[Federal Register Volume 69, Number 68 (Thursday, April 8, 2004)]
[Notices]
[Pages 18520-18524]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8019]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-853]


Bulk Aspirin From the People's Republic of China: Preliminary 
Results of 2002/2003 Antidumping Duty Administrative Review and Notice 
of Intent To Revoke Order in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on bulk aspirin from the People's Republic of 
China with respect to Shandong Xinhua Pharmaceutical Co., Ltd. This 
review covers sales of bulk aspirin to the United States during the 
period July 1, 2002, through June 30, 2003.
    We preliminarily find that, during the period of review, Shandong 
Xinhua

[[Page 18521]]

Pharmaceutical Co., Ltd. has not made sales below normal value. We also 
preliminarily find that the antidumping duty order with respect to 
Shandong Xinhua Pharmaceutical Co., Ltd. should be revoked. If these 
preliminary results are adopted in our final results of this 
administrative review, we will instruct the U.S. Customs and Border 
Protection not to assess 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 8, 2004.

FOR FURTHER INFORMATION CONTACT: Julie Santoboni or Scott Holland, 
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) 482-1279, 
respectively.

SUPPLEMENTARY INFORMATION:

Background

    On July 11, 2000, the Department of Commerce (``the Department'') 
published an antidumping order on bulk aspirin from the People's 
Republic of China (``PRC''). See Notice of Antidumping Duty Order: Bulk 
Aspirin from the People's Republic of China, 65 FR 42673 (July 11, 
2000) (``Bulk Aspirin Order''). On July 2, 2003, the Department 
published in the Federal Register a notice of the opportunity to 
request an administrative review in the above-cited segment of the 
antidumping duty proceeding (see 68 FR 39511). We received a timely 
filed request for review of Jilin Henghe Pharmaceutical Company Ltd. 
(``Jilin'') and Shandong Xinhua Pharmaceutical Co., Ltd. (``Shandong'') 
from Rhodia, Inc. (``the petitioner''). We also received a timely filed 
request for review from Shandong. Shandong also requested that the 
Department revoke the antidumping duty order with regard to its sales 
of subject merchandise, in accordance with 19 CFR 351.222(b). On August 
22, 2003, we initiated an administrative review of Jilin and Shandong. 
See Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 68 FR 50750 (August 22, 
2003). The period of this review (``POR'') is July 1, 2002, through 
June 30, 2003.
    We issued antidumping questionnaires to Jilin and Shandong on 
September 15, 2003. We received responses to the questionnaires from 
Shandong on October 16 and November 7, 2003, and Jilin on October 30 
and November 7, 2003.
    On November 12, 2003, 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 Jilin and Shandong on December 10, 2003 and 
January 9, 2004, respectively.
    On January 5, 2004, the petitioner withdrew its request for review 
of Jilin. Although this withdrawal was received by the Department after 
the regulatory deadline of November 20, 2003, 19 CFR 351.213(d)(1) 
permits the Department to extend the deadline if ``it is reasonable to 
do so.'' Because the petitioner was the only party to request the 
review, we found it is reasonable to extend the deadline to withdraw 
the review request. On February 3, 2004, in accordance with 19 CFR 
351.213(d)(1), we rescinded the administrative review with respect to 
Jilin. See Bulk Aspirin from the People's Republic of China: Notice of 
Partial Rescission of Antidumping Duty Administrative Review, 69 FR 
5126 (February 3, 2004).
    We issued supplemental questionnaires to Shandong in January and 
February 2004, and received responses from Shandong in January, 
February and March 2004. In January 2004, Perrigo Company, an 
interested party, responded to certain supplemental questions issued to 
Shandong. The Department verified the sales and factors of production 
responses submitted by Shandong during March 2004.

Scope of the Order

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

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(``the Act''), during March 2004, we verified the information provided 
by Shandong in the PRC using standard verification procedures, 
including on-site inspection of the manufacturer's facilities, 
examination of relevant sales, cost and financial records, and 
selection of original documentation containing relevant information. 
The Department will report its findings from the Shandong sales and 
factors-of-production verifications at a later date.

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 Notice of 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.

[[Page 18522]]

Absence of De Facto Control

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

Intent To Revoke

    On July 30, 2003, Shandong requested the revocation of the 
antidumping duty order covering bulk aspirin from the PRC as it 
pertains to its sales. Under section 751(d)(1) of the Act, the 
Department ``may revoke, in whole or in part'' an antidumping duty 
order upon completion of a review. Although Congress has not specified 
the procedures that the Department must follow in revoking an order, 
the Department has developed a procedure for revocation that is set 
forth under 19 CFR 351.222. Under section 351.222(b), the Department 
may revoke an antidumping duty order in part if it concludes that (i) 
an exporter or producer has sold the merchandise at not less than 
normal value for a period of at least three consecutive years, (ii) the 
exporter or producer has agreed in writing to its immediate 
reinstatement in the order if the Secretary concludes that the exporter 
or producer, subsequent to the revocation, sold the subject merchandise 
at less than normal value, and (iii) the continued application of the 
antidumping duty order is no longer necessary to offset dumping. 
Section 351.222(b)(3) states that, in the case of an exporter that is 
not the producer of subject merchandise, the Department normally will 
revoke an order in part under section 351.222(b)(2) only with respect 
to subject merchandise produced or supplied by those companies that 
supplied the exporter during the time period that formed the basis for 
revocation.
    A request for revocation of an order in part must address three 
elements. The company requesting the revocation must do so in writing 
and submit the following statements with the request: (1) The company's 
certification that it sold the subject merchandise at not less than 
normal value during the current review period and that, in the future, 
it will not sell at less than normal value; (2) the company's 
certification that, during each of the consecutive years forming the 
basis of the request, it sold the subject merchandise to the United 
States in commercial quantities; and (3) the agreement to reinstatement 
in the order if the Department concludes that the company, subsequent 
to revocation, has sold the subject merchandise at less than normal 
value. See 19 CFR 351.222(e)(1).
    We preliminarily find that the request from Shandong meets all of 
the criteria under 19 CFR 351.222(e)(1). Shandong's revocation request 
includes the necessary certifications in accordance with 351.222(e). 
Shandong has also agreed in writing to the immediate reinstatement in 
the order, as long as any exporter or producer is subject to the order, 
if the Department concludes that Shandong, subsequent to the 
revocation, sold the subject merchandise at less than normal value. 
With regard to the criteria of section 351.222(b)(2), our preliminary 
margin calculations show that Shandong sold bulk aspirin at not less 
than normal value during the current review period. See Dumping Margins 
below. In addition, it sold bulk aspirin at not less than normal value 
in the two previous administrative reviews in which it was involved. 
See Notice of Amended Final Results of Antidumping Duty Administrative 
Review: Bulk Aspirin from the People's Republic of China, 68 FR 12036 
(March 13, 2003), covering the period July 6, 2000, through June 30, 
2001, and Notice of Amended Final Results of Antidumping Duty 
Administrative Review: Bulk Aspirin from the People's Republic of 
China, 68 FR 54890 (September 19, 2003), covering the period July 1, 
2001, through June 30, 2002. Based on our examination of the sales data 
submitted by Shandong, we preliminarily find that Shandong sold the 
subject merchandise in the United States in commercial quantities in 
each of the consecutive years cited by Shandong to support its request 
for revocation. See Preliminary Results Calculation Memorandum for 
Shandong, dated April 1, 2004, which is in the Department's Central 
Records Unit (``CRU''), Room B-099. Also, we preliminarily find that 
application of the antidumping order to Shandong is no longer warranted 
for the following reasons: (1) The company had zero or de minimis 
margins for a period of at least three consecutive years; (2) the 
company has agreed to immediate reinstatement of the order if the 
Department finds that it has resumed making sales at less than fair 
value; and (3) the continued application of the order is not otherwise 
necessary to offset dumping.
    Therefore, we preliminarily find that Shandong qualifies for 
revocation of the order on bulk aspirin from the PRC pursuant to 19 CFR 
351.222(b)(2) and that the order with respect to merchandise produced 
and exported by Shandong should be revoked. If these preliminary 
findings are affirmed in our final results, we will revoke the order in 
part with respect to bulk aspirin from the PRC produced and exported by 
Shandong. In accordance with 19 CFR 351.222(f)(3), we will terminate 
the suspension of liquidation for bulk aspirin produced and exported by 
Shandong that was entered, or withdrawn from warehouse, for consumption 
on or after July 1, 2003, and will instruct the U.S. Customs and Border 
Protection (``CBP'') to refund any cash deposits for such entries.

Export Price and Constructed Export Price

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

[[Page 18523]]

price methodology was not otherwise indicated.
    We calculated EP based on the FOB prices to unaffiliated 
purchasers. We calculated CEP based on delivered prices from Shandong's 
U.S. subsidiary 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, 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 Shandong 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 Shandong 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, 45453 (July 9, 2002). 
Where Shandong 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 Shandong for all of its sales.
    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, and direct selling expenses. Since Shandong did not 
have 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 
Memorandum from Ron Lorentzen, Office of Policy, to Susan Kuhbach, 
Director, AD/CVD Enforcement, Office 1, ``Antidumping Administrative 
Review of Bulk Aspirin from the People's Republic of China: Request for 
a List of Surrogate Countries,'' dated October 31, 2003, which is on 
file in the Department's CRU. 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 producer's 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 
Memorandum from Team to Susan Kuhbach, Director, AD/CVD Enforcement, 
Office 1, ``Factors of Production Valuation for the Preliminary 
Results,'' dated April 1, 2004 (``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 respondent. To calculate 
NV, the reported unit factor quantities were multiplied by either price 
quotes or 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, 
1407-1408 (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.
    Material Inputs: We valued these inputs from MSFTI, ICW, or price 
quotes, as appropriate. See FOP Memo.
    Labor: We valued labor using the method described in 19 CFR 
351.408(c)(3).
    Energy: We calculated the surrogate value for electricity based on 
electricity rate data reported by the International Energy Agency 
(``IEA''), 4th quarter 2002. For coal, we used import values from the 
MSFTI. We based the value of fuel oil on prices reported by the IEA, 
4th quarter 2002. We valued water using the Second Water Utilities Data 
Book, Asian and Pacific Region, October 1997, adjusted for inflation.
    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 financial data of two other Indian producers 
of comparable merchandise, Andhra Sugars Ltd. (``Andhra''), and Gujarat 
Organics Ltd. (``Gujarat'') for 2002-2003 and 2001-2002, respectively.
    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

[[Page 18524]]

freight, we based our calculation on 1999 price quotes from Indian rail 
freight transporters, adjusted for inflation.

Preliminary Results of the Review

    We preliminary find that the following dumping margin exists for 
the period July 1, 2002, through June 30, 2003:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
Shandong Xinhua Pharmaceutical Co., Ltd....................         0.00
------------------------------------------------------------------------

Assessment Rates

    Pursuant to 19 CFR 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise for each 
respondent. 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 CBP to 
assess antidumping duties on appropriate entries. To determine whether 
the duty assessment rates covering the period were de minimis, in 
accordance with the requirement set forth in 19 CFR 351.106(c)(1), we 
calculate importer (or customer)-specific ad valorem rates by 
aggregating the dumping margins calculated for all U.S. sales to that 
importer (or customer) and dividing this amount by the total value of 
the sales to that importer (or customer). Where an importer (or 
customer)-specific ad valorem rate is greater than de minimis, we 
calculate a per unit assessment rate by aggregating the dumping margins 
calculated for all U.S. sales to that importer (or customer) and 
dividing this amount by the total quantity sold to that importer (or 
customer).
    All other entries of the subject merchandise during the POR will be 
liquidated at the antidumping duty rate in place at the time of entry.
    The Department will issue appropriate assessment instructions 
directly to CBP within 15 days of publication of the final results of 
this review.

Cash Deposit Rates

    The following deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of bulk aspirin from the PRC entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(1) of the Act: (1) Because Shandong has 
a zero margin, no cash deposit shall be required; (2) for a company 
previously found to be entitled to a separate rate and for which no 
review was requested, the cash deposit rate will be the rate 
established in the most recent review of that company; (3) for all 
other PRC exporters of subject merchandise, the rate will be the PRC 
country-wide rate, which is 144.02 percent; and (4) for non-PRC 
exporters of subject merchandise from the PRC, the cash deposit rate 
will be the rate applicable to the PRC exporter that supplied that 
exporter. Because Jilin is no longer covered by the antidumping duty 
order, no cash deposit is required for entries manufactured and 
exported by Jilin.
    These requirements, when imposed, 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. A hearing, if requested, will be held 37 
days after the publication of this notice, or the first business day 
thereafter. Interested parties may submit case briefs within 30 days of 
the date of publication of this notice. Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than 35 days after the date of publication of this notice. The 
Department will issue the final results of this administrative review, 
which will include the results of its analysis of issues raised in any 
such comments, within 120 days of publication of the 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.
    This administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 1, 2004.
Jeffrey A. May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-8019 Filed 4-7-04; 8:45 am]
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