[Federal Register Volume 70, Number 214 (Monday, November 7, 2005)]
[Notices]
[Pages 67434-67440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-22143]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-879
Polyvinyl Alcohol from the People's Republic of China:
Preliminary Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (``the Department'') is conducting
the first administrative review of the antidumping duty order on
polyvinyl alcohol (``PVA'') from the People's Republic of China
(``PRC'') covering the period August 11, 2003, through September 30,
2004. We have preliminarily determined that sales have been made below
normal value. If these preliminary results are adopted in our final
results of this review, we will instruct U.S. Customs and Border
Protection (``CBP'') to assess antidumping duties on entries of subject
merchandise during the period of review (``POR'') for which the
importer-specific assessment rates are above de minimis.
Interested parties are invited 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: November 7, 2005.
FOR FURTHER INFORMATION CONTACT: Lilit Astvatsatrian, AD/CVD
Operations, Office 8, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-
6412.
SUPPLEMENTARY INFORMATION:
Background
On October 1, 2003, the Department published in the Federal
Register the antidumping duty order on PVA from the PRC. See
Antidumping Duty Order: Polyvinyl Alcohol from the People's Republic of
China, 68 FR 56620 (October 1, 2003). On October 1, 2004, the
Department published a notice of opportunity to request an
administrative review of the antidumping duty order on PVA from the PRC
for the period March 20, 2003, through September 30, 2004. See
Antidumping or Countervailing Duty Order, Finding, or Suspended
Investigation: Opportunity to Request Administrative Review, 69 FR
58889 (October 1, 2004). On October
[[Page 67435]]
29, 2004, Petitioners\1\ requested an administrative review of Sinopec
Sichuan Vinylon Works (``SVW''), a producer and exporter of the subject
merchandise. SVW did not separately request an administrative review.
On November 19, 2004, the Department published in the Federal Register
a notice of the initiation of the antidumping duty administrative
review of PVA from the PRC for the period March 20, 2003, through
September 30, 2004. See Initiation of Antidumping and Countervailing
Duty Administrative Reviews, 69 FR 67701 (November 19, 2004).\2\ On May
9, 2005, the Department corrected the beginning of the POR date to
August 11, 2003. See Memorandum to the File from Lilit Astvatsatrian,
Case Analyst, through Robert Bolling, Program Manager, dated May 9,
2005.
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\1\ Celanese Chemicals, Ltd. and E.I. DuPont de Nemours and Co.
(collectively ``Petitioners'').
\2\ We note that the beginning date (i.e., March 20, 2003) of
the announced POR was not correct. The Department inadvertently
published an incorrect beginning date using the date of the
preliminary determination of sales at less than fair value
(``LTFV'') investigation. Because the only respondent in this
proceeding had a de minimis rate in the preliminary determination,
the correct beginning date for the POR should have been the date of
the final determination in the investigation. Thus, the Department
corrected the beginning date of the POR to reflect the correct POR
which is August 11, 2003, through September 30, 2004. See Memorandum
to the File from Lilit Astvatsatrian, Case Analyst, through Robert
Bolling, Program Manager, dated May 9, 2005.
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On June 23, 2005, the Department published a notice in the Federal
Register extending the time limit for the preliminary results of review
until August 2, 2005. See Extension of Time Limit for the Preliminary
Results of the Antidumping Duty Administrative Review: Polyvinyl
Alcohol from the People's Republic of China, 70 FR 36375 (June 23,
2005). Additionally, on July 22, 2005, the Department published a
notice in the Federal Register further extending the time limit for the
preliminary results of review until September 16, 2005. See Extension
of Time Limit for Preliminary Results of the Antidumping Duty
Administrative Review: Polyvinyl Alcohol from the People's Republic of
China, 70 FR 42309 (July 22, 2005). Finally, on September 6, 2005, the
Department published a notice in the Federal Register further extending
the time limit for the preliminary results of review until October 31,
2005. See Extension of Time Limit for Preliminary Results of the
Antidumping Duty Administrative Review: Polyvinyl Alcohol from the
People's Republic of China, 70 FR 52984 (September 6, 2005).
On December 9, 2004, the Department issued its standard antidumping
questionnaire\3\ to SVW. SVW submitted its Section A questionnaire
response on December 29, 2004, and its Sections C and D responses on
January 18, 2005. The Department issued a Section A supplemental
questionnaire to SVW on March 16, 2005, to which SVW responded on April
4, 2005. The Department issued a Sections C and D supplemental
questionnaire to SVW on May 3, 2005, to which SVW responded on May 17,
2005. On June 15, 2005, the Department issued a second Sections A-D
supplemental questionnaire to SVW, to which SVW responded on July 15,
2005. On September 13, 2005, the Department issued a third Sections A-D
supplemental questionnaire to SVW, to which SVW responded on September
20, 2005. Finally, on October 6, 2005, the Department issued a fourth
Section D supplemental questionnaire to SVW, to which SVW responded on
October 17, 2005.
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\3\ Section A: Organization, Accounting Practices, Markets and
Merchandise.
Section C: Sales to the United States.
Section D: Factors of Production.
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Period of Review
The POR is August 11, 2003, through September 30, 2004.
Scope of Order
The merchandise covered by this order is PVA. This product consists
of all PVA hydrolyzed in excess of 80 percent, whether or not mixed or
diluted with commercial levels of defoamer or boric acid, except as
noted below.
The following products are specifically excluded from the scope of
this investigation:
A. PVA in fiber form.
2) PVA with hydrolysis less than 83 mole percent and certified not
for use in the production of textiles.
3) PVA with hydrolysis greater than 85 percent and viscosity
greater than or equal to 90 cps.
4) PVA with a hydrolysis greater than 85 percent, viscosity greater
than or equal to 80 cps but less than 90 cps, certified for use in an
ink jet application.
5) PVA for use in the manufacture of an excipient or as an
excipient in the manufacture of film coating systems which are
components of a drug or dietary supplement, and accompanied by an end-
use certification.
6) PVA covalently bonded with cationic monomer uniformly present on
all polymer chains in a concentration equal to or greater than one mole
percent.
7) PVA covalently bonded with carboxylic acid uniformly present on
all polymer chains in a concentration equal to or greater than two mole
percent, certified for use in a paper application.
8) PVA covalently bonded with thiol uniformly present on all
polymer chains, certified for use in emulsion polymerization of non-
vinyl acetic material.
9) PVA covalently bonded with paraffin uniformly present on all
polymer chains in a concentration equal to or greater than one mole
percent.
10) PVA covalently bonded with silan uniformly present on all
polymer chains certified for use in paper coating applications.
11) PVA covalently bonded with sulfonic acid uniformly present on
all polymer chains in a concentration level equal to or greater than
one mole percent.
12) PVA covalently bonded with acetoacetylate uniformly present on
all polymer chains in a concentration level equal to or greater than
one mole percent.
13) PVA covalently bonded with polyethylene oxide uniformly present
on all polymer chains in a concentration level equal to or greater than
one mole percent.
14) PVA covalently bonded with quaternary amine uniformly present
on all polymer chains in a concentration level equal to or greater than
one mole percent.
15) PVA covalently bonded with diacetoneacrylamide uniformly
present on all polymer chains in a concentration level greater than
three mole percent, certified for use in a paper application.
The merchandise subject to this order is currently classifiable
under subheading 3905.30.00 of the Harmonized Tariff Schedule of the
United States (``HTSUS''). Although the HTSUS subheading is provided
for convenience and Customs purposes, the written description of the
scope of this order is dispositive.
Nonmarket Economy Country Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as a non-market economy (``NME'') country. In
accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as
amended (``the Act''), any determination that a foreign country is an
NME country shall remain in effect until revoked by the
[[Page 67436]]
administering authority. See Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, From the People's Republic of China:
Preliminary Results 2001-2002 Administrative Review and Partial
Rescission of Review, 68 FR 7500 (February 14, 2003). None of the
parties to this proceeding has contested such treatment. Accordingly,
we calculated normal value (``NV'') in accordance with section 773(c)
of the Act, which applies to NME countries.
Surrogate Country
When the Department is investigating imports from an NME country,
section 773(c)(1) of the Act directs it to base normal value on the NME
producer's factors of production, valued in a surrogate market-economy
country or countries considered to be appropriate by the Department. In
accordance with section 773(c)(4) of the Act, in valuing the factors of
production, the Department shall utilize, to the extent possible, the
prices or costs of factors of production in one or more market-economy
countries that are: (1) at a level of economic development comparable
to that of the NME country; and (2) significant producers of comparable
merchandise.
The Department has determined that India, Indonesia, Sri Lanka, the
Philippines, and Egypt are countries comparable to the PRC in terms of
economic development. See Memorandum from Ron Lorentzen to Wendy
Frankel: Antidumping Administrative Review of Polyvinyl Alcohol from
the People's Republic of China (PRC): Request for a List of Surrogate
Countries, dated March 7, 2005. Customarily, we select an appropriate
surrogate country based on the availability and reliability of data
from the countries that are significant producers of comparable
merchandise. For PRC cases, the primary surrogate country has often
been India if it is a significant producer of comparable merchandise.
In this case, we have found that India is a significant producer of
comparable merchandise. See Memo to Wendy Frankel and Robert Bolling
from Lilit Astvatsatrian: Polyvinyl Alcohol from the People's Republic
of China: Selection of a Surrogate Country, June 13, 2005.
The Department used India as the primary surrogate country and,
accordingly, has calculated normal value using Indian prices to value
the PRC producers' factors of production, when available and
appropriate. The sources of the surrogate factor values are discussed
under the ``Normal Value'' section below and in the Preliminary Results
of Review of the Order on Polyvinyl Alcohol from the People's Republic
of China: Factor Valuation Memorandum from Lilit Astvatsatrian, Case
Analyst, through Robert Bolling, Program Manager, Office VIII to the
File, dated October 31, 2005 (``Factor Valuation Memorandum''). We have
obtained and relied upon publicly available information wherever
possible.
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results
in an administrative review, interested parties may submit publicly
available information to value factors of production within 20 days
after the date of publication of these preliminary results.
Separate Rates
In an NME proceeding, the Department presumes that all companies
within the country are subject to government control and should be
assigned a single antidumping duty rate unless the respondent
demonstrates the absence of both de jure and de facto government
control over its export activities. See Notice of Final Determination
of Sales at Less Than Fair Value: Bicycles From the People's Republic
of China, 61 FR 19026 (April 30, 1996). SVW provided company-specific
separate rates information and stated that it met the standards for the
assignment of a separate rate. In determining whether companies should
receive separate rates, the Department focuses its attention on the
exporter, in this case SVW, rather than the manufacturer, as our
concern is the manipulation of dumping margins. 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).
Consequently, the Department analyzed whether the exporter of the
subject merchandise, SVW, should receive a separate rate.
The Department's separate rate test is not concerned, in general,
with macroeconomic, border-type controls (e.g., export licenses,
quotas, and minimum export prices), particularly if these controls are
imposed to prevent dumping. The test focuses, rather, on controls over
the investment, pricing, and output decision-making process at the
individual firm level. See Notice of Final Determination of Sales at
Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From
Ukraine, 62 FR 61754 (November 19, 1997); Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, from the People's Republic of
China; Final Results of Antidumping Duty Administrative Review, 62 FR
61276 (November 17, 1997); and Notice of Preliminary Determination of
Sales at Less than Fair Value: Honey from the People's Republic of
China, 60 FR 14725 (March 20, 1995).
To establish whether a firm is sufficiently independent from
government-control to be entitled to a separate rate, the Department
analyzes each exporting entity under a test arising out of the Final
Determination of Sales at Less Than Fair Value: Sparklers from the
People's Republic of China, 56 FR 20588 (May 6, 1991), as modified by,
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''). Under the separate rates test, the Department
assigns separate rates in NME cases only if the respondent can
demonstrate the absence of both de jure and de facto government control
over export activities. See Silicon Carbide and Notice of Final
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol from
the People's Republic of China, 60 FR 22544 (May 8, 1995) (``Furfuryl
Alcohol'').
A. Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual exporter may be granted a separate
rate: (1) an absence of restrictive stipulations associated with an
individual exporter's business and export licenses; and (2) any
legislative enactments decentralizing control of companies.
SVW has placed on the record statements and documents to
demonstrate absence of de jure control. In its questionnaire responses,
SVW reported that, other than paying taxes, it has no relationship with
any level of the PRC government. See page A-2 of SVW's December 29,
2004, Section A questionnaire response (``AQR''). SVW stated that it
legally became an independent entity responsible for its own profits
and losses. See page A-6 of the AQR. SVW submitted a copy of the
Foreign Trade Law of the PRC to demonstrate that there is no
centralized control over its export activities. See Attachment A-1 of
the AQR. SVW also confirmed that the subject merchandise is not subject
to export quotas or export control licenses. See page A-4 of the AQR.
Furthermore, SVW stated that the Chongqing City Economic and Trade
Commission has no involvement in SVW's daily activities and price
negotiations with its customers. See page SA-5 of SVW's April 4, 2005,
supplemental Section A response (``SAQR''). SVW reported that it is
required to obtain a business license,
[[Page 67437]]
which is issued by the Chongqing Municipal Industry and Commerce
Administration. See page A-3 of the AQR. We examined the laws and SVW's
business license which it provided in its questionnaire responses, and
determined that these documents demonstrate an authority for
establishing the absence of de jure control over the export activities
and provide evidence demonstrating the absence of government control
associated with SVW's business license.
B. Absence of De Facto Control
As stated in previous cases, there is some evidence that certain
enactments of the PRC central government have not been implemented
uniformly among different sectors and/or jurisdictions in the PRC. See
Final Determination of Sales at Less Than Fair Value: Certain Preserved
Mushrooms from the People's Republic of China, 63 FR 72255 (December
31, 1998). Therefore, the Department has determined that an analysis of
de facto control is critical in determining whether respondents are, in
fact, subject to a degree of government control which would preclude
the Department from assigning separate rates. The Department typically
considers four factors in evaluating whether a particular exporter is
subject to de facto government control of its export functions: (1)
whether the exporter sets its own export prices independent of the
government and without the approval of a government authority; (2)
whether the exporter has authority to negotiate and sign contracts, and
other agreements; (3) whether the exporter has autonomy from the
government in making decisions regarding the selection of its
management; and (4) whether the exporter retains the proceeds of its
export sales and makes independent decisions regarding disposition of
profits or financing of losses.
SVW states it is owned by ``all the people'' and has provided
separate rates information in its AQR, SAQR, and in its July 25, 2005,
supplemental response. SVW has stated that there is no element of
government control and has requested a separate, company-specific rate.
As stated in Furfuryl Alcohol, ownership of the company by ``all
the people'' does not require the application of a single rate.
Accordingly, SVW is eligible for consideration of a separate rate.
In support of demonstrating an absence of de facto control, SVW has
asserted the following: (1) SVW established its own export prices; (2)
SVW negotiated contracts without guidance from any government entities
or organizations; (3) SVW made its own personnel decisions; and (4) SVW
retained the proceeds of its export sales and independently used
profits according to its business needs. See pages A-4 through A-7 of
the AQR. Additionally, SVW's questionnaire responses indicate that it
does not coordinate with other exporters in setting prices. See page A-
5 of the AQR. This information supports a preliminary finding that
there is an absence of de facto government control of the export
functions of SVW. Consequently, we preliminarily determine that SVW has
met the criteria for the application of a separate rate.
The evidence placed on the record of this administrative review by
SVW demonstrates an absence of government control, both in law and in
fact, with respect to its exports of the merchandise under review. As a
result, for the purposes of these preliminary results, the Department
is granting a separate, company-specific rate to SVW, the exporter
which shipped the subject merchandise to the United States during the
POR.
Partial Facts Available
Section 776(a)(2) of the Act provides that if an interested party
withholds information that has been requested by the Department, fails
to provide such information in a timely manner or in the form
requested, significantly impedes a proceeding under the antidumping
statute, or provides information that cannot be verified, the
Department shall use facts available in reaching the applicable
determination. As discussed in detail below, we have preliminarily
determined that the use of partial facts available is warranted for
production labor hours not reported by SVW.
SVW failed to provide information regarding its classification of
selling, general, and administrative labor (``SG&A''). In its October
6, 2005, fourth supplemental questionnaire, the Department requested
that SVW describe the types of labor included in its general and
administrative labor hours and discuss the rationale behind this
classification. In response, SVW explained that the workers in this
category do not directly participate in the production process and
therefore, are considered to be general and administrative labor. See
page 5 of SVW October 17, 2005, fourth supplemental Section D response
(``FSDQR''). Further, SVW provided a worksheet indicating the number of
workers and hours under different SG&A categories. See Attachment S4-7
of id. However, SVW did not explain why some of the categories are
considered SG&A when they appear to be oriented toward production
labor, in particular ``Production management'' and ``Engineering
management.'' Since SVW withheld the descriptions that the Department
requested, the Department determines that the workers and labor hours
under the headings of ``Production management'' and ``Engineering
management'' represent production workers and labor hours. Therefore,
after determining the percentage of subject merchandise, we have
allocated the same portion of ``Production management'' and
``Engineering management'' to direct labor of PVA production. See
Exhibit 5 of Sinopec Sichuan Vinylon Works Program Analysis for the
Preliminary Results of Review, October 31, 2005 (``SVW Analysis
Memorandum'').
Normal Value Comparisons
To determine whether sales of PVA to the United States by SVW were
made at less than normal value (``NV''), we compared export price
(``EP'') to NV, as described in the ``Export Price'' and ``Normal
Value'' sections of this notice.
Export Price
In accordance with section 772(a) of the Act, EP is the price at
which the subject merchandise is first sold (or agreed to be sold)
before the date of importation by the producer or exporter of the
subject merchandise outside of the United States to an unaffiliated
purchaser in the United States or to an unaffiliated purchaser for
exportation to the United States, as adjusted under section 772(c) of
the Act. In accordance with section 772(a) of the Act, we used EP for
all of SVW's U.S. sales because the subject merchandise was sold
directly to the unaffiliated customers in the United States prior to
importation and because constructed export price was not otherwise
indicated for those transactions.
We calculated EP for SVW based on delivered prices to unaffiliated
purchaser(s) in the United States. We made deductions from the U.S.
sale price for movement expenses in accordance with section
772(c)(2)(A) of the Act. These included foreign inland freight from the
plant to the port of exportation and domestic brokerage and handling
charges. See SVW Analysis Memorandum.
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) the information
does not permit the
[[Page 67438]]
calculation of NV using home-market prices, third-country prices, or
constructed value under section 773(a) of the Act. The Department will
base NV on factors of production because the presence of government
controls on various aspects of these economies renders price
comparisons and the calculation of production costs invalid under our
normal methodologies.
Factors of production include: (1) hours of labor required; (2)
quantities of raw materials employed; (3) amounts of energy and other
utilities consumed; and (4) representative capital costs. We used
factors of production reported by respondents for materials, energy,
labor, by-products, and packing.
Our general policy, consistent with section 773(c)(1)(B) of the
Act, is to value the factors of production that a respondent uses to
produce the subject merchandise, based on the best available
information regarding the values of such factors in a market economy
country. See Notice of Preliminary Determination of Sales at Less Than
Fair Value, Affirmative Preliminary Determination of Critical
Circumstances and Postponement of Final Determination: Certain Frozen
Fish Fillets from the Socialist Republic of Vietnam, 68 FR 4986
(January 31, 2003). In accordance with section 773(c) of the Act, we
calculated NV based on factors of production reported by SVW for the
POR. As the basis for NV, SVW reported factors of production
information for each separate stage of production, including the
factors used in the production of all self-produced material and energy
inputs, and by-products. We have valued the factors reported for each
self-produced input for purposes of the preliminary results.
If the NME respondent is an integrated producer, we take into
account the factors utilized in each stage of the production process.
For example, in the case of preserved canned mushrooms produced by a
fully integrated firm, the Department valued the factors used to grow
the mushrooms, the factors used to further process and preserve the
mushrooms, and any additional factors used to can and package the
mushrooms, including any used to manufacture the cans (if produced in-
house). If, on the other hand, the firm was not integrated, but simply
a processor that bought fresh mushrooms to preserve and can, the
Department valued the purchased mushrooms and not the factors used to
grow them. See the final results valuation memorandum for Final Results
of First New Shipper Review and First Antidumping Duty Administrative
Review: Certain Preserved Mushrooms From the People's Republic of
China, 66 FR 31204 (June 11, 2001). This policy has been applied to
both agricultural and industrial products. See, e.g., Persulfates from
the People's Republic of China: Final Results of Antidumping Duty
Administrative Review, 68 FR 6712 (February 10, 2003) and Notice of
Final Determinations of Sales at Less Than Fair Value: Brake Drums and
Brake Rotors From the People's Republic of China 62 FR 9160 (February
28, 1997). Accordingly, our standard NME questionnaire asks respondents
to report the factors used in the various stages of production.
There are, however, two limited exceptions to this general rule.
First, in some cases a respondent may report factors used to produce an
intermediate input that accounts for a small or insignificant share of
total output. The Department recognizes that, in those cases, the
increased accuracy in our overall calculations that would result from
valuing (separately) each of those factors may be so small so as to not
justify the burden of doing so. Therefore, in those situations, the
Department would value the intermediate input directly. See Notice of
Final Determination of Sales at Less Than Fair Value: Polyvinyl Alcohol
from the People's Republic of China, 68 FR 47538 (August 11, 2003)
(``Polyvinyl Alcohol'').
Second, in certain circumstances, it is clear that attempting to
value the factors used in a production process yielding an intermediate
product would lead to an inaccurate result because a significant
element of cost would not be adequately accounted for in the overall
factors buildup. For example, in a recent case, we addressed whether we
should value the respondent's factors used in extracting iron ore an
input to its wire rod factory. The Department determined that, if it
were to use those factors, it would not sufficiently account for the
capital costs associated with the iron ore mining operation given that
the surrogate used for valuing production overhead did not have mining
operations. Therefore, because ignoring this important cost element
would distort the calculation, the Department declined to value the
inputs used in mining iron ore and valued the iron ore instead. See
Notice of Final Determination of Sales at Less Than Fair Value: Carbon
and Certain Alloy Steel Wire Rod From Ukraine, 67 FR 55785 (August 30,
2002); Final Determination of Sales at Less Than Fair Value: Certain
Hot-Rolled Carbon Steel Flat Products From the People's Republic of
China; 66 FR 49632 (September 28, 2001); 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); and
Furfuryl Alcohol, 60 FR 22544.
We have examined the information on the record of this review
related to the purity level of PVA and issued several supplemental
questionnaires to SVW on this issue. We find that despite its responses
to these supplemental questionnaires, SVW has not demonstrated clearly
that it accounted for the actual purity level of PVA in its calculation
of the vinyl acetate monomer (``VAM'') usage factors. See page 4 of
SVW's September 20, 2005 third supplemental questionnaire response; and
pages 2-3 and Attachments 3 and 4 of FSDQR. The burden is on the
respondent in an antidumping proceeding to create a complete and
accurate record upon which the Department can make its determination.
Therefore, consistent with our determination in the investigation, we
have preliminarily determined to adjust the reported VAM factor for
each type of PVA to reflect the actual PVA purity level. Accordingly,
we have adjusted the reported VAM utilization factor for each type of
PVA by the ratio of the actual purity level for each type of PVA to the
standard purity level reported by SVW. See SVW Analysis Memorandum, and
Polyvinyl Alcohol, 68 FR 47538 and its accompanying Issues and Decision
Memorandum, at Comment 4.
In accordance with 19 CFR 351.408(c)(1), the Department will
normally use publicly available information to value factors of
production, but when a producer sources an input from a market economy
and pays for it in market-economy currency, the Department will
normally value the factor using the actual price paid for the input.
See 19 CFR 351.408(c)(1); see also Lasko Metal Products v. United
States, 43 F. 3d 1442, 1445-1446 (Fed. Cir. 1994). However, when the
Department has reason to believe or suspect that such prices may be
distorted by subsidies, the Department will disregard the market-
economy purchase prices and use surrogate values to determine the NV.
See Notice of Amended Final Determination of Sales at Less than Fair
Value: Automotive Replacement Glass Windshields from the People's
Republic of China, 67 FR 11670 (March 15, 2002).
SVW reported that all of its inputs were sourced from non-market
economies and paid for in a non-market-economy currency. See Factor
Valuation Memorandum for a listing of
[[Page 67439]]
these inputs. Therefore, we did not use respondents' actual prices for
any NME purchases, and also did not use import statistics from
Indonesia, Thailand or Korea in valuing any factors of production,
i.e., for material inputs, packing materials, and by-product credits.
It is the Department's consistent practice that, where the facts
developed in U.S. or third-country countervailing duty findings include
the existence of subsidies that appear to be used generally (in
particular, broadly available, non-industry specific export subsidies),
it is reasonable for the Department to consider that it has particular
and objective evidence to support a reason to believe or suspect that
prices of the inputs from the country granting the subsidies may be
subsidized. See Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from the People's Republic of China; Final Results of the
1998-1999 Administrative Review, Partial Rescission of Review, and
Determination Not to Revoke Order in Part, 66 FR 1953 (January 10,
2001) and accompanying Issues and Decision Memorandum at Comment 1; see
also Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from the People's Republic of China; Final Results of 1999-
2000 Administrative Review, Partial Rescission of Review, and
Determination Not To Revoke Order in Part, 66 FR 57420 (November 15,
2001) and accompanying Issues and Decision Memorandum at Comment 1;
China National Machinery Imp & Exp. Corp. V. United States, 293 F.
Supp. 2d 1334, 1339 (CIT 2003).
Factor Valuations
In accordance with section 773(c) of the Act, we calculated NV
based on factors of production reported by the respondent for the POR.
To calculate NV, we multiplied the reported per-unit factor quantities
by publicly available Indian surrogate values (except as noted below).
In selecting the surrogate values, we considered the quality,
specificity, and contemporaneity of the data. As appropriate, we
adjusted input prices by including freight costs to make them delivered
prices. Specifically, we added to Indian import surrogate values a
surrogate freight cost using the shorter of the reported distance from
the domestic supplier to the factory or the distance from the nearest
seaport to the factory where appropriate (i.e., where the sales terms
for the market-economy inputs were not delivered to the factory). This
adjustment is in accordance with the decision of the Court of Appeals
for the Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401
(Fed. Cir. 1997). For a detailed description of all surrogate values
used for respondents, see Factor Valuation Memorandum.
We valued D-tartaric acid, sodium hexametaphosphate, sodium
nitrite, sulfuric acid, sodium carbonate, caustic soda, liquid caustic
soda, hydroquinone, N-butyl acetate, hydrochloric acid, zinc sulfate,
acrylic acid-acrylic ester, methyl acetate, and zinc oxide using Indian
domestic market prices reported in Chemical Weekly, contemporaneous
with the POR. We valued azodisisobutyronitrile, bacteria killer, de-
sulfur agent, solid activated carbon, quinone, liquid chlorine, steam
coal, solid sodium hydroxide, poly ferro-sulfate, and acetic acid using
India import statistics as published by the World Trade Atlas,
contemporaneous with the POR.
We valued natural gas using a price obtained from the website of
the Gas Authority of India Ltd., a supplier of natural gas in India,
contemporaneous with the POR. For further discussion, see Factor
Valuation Memorandum.
To value paper bags and polyethylene plastic bags (i.e., the
packing materials reported by the respondent), we used import values
from the World Trade Atlas, contemporaneous with the POR.
Regarding N-methyl-2pydrolidone, alkynes gas, and anti-erosion
agent, reported by SVW, we did not value these factors because: 1)
surrogate value information was not available; and 2) the materials
were reported as being used in minimal amounts. In previous cases,
where certain materials were reportedly consumed in very small amounts
and the surrogate values for these materials were not available, the
Department did not include surrogate values for these materials in its
calculation of normal value. See Preliminary Determination of Sales at
Less Than Fair Value and Postponement of Final Determination: Polyvinyl
Alcohol from the People's Republic of China, 68 FR 13680 (March 20,
2003); Synthetic Indigo from the People's Republic of China: Notice of
Final Determination of Sales at Less Than Fair Value, 65 FR 25706 (May
3, 2000), and its accompanying Issues and Decision Memorandum at
Comment 8; Ferrovanadium and Nitrided Vanadium from the Russian
Federation: Notice of Final Results of Antidumping Duty Administrative
Review, 62 FE 65656 (December 15, 1997), and its accompanying Issues
and Decision Memorandum at Comment 11; and Final Determination of Sales
at Less Than Fair Value: Oscillating Fans and Ceiling Fans from the
People's Republic of China, 56 FR 55273 (October 25, 1991). For the
same reasons we did not value industrial grade salt, and chlorine
dioxide used in treated water in our calculation of NV. In addition,
for the same reasons we did not value freon. Although Petitioners
provided a surrogate value for freon, the value provided reflected a
price between affiliated parties. See Attachment D of Petitioners'
April 21, 2005, submission of surrogate values. In selecting surrogate
values, the Department prefers, among other things, publicly available
prices that are representative of a range of prices, and the proposed
surrogate value does not meet this criteria.
For direct labor, indirect labor, and packing labor, consistent
with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate
as reported on Import Administration's home page, Import Library,
Expected Wages of Selected NME Countries, revised in November 2004,
http://ia.ita.doc.gov/wages/corrected02wages/02wages-corrected.html.
The source of these wage rate data on the Import Administration's web
site is the Yearbook of Labour Statistics 2002, ILO, (Geneva: 2002),
Chapter 5B: Wages in Manufacturing. Because this regression-based wage
rate does not separate the labor rates into different skill levels or
types of labor, we have applied the same wage rate to all skill levels
and types of labor reported by the respondent.
To determine factory overhead, depreciation, SG&A expenses,
interest expenses, and profit for the finished product, we relied on
rates derived from the financial statements of Jubilant Organosys Ltd.,
an Indian producer of comparable merchandise. We applied these ratios
to SVW's costs (determined as noted above) for materials, labor, and
energy. For further discussion, see the Factor Valuation Memorandum.
Finally, SVW reported that it generated certain by-products as a
result of the production of PVA or the inputs used to produce PVA.\4\
Because SVW did not provide sufficient information to permit the
accurate valuation of these by-products and we were unable to obtain
appropriate surrogate value data for them, we did not value these by-
products for these preliminary results.
---------------------------------------------------------------------------
\4\ These by-products included alkynes gas and recovered low
pressure nitrogen.
---------------------------------------------------------------------------
Weighted-Average Dumping Margin
The weighted-average dumping margin is as follows:
[[Page 67440]]
Polyvinyl Alcohol from the PRC
------------------------------------------------------------------------
Weighted-Average
Producer/Manufacturer/Exporter Margin (Percent)
------------------------------------------------------------------------
SVW................................................. 8.04 %
------------------------------------------------------------------------
Disclosure
The Department will disclose calculations performed for these
preliminary results to the parties within five days of the date of
publication of this notice in accordance with 19 CFR 351.224(b). Any
interested party may request a hearing within 30 days of publication of
these preliminary results. See 19 CFR 351.310(c). Any hearing, if
requested, will generally be held two days after the scheduled date for
submission of rebuttal briefs. See 19 CFR 351.310(d). Interested
parties may submit case briefs and/or written comments no later than 30
days after the date of publication of these preliminary results of
review. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to
written comments, limited to issues raised in such briefs or comments,
may be filed no later than 37 days after the date of publication. See
19 CFR 351.309(d). Further, parties submitting written comments should
provide the Department with an additional copy of those comments on
diskette. The Department will issue the final results of this
administrative review, which will include the results of its analysis
of issues raised in any comments, and at a hearing, within 120 days of
publication of these preliminary results, pursuant to section
751(a)(3)(A) of the Act.
Assessment Rates
Upon issuance of the final results, the Department will determine,
and CBP shall assess, antidumping duties on all appropriate entries.
Within 15 days of the completion of this review, the Department will
instruct CBP to assess antidumping duties on all appropriate entries of
subject merchandise. The Department will issue appropriate assessment
instructions directly to CBP upon completion of this review. If these
preliminary results are adopted in our final results of review, we will
direct CBP to assess the resulting rate against the entered customs
value for the subject merchandise on each importer's/customer's entries
during the POR.
Cash-Deposit Requirements
The following cash-deposit requirements will be effective upon
publication of the final results of this administrative review for all
shipments of the subject merchandise 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: (1) the cash deposit
rate for the reviewed company will be the rate listed in the final
results of review (except where the rate for a particular company is de
minimis, i.e., less than 0.5 percent, no cash deposit will be required
for that company); (2) for previously investigated companies not listed
above that have separate rate, the cash deposit rate will continue to
be the company-specific rate published for the most recent period; (3)
the cash deposit rate for all other PRC exporters will be 97.86
percent, the current PRC-wide rate; and (4) the cash deposit rate for
all non-PRC exporters will be the rate applicable to the PRC exporter
that supplied that exporter. These deposit requirements, when imposed,
shall remain in effect until publication of the final results of the
next administrative review.
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.
We are issuing and publishing these preliminary results of review
in accordance with sections 751(a)(1) and 777(i)(1) of the Act, and 19
CFR 351.221(b).
Dated: October 31, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 05-22143 Filed 11-4-05; 8:45 am]
BILLING CODE 3510-DS-S