[Federal Register Volume 67, Number 152 (Wednesday, August 7, 2002)]
[Notices]
[Pages 51167-51170]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-19989]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-853]


Bulk Aspirin from the People's Republic of China: Preliminary 
Results of Antidumping Duty Administrative Review and Changed 
Circumstances Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce is currently conducting an 
administrative review of the antidumping duty order on bulk aspirin 
from the People's Republic of China. The period of review is July 6, 
2000, through June 30, 2001. This review covers imports of subject 
merchandise from two producer/exporters.
    We preliminarily find that sales have not been made below normal 
value. If these preliminary results are adopted in our final results of 
review, we will instruct the Customs Service not to assess antidumping 
duties.
    In addition, in response to a request from Jilin Pharmaceutical 
Import and Export Corporation, Jilin Pharmaceutical (U.S.A.) Inc., and 
Jilin Pharmaceutical Company Ltd., the Department of Commerce published 
a notice of initiation of changed circumstances review on June 7, 2002 
(67 FR 39344). We preliminary find that Jilin Henghe Pharmaceutical is 
the successor-in-interest of Jilin Pharmaceutical Company Ltd. and 
Jilin Pharmaceutical Import and Export Corporation.
    We invite interested parties to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

EFFECTIVE DATE: August 7, 2002.

FOR FURTHER INFORMATION CONTACT: Blanche Ziv or Cole Kyle, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-4207, or (202) 482-1503, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
unless otherwise indicated, all citations to the Department of Commerce 
(``Department'') regulations are to 19 CFR Part 351 (April 2001).

Background

    On July 11, 2000, the Department published an antidumping order on 
bulk aspirin from the People's Republic of China (``PRC''). See Notice 
of Antidumping Duty Order: Bulk Aspirin from the People's Republic of 
China, 65 FR 42673 (July 11, 2000). On July 2, 2001 , the Department 
published in the Federal Register an Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 66 FR 34910 (July 2, 2001).
    On July 27 and 31, 2001, in accordance with 19 CFR 351.213(b), two 
manufacturers/exporters of the subject merchandise, Shandong Xinhua 
Pharmaceutical Co., Ltd. (``Shandong''), and Jilin Pharmaceutical 
Import and Export Company, Jilin Pharmaceutical (U.S.A.) Inc., and 
Jilin Pharmaceutical Limited Company (collectively, ``Jilin 
Pharmaceutical''), respectively, requested that the Department conduct 
an administrative review of this order. In addition, Jilin 
Pharmaceutical requested that, contemporaneous with the ongoing 
administrative review of the order, the Department review the company's 
name change and determine that Jilin Henghe Pharmaceutical (``Jilin 
Henghe'') is the successor-in-interest of Jilin Pharmaceutical.
    On August 20, 2001, we published a notice of initiation of the 
administrative review. See Initiation of Antidumping and Countervailing 
Duty Administrative Reviews and Requests for Revocations in Part, 66 FR 
43570 (August 20, 2001). The period of this review (``POR'') is July 6, 
2000, through June 30, 2001.
    We issued questionnaires to Jilin Pharmaceutical and Shandong on 
October 29, 2001. We received responses to the questionnaires from 
Shandong and Jilin Pharmaceutical on December 5 and 27, 2001, 
respectively.
    On December 21, 2001, the Department invited interested parties to 
comment on surrogate country selection and to provide publicly 
available information for valuing the factors of production. We 
received responses from Rhodia, Inc., (``the petitioner'') and Jilin 
Pharmaceutical on January 22, 2002. Shandong provided surrogate value 
information to the Department on July 8, 2002.
    On March 29, 2002, the Department found that it was not practicable 
to complete the review in the time allotted and published an extension 
of time limit for the completion of the preliminary results of this 
review to no later than July 31, 2002, in accordance with section 
751(a)(3)(A) of the Act. See Bulk Aspirin from the People's Republic of 
China; Extension of Time Limit for the Preliminary Results of the 
Antidumping Duty Administrative Review, 67 FR 15177 (March 29, 2002).
    We issued supplemental questionnaires to Jilin Pharmaceutical and 
Shandong on April 22 and 24, 2002, respectively. We received responses 
to the supplemental questionnaires from Jilin Pharmaceutical and 
Shandong on May 24 and 29, 2002, respectively.
    On, June 3, 2002, we initiated a changed circumstances review to be 
conducted contemporaneously with the ongoing administrative review of 
the order. See Bulk Aspirin From the People's Republic of China; 
Initiation of

[[Page 51168]]

Changed Circumstances Antidumping Duty Administrative Review, 67 FR 
39344 (June 7, 2002). On June 5, 2002, we issued a supplemental 
questionnaire to Jilin Pharmaceutical regarding the changed 
circumstances review. We received a response to the supplemental 
questionnaire from Jilin Pharmaceutical on June 28, 2002. See ``Changed 
Circumstances'' section, below.

Scope of the Order

    The product covered by this review is bulk acetylsalicylic acid, 
commonly referred to as bulk aspirin, whether or not in pharmaceutical 
or compound form, not put up in dosage form (tablet, capsule, powders 
or similar form for direct human consumption). Bulk aspirin may be 
imported in two forms, as pure ortho-acetylsalicylic acid or as mixed 
ortho-acetylsalicylic acid. Pure ortho-acetylsalicylic acid can be 
either in crystal form or granulated into a fine powder (pharmaceutical 
form). This product has the chemical formula C9H8O4. It is defined by 
the official monograph of the United States Pharmacopoeia 23 (``USP''). 
It is currently classifiable under the Harmonized Tariff Schedule of 
the United States (``HTSUS'') subheading 2918.22.1000.
    Mixed ortho-acetylsalicylic acid consists of ortho-acetylsalicylic 
acid combined with other inactive substances such as starch, lactose, 
cellulose, or coloring materials and/or other active substances. The 
presence of other active substances must be in concentrations less than 
that specified for particular nonprescription drug combinations of 
aspirin and active substances as published in the Handbook of 
Nonprescription Drugs, eighth edition, American Pharmaceutical 
Association. This product is currently classifiable under HTSUS 
subheading 3003.90.0000.
    Although the HTSUS subheadings are provided for convenience and 
customs purposes, the written description of the merchandise under 
review is dispositive.

Separate Rates

    It is the Department's standard policy to assign all exporters of 
the merchandise subject to review in nonmarket economy (``NME'') 
countries a single rate unless an exporter can demonstrate an absence 
of government control, both in law and in fact, with respect to 
exports. To establish whether an exporter is sufficiently independent 
of government control to be entitled to a separate rate, the Department 
analyzes the exporter in light of the criteria established in the Final 
Determination of Sales at Less Than Fair Value: Sparklers from the 
People's Republic of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), 
as amplified in the Final Determination of Sales at Less Than Fair 
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 
(May 2, 1994) (``Silicon Carbide'').

Absence of De Jure Control

    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. See Sparklers, 
56 FR at 20589.

Absence of De Facto Control

    A de facto analysis of absence of government control over exports 
is based on four factors -- whether the respondent: 1) sets its own 
export prices independently of the government and other exporters; 2) 
retains the proceeds from its export sales and makes independent 
decisions regarding the disposition of profits or financing of losses; 
3) has the authority to negotiate and sign contracts and other 
agreements; and 4) has autonomy from the government regarding the 
selection of management. See Silicon Carbide, 59 FR at 22587; see also 
Sparklers, 56 FR at 20589.
    In the Notice of Final Determination of Sales at Less Than Fair 
Value: Bulk Aspirin from the People's Republic of China 65 FR 33805 
(May 25, 2000) (``LTFV Investigation''), we determined that there was 
de jure and de facto absence of government control of each investigated 
company's export activities and determined that each company warranted 
a company-specific dumping margin. For the POR, Jilin Pharmaceutical 
and Shandong (collectively, ``the respondents''), responded to the 
Department's request for information regarding separate rates. We have 
found that the evidence on the record is consistent with the final 
determination in the LTFV Investigation and the respondents continue to 
demonstrate an absence of government control, both in law and in fact, 
with respect to their exports, in accordance with the criteria 
identified in Sparklers and Silicon Carbide.

Changed Circumstances

    Jilin Pharmaceutical has requested that the Department conduct a 
changed circumstances review to determine that Jilin Henghe is the 
successor-in-interest of Jilin Pharmaceutical. In making successor-in-
interest determinations, the Department examines several factors 
including, but not limited to, changes in: (1) Management; (2) 
production facilities; (3) supplier relationships; and (4) customer 
base. See, e.g., Brass Sheet and Strip from Canada; Final Results of 
Antidumping Duty Administrative Review, 57 FR 20460, 20461 (May 13, 
1992). While no single factor, or combination of factors, will 
necessarily prove dispositive, the Department will generally consider 
the new company to be the successor to its predecessor company if the 
resulting operations are essentially the same as those of the 
predecessor company. See, e.g., id. and Industrial Phosphoric Acid from 
Israel; Final Results of Changed Circumstances Review, 59 FR 6944, 6945 
(February 14, 1994). Thus, if the evidence demonstrates that, with 
respect to the production and sale of the subject merchandise, the new 
company operates as the same business entity as its predecessor, the 
Department will assign the new company the cash-deposit rate of its 
predecessor.
    Based on the information submitted by Jilin Pharmaceutical during 
the initiation stages of this changed circumstances review and the 
supplemental information submitted on June 28, 2002, we preliminarily 
determine that Jilin Henghe Pharmaceutical Company (``Jilin Henghe'') 
is the successor-in-interest to Jilin Pharmaceutical. We find that the 
company's organizational structure, senior management, production 
facilities, supplier relationships, and customers have remained 
essentially unchanged. Furthermore, Jilin Pharmaceutical has provided 
sufficient documentation of its name change (see Jilin Pharmaceutical's 
June 28, 2002, supplemental response). Based on all the evidence 
reviewed, we find that Jilin Henghe operates as the same business 
entity as Jilin Pharmaceutical. Thus, we preliminarily determine that 
Jilin Henghe should receive the same antidumping duty cash-deposit rate 
with respect to the subject merchandise as Jilin Pharmaceutical, its 
predecessor company.

Export Price and Constructed Export Price

    For certain sales made by the respondents to the United States, we 
used constructed export price (``CEP'') in accordance with section 
772(b) of the Act because the first sale to an unaffiliated purchaser 
occurred after importation of the merchandise into the United States. 
For other sales made by

[[Page 51169]]

the respondents, we used export price (``EP''), in accordance with 
section 772(a) of the Act, because the subject merchandise was sold 
outside the United States to unaffiliated purchasers in the United 
States prior to importation into the United States.
    We calculated EP based on the CIF, C&F, and FOB prices to 
unaffiliated purchasers, as appropriate. In accordance with section 
772(c) of the Act, we deducted from these prices, where appropriate, 
amounts for foreign inland freight, foreign brokerage and handling, 
international freight, and marine insurance. We valued the deductions 
for foreign inland freight, foreign brokerage and handling, and marine 
insurance using surrogate data based on Indian freight costs. (We 
selected India as the surrogate country for the reasons explained in 
the ``Normal Value'' section of this notice, below.) Where all of a 
respondent's marine insurance and ocean freight were provided by PRC-
owned companies, we valued the deductions using surrogate value data. 
However, where a respondent's marine insurance or ocean freight was 
provided by a market economy company and paid for in a market economy 
currency, we used the reported market economy marine insurance or ocean 
freight amount to value these expenses for all U.S. sales made by that 
respondent. See 19 CFR 351.408(c)(1).
    We calculated CEP based on FOB and delivered prices from the 
respondents' U.S. subsidiaries to unaffiliated customers. In accordance 
with section 772(c) of the Act, we deducted from the CEP starting price 
foreign inland freight, international freight, marine insurance, U.S. 
inland freight, U.S. customs duties, and U.S. warehousing expenses. In 
accordance with section 772(d)(1) of the Act, we made deductions for 
the following selling expenses that related to economic activity in the 
United States: credit expenses, indirect selling expenses, inventory 
carrying costs, and direct selling expenses. For certain sales made by 
Jilin Pharmaceutical, we have used the signature date of the 
preliminary results (i.e., July 31, 2002) in the calculation of imputed 
credit expenses (see the memorandum from the Team to the file 
(``Preliminary Results Calculation Memorandum for Jilin Henghe 
Pharmaceutical Co., Ltd.''), dated July 31, 2002). In accordance with 
section 772(d)(3) of the Act, we deducted from the starting price an 
amount for profit.
    International Freight: Where the respondent used a market-economy 
shipper for a significant portion of its sales and paid for the 
shipping in a market-economy currency, we used the average price paid 
by that producer/exporter to value international freight for all of its 
sales. See Tapered Roller Bearings from the People's Republic of China; 
Notice of Preliminary Results of 2000-2001 Review, Partial Rescission 
of Review, and Notice of Intent to Revoke Order, in Part, 67 FR 45451 
(July 9, 2002).
    Marine Insurance: Where the respondent used a market-economy marine 
insurance provider for its sales and paid for the insurance in a 
market-economy currency, we used the average price for marine insurance 
paid by that producer/exporter for all of its sales. Where the 
respondent did not use a market-economy insurance provider, we used a 
June 1998 price quote from a U.S. insurance provider, as we have in 
past PRC cases. See Tapered Roller Bearings and Parts Thereof, Finished 
and Unfinished, From the People's Republic of China; Preliminary 
Results of 1996-97 Antidumping Duty Administrative Review and New 
Shipper Review and Determination Not To Revoke Order in Part, 63 FR 
63842 (November 17, 1998).
    Brokerage and Handling: To value brokerage and handling, we used 
the public version of a U.S. sales listing reported in the 
questionnaire response submitted by Meltroll Engineering for Stainless 
Steel Bar from India; Final Results of Antidumping Duty Administrative 
Review and New Shipper Review and Partial Rescission of Administrative 
Review, 65 FR 48965 (August 10, 2000). Because this information is not 
contemporaneous with the POR, we adjusted the data to the POR by using 
the Indian wholesale price index.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the normal value (``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 (``CV'') 
under section 773(a) of the Act.
    The Department has treated the PRC as an NME country in all 
previous antidumping cases. Furthermore, available information does not 
permit the calculation of NV using home market prices, third country 
prices, or CV under section 773(a) of the Act. In accordance with 
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. The party in this proceeding has not contested 
such treatment in this review. Therefore, we treated the PRC as an NME 
country for purposes of this review and calculated NV by valuing the 
factors of production in a surrogate country.
    Section 773(c)(4) of the Act requires the Department to value the 
NME producer's factors of production, to the extent possible, in one or 
more market economy countries that: (1) are at a level of economic 
development comparable to that of the NME, and (2) are significant 
producers of comparable merchandise. The Department has determined that 
India, Pakistan, Indonesia, Sri Lanka, and the Philippines are 
countries comparable to the PRC in terms of overall economic 
development. For a further discussion of our surrogate selection, see 
the December 18, 2001, Memorandum to Susan Kuhbach from Jeff May ``1st 
Administrative Review of Bulk Aspirin from the People's Republic of 
China,'' (``Surrogate Country Memo''), which is on file in the 
Department's Central Records Unit in Room B-099 of the main Department 
building. According to the available information on the record, we 
determined that India is a significant producer of comparable 
merchandise. None of the interested parties contested the selection of 
India as the surrogate country. Accordingly, we calculated NV using 
Indian values for the PRC producers' factors of production. We obtained 
and relied upon publicly available information wherever possible. In 
many instances, we used the Monthly Statistics of the Foreign Trade of 
India; Volume II Imports (``MSFTI'' ) to value factors of production, 
energy inputs and packing materials. Consistent with the Final 
Determination of Sales at Less than Fair Value: Certain Automotive 
Replacement Glass Windshields From the People's Republic of China, 67 
FR 6482 (February 12, 2002) and accompanying Issues and Decision 
Memorandum, we excluded Indian import data reported in the MSFTI for 
Korea, Thailand and Indonesia in our surrogate value calculations. In 
addition to the MSFTI data, we used information from Indian Chemical 
Weekly (``ICW'') to value certain chemical inputs.

Factors of Production

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by the respondents. To 
calculate NV, the reported unit factor quantities were multiplied by 
publicly available Indian surrogate values.
    In selecting the surrogate values, we considered the quality, 
specificity, and contemporaneity of the data. As appropriate, we 
adjusted input prices to

[[Page 51170]]

make them delivered prices. For the distances reported, we added to 
Indian CIF surrogate values a surrogate freight cost using the reported 
distances from the PRC port to the PRC factory, or from the domestic 
supplier to the factory. This adjustment is in accordance with the 
United States Court of Appeals for the Federal Circuit's decision in 
Sigma Corp. v. United States, 117 F. 3d 1401, 1807-1908 (Fed.Cir. 
1997). For those values not contemporaneous with the POR, we adjusted 
for inflation using the appropriate wholesale or producer price index 
published in the International Monetary Fund's International Financial 
Statistics.
    Many of the inputs in the production of bulk aspirin are considered 
business proprietary information by the respondents. Due to the 
proprietary nature of this data, we are unable to discuss many of the 
inputs in this preliminary results notice. For a complete analysis of 
surrogate values, see the memorandum from the Team to the file 
(``Factors of Production Valuation Memorandum''), dated July 31, 2002.
    Labor: We valued labor using the method described in 19 CFR 
351.408(c)(3).
    Electricity, Coal and Oil: Consistent with our approach in 
Manganese Metal from the People's Republic of China; Final Results of 
Antidumping Duty Administrative Review, 66 FR 15076 (March 15, 2001), 
we calculated our surrogate value for electricity based on electricity 
rate data reported by the International Energy Agency (``IEA''), 4th 
quarter 2000. For coal, we used import values from the MSFTI. We based 
the value of fuel oil on prices reported by the IEA, 4th quarter 2000.
    Factory Overhead, SG&A, and Profit: We based our calculation of 
factory overhead, SG&A, and profit on a simple average derived from the 
financial data of three Indian companies of comparable merchandise: 
Andhra Sugars Ltd. (``Andhra''), Alta Laboratories Ltd. (``Alta''), and 
Gujarat Organics Ltd. (``Gujarat''). Our calculations and application 
of overhead, SG&A and profit ratios are consistent with the 
Department's practice. See, e.g., Certain Preserved Mushrooms from the 
People's Republic of China, 65 FR 66703, 66707 (November 7, 2000); 
Certain Cut-to-Length Carbon Steel Late from the People's Republic of 
China, 62 FR 61964, 61970 (November 20, 1997); Notice of Final 
Determination of Sales at Less Than Fair Value: Bicycles from the 
People's Republic of China, 61 FR 19026, 19039 (April 30, 1996).
    Packing Materials: For packing materials we used import values from 
the MSFTI.
    Inland Freight Rates: To value truck freight rates, we used a 2000 
rate quote from an Indian trucking company. For rail freight, we based 
our calculation on 1999 price quotes from Indian rail freight 
transporters.

Preliminary Results of the Review

    We preliminary find that the following dumping margins exist for 
the period July 6, 2000, through June 30, 2001:

------------------------------------------------------------------------
                                                        Weighted-average
                Exporter/Manufacturer                  margin percentage
------------------------------------------------------------------------
Shandong Xinhua Pharmaceutical Co., Ltd..............               0.00
Jilin Pharmaceutical.................................  0.04 (de minimis)
------------------------------------------------------------------------

    Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). Any hearing, if 
requested, will be held approximately 44 days after the date of 
publication of this notice, 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 this notice. 
Rebuttal briefs and rebuttals to written comments, which must be 
limited to issues raised in such briefs or comments, may be filed not 
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.
    The Department will issue a notice of final results of this 
administrative review, including the results of its analysis of issues 
raised in any such written comments, within 120 days of publication of 
these preliminary results.

Assessment Rates and Cash Deposit Requirements

    Pursuant to 19 CFR 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise. Upon 
issuance of the final results of this administrative review, if any 
importer-specific assessment rates calculated in the final results are 
above de minimis (i.e., at or above 0.5 percent), the Department will 
issue appraisement instructions directly to the Customs Service to 
assess antidumping duties on appropriate entries by applying the 
assessment rate to the entered value of the merchandise. For assessment 
purposes, we calculate importer-specific assessment rates for the 
subject merchandise by aggregating the dumping duties due for all U.S. 
sales to each importer and dividing the amount by the total entered 
value of the sales to that importer.
    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of bulk aspirin entered, or withdrawn from warehouse, for 
consumption on or after the publication date of the final results of 
this administrative review, as provided for by section 751(a)(1) of the 
Act: (1) For the PRC companies named above, which have separate rates, 
no antidumping duty deposits will be required; (2) for previously-
reviewed PRC and non-PRC exporters with separate rates, the cash 
deposit rate will be the company-specific rate established for the most 
recent period during which they were reviewed; (3) for all other PRC 
exporters, the rate will be the PRC country-wide rate, which is 144.02 
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 requirements, when 
imposed, shall remain in effect until publication of the final results 
of the next administrative review.

Notification to Importers

    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.
    We are issuing and publishing these results in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: July 31, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-19989 Filed 8-6-02; 8:45 am]
BILLING CODE 3510-DS-S