[Federal Register Volume 68, Number 54 (Thursday, March 20, 2003)]
[Notices]
[Pages 13669-13672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-6733]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-836]


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting a 
new shipper review of the antidumping duty order on glycine from the 
People's Republic of China (PRC) in response to a request from Tianjin 
Tiancheng Pharmaceutical Co. Ltd. (TTPC). The period of review (POR) is 
March 1, 2001, through February 28, 2002. The preliminary results are 
listed below in the section titled ``Preliminary Results of Review.'' 
Interested parties are invited to comment on these preliminary results. 
(See the ``Preliminary Results of Review'' section of this notice.)

EFFECTIVE DATE: March 20, 2003.

FOR FURTHER INFORMATION CONTACT: Scot Fullerton or Matthew Renkey, 
Office of AD/CVD Enforcement VII, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1386 or (202) 482-2312, respectively.

Background

    On March 29, 1995, the Department published in the Federal Register 
an antidumping duty order on glycine from the PRC. See Antidumping Duty 
Order: Glycine from the People's Republic of China, 60 FR 16116, (March 
29, 1995). On March 29, 2002, the Department received a request for a 
new shipper review from TTPC; however, this request was not filed in 
accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as 
amended (the Act) and section 351.214(c) of the Department's 
regulations. On April 29, 2002, the Department sent a letter to TTPC 
asking them to properly refile their request with the Department by May 
1, 2002. The Department allowed TTPC to correct its business 
proprietary information (BPI) as it had done with a concurrent request 
for a new shipper review in another case. See the Memorandum to the 
File through Maureen Flannery from Matthew Renkey, Initiation of New 
Shipper Review of Glycine from the People's Republic of China (May 17, 
2002). On May 1, 2002, the Department received a properly filed request 
for a new shipper review from TTPC for the antidumping duty order on 
glycine from the People's Republic of China. On May 24, 2002, the 
Department published its initiation of this new shipper review for the 
period March 1, 2001, through February 28, 2002. See Glycine from the 
People's Republic of China: Initiation of Antidumping New Shipper 
Review, 67 FR 36572 (May 24, 2002).
    On May 24, 2002, we issued a questionnaire to TTPC. On July 11, 
2002, we received TTPC's section A questionnaire response, and on July 
12, 2002 we received the sections C and D questionnaire response. On 
November 13, 2002, we issued a supplemental questionnaire to TTPC. We 
received the response to this questionnaire on December 9, 2002. On 
February 26, 2003, we requested information from the U.S. importer of 
TTPC's new shipper merchandise. We have not yet received a response to 
this request. Any information provided by the importer will be analyzed 
for purposes of the final results of this new shipper review. On 
November 12, 2002, the Department extended the preliminary results of 
this new shipper review by 120 days until March 13, 2002. See Glycine 
from the People's Republic of China: Notice of Extension of Time Limit 
for Preliminary Results of Antidumping Duty New Shipper Review, 67 FR 
69717 (November 19, 2002).

Scope of the Antidumping Duty Order

    The product covered by this proceeding is glycine which is a free-
flowing crystalline material, like salt or sugar. Glycine is produced 
at varying levels of purity and is used as a sweetener/taste enhancer, 
a buffering agent, reabsorbable amino acid, chemical intermediate, and 
a metal complexing agent. Glycine is currently classified under 
subheading 2922.49.4020 of the Harmonized Tariff Schedule of the United 
States (HTSUS). This proceeding includes glycine of all purity levels.

Verification

    As provided in section 782(i) of the Act, we conducted verification 
of the questionnaire responses of TTPC and its producer, Baoding 
Mancheng Eastern Chemical Plant (Eastern Chemical). We used standard 
verification procedures,

[[Page 13670]]

including on-site inspection of the production and sales facilities, 
and an examination of relevant sales and financial records. Our 
verification results are outlined in the New Shipper Review of Glycine 
from the People's Republic of China: Sales and Factors Verification 
Report for Tianjin Tiancheng Pharmaceutical Co. Ltd., dated March 6, 
2003. (TTPC Verification Report), and New Shipper Review of Glycine 
from the People's Republic of China: Factors Verification Report for 
Baoding Mancheng Eastern Chemical Plant, dated March 6, 2003 (Eastern 
Chemical Verification Report). A public version of this report is on 
file in the Central Records Unit located in room B-099 of the Main 
Commerce Building.

Separate Rates

    TTPC requested a separate, company-specific rate. In its 
questionnaire response, the company stated that it is an independent 
legal entity.
    To establish whether a company operating in a non-market economy 
(NME) country is sufficiently independent to be entitled to a separate 
rate, the Department analyzes each exporting entity under the test 
established in Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 
1991), as amplified by Final Determination of Sales at Less Than Fair 
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 
(May 2, 1994). Under this policy, exporters in NME countries are 
entitled to separate, company-specific margins when they can 
demonstrate an absence of government control, in law and in fact, with 
respect to export activities. Evidence supporting, though not 
requiring, a finding of de jure absence of government control over 
export activities includes: (1) An absence of restrictive stipulations 
associated with an individual exporter's business and export licenses; 
(2) any legislative enactments decentralizing control of companies; and 
(3) any other formal measures by the government decentralizing control 
of companies. De facto absence of government control over exports is 
based on four factors: (1) Whether each exporter sets its own export 
prices independently of the government and without the approval of a 
government authority; (2) whether each exporter retains the proceeds 
from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) whether each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and (4) whether each exporter has autonomy from the 
government regarding the selection of management.

De Jure Control

    With respect to the absence of de jure government control over the 
export activities of the company reviewed, evidence on the record 
supports the claim made by TTPC that its export activities are not 
controlled by the government. TTPC submitted evidence of its legal 
right to set prices independently of all government oversight. The 
business license of TTPC indicates that the company is permitted to 
engage in the exportation of glycine. We found no evidence of de jure 
government control restricting this company's exportation of glycine.
    In general, no export quotas apply to glycine. The Administrative 
Regulations of the People's Republic of China for Controlling the 
Registration of Enterprises as Legal Persons (Legal Persons Law), 
issued on June 13, 1988 by the State Administration for Industry and 
Commerce of the PRC, the Company Law of the People's Republic of China 
(Company Law), adopted by the National People's Congress and 
promulgated by the President on December 29, 1993 and effective on July 
1, 1994, and the Foreign Trade Law of the People's Republic of China 
(Foreign Trade Law), adopted by the National People's Congress and 
promulgated by the President on May 12, 1994 and effective on July 1, 
1994, provided in the record of this review, all indicate a lack of de 
jure government control over privately-owned companies, such as TTPC. 
They demonstrate that control over the company rests with the 
enterprise itself. The Legal Persons Law, Company Law, and Foreign 
Trade Law provide that, to qualify as legal entities, companies must 
have the ``ability to bear civil liability independently'' and the 
right to control and manage their businesses. These laws also state 
that, as an independent legal entity, a company is responsible for its 
own profits and losses. (See Notice of Final Determination of Sales at 
Less Than Fair Value; Manganese Metal from the People's Republic of 
China, 60 FR 56045 (November 6, 1995) (Manganese Metal).) At 
verification, we saw that the business license for TTPC was granted in 
accordance with these laws. The results of verification support the 
information provided regarding these laws. See TTPC Verification Report 
at 2. Compliance with these laws supports a finding of de jure absence 
of central control. Therefore, we preliminarily determine that there is 
an absence of de jure control with respect to TTPC.

De Facto Control

    With respect to the absence of de facto control over export 
activities, the information submitted on the record and reviewed at 
verification, indicates that the management of TTPC is responsible for 
the determination of export prices, profit distribution, marketing 
strategy, and contract negotiations. Our analysis indicates that there 
is no government involvement in the daily operations or the selection 
of management for this company. In addition, we have found that the 
respondent's pricing and export strategy decisions are not subject to 
the review or approval of any outside entity, and that there are no 
governmental policy directives that affect these decisions.
    There are no restrictions on the use of export earnings. The 
general manager of TTPC has the right to negotiate and enter into 
contracts, and may delegate this authority to employees within the 
company. There is no evidence that this authority is subject to any 
level of governmental approval. TTPC stated that its management is 
selected by a board of directors and there is no government involvement 
in the selection process. Finally, decisions made by the respondent 
concerning purchases of subject merchandise from suppliers are not 
subject to government approval. Consequently, because evidence on the 
record indicates an absence of government control, both in law and in 
fact, over the company's activities, we preliminarily determine that a 
separate rate should be applied to TTPC.

Normal Value Comparisons

    To determine whether the respondent's sale of the subject 
merchandise to the United States was made at a price below normal value 
(NV), we compared its United States price to NV, as described in the 
``United States Price'' and ``Normal Value'' sections of this notice.

United States Price

    We based the United States price on export price (EP) in accordance 
with section 772(a) of the Act, because the first sale to an 
unaffiliated purchaser was made prior to importation, and constructed 
export price (CEP) was not otherwise warranted by the facts on the 
record. We calculated EP based on the packed price from the exporter to 
the first unaffiliated purchaser in the United States. We deducted 
foreign inland freight, foreign brokerage and handling, international 
freight, and marine insurance expenses from the starting

[[Page 13671]]

price (gross unit price) in accordance with section 772(c) of the Act.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using a factors-of-production methodology if (1) the 
merchandise is exported from a NME country, and (2) available 
information does not permit the calculation of NV using home-market 
prices, third-country prices, or constructed value under section 773(a) 
of the Act.
    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a NME country. Pursuant to section 
771(18)(C)(i) of the Act, any determination that a foreign country is a 
NME country shall remain in effect until revoked by the administering 
authority. TTPC did not contest such treatment in this review. 
Accordingly, we have applied surrogate values to the factors of 
production to determine NV. See Surrogate Values Used for the 
Preliminary Results of the Antidumping Duty New Shipper Review of 
Glycine from the People's Republic of China, dated March 13, 2003 
(Factor Values Memo).
    We calculated NV based on factors of production in accordance with 
section 773(c)(4) of the Act and section 351.408(c) of our regulations. 
Consistent with the original investigation and the subsequent new 
shipper review of this order, we determined that India (1) is 
comparable to the PRC in level of economic development, and (2) is a 
significant producer of comparable merchandise. We valued the factors 
of production using publicly available information from India. We 
adjusted the Indian import prices and price quotes from Chemical Weekly 
(which publishes chemical prices in India and which has been used as a 
source in other antidumping duty cases) by adding foreign inland 
freight expenses to make them delivered prices.
    We valued the factors of production as follows:

Materials and Energy

    To value chloroacetic acid (also known as monochloroacetic acid), 
we used prices concurrent with the POR as reported in Chemical Weekly. 
To value liquid ammonia, we used the weighted-average unit import value 
derived from the Monthly Trade Statistics of Foreign Trade of India--
Volume II--Imports (Indian Import Statistics) for the period March 2001 
through January 2002. To value hexamine, we used prices reported in 
Chemical Weekly during the months coinciding with the POR. To value 
methanol (also known as methyl alcohol), we used the weighted-average 
unit import value derived from the Indian Import Statistics for the 
period March 2001 through January 2002. We adjusted these values to 
include freight costs incurred between the supplier and the factory. 
For transportation distances used in the calculation of freight 
expenses on these inputs, we added, to surrogate values from India, a 
surrogate freight cost using the shorter of (a) the distance between 
the closest PRC port and the factory, or (b) the distance between the 
domestic supplier and the factory. See Notice of Final Determination of 
Sales at Less Than Fair Value: Collated Roofing Nails From the People's 
Republic of China, 62 FR 51410, 51413 (October 1, 1997) (Roofing 
Nails).
    To value coal, we relied upon Indian import data for steam coal for 
the period March 2001 through January 2002 from the Indian Import 
Statistics. We adjusted the cost of coal to include an amount for 
transportation. To value electricity, we used the 2001 total cost per 
kilowatt hour (KWH) for ``Electricity for Industry'' as reported in the 
International Energy Agency's publication, Key World Energy Statistics, 
2002. For water, we relied upon public information from the October 
1997 Second Water Utilities Data Book: Asian and Pacific Region, 
published by the Asian Development Bank. To achieve comparability of 
electricity and water prices to the factors reported for the POR, we 
adjusted these factor values to reflect inflation to the POR using the 
Wholesale Price Index (WPI) for India, as published in the 2002 
International Financial Statistics (IFS) by the International Monetary 
Fund (IMF).
    To value packing materials (plastic bags and cardboard drums), we 
relied upon Indian import data. To value plastic bags, we used data for 
the period March 2001 through January 2002 as reported in the Indian 
Import Statistics. To value cardboard drums, we used data for the 
period March 2001 through December 2001 from the Indian Import 
Statistics, which was the latest available to the Department for this 
factor. We adjusted the values of packing materials to include freight 
costs incurred between the supplier and the factory following the 
methodology discussed above.

Labor

    For labor, we used the PRC regression-based wage rate at Import 
Administration's home page, Import Library, Expected Wages of Selected 
NME Countries, revised in September 2002, and corrected in February 
2003. See http://ia.ita.doc.gov/wages/corrected00wages/ 
corrected00wages.htm. Because of the variability of wage rates in 
countries with similar per capita gross domestic products, section 
351.408(c)(3) of the Department's regulations requires the use of a 
regression-based wage rate. The source of these wage rate data on the 
Import Administration's web site is the Year Book of Labour Statistics 
2001, International Labour Office (Geneva: 2001), Chapter 5B: Wages in 
Manufacturing.

Factory Overhead, SG&A, and Profit

    To value factory overhead, selling, general, and administrative 
expenses (SG&A), and profit, we used financial information from the 
most recent financial statements of two Indian chemical producers: 
Calibre Chemicals Pvt. Ltd. and National Peroxide Ltd. This information 
was used in the preliminary determination in the antidumping duty 
investigation of saccharin from the PRC. See Notice of Preliminary 
Determination of Sales at Less than Fair Value: Saccharin from the 
People's Republic of China, 67 FR 79049 (December 27, 2002). We applied 
these rates to the calculated cost of manufacture. See Factor Values 
Memo. Other information regarding potential surrogate values for 
factory overhead, SG&A, and profit has recently been placed on the 
record of this case. We will consider this information, and any other 
new surrogate information, for the final results of this review.

Transportation Expenses

    To value truck freight expenses we used nineteen Indian price 
quotes as reported in the February 14, 2000 issue of The Financial 
Express (an Indian business publication), which were used in the 
antidumping duty investigation of certain circular welded carbon-
quality steel pipe from the PRC. See Notice of Final Determination of 
Sales at Less than Fair Value: Certain Circular Welded Carbon-Quality 
Steel Pipe from the People's Republic of China, 67 FR 36570 (May 24, 
2002) (China Pipe). We adjusted the rates to reflect inflation to the 
POR using the WPI for India from the IFS.
    To value foreign brokerage and handling, we used a publicly 
summarized version of the average value for brokerage and handling 
expenses reported in Final Determination of Sales at Less Than Fair 
Value: Certain Hot-Rolled Carbon Steel Flat Products from India, 66 FR 
50406 (October 3, 2001) (Hot-Rolled from India), which was also used in 
China Pipe. We used the average of the

[[Page 13672]]

foreign brokerage and handling expenses reported in the U.S. sales 
listing of the public questionnaire response submitted in the 
antidumping investigation of Essar Steel Ltd. in Hot-Rolled from India. 
Charges were reported on a per metric ton basis. We adjusted these 
values to reflect inflation to the POR using the WPI for India from the 
IFS. See Factor Values Memo.
    To value marine insurance, we used marine insurance data collected 
in the tenth administrative review of tapered roller bearings and parts 
thereof, finished and unfinished, from the People's Republic of China. 
See Memorandum to the File: Marine Insurance Rates (June 30, 1998) 
included in the Factor Values Memo, and Tapered Roller Bearings and 
Parts Thereof, Finished and Unfinished, From the People's Republic of 
China; Final Results of the 1996-1997 Administrative Review and New 
Shipper Review and Determination Not To Revoke Order in Part, 63 FR 
63842 (November 17, 1998). We adjusted this value for inflation during 
the POR using the U.S. dollar PPI data published by the IMF.
    TTPC obtained its international freight service from a market 
economy carrier. Therefore, we are using the amount reported by TTPC, 
which it incurred in U.S. dollars.

Currency Conversion

    We made currency conversions pursuant to section 351.415 of the 
Department's regulations at the rates certified by the Federal Reserve 
Bank.

Preliminary Results of Review

    We preliminarily determine that the following dumping margin 
exists:

------------------------------------------------------------------------
            Manufacturer/Exporter                Time period     Margin
------------------------------------------------------------------------
Baoding Mancheng Eastern Chemical Plant/        3/1/01-2/28/02    43.44%
 Tianjin Tiancheng Pharmaceutical Co. Ltd.
------------------------------------------------------------------------

Cash-Deposit Requirements

    If these preliminary results are not modified in the final results 
of this review, a cash deposit rate of 43.44 percent will be effective 
upon publication of the final results of this new shipper review for 
all shipments of glycine from the PRC produced by Eastern Chemical and 
exported by TTPC and entered, or withdrawn from warehouse, for 
consumption on or after publication date, as provided for by section 
751(a)(2)(c) of the Act. For glycine exported by TTPC but not produced 
by Eastern Chemical, we will apply as the cash deposit rate the PRC-
wide rate, which is currently 155.89 percent.

Assessment Rates

    Upon completion of this new shipper review, the Department shall 
determine, and the U.S. Customs Service shall assess, antidumping 
duties on all appropriate entries. The Department will issue 
appraisement instructions directly to the U.S. Customs Service within 
15 days of the completion of this review. For assessment purposes, we 
calculated importer-specific assessment rates for glycine from the PRC. 
Upon the completion of this review, we will direct Customs to assess 
the resulting ad valorem rates on each entry of the subject merchandise 
by the importer during the POR. For glycine exported by TTPC but not 
produced by Eastern Chemical, we will assess antidumping duties at the 
PRC-wide rate.

Schedule for Final Results of Review

    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 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. Normally, case briefs are to be submitted within 30 days after 
the date of publication of this notice, and rebuttal briefs, limited to 
arguments raised in case briefs, are to be submitted no later than five 
days after the time limit for filing case briefs. Parties who submit 
arguments in this proceeding are requested to submit with the argument: 
(1) A statement of the issues, 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) of the Department's regulations.
    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 date for submission of rebuttal briefs. 
Parties will be notified of the time and location. The Department will 
issue the final results of this new shipper review, which will include 
the results of its analysis of issues raised in the briefs, within 90 
days from the date of the preliminary results, unless the time limit is 
extended.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 351.402(f) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during these review 
periods. 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 new shipper review and this notice are published in accordance 
with sections 751(a)(2)(B) and 777 (i)(1) of the Act.

    Dated: March 11, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-6733 Filed 3-19-03; 8:45 am]
BILLING CODE 3510-DS-P