[Federal Register Volume 65, Number 174 (Thursday, September 7, 2000)]
[Notices]
[Pages 54211-54215]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22998]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-836]


Notice of Preliminary Results of New Shipper Antidumping 
Administrative Review: Glycine From the People's Republic of China

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

EFFECTIVE DATE: September 7, 2000.

FOR FURTHER INFORMATION CONTACT: Maria Dybczak or Rick Johnson, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 
20230; telephone: (202) 482-5811, and (202) 482-3818, respectively.

The Applicable Statute

    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, 
unless otherwise indicated, all citations to the Department's 
regulations are to the regulations at 19 CFR Part 351 (1999).

SUMMARY: The Department of Commerce (``the Department'') is conducting 
a new shipper review of the antidumping duty order on glycine from the 
People's Republic of China (``PRC'') in response to a request by a PRC 
exporter of subject merchandise, Nantong Dongchang Chemical Industry 
Corp. (``Nantong''). This review covers shipments of merchandise to the 
United States during the period of March 1, 1999 through August 31, 
1999. We have preliminarily determined that sales have been made below 
normal value (``NV''). If these preliminary results are adopted in our 
final results, we will instruct the U.S. Customs Service to assess 
antidumping duties on entries subject to this review.

Background

    The Department published in the Federal Register an antidumping 
duty order on glycine from the PRC on March 29, 1995 (60 FR 131201). On 
September 30, 1999, the Department received a request from Nantong for 
a new shipper review pursuant to section 751(a)(2)(B) of the Act and 
section 351.214(b) of the Department's regulations. These provisions 
state that, if the Department receives a request for review from an 
exporter or producer of the subject merchandise which states that it 
did not export the merchandise to the United States during the period 
covered by the original less-than-fair-value (``LTFV'') investigation 
(``the POI'') and that such exporter or producer is not affiliated with 
any exporter or producer who exported the subject merchandise during 
that period, the Department shall conduct a new shipper review to 
establish an individual weighted-average dumping margin for such 
exporter or producer who exported, if the Department has not previously 
established such a margin for the exporter or producer. The regulations 
require that the exporter or producer shall include in its request, 
with appropriate certifications: (1) The date on which the merchandise 
was first entered, or withdrawn from the warehouse, for consumption, 
or, if it cannot certify as to the date of the first entry, the date on 
which it first shipped the merchandise for export to the United States, 
or if the merchandise has not yet been shipped or entered, the date of 
sale; (2) a list of the firms with which it is affiliated; (3) a 
statement from such exporter or producer, and from each affiliated 
firm, that it did not, under its current or a former name, export the 
merchandise during the POI, and (4) in an antidumping proceeding 
involving inputs from a nonmarket economy country, a certification that 
the export activities of such exporter or producer are not controlled 
by the central government. See 19 CFR 351.214(b)(2)(ii), (iii), and 
(iv).
    Nantong's request was accompanied by information and certifications 
establishing the date on which it first shipped the subject 
merchandise. Nantong also claimed it had no affiliated companies which 
exported glycine from the PRC during the POI. In addition, Nantong 
certified that its export activities are not controlled by the central 
government. Based on the above information, the Department initiated a 
new shipper review covering Nantong (see Glycine from the People's 
Republic of China: Initiation of New Shipper Administrative Review (64 
FR 61834, November 15, 1999)). Due to extraordinarily complicated 
issues in this case, the Department extended the

[[Page 54212]]

deadline for completion of the new shipper review, first on April 17, 
2000 (see Notice of Extension of Time Limit for Preliminary Results of 
New Shipper Antidumping Review: Glycine from the People's Republic of 
China, 65 FR 20431), and then on May 26, 2000 (see Notice of Extension 
of Time Limit for Preliminary Results of New Shipper Antidumping 
Review: Glycine from the People's Republic of China, 65 FR 34147).

Scope of Review

    The product covered by this review is glycine, which is a free-
flowing crystalline material, like salt or sugar. Glycine is produced 
at varying levels of purity and is used as a sweetener/taste enhancer, 
a buffering agent, reabsorbable amino acid, chemical intermediate, and 
a metal complexing agent. Glycine is currently classified under 
subheading 2922.49.4020 of the Harmonized Tariff Schedule of the United 
States (``HTSUS''). This proceeding includes glycine of all purity 
levels. Although the HTSUS subheading is provided for convenience and 
Customs purposes only, the written description of the scope of this 
review is dispositive. This review covers the period March 1, 1999 
through August 31, 1999.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Nantong, which is both the producer and exporter of the 
subject merchandise, using standard procedures, including on-site 
inspection of the manufacturer's facilities and the examination of 
relevant sales and financial records. Our verification results are 
outlined in the public version of the verification report, which is on 
file in the Central Records Unit (room B-099 of the Main Commerce 
Building).

Separate Rates

    Nantong has requested a separate, company-specific rate. In its 
questionnaire response, Nantong states that it is an independent legal 
entity. To establish whether a company operating in a nonmarket economy 
country is sufficiently independent to be entitled to a separate rate, 
the Department analyzes each exporting entity under the test 
established in Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991), as amplified by Final Determination of Sales at Less Than Fair 
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 
(May 2, 1994). Under this policy, exporters in nonmarket economies 
(``NMEs'') are entitled to separate, company-specific margins when they 
can demonstrate an absence of government control, both in law (``de 
jure'') and in fact (``de facto''), with respect to export activities. 
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 an 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. De facto absence 
of government control over exports is based on four factors: (1) 
Whether each exporter sets its own export prices independently 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.

De Jure Control

    With respect to the absence of de jure government control over its 
export activities, evidence on the record indicates that Nantong is not 
controlled by the government. Effective during the period of review, 
Nantong's business license indicates that the company was recognized as 
a ``company owned by the people.'' However, this type of company form 
is not an indication that the company is controlled by the government 
of the PRC. We found no evidence of de jure government control 
restricting Nantong from the exportation of glycine (see Section A 
Response, pages 2 through 7, and exhibits A-1 and A-2, February 10, 
2000). No export quotas apply to glycine; in addition, a specialized 
export license (beyond the general export license required for any 
direct export) is not required for exports of the subject merchandise 
to the United States (see Section A Response, page 4, February 10, 
2000). We confirmed at verification that there are no export licenses 
required and no applicable quotas (see Verification of the Response of 
Nantong Dongchang Chemical Industy Corp. (``Nantong'') with Regard to 
the Sales and Factors of Production of Glycine (``Verification 
Report''), dated August 18, 2000, page 8). The PRC's Enterprise Legal 
Person Registration Administrative Regulations, issued on June 13, 
1988, by the State's Industrial and Commercial Bureau, and placed on 
the record of this review, provide that, to qualify as legal persons, 
companies must have the ``ability to bear civil liability 
independently'' and the right to control and manage their businesses 
(see Nantong's Section A response, dated February 10, 2000). The 
Department has recognized in other cases that these regulations also 
state that, as an independent legal entity, a company is responsible 
for its own profits and losses (see Notice of Final Determination of 
Sales at Less Than Fair Value: Manganese Metal from the People's 
Republic of China, 60 FR 56046 (November 6, 1995)). Nantong also 
submitted the Foreign Trade Law of the People's Republic of China, 
adopted by the government of the PRC in 1994, which grants autonomy to 
businesses involved in the importation and exportation of merchandise 
in their management decisions and establishes accountability for their 
own profits and losses (see Section A Response, dated February 10, 
2000, Appendix A-1). Nantong's business license allows the company to 
enter into contracts and conduct business activities without the 
direction of a government ministry or agency (see Section A Response, 
February 10, 2000, Appendix A-2). We found no evidence at verification 
that contradicted the information submitted on the record with respect 
to de jure control (see Verification Report, page 7). Therefore, with 
respect to the existence or absence of de jure control over export 
activity, we preliminarily determine that Nantong is an independent 
legal entity.

De Facto Control

    With respect to the existence or absence of de facto control over 
export activities, Nantong indicates that the company's management is 
responsible for all decisions regarding the determination of export 
prices, profit distribution, marketing strategy, and contract 
negotiations. We found no evidence at verification that contradicted 
the information submitted on the record with regard to de facto 
control. Our analysis of the information on the record and our findings 
at verification indicates that there is no government involvement in 
the daily operations or selection of management for Nantong (see 
Section A Response, pages 2-7 and exhibit A-1; see Verification Report, 
page 8; see also Memorandum to Edward Yang; Re: Separate Rate Analysis 
in the New Shipper Review of Nantong Dongchang Chemical Industry Corp.; 
Glycine from the People's Republic of China

[[Page 54213]]

(``Separate Rates Memorandum''), dated August 28, 2000, which is on 
file in the Central Records Unit (room B-099 of the Main Commerce 
Building). Consequently, because evidence on the record indicates an 
absence of government control, both in law and in fact, over Nantong's 
export activities, we preliminarily determine that this exporter is 
entitled to a separate rate. For further discussion of the Department's 
preliminary determination that this exporter is entitled to a separate 
rate, see Separate Rates Memorandum.

Normal Value Comparisons

    To determine whether respondent's sales of the subject merchandise 
to the United States were made at NV, we compared its United States 
price to NV, as described in the ``United States Price'' and ``Normal 
Value'' sections of this notice.

United States Price

    We based United States price on export price (``EP'') in accordance 
with section 772(a) of the Act, because the sale made to the 
unaffiliated purchaser was made prior to importation, and a constructed 
export price (``CEP'') classification was not otherwise warranted by 
the facts on the record. We calculated EP based on packed prices from 
the exporter to the first unaffiliated purchaser in the United States. 
We deducted domestic inland freight expenses in the home market from 
the starting price (gross unit price) in accordance with 772(c) of the 
Act. Consistent with recent determinations by the Department in other 
reviews and investigations involving the PRC (see Sebacic Acid From the 
People's Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 65 FR 18968, April 10, 2000; and Notice of 
Preliminary Determination of Sales at Less Than Fair Value: Bulk 
Aspirin From the People's Republic of China, 65 FR 116, January 3, 
2000), we have chosen India as a surrogate country for valuing all 
expenses, as we have determined that India is (1) is comparable with 
the PRC in terms of the level of economic development, and (2) is a 
significant producer of comparable merchandise (see Memorandum to 
Edward Yang, Office Director, Re: Selection of Surrogate Country with 
Significant Producer of Comparable Merchandise in the New Shipper 
Review of Glycine from the People's Republic of China (``Surrogate 
Country Memorandum''), dated August 28, 2000).
    We valued movement expenses as follows: to value inland truck 
freight, we used the average of trucking rates obtained by the 
Department from Indian truck companies in November 1999, as used in the 
Department's 1998-1999 administrative review of Sebacic Acid from the 
PRC (see Memorandum to the File; Re: Final Results Factors Valuation 
Memorandum, dated August 7, 2000). As we were unable to identify a 
surrogate value for inland water transportation, we valued boat and 
barge transportation using the surrogate value for truck freight. We 
adjusted the rates to reflect inflation through the POR using wholesale 
price indices (``WPI'') for India in International Financial 
Statistics, published by the International Monetary Fund (``IMF'').

Normal Value

    For companies located in NME countries, section 773(c)(1) of Act 
provides that the Department shall determine NV using a factors-of-
production methodology if: (1) the merchandise is exported from an NME 
country; and (2) available information does not permit the calculation 
of NV using home-market prices, third-country prices, or constructed 
value under section 773(a) of the Act. In every case conducted by the 
Department involving the PRC, the PRC has been treated as an NME 
country. Pursuant to section 771(18)(C)(i) of the Act, any 
determination that a foreign country is an NME country shall remain in 
effect until revoked by the administering authority. Nantong has not 
contested such treatment in this review. Accordingly, we have applied 
surrogate values to the factors of production to determine NV. We 
calculated NV based on factors of production in accordance with section 
773(c)(4) of the Act and section 351.408(c) of our regulations. 
Consistent with other recent determinations by the Department, we 
determined that India: (1) Is comparable with the PRC in terms of the 
level of economic development, and (2) is a significant producer of 
comparable merchandise (see Surrogate Country Memorandum). We valued 
the factors of production using publicly available information from 
India (see Memorandum to Edward Yang, Re: New Shipper Review of 
Antidumping Administrative Review of Glycine from the People's Republic 
of China: Factor Values and Preliminary Margin Calculations, dated 
August 28, 2000 (``Factors Valuation Memorandum'')). We used import 
prices to value many factors. As appropriate, we adjusted import prices 
by adding freight expenses to make them delivered prices. For a 
complete analysis of surrogate values, see Factors Valuation 
Memorandum. We valued the factors of production as follows: to value 
chloroacetic acid (also known as monochloroacetic acid), we used prices 
reported in Chemical Weekly, which publishes chemical prices in India, 
during the period April through August 1999. To value liquid ammonia, 
we used the weighted-average unit import value derived from the Monthly 
Trade Statistics of Foreign Trade of India--Volume II--Imports 
(``Indian Import Statistics'') for the period April 1996 through 
December 1997, adjusted for inflation through the POR. To value 
hexamine, we used prices reported in Chemical Weekly during the months 
March through August 1999, coinciding with the POR. To value methanol 
(also known as methyl alcohol), we used prices reported in Chemical 
Weekly, under the ``General Market Information'' section, which 
represents India-wide prices, during the period coinciding with the 
POR.
    In accordance with the decision in Sigma Corp. v. United States, 
117 F.3d 1401 (CAFC 1997), when using an import surrogate value, we 
have added a surrogate freight cost to CIF surrogate values from India, 
using the shorter of the reported distances from either the closest PRC 
port to the factory, or from the domestic supplier to the factory.
    Nantong both purchased water and pumped water from its own wells 
and an adjoining canal during the POR. In its calculation of the usage 
factor for water, Nantong only included the water it purchased, and did 
not account for water it pumped itself (see Verification Report, pages 
18-19). We adjusted the usage factor for water as reported by Nantong 
to account for water usage that Nantong did not report. For a further 
discussion on the recalculation of the usage factor for water, see 
Memorandum to the File; Re: Analysis for the Preliminary Results of New 
Shipper Review of Glycine from the People's Republic of China 
(``Analysis Memo''), dated August 28, 2000, page 3-4). To value water, 
we used an average of water tariff rates reported in the Second Water 
Utilities Data Book: Asian and Pacific Region, published by the Asian 
Development Bank in 1997, which was adjusted for inflation, as used 
recently by the Department in Synthetic Indigo From the People's 
Republic of China; Notice of Final Determination of Sales at Less Than 
Fair Value (65 FR 25706 (May 3, 2000) (``Synthetic Indigo''). To value 
electricity, we used data reported as the average Indian domestic 
prices within the category ``Electricity for Industry,'' published in 
the International Energy Agency's publication, Energy Prices and Taxes, 
Fourth Quarter, 1999.

[[Page 54214]]

    To value coal, we used the weighted average unit import price for 
steam coal derived from Indian Import Statistics for the period April 
1997 through March 1998, also used by the Department in Synthetic 
Indigo. We adjusted the cost of coal to include an amount for 
transportation. As we were unable to identify a surrogate value for 
inland water transportation, we valued boat and barge transportation 
using the surrogate value for truck freight, consistent with our 
practice in past proceedings (see Synthetic Indigo, and Final 
Determination of Sales at Less than Fair Value: Certain Preserved 
Mushrooms from the People's Republic of China, 63 FR 72255 (December 
31, 1998)). To achieve comparability of the energy and water prices to 
the usage factors reported for the POR, we adjusted these factor values 
using the WPI for India, as published in International Financial 
Statistics, to reflect inflation through the applicable periods.
    Nantong reported using a ``paper'' pallet in preparing the glycine 
for shipment to the United States, as indicated on the commercial 
invoice (see Verification Report, page 20). However, Nantong did not 
report the pallet as a packing material in its factors of production. 
We have been unable to identify a surrogate value for paper pallets, 
and therefore, for the purposes of the preliminary determination, we 
will use a surrogate value for the most comparable product, wooden 
pallets, as the facts available. To value wooden pallets, and inner and 
outer plastic bags, we relied upon Indian import data from the April 
1996 through February 1997 (for wooden pallets) and April 1997 through 
March 1998 (for inner and outer bags) issues of Monthly Statistics of 
the Foreign Trade of India. We adjusted the values of packing materials 
to include freight costs incurred between the supplier and the factory, 
where applicable.
    To value factory overhead, selling, general and administrative 
expenses (``SG&A''), and profit, we calculated simple average rates 
based on information used by the Department in Synthetic Indigo from an 
Indian chemical producer, Duarala Organics Ltd. (for a further 
discussion of the surrogate values for overhead, SG&A and profit, see 
Factor Valuation Memorandum, page 7). For labor, we used the PRC 
regression-based wage rate at Import Administration's home page, Import 
Library, Expected Wages of Selected NME Countries, revised in May 2000 
(see http:// ia.ita.doc.gov/wages). Because of the variability of wage 
rates in countries with similar per capita Gross Domestic Products, 
section 351.408(c)(3) of the Department's regulations requires the use 
of a regression-based wage rate. The source of the wage rate data on 
the Import Administration's Web site can be found in the 1999 Year Book 
of Labour Statistics, International Labor Office (Geneva: 1999), 
Chapter 5B: Wages in Manufacturing.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on the rates certified by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
                                                             Weighted
             Manufacturer/producer/ exporter              average margin
                                                            percentage
------------------------------------------------------------------------
Nantong Dongchang Chemical Industry Corp................           23.90
------------------------------------------------------------------------

The Department will disclose calculations performed within 10 days of 
the date of publication of this notice in accordance with 19 CFR 
351.224(b). Any interested party may request a hearing within 30 days 
of publication in accordance with 19 CFR 351.310(c). Any hearing would 
normally be held 37 days after the publication of this notice, or the 
first workday thereafter, at the U.S. Department of Commerce, 14th 
Street and Constitution Avenue NW., Washington, DC, 20230. Individuals 
who wish to request a hearing must submit a written request within 30 
days of the publication of this notice in the Federal Register to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, 14th Street and Constitution Avenue, NW., 
Washington, DC 20230. Requests for a public hearing should contain: (1) 
the party's name, address, and telephone number; (2) the number of 
participants; (3) the reason for attending; and (4) a list of the 
issues to be discussed. Interested parties may submit case briefs 
within 30 days of the date of publication of this notice in accordance 
with 19 CFR 351.309(c)(2). Rebuttal briefs, which must be limited to 
issues raised in the case briefs, may be filled not later than 35 days 
after the date of publication. Parties who submit arguments are 
requested to submit with each argument: (1) a statement of the issue; 
and (2) a brief summary of the argument. If a hearing is held, an 
interested party may make an affirmative presentation only on arguments 
included in that party's case brief and may make a rebuttal 
presentation only on arguments included in that party's rebuttal brief. 
Parties should confirm by telephone the time, date, and place of the 
hearing 48 hours before the scheduled time. The Department will issue 
the final results of this new shipper review, which will include the 
results of its analysis of issues raised in the briefs, within 90 days 
from issuance of these preliminary results, unless this time limit is 
extended. Upon completion of this new shipper review, the Department 
shall determine, and the U.S. Customs Service (``Customs'') shall 
assess, antidumping duties on all appropriate entries. The Department 
will issue appraisement instructions directly to Customs upon 
completion of this review. The final results of this review shall be 
the basis for the assessment of antidumping duties on entries of 
merchandise covered by the final results of this review and for future 
deposits of estimated duties. For assessment purposes, we intend to 
calculate importer-specific assessment rates for glycine from the PRC. 
We will divide the total dumping margins (calculated as the difference 
between NV and EP) for each importer by the entered value of the 
merchandise.
    Upon the completion of this review, we will direct Customs to 
assess the resulting ad valorem rates against the entered value of each 
entry of the subject merchandise by the importer during the POR. 
Furthermore, the following deposit rate will be effective upon 
publication of the final results of this new shipper review for all 
shipments of glycine from the PRC entered, or withdrawn from the 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) The cash deposit 
rate for the reviewed firm will be the rate indicated above; (2) for 
previously-reviewed PRC and non-PRC exporters with separate rates, the 
cash deposit rate will be the company-specific rate established in the 
most recent period; (3) for all other PRC exporters, the rate will be 
the PRC-wide rate, which is 155.89 percent; and (4) for all other non-
PRC exporters of subject merchandise from the PRC, the cash deposit 
rate 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.
    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

[[Page 54215]]

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 determination is issued 
and published in accordance with sections 751(a)(1) and 777(i)(1) of 
the Act.

    Dated: August 28, 2000.
Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-22998 Filed 9-6-00; 8:45 am]
BILLING CODE 3510-DS-P