycerine, using Indian Import Statistics data; (7) We
included macropore resin in Handan's normal value calculation (see
Comment 9); (8) We corrected a certain ministerial error with respect
to Handan's packing costs (see Comment 9); (9) We replaced incorrect
surrogate values for activated carbon and foreign rail freight with
proper values for certain exporters' normal value calculations; (10) We
revised the manner in which we calculated the deduction for sales and
excise taxes from the Chemical Weekly price quotes; (11) We valued the
castor oil which Hengshui purchased from both market and non-market
economy suppliers using the factory's actual purchase price from a
market-economy supplier.
Analysis of Comments Received
Comment 1: Concentration Levels of Subsidiary Products
The petitioner asserts that the Department erred in its normal
value calculations by failing to adjust the values of the sebacic acid
subsidiary products glycerine and fatty acid, as well as the co-product
capryl alcohol, by their respective concentration levels. For Handan,
the one manufacturer for which the Department did adjust the glycerine
value to reflect its purity level, the petitioner asserts that the
Department used the incorrect glycerine concentration percentage in its
normal value calculation. Because Hengshui and Zhong He did not report
the concentration levels at which they produce fatty acid, the
petitioner urges the Department to use as facts available Handan's
fatty acid concentration levels.
The respondents argue that the Department should not adjust
subsidiary product values to reflect differences in their concentration
levels, as these purity levels do not affect the products' usages or
prices. The respondents urge the Department to follow its decision in
the final determination of the investigation by refusing to adjust
products' surrogate values by their concentration levels in those cases
in which the products' Indian price purity levels are unknown. See
Notice of Final Determination of Sales at Less than Fair Value (LTFV
Investigation): Sebacic Acid from the PRC, 59 F.R. 28053, 28059 (May
31, 1994) (Sebacic Acid Final Determination). The respondents argue
that there is no information on the record of this case which supports
a determination of the purity level at which the co-product and
subsidiary products were sold. However, should the Department decide to
adjust the values for subsidiary products on the basis of their
respective concentration levels, the respondents ask that the
Department adjust sebacic acid's gross unit price to reflect the
concentration level at which sebacic acid was sold during the period of
review (POR).
DOC Position
For purposes of the final results, we adjusted the surrogate values
for the subsidiary product fatty acid and the co-product capryl alcohol
to reflect variations between the product's reported concentration
levels and the surrogate value's concentration level. We did not,
however, adjust the surrogate value for the by-product glycerine.
For purposes of the Sebacic Acid Final Determination, the
Department stated that it would not adjust surrogate values to reflect
purity levels when the surrogate value sources do not indicate levels
of purity which can be used for comparison purposes. Sebacic Acid Final
Determination, 59 F.R. 28053, 28059 (May 31, 1994). However, the
Department may make surrogate value adjustments when information on the
record provides a basis upon which the Department may infer Indian
price quotes' purity percentages. Notice of Final Determination of
Sales at Less than Fair Value: Certain Paper Clips from the People's
Republic of China, 59 F.R. 51168, 51174 (October 7, 1994). In response
to a November 16, 1999, inquiry regarding the concentration levels of
Chemical Weekly price quotes, the editor of Chemical Weekly stated that
chemical price quotes which do not mention the chemical's purity level
are based on a one hundred percent purity level. See November 22, 1999,
Memo to the File from Christopher Priddy. Because we based the
surrogate values for capryl alcohol and fatty acid on Chemical Weekly
price quotes which reflect a one hundred percent purity level, the
Department adjusted these products' surrogate values to reflect the
reported concentration levels at which they were produced.
For purposes of the final results, the Department derived the
surrogate value for glycerine from import prices published in the
Indian Import Statistics. The Department does not have adequate
information to determine the purity level of glycerine generated by the
respondents and the glycerine covered by the Indian Import prices.
Because we lack this necessary information, the Department did not make
concentration level adjustments for glycerine. Accordingly, the
Department revised its normal value calculations in those instances in
which it adjusted the glycerine value by its chemical concentration
level.
Finally, we disagree with the respondents' argument that if we
adjust the values for subsidiary products we should also adjust the
respondents' reported gross unit prices of sebacic acid to reflect the
concentration level at which the product was sold during the POR. We
make an adjustment to the prices when there is a known difference
between the concentration levels of the product and the price for the
product. The respondents sold sebacic acid at a 99.5 percent
concentration level, and the sebacic acid prices which the respondents
reported to the Department correspond with the reported 99.5 percent
concentration level. Therefore, the Department has no basis to make the
type of adjustment requested by the respondents.
Comment 2: Caustic Soda Concentration Level
The petitioner argues that the Department undervalued the cost of
caustic soda by interpreting Chemical Weekly prices as quotes for
caustic soda sold at one hundred percent purity concentration levels.
The petitioner states that it provided the Department with information
indicating that liquid caustic soda is normally sold in 50 percent
concentration levels and urges the Department to adjust the
respondents' caustic soda surrogate values from an original caustic
soda concentration level of 50 percent. See Petitioner's January 25,
1999, Surrogate Value Submission.
The respondents assert that the Department should follow precedent
in this case and allow reductions for caustic soda purity levels based
on a one hundred percent purity level
[[Page 69505]]
standard. The respondents state that the Department, in the original
investigation, based its decision regarding caustic soda prices on a
letter from Chemical Weekly's editor reporting that Chemical Weekly
caustic soda prices reference caustic soda at a one hundred percent
purity level. See Sebacic Acid From the People's Republic of China;
Final Results of Antidumping Duty Administrative Review, 59 Fed. Reg.
28053, 28059 (May 31, 1994). The respondents argue that Chemical Weekly
caustic soda prices reflect a one hundred percent dry basis due to
price valuation purposes for buyers of different caustic soda purity
percentages who do not pay for water included in liquid caustic soda.
The respondents urge the Department to follow its precedent from the
Sebacic Acid Final Determination and adjust caustic soda percentages
according to Chemical Weekly caustic soda prices referencing caustic
soda of one hundred percent purity.
DOC Position
We agree with the respondents. On November 16, 1999, the Department
submitted an inquiry to Chemical Weekly regarding the relationship
between chemical purity levels and price quotes. The editor of Chemical
Weekly responded that chemical price quotes which do not mention the
chemical's purity level are based on a one hundred percent purity level
and used caustic soda as an example. See November 22, 1999, Memo to the
File from Christopher Priddy. Based on the Chemical Weekly editor's
statement, the Department determined that the caustic soda price quote
was based on caustic soda of one hundred percent purity. Because the
respondents reported variances in the purity levels of the caustic soda
used to produce sebacic acid, we have continued to adjust the
respondents' caustic soda levels by a percentage of the one hundred
percent purity based on Chemical Weekly caustic soda price.
Comment 3: Surrogate Value for Foreign Trucking Freight Rate
For purposes of our preliminary results, we used a trucking rate
derived from an April 20,1994, Times of India newspaper article to
value foreign trucking freight. The petitioner argues that the
Department should use trucking rates quoted in a May 18, 1998,
Financial Express article for purposes of valuing foreign trucking
expenses for purposes of the final results. Because the article's rates
are contemporaneous to the POR, the petitioner claims that the
article's trucking rates are preferable to the rates used by the
Department for purposes of the preliminary results.
The respondents argue that the Financial Express rates are
aberrational, due to a temporary shortage of vehicles in India at the
time of the trucking rate quotes. The respondents claim that the high
freight rates were a regional phenomenon and do not represent a
fundamental trucking freight rate increase throughout India.
Accordingly, for purposes of the final results, the respondents request
that the Department continue to value foreign trucking expenses with
rates used in the preliminary results.
DOC Position
We agree with the petitioner that the May 18, 1998, Financial
Express trucking freight rates are more appropriate surrogate values
for trucking expenses than the rates used for purposes of the
preliminary results, as the Financial Express rates are contemporaneous
to the POR. However, as noted by the respondents and discussed in the
Financial Express article, prices for certain routes reported in the
article, such as Mumbai to Calcutta, reflected increases resulting from
vehicle shortages during the week prior to May 18, 1998. Because the
trucking rate increases occurred at the end of the POR and appear to be
related to unusual circumstances, we believe that trucking freight
quotes effective prior to the price increase more accurately represent
trucking freight costs during the POR. Accordingly, for purposes of the
final results, we made adjustments to Financial Express truck rates
based on information contained in the article to derive rates that
would have been effective prior to the price increase. See December 6,
1999, Final Results Factors Valuation Memorandum.
Comment 4: Indirect Labor
The petitioner argues that the Department erroneously excluded from
its calculation of normal value indirect labor amounts reported by the
respondents. The petitioner claims that the Department cannot assume
that indirect labor is included in the factory overhead surrogate
value, as the respondents have not explained what types of work tasks
are included in the indirect labor category. Furthermore, the
petitioner notes that in all prior proceedings of this case, the
Department included indirect labor as reported by the respondents in
the calculation of normal value.
The respondents counter by first noting that, contrary to the
petitioner's assertion, they explained the types of indirect labor
reported to the Department as labor such as maintenance work that is
not directly involved in the production process. The respondents also
claim that the Department's factory overhead calculation, based on the
Reserve Bank of India Bulletin (RBI) data, includes an amount for
indirect labor. Specifically, the respondents state that indirect labor
is included in the expense line-item ``Repairs to Machinery.'' The
respondents further argue that including indirect labor hours may lead
to the Department's double counting of unskilled labor hours as all
unskilled labor hours associated with the production of sebacic acid
have been reported in the factors of production table under the field
``Unskilled Labor Hours.''
DOC Position
We disagree with the respondents' claim that indirect labor is
included in the surrogate factory overhead rate; specifically, we do
not interpret the expense line-item ``Repairs to Machinery'' as
including indirect labor. Our examination of the RBI data indicates
that labor costs, irrespective of whether these costs are direct or
indirect, are reported under separate categories (i.e., ``Salaries,
Wages and Bonuses,'' ``Provident Fund,'' and ``Employees' Welfare
Expenses''). Therefore, we have no basis to conclude that either the
cost element ``Repairs to Machinery'' or other cost items included in
our factory overhead calculation contains labor costs associated with
production.
With respect to the respondents' concern about our double-counting
unskilled labor hours, we first note that unskilled labor hours
reported in the responses pertain to labor directly related to the
production of sebacic acid. The respondents further stated that
reported indirect labor hours include all labor hours which have not
been included in the direct labor total. Therefore, contrary to the
respondents' assertion, there is no reason to believe that including
reported indirect labor hours would lead to the double-counting of
unskilled labor factors. Moreover, as noted by the petitioner, we have
included reported indirect labor hours in our factors of production
calculations in prior proceedings of this case, and we have followed
our precedent in this administrative review by including indirect labor
hours as reported by the respondents in our normal value calculation.
[[Page 69506]]
Comment 5: Octanol Valuation
The petitioner argues that the Department incorrectly based its
octanol surrogate value on general category Chemical Weekly octanol
prices rather than more product-specific Indian Import Statistics
prices for 2-ethylhexanol. The respondents, on the other hand, assert
that the Department correctly used Chemical Weekly ``octanol'' price
quotes which, as a 1996 letter from Chemical Weekly's editor explains,
are for 2-ethylhexanol. The respondents state that the Chemical Weekly
prices for the domestically-produced 2-ethylhexanol better represent 2-
ethylhexanol's actual cost and price in the Indian domestic market than
import prices reported in the Indian Import Statistics. According to
the respondents, the Indian Import Statistics are not as reliable as
the domestic Chemical Weekly prices, as the import prices are from
three exporting countries and provide greater risk of aberrational
sales or purity issues. The respondents argue that even though the
Department has relied on import statistics in other administrative
reviews, the Department should adopt domestic rather than import prices
when deciding between two non-aberrational, contemporaneous surrogate
values.
DOC Position
We agree with the respondents. When the Department is deciding
between tax- and duty-exclusive, non-aberrational domestic and import
prices for surrogate valuation purposes, the Department's preference is
to use domestic prices. Sulfanic Acid from the People's Republic of
China; Final Results of Antidumping Duty Administrative Review, 63 FR
63834, 63837-8 (Nov. 17, 1998). In this review, we have on the record a
letter from the editor of Chemical Weekly which states that the
Chemical Weekly octanol price corresponds to the domestic price for 2-
ethylhexanol. Because we have no claims that either the domestic or
import surrogate value is aberrational, the Department continued to
value octanol using Indian domestic Chemical Weekly prices for 2-
ethylhexanol. In order to have a more representative octanol price for
this review, the Department used twelve octanol rates reflecting each
month of the POR supplied by the editor of Chemical Weekly. See
November 12, 1999, Letter to Chemical Weekly from Christopher Priddy;
see also November 22, 1999, Memo to the File from Christopher Priddy.
Comment 6: Surrogate Value for Activated Carbon
For purposes of our preliminary results, we valued activated carbon
using September 10, 1996, Chemical Weekly export prices. The petitioner
placed on the record published activated carbon import values
contemporaneous to the POR and argues that, because the Department has
stated its preference for using data that includes a range of prices
which are within the POR, we should value activated carbon using these
import values for purposes of our final results.
The respondents contend that the activated carbon import prices are
not effective for liquid phase activated carbon, which is used by the
respondents, but, instead, represent prices for the more expensive gas
phase activated carbon. In support of their claim, the respondents rely
on the Department's past decision in which it found that (1) ``The
import prices do not appear to correspond to the type of activated
carbon used by Chinese manufacturers;'' and (2) The ``great disparity
between the import and export prices of activated carbon suggests that
these price quotes may be for different grades of activated carbon.''
Sulfanilic Acid From the People's Republic of China: Final Results of
Antidumping Duty Administrative Review 62 FR 48597, 48600 (Sept. 16,
1997) (Sulfanilic Acid). Accordingly, the respondents urge the
Department to conclude in this case, as we did in Sulfanilic Acid, that
export prices are the best available information for valuing this
factor.
DOC Position
We agree with the respondents that import values do not appear to
correspond to the type of activated carbon used by the Chinese
producers. The record of this review contains three sources of publicly
available price data on activated carbon: Chemical Weekly import and
export values and public price quotes obtained from Indian companies.
Although the Chemical Weekly prices do not indicate the type or
specification of activated carbon included in the export and import
values, the price quotes submitted by the respondents include values
for the ``powder'' form of activated carbon used by the manufacturers
in this case.
In comparing prices from the three sources we found that Indian
producers' price quotes and export values were comparable, but that
import values were substantially higher than these prices. As noted by
the respondents, the Department determined in Sulfanilic Acid that the
disparity between import and export prices appears to be attributable
to the fact that these prices may be for different types of activated
carbon and that export prices are more representative of the type of
activated carbon used by the Chinese producers. In Sulfanilic Acid, we
also cited the less than fair value investigation of Polyvinyl Alcohol
from the PRC, in which we found that Indian export prices for activated
carbon are more reliable than import prices. See Notice of Final
Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol From
the People's Republic of China, 61 FR 14057 (March 29, 1996).
Therefore, considering the above factors, we find that Chemical
Weekly export prices and public price quotes obtained from Indian
companies are more appropriate activated carbon surrogate values. We
note that for purposes of our preliminary results we used Chemical
Weekly export statistics to value activated carbon. For purposes of the
final results, we have used public price quotes for ``powder''
activated carbon as the surrogate value for this production factor
because these price quotes are supported by publicly available
published information (i.e., the export price) and, most importantly,
are specific to the type of activated carbon used by the Chinese
producers.
Comment 7: Ocean Freight Surrogate Value
The respondents argue that the Department incorrectly used a Sea-
Land Services, Ltd. (Sea-Land) ocean freight rate for the shipment of
oxalic acid to value the respondents' international shipping expenses
for purposes of the preliminary results. The respondents assert that
the Sea-Land ocean freight quote is an unacceptable ocean freight
surrogate value for several reasons. First, the respondents argue that
the Sea-Land quote was dated November 16, 1998, and, therefore,
reflects an ocean freight rate outside the POR. The respondents also
state that the Department should not use a Sea-Land ocean freight rate
for the shipment of oxalic acid to Elizabeth, New Jersey, which
references neither this review's actual subject merchandise, sebacic
acid, nor the actual port of destination, New York, New York.
Moreover, the respondents maintain that Sea-Land's ocean freight
quote is unacceptable, as it is a premium shipping company rate
obtained through private rather than public channels for comparison and
not commercial purposes. Because the respondents view Sea-Land's per
metric ton rate as significantly higher than previous administrative
reviews' ocean
[[Page 69507]]
freight surrogate values, the respondents argue that Sea-Land's quote
does not accurately reflect ocean freight costs set by Chinese market
forces. The respondents urge the Department to follow its precedence in
former administrative reviews or use Federal Maritime Commission rates
to value ocean freight. In the alternative, the respondents urge the
Department to use ocean freight quotes provided in the respondents'
August 26, 1999, submission from Sea-Land, Hanjin Shipping, or American
International Cargo Services.
The petitioner asserts that the Department correctly used the Sea-
Land ocean freight value which the petitioner submitted on January 25,
1999. First, the petitioner states that the Sea-Land ocean freight rate
was obtained on November 16, 1998, but was effective on May 1, 1998,
and, therefore, was within the POR. The petitioner acknowledges that
Sea-Land's ocean freight quote is for Elizabeth, New Jersey, a city
geographically proximate to New York, New York, and argues that a price
differential between the two port cities would be minimal. The
petitioner also maintains that even though it obtained the ocean
freight quote from a Sea-Land sales agent, the rate is publicly
available on Sea-Land's website.
The petitioner argues that the respondents have provided the
Department no information to support their assertions that Sea-Land is
a premier shipping company and that the Sea-Land container rate is only
a comparison rate. In addressing the respondents' arguments concerning
price disparities between Sea-Land's and prior administrative
proceedings' ocean freight rates, the petitioner argues that because
other Departmental proceedings' surrogate values are at least three
years old, they are inaccurate and do not satisfy the Department's
preference for contemporaneous surrogate values. The petitioner urges
the Department to use the Sea-Land quote for purposes of the final
results and cited several past Departmental proceedings in which the
Department relied on Sea-Land shipping quotes to value ocean freight.
DOC Position
For purposes of these final results, we used ocean freight prices
provided to the Department by Maersk, Inc. (Maersk) as surrogate values
for ocean freight. To ascertain the comparability of Sea-Land's and
other international freight carriers' prices for the POR, the
Department contacted Maersk on November 5, 1999, and requested that
Maersk provide its POR-applicable freight quotes and the maximum number
of pounds which Maersk can ship in a twenty-foot container. Maersk
provided May 1, 1997, and May 1, 1998, per-container ocean freight
rates which varied only slightly from the May 1, 1998, Sea-Land rate
provided by the petitioner. See November 8, 1999, and November 9, 1999,
Memos to the File from Christopher Priddy. However, the maximum number
of pounds which Maersk reported it can ship in a twenty-foot container
deviated significantly from the maximum number of pounds used by the
petitioner to calculate the Sea-Land per metric ton rate in its January
25, 1999, submission. We contacted Sea-Land but could not corroborate
the maximum number of pounds it stated it can ship in a twenty-foot
container with the amount used in the petitioner's ocean freight
calculations. See November 10, 1999, Memo to the File from Christopher
Priddy.
Maersk's assertion of the maximum number of pounds capable of being
shipped in a twenty-foot container is consistent with information
previously filed with the Department. See June 20, 1997, Memo to the
File from Charles Riggle for Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof From Romania; Final Results of
Antidumping Duty Administrative Review, 62 FR 32292 (June 13, 1997).
Because we corroborated the maximum number of pounds which Maersk can
ship to customers in a twenty-foot container, we used a per-metric ton
ocean freight surrogate value based on the information provided by
Maersk. The Department has relied on Maersk ocean freight rates in
previous cases for ocean freight valuation purposes. See Tapered Roller
Bearings from Romania, 62 FR 32232 (June 13, 1997); Manganese Metal
From the People's Republic of China; Final Results of Second
Antidumping Administrative Review, 64 FR 49447 (September 13, 1999);
Notice of Preliminary Determination of Sales at Less than Fair Value
and Postponement of Final Determination: Creatine Monohydrate from the
PRC, 64 FR 41375 (July 30, 1999). Our decision to use Maersk
information as the basis for an ocean freight surrogate value is also
based on the fact that Maersk provided rates effective at both the
beginning and end of the POR. By using an average of these two values,
the Department adopted an ocean freight surrogate value more reflective
of the POR than the single-month ocean freight rate supplied by Sea-
Land. Although certain respondents made shipments of sebacic acid to
Chicago, Illinois, the Department was unable to obtain freight rates
through to Chicago. We have accordingly used the Maersk international
freight rate to New York in valuing the respondents' shipments to
Chicago.
Comment 8: By-Product Glycerine Valuation
The respondents argue that the Department should value glycerine
for Hengshui and Zhong He using either an averaged value for refined
and crude glycerine or the surrogate value for 95 percent refined
glycerine. The respondents state that the Chinese sebacic acid
manufacturers produce both crude and refined glycerine and that the
respondents provided the refined glycerine's technical specifications.
The respondents assert that the Department has on the record the
factors used for producing the refined glycerine, as well as statements
by Hengshui and Zhong He that they produce 95 percent refined
glycerine. Accordingly, for Hengshui and Zhong He, the respondents urge
the Department to adjust the glycerine values to 95 percent purity
glycerine prices or use averaged crude and refined quality glycerine
values.
The petitioner maintains that the Department should adjust the
glycerine surrogate value to reflect an 85 percent concentration level
for glycerine produced by Hengshui and Zhong He and an 80 percent
concentration level for glycerine produced by Handan. The petitioner
argues that the respondents' technical specifications regarding refined
glycerine are unacceptable, as the respondents only provide a statement
concerning the 95 percent purity percentage of the produced glycerine.
The petitioner also argues that the respondents have reported in
neither narrative nor diagram form the glycerine refinement process and
the stage at which this refinement occurs. Moreover, the petitioner
alleges that the respondents have provided no information to support
their claim that the reported glycerine production factors are for the
95 percent refined glycerine.
DOC Position
We agree with the respondents and used a surrogate value for
refined glycerine to value Hengshui's and Zhong He's glycerine by-
products and a crude glycerine surrogate value for Handan's by-product
glycerine. For purposes of this administrative review, both Hengshui
and Zhong He reported in their technical description of the sebacic
acid production stages that
[[Page 69508]]
glycerine was later purified by the factories to 95 percent refined
glycerine. We believe that Hengshui's and Zhong He's statements provide
a reasonable basis for determining that the glycerine purification
costs were included in the factors of production which the two
respondents reported to the Department. Furthermore, in the prior
review of this proceeding the Department verified that Handan and
Hengshui produced and sold refined glycerine. The Department grants a
by-product credit based on the subsidiary product's refined value in
those cases in which the factors of production to convert the by-
product to the refined grade have already been included in the subject
merchandise's overall production costs. Sebacic Acid form the PRC;
Final Results of Antidumping Duty Administrative Review, 63 FR 43373,
43378 (Aug. 13, 1998). Because the Department concluded that costs for
Hengshui's and Zhong He's glycerine refinement were included in the
sebacic acid production costs and because Hengshui and Zhong He
reported quantities of refined glycerine produced, we used the refined
glycerine surrogate values for glycerine produced by Hengshui and Zhong
He. We continued using the crude glycerine surrogate to value Handan's
by-product glycerine.
We have calculated a new refined glycerine surrogate value for
purposes of the final results. The Department's basis for a glycerine
surrogate value for purposes of the preliminary results was based on
Chemical Weekly price quotes for glycerine in the Indian domestic
market. See Preliminary Results Factors Valuation Memorandum, August 2,
1999, at Attachment 10. For purposes of valuing refined and crude
glycerine for the final results, we used the averages of Indian Import
Statistics data provided by the respondents for refined and chemically
pure as well as crude glycerine from Japan, Malaysia, the Netherlands,
and the United States. Although the Chemical Weekly price quotes used
for purposes of valuing glycerine in the preliminary results were
contemporaneous to the POR, these price quotes did not reference
glycerine type. In order to accurately value the two types of glycerine
which the respondents reported as by-products of sebacic acid, the
Department used Indian Import Statistics data which referenced the type
of glycerine for which the prices were provided.
Comment 9: Ministerial Errors Alleged by the Petitioner
The petitioner maintains that the Department should correct the
following ministerial errors discussed in the Department's Preliminary
Results Factors Valuation Memorandum: (1) The Department should include
a value for sodium chloride in Zhong He's normal value calculation as
Zhong He reported that it used this input; (2) In Handan's normal value
calculation, the Department should include a value for macropore resin
as Handan reported that it used this chemical; (3) The Department
should correct Handan's total packing costs.
The respondents disagree with the petitioner's assertion regarding
the inclusion of a sodium chloride value in Zhong He's normal value
calculation. The respondents assert that Zhong He stated in its
supplemental questionnaire response that it did not use sodium chloride
during the POR and that the Department correctly omitted sodium
chloride from Zhong He's normal value calculation.
DOC Position
We agree with the petitioner concerning alleged errors (2) and (3)
and have corrected for these errors; we agree with the respondents
concerning alleged error (1) and continued to omit sodium chloride from
Zhong He's normal value calculation.
Final Results of the Review
As a result of our analysis of the comments we received, we
determine that the following weighted-average margins exist for the
period July 1, 1997 through June 30, 1998:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Tianjin Chemicals I/E Corp................................. 2.74
Sinochem International Chemicals Corp...................... 0.00
Guangdong Chemicals I/E Corp............................... 9.01
PRC-Wide Rate.............................................. 243.40
------------------------------------------------------------------------
Assessment Rates
The Department shall determine and the Customs Service shall assess
antidumping duties on all appropriate entries. We have calculated
importer-specific assessment rates based on the ratio of the total
amount of antidumping duties calculated for the examined sales to the
total estimated entered value of the examined sales. We estimated each
exporter's entered values by subtracting international movement
expenses from each exporter's reported gross unit prices. These rates
will be assessed uniformly on all entries of that particular importer
made during the POR. Pursuant to 19 CFR 351.106(c)(2), we will instruct
the Customs Service to liquidate without regard to antidumping duties
all entries for any importer for whom the assessment rate is deminimis
(i.e., less than 0.50 percent). 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) The cash
deposit rates for Tianjin Chemicals and Guangdong Chemicals will be the
rates stated above, and the cash deposit rate for SICC will be zero;
(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, the cash deposit rates
will be 243.40 percent, the PRC country-wide rate; 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 serves as a final reminder to importers of their
responsibility under 19 CFR 351.402(f) 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 notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 351.305(a)(3). See Antidumping and
Countervailing Duty Proceedings: Administrative Protective Order
Procedures; Procedures for Imposing Sanction for Violation of a
Protective Order, 63 FR 24391, 24404 (May 4, 1998). Timely written
notification of return/destruction of APO materials or conversion to
judicial protective order is hereby requested. Failure to comply with
the regulations and terms of the APO is a sanctionable violation.
[[Page 69509]]
This administrative review is issued and published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: December 6, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-32224 Filed 12-10-99; 8:45 am]
BILLING CODE 3510-DS-P