[Federal Register Volume 69, Number 16 (Monday, January 26, 2004)]
[Notices]
[Pages 3544-3552]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-1574]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-886]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination: Polyethylene Retail 
Carrier Bags from the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: We preliminarily determine that polyethylene retail carrier 
bags from the People's Republic of China are being, or are likely to 
be, sold in the United States at less than fair value, as provided in 
section 733 of the Tariff Act of 1930, as amended. Interested parties 
are invited to comment on this preliminary determination. We will make 
our final determination not later than 135 days after the date of 
publication of this preliminary determination. The estimated margins of 
sales at less than fair value are shown in the ``Suspension of 
Liquidation'' section of this notice.

EFFECTIVE DATE: January 26, 2004.

FOR FURTHER INFORMATION CONTACT: Hermes Pinilla (Nantong), Edythe 
Artman (Senetex), Kristin Case (United Wah), Jeff Frank (Ming Pak), 
Janis Kalnins (Zhongshan), Jennifer Moats (Hang Lung), Thomas Schauer 
(Rally Plastics), or Dmitry Vladimirov (Glopack), Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 
20230; telephone: (202) 482-4733.

SUPPLEMENTARY INFORMATION:

Preliminary Determination

    The Department of Commerce (the Department) has conducted this 
antidumping investigation in accordance with section 733 of the Tariff 
Act of 1930, as amended (the Act). We preliminarily determine that 
polyethylene retail carrier bags (PRCBs) 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

[[Page 3545]]

``Suspension of Liquidation'' section of this notice.

Case History

    We initiated this investigation on July 10, 2003. See Initiation of 
Antidumping Duty Investigations: Polyethylene Retail Carrier Bags from 
The People's Republic of China, Malaysia, and Thailand, 68 FR 42002 
(July 16, 2003) (Initiation Notice). Since the initiation of this 
investigation the following events have occurred.
    On July 14, 2003, we issued a letter to interested parties in this 
investigation providing an opportunity to comment on the 
characteristics that we should use in identifying the different models 
that the respondents sold in the United States. The petitioners and 
respondents in the concurrent Thailand investigation submitted comments 
on July 28, 2003. No other party submitted comments. After reviewing 
the parties' comments, we adopted the characteristics discussed in the 
``Fair Value Comparisons'' section below in order to determine unique 
models of the subject merchandise.
    On July 14, 2003, we sent a partial Section A questionnaire to all 
of the producers/exporters named in the petition and to the exporters 
who comprise the top 80 percent of exporters in terms of quantity 
imported (in thousands of units) of the subject merchandise according 
to data from U.S. Customs and Border Protection (CBP). We requested 
information on the quantity and value of merchandise sold by these 
exporters in order to identify potential respondents in the 
investigation. We received responses from 39 firms which reported 
exports of subject merchandise during the period of investigation 
(POI). In addition, a number of firms indicated that they did not 
export subject merchandise to the United States during the POI. We did 
not receive responses from a number of firms in the PRC although the 
record indicates that these companies received our July 14, 2003, 
questionnaire. On August 1, 2003, we sent a letter to these firms to 
reiterate our request for a response to the July 14, 2003, 
questionnaire. We received no responses from these firms.
    On August 4, 2003, the U.S. 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, Malaysia, and Thailand. See Polyethylene Retail Carrier Bags 
From China, Malaysia, and Thailand, 68 FR 47609 (August 11, 2003).
    On August 14, 2003, the Department selected the following nine 
mandatory respondents: Hang Lung Plastic Manufactory Limited (Hang 
Lung); Dongguan Huang Jiang United Wah Plastic Bag Factory (United 
Wah); Nantong Huasheng Plastic Products Company, Limited (Nantong); 
Rally Plastics Company, Limited (Rally Plastics); Senetex Trading 
Limited (Senetex); Shanghai Glopack Packing Company Limited and Sea 
Lake Polyethylene Enterprise Limited (collectively Glopack); Tai Chiuan 
Plastic Products Company, Limited (Tai Chiuan); Xiamen Ming Pak 
Plastics Company, Limited (Ming Pak); Zhongshan Dongfeng Hung Wai 
Plastic Bag Manufactory (Zhongshan). See Memorandum from Laurie 
Parkhill to Jeff May regarding selection of respondents dated August 
14, 2003.
    On August 14, 2003, the Department issued its full antidumping 
questionnaire to the mandatory respondents. All of the companies 
responded to the questionnaire except Tai Chiuan. In addition, we 
received section A responses from the following companies: Beijing 
Lianbin Plastics and Printing Company Limited (Beijing Lianbin); 
Dongguan Zhongqiao Combine Plastic Bag Factory (Dongguan Zhongqiao); 
Good-in Holdings Limited (Good-in Holdings); Guangdong Esquel Packaging 
Company, Limited (Guangdong Esquel); Nan Sing Plastics, Limited (Nan 
Sing); Ningbo Fanrong Plastic Products Company Limited (Ningbo 
Fanrong); Ningbo Huansen Plasthetics Company, Limited (Ningbo Huansen); 
Rain Continent Shanghai Company Limited (Rain Continent); Shanghai 
Dazhi Enterprise Development Company, Limited (Shanghai Dazhi); 
Shanghai Fangsheng Coloured Packaging Company Limited (Shanghai 
Fangsheng); Shanghai Jingtai Packaging Material Company, Limited 
(Shanghai Jingtai); Shanghai Light Industrial Products Import and 
Export Corporation (Shanghai Light Industrial); Shanghai Minmetals 
Development Limited (Shanghai Minmetals); Shanghai New Ai Lian Import 
and Export Company Limited (Shanghai New Ai Lian); Shanghai Overseas 
International Trading Company, Limited (Shanghai Overseas); Shanghai 
Yafu Plastics Industries Company Limited (Shanghai Yafu); Weihai 
Weiquan Plastic and Rubber Products Company, Limited (Weihai Weiquan); 
Xiamen Xingyatai Industry Company, Limited (Xiamen Xingyatai); Xinhui 
Henglong.
    We issued supplemental questionnaires to the mandatory respondents 
which submitted full questionnaire responses. We received responses to 
all of the supplemental questionnaires except from Senetex. On December 
3, 2003, Senetex submitted a letter in which it stated that it no 
longer wished to participate in the investigation.
    On October 6, 2003, we requested publicly available information for 
valuing the factors of production and comments on surrogate-country 
selection. On November 20, 2003, we received comments from the 
petitioners on surrogate-country selection. On the same day, we 
received information for factor valuations from the petitioners and the 
mandatory respondents.
    On October 16, 2003, the petitioners requested that the Department 
postpone its preliminary determination by 50 days. In accordance with 
section 733(c)(1)(A) of the Act, we postponed our preliminary 
determination by 50 days. See Notice of Postponement of Preliminary 
Determinations in Antidumping Duty Investigations: Polyethylene Retail 
Carrier Bags From the People's Republic of China, Malaysia, and 
Thailand, 68 FR 61656 (October 29, 2003).

Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2)(A) of the Act provides that a final determination 
may be postponed until no later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise. In accordance with 19 CFR 
351.210(e)(2), the Department requires that exporters requesting 
postponement of the final determination must also request an extension 
of the provisional measures in section 733(d) of the Act from a four-
month period until not more than six months.
    We received requests to postpone the final determination from 
United Wah, Hang Lung, Rally Plastics, Glopack, and Ming Pak. In their 
requests, these respondents consented to the extension of provisional 
measures to no longer than six months. This preliminary determination 
is affirmative, the requests for postponement have been made by 
exporters that account for a significant proportion of exports of the 
subject merchandise, and there is no compelling reason to deny the 
respondents' requests. Therefore, we have extended the deadline for 
issuance of the final determination until 135 days after the date of 
publication of this

[[Page 3546]]

preliminary determination in the Federal Register and have extended 
provisional measures to no longer than six months.

Period of Investigation

    The POI corresponds to the two most recent fiscal quarters prior to 
the filing of the petition, i.e., October 1, 2002, through March 31, 
2003.

Scope Comments

    In accordance with the preamble to our regulations (see Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 
1997)), we set aside a period of time for parties to raise issues 
regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice. Interested parties submitted such comments by August 5, 2003.
    Pursuant to the Department's solicitation of scope comments in the 
Initiation Notice, Regal Import Packaging, an importer of PRCBs, 
requested on August 4, 2003, that bags that are ``four dimensional,'' 
bags with handles made of a material that differs from the bag itself, 
and custom-printed bags where the bag order is of 50,000 bags or less 
be excluded from the scope of the investigation. The importer asserted 
that these types of bags were not manufactured in the United States and 
therefore should be excluded from the scope of the investigation. On 
August 12, 2003, the petitioners commented that the bags in question 
were manufactured in the United States and requested that the 
investigation not exclude these types of bags. We have not adopted the 
changes in the scope of the investigation requested by Regal Import 
Packaging because we find the petitioners have placed sufficient 
evidence on the record to show that the bags in question are 
manufactured in the United States and fall within the scope of the 
petition.

Scope of Investigation

    The merchandise subject to this investigation is PRCBs which may be 
referred to as t-shirt sacks, merchandise bags, grocery bags, or 
checkout bags. The subject merchandise is defined as non-sealable sacks 
and bags with handles (including drawstrings), without zippers or 
integral extruded closures, with or without gussets, with or without 
printing, of polyethylene film having a thickness no greater than .035 
inch (0.889 mm) and no less than .00035 inch (0.00889 mm), and with no 
length or width shorter than 6 inches (15.24 cm) or longer than 40 
inches (101.6 cm). The depth of the bag may be shorter than 6 inches 
but not longer than 40 inches (101.6 cm).
    PRCBs are typically provided without any consumer packaging and 
free of charge by retail establishments (e.g., grocery, drug, 
convenience, department, specialty retail, discount stores, and 
restaurants) to their customers to package and carry their purchased 
products. The scope of the investigation excludes (1) polyethylene bags 
that are not printed with logos or store names and that are closeable 
with drawstrings made of polyethylene film and (2) polyethylene bags 
that are packed in consumer packaging with printing that refers to 
specific end-uses other than packaging and carrying merchandise from 
retail establishments (e.g., garbage bags, lawn bags, trash-can 
liners).
    Imports of the subject merchandise are classified under statistical 
category 3923.21.0090 of the Harmonized Tariff Schedule of the United 
States (HTSUS). This subheading also covers products that are outside 
the scope of this investigation. Furthermore, although the HTSUS 
subheading is 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. Section 777A(c)(2) of the Act gives the Department 
discretion, when faced with a large number of producers or exporters, 
to limit its examination to a reasonable number of such companies if it 
is not practicable to examine all companies.
    On July 14, 2003, the Department sent a partial Section A 
questionnaire to all producers/exporters of the subject merchandise 
named in the petition and to the exporters who represent 80 percent of 
exporters of subject merchandise in terms of quantity imported (in 
thousands of units) into the United States according to data from CBP. 
We also sent the partial questionnaire to the Chinese government and 
asked for its assistance in delivering the questionnaire to all 
producers and exporters of the subject merchandise. We received 
responses from 39 firms that reported exports of subject merchandise 
during the POI.
    There is no data on the record that indicates conclusively the 
number of producers or exporters from the PRC which exported the 
subject merchandise to the United States during the POI. Having 
received 39 responses from producers or exporters to our partial 
Section A questionnaire, we determined that we had the resources to 
examine a maximum of nine of the companies. We found it appropriate to 
select the largest producers/exporters of the subject merchandise from 
the 39 companies in order to cover the greatest possible export volume 
of the merchandise. Thus, we selected Hang Lung, United Wah, Nantong, 
Rally Plastics, Senetex, Glopack, Tai Chiuan, Ming Pak, and Zhongshan 
as our mandatory respondents. See Memorandum from Laurie Parkhill to 
Jeff May regarding selection of respondents, dated August 14, 2003.

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).
    No party in this investigation has requested a revocation of NME 
status for the PRC. Therefore, we have 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 on the NME producer's factors of production, valued in a market 
economy that is 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, the mandatory respondents 
Hang Lung, United Wah, Nantong, Rally Plastics, Senetex, Glopack, Ming 
Pak, and Zhongshan have requested separate company-specific rates. In 
addition, Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, 
Guangdong Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain 
Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, 
Shanghai Light Industrial,

[[Page 3547]]

Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai 
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have 
requested separate rates.
    It is the Department's policy to treat Hong Kong companies as 
market-economy companies. See Application of U.S. Antidumping and 
Countervailing Duty Laws to Hong Kong, 62 FR 42965 (August 11, 1997). 
Based on a review of the Section A responses, we have concluded that 
Good-in Holdings, Hang Lung, United Wah, Nan Sing, Rally Plastics, and 
Zhongshan are companies based in Hong Kong. Therefore, we determine 
that no separate-rate analysis is required for these companies.
    Shanghai Glopack Packing Limited (Shanghai Glopack), an exporter 
with no PRC ownership, reported that it is affiliated with Sea Lake 
Polyethylene Enterprise Limited (Sea Lake), a Hong Kong-based company 
with no PRC ownership. Shanghai Glopack is controlled by the Law 
family, the family that also owns Sea Lake. See Glopack's Section A 
Response, dated September 11, 2003, at page 2. Because of these 
circumstances, we determine that no separate-rate analysis is required 
for Glopack.
    In its Section A Response, dated September 11, 2003, on page A-4, 
Senetex claimed that it was not a PRC entity. We asked for 
documentation of company ownership in the November 20, 2003, 
supplemental questionnaire that we issued to that company. Instead of 
filing a response to the questionnaire, Senetex filed a letter on 
December 3, 2003, in which it stated that it no longer wished to 
participate in the investigation, including verification of the 
company's responses. Because the record does not establish clearly that 
Senetex is a non-PRC entity and because we are unable to verify 
information on this matter, we do not find that Senetex is entitled to 
a separate rate.
    With respect to the companies based in China, in order to establish 
whether a company operating in an NME country is sufficiently 
independent to be eligible for a separate rate, it must establish an 
absence of governmental control on both a de jure and a de facto basis. 
In determining whether a company meets this requirement, 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) (Silicon 
Carbide). Under this test, the Department assigns separate rates in NME 
cases only if an exporter can demonstrate the absence of both de jure 
and de facto governmental control over its export activities. See 
Silicon Carbide.

De Jure Control

    In determining whether there is an absence of de jure government 
control, the Department considers the following: (1) an absence of 
restrictive stipulations associated with an individual exporter's 
business and export licenses; (2) any legislative enactments 
decentralizing control of companies; (3) any other formal measures by 
the government decentralizing control of companies. See id. In this 
case, the mandatory respondents Nantong and Ming Pak provided evidence 
on the record that indicates that their export activities are not 
controlled by the government. In addition, evidence on the record 
indicates that the export activities of the following companies are 
also not controlled by the government: Beijing Lianbin, Dongguan 
Zhongqiao, Guangdong Esquel, Ningbo Fanrong, Ningbo Huansen, Rain 
Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, 
Shanghai Light Industrial, Shanghai Minmetals, Shanghai New Ai Lian, 
Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and 
Xinhui Henglong (collectively the Section A respondents).
    The respondents have placed a number of documents on the record to 
demonstrate absence of de jure government control, including ``Foreign 
Trade Law of the People's Republic of China'' (Foreign Trade Law), 
``Company Law of the PRC'' (Company Law), the ``Administrative 
Regulations of the People's Republic of China Governing the 
Registration of Legal Corporations'' (Administrative Regulations), and 
the ``Law of the People's Republic of China on Industrial Enterprises 
Owned by the Whole People'' (Industrial Enterprise Law). These laws 
indicate that the government lacks control over privately owned 
companies, such as Nantong or Ming Pak, and that these enterprises 
retain control over themselves.
    The Department has analyzed these laws in prior cases and found 
that they establish an absence of de jure control. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Certain Partial-Extension Steel 
Drawer Slides With Rollers From the People's Republic of China, 60 FR 
29571 (June 5, 1995), 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). We have no new information in 
this proceeding which would cause us to reconsider this determination.
    Accordingly, we preliminarily determine that there is an absence of 
de jure government control over export pricing and marketing decisions 
of the respondents identified in paragraph one of this section.

De Facto Control

    The Department typically considers the following four factors in 
evaluating whether each respondent is subject to de facto governmental 
control of its export functions: (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; (4) whether each exporter has autonomy from the government 
regarding the selection of management. See id.
    With respect to the absence of de facto government control over the 
export activities of the companies investigated and those which applied 
for a separate rate, evidence on the record indicates that the 
government has no involvement in the determination of export prices, 
profit distribution, marketing strategy, and contract negotiations with 
regard to Nantong, Ming Pak, or any of the Section A respondents. Our 
analysis indicates that there is no government involvement in the daily 
operations or the selection of management for these companies. In 
addition, we found that these companies' pricing and export strategy 
decisions are not subject to any governmental review or approval and 
that there are no governmental policy directives that affect these 
decisions.
    Consequently, because evidence on the record indicates an absence 
of government control, both in law and in fact, over the export 
activities of all the companies named above, we preliminarily determine 
that these companies have met the requirements for receiving a separate 
rate for purposes of this investigation.

Margins for Cooperative Exporters Not Selected

    Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, Guangdong 
Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain Continent, 
Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light 
Industrial,

[[Page 3548]]

Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai 
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have 
requested separate company-specific rates. These parties responded to 
Section A of the Department's antidumping questionnaire but were not 
selected as respondents in this investigation. They provided 
information to the Department, in a timely manner, for a separate-rate 
analysis. Although we are unable to calculate a company-specific rate 
for these companies due to administrative constraints (see Memorandum 
from Laurie Parkhill to Jeff May regarding selection of respondents, 
dated August 14, 2003), they cooperated in providing the information 
that we requested. Thus, we have calculated a weighted-average margin 
for these companies based on the rates we calculated for the selected 
respondents (see Memorandum from Thomas Schauer to the File regarding 
calculation of the adverse-facts-available and non-adverse-facts-
available margins dated January 16, 2004). See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value: Freshwater Crawfish 
Tail Meat From the People's Republic of China, 62 FR 41347, 41350 
(August 1, 1997). Companies receiving this ``all others'' rate of 12.71 
percent are identified by name in the ``Suspension of Liquidation'' 
section of this notice.

The PRC-Wide Rate

    All exporters were given the opportunity to respond to the 
Department's questionnaire. As explained above, we received responses 
to the full questionnaire from Hang Lung, United Wah, Nantong, Rally 
Plastics, Senetex, Glopack, Ming Pak, and Zhongshan. We have received 
responses to Section A of our questionnaire from Beijing Lianbin, 
Dongguan Zhongqiao, Good-in Holdings, Guangdong Esquel, Nan Sing, 
Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi, 
Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial, 
Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai 
Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong. Tai 
Chiuan, a mandatory respondent, did not respond to our full 
questionnaire and withdrew itself from this investigation on September 
8, 2003; its response to our July 14, 2003, questionnaire indicated it 
exported the subject merchandise to the United States during the POI. 
Another mandatory respondent, Senetex, responded to our full 
questionnaire but then refused to file a response to a supplemental 
questionnaire and withdrew its participation in the investigation. 
Thus, we preliminarily determine that these two PRC exporters of PRCBs 
failed to respond to our requests for information. Moreover, we assume 
that the firms which received our July 14, 2003, questionnaire but did 
not respond to it (see the ``Case History'' section above) also 
exported the subject merchandise to the United States during the POI. 
In addition, we obtained data from CBP that indicated that a number of 
these companies may have 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 which 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 companies which we have preliminarily determined to 
have met the requirements for receiving a separate rate for purposes of 
this investigation.

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.
    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 requests 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 our requests for information, we have 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 have recalculated the 
four margins that the petitioners alleged in their June 20, 2003, 
petition using the surrogate values that we selected for the 
preliminary determination and selecting the highest of the four 
margins, since the margins derived from the information in the petition 
exceed those we calculated for the respondent companies. For details on 
this calculation, see the Memorandum from Thomas Schauer to the File 
regarding calculation of the adverse-facts-available and non-adverse-
facts-available margins dated January 16, 2004.
    In addition, we have determined that the use of a partial adverse 
inference is warranted for certain U.S. sales reported by Zhongshan. On 
January 12, 2004, four days before the due date of our preliminary 
determination, Zhongshan submitted information in which it disclosed 
that an affiliation relationship existed between it and a Hong Kong 
reseller. Because the timing of Zhongshan's submission precluded us 
from analyzing this affiliation completely or from requesting 
additional information pertaining to the matter for purposes of this 
preliminary determination, we found that Zhongshan had failed to 
cooperate to the best of its ability in responding to our requests for 
information. Accordingly, we have applied the adverse-facts-available 
rate, as described above, to all of Zhongshan's sales of subject 
merchandise through this Hong Kong reseller in our calculations for 
this preliminary determination. The Department will evaluate whether 
the submitted information should be used for purposes of the final 
determination. For a detailed discussion of this matter, see the 
calculation memorandum with respect to Zhongshan dated January 16, 
2004.
    We have preliminarily determined to use facts otherwise available 
for all sales reported by Nantong. In our original and supplemental 
questionnaires, we requested that Nantong report its factors-of-
production information on a product-specific basis. On January 12, 
2004, Nantong clarified that its usual

[[Page 3549]]

business practices did not permit it to allocate its use of inputs on 
this basis and that, therefore, it could only provide factor 
information on a more generalized basis. We have concluded that we are 
unable to calculate a margin because, as provided, the factor 
information is distortive of the amount of raw material inputs used in 
the production of the various reported products. Thus, pursuant to 
section 776(a) of the Act, we have determined to use total facts 
available for Nantong's sales. We have found that an adverse inference 
is not warranted in the selection of the facts available since Nantong 
provided timely responses to all of our requests for information and, 
without evidence to the contrary, acted to the best of its ability to 
provide the requested factors-of-production information. Therefore, 
pending our findings at verification, we have concluded that an adverse 
inference, pursuant to section 776(b) of the Act, is not warranted. 
Consequently, we have applied the ``all others'' rate to Nantong's 
sales as the facts otherwise available. For a more detailed discussion 
of this matter, see the calculation memorandum with respect to Nantong 
dated January 16, 2004.
    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 and 
normal value in the petition is discussed in the initiation notice. See 
Initiation Notice, 68 FR at 42003. To corroborate the recalculated 
margin of 80.52 percent, we compared that margin to the margins we 
found for one of the respondents.
    As discussed in the Memorandum to the File regarding the 
corroboration of facts available, dated January 16, 2004, we found that 
the margin of 80.52 percent has probative value. Accordingly, we find 
that the highest margin, based on petition information and adjusted as 
described above, of 80.52 percent is corroborated within the meaning of 
section 776(c) of the Act.
    Accordingly, for the preliminary determination, the PRC-wide rate 
is 80.52 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 that normal value, in most 
circumstances, be based 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 Ron Lorentzen to Laurie 
Parkhill regarding surrogate-country selection dated August 25, 2003. 
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 that we have reliable data from India that we can use 
to value the factors of production. Furthermore, every party that 
submitted factor-valuation data provided data from India and no party 
argued that we should use another country as the surrogate country.
    We have selected India as the surrogate country and, accordingly, 
we have calculated normal value using Indian prices when available and 
appropriate to value the factors of production of the PRCBs producers. 
We have obtained and relied upon publicly available information 
wherever possible. See the Memorandum from Jeff Frank to the File 
regarding surrogate-country selection and factor valuations dated 
January 16, 2004 (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 of the date 
of publication of this preliminary determination.

Fair Value Comparisons

    To determine whether sales of PRCBs to the United States were made 
at less than fair value, we compared export price or constructed export 
price to normal value, as described in the ``U.S. Price'' and ``Normal 
Value'' sections of this notice below. In accordance with section 
777A(d)(1)(A)(i) of the Act, we calculated weighted-average export 
prices and constructed export prices.
    In making the product comparisons, we determined what products 
constituted a unique model based on the following physical 
characteristics reported by the respondents: 1) quality, 2) bag type, 
3) length, 4) width, 5) gusset, 6) thickness, 7) percent of high-
density polyethylene resin, 8) percent of low-density polyethylene 
resin, 9) percent of low-linear-density polyethylene resin, 10) percent 
of color concentrate, 11) percent of ink coverage, 12) number of ink 
colors, 13) number of sides printed.

U.S. Price

    In accordance with section 772(a) of the Act, we used export price 
for Hang Lung, Rally Plastics, Ming Pak, and Zhongshan because the 
subject merchandise was sold directly to unaffiliated customers in the 
United States prior to importation and because constructed export price 
was not otherwise indicated. In accordance with section 772(b) of the 
Act, we used constructed export price for United Wah and Glopack 
because the subject merchandise was sold in the United States after the 
date of importation by a U.S. seller affiliated with the producer. In 
accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-
wide weighted-average export prices and constructed export prices to 
the normal values.
    We calculated export price and constructed export price based on 
the packed F.O.B., C.I.F., or delivered price to unaffiliated 
purchasers in, or for exportation to, the United States. We made 
deductions, as appropriate, for discounts and rebates. We also made 
deductions for any movement expenses in accordance with section 
772(c)(2)(A) of the Act.
    In accordance with section 772(d)(1) of the Act and the SAA at 823-
824, we calculated the constructed export price by deducting selling 
expenses associated with economic activities occurring in the United 
States, which includes commissions, direct selling expenses, and 
indirect selling expenses. For United Wah, we also deducted the cost of 
further manufacturing in accordance with section 772(d)(2) of the

[[Page 3550]]

Act. Finally, we made an adjustment for profit allocated to these 
expenses in accordance with section 772(d)(3) of the Act.

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the normal value 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 normal value 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 
reported factors of production for materials, energy, labor, 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 normal value. See also Lasko Metal Products 
v. United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994). A number of 
respondents reported that some of their inputs were purchased from 
market economies and paid for in market-economy currency. See the 
``Factor Valuations'' section below.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated normal 
value based on factors of production reported by respondents for the 
POI. To calculate normal value, we multiplied the reported per-unit 
factor quantities by publicly available Indian surrogate values (except 
as described 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 company-specific calculation memoranda dated January 
16, 2004.
    Because we used Indian import values to value inputs purchased 
domestically by the Chinese producers, we added surrogate freight costs 
to the calculated surrogate values. We calculated the freight costs by 
selecting the shorter of the reported distances from a domestic 
supplier to the factory or the distance from the nearest seaport to the 
factory 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 some of the values were not contemporaneous with 
the POI, we adjusted those values for inflation using wholesale price 
indices published in the International Monetary Fund's International 
Financial Statistics.
    Except as described below, we valued raw material inputs using the 
weighted-average unit import values derived from Indian import data 
available from the World Trade Atlas (Internet Version, maintained by 
Global Trade Information Services, Incorporated) (Indian Import 
Statistics) for the period October 2002 through March 2003.
    As explained above, a number of respondents purchased certain raw 
material inputs from market-economy suppliers and paid for them in 
market-economy currencies. The respondents provided evidence that 
indicated they paid for their market-economy purchases of inputs in a 
market-economy currency. Therefore, in accordance with 19 CFR 
351.408(c)(1), the Department has determined to use the market-economy 
prices as reported by the respondents in order to value these inputs in 
instances where the inputs were obtained from both market-economy and 
NME suppliers because the market-economy inputs represent a significant 
quantity of the inputs and they were paid for in a market-economy 
currency.
    Furthermore, with regard to both the Indian import-based surrogate 
values and the market-economy input values, we have disregarded prices 
that we have reason to believe or suspect may be subsidized. We have 
reason to believe or suspect that prices of inputs from India, 
Indonesia, South Korea, and Thailand may have been subsidized. We have 
found in other proceedings that these countries maintain broadly 
available, non-industry-specific export subsidies and, therefore, it is 
reasonable to infer that all exports to all markets from these 
countries are subsidized. See Certain Helical Spring Lock Washers from 
the People's Republic of China; Final Results of Administrative Review, 
61 FR 66255 (December 17, 1996), at Comment 1. We are also directed by 
the legislative history not to conduct a formal investigation to ensure 
that such prices are not subsidized. See H.R. Rep. 100-576 at 590 
(1988). Rather, the Department was instructed by Congress to base its 
decision on information that is available to it at the time it is 
making its determination. Therefore, we have not used prices from these 
countries either in calculating the Indian import-based surrogate 
values or in calculating market-economy input values. In instances 
where a market-economy input was obtained solely from suppliers located 
in these countries, we used Indian import-based surrogate values to 
value the input.
    Rally Plastics, Hang Lung, and Ming Pak reported the use of 
recycled resin scrap in the production of its subject merchandise. 
Because the scrap represented the re-use of purchased raw materials, we 
only valued the labor and electricity used to recycle the scrap when 
valuing this input.
    Zhongshan reported amounts of resin scrap produced as a result of 
the production of subject merchandise. We valued the scrap by using 
Indian Import Statistics for imports of polyethylene scrap and thereby 
granted a by-product offset for the scrap. We intend to examine the 
issue of this offset more closely at verification.
    To value electricity, we used data from the International Energy 
Agency's Key World Energy Statistics (2003 edition). Submitted by the 
petitioners in Exhibit 5 of their November 20, 2003, submission, this 
information is contemporaneous with the POI.
    The respondents also reported packing inputs. We used Indian Import 
Statistics data from the period October 2002 through March 2003 to 
value these inputs except where respondents obtained the inputs from 
market-economy suppliers and paid for them in a market-economy 
currency.
    We used Indian transport information in order to value the 
transportation of raw materials. To calculate domestic inland freight 
for trucking services, we selected the week of January 1, 2003, the 
week in the middle of the POI, and obtained freight values from the 
website www.infreight.com. We converted the Indian Rupee value into 
U.S. dollars. To calculate domestic inland freight for rail services, 
we relied upon a rate used in the Final Results of Antidumping 
Administrative Review of Bulk Aspirin from the People's Republic of 
China, 68 FR 48337 (August 13, 2003). We adjusted the rate for 
inflation and converted the Rupee value to U.S. dollars. Some inputs 
were transported by market-economy transportation firms and paid for in 
a market-economy currency. Where this was the case, we added the actual 
market-economy

[[Page 3551]]

transportation expense to the valuation of the factor of production.
    For NME-supplied marine insurance, we relied upon a rate calculated 
in the LTFV investigation of certain color television receivers from 
the PRC. See the Calculations Performed for Xiamen Overseas Chinese 
Electronic Company, Limited, Memorandum, dated November 21, 2003, at 
Attachment IX. Because the rate we used is contemporaneous with the POI 
and in U.S. dollars, we did not need to adjust it for our calculations. 
As is customary in the marine insurance industry, we applied the rate 
to 110 percent of the value of the cargo.
    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, Smitabh Intercon Ltd. For a detailed 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 website, http://ia.ita.doc.gov/wages/corrected00wages/corrected00wages.htm. The source 
of the wage-rate data on the Import Administration's website is the 
International Labour Organization's Yearbook of Labour Statistics 2001.

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

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

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we are directing CBP 
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 CBP to require a cash deposit or the posting 
of a bond equal to the weighted-average amount by which the normal 
value exceeds the export price or the constructed export price, as 
indicated in the chart below except for Hang Lung. Because the 
estimated weighted-average amount for Hang Lung is de minimis, we are 
not directing CBP to suspend liquidation of entries of its merchandise. 
In this instance, the Department shall not require a deposit or posting 
of bond. These suspension-of-liquidation instructions will remain in 
effect until further notice. The weighted-average dumping margins are 
as follows:

----------------------------------------------------------------------------------------------------------------
                 Exporter or Producer                                Weighted-average percent margin
----------------------------------------------------------------------------------------------------------------
Hang Lung.............................................                                                      0.12
United Wah............................................                                                     16.55
Nantong...............................................                                                     12.71
Rally Plastics........................................                                                      9.01
Glopack...............................................                                                      4.45
Ming Pak..............................................                                                     32.19
Zhongshan.............................................                                                     57.09
Beijing Lianbin.......................................                                                     12.71
Dongguan Zhongqiao....................................                                                     12.71
Good-in Holdings......................................                                                     12.71
Guangdong Esquel......................................                                                     12.71
Nan Sing..............................................                                                     12.71
Ningbo Fanrong........................................                                                     12.71
Ningbo Huansen........................................                                                     12.71
Rain Continent........................................                                                     12.71
Shanghai Dazhi........................................                                                     12.71
Shanghai Fangsheng....................................                                                     12.71
Shanghai Jingtai......................................                                                     12.71
Shanghai Light Industrial.............................                                                     12.71
Shanghai Minmetals....................................                                                     12.71
Shanghai New Ai Lian..................................                                                     12.71
Shanghai Overseas.....................................                                                     12.71
Shanghai Yafu.........................................                                                     12.71
Weihai Weiquan........................................                                                     12.71
Xiamen Xingyatai......................................                                                     12.71
Xinhui Henglong.......................................                                                     12.71
PRC-wide Rate.........................................                                                     80.52
----------------------------------------------------------------------------------------------------------------

    The PRC-wide rate applies to all entries of the subject merchandise 
produced in the PRC except for entries from exporters or 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. Section 735(b)(2) requires 
that the ITC make a final determination before the later of 120 days 
after the date of the Department's preliminary determination or 45 days 
after the Department's 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. Because we have 
postponed the deadline for our final determination to 135 days from the 
date of publication of this preliminary determination, the ITC will 
make its final determination within 45 days of our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report issued in this 
proceeding and rebuttal briefs, limited to issues raised in case 
briefs, no later than five days after the deadline date for case 
briefs. A list of authorities

[[Page 3552]]

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 three days after 
the deadline for submission of the rebuttal briefs 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).
    We will make our final determination no later than 135 days after 
the date of publication of the preliminary determination.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: January 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1574 Filed 1-23-04; 8:45 am]
BILLING CODE 3510-DS-S