[Federal Register Volume 65, Number 67 (Thursday, April 6, 2000)]
[Notices]
[Pages 18059-18062]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-8563]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-804]


Sparklers 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: In response to a request by the petitioner, Diamond Sparkler 
Company (``Diamond''), the Department of Commerce (``the Department'') 
is conducting an administrative review of the antidumping duty order on 
sparklers from the People's Republic of China (``PRC''). The review 
covers three manufacturers/exporters of this merchandise to the United 
States, Guangxi Native Produce Import & Export Corporation, Beihai 
Fireworks and Firecrackers Branch (``Guangxi''); Hunan Provincial 
Firecrackers & Fireworks Import & Export (Holding)

[[Page 18060]]

Corporation, Liling City Fireworks Bomb Fty. (``Hunan''); and Jiangxi 
Native Produce Import & Export Corporation, Guangzhou Fireworks Company 
(``Jiangxi'') (collectively ``the respondents''). The period covered is 
June 1, 1998, through May 31, 1999. As a result of the review, the 
Department has preliminarily determined that dumping margins exist for 
the respondents for the covered period.
    We invite interested parties to comment on these preliminary 
results. 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 arguments.

EFFECTIVE DATE: April 6, 2000.

FOR FURTHER INFORMATION CONTACT: Paige Rivas or Nithya Nagarajan, 
Antidumping/Countervailing Duty Enforcement, Office IV, Group II , 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230; telephone: (202) 482-0651 or 482-5253, 
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 (``URAA''). In addition, 
all references to the Department's regulations are to 19 CFR part 351 
(April 1999).

Background

    On June 18, 1991, the Department published in the Federal Register 
the antidumping duty order on sparklers from the PRC, see, Antidumping 
Duty Order: Sparklers from the People's Republic of China, 56 FR 27946 
(June 18, 1991), as amended by from the People's Republic of China: 
Adverse Decision and Amendment to Final Determination of Sales at Less 
Than Fair Value and Antidumping Duty Order in Accordance with Decision 
on Remand, 58 FR 40624 (July 29, 1993). On June 9, 1999, the Department 
published in the Federal Register a notice of opportunity to request an 
administrative review of the antidumping duty order on sparklers from 
the PRC covering the period June 1, 1998, through May 31, 1999. 
Antidumping and Countervailing Duty Order, Finding or Suspended 
Investigation: Opportunity to Request Administrative Review, 64 FR 
30962 (June 9, 1999). On June 30, 1999, the petitioner requested, in 
accordance with 19 CFR Sec. 351.213, that we conduct an administrative 
review of exports to the United States by three manufacturers/exporters 
of sparklers from the PRC. We published a notice of initiation of this 
antidumping duty administrative review on July 29, 1999. Notice of 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 64 FR 41074 (July 29, 
1999).
    Under section 751(a)(3)(A) of the Act, the Department may extend 
the deadline for issuing a preliminary determination in an 
administrative review if it determines that it is not practicable to 
complete the preliminary review within the statutory time limit of 245 
days. On March 7, 2000, the Department published a notice of extension 
of the time limit for the preliminary results in this case to March 31, 
2000. See Sparklers from the People's Republic of China: Time Limit, 65 
FR 11985 (March 7, 2000).
    The Department is now conducting that review in accordance with 
section 751 of the Act.

Period of Review

    The period of review (POR) is June 1, 1998 through May 31, 1999.

Scope of Review

    The products covered by this administrative review are sparklers 
from the People's Republic of China. Sparklers are fireworks, each 
comprising a cut-to-length wire, one end of which is coated with a 
chemical mix that emits bright sparks while burning. Sparklers are 
currently classifiable under subheading 3604.10.00 of Harmonized Tariff 
Schedules (``HTS''). The HTS subheadings are provided for convenience 
and customs purposes. The written description remains dispositive as to 
the scope of this proceeding.

Separate Rates Determination

    In previous reviews, the Department has treated the PRC as a non-
market economy (``NME'') country. We have no evidence suggesting that 
this determination should be changed. Accordingly, the Department has 
determined that NME treatment is appropriate in this review. See 19 
U.S.C. 1677(18)(c)(i).
    To establish whether a company operating in a NME is sufficiently 
independent to be entitled to a separate rate, the Department analyzes 
each exporting entity 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''). Under this test, NMEs are entitled 
to separate, company-specific margins when they can demonstrate an 
absence of government control, both in law and in fact, with respect to 
export activities. Sparklers, 56 FR at 20589. Evidence supporting, 
though not requiring, a finding of de jure absence of government 
control over export activities includes: (1) An absence of restrictive 
stipulations associated with the individual exporter's business and 
export licenses; (2) any legislative enactments decentralizing control 
of companies; and (3) any other formal measures by the government 
decentralizing control of companies. Id. De facto absence of government 
control over exports is based on four factors: (1) Whether each 
exporter sets its own export prices independent of the government and 
without 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 or financing of losses; 
(3) whether each exporter has the authority to negotiate and sign 
contracts and other agreements; and (4) whether each exporter has 
autonomy from the government regarding the selection of management. See 
Silicon Carbide, 59 FR at 22587.
    In the instant review, none of the three respondents named above 
submitted responses to the separate rates section of the Department's 
questionnaire. We therefore preliminarily determine that these 
companies did not establish their entitlement to a separate rate.

Use of Facts Otherwise Available

    On October 14, 1999, the Department sent each of the respondents a 
questionnaire and cover letter, explaining the review procedures, by 
air mail through FedEx International Airway Bill. A response to the 
questionnaire, which covered exports to the United States for the 
period of review, was due by November 27, 1999. We did not receive 
responses by the due date. On January 12, 2000, we sent a follow-up 
letter regarding the past due dates for the questionnaire responses and 
noting the necessity of relying on facts available. Because we have 
received no responses and have not been contacted by the respondents, 
we determine that the use of facts available is appropriate.

[[Page 18061]]

    Section 776(a)(2) of the Act provides that ``if an interested party 
or any other person (A) withholds information that has been requested 
by the administering authority; (B) fails to provide such information 
by the deadlines for the submission of the information or in the form 
and manner requested, subject to subsections (c)(1) and (e) of section 
782; (C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.''
    Because all three respondents have failed to respond to the 
original questionnaires and have refused to participate in this 
administrative review, we find that, in accordance with sections 
776(a)(2)(A) and (C) of the Act, the use of total facts available is 
appropriate. See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value: Persulfates from The People's Republic of China, 62 FR 
27222, 27224 (May 19, 1997); and Certain Grain-Oriented Electrical 
Steel From Italy: Final Results of Antidumping Duty Administrative 
Review, 62 FR 2655 (Jan. 17, 1997) (for a more detailed discussion, see 
Certain Grain-Oriented Electrical Steel From Italy: Preliminary Results 
of Antidumping Duty Administrative Review, 61 FR 36551, 36552 (July 4, 
1996)) (Grain-Oriented Electrical Steel from Italy).
    Section 776(b) of the Act provides that, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of the 
party as facts otherwise available. Adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See Statement 
of Administrative Action (``SAA'') accompanying the URAA, H.R. Doc. No. 
103-316, at 870 (1994). Furthermore, ``an affirmative finding of bad 
faith on the part of the respondent is not required before the 
Department may make an adverse inference.'' See Antidumping Duties; 
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997) 
(Final Rule). Section 776(b) of the Act authorizes the Department to 
use as adverse facts available information derived from the petition, 
the final determination from the less than fair value (``LTFV'') 
investigation, a previous administrative review, or any other 
information placed on the record.
    Under section 782(c) of the Act, a respondent has a responsibility 
not only to notify the Department if it is unable to provide requested 
information, but also to provide a ``full explanation and suggested 
alternative forms.'' The respondents failed to respond to our requests 
for information, thereby failing to comply with this provision of the 
statute. Therefore, we determine that respondents failed to cooperate 
to the best of their ability, making the use of an adverse inference 
appropriate. In this proceeding, in accordance with Department 
practice, as adverse facts available we have preliminarily assigned the 
respondents the rate of 93.54 percent, which is the highest margin 
determined in any segment of this proceeding. See Extruded Rubber 
Thread from Malaysia: Final Results of Antidumping Duty Administrative 
Review, 65 FR 6140,6141 (February 8, 2000) (Extruded Rubber Thread from 
Malaysia). As adverse facts available, the Department uses the highest 
rate ever determined for any respondent in any segment of the 
proceeding because it assumes that if a respondent could demonstrate 
that its actual margins were lower, it would participate in the review 
and do so. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 
1190-91 (Fed. Cir. 1990). Moreover, respondents are not benefitting by 
their failure to cooperate because they are receiving the highest rate 
ever calculated, which is higher than the petition rate. Furthermore, 
we have no evidence that indicates any other rate is appropriate.
    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``[i]nformation derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870. The 
SAA states that ``corroborate'' means to determine that the information 
used has probative value. See id. To corroborate secondary information, 
the Department will, to the extent practicable, examine the reliability 
and relevance of the information to be used. A respondent's own current 
rate has probative value. In this case, respondents already are subject 
to a PRC-wide cash deposit rate of 93.54 percent. It is reasonable to 
assume that if they could have demonstrated that their actual dumping 
margins are lower, they would have participated in this review and 
attempted to do so.
    In addition, unlike other types of information, such as input costs 
or selling expenses, there are no independent sources for calculated 
dumping margins. The only source for margins is administrative 
determinations. Thus, in an administrative review, if the Department 
chooses as total adverse facts available a calculated dumping margin 
from a prior segment of the proceeding, it is not necessary to question 
the reliability of the margin for that time period. See Grain-Oriented 
Electrical Steel from Italy, 61 FR at 36552. Also, with respect to the 
relevance aspect of corroboration, the Department will consider 
information reasonably at its disposal to determine whether a margin 
has relevance. In this case, if any of the respondents could have 
demonstrated its actual margins were lower (and that it qualifies for a 
separate rate), we presume it would have done so. Further, assigning a 
lower rate would reward these exporters for their failure to cooperate. 
Thus, these exporters' own current rate is relevant.
    We also note that the Department will disregard the margin and 
determine an appropriate margin where circumstances indicate that the 
selected margin is not appropriate as adverse facts available. For 
example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping 
Administrative Review, 61 FR 6812 (February 22, 1996), the Department 
disregarded the highest margin in that case as adverse best information 
available (the predecessor to facts available) because the margin was 
based on another company's uncharacteristic business expense resulting 
in an unusually high margin. Similarly, the Department does not apply a 
margin that has been discredited. See D & L Supply Co. v. United 
States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not 
use a margin that has been judicially invalidated); see also Borden 
Inc. v. United States, 4 F. Supp. 2d 1221, 1246-48 (CIT 1998) (the 
Department may not use an uncorroborated petition margin that is high 
when compared to calculated margins for the period of review). None of 
these unusual circumstances are present here. Moreover, there is no 
evidence on the record indicating that the selected margin is not 
appropriate as adverse facts available.

[[Page 18062]]

Suspension of Liquidation

    As a result of our review, we preliminarily determine that the 
following margin exists for the period June 1, 1998, through May 31, 
1999:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
PRC-wide...................................................        93.54
------------------------------------------------------------------------

Cash Deposit

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) For previously 
reviewed or investigated companies that have a separate rate and for 
which no review was requested, the cash deposit rate will continue to 
be the company-specific rate published for the most recent period; (2) 
for all other PRC exporters, the cash deposit rate will be the rate 
established in the final results of this administrative review; and (3) 
the cash deposit rate for non-PRC exporters will be the rate applicable 
to the PRC supplier of the exporter. These deposit requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative reviews.
    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 days after the publication of 
this notice. Pursuant to 19 CFR 351.309, interested parties may submit 
written comments in response to these preliminary results. Case briefs 
must be submitted 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 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 raised in the case and rebuttal briefs. 
Unless the Secretary specifies otherwise, the hearing, if requested, 
will be held two days after the date for submission of rebuttal briefs, 
that is, thirty-seven days after the date of publication of these 
preliminary results. The Department will publish the final results of 
this administrative review, including the results of its analysis of 
issues raised in any case or rebuttal brief or at a hearing, not later 
than 120 days after the date of publication of these preliminary 
results, unless this time period is extended.

Assessment

    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions directly to the U.S. Customs 
Service.

Notification to Parties

    This notice also serves as a preliminary 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 administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: Dated: March 31, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-8563 Filed 4-5-00; 8:45 am]
BILLING CODE 3510-DS-P