[Federal Register Volume 68, Number 68 (Wednesday, April 9, 2003)]
[Notices]
[Pages 17343-17346]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8670]


-----------------------------------------------------------------------

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

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 1, 
2001, through June 30, 2002. This review covers imports of subject 
merchandise from two producer/exporters.
    We preliminarily find that sales have been made at not less than 
normal value. If these preliminary results are adopted in our final 
results of review, we will instruct the Customs Service to liquidate 
entries of bulk aspirin produced and exported by Shandong Xinhua 
Pharmaceutical Co., Ltd., and Jilin Henghe Pharmaceutical Company Ltd., 
without regard to antidumping duties.
    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: April 9, 2003.

FOR FURTHER INFORMATION CONTACT: Julie Santoboni or Blanche Ziv, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-4194, or(202) 482-4207, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 11, 2000, the Department of Commerce (``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 1, 2002, the Department published in the Federal 
Register an Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity To Request Administrative Review, 
67 FR 77172 (July 1, 2002).
    On July 10 and 30, 2002, in accordance with 19 CFR 351.213(b), two 
producer/exporters of the subject merchandise, Shandong Xinhua 
Pharmaceutical Co., Ltd. (``Shandong''), and Jilin Henghe 
Pharmaceutical Company Ltd. (``Jilin''), respectively, requested that 
the Department conduct an administrative review of this order. On July 
31, 2002, Rhodia, Inc. (``petitioner'') also requested an 
administrative review for Jilin and Shandong.
    On August 27, 2002, 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, 67 FR 
55000 (August 27, 2002). The period of this review (``POR'') is July 1, 
2001, through June 30, 2002.
    We issued questionnaires to Jilin and Shandong on September 24, 
2002. We received responses to the questionnaires from Shandong and 
Jilin on November 22 and December 4, 2002, respectively.
    On December 18, 2002, 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 the petitioner on January 22 and 27, 2003. 
Jilin provided surrogate value information to the Department on January 
28 and March 13, 2003.
    We issued supplemental questionnaires to Jilin and Shandong between 
December 2002, and March 2003. We received responses to the 
supplemental questionnaires from both respondents from January through 
March 2003.

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 C[bdi9]H[bdi8]O[bdi4]. 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

[[Page 17344]]

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 
an absence of both de jure and de facto government control of each 
investigated company's export activities and determined that each 
company warranted a company-specific dumping margin. For the POR, Jilin 
and Shandong (collectively, ``the respondents''), responded to the 
Department's request for information regarding separate rates. We find 
that the evidence on the record is consistent with 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.

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 Tariff Act of 1930, as amended (``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 Jilin, 
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 and constructed export price methodology was not 
otherwise indicated.
    We calculated EP based on the FOB prices to unaffiliated 
purchasers. 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, as appropriate, we deducted 
from the starting price foreign inland freight, international freight, 
marine insurance, brokerage and handling, U.S. inland freight, U.S. 
customs duties, and U.S. warehousing expenses. We valued the deductions 
for foreign inland freight 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 
the respondent used a market-economy shipper for more than an 
insignificant 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). Where the respondent used a market-economy marine 
insurance provider for more than an insignificant portion of 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.
    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). See the ``Factors of Production Valuation Memorandum'' dated 
April 2, 2003 (``FOP memo''). Because this information is not 
contemporaneous with the POR, we adjusted the data to the POR by using 
the Indian wholesale price index.
    In accordance with section 772(d)(1) of the Act, for CEP sales 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. Since neither respondent had U.S. dollar denominated 
borrowings during the POR, we calculated credit expenses using the 
short-term interest rate during the POR, as stated by the Federal 
Reserve Board. In accordance with section 772(d)(3) of the Act, we 
deducted from the starting price an amount for profit.

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 a 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 a NME country in all previous 
antidumping cases. In accordance with 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. The parties in 
this proceeding have not contested such treatment in this review. 
Therefore, we treated the PRC as a 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 12, 2002, Memorandum to Susan Kuhbach from Jeffrey May, 
``2\nd\ 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 import data reported in the MSFTI for 
Korea, Thailand and Indonesia in our surrogate value calculations. In 
addition to the MSFTI data, we used Indian domestic prices from Indian 
Chemical Weekly (``ICW'') to value certain chemical inputs. See FOP 
memo.

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

[[Page 17345]]

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 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.
    Certain inputs in the production of bulk aspirin are considered 
business proprietary information by the respondents and cannot be 
discussed in this preliminary results notice. For a complete analysis 
of surrogate values, see the FOP memo.
    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 2001. For coal, we used import values from the MSFTI. We based 
the value of fuel oil on prices reported by the IEA, 4th quarter 2001.
    Factory Overhead, SG&A, and Profit: We based our calculation of 
factory overhead and SG&A on the 2001-2002 financial data of Alta 
Laboratories Ltd. (``Alta''), an Indian producer of identical 
merchandise. Because Alta did not realize a profit during the financial 
period, we relied on the 2001-2002 financial data of two other Indian 
producers of comparable merchandise, Andhra Sugars Ltd. (``Andhra''), 
and Gujarat Organics Ltd. (``Gujarat'').
    Packing Materials: For packing materials we used import values from 
the MSFTI.
    Inland Freight Rates: To value truck freight rates, we used an 
average of trucking rates quoted in ICW. 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 1, 2001, through June 30, 2002:

------------------------------------------------------------------------
                                                       Weighted-average
                Exporter/Manufacturer                  margin percentage
------------------------------------------------------------------------
Shandong Xinhua Pharmaceutical Co., Ltd.............                0.00
Jilin Henghe Pharmaceutical Company Ltd.............                0.00
------------------------------------------------------------------------

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 companies named above, the cash deposit rates for 
exports to the United States by these companies will be the rates for 
these firms shown above, except that, for exporters with de minimis 
rates (i.e., less than 0.5 percent) no deposit will be required; (2) 
for exporters previously found to be entitled to a separate rate in a 
prior segment of the proceeding, and for which no review has been 
requested, the cash deposit rate will continue to be the rate 
established for that exporter in the most recent segment of the 
proceeding; (3) for all other PRC exporters the cash deposit rate will 
be 144.02 percent, the PRC country-wide ad-valorem rate; and (4) for 
all other non-PRC exporters of subject merchandise from the PRC to the 
United States, the cash deposit rate will be the rate applicable to the 
PRC exporter that supplied that non-PRC exporter. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.

Public Comment

    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.

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.


[[Page 17346]]


    Dated: April 2, 2003.
Joseph A. Spetrini,
 Acting Assistant Secretary for Import Administration.
[FR Doc. 03-8670 Filed 4-8-03; 8:45 am]
BILLING CODE 3510-DS-S