[Federal Register Volume 65, Number 8 (Wednesday, January 12, 2000)]
[Notices]
[Pages 1849-1851]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-745]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-570-825]


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

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

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

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SUMMARY: On October 19, 1999, the United States Court of International 
Trade (``CIT'') sustained the remand and upheld the Department of 
Commerce's (``the Department'') findings in Remand Determination: Union 
Camp Corporation v. United States (``Second Remand''), Consol. Court 
No. 97-03-00483, Slip Op. 99-40 (September 2, 1999), affecting the 
final assessment rate for the 1994/95 administrative review in the case 
of sebacic acid from the People's Republic of China. See Union Camp 
Corporation v. United States, Slip Op. 99-111, (CIT October 19, 1999) 
(Consol. Court No. 97-03-00483). Because no appeal was filed within the 
requested period, that decision is final and conclusive. Therefore, we 
are amending our final results of review, and we will instruct the U.S. 
Customs Service to liquidate entries subject to this review. A summary 
of the specific issues from the two remands in this case are listed 
below.

EFFECTIVE DATE: January 12, 2000.

FOR FURTHER INFORMATION CONTACT: Brandon Farlander or Rick Johnson,

[[Page 1850]]

Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th and Constitution Avenue, NW, Washington, 
DC 20230; telephone: (202) 482-0182 or (202) 482-3818, respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act (``URAA''). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the current regulations at 19 CFR Part 351 (1998).

SUPPLEMENTARY INFORMATION:

Background

    On March 7, 1997, the Department published its final results of the 
first administrative review of the antidumping duty order on sebacic 
acid from the People's Republic of China (``PRC''). See Sebacic Acid 
From the People's Republic of China; Final Results of Antidumping Duty 
Administrative Reviews, 62 FR 10530 (March 7, 1997) (``Final 
Results''). In the Final Results, we used the Indian price for octanol-
1 as a surrogate for octanol-2 because we determined that octanol-1 was 
comparable to octanol-2 based on its similar molecular formula. While 
we determined that the value of octanol cited in the Chemical Weekly 
(Indian) was a value for octanol-1, it was not clear from the 
publication whether the octanol value quoted was actually for octanol-
1, octanol-2, or a combination of the two products. We also determined 
that the surrogate values obtained from The Economic Times (Bombay) 
were inclusive of taxes. We used an average, tax-exclusive, castor oil 
value of $17.93/kg. Finally, we did not allocate a glycerine by-product 
credit to sebacic acid and octanol-2.
    Both Union Camp and Dastech challenged the Department's final 
results on several grounds, and on March 27, 1998, the CIT issued its 
first remand to the Department to reconsider the following four issues: 
(1) Value octanol-2 based on an appropriate cost of crude octanol-2 
(which may be the U.S. cost but which may not be based solely on 
similar molecular structure without any additional evidence), and then 
recalculate the by-product/co-product determination with the correct 
value; (2) reconsider whether the surrogate values obtained from The 
Economic Times were inclusive or exclusive of taxes; (3) calculate the 
average castor oil prices using the Indian rupee figure 23.32/kg; and 
(4) allocate the glycerine by-product credit to sebacic acid and 
octanol-2. As discussed below, the Department complied with the Court's 
order.
    On June 25, 1998, the Department submitted to the CIT the results 
of the first remand. See Remand Determination: Union Camp Corporation 
v. United States (``First Remand''), Consol. Court No. 97-03-00483, 
Slip Op. 98-38 (June 25, 1998). A summarization of our response for 
each of the four issues is listed below.
    For the first issue, we valued the subsidiary product, capryl 
alcohol, also known as octanol-2, based on the ``cost'' of crude 
octanol-2, as the CIT instructed. Based on our recalculation of the by-
product/co-product analysis for this subsidiary product, we determined 
that octanol-2 was now a by-product, instead of a co-product, as 
determined in the Final Results. We complied with the CIT's order; 
however, we respectfully disagreed with the CIT's remand to value 
octanol-2 based on the ``cost'' of crude octanol-2. Instead, we stated 
that we believe that the refined octanol value from the Chemical Weekly 
(India) is an appropriate surrogate, based on the following reasons. 
First, the Department believed that a more accurate margin results if 
subsidiary products, such as octanol-2, are valued using publicly 
available information reflecting actual market prices rather than 
petitioner's internal cost. We noted that we used petitioner's U.S. 
internal cost for octanol-2 because we did not have any other surrogate 
value for crude octanol-2. Also, we noted that the production of 
sebacic acid results in the production of crude octanol-2 as a 
subsidiary product. However, the additional sebacic acid factors of 
production used to calculate normal value already incorporate the 
relatively few factors of production (labor and energy) necessary to 
refine crude octanol-2. Thus, the Department believed that its use of 
the surrogate value for refined octanol-2 resulted in a more accurate 
by-product/co-product analysis. Finally, we noted our belief to the CIT 
that the use of crude octanol-2 as a surrogate value results in less 
accurate dumping margins.
    Second, we addressed additional information on the record, which 
demonstrated that octanol-1 and octanol-2 are comparable merchandise, 
based on overlapping uses. Thus, we noted that given the fact that the 
Chemical Weekly (India) does not specify a particular type of octanol, 
we believed that evidence on the record suggested that the refined 
octanol price listed in the Chemical Weekly (India) is a reasonable 
surrogate value for octanol-2.
    Third, we noted that, as directed by the statue, to the extent 
possible, the Department values factors of production from a country 
comparable to the non-market economy in terms of overall economic 
development. We continued, stating that while the Department may use 
specific values from a country not at a comparable level of development 
(including the United States), we do so only rarely and only if we 
cannot find an appropriate value in a comparable economy. See Final 
Determination of Sales at Less Than Fair Value: Beryllium Metal and 
High Beryllium Alloys from the Republic of Kazakstan, 62 FR 2648 
(January 17, 1997).
    For the second issue, we did not deduct taxes for castor oil, 
castor seed, and castor seed cake price quotes from The Economic Times 
(India), consistent with the Department's practice to exclude taxes 
only when a price quote is specifically identified as being inclusive 
of taxes. See Final Antidumping Duty Determination: Polyvinyl Alcohol 
from the People's Republic of China, 61 FR 14057 (March 29, 1996).
    For the third issue, we used the Indian rupee value of 23.32/kg for 
castor oil as the surrogate value.
    For the fourth issue, we did not allocate the glycerine by-product 
credit to sebacic acid and octanol-2 because there was no co-product.
    On April 29, 1999, the CIT issued its second remand in this segment 
of the proceeding to the Department to reconsider the following three 
issues: (1) Value the octanol-2 that results from the sebacic acid 
production process based on an appropriate surrogate value for this 
product, and then recalculate the by-product/co-product determination 
in light of this surrogate value. This surrogate value may be an 
appropriate foreign or U.S. price or cost for comparable merchandise. 
In seeking the best information available to use as a surrogate, the 
Department was instructed to specifically consider and address all 
alternative surrogate values that have been placed on the record by the 
parties; (2) open the administrative record and consider the letter 
from the editor of the Chemical Weekly (India). Unless the Department 
was unable to identify substantial record evidence on remand which 
demonstrated that, notwithstanding the letter from the editor of the 
Chemical Weekly (India), the ``octanol'' quote from the Chemical Weekly 
(India) was actually a quote for octanol-1, the Department may not 
continue to argue for the use of this figure on the grounds that 
octanol-1 and

[[Page 1851]]

octanol-2 are ``comparable merchandise''; and (3) consider, and express 
its views on, whether it should accept new evidence concerning the 
comparability of 2-ethylhexanol and octanol-2. Should the Department 
come to the conclusion that it should accept such evidence, the 
Department may do so on remand and, if appropriate, use this evidence 
as a basis for justifying its use of the Chemical Weekly (India) value 
for ``octanol.'' As discussed below, the Department complied with the 
Court's order.
    On September 2, 1999, the Department submitted the results of the 
second remand to the CIT. See Second Remand, Consol. Court No. 97-03-
00483, Slip Op. 99-40 (September 2, 1999). A summarization of our 
response for each of the three issues is listed below.
    For the first issue, we determined that 2-ethylhexanol and octanol-
2 are comparable chemicals, and that the octanol value quoted in the 
Chemical Weekly (India) is a value for 2-ethylhexanol. We considered 
the other surrogate values placed on the record, such as the U.S. cost 
for crude octanol-2 and the U.S. price for refined octanol-2, and 
determined, based on our criteria for selecting the appropriate 
surrogate value for octanol-2 as stated in the First Remand, that the 
refined octanol value from Chemical Weekly (India), which was for 2-
ethylhexanol, was the best available surrogate value. Based on 
reexamination of the by-product/co-product determination in light of 
this surrogate value, we determined that octanol-2 was a co-product of 
sebacic acid production because the overall value of octanol-2 was 
significant relative to the value of sebacic acid and the other 
subsidiary products. Also, because octanol-2 was now a co-product, 
rather than a by-product, we were able to allocate the glycerine by-
product credit to sebacic acid and octanol-2, as instructed by the CIT 
in the First Remand.
    For the second issue, after an analysis of certain information 
placed on the record, we determined that the octanol value quoted in 
the Chemical Weekly (India) was for 2-ethylhexanol, and not for 
octanol-1.
    For the third issue, we determined to open the administrative 
record to accept new evidence concerning the comparability of 2-
ethylhexanol and octanol-2. Based on this new information, we 
determined that we had substantial evidence establishing that 2-
ethylhexanol (also known as 2-ethylhexanol alcohol and octyl alcohol) 
and octanol-2 were comparable merchandise based on similar uses. Thus, 
we concluded that the Chemical Weekly (India) value for 2-ethylhexanol 
is the most appropriate surrogate value.
    As noted above, on October 19, 1999, the CIT sustained and upheld 
our finding of the Department's Second Remand and no appeal was filed. 
As there is now a final and conclusive court decision in this action, 
we are amending our final results of review in this matter and we will 
instruct the U.S. Customs Service to liquidate entries subject to this 
review in accordance with the remand results. Because the Department 
has published subsequent administrative reviews that govern future cash 
deposits, the cash deposit rates will be governed not by the rate 
published in the Second Remand, but by the most recently completed 
administrative review, according to the Department's normal procedures. 
See Sebacic Acid From the People's Republic of China; Final Results of 
Antidumping Duty Administrative Review, 63 FR 43373-43379 (August 13, 
1998).

Amended Final Results

    Pursuant to 516A(e) of the Act, we are now amending the final 
results of administrative review of the antidumping duty order on 
sebacic acid from the People's Republic of China for the period July 1, 
1994, through June 30, 1995. As a result of our recalculation of the 
margins from the Second Remand, the final weighted-average margins for 
Sinochem International Chemicals Company (``SICC''), Tianjin Chemicals 
Import and Export Corporation (``Tianjin''), and Guangdong Chemicals 
Import and Export Corporation (``Guangdong'') changed. The final 
weighted-average margins for the above period of review are as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
SICC.......................................................        75.36
Tianjin....................................................         5.74
Guangdong..................................................         36.5
Sinochem Jiangu Import and Export Corporation..............       243.40
Country-Wide Rate..........................................       243.40
------------------------------------------------------------------------

    The Department will determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. We calculated 
importer-specific duty assessment rates for the merchandise based on 
the ratio of the total amount of antidumping duties calculated for the 
examined sales to the total entered value of sales examined. The 
Department will issue appraisement instructions to the U.S. Customs 
Service after publication of this amended final results of review.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: January 5, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-745 Filed 1-11-00; 8:45 am]
BILLING CODE 3510-DS-P