[Federal Register Volume 69, Number 148 (Tuesday, August 3, 2004)]
[Notices]
[Pages 46512-46516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-17562]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-504
Petroleum Wax Candles from the People's Republic of China: Notice
of Preliminary Results of Antidumping Duty New Shipper Review of
Shandong Huihe, Ltd.
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: On September 30, 2003 the Department of Commerce (the
Department) initiated three new shipper reviews of the antidumping duty
order on petroleum wax candles from the People's Republic of China
(PRC) covering the period August 1, 2002, through July 31, 2003. See
Petroleum Wax Candles from the People's Republic of China: Initiation
of Antidumping Duty New Shipper Reviews, 68 FR 57876 (October 7, 2004)
(Initiation Notice). These new shipper reviews covered three exporters:
Shanghai R&R Imp./Exp. Co., Ltd. (Shanghai R&R); Changshan Import/
Export Co., Ltd. (Changshan); and Shandong Huihe., Ltd (Shandong). The
Department is addressing the preliminary results for Shanghai R&R and
Changshan in separate notices. The review of Shandong covers the period
August 1, 2002 through August 15, 2003.
We preliminarily determine that sales have not been made below
normal value (NV). The preliminary results are listed below in the
section titled ``Preliminary Results of Review.'' If these preliminary
results are adopted in our final results, we will instruct U.S. Customs
and Border Protection (CBP) to assess antidumping duties based on the
difference between the export price (EP) and NV. Interested parties are
invited to comment on these preliminary results. (See the ``Preliminary
Results of Review'' section of this notice.)
EFFECTIVE DATE: August 3, 2004.
FOR FURTHER INFORMATION CONTACT: Dara Iserson or Douglas Kirby, Office
of AD/CVD Enforcement VII, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, D.C. 20230; telephone: (202) 482-
4052 or (202) 482-3782, respectively.
SUPPLEMENTARY INFORMATION:
Background
The Department published in the Federal Register an antidumping
duty order on petroleum wax candles from the PRC on August 28, 1986.
See Notice
[[Page 46513]]
of Final Determination of Sales at Less Than Fair Value and Antidumping
Duty Order: Petroleum Wax Candles from the People's Republic of China,
(51 FR 30686). On August 12, 2003, the Department received from
Shandong Huihe a timely request for a new shipper review this in
accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as
amended (theAct) and section 351.214(c) of the Department's
regulations. In its request, Shandong Huihe identified itself as the
company that produced the petroleum wax candles exported for its new
shipper sale. On September 30, 2003, the Department initiated this new
shipper review for the period August 1, 2002 through July 31, 2003. See
Petroleum Wax Candles From the People's Republic of China: Initiation
of Antidumping Duty New Shipper Review, 68 FR 57876 (October 7, 2003).
On October 22, 2003 we issued a questionnaire to Shandong Huihe.\1\
On December 16, 2003, we received the company's sections A, C, and D
questionnaire response. On April 27, 2004, we issued a supplemental
questionnaire to Shandong Huihe. We received the response to this
questionnaire on May 11, 2004.
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\1\ Section of A of the questionnaire requests general
information concerning a company's corporate structure and business
practices, the merchandise under this investigation that it sells,
and the manner in which it sells that merchandise in all of its
markets. Section B requests a complete listing of all home market
sales, or, if the home market is not viable, of sales in the most
appropriate third-country market (this section is not applicable to
respondents in non-market economy (NME) cases). Section C requests a
complete listing of U.S. sales. Section D requests information on
the factors of production of the merchandise under investigation.
Section E requests information on further manufacturing.
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On January 26, 2004, we requested information from the U.S.
importer of Shandong Huihe's new shipper sales. We received the
importer's response to the questionnaire on May 12, 2004.On June 26,
2004, Shandong Huihe requested that the Department extend the period of
review in order to capture the entry of its new shipper sales.
On March 11, 2004, the Department extended the preliminary results
of this new shipper review by 120 days until July 26, 2004. See
Petroleum Wax candles from the People's Republic of China: Extension of
Time Limit of Preliminary Results of New Shipper Review, 69 FR 12641
(March 17, 2004).
On July 20, 2004, the National Candle Association, petitioner,
submitted comments regarding the sales under review. We received these
comments too late for them to be considered for these preliminary
results. These comments will be fully considered and addressed for the
final results of this new shipper review. In addition, on July 26,
2004, the Department issued a supplemental questionnaire to Shandong
Huihe. The response to this questionnaire will be fully analyzed for
the final results of this new shipper review.
Period of Review
Pursuant to section 351.214(g)(1)(i)(A), the standard period of
review (POR) in a new shipper proceeding initiated in the month
immediately following the anniversary month is the one-year period
immediately preceding the anniversary month. Shandong Huihe requested
that the Department extend the normal one-year period. The Department's
regulations provide it with the discretion to expand the normal POR to
include an entry and sale to an unaffiliated customer in the United
States of subject merchandise if the expansion of the period would
likely not prevent the completion of the review within the time limits
set forth in Section 351.214(i)(1). See Antidumping Duties;
Countervailing Duties; Notice of Proposed Rulemaking and Request for
Public Comment, 61 FR 7308, 7318 (February 27, 1996); Antidumping
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27319-20 (May
19, 1997). See also 19 CFR 351.214(f)(2)(ii).
Because we determine that this short expansion of the period will
not likely prevent the completion of the review within the prescribed
time limits, we have expanded the annual review period. Therefore, the
POR for Shandong Huihe's new shipper review has been defined as August
1, 2002 through August 15, 2003.
Scope of the Order
The products covered by this order are certain scented or unscented
petroleum wax candles made from petroleum wax and having fiber or
paper-cored wicks. They are sold in the following shapes: tapers,
spirals, and straight-sided dinner candles; rounds, columns, pillars,
votives; and various wax-filled containers. The products were
classified under the Tariff Schedules of the United States (TSUS) item
755.25, Candles and Tapers. The products are currently classified under
the Harmonized Tariff Schedule of the United States (HTSUS) item
3406.00.00. Although the HTSUS subheading is provided for convenience
and customs purposes, our written description of the scope of this
proceeding remains dispositive.
Verification
As provided in section 782(i) of the Act, we will conduct
verification of Shandong Huihe following the issuance of the
preliminary results.
Separate Rates
Shandong Huihe has requested a separate, company-specific rate. In
its questionnaire responses, the company states that it is an
independent legal entity.
To establish whether a company operating in a non-market economy
(NME) country is sufficiently independent to be eligible for a separate
rate, the Department analyzes each exporting entity under the test
established in Final Determination of Sales at Less Than Fair Value:
Sparklers from the People's Republic of China, 56 FR 20588 (May 6,
1991), as amplified by Final Determination of Sales at Less Than Fair
Value: Silicon Carbide from the People's Republic of China, 59 FR 22585
(May 2, 1994). Under this policy, exporters in NMEs are entitled to
separate, company-specific margins when they can demonstrate an absence
of government control, both in law and in fact, with respect to export
activities. Evidence supporting, though not requiring, a finding of de
jure absence of government control over export activities includes: 1)
an absence of restrictive stipulations associated with an individual
exporter's business and export licenses; 2) any legislative enactments
decentralizing control of companies; and 3) any other formal measures
by the government decentralizing control of companies. De facto absence
of government control over exports is based on four factors: 1) whether
each exporter sets its own export prices independently of the
government and without the approval of a government authority; 2)
whether each exporter retains the proceeds from its sales and makes
independent decisions regarding the disposition of profits or financing
of losses; 3) whether each exporter has the authority to negotiate and
sign contracts and other agreements; and 4) whether each exporter has
autonomy from the government regarding the selection of management.
De Jure Control
With respect to the absence of de jure government control over the
export activities of the company reviewed, evidence on the record
indicates that Shandong Huihe's export activities are not controlled by
the government. Shandong Huihe submitted evidence of its legal right to
set prices
[[Page 46514]]
independently of all government oversight. The business license of the
company indicates that it is permitted to engage in the exportation of
candles. We find no evidence of de jure government control restricting
this company's exportation of candles.
The following laws, which have been placed on the record of this
review, indicate a lack of de jure government control over privately-
owned companies, such as Shandong Huihe, and that control over these
enterprises rests with the enterprises themselves. The Administrative
Regulations of the People's Republic of China Governing the
Registration of Enterprises as Legal Persons, issued on June 3, 1988,
by the State Council of the PRC, the Company Law of the People's
Republic of China, issued on December 29, 1993, by the National
People's Congress, the Regulations of the People's Republic of China
for Controlling the Registration of Enterprises as Legal Persons,
promulgated by the State Administration for Industry and Commerce on
June 13, 1988, and the General Principles of the Civil Law of the
People's Republic of China, effective on January 1, 1987, all placed on
the record of this review, provide that, to qualify as legal persons,
companies must have the ``ability to bear civil liability
independently'' and the right to control and manage their businesses.
These regulations also state that, as an independent legal entity, a
company is responsible for its own profits and losses. See Notice of
Final Determination of Sales at Less Than Fair Value: Manganese Metal
from the People's Republic of China, 60 FR 56045 (November 6, 1995)
(Manganese Metal). Unless verification shows otherwise, we
preliminarily determine that there is an absence of de jure control
over export activity with respect to this firm.
De Facto Control
With respect to the absence of de facto control over export
activities, the information provided in the questionnaire responses,
which will be reviewed at verification, indicates that the management
of Shandong Huihe is responsible for the determination of export
prices, profit distribution, marketing strategy, and contract
negotiations. Our analysis indicates that there is no government
involvement in the daily operations or the selection of management for
this company. In addition, we have found that the respondent's pricing
and export strategy decisions are not subject to any outside entity's
review or approval, and that there are no governmental policy
directives that affect these decisions.
There are no restrictions on the use of export earnings. The
company's general manager has the right to negotiate and enter into
contracts, and may delegate this authority to employees within the
company. There is no evidence that this authority is subject to any
level of governmental approval. Shandong Huihe has stated that its
management is selected by its board of directors and/or its employees
and that there is no government involvement in the selection process.
Lastly, decisions made by respondent concerning purchases of subject
merchandise from other suppliers are not subject to government
approval. Consequently, because evidence on the record indicates an
absence of government control, both in law and in fact, over its export
activities, we preliminarily determine that Shandong Huihe is eligible
for a separate rate for purposes of this new shipper review.
Normal Value Comparisons
To determine whether respondent's sales of the subject merchandise
to the United States were made at prices below NV, we compare the
United States prices to NV, as described in the ``United States Price''
and ``Normal Value'' sections of this notice.
United States Price
For Shandong Huihe, we based United States price on EP, in
accordance with section 772(a) of the Act, because the first sale to an
unaffiliated purchaser was made prior to importation, and constructed
export price (CEP) was not otherwise warranted by the facts on the
record. We calculated EP based on the packed price from the exporter to
the first unaffiliated purchaser in the United States. We deducted
foreign inland freight and foreign brokerage and handling from the
starting price (gross unit price) in accordance with section 772(c) of
the Act.
Normal Value
Section 773(c)(1) of the Act provides that the Department shall
determine NV using a factors-of-production methodology if (1) the
merchandise is exported from an NME country, and (2) available
information does not permit the calculation of NV using home-market
prices, third-country prices, or constructed value under section 773(a)
of the Act.
In every case conducted by the Department involving the PRC, the
PRC has been treated as an NME country. Pursuant to section
771(18)(C)(i) of the Act, any determination that a foreign country is
an NME country shall remain in effect until revoked by the
administering authority. Shandong Huihe did not contest such treatment
in this review. Accordingly, we have applied surrogate values to the
factors of production to determine NV. See Factor Values Memo for the
Preliminary Results of the Antidumping Duty New Shipper Review of
Petroleum Wax Candles from the People's Republic of China, July 26,
2004 (Factor Values Memo).
We calculated NV based on factors of production in accordance with
section 773(c)(4) of the Act and section 351.408(c) of our regulations.
Consistent with numerous other cases involving the PRC, we determined
that India (1) is comparable to the PRC in level of economic
development, and (2) is a significant producer of comparable
merchandise. See the Memorandum from the Office of Policy regarding
surrogate country selection for this review. We valued the factors of
production using publicly available information from India. We adjusted
the Indian input prices by adding freight expenses to reflect delivered
prices.
We valued the factors of production as follows:
To value petroleum wax, we used the average Indian price for
paraffin wax derived from rates published in Chemical Weekly for the
period August 2001 through July 2002. This price was adjusted on a tax-
exclusive basis to account for the Indian excise tax of 16 percent and
has been inflated through the POR using the wholesale price index (WPI)
published by the Reserve Bank of India (RBI) for the chemicals and
chemical products industry sector. See Reserve Bank of India Bulletin,
Table 39 Index Numbers of Wholesale Prices in India by Groups and Sub-
Groups (Averages), http://www.rbi.org.in.
To value wicks, we used the average Indian import price for HTS
number 5908 from the World Trade Atlas. See http://www.gtis.com/. For
this unit value, we adjusted the total import value by excluding the
value of imports from NME countries, and countries providing their
exporters with non-specific export subsidies (South Korea, Thailand,
and Indonesia). See, e.g., Notice of 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).
Also consistent with our policy, we excluded, in a few instances,
import data that appeared to be aberrational. See, e.g., Memorandum to
Jeff May, Acting Assistant Secretary for Import Administration, from
Barbara Tillman, Acting Deputy Assistant Secretary for Import
Administration, Group III,
[[Page 46515]]
Regarding Issues and Decision Memorandum for the Final Determination of
the Antidumping Duty Investigation of Saccharin from the People's
Republic of China, dated May 20, 2003, at Comment 2, page 5, for a
discussion of this issue. We then divided this import value by the
total import quantity, which we similarly adjusted to exclude the
quantity from NME countries and countries providing non-specific export
subsidies, and import data that appeared aberrational. Since this data
is contemporaneous with the POR, we did not adjust for inflation.
To value polyethylene wax, we used the average Indian import price
for HTS number 34042000 from the World Trade Atlas. See http://www.gtis.com/. For this unit value, we divided the total import value
(which we adjusted to exclude the value of imports from NME countries,
countries with non-specific export subsidies, and import data that
appeared aberrational), by the total import quantity (similarly
adjusted). Since this data is contemporaneous with the POR, we did not
adjust for inflation.
To value coal we used the average Indian import price for HTS
number 27011902 from the Wold Trade Atlas. See http://www.gtis.com. For
this unit value, we divided the total import value (which we adjusted
to exclude the value of imports from NME countries, countries with non-
specific export subsidies, and import data that appeared aberrational),
less the value of imports from NME countries, by the total import
quantity (similarly adjusted). Since this data is contemporaneous with
the POR, we did not adjust for inflation.
To value electricity, we used the value for electricity published
in the first quarter 2001 edition of the International Energy Agency's
Energy Prices and Taxes. Because this data is reported for 1997, we
used the Reserve Bank of India (RBI) Wholesale Price Index (WPI)
inflator for the fuel, power, light and lubricants sector to adjust the
reported price for electricity to reflect inflation through the POR.
See Reserve Bank of India Bulletin, Table 39 Index Numbers of Wholesale
Prices in India by Groups and Sub-Groups (Averages), http://www.rbi.org.in.
To value packing materials (inner box, outerbox, and tape), we used
average Indian import prices for HTS numbers 48192000, 48191000, and
39191000 respectively from the World Trade Atlas. See http://www.gtis.com/. For each of these unit values, we divided the total
import value (which we adjusted to exclude the value of imports from
NME countries, countries with non-specific export subsidies, and import
data that appeared aberrational), by the total import quantity
(similarly adjusted). Since this data is contemporaneous with the POR,
we did not adjust for inflation.
To value factory overhead, selling, general, and administrative
expenses (SG&A), and profit, in accordance with our decision in the
most recent administrative review of petroleum wax candles from the
PRC, we used information reported in the January 1997 Reserve Bank of
India Bulletin, ``Statement 1 - Combined Income, Value of Production,
Expenditure and Appropriation Accounts, Industry Group-wise'' of that
report for the Indian metals and chemicals (and products thereof)
industries. See Notice of Final Results and Rescission, in Part, of the
Antidumping Duty Administrative Review of Petroleum Wax Candles from
the People's Republic of China, 69 FR 12121 (March 15, 2004) (Candles
Final).
For labor, we used the PRC regression-based wage rate at Import
Administration's home page, Import Library, Expected Wages of Selected
NME Countries, revised in September 2001. See http://ia.ita.doc.gov/wages/. Because of the variability of wage rates in countries with
similar per capita gross domestic products, section 351.408(c)(3) of
the Department's regulations requires the use of a regression-based
wage rate. The source of these wage rate data on the Import
Administration's web site is the Yearbook of Labour Statistics 2000,
International Labour Office (Geneva: 2000), Chapter 5B: Wages in
Manufacturing.
To value foreign inland freight, in accordance with our decision in
the most recent administrative review of petroleum wax candles from the
PRC, we used an average of shipping rates for the Mumbai to Pune route
from Chemical Weekly for the period from February 2002 to June 2002.
See Candles Final. Because the data were not contemporaneous with the
period of review (POR) we inflated the price using the WPI for India
taken from the International Monetary Fund's 2003 International
Financial Statistics.
Currency Conversion
We made currency conversions pursuant to section 351.415 of the
Department's regulations at the rates certified by the Federal Reserve
Bank. See http://ia.ita.doc.gov/exchange/index.html.
Preliminary Results of Review
We preliminarily determine that the following dumping margin
exists:
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Manufacturer/Exporter Time Period Margin (ad valorem)
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Shandong Huihe, Ltd........................... 8/1/02-8/15/03 0.00 percent
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Cash Deposit Requirements
At the completion of this new shipper review, the Department will
notify the CBP that bonding will no longer be permitted to fulfill the
security requirements for shipments of petroleum wax candles produced
and exported by Shandong Huihe. If these preliminary results are not
modified in the final results of this review, a cash deposit rate of
zero will be effective upon the publication of the final results of
this new shipper review for all shipments of petroleum wax candles from
the PRC produced and exported by Shandong Huihe and entered, or
withdrawn from warehouse, for consumption on or after the publication
date, as provided for by section 751(a)(2)(C) of the Act. For petroleum
wax candles exported, but not produced by Shandong Huihe, we will apply
as the cash deposit rate the PRC-wide rate, which is currently 108.30
percent ad valorem.
Assessment Rates
If these preliminary results are not changed by the final results,
the Department will direct CBP to liquidate, without regard to
antidumping duties, Shandong Huihe's entries covered by this review.
Schedule for Final Results of Review
Pursuant to19 CFR 351.224(b), the Department will disclose
calculations performed in connection with the preliminary results of
this review within five days of the date of publication of this notice.
Any interested party may request a hearing within 30 days of
publication of this notice in accordance with section 351.310(c) of the
Department's regulations. Any hearing would normally be held 37 days
after the publication of this notice, or the first
[[Page 46516]]
workday thereafter, at the U.S. Department of Commerce, 14th Street and
Constitution Avenue NW, Washington, DC 20230. Individuals who wish to
request a hearing must submit a written request within 30 days of the
publication of this notice in the Federal Register to the Assistant
Secretary for Import Administration, U.S. Department of Commerce, Room
1870, 14th Street and Constitution Avenue, NW, Washington, DC 20230.
Requests for a public hearing should contain: (1) the party's name,
address, and telephone number; (2) the number of participants; and, (3)
to the extent practicable, an identification of the arguments to be
raised at the hearing.
Unless otherwise notified by the Department, interested parties may
submit case briefs within 30 days of the date of publication of this
notice in accordance with 351.309(c)(ii) of the Department's
regulations. As part of the case brief, parties are encouraged to
provide a summary of the arguments not to exceed five pages and a table
of statutes, regulations, and cases cited. Rebuttal briefs, which must
be limited to issues raised in the case briefs, must be filed within
five days after the case brief is filed. If a hearing is held, an
interested party may make an affirmative presentation only on arguments
included in that party's case brief and may make a rebuttal
presentation only on arguments included in that party's rebuttal brief.
Parties should confirm by telephone the time, date, and place of the
hearing 48 hours before the scheduled time.
Unless the time limit is extended, the Department will issue the
final results of this new shipper review no later than 90 days after
the signature date of the preliminary results. The final results will
include the analysis of issues raised in the briefs.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 351.402(f) of the Department's regulations
to file a certificate regarding the reimbursement of antidumping duties
prior to liquidation of the relevant entries during these review
periods. Failure to comply with this requirement could result in the
Secretary's presumption that reimbursement of antidumping duties
occurred and the subsequent assessment of double antidumping duties.
This new shipper review and this notice are published in accordance
with sections 751(a)(2)(B) and 777 (i)(1) of the Act.
Dated: July 26, 2004.
Jeffrey A. May,
Acting Assistant Secretary for Import Administration.
[FR Doc. 04-17562 Filed 8-2-04; 8:45 am]
BILLING CODE 3510-DS-S