[Federal Register Volume 71, Number 61 (Thursday, March 30, 2006)]
[Notices]
[Pages 16116-16120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-4657]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-899]


Final Determination of Sales at Less Than Fair Value: Certain 
Artist Canvas from the People's Republic of China

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: On November 7, 2005, the Department of Commerce (``the 
Department'') published its preliminary determination of sales at less 
than fair value (``LTFV'') in the antidumping investigation of artist 
canvas from the People's Republic of China (``PRC''). The period of 
investigation (``POI'') is July 1, 2004, through December 31, 2004. The 
investigation covers two manufacturers/exporters which are mandatory 
respondents and two separate-rate status applicants. On February 17, 
2006, we issued a preliminary scope ruling with regard to cut and 
stretched artist canvas made in the PRC from bulk roll canvas woven and 
primed in India. We invited interested parties to comment on our 
preliminary determination of sales at LTFV and our preliminary scope 
ruling. Based on our analysis of the comments we received, we have made 
changes to our calculations for the mandatory respondents. The final 
dumping margins for this investigation are listed in the ``Final 
Determination Margins'' section below.

EFFECTIVE DATE: March 30, 2006.

FOR FURTHER INFORMATION CONTACT: Michael Holton or Robert Bolling, 
Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue N.W., 
Washington, DC 20230; telephone: (202) 482-1324 and (202) 482-3434, 
respectively.

SUPPLEMENTARY INFORMATION:

FINAL DETERMINATION

    We determine that artist canvas from the PRC is being, or is likely 
to be, sold in the United States at LTFV as provided in section 735 of 
Tariff Act of 1930, as amended (``the Act''). The estimated margins of 
sales at LTFV are shown in the ``Final Determination Margins'' section 
of this notice.

Case History

    The Department published its preliminary determination of sales at 
LTFV on November 7, 2005. See Notice of Preliminary Determination of 
Sales at Less Than Fair Value: Certain Artist Canvas from the People's 
Republic of China, 70 FR 67412 (November 7, 2005) (``Preliminary 
Determination''). The Department conducted verification of both 
mandatory respondents in both the PRC and the United States (where 
applicable), and one separate-rate status applicant. See the 
``Verification'' section below for additional information. On February 
9, 2006, the Department solicited comments from all interested parties 
regarding changes to its calculation of financial ratios and the 
expected wage rate (i.e., $0.97) for the PRC which are based on 2003 
income data. On February 17, 2006, the Department issued a memorandum 
finding that primed bulk rolls of artist canvas produced, coated, and 
shipped from India to the PRC and stretched and framed in the PRC are 
not substantially transformed in the PRC and, therefore, not covered by 
the scope of this investigation. See Preliminary Decision Regarding the 
Country of Origin of Artist Canvas Exported by Hangzhou Foreign 
Economic Relations & Trade Service Co., Ltd., - Certain Artist Canvas 
from the People's Republic of China from Jon Freed to Wendy Frankel, 
dated February 17, 2006 (``Scope Memorandum'').
    We invited parties to comment on the Preliminary Determination and 
Scope Memorandum. We received comments from the Petitioner, the 
mandatory respondents, the separate-rate status applicant, and other 
interested parties to this investigation.
    On February 27, 2006, parties submitted case briefs. On March 1, 
2006, parties submitted rebuttal briefs. On December 7, 2005, Wuxi 
Phoenix Artist Materials Co., Ltd. (``Phoenix Materials'') requested 
the Department hold a public hearing in this proceeding. On March 1, 
2006, Phoenix Materials withdrew its request for a public hearing.

Analysis of Comments Received

    All issues raised in the case and rebuttal briefs by parties to 
this investigation are addressed in the Issues and Decision Memorandum, 
dated March 22, 2006, which is hereby adopted by this notice (``Issues 
and Decision Memorandum''). A list of the issues which parties raised 
and to which we respond in the Issues and Decision Memorandum is 
attached to this notice as an Appendix. The Decision Memorandum is a 
public document and is on file in the Central Records Unit (``CRU''), 
Main Commerce Building, Room B-099, and is accessible on the Web at 
http://ia.ita.doc.gov. The paper copy and electronic version of the 
memorandum are identical in content.

Changes Since the Preliminary Results

    Based on our analysis of comments received, we have made changes in 
the margin calculation for Phoenix Materials. See Issues and Decision 
Memorandum at Comments 3, 4, and 6.

Phoenix Materials

 In the Preliminary Determination, the Department used facts 
available for the distance from Phoenix Material's factory to two of 
its coal suppliers. As facts available, the Department used the 
distance to the nearest port as the distance from the factory to the 
coal suppliers. However, based on information found at verification, 
for the final determination, we have used the actual distances between 
the producer and its two coal suppliers.

[[Page 16117]]

See Issues and Decision Memorandum at Comment 6 for a thorough 
discussion of this issue and ``Analysis Memorandum for the Final 
Determination in the Investigation of Artist Canvas from the People's 
Republic of China: Wuxi Phoenix Artist Materials Co., Ltd.'' from 
Michael Holton, Case Analyst through Robert Bolling, Program Manager, 
to the File, dated March 22, 2006 (``Phoenix Materials Final Analysis 
Memorandum'').
 For the final determination, the Department has updated the 
surrogate value for labor and made changes to the surrogate financial 
ratio calculation. See Phoenix Materials Final Analysis Memorandum.
 One of Phoenix Material's affiliated suppliers (i.e.,Shuyang 
Phoenix Artist Materials Co. Ltd. (``Shuyang Phoenix'')) presented 
minor corrections to its reported labor consumption at verification. 
For the final determination, the Department has incorporated this 
change into the margin calculation program. See Phoenix Materials Final 
Analysis Memorandum.
 Due to the change in labor consumption, a resulting change in 
the allocation of electricity was also required for Shuyang Phoenix. 
See Phoenix Materials Final Analysis Memorandum.
 At verification, Phoenix Materials presented a minor 
correction to its reported coal consumption. For the final 
determination, the Department has incorporated this change into its 
margin calculation program. See Phoenix Materials Final Analysis 
Memorandum.
 At verification, the Department found that Phoenix Materials 
had not reported all of its indirect labor hours (i.e., supervisors, 
office cleaners, security guards, and doormen). For the final 
determination, the Department has incorporated all of Phoenix 
Material's indirect labor hours into its margin calculation program. 
See Phoenix Materials Final Analysis Memorandum.
 At verification, the Department found that Phoenix Materials 
did not report diesel as a factor of production. For the final 
determination, the Department has applied the diesel consumption factor 
in the margin calculation program. See Phoenix Materials Final Analysis 
Memorandum.

Scope of Investigation

    The products covered by this investigation are artist canvases 
regardless of dimension and/or size, whether assembled or unassembled, 
that have been primed/coated, whether or not made from cotton, whether 
or not archival, whether bleached or unbleached, and whether or not 
containing an ink receptive top coat. Priming/coating includes the 
application of a solution, designed to promote the adherence of artist 
materials, such as paint or ink, to the fabric. Artist canvases (i.e., 
pre-stretched canvases, canvas panels, canvas pads, canvas rolls 
(including bulk rolls that have been primed), printable canvases, floor 
cloths, and placemats) are tightly woven prepared painting and/or 
printing surfaces. Artist canvas and stretcher strips (whether or not 
made of wood and whether or not assembled) included within a kit or set 
are covered by this proceeding.
    Artist canvases subject to this investigation are currently 
classifiable under subheadings 5901.90.20.00 and 5901.90.40.00 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). 
Specifically excluded from the scope of this investigation are tracing 
cloths, ``paint-by-number'' or ``paint-it-yourself'' artist canvases 
with a copyrighted preprinted outline, pattern, or design, whether or 
not included in a painting set or kit.\1\ Also excluded are stretcher 
strips, whether or not made from wood, so long as they are not 
incorporated into artist canvases or sold as part of an artist canvas 
kit or set. While the HTSUS subheadings are provided for convenience 
and customs purposes, our written description of the scope of this 
proceeding is dispositive.
    Additionally, we have determined that canvas woven and primed in 
India but cut and stretched in the PRC and exported from the PRC is not 
subject to the investigation covering artist canvas from the PRC.
---------------------------------------------------------------------------

    \1\ Artist canvases with a non-copyrighted preprinted outline, 
pattern, or design are included in the scope, whether or not 
included in a painting set or kit.
---------------------------------------------------------------------------

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by the mandatory respondents and one separate-
rate status applicant for use in our final determination. See the 
Department's verification reports on the record of this investigation 
in the CRU with respect to Ningbo Conda Import & Export Co., Ltd. 
(``Ningbo Conda''), Jinhua Universal Canvas Manufacturing Co., Ltd. 
(``Jinhua Universal''), Wuxi Silver Eagle Cultural Goods Co. Ltd., Wuxi 
Pegasus Cultural Goods Co. Ltd., ColArt Americas Inc. (``ColArt US''), 
Hangzhou Foreign Relation & Trade Service Co. Ltd. (``HFERTS''), and 
Phoenix Materials. For all verified companies, we used standard 
verification procedures, including examination of relevant accounting 
and production records, as well as original source documents provided 
by respondents.

Surrogate Country

    In the Preliminary Determination, we stated that we had selected 
India as the appropriate surrogate country to use in this investigation 
for the following reasons: (1) It is a significant producer of 
comparable merchandise; (2) it is at a similar level of economic 
development pursuant to 773(c)(4) of the Act; and (3) we have reliable 
data from India that we can use to value the factors of production. See 
Preliminary Determination, 70 FR at 67415-16. For the final 
determination, we made no changes to our findings with respect to the 
selection of a surrogate country.

Separate Rates

    In proceedings involving non-market-economy (``NME'') countries, 
the Department begins with a rebuttable presumption that all companies 
within the country are subject to government control and, thus, should 
be assigned a single antidumping duty deposit rate. It is the 
Department's policy to assign all exporters of merchandise subject to 
investigation in an NME country this single rate unless an exporter can 
demonstrate that it is sufficiently independent so as to be entitled to 
a separate rate.
    In the Preliminary Determination, we found that Ningbo Conda and 
its affiliated exporters, Conda (Ningbo) Painting Material Mfg. 
(``Conda Painting'') and Jinhua Universal; Phoenix Materials and its 
affiliated exporter Wuxi Phoenix Stationary Co. Ltd (``Phoenix 
Stationary''); and Jiangsu Animal By-products Import & Export Group 
Corp. (``Jiangsu By-products'') demonstrated their eligibility for 
separate-rate status. For the final determination, we continue to find 
that the evidence placed on the record of this investigation by Ningbo 
Conda and its affiliated exporters, Phoenix Materials and its 
affiliated exporter, and Jiangsu By-products demonstrate an absence of 
government control, both in law and in fact, with respect to their 
respective exports of the merchandise under investigation, and, thus 
are eligible for separate rate status.

[[Page 16118]]

    Additionally, in the Preliminary Determination, because the 
Department found that Jiangsu By-products demonstrated its eligibility 
for a rate separate from the PRC-wide rate, but was not a mandatory 
respondent, the margin we established in the Preliminary Determination 
for Jiangsu By-products was based on a weighted-average of the margins 
calculated for the two mandatory respondents. Because we are applying 
facts available to one of the selected mandatory respondents for the 
final determination, we have recalculated the rate applicable to 
Jiangsu By-products based on the rate calculated for the remaining 
mandatory respondent.
    Further, in the Preliminary Determination, although we determined 
that HFERTS demonstrated an absence of government control, both in law 
and in fact, with respect to its exports of artist canvas, we had not 
yet determined the country of origin of the merchandise exported by 
HFERTS, and thus had not made a determination with respect to whether 
HFERTS was eligible to apply for a separate rate. For the final 
determination, we have determined that the merchandise that HFERTS 
exported to the United States is not of Chinese origin. Thus, HFERTS 
did not export subject merchandise and, therefore, is not eligible for 
a separate rate.

Adverse Facts Available

    Sections 776(a)(1) and (2) of the Act provide that the Department 
shall apply ``facts otherwise available'' if necessary information is 
not on the record or an interested party or any other person (A) 
withholds information that has been requested, (B) fails to provide 
information within the deadlines established, or in the form and manner 
requested by the Department, subject to subsections (c)(1) and (e) of 
section 782, (C) significantly impedes a proceeding, or (D) provides 
information that cannot be verified as provided by section 782(i) of 
the Act.
    Where the Department determines that a response to a request for 
information does not comply with the request, section 782(d) of the Act 
provides that the Department will so inform the party submitting the 
response and will, to the extent practicable, provide that party the 
opportunity to remedy or explain the deficiency. If the party fails to 
remedy the deficiency within the applicable time limits and subject to 
section 782(e) of the Act, the Department may disregard all or part of 
the original and subsequent responses, as appropriate. Section 782(e) 
of the Act provides that the Department ``shall not decline to consider 
information that is submitted by an interested party and is necessary 
to the determination but does not meet all applicable requirements 
established by the administering authority'' if the information is 
timely, can be verified, is not so incomplete that it cannot be used, 
and if the interested party acted to the best of its ability in 
providing the information. Where all of these conditions are met, the 
statute requires the Department to use the information if it can do so 
without undue difficulties.
    Section 776(b) of the Act further provides that the Department may 
use an adverse inference in applying the facts otherwise available when 
a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Section 776(b) of the 
Act also authorizes the Department to use as adverse facts available 
(``AFA''), information derived from the petition, the final 
determination, a previous administrative review, or other information 
placed on the record.
    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. Secondary information is defined as 
``[i]nformation derived from the petition that gave rise to the 
investigation or review, the final determination concerning the subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See Statement of Administrative Action (``SAA'') 
accompanying the Uruguay Round Agreements Act, H. Doc. No. 316, 103d 
Cong., 2d Sess. Vol.1 at 870 (1994). Corroborate means that the 
Department will satisfy itself that the secondary information to be 
used has probative value. See SAA at 870. To corroborate secondary 
information, the Department will, to the extent practicable, examine 
the reliability and relevance of the information to be used. The SAA 
emphasizes, however, that the Department need not prove that the 
selected facts available are the best alternative information. See SAA 
at 869.
    The Department finds that the information necessary to calculate an 
accurate and otherwise reliable margin is not available on the record 
with respect to Ningbo Conda. As the Department finds that Ningbo Conda 
failed to act to the best of its ability, withheld information, failed 
to provide information requested by the Department in a timely manner 
and in the form required, and significantly impeded the proceeding, 
(e.g., provided unverifiable information, failed to reported certain 
U.S. sales and certain factors of production, and failed to 
substantiate an unaffiliated supplier's reported factor consumption 
rates, etc.). Therefore, pursuant to sections 776(a)(2)(A), (B), (C) 
and (D) of the Act, the Department is resorting to facts otherwise 
available. In addition, in accordance with section 776(b) of the Act, 
the Department is applying an adverse inference in selecting the facts 
available rate as it has determined that Ningbo Conda did not act to 
the best of its ability to cooperate with the Department in this 
investigation.

Corroboration

    At the Preliminary Determination, in accordance with section 776(c) 
of the Act, we corroborated our AFA margin using information submitted 
by both mandatory respondents. See Memorandum to The File Through 
Robert Bolling, Program Manager, China/NME Group, Corroboration for the 
Preliminary Determination of Certain Artist Canvas from the People's 
Republic of China, dated October 28, 2005, (``Corroboration Memo''). 
For the final determination, we are no longer using the information 
submitted by Ningbo Conda (see ``Adverse Facts Available'' section 
above).
    To assess the probative value of the total AFA rate it has chosen 
for Ningbo Conda and the PRC-wide entity, the Department compared the 
final margin calculations of Phoenix Materials in this investigation 
with the rate of 264.09 percent from the petition. We find that the 
rate is within the range of the highest margins we have determined in 
this investigation. See Final Determination in the Investigation of 
Artist Canvas from the People's Republic of China, Corroboration 
Memorandum from Michael Holton, Analyst, through Robert Bolling, 
Program Manager, (``Final Corroboration Memo''), dated March 22, 2006. 
Since the record of this investigation contains margins within the 
range of the petition margin, we determine that the rate from the 
petition continues to be relevant for use in this investigation. As 
discussed therein, we found that the margin of 264.09 percent has 
probative value. See Final Corroboration Memo. Accordingly, we find 
that the rate of 264.09 percent is corroborated within the meaning of 
section 776(c) of the Act.

The PRC-Wide Rate

    Because we begin with the presumption that all companies within a 
NME country are subject to

[[Page 16119]]

government control and because only the companies listed under the 
``Final Determination Margins'' section below have overcome that 
presumption, we are applying a single antidumping rate - the PRC-wide 
rate - to all other exporters of subject merchandise from the PRC. Such 
companies did not demonstrate entitlement to a separate rate. See, 
e.g., Final Determination of Sales at Less Than Fair Value: Synthetic 
Indigo from the People's Republic of China, 65 FR 25706 (May 3, 2000). 
The PRC-wide rate applies to all entries of subject merchandise except 
for entries from the respondents which are listed in the ``Final 
Determination Margins'' section below (except as noted).

Combination Rates

    In the Notice of Initiation, the Department stated that it would 
calculate combination rates for certain respondents that are eligible 
for a separate rate in this investigation. See Notice of Initiation, 70 
FR 21996, 21999. This change in practice is described in Policy 
Bulletin 05.1: Separate-Rates Practice and Application of Combination 
Rates in Antidumping Investigations involving Non-Market Economy 
Countries, (April 5, 2005), (``Policy Bulletin 05.1'') available at 
http://ia.ita.doc.gov/. The Policy Bulletin 05.1, states:
    ``[w]hile continuing the practice of assigning separate rates only 
to exporters, all separate rates that the Department will now assign in 
its NME investigations will be specific to those producers that 
supplied the exporter during the period of investigation. Note, 
however, that one rate is calculated for the exporter and all of the 
producers which supplied subject merchandise to it during the period of 
investigation. This practice applies both to mandatory respondents 
receiving an individually calculated separate rate as well as the pool 
of non-investigated firms receiving the weighted-average of the 
individually calculated rates. This practice is referred to as the 
application of ``combination rates'' because such rates apply to 
specific combinations of exporters and one or more producers. The cash-
deposit rate assigned to an exporter will apply only to merchandise 
both exported by the firm in question and produced by a firm that 
supplied the exporter during the period of investigation.''
    Policy Bulletin 05.1, at page 6.
    Therefore, for the final determination, we have assigned a 
combination rate to respondents that are eligible for a separate rate. 
See Final Determination Margins, below.

Final Determination Margins

    We determine that the following percentage weighted-average margins 
exist for the POI:

                          Artist Canvas from the PRC - Weighted-average Dumping Margins
----------------------------------------------------------------------------------------------------------------
                 Exporter                                  Producer                   Weighted-Average Deposit
------------------------------------------------------------------------------------------------Rate------------
Ningbo Conda.............................                         Jinhua Universal                        264.09
Ningbo Conda.............................     Wuxi Silver Eagle Cultural Goods Co.                        264.09
                                                                              Ltd.
Conda Painting...........................     Wuxi Pegasus Cultural Goods Co. Ltd.                        264.09
Jinhua Universal.........................                         Jinhua Universal                        264.09
Phoenix Materials........................                        Phoenix Materials                         77.90
Phoenix Materials........................                       Phoenix Stationary                         77.90
Phoenix Materials........................                          Shuyang Phoenix                         77.90
Phoenix Stationary.......................                        Phoenix Materials                         77.90
Phoenix Stationary.......................                       Phoenix Stationary                         77.90
Phoenix Stationary.......................                          Shuyang Phoenix                         77.90
Jiangsu By-products......................       Wuxi Yinying Stationery and Sports                         77.90
                                                           Products Co. Ltd. Corp.
Jiangsu By-products Su Yang..............   Yinying Stationery and Sports Products                         77.90
                                                                    Co. Ltd. Corp.
China-Wide Rate..........................  .......................................                        264.09
----------------------------------------------------------------------------------------------------------------

Continuation of Suspension of Liquidation

    Pursuant to section 735(c)(1)(B) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to continue to suspend 
liquidation of all entries of subject merchandise from the PRC entered, 
or withdrawn from warehouse, for consumption on or after November 7, 
2005, the date of publication of the Preliminary Determination. CBP 
shall continue to require a cash deposit or the posting of a bond equal 
to the estimated amount by which the normal value exceeds the U.S. 
price as shown above. These instructions suspending liquidation will 
remain in effect until further notice.

Disclosure

    We will disclose the calculations performed within five days of the 
date of publication of this notice to parties in this proceeding in 
accordance with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
ITC of our final determination of sales at LTFV. As our final 
determination is affirmative, in accordance with section 735(b)(2) of 
the Act, within 45 days the ITC will determine whether the domestic 
industry in the United States is materially injured, or threatened with 
material injury, by reason of imports or sales (or the likelihood of 
sales) for importation of the subject merchandise. If the ITC 
determines that material injury or threat of material injury does not 
exist, the proceeding will be terminated and all securities posted will 
be refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order directing 
CBP to assess antidumping duties on all imports of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the effective date of the suspension of liquidation (i.e., 
November 7, 2005).

Notification Regarding APO

    This notice also serves as a reminder to parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance

[[Page 16120]]

with 19 CFR 351.305. Timely notification of return or destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    This determination and notice are issued and published in 
accordance with sections 735(d) and 777(i)(1) of the Act.

    Dated: March 22, 2006.
Stephen J. Claeys,
Acting Assistant Secretary for Import Administration.
[FR Doc. E6-4657 Filed 3-29-06; 8:45 am]
BILLING CODE: 3510-DS-S