[Federal Register Volume 66, Number 151 (Monday, August 6, 2001)]
[Notices]
[Pages 40973-40978]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-19622]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-866]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value: Certain Folding Gift Boxes From the People's Republic of China

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

EFFECTIVE DATE: August 6, 2001.

FOR FURTHER INFORMATION CONTACT: Thomas Schauer or George Callen, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230; telephone: (202) 482-0410 and (202) 482-0180, 
respectively.

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (the Act) by the 
Uruguay Round Agreements Act (URAA). In addition, unless otherwise 
indicated, all citations to the Department of Commerce's (the 
Department's) regulations are to the provisions codified at 19 CFR Part 
351 (2000).

Preliminary Determination

    We preliminarily determine that certain folding gift boxes (gift 
boxes) from the People's Republic of China (PRC) are being, or are 
likely to be, sold in the United States at less than fair value (LTFV), 
as provided in section 733 of the Act. The estimated margins of sales 
at LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Case History

    We initiated this investigation on March 12, 2001. See Initiation 
of Antidumping Duty Investigation: Certain Folding Gift Boxes From the

[[Page 40974]]

People's Republic of China, 66 FR 15400 (March 19, 2001) (Initiation 
Notice). The Department set aside a period for all interested parties 
to raise issues regarding product coverage. See Initiation Notice, 66 
FR at 15400. On March 20, 2001, Harvard Folding Box Company and Field 
Container Company, Inc. (collectively, ``the petitioners'') requested 
that the scope of the investigation be amended to exclude gift boxes 
for which no side of the box when assembled is at least nine inches in 
length and gift boxes where both the outside of the box is a single 
color and the box is not packaged in shrink-wrap, cellophane, other 
resin-based packaging films, or paperboard. We have adopted the changes 
requested by the petitioners. See Memorandum from Thomas Schauer to the 
File dated March 21, 2001. (Public versions of memoranda identified in 
this notice are available in the Central Records Unit, Room B-099, of 
the main Commerce building.)
    Since the initiation of this investigation the following events 
have occurred.
    On March 29, 2001, we issued a letter to interested parties in this 
investigation providing an opportunity to comment on the 
characteristics we should use in identifying the different models the 
respondents sold in the United States. The petitioners submitted 
comments on April 10, 2001. No other party submitted comments. After 
reviewing the petitioners' comments, we have adopted the 
characteristics proposed by the petitioners.
    The petitioners argued, in their February 20, 2001, petition, that 
the Department should extend the period of investigation (POI) to cover 
all of calendar year 2000. In order to collect the data necessary to 
determine whether to extend the POI and to identify respondents, on 
March 27, 2001, we sent partial section A questionnaires to all 
producers/exporters of the subject merchandise listed in the petition 
and to the Chinese government asking for its assistance in delivering 
the questionnaire to all producers/exporters of the subject 
merchandise. We received responses from Max Fortune Industrial Ltd. 
(Max Fortune), Red Point Paper Products Co., Ltd. (Red Point), Luk Ka 
Paper Industrial Ltd. (Luk Ka), and Dexon Workshop Company (Dexon) that 
indicated that these companies all exported subject merchandise to the 
United States during the POI. We also received responses from Leo Paper 
Products Ltd., Chung Tai Printing (China) Co., Ltd., Mang Sang Envelope 
Manufacturing Co., Ltd., Hung Hing Off-Set Printing Co., Ltd., and K.C. 
(Hong Kong) Ltd. These companies indicated they did not export subject 
merchandise to the United States during calendar year 2000.
    We did not receive responses from the other producers/exporters 
identified in the February 20, 2001, petition. These companies are Rank 
Sharp Investments, Ltd., Bigfield Goldenford Holdings Ltd., Fangyuan 
International Economy and Trade Co., and Hong Kong Dasan Paper Products 
Co., Ltd. The record indicates that these companies received our March 
27, 2001, questionnaire. See Memorandum from Thomas Schauer to the file 
dated July 13, 2001. On April 13, 2001, we sent a letter to these firms 
to reiterate our request for a response to our March 27, 2001, 
questionnaire. We received no responses from these firms.
    On April 13, 2001, the United States International Trade Commission 
(ITC) issued its affirmative preliminary determination that there is a 
reasonable indication that an industry in the United States is 
materially injured by reason of imports of the subject merchandise from 
the PRC, which the ITC published in the Federal Register on April 18, 
2001. See Folding Gift Boxes From China, 66 FR 19981 (April 18, 2001) 
(ITC Preliminary Determination).
    On May 1, 2001, the Department selected Red Point, Luk Ka, and Max 
Fortune as mandatory respondents and decided not to extend the POI. See 
Memorandum from Laurie Parkhill to Richard W. Moreland dated May 1, 
2001.
    On May 1, 2001, the Department issued its antidumping questionnaire 
to Red Point, Luk Ka, and Max Fortune. On June 13, 2001, we learned 
from counsel for Luk Ka that Luk Ka was not going to submit a response 
to our questionnaire. See Memorandum from Thomas Schauer to the File 
dated June 13, 2001. On June 21, 2001, we received responses to our 
questionnaire from Red Point and Max Fortune.
    The petitioners filed comments on the respondents' submissions in 
June 2001. On June 29, 2001, the Department issued supplemental 
questionnaires to Red Point and Max Fortune. On July 13, 2001, we 
received responses to our supplemental questionnaires from Red Point 
and Max Fortune.
    On June 6, 2001, we requested publicly available information for 
valuing the factors of production and comments on surrogate-country 
selection. On June 29, 2001, we received comments from Max Fortune on 
the surrogate country it believes is appropriate to use for valuing the 
factors of production.
    On July 20, 2001, the petitioners submitted additional factors 
information and argument for the use of Indonesia as the surrogate 
country. However, this information came in too late for us to be able 
to use it in our preliminary determination. We intend to re-examine the 
issue of surrogate-country selection for our final determination and 
invite parties to comment pursuant to the instructions in the ``Public 
Comment'' section of this notice, below.

Period of Investigation

    The POI corresponds to each exporter's two most recent fiscal 
quarters prior to the filing of the petition, i.e., July 1, 2000, 
through December 31, 2000.

Scope of Investigation

    The products covered by this investigation are certain folding gift 
boxes. Certain folding gift boxes are a type of folding or knock-down 
carton manufactured from paper or paperboard. Certain folding gift 
boxes are produced from a variety of recycled and virgin paper or 
paperboard materials, including, but not limited to, clay-coated paper 
or paperboard and kraft (bleached or unbleached) paper or paperboard. 
The scope of the investigation excludes gift boxes manufactured from 
paper or paperboard of a thickness of more than 0.8 millimeters, 
corrugated paperboard, or paper mache. The scope of the investigation 
also excludes those gift boxes for which no side of the box, when 
assembled, is at least nine inches in length.
    Certain folding gift boxes are typically decorated with a holiday 
motif using various processes, including printing, embossing, 
debossing, and foil stamping, but may also be plain white or printed 
with a single color. The subject merchandise includes certain folding 
gift boxes, with or without handles, whether finished or unfinished, 
and whether in one-piece or multi-piece configuration. One-piece gift 
boxes are die-cut or otherwise formed so that the top, bottom, and 
sides form a single, contiguous unit. Two-piece gift boxes are those 
with a folded bottom and a folded top as separate pieces. Certain 
folding gift boxes are generally packaged in shrink-wrap, cellophane, 
or other packaging materials, in single or multi-box packs for sale to 
the retail customer. The scope of the investigation excludes folding 
gift boxes that have a retailer's name, logo, trademark or similar 
company information printed prominently on the box's top exterior (such 
folding gift boxes are often known as ``not-for-

[[Page 40975]]

resale'' gift boxes or ``give-away'' gift boxes and may be provided by 
department and specialty stores at no charge to their retail 
customers). The scope of the investigation also excludes folding gift 
boxes where both the outside of the box is a single color and the box 
is not packaged in shrink-wrap, cellophane, other resin-based packaging 
films, or paperboard.
    Imports of the subject merchandise are classified under Harmonized 
Tariff Schedules of the United States (HTSUS) subheadings 4819.20.00.40 
and 4819.50.40.60. These subheadings also cover products that are 
outside the scope of this investigation. Furthermore, although the 
HTSUS subheadings are provided for convenience and customs purposes, 
our written description of the scope of this investigation is 
dispositive.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual dumping margins for each known exporter and producer of the 
subject merchandise. However, section 777A(c)(2) of the Act gives the 
Department discretion, when faced with a large number of exporters/
producers, to limit its examination to a reasonable number of such 
companies if it is not practicable to examine all companies. There is 
no data on the record that indicates conclusively the number of 
producers/exporters from the PRC that exported the subject merchandise 
to the United States during the POI.
    On March 27, 2001, the Department sent partial section A 
questionnaires addressed to all producers/exporters of the subject 
merchandise listed in the petition and to the Chinese government asking 
for its assistance in delivering the questionnaire to all producers/
exporters of the subject merchandise. On April 11, 2001, Max Fortune 
and Red Point submitted their responses. On April 17, 2001, we received 
a response from Dexon. Finally, on April 19, 2001, we received a 
response from Luk Ka. All of these companies had export sales to the 
United States. However, Dexon indicated that it went out of business on 
March 26, 2001. On this basis, we have no reason to believe that Dexon 
continues to be a going concern that would be affected by this 
antidumping investigation. For this reason, we found that it is not 
necessary to investigate Dexon further. In addition, Red Point, Luk Ka, 
and Max Fortune were responsible for over 99.7 percent of all exports 
during the POI of subject merchandise of the companies that responded 
to our March 27, 2001, questionnaire. Therefore, we examined Red Point, 
Luk Ka, and Max Fortune as mandatory respondents but did not 
investigate Dexon. See Memorandum from Laurie Parkhill to Richard W. 
Moreland dated May 1, 2001.

Non-Market-Economy Country Status

    The Department has treated the PRC as a non-market-economy (NME) 
country in all past antidumping investigations (see, e.g., Final 
Determination of Sales at Less Than Fair Value: Creatine Monohydrate 
from the People's Republic of China, 64 FR 71104 (December 20, 1999), 
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)). A designation as an NME remains in effect until 
it is revoked by the Department (see section 771(18)(C) of the Act).
    The respondents in this investigation have not requested a 
revocation of the PRC's NME status. We have, therefore, preliminarily 
determined to continue to treat the PRC as an NME. When we investigate 
imports from an NME, section 773(c)(1) of the Act directs us to base 
the normal value (NV) on the NME producer's factors of production, 
valued in a market economy at a comparable level of economic 
development and that is a significant producer of comparable 
merchandise. The sources used to value individual factors are discussed 
in the ``Factor Valuations'' section, below.

Separate Rates

    In proceedings involving NME countries, the Department begins with 
a rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty deposit rate. In this case, two respondents have 
requested separate company-specific rates. Max Fortune is a Hong Kong 
company which is wholly owned by two Hong Kong nationals. Red Point is 
a Hong Kong company which is wholly owned by non-PRC nationals. Because 
Hong Kong companies are treated as market-economy companies (see 
Application of U.S. Antidumping and Countervailing Duty Laws to Hong 
Kong, 62 FR 42965 (August 11, 1997)), we determine that no separate-
rate analysis is required for either Max Fortune or Red Point.
    Although the record indicates that Luk Ka is located in Hong Kong, 
Luk Ka did not respond in full to our questionnaire. See Memorandum to 
File dated June 13, 2001. Therefore, we have no information as to who 
owns Luk Ka, whether it is registered for business in Hong Kong or the 
PRC, or what degree of control the government of the PRC exercises over 
Luk Ka. Therefore, we preliminarily determine that Luk Ka has not 
rebutted the presumption that it is subject to PRC government control 
and is part of the PRC-wide entity.

The PRC-Wide Rate

    All exporters were given the opportunity to respond to the 
Department's questionnaire. As explained above, we received 
questionnaire responses from Red Point and Max Fortune. Luk Ka did not 
respond to our full questionnaire, but its response to our March 27, 
2001, questionnaire indicated it exported the subject merchandise to 
the United States during the POI. For this reason, we preliminarily 
determine that at least one PRC exporter of certain folding gift boxes 
failed to respond to our questionnaire. Moreover, because Rank Sharp 
Investments, Ltd., Bigfield Goldenford Holdings Ltd., Fangyuan 
International Economy and Trade Co., and Hong Kong Dasan Paper Products 
Co., Ltd., did not respond to our March 27, 2001, request for 
information, we assume that these companies also exported the subject 
merchandise to the United States during the POI. Consequently, we are 
applying a single antidumping rate--the PRC-wide rate--to all other 
exporters in the PRC based on our presumption that those respondents 
who failed to demonstrate entitlement to a separate rate constitute a 
single enterprise under common control by the Chinese government. See, 
e.g., Final Determination of Sales at Less Than Fair Value: Synthetic 
Indigo from the People's Republic of China, 65 FR 25706, 25707 (May 3, 
2000). The PRC-wide rate applies to all entries of subject merchandise 
except for entries from Red Point and Max Fortune.

Use of Facts Otherwise Available

    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information that has been requested by the Department, fails 
to provide such information in a timely manner or in the form or manner 
requested, significantly impedes a proceeding under the antidumping 
statute, or provides such information but the information cannot be 
verified, the Department shall, subject to sections 782(d) and (e) of 
the Act, use facts otherwise available in reaching the applicable 
determination. Pursuant to section 782(e) of the Act, the Department 
shall not decline to consider submitted information if that information 
is necessary to the determination but does not meet all of the 
requirements established by the Department provided that all of the 
following requirements are met: (1) The

[[Page 40976]]

information is submitted by the established deadline; (2) the 
information can be verified; (3) the information is not so incomplete 
that it cannot serve as a reliable basis for reaching the applicable 
determination; (4) the interested party has demonstrated that it acted 
to the best of its ability; and (5) the information can be used without 
undue difficulties.
    Section 776(a)(2)(B) of the Act requires the Department to use 
facts available when a party does not provide the Department with 
information by the established deadline or in the form and manner 
requested by the Department. In addition, 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 that party as facts otherwise 
available.
    As explained above, the exporters comprising the single PRC-wide 
entity failed to respond to the Department's request for information. 
Pursuant to section 776(a) of the Act, in reaching our preliminary 
determination, we have used total facts available for the PRC-wide rate 
because we did not receive the data needed to calculate a margin for 
that entity. Also, because the exporters comprising the PRC-wide entity 
failed to respond to the Department's requests for information, the 
Department has found that the PRC-wide entity failed to cooperate to 
the best of its ability. Therefore, pursuant to section 776(b) of the 
Act, we have used an adverse inference in selecting from the facts 
available for the margin for that entity. As adverse facts available, 
we recalculated the margins that the petitioners alleged in their 
February 20, 2001, petition using the surrogate values we selected for 
the preliminary determination and selected the higher of the two 
margins because the margins derived from the information in the 
petition are higher than the margins we have calculated for the 
responsive exporters.
    Section 776(c) of the Act provides that, where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 
103-316 (1994) (SAA), states that ``corroborate'' means to determine 
that the information used has probative value. See SAA at 870.
    The petitioners' methodology for calculating the export price (EP) 
and normal value (NV) in the petition is discussed in the initiation 
notice. See Initiation Notice, 66 FR at 15401-15402. To corroborate the 
petitioners' EP calculations, we compared the prices in the petition to 
the prices submitted by Max Fortune for comparable products. To 
corroborate the petitioners' NV calculations, we compared the 
petitioners' factor-consumption data to the data reported by Max 
Fortune and Red Point. Finally, we valued the factors in the petition 
using the surrogate values we selected for the preliminary 
determination.
    As discussed in the memorandum to the file entitled Corroboration 
of Facts Available, dated July 30, 2001, we found that the EP and 
factors-of-production information in the petition were reasonable and, 
therefore, we preliminarily determine that the petition information has 
probative value. Accordingly, we find that the highest margin based on 
petition information and adjusted as described above, 164.75 percent, 
is corroborated within the meaning of section 776(c) of the Act.
    Accordingly, for the preliminary determination, the PRC-wide rate 
is 164.75 percent. Because this is a preliminary margin, the Department 
will consider all margins on the record at the time of the final 
determination for the purpose of determining the most appropriate final 
PRC-wide margin.

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it to base NV, in most 
circumstances, on the NME producer's factors of production, valued in a 
surrogate market-economy country or countries selected in accordance 
with section 773(c)(4) of the Act. In accordance with that provision, 
the Department shall utilize, to the extent possible, the prices or 
costs of factors of production in one or more market-economy countries 
that are at a level of economic development comparable to the NME 
country and are significant producers of comparable merchandise. The 
sources of the surrogate factor values are discussed in the ``Normal 
Value'' section below.
    The Department has determined that India, Pakistan, Indonesia, Sri 
Lanka, and the Philippines are countries comparable to the PRC in terms 
of economic development. See Memorandum from Jeffrey May to Laurie 
Parkhill: Antidumping Duty Investigation on Certain Folding Gift Boxes 
from the People's Republic of China, dated June 12, 2001. Customarily, 
we select an appropriate surrogate based on the availability and 
reliability of data from these countries. In this case, we have found 
that India is a significant producer of comparable merchandise and we 
have reliable data from India which we can use to value the factors of 
production.
    We have used India as the surrogate country and, accordingly, we 
have calculated NV using Indian prices to value the PRC producers' 
factors of production, when available and appropriate. See Surrogate 
Country Selection Memorandum to The File from Thomas Schauer dated July 
30, 2001 (Surrogate Country Memorandum). We have obtained and relied 
upon publicly available information wherever possible. See Factor 
Valuation Memorandum to Laurie Parkhill from Thomas Schauer, dated July 
30, 2001 (Factor Valuation Memorandum).
    In accordance with section 351.301(c)(3)(i) of the Department's 
regulations, for the final determination in an antidumping 
investigation, interested parties may submit publicly available 
information to value factors of production within 40 days after the 
date of publication of this preliminary determination.

Fair Value Comparisons

    To determine whether sales of certain folding gift boxes to the 
United States by Red Point and Max Fortune were made at less than fair 
value, we compared EP to NV, as described in the ``Export Price'' and 
``Normal Value'' sections of this notice. In accordance with section 
777A(d)(1)(A)(i) of the Act, we calculated weighted-average EPs.

Export Price

    In accordance with section 772(a) of the Act, we used EP for Max 
Fortune and Red Point because the subject merchandise was sold directly 
to unaffiliated customers in the United States prior to importation and 
because CEP was not otherwise indicated. In accordance with section 
777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average EPs 
to the NVs.
    We calculated EP based on prices to unaffiliated purchasers in the 
United States. For Max Fortune we made deductions, where appropriate, 
for foreign inland freight, seaport charges, brokerage and handling, 
and declaration fees. All of these charges were provided by Hong Kong 
companies and charged in Hong Kong dollars. Therefore, valuation of 
these charges based on surrogate values was not necessary.

[[Page 40977]]

    Red Point claimed that the Department should classify all of its 
sales as CEP sales because, it claimed, its importer, The Lindy Bowman 
Company, is an affiliated party within the meaning of section 771(33) 
of the Act. Based on our review of the business relationship of Red 
Point and Lindy Bowman, we concluded that Red Point has not 
demonstrated that the two firms are affiliated. See Red Point United 
States Price Analysis Memorandum dated July 30, 2001. We intend to 
examine this issue further at verification.
    We calculated weighted-average EPs for Red Point's U.S. sales made 
to Lindy Bowman. We made deductions, where appropriate, for foreign 
inland freight from the plant to the port of exportation, domestic 
brokerage and handling, marine insurance, U.S. brokerage and handling, 
and U.S. Customs duties in accordance with section 772(c)(2)(A) of the 
Act. All of these charges were provided by Hong Kong or U.S. companies 
and charged in Hong Kong dollars or U.S. dollars. Therefore, valuation 
of these charges based on surrogate values was not necessary.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if: (1) The 
merchandise is exported from an NME country; and (2) the 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.
    Factors of production include: (1) Hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used 
factors of production, reported by respondents, for materials, energy, 
labor, by-products, and packing. We valued all input factors not 
obtained from market economies using publicly available published 
information as discussed in the ``Surrogate Country'' and ``Factor 
Valuations'' sections of this notice.
    In accordance with 19 CFR 351.408(c)(1), where a producer sources 
an input from a market economy and pays for it in market-economy 
currency, the Department employs the actual price paid for the input to 
calculate the factors-based NV. See also Lasko Metal Products v. United 
States, 437 F.3d 1442, 1445-1446 (Fed. Cir. 1994). Both Max Fortune and 
Red Point reported that some of their inputs were purchased from market 
economies and paid for in market-economy currency. See ``Factor 
Valuations'' section below.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POI. To 
calculate NV, we multiplied the reported per-unit factor quantities by 
publicly available Indian surrogate values (except as noted below). In 
selecting the surrogate values, we considered the quality, specificity, 
and contemporaneity of the data. As appropriate, we adjusted input 
prices by including freight costs to make them delivered prices. For a 
detailed description of all surrogate values used for respondents, see 
the Factor Valuation Memorandum. For a detailed description of all 
actual values used for market-economy inputs, see the Red Point 
Preliminary Calculation Memorandum dated July 30, 2001, and the Max 
Fortune Preliminary Calculation Memorandum dated July 30, 2001.
    Because we used Indian import values to value inputs purchased 
domestically by the Chinese producers, we added to Indian surrogate 
values a surrogate freight cost calculated using the shorter of the 
reported distance from the domestic supplier to the factory or the 
distance from the nearest seaport to the factory. This adjustment is in 
accordance with the decision by the Court of Appeals for the Federal 
Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 
1997). Because the values were not contemporaneous with the POI, we 
adjusted for inflation using wholesale price indices published in the 
International Monetary Fund's International Financial Statistics.
    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from Monthly Trade 
Statistics of Foreign Trade of India--Volume II--Imports (Indian Import 
Statistics) for the time period of April 2000 through September 2000 
because POI-specific Indian import statistics data were not available. 
We adjusted the value for inflation using wholesale price indices 
published in the International Monetary Fund's International Financial 
Statistics.
    As explained above, both Max Fortune and Red Point purchased 
certain raw material inputs from market-economy suppliers and paid for 
them in market-economy currencies. See Red Point's June 21, 2001, 
section D response at page 4 and Max Fortune's June 21, 2001, section D 
response at page D-5 for a description of these inputs. The evidence 
provided by the respondents indicated that their market-economy 
purchases of these inputs were paid for by the respondent in a market-
economy currency. See Red Point's June 21, 2001, section D response at 
page 5 and Max Fortune's June 21, 2001, section D response at Exhibit 
24. Therefore, the Department has determined to use the market-economy 
prices as reported by the respondents to value these inputs from both 
market-economy and NME suppliers because the market-economy inputs 
represented a significant quantity of the inputs in each case and they 
were paid for in a market-economy currency, in accordance with 19 CFR 
351.408(c)(1).
    To value electricity, we used the data we used in Brake Rotors From 
the People's Republic of China: Preliminary Results and Partial 
Rescission of Fifth New Shipper Review, 66 FR 29080, (May 29, 2001) 
(see Factors Valuation of the Preliminary Results Memorandum for that 
proceeding dated May 21, 2001). We had obtained this data from the 
Indian publication ``1995 Conference of Indian Industries: Handbook of 
Statistics and The Center for Monitoring Indian Economy.'' Because the 
rate from this source was not contemporaneous with the POI, we adjusted 
the rate for inflation.
    The respondents reported the following packing inputs: corrugated 
boxes, cartons, shrink wrap, polybags, hand tags, tape, labels, and 
inner paper. We used Indian Import Statistics data for the period April 
2000 through September 2000 (adjusted for inflation) for Red Point. See 
the Factor Valuation Memorandum. Max Fortune obtained all of its 
packing inputs, except as described below, from market-economy 
suppliers. For all packing inputs Max Fortune obtained from market-
economy suppliers, we used the market-economy prices as reported by Max 
Fortune, in accordance with 19 CFR 351.408(c)(1). Max Fortune obtained 
cartons from both market-economy and NME suppliers. See Max Fortune's 
June 21, 2001, section D response at Exhibit 24. In accordance with 19 
CFR 351.408(c)(1), we used the market-economy prices as reported by Max 
Fortune to value all cartons.
    We used Indian transport information to value transport for raw 
materials. To calculate domestic inland freight (truck), we used a 
price report from The Financial Express for transporting materials 
between Mumbai and Surat (263 kilometers), which was provided in 
Exhibit 22 of Max Fortune's June 29, 2001, surrogate-value submission. 
We converted the Indian Rupee value to U.S. dollars and adjusted for 
inflation.
    Both respondents identified a by-product (paperboard scrap) which 
they

[[Page 40978]]

claimed is sold to customers in the PRC. The Department has offset the 
respondents' cost of production by the value of a reported by-product 
where the respondents' responses indicated that it was sold and/or 
where the record evidence demonstrates clearly that the by-product was 
re-entered into the production process. We intend to examine this issue 
more closely at verification for both respondents. See the Factor 
Valuation Memorandum for a complete discussion of by-product credits 
given and the surrogate values used.
    To value factory overhead expenses, selling, general and 
administrative expenses (SG&A), and profit we calculated a rate based 
on financial statements from an Indian producer of comparable 
merchandise, Rollatainers Limited. For a further discussion of the 
surrogate values for overhead, SG&A and profit, see the Factor 
Valuation Memorandum.
    For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC 
regression-based wage rate at Import Administration's home page, 
Expected Wages of Selected NME Countries, revised in May 2000 (see 
http://ia.ita.doc.gov/wages). The source of the wage rate data on the 
Import Administration's Web site is the 1999 Year Book of Labour 
Statistics, International Labor Office (Geneva: 1999), Chapter 5B: 
Wages in Manufacturing.

Verification

    As provided in section 782(i) of the Act, we will verify the 
information relied upon in making our final determination.

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing the 
U.S. Customs Service to suspend liquidation of all imports of subject 
merchandise from the PRC that are entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will instruct the Customs Service to require a 
cash deposit or the posting of a bond equal to the weighted-average 
amount by which the NV exceeds the EP or CEP, as indicated in the chart 
below. These suspension-of-liquidation instructions will remain in 
effect until further notice. The weighted-average dumping margins are 
as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                       percent
                                                                margin
------------------------------------------------------------------------
Red Point Paper Products Co., Ltd..........................        30.11
Max Fortune Industrial Ltd.................................        14.05
PRC-wide Rate..............................................       164.75
------------------------------------------------------------------------

    The PRC-wide rate applies to all entries of the subject merchandise 
except for entries from exporters/producers that are identified 
individually above.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our determination of sales at LTFV. If our final determination 
is affirmative, the ITC will determine before the later of 120 days 
after the date of this preliminary determination or 45 days after our 
final determination whether the domestic industry in the United States 
is materially injured, or threatened with material injury, by reason of 
imports, or sales (or the likelihood of sales) for importation, of the 
subject merchandise.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than fifty days 
after the date of publication of this notice, and rebuttal briefs, 
limited to issues raised in case briefs, no later than fifty-five days 
after the date of publication of this preliminary determination. See 19 
CFR 351.309(c)(1)(i); 19 CFR 351.309(d)(1). A list of authorities used 
and an executive summary of issues should accompany any briefs 
submitted to the Department. This summary should be limited to five 
pages total, including footnotes. In accordance with section 774 of the 
Act, we will hold a public hearing, if requested, to afford interested 
parties an opportunity to comment on arguments raised in case or 
rebuttal briefs. Tentatively, any hearing will be held fifty-seven days 
after publication of this notice at the U.S. Department of Commerce, 
14th Street and Constitution Avenue, NW., Washington, DC 20230, at a 
time and location to be determined. Parties should confirm by telephone 
the date, time, and location of the hearing two days before the 
scheduled date. Interested parties who wish to request a hearing, or to 
participate if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the date of publication of this 
notice. See 19 CFR 351.310(c). Requests should contain: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. At the hearing, each 
party may make an affirmative presentation only on issues raised in 
that party's case brief and may make rebuttal presentations only on 
arguments included in that party's rebuttal brief. See 19 CFR 
351.310(c).
    If this investigation proceeds normally, we will make our final 
determination no later than 75 days after the date of the preliminary 
determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: July 30, 2001.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 01-19622 Filed 8-3-01; 8:45 am]
BILLING CODE 3510-DS-P