[Federal Register Volume 66, Number 46 (Thursday, March 8, 2001)]
[Notices]
[Pages 13881-13885]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5773]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-830]


Coumarin 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: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on coumarin from 
the People's Republic of China (PRC). The review covers exports of this 
merchandise to the United States for the period February 1, 1999, 
through January 31, 2000, and two firms: Netchem, Inc. (Netchem) and 
Jiangsu Native Produce Import & Export Corporation (Jiangsu). The 
preliminary results of this review indicate that both Netchem and 
Jiangsu failed to

[[Page 13882]]

cooperate. Consequently, we have preliminarily determined that Jiangsu 
is part of the PRC entity, and have used adverse facts available to 
determine the margins for the PRC entity and Netchem.

EFFECTIVE DATE: March 8, 2001.

FOR FURTHER INFORMATION CONTACT: Elfi Blum or Abdelali Elouaradia, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue NW., 
Washington, DC 20230, at (202) 482-0197 or (202) 482-1374, 
respectively.

SUPPLEMENTARY INFORMATION:   

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 Tariff Act) 
by the Uruguay Round Agreements Act (URAA). In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the regulations codified at 19 CFR Part 351 (1999).

Background

    On February 14, 2000, the Department published in the Federal 
Register (65 FR 7348-03) a notice of ``Opportunity to Request 
Administrative Review'' for the period February 1, 1999, through 
January 31, 2000. In accordance with 19 CFR 351.213, on February 21, 
2000, Netchem requested a review of itself, and, on February 29, 2000, 
the petitioner, Rhodia Inc., requested a review of Jiangsu, for the 
aforementioned period. On March 30, 2000, we published a notice of 
``Initiation of Antidumping Review.'' See 65 FR 16875-01. The 
Department is now conducting this administrative review pursuant to 
section 751(a) of the Tariff Act.
    On May 2, 2000, and July 28, 2000, we issued questionnaires to 
Jiangsu and Netchem, respectively. On July 31, 2000, Jiangsu submitted 
a letter stating that it was withdrawing its request to be reviewed. On 
August 2, 2000, the Department confirmed with Jiangsu's counsel that 
Jiangsu had not requested a review, and that the intent of the letter 
was to notify the Department that Jiangsu would no longer be 
participating in the review. See Memorandum to File through Maureen 
Flannery from Mark Hoadley: Coumarin from the People's Republic of 
China, Jiangsu's Native Import & Export Corp. (Jiangsu), Letter of July 
31, 2000, dated August 4, 2000.
    Netchem filed its section A response on September 5, 2000, and its 
sections C and D response on September 12, 2000. Upon the Department's 
verbal inquiry regarding verification, Netchem informed the Department 
by telephone on November 14, 2000 that the producer in China had gone 
bankrupt. On November 20, 2000, the Department issued a supplemental 
questionnaire for sections A through D to clarify deficient information 
in the response and to obtain information not yet provided. On the same 
day, the Department sent a separate letter to Netchem, referencing the 
November 14 conversation, and asking for clarification regarding which 
company had gone bankrupt, what the role of the company was in the 
production and sale of subject merchandise, who had provided Netchem 
with the necessary information for questionnaire responses, and the 
current owner and location of source documents. This letter also asked 
Netchem to confirm the dates for verification in China and Canada. 
Netchem submitted its response to the November 20 letter on December 1, 
2000, indicating that the director of the producing company had 
provided Netchem with information pertaining to factors of production. 
Netchem further stated that there were no original documents available. 
On December 8, 2000, the Department received Netchem's supplemental 
questionnaire response. Again, Netchem stated that it was unable to 
provide the information pertaining to the producer of its subject 
merchandise due to the bankruptcy of the Chinese producer.

Scope of Review

    The product covered by this order is coumarin. Coumarin is an aroma 
chemical with the chemical formula C sub9 H sub6 O sub2 that is also 
known by other names, including 2H-1-benzopyran-2-one, 1,2-benzopyrone, 
cis-o-coumaric acid lactone, coumarinic anhydride, 2-Oxo-1,2-
benzopyran, 5,6-benzo-alpha-pyrone, ortho-hydroxyc innamic acid 
lactone, cis-ortho-coumaric acid anhydride, and tonka bean camphor. All 
forms and variations of coumarin are included within the scope of the 
order, such as coumarin in crystal, flake, or powder form, and 
``crude'' or unrefined coumarin (i.e. prior to purification or 
crystallization). Excluded from the scope of this order are 
ethylcoumarins (C sub11 H sub10 O sub2) and methylcoumarins (C sub10 H 
sub8 O sub2). Coumarin is classifiable under subheading 2932.21.0000 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 review is dispositive.

Period of Review

    The review period is February 1, 1999 through January 31, 2000.

Separate Rates

    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in non-market economy (NME) countries 
a single rate, unless an exporter can affirmatively demonstrate an 
absence of government control, both in law (de jure) and in fact (de 
facto), with respect to exports. To establish whether a company is 
sufficiently independent to be entitled to a separate, company-specific 
rate, the Department analyzes each exporting entity in an NME country 
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), 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). Because Jiangsu failed to cooperate, 
the Department is not granting a separate rate to Jiangsu.

Use of Facts Otherwise Available

    Pursuant to sections 776(a)(1) of the Tariff Act, (1) if necessary 
information is not available on the record, or (2) 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, (C) significantly impedes a 
proceeding under the antidumping statute, or (D) provides such 
information, but the information cannot be verified as provided in 
section 782(i) of the Act, the administering authority shall, subject 
to section 782(d) of the Act, use the facts otherwise available in 
reaching the applicable determination.
    Although Netchem provided the Department with some information, 
that information was too incomplete and too deficient for the 
Department to conduct a margin analysis. In addition, upon requests by 
the Department for further information, in accordance with section 
782(d), Netchem repeatedly stated, verbally and in writing, that its 
supplier in the PRC went bankrupt, and that it would be unable to 
obtain any missing information pertaining to the supplier. Netchem 
further insisted that there were no source documents used to answer to 
the Department's questionnaire, but that the data was supplied by a 
former

[[Page 13883]]

company official of the supplier. As a result, information necessary to 
conduct a margin analysis is not available on the record, and some of 
the limited information that is on the record cannot be verified in 
accordance with section 782(e)(2) of the Tariff Act. Therefore, 
pursuant to section 776(a)(1) and section 776(a)(2)(D), the Department 
must resort to facts otherwise available in reaching the applicable 
determination.
    Jiangsu's withdrawal of its participation in the review deprives 
the Department of the information necessary to conduct its margin 
analysis and also constitutes a refusal to provide information 
necessary to conduct the Department's antidumping analysis, pursuant to 
sections 776(a)(1) and (2)(A) of the Tariff Act. Moreover, Jiangsu's 
withdrawal significantly impedes the review process. See section 
776(a)(2)(C) of the Tariff Act. Therefore, the Department must resort 
to facts otherwise available in reaching the applicable determination. 
Absent any response on the record from Jiangsu, sections 782(d) and (e) 
do not apply.

Use of Adverse Facts Available

    Section 776(b) of the Tariff Act further provides that, in 
selecting from among the facts otherwise available, the Department may 
use an inference adverse to the interests of a party that has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information (see also the Statement of Administrative 
Action (SAA), accompanying the URAA, H.R. Doc. No. 316, Vol. 1, 103rd 
Cong., 2d Sess. (1994), at 870). On three different occasions the 
Department asked Netchem in writing to provide the information 
necessary to conduct the margin analysis, namely, with the original 
questionnaire (issued on July 28, 2000), with the supplemental 
questionnaire (issued on November 20, 2000), and in a separate letter 
(issued on November 20, 2000).
    In response to the Department's inquiry regarding verification, 
Netchem informed the Department by telephone on November 14, 2000, that 
its producer in China had gone bankrupt. See Department's letter to 
Netchem dated November 20, 2000. Based on this information, we issued a 
letter on November 20, 2000, asking for clarification regarding which 
company had gone bankrupt, what the role of the company was in the 
production and sale of subject merchandise, who had provided Netchem 
with the necessary information for questionnaire responses, and the 
current location of source documents. This letter also asked Netchem to 
confirm the dates for verification in China and Canada. In its 
response, Netchem provided the name of the company that went bankrupt, 
stated Netchem's intent to contact that company for a copy of the 
official documents, provided the names of Netchem's producer and 
supplier, named the individual providing the information for the 
questionnaire response, and stated that there are no original documents 
to support the claim that the supplier is bankrupt, or any other 
information pertaining to the supplier. The supplemental questionnaire 
response was still so highly deficient that we were unable to conduct 
an analysis based on the factor information provided. In its 
supplemental questionnaire, the Department asked three questions 
pertaining to organizational structure of Netchem's supplier. However, 
Netchem did not answer these questions, stating that it needed further 
clarification or that the supplier was bankrupt and therefore the 
information was unavailable. With respect to section D, factors of 
production, Netchem again did not provide an answer to six out of nine 
questions, other than to restate its assertion that the supplier is 
bankrupt and that the information is not available. Netchem also failed 
to satisfy the Department's request to provide a narrative response to 
each question issued in the original questionnaire. Rather, the company 
merely cross-referenced other sections of its response. Therefore, the 
Department has determined that Netchem has not complied with its 
responsibility to provide the information necessary to conduct a margin 
analysis.
    Section 782(d) of the Tariff Act states that if the administering 
authority determines that a response to a request for information under 
this title does not comply with the request, the administering 
authority shall promptly inform the person submitting the response of 
the nature of the deficiency and shall, to the extent practicable, 
provide that person with an opportunity to remedy or explain the 
deficiency in light of the time limits established for the completion 
of investigations or reviews under this title. If that person submits 
further information in response to such deficiency and either (1) the 
administering authority finds that such response is not satisfactory, 
or (2) such response is not submitted within the applicable time 
limits, then the administering authority may, subject to subsection 
(e), disregard all or part of the original and subsequent responses. As 
discussed above, the Department requested Netchem to submit information 
necessary to conduct its margin analysis on three separate occasions; 
however, in each instance, Netchem's response was insufficient, failing 
to provide, for example, conversion factors used to calculate the 
reported amounts of water and ethyl alcohol, the quantity of by-
products, and calculation worksheets demonstrating how Netchem's 
supplier calculated the reported usage for each source of energy to 
produce one unit of subject merchandise. Netchem, by not providing the 
Department with the necessary factor information to conduct a margin 
analysis, as described above, repeatedly failed to respond 
satisfactorily to the Department's request for information within the 
meaning of section 782(d)(1) of the Tariff Act. For Netchem to state 
that its supplier of subject merchandise went bankrupt is not 
sufficient, as there is no evidence that the responsive information is 
unavailable. The limited information available on the record is so 
deficient that it cannot serve as a reliable basis for reaching the 
applicable determination, and cannot be used without undue 
difficulties. Furthermore, this information cannot be verified since 
there are no source documents, as stated by Netchem. Therefore, the 
Department declines to consider in its determination the information 
submitted by Netchem, in accordance with sections 782(e)(2), (e)(3), 
and (e)(5) of the Tariff Act.
    Jiangsu's withdrawal from this review constitutes a refusal to 
participate in the review, and demonstrates that Jiangsu failed to 
cooperate by not acting to the best of its ability to comply with the 
Department's request for information.
    Pursuant to section 776(b) of the Act, the Department has 
determined that an adverse inference is warranted with respect to both 
companies, Netchem and Jiangsu, because they have failed to cooperate 
by not acting to the best of their ability, as discussed above.
    When making adverse inferences, the SAA authorizes the Department 
to consider the extent to which a party may benefit from its own lack 
of cooperation (SAA at 870). Because the PRC-wide rate that was the 
cash deposit rate applicable during the period of review and that is 
applicable to current imports is 160.80 percent, a rate derived from 
the petition, the Department determines that assigning a 160.80 percent 
rate will prevent non-responding firms from benefitting from their 
failure to respond to the Department's requests for information. 
Anything less than the current cash deposit rate would effectively 
reward

[[Page 13884]]

non-responding firms for not cooperating by not acting to the best of 
their ability.

Corroboration

    Section 776(c) of the Act provides that, when the Department relies 
on secondary information in using the facts otherwise available, it 
must, to the extent practicable, corroborate that information from 
independent sources that are reasonably at its disposal. The SAA 
defines secondary information as ``information derived from the 
petition that gave rise to the investigation or review, the final 
determination concerning the subject merchandise, or any previous 
review'' (see SAA at 870). In addition, the SAA clarifies that 
``corroborate'' means that the Department will satisfy itself that the 
secondary information to be used has probative value (see id.). The SAA 
also states that independent sources used to corroborate may include, 
for example, published price lists, official import statistics and 
customs data, as well as information obtained from interested parties 
during the particular investigation (see id.).
    To corroborate the less-than-fair-value (LTFV) rate of 160.80 
percent, we examined the basis of the rates contained in the petition 
of December 30, 1993, as revised in the final LTFV determination (59 FR 
66895; December 28, 1994). The U.S. price in the petition, as amended, 
was based on average unit prices derived from U.S. Census import 
statistics, and on price lists from U.S. importers of coumarin. We were 
able to corroborate the average unit values listed in the amended 
petition by comparing those values to publicly available information 
compiled by the U.S. Census Bureau and made available by the 
International Trade Commission (ITC). The ITC reports quantity and 
value by HTSUS numbers. Using the same HTSUS number as listed in the 
petition (HTSUS 2932.21.000), we divided the total value by the total 
quantity for the periods referenced in the concurrence memorandum to 
the final antidumping duty determination for coumarin from the PRC, and 
noted the average unit values were very similar to those reported in 
the petition, as amended. See Memorandum to File through Louis Apple 
from David J. Goldberger: Coumarin from the PRC; Alleged Margin 
Calculation Worksheet, of January 18, 1994, on file in the Central 
Records Unit, located in Room B-099 main Department of Commerce 
Building.
    The petition also states that, due to the NME status of the PRC, 
the foreign market value was calculated using a factors of production 
methodology. Based on the production experience of the petitioner, 
which it states is comparable to the PRC production process, the 
petition identified actual factors of production for subject 
merchandise. Such factors include: materials; labor; energy; utilities; 
overhead; general, selling and administrative expenses; profit; and 
packing. The petition relied, where possible, on publicly available 
information for India as surrogate values for the above-mentioned 
factors in the PRC. Where such information was not available, the 
petition relied on petitioner's own cost experience. See Initiation of 
Antidumping Duty Investigation: Coumarin From the People's Republic of 
China, 59 FR 3841-01 (January 27, 1994). Further, in the Final 
Determination of Sales at Less Than Fair Value: Coumarin From the 
People's Republic of China, 59 FR 66895-01 (December 28, 1994) (Final 
Determination), the Department revised the PRC-wide margin from the 
petition to reflect changes in the surrogate values of almost all 
inputs, including the most significant raw material for producing 
coumarin, as determined during the investigation. The source for this 
information was publicly available Indian and Indonesian import 
statistics. For detailed information, refer to Concurrence Memorandum: 
Final Antidumping Duty Determination; Coumarin from the People's 
Republic of China (PRC), December 19, 1994, at 5, 8-9. Because 
petitioners used published, publicly available data for valuing inputs, 
and these data were revised by the Department with publicly available 
information, as stated above, we consider these data to have probative 
value.
    The SAA specifically states that where ``corroboration may not be 
practicable in a given circumstance,'' the Department may apply an 
adverse inference. See SAA at 870. Based on our efforts, described 
above, to corroborate information contained in the petition, as revised 
in the Final Determination, and mindful of the legislative history 
discussing facts available and corroboration, we consider the revised 
petition margin that we are assigning as adverse facts available in 
this review to be corroborated to the extent practicable. Furthermore, 
nothing on the record of this administrative review supports a 
determination that the highest margin rate from the petition in the 
underlying investigation, as revised, does not represent reliable and 
relevant information for purposes of adverse facts available. This rate 
has been used as the PRC-wide rate since the Department's Final 
Determination.

Preliminary Results of the Review

    As a result of our review, we preliminarily determine the dumping 
margins for Netchem and the PRC entity, based on total adverse facts 
available for the period February 1, 1999 through January 31, 2000, to 
be as follows:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Netchem, Inc...............................................       160.80
PRC-wide Rate..............................................       160.80
------------------------------------------------------------------------

    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 (5) days after the date of 
publication of this notice. Pursuant to 19 CFR 351.309, interested 
parties may submit written comments in response to these preliminary 
results. Case briefs are currently scheduled for submission 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 (5) 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 to be raised in the 
case and rebuttal briefs. Unless the Secretary specifies otherwise, the 
hearing, if requested, will be held two days after the deadline for 
submission of rebuttal briefs. The Department plans to issue the final 
results of this administrative review, including 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 this notice.
    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Upon completion 
of this review, the Department will issue appraisement instructions 
directly to the Customs Service.
    Furthermore, upon issuance of the final results of this review, the 
following deposit rates will be effective with respect to all shipments 
of coumarin from the PRC entered, or withdrawn from warehouse, for 
consumption on or

[[Page 13885]]

after the publication date of the final results of this review, as 
provided for by section 751(a)(2)(c) of the Tariff Act: (1) The cash 
deposit rate for reviewed companies listed above will be the rates for 
those firms established in the final results of this review; (2) for 
companies previously found to be entitled to a separate rate and for 
which no review was requested, the cash deposit rate 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 rate will 
be the PRC-wide rate of 160.80 percent; and (4) for non-PRC exporters 
of subject merchandise from the PRC not covered by this review, or by 
the LTFV investigation, or a previous review, the cash deposit rate 
will be the rate applicable to the PRC supplier of that exporter. These 
deposit requirements, 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 preliminary reminder to importers of their 
responsibility under section 351.402(f)(2) of the Department's 
regulations 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 771 (i)(1) of the Tariff Act. Effective January 
20, 2001, Bernard T. Carreau is fulfilling the duties of the Assistant 
Secretary for Import Administration.

    Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5773 Filed 3-7-01; 8:45 am]
BILLING CODE 3510-DS-P