[Federal Register Volume 67, Number 189 (Monday, September 30, 2002)]
[Notices]
[Pages 61315-61316]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-24777]


=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-853]


Bulk Aspirin from the People's Republic of China: Notice of Court 
Decision and Suspension of Liquidation

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On September 9, 2002, in Rhodia, Inc. v. United States, 
Consol. Court No. 00-08-00407, Slip. Op. 02-109 (CIT 2002), a lawsuit 
challenging the Department of Commerce's (``the Department's'') 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) and 
accompanying Issues and Decision Memorandum (May 17, 2000) (``Issues 
and Decision Memorandum''), and Notice of Amended Final Determination 
of Sales at Less Than Fair Value: Bulk Aspirin from the People's 
Republic of China, 65 FR 39598 (June 27, 2000) (collectively, ``Final 
Determination''), the Court of International Trade (``CIT'') affirmed 
the Department's remand determination and entered a judgment order. In 
its remand determination, the Department reviewed the record evidence 
regarding the extent to which the Indian surrogate producers are 
integrated and concluded that the evidence did not support the Final 
Determination in this regard. We also reconsidered our use of weighted-
average ratios for overhead, SG&A, and profit, and amended our 
calculations using simple averages. Finally, in accordance with our 
voluntary request for remand, we removed ``trade sales'' (or ``traded 
goods'') from the denominator in calculating the overhead ratio.
    As a result of the remand determination, Jilin Pharmaceutical 
(``Jilin'') will be excluded from the antidumping duty order on bulk 
aspirin from the People's Republic of China (``PRC'') because its 
antidumping rate was de minimis (1.27 percent).\1\ The antidumping duty 
rate for Shandong Xinhua Pharmaceutical Factory, Ltd. (``Shandong'') 
was decreased from 16.51 to 6.42 percent. The PRC-wide rate was 
unchanged from the Final Determination.
---------------------------------------------------------------------------

    \1\ If the Department affirms its preliminary finding in the 
changed circumstances review that Jilin Henghe Pharmaceutical Co. is 
the successor-in-interest to Jilin Pharmaceutical Co., Jilin Henghe 
Pharmaceutical Co. will be excluded from the antidumping duty order 
on bulk aspirin from the PRC.
---------------------------------------------------------------------------

    Consistent with the decision of the U.S. Court of Appeals for the 
Federal Circuit in Timken Co. v. United States, 893 F.2d 337 (Fed. Cir. 
1990) (``Timken''), the Department will continue to order the 
suspension of liquidation of the subject merchandise until there is a 
``conclusive'' decision in this case. If the case is not appealed, or 
if it is affirmed on appeal, the Department will instruct the U.S. 
Customs Service to terminate the suspension of liquidation for Jilin 
and revise the cash deposit rate for Shandong.

EFFECTIVE DATE: September 30, 2002.

FOR FURTHER INFORMATION CONTACT: Blanche Ziv or Julie Santoboni, AD/CVD 
Enforcement Group I, Office 1, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230;

[[Page 61316]]

telephone: (202) 482-4207 or (202) 482-4194, respectively.

SUPPLEMENTARY INFORMATION:

Background

    Following publication of the Final Determination, Rhodia, Inc., the 
petitioner in this case, and respondents, Jilin and Shandong, filed 
lawsuits with the CIT challenging the Department's Final Determination.
    In the underlying investigation, the Department was required to 
develop values for factory overhead, SG&A, and profit relying on 
``surrogate'' data from Indian producers of comparable merchandise. See 
section 773(c) of the Act. Regarding factory overhead, the Department 
used information from three Indian producers: Andhra Sugars, Alta 
Laboratories, and Gujarat Organics, Ltd. In the Final Determination, 
the Department found that the PRC producers of bulk aspirin were more 
fully integrated than the Indian producers. Therefore, the Department 
reasoned, the PRC producers would have a higher overhead-to-raw 
material ratio than the surrogate Indian producers. To account for this 
in computing normal value, the Department applied the overhead ratio 
calculated from the Indian producers' data twice, once to reflect the 
overhead incurred in producing the inputs for aspirin, and again to 
reflect the overhead incurred in producing aspirin from those inputs.
    The Court remanded this issue to the Department. First, the Court 
pointed to the lack of evidence or explanation regarding the 
Department's position that integrated producers would experience higher 
overhead ratios than non-integrated producers. The Court acknowledged 
that the Department had provided a more detailed explanation of its 
rationale in its brief to the Court. However, citing Hoogovens Staal 
B.V. v. United States, 86 F. Supp. 2d 1317, 1331 (CIT 2000), the Court 
ruled that the Department could not rely upon such post hoc 
rationalizations. Rhodia at 10.
    Additionally, the Court questioned the Department's conclusion that 
the Indian producers were less integrated than the PRC producers. 
Specifically, the Court found that the Department could not reasonably 
infer this from the evidence cited in the Issues and Decision 
Memorandum. Therefore, the Court remanded this issue to the Department 
and asked the agency to identify the facts in the record that support 
its final determination. Rhodia at 12.
    The second issue remanded to the Department relates to the 
calculation of the ratios for overhead, SG&A, and profit. In the Final 
Determination, the Department computed a weighted average of the 
overhead, SG&A, and profit of the three Indian surrogate producers. 
However, citing to the agency's usual practice of using simple averages 
in these situations, the Court ruled that the Department had provided 
no explanation for departing from this practice. Thus, the Court 
directed the Department to explain its reasoning for computing weighted 
averages in this case. Rhodia at 15.
    Finally, the Department sought, and the Court granted, a voluntary 
remand to correct the calculation of the overhead ratio by removing 
traded goods from the denominator. Rhodia at 13.
    To assist it in complying with the Court's instructions, the 
Department asked the parties to identify information on the record of 
the proceeding regarding the extent of integration of Indian producers 
of comparable merchandise. See the December 13, 2001, letter to Rhodia, 
Inc., Jilin and Shandong. Responses were received from the three 
parties on January 15, 2002, and rebuttal comments were received on 
January 22, 2002.
    The Draft Redetermination Pursuant to Court Remand (``Draft 
Results'') was released to the parties on February 4, 2002. In its 
Draft Results, the Department reviewed the record evidence regarding 
the extent to which the Indian surrogate producers are integrated and 
concluded that the evidence did not support the Final Determination in 
this regard. We also reconsidered our use of weighted-average ratios 
for overhead, SG&A, and profit, and amended our calculations using 
simple averages. Finally, in accordance with our voluntary request for 
remand, we removed ``trade sales'' (or ``traded goods'') from the 
denominator in calculating the overhead ratio.
    Comments on the Draft Results were received from Rhodia, Inc. and 
Shandong on February 11, 2002, and rebuttal comments were received from 
the petitioner and Jilin on February 14, 2002. On March 29, 2002, the 
Department responded to the Court's Order of Remand by filing its Final 
Results of Redetermination pursuant to the Court remand. (``Final 
Results of Redetermination''). The Department's Final Results of 
Redetermination were identical to the Draft Results except that in the 
Final Results of Redetermination, the Department did not include the 
two companies with negative profits, i.e., Alta and Gujarat, in the 
profit calculation.
    The CIT affirmed the Department's Final Results of Redetermination 
on September 9, 2002. See Rhodia, Inc. v. United States, Consol. Court 
No. 00-08-00407, Slip. Op. 02-109 (CIT 2002).

Suspension of Liquidation

    The U.S. Court of Appeals for the Federal Circuit, in Timken, held 
that the Department must publish notice of a decision of the CIT or the 
Federal Circuit which is not ``in harmony'' with the Department's Final 
Determination. Publication of this notice fulfills that obligation. The 
Federal Circuit also held that the Department must suspend liquidation 
of the subject merchandise until there is a ``conclusive'' decision in 
the case. Therefore, pursuant to Timken, the Department must continue 
to suspend liquidation pending the expiration of the period to appeal 
the CIT's September 9, 2002, decision or, if that decision is appealed, 
pending a final decision by the Federal Circuit. The Department will 
instruct the Customs Service to revise cash deposit rates and liquidate 
relevant entries covering the subject merchandise effective September 
30, 2002, in the event that the CIT's ruling is not appealed, or if 
appealed and upheld by the Court of Appeals for the Federal Circuit.

    Dated: September 23, 2002.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 02-24777 Filed 9-27-02; 8:45 am]
BILLING CODE 3510-DS-S