[Federal Register Volume 65, Number 174 (Thursday, September 7, 2000)]
[Notices]
[Pages 54224-54227]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22990]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-504]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review and Partial Recission of Review: Petroleum Wax Candles From the 
People's Republic of China

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

ACTION: Notice of Preliminary Results of Antidumping Duty 
Administrative Review and Partial Recission of Review

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EFFECTIVE DATE: September 7, 2000.

FOR FURTHER INFORMATION CONTACT: Martin Odenyo or Robert M. James, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW. 
Washington, DC 20230; telephone: (202) 482-5254, or (202) 482-0649, 
respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff 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, unless 
otherwise indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to 19 CFR part 351 (April 1, 2000).

SUPPLEMENTARY INFORMATION:

Background

    On August 11, 1999, the Department published in the Federal 
Register at 64 FR 43649 a ``Notice of Opportunity to Request an 
Administrative Review'' of the antidumping duty order on petroleum wax 
candles from the People's Republic of China (PRC) covering the period 
August 1, 1998, through July 31, 1999.
    On August 13, 1999, in accordance with 19 CFR 351.213(b), counsel 
for three PRC companies requested that we conduct an administrative 
review. These three companies are Shanghai Gift and Travel Products 
Import and Export Corporation (Shanghai), Liaoning Native Product 
Import and Export Corporation (Liaoning), and Tianjin Native Produce 
Import and Export Group Corporation, Ltd. (Tianjin). On August 31, 
1999, the National Candle Association (petitioner) requested that we 
conduct an administrative review of twenty-two specific producers/
exporters: CNACC (Zhejiang Imports & Export Co., Ltd., Shanghai Ornate 
Candle Art Co., Ltd., China Overseas Trading Dalian Corp., Jilin 
Province Arts and Crafts, China Hebei Boye Great Nation Candle Co., 
Ltd., Taizhou Sungod Gifts Co., Ltd., Zhejiang Native Produce & Animal 
By-Products, Import & Export Corp., Cnart China Gifts Import & Export 
Corp., Liaoning Light Industrial Products Import & Export Corp., Jintan 
Foreign Trade Corp., Jiangsu Yixing Foreign Trade Corp., Tonglu Tiandi, 
Zhongnam Candle, China Packaging Import & Export Liaoning Co., Kwung's 
International Trade Co., Ltd., Shanghai Gift & Travel Products Imp. & 
Exp. Corp., Liaoning Native Product Import & Export Corporation, 
Tianjin Native Produce Imp. & Exp. Group Corp. Ltd., Candle World 
Industrial Co., Fu Kit, Shanghai Zhen Hua, and Universal Candle 
Company, Ltd. We published a notice of initiation of this antidumping 
duty administrative review for these companies (respondents) on October 
1, 1999, at 64 FR 53318.
    On October 15, 1999, we issued questionnaires to the each of the 
twenty-two respondents. In response to our request for information, 
Jilin Province Arts and Crafts (Jilin) reported that it had no sales or 
shipments during the POR. Our review of Customs import data indicated 
that there were no entries by Jilin during the POR. See Memorandum to 
the File, July 31, 2000. Accordingly, we are rescinding the review with 
respect to Jilin.
    Only five respondents responded to section A of the antidumping 
questionnaire. Liaoning, Tianjin, and Shanghai submitted responses to 
section A on November 29, 1999, Universal Candle Company, Ltd. 
(Universal) submitted its response on December 20, 1999, and Rich 
Talent Trading, Ltd. (Rich Talent) submitted its response on December 
21, 1999. Liaoning, Tianjin, and Universal responded to sections C and 
D of the questionnaire in March 2000. Tianjin submitted a corrected 
version of these documents on April 24, 2000. Rich Talent did not 
submit a response to sections C and D of the questionnaire, nor has the 
company responded to any further requests for information by the 
Department. On February 28, 2000, Shanghai formally notified the 
Department that it would no longer participate in this review. 
Accordingly, the Department considers Rich Talent, Shanghai, and the 
remaining sixteen named companies that failed to respond to our 
antidumping questionnaires to be uncooperative respondents, as 
discussed further below.

[[Page 54225]]

    The Department issued supplemental section A questionnaires to Rich 
Talent, Liaoning, Tianjin, and Universal on March 21, 2000. We received 
responses from Liaoning, Tianjin, and Universal in April, 2000. The 
Department issued supplemental sections C and D questionnaires and a 
second supplemental section A questionnaire to the respondents in May, 
2000. Liaoning, Tianjin and Universal submitted responses to these 
supplemental questionnaires in June, 2000. As discussed above, Rich 
Talent did not respond to any of the Department's supplemental 
questionnaires.
    On April 18, 2000, the Department published in the Federal Register 
a notice of extension of the time limit for the preliminary 
determination in this review (65 FR 20800). This notice extended the 
preliminary determination until August 30, 2000, and listed the four 
respondents which to date had responded to the Department's 
questionnaire.
    On March 21, 2000, the Department invited interested parties to 
provide publicly available information (PAI) for valuing the factors of 
production and for surrogate country selection. We received a joint 
response from Liaoning and Tianjin on April 24, 2000. Petitioner 
submitted a rebuttal to the respondents' submission on May 8, 2000. On 
June 16, 2000, we selected India as the surrogate country for the PRC 
in this review.

Scope of Review

    The products covered by this order are certain scented or unscented 
petroleum wax candles made from petroleum wax and having fiber or 
paper-cored wicks. They are sold in the following shapes: tapers, 
spirals, and straight-sided dinner candles; rounds, columns, pillars, 
votives; and various wax-filled containers. The products were 
classified under the Tariff Schedules of the United States (TSUS) item 
755.25, Candles and Tapers. The products are currently classified under 
the Harmonized Tariff Schedule (HTS) item 3406.00.00. Although the HTS 
subheading is provided for convenience and customs purposes, our 
written description of the scope of this proceeding remains 
dispositive.

Use of Facts Otherwise Available

    The Department preliminarily determines that the twenty-one 
respondents in this review should be assigned a dumping margin based 
upon the facts otherwise available.
    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.'' The Department has 
determined that the use of facts available is appropriate for the 
eighteen respondents that failed wholly to respond to our 
questionnaires since they withheld information necessary to complete 
this review and did not act to the best of their ability. See, e.g., 
Sulfanilic Acid From the People's Republic of China; Final Results of 
Antidumping Duty Administrative Review, 65 FR 13366, 13367 (March 13, 
2000). Similarly, based on the facts in this review, described as 
follows, the Department has preliminarily determined that the use of 
facts available is warranted for Liaoning, Tianjin, and Universal. 
These three respondents withheld information necessary to complete this 
review, failed to provide such information by the deadlines in the form 
and manner requested, and submitted unverifiable information. 
Therefore, pursuant to section 776(a)(2) (A), (B), and (D) of the 
Tariff Act, the Department will use the facts otherwise available to 
determine the appropriate antidumping margins for these companies in 
this review.
    We determine that the questionnaire responses submitted by 
Liaoning, Tianjin, and Universal are deficient and contain unreliable 
and unverifiable data which cannot be used as the basis of a calculated 
dumping margin. These three respondents did not respond adequately to 
the original and supplemental questionnaires which instructed the 
respondents to explain and provide sample calculations of the 
methodologies used to construct the response to section D of the 
questionnaire. Where such information was submitted, it was often 
either incomplete or contradictory to the point that serious concerns 
remain regarding the basic reliability of the data.
    Throughout the majority of this administrative review leading up to 
our preliminary results, Universal insisted that all of its POR 
shipments were not subject to the antidumping order, and stated that 
all in-scope candles were produced and shipped from Hong Kong, as 
opposed to mainland China. During the period that Universal maintained 
this position, the company did not submit any sales data pertaining to 
sales of subject merchandise from mainland China. Furthermore, although 
the Department requested information relating to Universal's worldwide 
legal and operational affiliations, Universal's initial responses were 
minimal. Finally, after the Department repeatedly requested such 
information, Universal began submitting basic information pertaining to 
affiliations and sales of what it referred to as ``potentially subject 
merchandise.'' Universal's supplemental responses included numerous new 
and often contradictory sales data and information on affiliations 
which did not reconcile with previous submissions (e.g. local 
subcontracting, overseas business relationships). The contradictory 
information on the record suggests that Universal may have had sales of 
subject merchandise during the POR. However, the wholly incomplete and 
contradictory information submitted by Universal provides the 
Department with no basis for determining an accurate margin, and as 
such, is unverifiable.
    With respect to reported costs of production, Universal initially 
stated that it keeps production records for its facilities in mainland 
China. However, contrary to the company's earlier statements, Universal 
subsequently claimed that it does not maintain PRC production records, 
since the maintenance of such records is not required by law in the 
PRC. Accordingly, Universal's reported raw material input and labor 
amounts are based upon estimates, using samples of those candles still 
available to the company, rather than based upon actual company 
records. See April 13, 2000 supplemental section A response at 10; June 
14, 2000, second supplemental section A response at 2 and 19; and May 
31, 2000 supplemental section D response at 10. In many instances the 
estimated quantity of the primary raw material input, paraffin wax, was 
inconsistent with the net weight of the product as reported in the 
response to section C of the questionnaire. Thus, Universal failed to 
provide verifiable factors of production data, and the information it 
did submit was often contradictory.
    With respect to Liaoning and Tianjin, two of the three factories 
which supplied Liaoning with its subject merchandise did not respond to 
the Department's request for information. We noted in our May 3, 2000 
supplemental section C questionnaire that the Department may rely on 
facts otherwise available as a substitute for the missing information. 
In addition, in response to many basic supplemental

[[Page 54226]]

questions, Liaoning and Tianjin both failed to provide the information 
requested, stating that such factor of production information was 
unknown or was not available at the time. Specifically, in response to 
numerous fundamental questions from the Department, Liaoning and 
Tianjin responded either ``unknown'', ``not available at this time'', 
or ``as soon as it becomes available, the information will be 
submitted.'' However, the type of information the Department requested 
was standard business information typically maintained by most 
businesses, and representative of the type of information the 
Department has asked of Chinese companies in previous administrative 
reviews (e.g. methodologies used to allocate the reported factors 
data). Moreover, as stated previously, Liaoning and Tianjin, through 
counsel, requested that the Department initiate this antidumping 
review. The antidumping order for this case was issued in 1986, and 
Liaoning, Tianjin, and Universal should have anticipated that the 
Department would require verifiable production and sales information to 
complete its analysis in any subsequent reviews. (For more detailed 
information on these three companies' questionnaire responses, see 
petitioner comments filed on June 16, 2000).
    As previously described, the Department granted numerous requests 
for extensions of time to the respondents in order for the companies to 
supply the Department with the necessary information for a calculation 
of a reliable antidumping margin. Despite these extensions, the 
responses from Liaoning, Tianjin, and Universal were wholly inadequate 
and contained much unsubstantiated, and unverifiable information. This 
information is too incomplete to serve as a reliable basis for reaching 
a determination in this review within the meaning of section 782(e) of 
the Tariff Act. Therefore, we preliminarily determine that these three 
respondents failed to cooperate by not acting to the best of their 
ability. As previously noted, we similarly find that the eighteen 
uncooperative respondents failed to act to the best of their ability. 
Under section 782(c) of the Tariff 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 uncooperative respondents that 
failed to respond to our requests for information did not comply with 
this provision of the statute. Therefore, we determine that all twenty-
one respondents, both those which initially responded to our 
questionnaires, and those which did not, failed to cooperate by not 
acting to the best of their ability.
    Additionally, section 776(b) of the Tariff Act provides that, if 
the Department finds 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.'' Statement of Administrative Action (``SAA'') accompanying the 
URAA, H.R. Doc. No. 103-316 at 870 (1994). It is reasonable to assume 
that if the eighteen respondents that did not respond at all could have 
demonstrated that their actual dumping margins were lower than the PRC-
wide rate established in the less-than-fair value (LTFV) investigation, 
they would have participated in this review and attempted to do so. 
Furthermore, the Department, in assigning adverse facts available to 
Liaoning, Tianjin, and Universal, is aware that ``an affirmative 
finding of bad faith on the part of the respondent is not required 
before the Department may make an adverse inference.'' Antidumping 
Duties; Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 
1997) (Final Rule).
    Section 776(b) of the Tariff Act authorizes the Department to use 
as adverse facts available ``secondary information,'' including 
information derived from the petition, the final determination from the 
LTFV investigation, a previous administrative review, or any other 
information placed on the record. Section 776(b) of the Tariff Act 
requires the Department to corroborate, to the extent practicable, 
secondary information used as facts available. 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 SAA at 870. Thus, to corroborate secondary information, the 
Department will examine the reliability and relevance of the 
information used.
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin is 
sufficiently adverse ``as to effectuate the purpose of the facts 
available role to induce respondents to provide the Department with 
complete and accurate information in a timely manner.'' Static Random 
Access Memory Semiconductors from Taiwan; Final Determination of Sales 
at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). The 
Department also considers the extent to which a party may benefit from 
its own lack of cooperation in selecting a rate. See Roller Chain, 
Other than Bicycle, from Japan; Notice of Final Results and Partial 
Recission of Antidumping Duty Administrative Review, 62 FR 60472, 60477 
(November 10, 1997).
    In accordance with Department practice, as adverse facts available 
we have preliminarily assigned these exporters the highest dumping 
margin determined in any segment of this proceeding (54.21 percent), 
which is the PRC-wide rate established in the LTFV investigation, and 
is the only rate available for use as facts available. See Antidumping 
Duty Order: Petroleum Wax Candles From the People's Republic of China, 
51 FR 30686 (August 28, 1986). With respect to corroboration of this 
margin we note that, unlike other types of information, such as input 
costs or selling expenses, there are no independent sources for 
calculated dumping margins. 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; Preliminary 
Results of Antidumping Duty Administrative Review, 61 FR 36551, 36552 
(July 11, 1996). With respect to the relevance aspect of corroboration, 
however, the Department will consider information reasonably at its 
disposal to determine whether a margin continues to have relevance. 
Accordingly, we have used the highest calculated margin from any prior 
segment of the proceeding as the margin for these preliminary results 
because there is no evidence on the record indicating that such a 
calculated margin is not appropriate as adverse facts available. This 
rate is currently applicable to all exports of subject merchandise. 
Thus, if any respondent could demonstrate that its margin is lower, we 
presume that it would have cooperated in attempting to do so.

Separate Rates

    The Department presumes that a single dumping margin is appropriate 
for all exporters in a non-market economy (NME) country. See Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585 (May 2, 1994). The 
Department may, however, consider requests for a separate rate

[[Page 54227]]

from individual exporters. Liaoning, Tianjin, and Universal responded 
to the separate rates section of the antidumping questionnaire.
    We preliminarily determine that Liaoning, Tianjin, Universal and 
the remaining eighteen respondents are not eligible for a separate rate 
due to our preliminary determination that the most appropriate 
antidumping margin is based upon total adverse facts available. 
Although Liaoning, Tianjin, and Universal initially responded to the 
separate rates section of the questionnaire, their responses were so 
wholly inadequate and unreliable that they did not establish that 
separate rates were warranted.

Preliminary Results of Review

    We preliminarily determine that the following dumping margins 
exists for the period August 1, 1998, through July 30, 1999:

------------------------------------------------------------------------
                                                              Margin
                  Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
People's Republic of China-Wide Rate....................           54.21
------------------------------------------------------------------------

An interested party may request a hearing within 30 days of publication 
of these preliminary results. See 19 CFR 351.310(c). Any hearing, if 
requested, will be held 44 days after the date of publication, or the 
first working day thereafter. Interested parties may submit case briefs 
and/or written comments no later than 30 days after the date of 
publication of these preliminary results of review. Rebuttal briefs and 
rebuttals to written comments, limited to issues raised in such briefs 
or comments, may be filed no later than 37 days after the date of 
publication. Parties who submit arguments are requested to submit with 
the argument (1) a statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, we would appreciate 
it if parties submitting written comments would provide the Department 
with an additional copy of the public version of any such comments on 
diskette. The Department will issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any such comments, within 120 days of publication 
of these preliminary results.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. This rate will 
be assessed uniformly on all entries of subject merchandise made during 
the POR. 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 by section 751(a)(1) of the Tariff 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.
    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 notice is issued and published in accordance with sections 
751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: August 30, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-22990 Filed 9-6-00; 8:45 am]
BILLING CODE 3510-DS-P