[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