[Federal Register Volume 70, Number 68 (Monday, April 11, 2005)]
[Notices]
[Pages 18362-18366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E5-1664]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-898


Partial Affirmative Preliminary Determination of Critical 
Circumstances: Chlorinated Isocyanurates from the People's Republic of 
China

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

EFFECTIVE DATE: April 11, 2005.

FOR FURTHER INFORMATION CONTACT: Cindy Lai Robinson or Brian C. Smith, 
AD/CVD Operations, Office 9, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution

[[Page 18363]]

Avenue, NW, Washington, DC 20230; telephone: (202) 482-3797 or (202) 
482-1766, respectively.

SUPPLEMENTARY INFORMATION:

PRELIMINARY DETERMINATION OF CRITICAL CIRCUMSTANCES

    Based on allegations contained in the Petitioners'\1\ March 4, 
2005, amendment to the May 14, 2004 petition, we preliminarily find, 
pursuant to section 733(e) of the Tariff Act of 1930, as amended (``the 
Act''), and section 351.206 of the Department of Commerce 
(``Department'') regulations, that critical circumstances exist with 
regard to imports of chlorinated isocyanurates from the PRC for the 
PRC-wide entity and Shanghai Tian Yuan International Trading Co., Ltd. 
(``Tian Yuan''), one of the Section A Respondents.\2\ Critical 
circumstances do not exist with regard to imports of chlorinated 
isocyanurates from the PRC for the following entities: Hebei Jiheng 
Chemical Co., Ltd. (``Jiheng''), Nanning Chemical Industry Co., Ltd. 
(``Nanning''), and the remaining four Section A Respondents.
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    \1\\\The petitioners in this antidumping duty investigation are 
Clearon Corporation and Occidental Chemical Corporation (``the 
Petitioners'').
    \2\ The five Section A respondents include: Liaocheng Huaao 
Chemical Industry Co., Ltd. (``Huaao''); Shanghai Tian Yuan 
International Trading Co., Ltd., (``Tian Yuan''); Changzhou Clean 
Chemical Co., Ltd. (``Clean Chemical''); Sinochem Hebei Import & 
Export Corporation (``Sinochem Hebei''); and Sinochem Shanghai 
Import & Export Corporation (``Sinochem Shanghai'') (collectively 
``Section A Respondents'').
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Background

    The Petitioners filed a timely allegation of critical circumstances 
on March 4, 2005 (``critical circumstances petition''), in accordance 
with section 733(e)(1) of the Act and section 351.206(c)(1) of the 
Department's regulations. On March 8 and 14, 2005, the Department 
requested that Jiheng and Nanning report their monthly shipment data of 
subject merchandise to the United States for 2002 through 2005. Nanning 
and Jiheng provided the requested information. In its March 14, 2005, 
response, pursuant to section 351.301(c) of the Department's 
regulations, Jiheng argued that the evidence on the record does not 
support an affirmative finding of critical circumstances with respect 
to Jiheng.

Period of Investigation

    The period of investigation (``POI'') is October 1, 2003, through 
March 31, 2004. This period corresponds to the two most recent fiscal 
quarters prior to the month of the filing of the Petition (May 14, 
2004). See 19 CFR 351.204(b)(1).

Scope of Investigation

    The products covered by this investigation are chlorinated 
isocyanurates. Chlorinated isocyanurates are derivatives of cyanuric 
acid, described as chlorinated s-triazine triones. There are three 
primary chemical compositions of chlorinated isocyanurates: (1) 
trichloroisocyanuric acid (``TCCA'') (Cl[bdi3] (NCO)[bdi3]), (2) sodium 
dichloroisocyanurate (dihydrate) (NaCl[bdi2](NCO)[bdi3])  
2H[bdi2]O), and (3) sodium dichloroisocyanurate (anhydrous) 
(NaCl[bdi2](NCO)[bdi3]). Chlorinated isocyanurates are available in 
powder, granular, and tableted forms. This investigation covers all 
chlorinated isocyanurates.
    Chlorinated isocyanurates are currently classifiable under 
subheadings 2933.69.6015, 2933.69.6021, and 2933.69.6050 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). The tariff 
classification 2933.69.6015 covers sodium dichloroisocyanurates 
(anhydrous and dihydrate forms) and trichloroisocyanuric acid. The 
tariff classifications 2933.69.6021 and 2933.69.6050 represent basket 
categories that include chlorinated isocyanurates and other compounds 
including an unfused triazine ring. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the scope of this investigation is dispositive. Arch's patented 
chlorinated isocyanurates tablet is also included in the scope of this 
investigation. See Preliminary Determination\3\ and Amended Preliminary 
Determination.\4\
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    \3\ Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Chlorinated 
Isocyanurates from the People's Republic of China, 69 FR 75293 
(December 16, 2004) (``Preliminary Determination'').
    \4\ Notice of Amended Preliminary Antidumping Duty Determination 
of Sales at Less Than Fair Value: Chlorinated Isocyanurates from the 
People's Republic of China, 70 FR 9035 (February 24, 2005) (``'''').
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Critical Circumstances

    On March 4, 2005, the Petitioners alleged that there is a 
reasonable basis to believe or suspect critical circumstances exist 
with respect to the antidumping investigation of chlorinated 
isocyanurates from the PRC. Because the Petitioners submitted critical 
circumstances allegations more than 30 days before the scheduled date 
of the final determination but later than 20 days before the 
preliminary determination, the Department must issue a preliminary 
determination of critical circumstances within 30 days after the 
Petitioners submitted the allegation. See Section 351.206(c)(2)(ii) of 
the Department's regulations. Section 733(e)(1) of the Act provides 
that, upon receipt of a timely allegation of critical circumstances, 
the Department will determine whether there is a reasonable basis to 
believe or suspect that: (A)(i) there is a history of dumping and 
material injury by reason of dumped imports in the United States or 
elsewhere of the subject merchandise or (ii) the person by whom, or for 
whose account, the merchandise was imported knew or should have known 
that the exporter was selling the subject merchandise at less than its 
fair value and that there was likely to be material injury by reason of 
such sales, and (B) there have been massive imports of the subject 
merchandise over a relatively short period.
    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine (i) the volume 
and value of the imports, (ii) seasonal trends, and (iii) the share of 
domestic consumption accounted for by the imports. In addition, section 
351.206(h)(2) of the Department's regulations provides that, ``In 
general, unless the imports during the 'relatively short period' . . . 
have increased by at least 15 percent over the imports during an 
immediately preceding period of comparable duration, the Secretary will 
not consider the imports massive.''
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as generally the period beginning on the 
date the proceeding begins (i.e., the date the petition is filed) and 
ending at least three months later. This section provides further that, 
if the Department ``finds that importers, or exporters or producers, 
had reason to believe, at some time prior to the beginning of the 
proceeding, that a proceeding was likely,'' then the Department may 
consider a period of not less than three months from that earlier time.
    In determining whether the above statutory criteria have been 
satisfied, we examined the following information: (1) the evidence 
presented in the Petitioners' March 4, 2005, submission; (2) evidence 
obtained since the initiation of the less-than-fair-value (``LTFV'') 
investigation (i.e., import statistics released by the U.S. Census 
Bureau); and (3) the International Trade Commission's (``ITC'') 
preliminary material injury determination. See

[[Page 18364]]

Chlorinated Isocyanurates from China and Spain, 69 FR 40417 (July 2, 
2004) (``ITC Preliminary Determination'').In determining whether a 
history of dumping and material injury exists, the Department generally 
considers current or previous antidumping duty orders on subject 
merchandise from the country in question in the United States and 
current orders in any other country with regard to imports of 
chlorinated isocyanurates from the PRC. In their March 4, 2005, 
submission, the Petitioners made no statement concerning a history of 
dumping chlorinated isocyanurates from the PRC. However, we are aware 
of an antidumping order in Mexico on trichloroisocyanuric acid from the 
PRC dated December 20, 2002. See WTO Committee on Anti-Dumping 
Practices, Semi-Annual Report Under Article 16.4 of the Agreement, G/
ADP/N/126/MEX at 7 (Feb. 25, 2005).\5\ As discussed in the ``scope of 
investigation'' section of the accompanying Federal Register notice, 
TCCA (i.e., one of three primary chemical compositions of chlorinated 
isocyanurates) is included in the scope of this investigation. 
Therefore, the Department finds that there is a history of injurious 
dumping of chlorinated isocyanurates from the PRC pursuant to section 
733(e)(1)(A)(i) of the Act. See, e.g., Initiation of Antidumping Duty 
Investigation: Certain Steel Concrete Reinforcing Bar From Turkey, 61 
FR 15039, 15040 (April 4, 1996).
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    \5\ We also note that the European Communities reported to the 
WTO that an investigation on trichloroisocyanuric acid (TCCA) was 
initiated in July 2004. See WTO Committee on Anti-Dumping Practices, 
Semi-Annual Report Under Article 16.4 of the Agreement, G/ADP/N/126/
EEC at 39 (Mar. 8, 2005). The existence of this investigation is not 
a factor in our conclusion that there is a history of injurious 
dumping of chlorinated isocyanurates from the PRC pursuant to 
section 733(e)(1)(A)(i) of the Act.
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    Having satisfied Section 733(e)(1)(A)(i) of the Act, the first 
prong of the test is met. However, for these preliminary findings, we 
have also examined the applicability of Sections 733(e)(1)(A)(ii) and 
733(e)(1)(B) as discussed below.
    In determining whether an importer knew or should have known that 
the exporter was selling subject merchandise at LTFV, the Department 
must rely on the facts before it at the time the determination is made. 
The Department generally bases its decision with respect to knowledge 
on the margins calculated in the preliminary antidumping duty 
determination.
    The Department normally considers margins of 25 percent or more for 
export price (``EP'') sales and 15 percent or more for constructed 
export price (``CEP'') sales sufficient to impute importer knowledge of 
sales at LTFV. See e.g., Carbon and Alloy Steel Wire Rod From Germany, 
Mexico, Moldova, Trinidad and Tobago, and Ukraine: Preliminary 
Determination of Critical Circumstances, 67 FR 6224, 6225 (February 11, 
2002). See also Affirmative Preliminary Determination of Critical 
Circumstances: Magnesium Metal from the People's Republic of China, 70 
FR 5606 (February 3, 2005). Our Amended Preliminary Determination found 
margins of 86.79 percent and 179.48 percent for the two mandatory 
respondents, Jiheng and Nanning, respectively. The five Section A 
Respondents received a separate rate margin of 111.03 percent based on 
the weighted-average margins of Jiheng and Nanning, the mandatory 
respondents in this investigation. See Amended Preliminary 
Determination. The PRC-wide entity received a margin of 179.48 percent. 
See Amended Preliminary Determination; see also Antidumping Duty 
Investigation of Chlorinated Isocyanurates from the People's Republic 
of China (the ``PRC'') - Partial Affirmative Preliminary Determination 
of Critical Circumstances (``Preliminary Critical Circumstances 
Memorandum'') at Attachment II, dated April 4, 2005, from James C. 
Doyle, Office Director, AD/CVD Operations, Office 9, to Barbara E. 
Tillman, Acting Deputy Assistant Secretary, Import Administration.
    In determining whether an importer knew or should have known that 
there was likely to be material injury caused by reason of such 
imports, the Department normally will look to the preliminary injury 
determination of the ITC. If the ITC finds a reasonable indication of 
present material injury to the relevant U.S. industry, the Department 
will determine that a reasonable basis exists to impute importer 
knowledge that material injury is likely by reason of such imports. See 
Final Determination of Sales at Less Than Fair Value: Certain Cut-To-
Length Carbon Steel Plate from the People's Republic of China, 62 FR 
61964 (November 20, 1997). In the present case, the ITC preliminarily 
found a reasonable indication that an industry in the United States is 
materially injured by imports of chlorinated isocyanurates from the 
PRC. See ITC Preliminary Determination.
    Based on the ITC's preliminary determination of material injury and 
the preliminary dumping margins for Jiheng, Nanning, the Section A 
Respondents, and the PRC-wide entity, the Department preliminarily 
finds that there is a reasonable basis to believe or suspect that the 
importers knew or should have known that there was likely to be 
material injury by reason of sales at LTFV of subject merchandise from 
the PRC from these exporters.
    Pursuant to section 351.206(h) of the Department's regulations, we 
will not consider imports to be massive unless imports in the 
comparison period have increased by at least 15 percent during a 
relatively ``short period'' over imports in the base period. The 
Department normally considers a ``relatively short period'' as the 
period beginning on the date the proceeding begins and ending at least 
three months later. See 19 C.F.R. 351.206(I). According to section 
351.206(i) of the Department's regulations, ``if the Secretary finds 
that importers, or exporters or producers, had reason to believe, at 
some time prior to the beginning of the proceeding, that a proceeding 
was likely, then the Secretary may consider a time period of not less 
than three months from that earlier time.'' The Department normally 
compares the import volumes of the subject merchandise for at least 
three months immediately preceding the filing of the petition (i.e., 
the ``base period'') to a comparable period of at least three months 
following the filing of the petition (i.e., the ``comparison period''). 
Imports normally will be considered massive when imports during the 
comparison period have increased by 15 percent or more compared to 
imports during the base period. See 19 C.F.R. 351.206(c)(2).
    Based on information contained in an e-mail dated March 2004, the 
Petitioners maintain that there was an awareness in both the United 
States and China of an impending antidumping proceeding prior to the 
May 14, 2004, filing of the petition. Accordingly, the Petitioners 
requested that the Department use an eight-month base period and eight-
month comparison period, and use March 2004 as the knowledge month.
    Our analysis shows that we obtain the same conclusion regarding 
whether there are massive imports for Jiheng, Nanning, the Section A 
Respondents, and the China-wide entity, regardless of whether we use 
March 2004 as the knowledge month, as suggested by the Petitioners, or 
use May 2004 as the knowledge month, in which this proceeding was 
filed.
    According to section 351.206(i) of the Department's regulations, 
the comparison period normally should be at least three months. In this 
case, we determine that a seven-month period is appropriate to be used 
as the ``relatively short period.'' The Department requested that the 
respondents in this

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investigation provide monthly shipment data for 2002 through 2005. See 
Letters to Jiheng and Nanning dated March 8 and 14, 2005, respectively. 
In addition, the Department obtained U.S. import data for subject 
merchandise for 2002, 2003, and 2004 as reported at the ITC's website, 
http://dataweb.usitc.gov.
    On March 14, 15, and 17, 2005, the Department received company-
specific data from Jiheng and Nanning. When we compared these 
companies' import data during the base period with the comparison 
period, we found that the volumes of imports of chlorinated 
isocyanurates from Jiheng and Nanning decreased over the base period, 
regardless of whether we used March or May 2004 as the knowledge month. 
See Preliminary Critical Circumstances Memorandum at Attachment I. 
Therefore, we find no massive imports from Jiheng and Nanning.
    Because the PRC NME entity did not respond to the Department's 
antidumping questionnaire, we were unable to obtain shipment data from 
the PRC NME entity for purposes of our critical circumstances analysis 
and there is therefore no verifiable information on the record with 
respect to its export volumes. Section 776(a)(2) of the Act provides 
that, if an interested party or any other person (A) withholds 
information that has been requested by the administering authority or 
the Commission under this title, (B) fails to provide such information 
by the deadlines for submission of the information or in the form and 
manner requested, subject to subsections (c)(1) and (e) of section 782, 
(C) significantly impedes a proceeding under this title, or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority and the 
Commission shall, subject to section 782(d), use the facts otherwise 
available in reaching the applicable determination under this title. 
Furthermore, Section 776(b) of the Act provides that, if a party has 
failed to act to the best of its ability, the Department may apply an 
adverse inference.
    The PRC NME entity did not respond to the Department's request for 
information. Thus, we are using facts available, in accordance with 
section 776(a) of the Act, in preliminarily determining whether there 
were massive imports of merchandise from the PRC NME entity. In 
accordance with section 776(b) of the Act, we also find that an adverse 
facts available is warranted.
    In this case, the only source of available data from which to 
measure whether imports from the PRC entity were massive are the 
aggregate import statistics from the PRC, as reported on the ITC 
DataWeb site (http://dataweb.usitc.gov). Therefore, we have used these 
statistics to determine whether imports from the PRC entity were 
massive during the comparison period. We made adjustments for shipments 
reported by the mandatory respondents. Section 776(c) of the Act 
provides that, when the Department selects from among the facts 
otherwise available and relies on ``secondary information,'' the 
Department shall, to the extent practicable, corroborate that 
information from independent sources reasonably at the Department's 
disposal. The Statement of Administrative Action (``SAA''), 
accompanying the URAA, H.R. Doc. No. 316, 103d Cong., 2d Sess. (1994), 
states that ``corroborate'' means to determine that the information 
used has probative value. See SAA at 870. The aggregate import 
statistics from the ITC DataWeb are publicly available data by which 
the Department can determine import volumes of chlorinated 
isocyanurates into the United States on a month-by-month basis. 
Furthermore, this data is reported on a U.S. government website, 
enhancing its reliability.
    Our analysis of the import statistics, adjusted for shipments by 
the mandatory respondents, indicates that shipments in the comparison 
period increased over those for the base period. In comparing import 
statistics from the base period to the comparison period, imports of 
chlorinated isocyanurates have increased by more than 15 percent,\6\ 
regardless of whether we used March or May 2004 as the knowledge month. 
See Preliminary Critical Circumstances Memorandum at Attachment IV. 
This comparison is based on the HTSUS number identified in the scope of 
the Preliminary Determination, HTSUS 2933.69.6050.\7\ As a result of 
our analysis, we determine that there were massive imports from the 
PRC-wide entity during the applicable relatively short period of time.
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    \6\ See Prelimniary Critical Circumstances Memorandum at 
Attachment III.
    \7\ There were no shipments under the two additional HTSUS 
numbers identified in the scope of the Amended Preliminary 
Determination investigation, HTSUS 2933.69.6015 and 2933.69.6021.
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    For the five Section A Respondents that voluntarily submitted 
information (Section A questionnaire responses) and received a separate 
rate, we did not request the monthly shipment information necessary to 
determine if there were massive imports. Tian Yuan, one of the Section 
A Respondents in this investigation, refused to participate in the 
Department's verification. Therefore, for the reasons expressed above 
with respect to the PRC-wide entity, we determine that imports from 
Tian Yuan were ``massive'' within the meaning of the Act during the 
applicable relatively short period of time and, as such, justify a 
preliminary determination of critical circumstances.
    As the basis for determining whether massive imports existed for 
the remaining four Section A Respondents, we calculated a weighted-
average increase/decrease in import volume based on the mandatory 
respondents' import volumes. When we compared these companies' import 
data during the base period with the comparison period, we found that 
the volume of imports of chlorinated isocyanurates decreased over the 
base period. Therefore, for all Section A respondents except for Tian 
Yuan, we find no massive imports during the applicable relatively short 
period of time.
    We will issue a final determination concerning critical 
circumstances for all producers/ exporters of subject merchandise from 
the PRC when we issue our final determination in this investigation, 
which will be no later than May 2, 2005.
    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than three days 
after the publication of the preliminary determination of critical 
circumstances in this proceeding. Rebuttal briefs limited to issues 
raised in the aforementioned case briefs will be due no later than two 
days after the deadline date for case briefs.

Suspension of Liquidation

    With respect to Tian Yuan and the PRC-wide entity for chlorinated 
isocyanurates, we will direct U.S. Customs and Border Protection 
(``CBP'') to suspend liquidation of all unliquidated entries of 
chlorinated isocyanurates from the PRC that were entered, or withdrawn 
from warehouse, for consumption on or after 90 days prior to the date 
of publication in the Federal Register of our preliminary determination 
in these investigation. In accordance with section 733(d) of the Act, 
with respect to Jiheng, Nanning, and all Section A Respondents other 
than Tian Yuan for chlorinated isocyanurates, we will make no changes 
to our instructions to the CBP with respect to the suspension of 
liquidation of all entries of subject merchandise entered, or withdrawn 
from warehouse, for consumption on or after the date of publication of 
our preliminary determination in the Federal Register.

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    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: April 4, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-1664 Filed 4-8-05; 8:45 am]
BILLING CODE 3510-DS-S