[Federal Register Volume 71, Number 73 (Monday, April 17, 2006)]
[Notices]
[Pages 19695-19706]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 06-3638]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-901


Preliminary Determination of Sales at Less Than Fair Value, 
Affirmative Critical Circumstances, In Part, and Postponement of Final 
Determination: Certain Lined Paper Products from the People's Republic 
of China

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

EFFECTIVE DATE: April 17, 2006.
SUMMARY: We preliminarily determine that certain lined paper products 
(``CLPP'') from the People's Republic of China (``PRC'') are being, or 
are likely to be, sold in the United States at less than fair value 
(``LTFV''), as provided in section 733 of the Tariff Act of 1930, as 
amended (``the Act''). The estimated margins of sales at LTFV are shown 
in the ``Preliminary Determination'' section of this notice. Pursuant 
to requests from interested parties, we are postponing the final 
determination and extending the provisional measure from a four-month 
period to not more than six months. Accordingly, we will make our final 
determination not later than 135 days after publication of the 
preliminary determination.

FOR FURTHER INFORMATION CONTACT: Marin Weaver or Frances Veith, 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-
2336 or 482-4295, respectively.

SUPPLEMENTARY INFORMATION:

Case History

    On September 9, 2005, the Association of American School Paper 
Suppliers and its individual members (MeadWestvaco Corporation; Norcom, 
Inc.; and Top Flight, Inc.) (``Petitioner'') filed, in proper form on 
behalf of the domestic industry and workers producing CLPP, petitions 
concerning imports of CLPP from India, Indonesia, and the PRC 
(``Petition'').
    In accordance with section 732(b) of the Act, Petitioner alleged 
that imports of CLPP from India, Indonesia and the

[[Page 19696]]

PRC are being, or are likely to be, sold in the United States at LTFV 
within the meaning of section 731 of the Act, and that such imports are 
materially injuring and threaten to injure an industry in the United 
States.
    The Department of Commerce (``the Department'') initiated this 
investigation on September 29, 2005. See Initiation of Antidumping Duty 
Investigations: Certain Lined Paper Products from India, Indonesia, and 
the People's Republic of China, 70 FR 58374 (October 6, 2005) (``Notice 
of Initiation''). In the Notice of Initiation, the Department applied a 
modified process by which exporters and producers may obtain separate-
rate status in non-market economy (``NME'') investigations. The new 
process requires exporters and producers to submit a separate-rate 
status application. See 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/policy/bull05-1.pdf. 
However, the standard for eligibility for a separate rate (which is 
whether a firm can demonstrate an absence of both de jure and de facto 
government control over its export activities) has not changed. The 
separate-rate application for this investigation was posted on the 
Department's website http://ia.ita.doc.gov/ia-highlights-and-news.html 
on October 6, 2005. The due date listed on the application was December 
5, 2005.
    On October 19, 2005, the Department provided interested parties to 
this proceeding the opportunity to comment on the Department's proposed 
product characteristic reporting criteria and matching hierarchy. On 
October 20, 2005, the Department requested the assistance of the 
government of the PRC (through the Ministry of Commerce) in 
transmitting the Department's Quantity and Value questionnaire (``Q&V 
questionnaire'') to all companies that manufacture and export subject 
merchandise to the United States, as well as to manufacturers that 
produce the subject merchandise for companies that were engaged in 
exporting subject merchandise to the United States during the period of 
investigation (``POI''). Also on October 20 and October 21, 2005, the 
Department issued Q&V questionnaires to 45 companies.
    On October 24, 2005, the United States International Trade 
Commission (``ITC'') issued its affirmative preliminary determination 
that there is a reasonable indication that an industry in the United 
States is materially injured by reason of imports of CLPP from the PRC. 
The ITC's determination was published in the Federal Register on 
October 31, 2005. See Investigation Nos. 701 -TA-442-443 and 731-TA-
1095-1097 (``ITC Preliminary''), Certain Lined Paper School Supplies 
from China, India and Indonesia, 70 FR 62329 (October 31, 2005).
    On October 27, 2005, Petitioner submitted information concerning 
the identities of Chinese foreign producers to consider as mandatory 
respondents in the investigation.
    On October 28, 2005, the Department received comments on the 
proposed product characteristics criteria and matching hierarchy from 
CPP International; Watanabe Paper Product (Shanghai) Co., Ltd. 
(``Watanabe Shanghai''); Hotrock Stationery (Shenzhen) Co., (``Watanabe 
Shenzhen''); and Watanabe Paper Product (Linqing) Co., Ltd. (``Watanabe 
Linqing''), collectively (the ``Watanabe Group''). On October 31, 2005, 
the Department received comments from Petitioner.
    From November 1, 2005 through November 4, 2005, the Department 
received affirmative Q&V responses from 28 producers/exporters of 
Chinese CLPP.\1\
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    \1\ The Watanabe Group companies; Yalong Paper Products 
(Kunshan) Co., Ltd. (``Yalong''); Changshu Changjiang Printing Co., 
Ltd. (``Changjiang''); Shanghai Lian Li Paper Products Co., Ltd. 
(``Lian Li''); Ningbo Guangbo Imports and Exports Co., Ltd. 
(``Ningbo''); Suzhou Industrial Park Asia Pacific Paper Converting 
Co., Ltd. (``Suzhou''); Sunshine International Group (HK) Ltd. 
(``Sunshine''); Shanghai Foreign Trade Enterprise Co., Ltd. 
(``SFTE''); Shanghai Lansheng Stationery & Sporting Goods Import & 
Export Co., Ltd. (``Lansheng''); Jiaxing Te Gao Te Paper Products 
Co., Ltd. (``Te Gao Te''); Chinapack Ningbo Paper Products Co., Ltd. 
(``Chinapack''); Planet International Company, Ltd. (``Planet''); 
Planet (Hong Kong) International Company, Ltd. (``Planet HK''); 
Linqing Silver Star Paper Products Co., Ltd. (``Linqing Silver''); 
You-You Paper Products (Suzhou) Co., Ltd. (``You-You''); Suzhou 
Industrial Park You-You Trading Co., Ltd. (``You-You Trading''); 
Yantai Licence Printing & Making Co., Ltd. (``Yantai''); Fujian 
Hengda Group Co., Ltd. (``Hengda''); Wah Kin Stationery and Paper 
Product Limited (``Wah Kin''); Haijing Stationery (Shanghai) Co., 
Ltd. (``Haijing''); Orient International Holding Shanghai Foreign 
Trade Co., Ltd. (``Orient''); Anhui Light Industries International 
Co., Ltd. (``Anhui Light''); and Shanghai Pudong Wenbao Paper 
Products Factory (``Wenbao Paper''), Shanghai Glistar Paper Products 
Co., Ltd. (``Shanghai Glistar''), Linqing Glistar Paper Products 
Co., Ltd. (``Linqing Glistar''), and Paperline Limited 
(``Paperline'').
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    On November 1, 2005, Shenzhen Comix Stationery Co., Ltd. reported 
that it did not export subject merchandise during the POI. On November 
7, 2005, Excel Sheen Limited (``Excel'') submitted an entry of 
appearance. On November 9, 2005, the Department issued a Q&V 
questionnaire to Excel. Excel submitted its response on November 14, 
2005. On November 17, 2005, Maxleaf Stationery Ltd. (Maxleaf) submitted 
an entry of appearance and a Q&V questionnaire response. On November 
17, 2005, the Department issued a Q&V questionnaire to Atico 
International (HK) & Atico Overseas Ltd., (``Atico''). Atico responded 
on November 18, 2005. Also, on November 18, 2005, Changjiang submitted 
a revised Q&V response. On November 22, 2005, the Department sent a 
revised Q&V questionnaire to all parties that had submitted a Q&V 
response, asking that companies report separately their direct export 
price sales and their indirect export price sales.
    The PRC government did not respond to the Department's October 20, 
2005, letter requesting assistance in transmitting the Q&V 
questionnaire to producers and exporters of the subject merchandise in 
the PRC.
    On November 7, 8, and 9, 2005, the Department received separate-
rate applications from 26 producers/exporters of Chinese CLPP: Atico, 
the Watanabe Group,\2\ Yalong, Changjiang, Lian Li, Ningbo, Suzhou, 
Sunshine, SFTE, Lansheng, Te Gao Te, Chinapack, Planet, Planet HK, 
Linqing Silver, You-You, You-You Trading, Yantai, Hengda, Wah Kin, 
Haijing, Orient, Anhui Light, and Excel. The Department issued 
supplemental questionnaires to these separate-rate applicants and 
received a timely response from each of them.
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    \2\ The Watanabe Group is comprised of three companies, as noted 
above. Each company filed a separate-rate application.
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    On November 29, 2005, Petitioner requested that the Department make 
an expedited finding that critical circumstances exist with respect to 
imports of CLPP from the PRC, India, and Indonesia. On December 1, 
2005, Target Corporation and the Watanabe Group submitted comments on 
Petitioner's request with respect to critical circumstances.
    On December 5, 2005, the following companies submitted supplements 
to their separate-rate applications: Planet HK, Chinapack, and SFTE. 
Also on December 5, 2005, the following companies submitted separate-
rate applications: Essential Industries Limited (``Essential''), 
Dongguan Yizhi Gao Paper Products Ltd (``Yizhi Gao''), Paperline, MGA 
Entertainment (H.K.) Limited (``MGA''), Wenbao Paper, and Maxleaf.
    On December 13, 2005, the Department issued its respondent-
selection memorandum, selecting the following companies as mandatory 
respondents in this investigation: the Watanabe Group, Atico, and Lian 
Li.

[[Page 19697]]

See ``Selection of Respondents'' section, below.
    On December 13, 2005, the Department issued its antidumping 
questionnaire to the Watanabe Group, Atico, and Lian Li. The Watanabe 
Group and Lian Li submitted timely responses to the questionnaire. On 
January 26, 2006, Atico submitted a letter informing the Department 
that it was unable to participate further in this investigation. See 
``Use of Total Adverse Facts Available'' section, below.
    On December 20, 2005, the Department determined that India, Sri 
Lanka, Indonesia, the Philippines, and Egypt are countries comparable 
to the PRC in terms of economic development. See Memorandum from Ron 
Lorentzen, Director, Office of Policy to Wendy Frankel, Director, 
China/NME Group, Office 8: Antidumping Duty Investigation of Certain 
Lined Paper Products from the People's Republic of China (PRC): Request 
for a List of Surrogate Countries, dated December 20, 2005 (Office of 
Policy Surrogate Countries Memorandum).
    On January 31, 2006, the Department found that Petitioner's 
critical circumstances allegation did not in itself provide a 
sufficient factual basis for making an affirmative finding. See 
Memorandum for Stephen J. Claeys, Deputy Assistant Secretary for Import 
Administration from Susan H. Kuhbach, Director, Office 1, Melissa 
Skinner, Director, Office 3 and Wendy J. Frankel, Director, Office 8, 
Import Administration: Antidumping Duty Investigations of Certain Lined 
Paper Products from India, Indonesia, and the People's Republic of 
China and Countervailing Duty Investigations of Certain Lined Paper 
Products from India and Indonesia: Whether Critical Circumstances Exist 
with Respect to Imports of Certain Lined Paper Products. However, the 
Department stated that it would monitor imports of merchandise covered 
by the scope of these investigations in order to determine whether the 
criteria for a finding of critical circumstances are met. In order to 
make a critical circumstances determination, we requested on February 8 
and March 1, 2006, respectively, that the Watanabe Group and Lian Li 
report the monthly quantity and value of shipments of subject 
merchandise to the United States covering the period from September 
2002 through April 2006. On March 15, 2006, we requested the same 
information from all separate-rate status applicants.
    On January 23, 2006, the Department received a request from 
Petitioner requesting that the Department postpone the preliminary 
determination by 30 days, i.e., until March 18, 2006. We did so on 
February 10, 2006. See Notice of Postponement of Preliminary 
Determination of Antidumping Duty Investigation: Certain Lined Paper 
Products from the People's Republic of China, India, and Indonesia, 71 
FR 7015 (February 10, 2006). On February 21, 2006, the Department 
received a request that the Department postpone the preliminary 
determination by an additional 20 days. On March 14, 2006, the 
Department published a postponement of the preliminary determination on 
CLPP from the PRC until April 7, 2006. See Notice of Postponement of 
Preliminary Determinations of Antidumping Duty Investigation: Certain 
Lined Paper Products from the People's Republic of China and India, 71 
FR 13090 (March 14, 2006).
    On February 21, 2006, Petitioner, the Watanabe Group, and Lian Li 
submitted surrogate value data. Petitioner argued that India is the 
appropriate surrogate country and provided only Indian surrogate value 
data. The Watanabe Group and Lian Li likewise submitted only Indian 
surrogate value data.
    On February 25, 2006, we requested additional information from 
Orient, Ningbo, Planet, Planet HK, Haijing, Suzhou and Sunshine 
regarding their separate-rate applications, and received a timely 
response from each company.

Postponement of Final Determination

    Section 735(a) of the Act provides that a final determination may 
be postponed until no later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise or, in the event of a negative 
preliminary determination, a request for such postponement is made by 
the petitioner. Section 351.210(e)(2) of the Department's regulations 
requires that requests by respondents for postponement of a final 
determination be accompanied by a request for an extension of the 
provisional measures from a four-month period to not more than six 
months. On April 6, 2006, Lian Li requested that, in the event of an 
affirmative preliminary determination in this investigation, the 
Department postpone its final determination by 60 days until 135 days 
after the publication of the preliminary determination. Additionally, 
Lian Li requested that the Department extend the provisional measures 
under section 733(d) of the Act. On April 7, 2006, the Watanabe Group 
requested that, in the event of an affirmative preliminary 
determination in this investigation, the Department postpone its final 
determination by 30 days until 105 days after the publication of the 
preliminary determination. Additionally, the Watanabe Group and Lian Li 
requested that the Department extend the provisional measures under 
Section 733(d) of the Act. Accordingly, because we have made an 
affirmative preliminary determination and the requesting parties 
account for a significant proportion of the exports of the subject 
merchandise, pursuant to 735(a)(2) of the Act, we have postponed the 
final determination until no later than 135 days after the date of 
publication of the preliminary determination and are extending the 
provisional measures accordingly.

Period of Investigation

    The POI is January 1, 2005, through June 30, 2005. This period 
corresponds to the two most recent fiscal quarters prior to the month 
of the filing of the petition (September 2005). See 19 CFR 
351.204(b)(1).

Scope of Investigation

    The scope of this investigation includes certain lined paper 
products, typically school supplies,\3\ composed of or including paper 
that incorporates straight horizontal and/or vertical lines on ten or 
more paper sheets,\4\ including but not limited to such products as 
single- and multi-subject notebooks, composition books, wireless 
notebooks, looseleaf or glued filler paper, graph paper, and laboratory 
notebooks, and with the smaller dimension of the paper measuring 6 
inches to 15 inches (inclusive) and the larger dimension of the paper 
measuring 8-3/4 inches to 15 inches (inclusive). Page dimensions are 
measured size (not advertised, stated, or ``tear-out'' size), and are 
measured as they appear in the product (i.e., stitched and folded pages 
in a notebook are measured by the size of the page as it appears in the 
notebook page, not the size of the unfolded paper). However, for 
measurement purposes, pages with tapered or rounded edges shall be 
measured at their longest and widest points. Subject lined paper 
products may be loose, packaged or bound using any binding method 
(other than case bound through the inclusion of binders board, a spine 
strip, and cover wrap).

[[Page 19698]]

 Subject merchandise may or may not contain any combination of a front 
cover, a rear cover, and/or backing of any composition, regardless of 
the inclusion of images or graphics on the cover, backing, or paper. 
Subject merchandise is within the scope of this petition whether or not 
the lined paper and/or cover are hole punched, drilled, perforated, 
and/or reinforced. Subject merchandise may contain accessory or 
informational items including but not limited to pockets, tabs, 
dividers, closure devices, index cards, stencils, protractors, writing 
implements, reference materials such as mathematical tables, or printed 
items such as sticker sheets or miniature calendars, if such items are 
physically incorporated, included with, or attached to the product, 
cover and/or backing thereto.
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    \3\ For purposes of this scope definition, the actual use or 
labeling of these products as school supplies or non-school supplies 
is not a defining characteristic.
    \4\ There shall be no minimum page requirement for looseleaf 
filler paper.
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Specifically excluded from the scope of this investigation are:
 unlined copy machine paper;
 writing pads with a backing (including but not limited to 
products commonly known as ``tablets,'' ``note pads,'' ``legal pads,'' 
and ``quadrille pads''), provided that they do not have a front cover 
(whether permanent or removable). This exclusion does not apply to such 
writing pads if they consist of hole-punched or drilled filler paper;
 three-ring or multiple-ring binders, or notebook organizers 
incorporating such a ring binder provided that they do not include 
subject paper;
 index cards;
 printed books and other books that are case bound through the 
inclusion of binders board, a spine strip, and cover wrap;
 newspapers;
 pictures and photographs;
 desk and wall calendars and organizers (including but not 
limited to such products generally known as ``office planners,'' ``time 
books,'' and ``appointment books'');
 telephone logs;
 address books;
 columnar pads & tablets, with or without covers, primarily 
suited for the recording of written numerical business data;
 lined business or office forms, including but not limited to: 
preprinted business forms, lined invoice pads and paper, mailing and 
address labels, manifests, and shipping log books;
 lined continuous computer paper;
 boxed or packaged writing stationary (including but not 
limited to products commonly known as ``fine business paper,'' 
``parchment paper,'' and ``letterhead''), whether or not containing a 
lined header or decorative lines;
 Stenographic pads (``steno pads''), Gregg ruled,\5\ measuring 
6 inches by 9 inches;
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    \5\ ``Gregg ruling'' consists of a single- or double-margin 
vertical ruling line down the center of the page. For a six-inch by 
nine-inch stenographic pad, the ruling would be located 
approximately three inches from the left of the book.
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Also excluded from the scope of this investigation are the following 
trademarked products:
 Fly\TM\ lined paper products: A notebook, notebook organizer, 
loose or glued note paper, with papers that are printed with infrared 
reflective inks and readable only by a Fly\TM\ pen-top computer. The 
product must bear the valid trademark Fly\TM\.\6\
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    \6\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 Zwipes\TM\: A notebook or notebook organizer made with a 
blended polyolefin writing surface as the cover and pocket surfaces of 
the notebook, suitable for writing using a specially-developed 
permanent marker and erase system (known as a Zwipes\TM\ pen). This 
system allows the marker portion to mark the writing surface with a 
permanent ink. The eraser portion of the marker dispenses a solvent 
capable of solubilizing the permanent ink allowing the ink to be 
removed. The product must bear the valid trademark Zwipes\TM\.\7\
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    \7\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar[reg]Advance\TM\: A notebook or notebook organizer 
bound by a continuous spiral, or helical, wire and with plastic front 
and rear covers made of a blended polyolefin plastic material joined by 
300 denier polyester, coated on the backside with PVC (poly vinyl 
chloride) coating, and extending the entire length of the spiral or 
helical wire. The polyolefin plastic covers are of specific thickness; 
front cover is .019 inches (within normal manufacturing tolerances) and 
rear cover is .028 inches (within normal manufacturing tolerances). 
Integral with the stitching that attaches the polyester spine covering, 
is captured both ends of a 1'' wide elastic fabric band. This band is 
located 2-3/8'' from the top of the front plastic cover and provides 
pen or pencil storage. Both ends of the spiral wire are cut and then 
bent backwards to overlap with the previous coil but specifically 
outside the coil diameter but inside the polyester covering. During 
construction, the polyester covering is sewn to the front and rear 
covers face to face (outside to outside) so that when the book is 
closed, the stitching is concealed from the outside. Both free ends 
(the ends not sewn to the cover and back) are stitched with a turned 
edge construction. The flexible polyester material forms a covering 
over the spiral wire to protect it and provide a comfortable grip on 
the product. The product must bear the valid trademarks 
FiveStar[reg]Advance\TM\.\8\
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    \8\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar Flex\TM\: A notebook, a notebook organizer, or binder 
with plastic polyolefin front and rear covers joined by 300 denier 
polyester spine cover extending the entire length of the spine and 
bound by a 3-ring plastic fixture. The polyolefin plastic covers are of 
a specific thickness; front cover is .019 inches (within normal 
manufacturing tolerances) and rear cover is .028 inches (within normal 
manufacturing tolerances). During construction, the polyester covering 
is sewn to the front cover face to face (outside to outside) so that 
when the book is closed, the stitching is concealed from the outside. 
During construction, the polyester cover is sewn to the back cover with 
the outside of the polyester spine cover to the inside back cover. Both 
free ends (the ends not sewn to the cover and back) are stitched with a 
turned edge construction. Each ring within the fixture is comprised of 
a flexible strap portion that snaps into a stationary post which forms 
a closed binding ring. The ring fixture is riveted with six metal 
rivets and sewn to the back plastic cover and is specifically 
positioned on the outside back cover. The product must bear the valid 
trademark FiveStar Flex\TM\.\9\
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    \9\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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Merchandise subject to this proceeding is typically imported under 
headings 4820.10.2050, 4810.22.5044, 4811.90.9090 of the Harmonized 
Tariff Schedule of the United States (HTSUS).\10\ The tariff 
classifications are provided for convenience and customs purposes; 
however, the written description of the scope of the proceeding is 
dispositive.
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    \10\ During the investigation additional HTS codes may be 
identified.
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Scope Comments

    In accordance with the preamble to our regulations (See Antidumping 
Duties; Countervailing Duties, 62 FR 27296, 27323 (May 19, 1997)), in 
our initiation notice we set aside a period of time for parties to 
raise issues regarding product coverage and encouraged all parties to 
submit comments within 20 calendar days of publication of the

[[Page 19699]]

initiation notice. See Notice of Initiation at 58375.
    On October 28, 2005, Continental Accessory Corporation 
(``Continental'') submitted timely scope comments in which it argued 
that the Department should issue a ruling that the scope of these 
investigations does not cover ``fashion stationery,'' a niche lined 
paper product. Continental argued that fashion stationery is 
substantially different from subject commodity-grade lined paper 
products because of differences in physical appearance, production 
methods, costs, consumer expectations, and other factors. Continental 
also argued that none of the domestic petitioners has the capability of 
manufacturing fashion stationery in the United States.
    On November 16, 2005, Petitioner submitted rebuttal comments. 
Petitioner argued that what Continental refers to as ``stationery,'' 
and ``fashion goods,'' is actually nothing more than notebooks. 
Contrary to Continental's allegation, Petitioner claimed these 
notebooks are ``substantially produced'' within the United States. 
Petitioner stated that the language of the scope is clear in describing 
the products for which relief is sought, ``certain lined paper products 
regardless of the material used for a front or back cover, regardless 
of the inclusion of material on the front and cover, and regardless of 
the binding materials.'' Petitioner also argued that Continental's 
claim that fashion notebooks ``are not intended to be included with 
covered merchandise'' is baseless. Petitioner stated that Continental 
had provided no evidence to demonstrate that the purchaser views 
fashion notebooks as a higher value product. Lastly, Petitioner noted 
that the ITC had already rejected Continental's claims that its fashion 
books are not within the scope of the domestic like product or should 
be treated as a separate like product. See ITC Preliminary Report.
    As further discussed in the memorandum to Stephen J. Claeys, Deputy 
Assistant Secretary for AD/CVD Operations, Import Administration, 
through Susan H. Kuhbach, Director, Office 1, AD/CVD Operations, from 
Damian Felton, case analyst: Antidumping and Countervailing Duty 
Investigation: Scope Exclusion/Clarification Request: Continental 
Accessory Corporation, dated March 20, 2006, the Department denied 
Continental's request that its fashion notebooks be excluded from the 
scope of the investigation.
    On March 29, 2006, SchoolMax LLC (``SchoolMax''), a U.S. importer 
of CLPP from the PRC requested that the Department determine that 
certain products imported by SchoolMax are outside the scope of these 
investigations. The Department will consider this request for the final 
determination in these investigations.

Selection of Respondents

    Section 777A(c)(1) of the Act directs the Department to calculate 
individual weighted-average dumping margins for each known exporter and 
producer of the subject merchandise. Section 777A(c)(2) of the Act 
gives the Department discretion, when faced with a large number of 
exporters/producers, to limit its examination to a reasonable number of 
such companies if it is not practicable to examine all companies. Where 
it is not practicable to examine all known producers/exporters of 
subject merchandise, this provision permits the Department to 
investigate either (1) a sample of exporters, producers, or types of 
products that is statistically valid based on the information available 
to the Department at the time of selection or (2) exporters/producers 
accounting for the largest volume of the merchandise under 
investigation that can reasonably be examined. After consideration of 
the complexities expected to arise in this proceeding and the resources 
available to it, the Department determined that it was not practicable 
in this investigation to examine all known producers/exporters of 
subject merchandise. Instead, we limited our examination to the 
exporters and producers accounting for the largest volume of the 
subject merchandise pursuant to section 777A(c)(2)(B) of the Act. The 
Watanabe Group, Atico, and Lian Li, the exporters accounting for the 
largest volume of exports to the United States, account for a 
significant percentage of all exports of the subject merchandise from 
the PRC during the POI and were selected as mandatory respondents. See 
Memorandum from Charles Riggle, Program Manager, AD/CVD Enforcement, 
Office 8, to Wendy J. Frankel, Director, AD/CVD Enforcement, Office 8, 
Selection of Respondents for the Antidumping Duty Investigation of 
Certain Lined Paper Products from the People's Republic of China, dated 
December 13, 2005 (``Respondent Selection Memo'').

Non-Market Economy Country

    For purposes of initiation, Petitioner submitted an LTFV analysis 
for the PRC as an NME. See Notice of Initiation, 70 FR at 58377. In 
every case conducted by the Department involving the PRC, the PRC has 
been treated as an NME country. In accordance with section 
771(18)(C)(i) of the Act, any determination that a foreign country is 
an NME country shall remain in effect until revoked by the 
administering authority. See, e.g., Final Determination of Sales at 
Less Than Fair Value: Certain Artist Canvas from the People's Republic 
of China, 71 FR 16116 (March 30, 2006) (``Artist Canvas''). Therefore, 
we have treated the PRC as an NME country for purposes of this 
preliminary determination.

Surrogate Country

    When the Department is investigating imports from an NME country or 
producer, section 773(c)(1) of the Act directs it to base normal value 
(``NV''), in most circumstances, 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 at a level of economic development comparable to that of the NME 
country and are significant producers of comparable merchandise. The 
sources of the surrogate values we have used in this investigation are 
discussed under the ``Normal Value'' section below.
    As stated previously, the Department determined that India, 
Indonesia, Sri Lanka, the Philippines, and Egypt are countries 
comparable to the PRC in terms of economic development. See Office of 
Policy Surrogate Countries Memorandum. Once the countries that are 
economically comparable to the PRC have been identified, we select an 
appropriate surrogate country by determining whether an economically 
comparable country is a significant producer of comparable merchandise 
and whether the data for valuing factors of production is both 
available and reliable.
    We have made the following determination about the use of India as 
a surrogate country pursuant to section 773(c)(4) of the Act: (A) India 
is at a level of economic development comparable to that of the PRC, 
and (B) India is a significant producer of comparable merchandise. 
Furthermore, we have reliable data from India that we can use to value 
the factors of production. See Memorandum to Wendy J. Frankel, 
Director, Office 8, AD/CVD Operations through Charles Riggle, Program 
Manager, from Hua Lu, Case Analyst: Antidumping Investigation of 
Certain Lined Paper Products from the People's Republic of

[[Page 19700]]

China: Selection of a Surrogate Country, dated April 7, 2006. Thus, we 
have calculated NV using Indian prices when available and appropriate 
to value the factors of production of the CLPP producers. We have 
obtained and relied upon publicly available information wherever 
possible. See Memorandum to the File from Marin Weaver, Paul Stolz, 
Frances Veith, and William M. Quigley, International Trade Compliance 
Analysts, through Charles Riggle, Program Manager, and Wendy J. 
Frankel, Director, Office 8, Import Administration: Certain Lined Paper 
Products from the People's Republic of China: Factors-of-Production 
Valuation for Preliminary Determination, dated April 7, 2006 (``Factor-
Valuation Memorandum'').
    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the factors of 
production within 40 days after the date of publication of the 
preliminary determination.

Affiliation

    Section 771(33) of the Act states that the Department considers the 
following entities to be affiliated: (A) Members of a family, including 
brothers and sisters (whether by whole or half blood), spouse, 
ancestors, and lineal descendants; (B) Any officer or director of an 
organization and such organization; (C) Partners; (D) Employer and 
employee; (E) Any person directly or indirectly owning, controlling, or 
holding with power to vote, 5 percent or more of the outstanding voting 
stock or shares of any organization and such organization; (F) Two or 
more persons directly or indirectly controlling, controlled by, or 
under common control with, any person; and (G) Any person who controls 
any other person and such other person.
    For purposes of affiliation, section 771(33) of the Act states that 
a person shall be considered to control another person if the person is 
legally or operationally in a position to exercise restraint or 
direction over the other person. In order to find affiliation between 
companies, the Department must find that at least one of the criteria 
listed above is applicable to the respondents.
    To the extent that the affiliation provisions in section 771(33) of 
the Act do not conflict with the Department's application of separate 
rates and the statutory NME provisions in section 773(c) of the Act, 
the Department will determine that exporters and/or producers are 
affiliated if the facts of the case support such a finding. See Certain 
Preserved Mushrooms From the People's Republic of China: Preliminary 
Results of Sixth New Shipper Review and Preliminary Results and Partial 
Rescission of Fourth Antidumping Duty Administrative Review, 69 FR 
10410, 10413 (March 5, 2004), unchanged in Final Results and Final 
Rescission, in Part, of Antidumping Duty Administrative Review: Certain 
Preserved Mushrooms From the People's Republic of China, 70 FR 54361 
(September 14, 2005).

Watanabe Group

    Following these guidelines, we preliminarily determine that members 
of the Watanabe Group are affiliated pursuant to section 771(33) of the 
Act. We are also treating them as a single entity for purposes of this 
investigation. See Memorandum to Wendy Frankel, Director, from Charles 
Riggle, Program Manager: Antidumping Duty Investigation of Certain 
Lined Paper Products from the People's Republic of China: Affiliation 
and Treatment of the Watanabe Group as a Single Entity, dated April 7, 
2006.

Separate Rates

    In proceedings involving 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. The 
mandatory respondents and several separate rate applicants have 
provided company-specific information and each has stated that it meets 
the standards for the assignment of a separate rate.
    We have considered whether the mandatory respondents and the 
separate rate applicants referenced above are eligible for a separate 
rate. The Department's separate-rate test to determine whether the 
exporters are independent from government control does not consider, in 
general, 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 Certain Cut-to-Length Carbon Steel Plate 
from Ukraine: Final Determination of Sales at Less than Fair Value, 62 
FR 61754, 61758 (November 19, 1997); and 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, 61279 (November 17, 1997).
    To establish whether a firm is sufficiently independent from 
government control of its export activities to be entitled to a 
separate rate, the Department analyzes each entity exporting the 
subject merchandise under a test arising from the Final Determination 
of Sales at Less Than Fair Value: Sparklers from the People's Republic 
of China, 56 FR 20588 (May 6, 1991) (``Sparklers''), as amplified by 
Final Determination of Sales at Less Than Fair Value: Silicon Carbide 
from the People's Republic of China, 59 FR 22585 (May 2,1994) 
(``Silicon Carbide''). In accordance with the separate-rates criteria, 
the Department assigns separate rates in NME cases only if respondents 
can demonstrate the absence of both de jure and de facto government 
control over export activities.
1. Absence of De Jure Control
    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) an absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; or (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
2. Absence of De Facto Control
    Typically the Department considers the following four factors in 
evaluating whether each respondent is subject to de facto government 
control of its export functions: (1) whether the export prices are set 
by or are subject to the approval of a government agency; (2) whether 
the respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses. See Silicon Carbide, 59 FR at 22586-87; See, also, 
Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol 
From the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). 
The

[[Page 19701]]

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 evidence placed on the record of this investigation 
demonstrates an absence of government control, both in law and in fact, 
in accordance with the criteria identified in Sparklers and Silicon 
Carbide, for the Watanabe Group and Lian Li, mandatory respondents in 
this proceeding, and the following separate-rate status applicants that 
shipped subject merchandise to the United States during the POI: Anhui 
Light, Changjiang, Chinapack, Essential, Hengda, Haijing, Te Gao Te, 
Linqing Silver, MGA, Ningbo, Orient, Paperline, Planet HK, Planet, 
Wenbao Paper, SFTE, Sunshine, Suzhou, You-You Trading, Wah Kin, and 
Yalong. As a result, for the purposes of this preliminary 
determination, we have granted separate-rate status to these companies.
    Evidence placed on the record of this investigation fails to 
demonstrate an absence of government control, both in law and in fact, 
in accordance with the criteria identified in Sparklers and Silicon 
Carbide, for the following companies: Atico, Lansheng, You-You, Excel, 
Maxleaf, Yantai, and Yizhi Gao. For a full discussion of this issue, 
please See Memorandum to Wendy Frankel, Director, through Charles 
Riggle, Program Manager, from Robert Bolling, Program Manager: Certain 
Lined Paper Products from the People's Republic of China: Separate 
Rates Memorandum (``Separate Rates Memorandum''), dated April 7, 2006.

Use of Total Adverse Facts Available

The PRC Entity - PRC-Wide Rate

    The Department has data that indicate there were more exporters of 
CLPP from the PRC during the POI than those that responded to the Q&V 
questionnaire or the full antidumping questionnaire. See Respondent 
Selection Memorandum at 1. We issued the Q&V questionnaire to 45 known 
Chinese exporters of the subject merchandise but received responses 
from only 32, with one reporting that it made no shipments of subject 
merchandise during the POR. Also, on October 20, 2005, we issued our 
Q&V questionnaire to the government of the PRC (through the Ministry of 
Commerce). The government of the PRC did not respond to the 
Department's questionnaire. In addition, Atico, one of the mandatory 
respondents, did not respond to sections C, D and E of the Department's 
antidumping questionnaire. Therefore, the Department determines 
preliminarily that there were exports of the merchandise under 
investigation from PRC producers/exporters that did not respond to the 
Department's questionnaire, and we are treating these PRC producers/
exporters as part of the countrywide entity.

Atico

    Atico withheld or failed to provide information specifically 
requested by the Department during the course of this investigation. 
After submission of its separate-rate application and Section A 
questionnaire response, Atico submitted a letter on January 26, 2006, 
stating that it was unable to participate further in this 
investigation. Atico did not submit a response to the remainder of its 
questionnaire. We find that because Atico ceased participation in the 
investigation and none of the information submitted can be verified, 
Atico does not merit a separate rate and will be subject to the PRC-
wide rate.
    The Department will consider all margins on the record at the time 
of the final determination for the purpose of determining the most 
appropriate AFA rate for the PRC-wide entity. See Preliminary 
Determination of Sales at Less Than Fair Value: Saccharin from the 
People's Republic of China, 67 FR 79049, 79053-54 (December 27, 2002), 
unchanged in Final Determination of Sales at Less Than Fair Value: 
Saccharin From the People's Republic of China, 68 FR 27530 (May 20, 
2003).
    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information that has been requested by the Department, 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act, (C) significantly impedes a proceeding under the antidumping 
statute, or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Pursuant to section 782(e) of the Act, the Department shall not 
decline to consider submitted information if all of the following 
requirements are met: (1) the information is submitted by the 
established deadline; (2) the information can be verified; (3) the 
information is not so incomplete that it cannot serve as a reliable 
basis for reaching the applicable determination; (4) the interested 
party has demonstrated that it acted to the best of its ability; and 
(5) the information can be used without undue difficulties.
    Information on the record of this investigation indicates that 
there are numerous producers/exporters of CLPP in the PRC. Information 
on the record also indicates that the responding companies did not 
account for all imports into the United States from the PRC. Therefore, 
we preliminarily determine that certain PRC exporters of CLPP failed to 
respond to our questionnaires. Additionally, in this case, the 
government of the PRC did not respond to the Department's 
questionnaire, and Atico, a mandatory respondent, stopped cooperating 
in this investigation. As a result, use of facts available pursuant to 
section 776(a)(2)(A) of the Act is appropriate for the PRC entity. See, 
e.g., Artist Canvas, 71 FR 16116 (March 30, 2006).
    Section 776(b) of the Act provides that if an interested party 
fails to cooperate by not acting to the best of its ability to comply 
with requests for information, the Department may employ adverse 
inferences. See, e.g., Artist Canvas, 71 FR 16116 (March 30, 2006). See 
also Statement of Administrative Action accompanying the URAA, H.R. Rep 
No. 103-316 (``SAA'') at 870. We find that, because the PRC-wide entity 
did not respond to our request for information, it has failed to 
cooperate to the best of its ability. Therefore, the Department 
preliminarily finds that, in selecting from among the facts available, 
an adverse inference is appropriate.
    In selecting from among the facts available, Section 776(b) of the 
Act authorizes the Department to use adverse-facts-available (``AFA'') 
information derived from the petition, the final determination from the 
LTFV investigation, a previous administrative review, or any other 
information placed on the record. In selecting a rate for AFA, the 
Department selects a rate that is sufficiently adverse ``as to 
effectuate the purpose of the facts available rule to induce 
respondents to provide the Department with complete and accurate 
information in a timely manner.'' See Final Determination of Sales at 
Less Than Fair Value: Static Random Access Memory Semiconductors from 
Taiwan, 63 FR 8909, 8932 (February 23, 1998). It is the Department's 
practice to select, as AFA, the higher of the (a) highest margin 
alleged in the petition, or (b) the highest calculated rate of any 
respondent in the investigation. See Final Determination of Sales at 
Less Than Fair Value: Certain Cold-Rolled Carbon Quality Steel Products 
from the People's Republic of China, 65 FR 34660 (May 31, 2000), and 
accompanying Issues and Decision Memorandum, at ``Facts Available.'' As 
AFA, we have

[[Page 19702]]

assigned to the PRC-wide entity a margin based on information in the 
petition because the margins derived from the petition are higher than 
the calculated margins for the selected respondents. In this case, we 
have applied a rate of 258.21 percent.
    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 as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. Secondary information is described in the 
SAA as ``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning subject 
merchandise, or any previous review under section 751 concerning the 
subject merchandise.'' See SAA at 870. The SAA provides that to 
``corroborate'' means simply that the Department will satisfy itself 
that the secondary information to be used has probative value. See id. 
The SAA also states that independent sources used to corroborate may 
include, for example, published price lists, official import statistics 
and customs data, and information obtained from interested parties 
during the particular investigation. See id. As explained in Tapered 
Roller Bearings and Parts Thereof, Finished and Unfinished, from Japan, 
and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, 
and Components Thereof, from Japan; Preliminary Results of Antidumping 
Duty Administrative Reviews and Partial Termination of Administrative 
Reviews, 61 FR 57391, 57392 (November 6, 1996), unchanged in Final 
Results of Antidumping Duty Administrative Reviews and Termination in 
Part: Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or 
Less in Outside Diameter, and Components Thereof, From Japan, 62 FR 
11825 (March 13, 1997), to corroborate secondary information, the 
Department will, to the extent practicable, examine the reliability and 
relevance of the information used.
    Petitioner's methodology for calculating the export price (``EP'') 
and NV in the petition is discussed in the initiation notice. See 
Notice of Initiation, 70 FR at 58377-8. To corroborate the AFA margin 
we have selected, we compared the net export prices and normal values 
used to calculate the margin listed in the Notice of Initiation with 
the export prices and normal values calculated for the mandatory 
respondents in this investigation.
    As discussed in Memorandum to The File from Charles Riggle, Program 
Manager, China/NME Group, Corroboration for the Preliminary 
Determination of Certain Lined Paper Products from the People's 
Republic of China, regarding the corroboration of the AFA rate, we 
found that the margin of 258.21 percent has probative value. 
Accordingly, we find that the rate of 258.21 percent is corroborated 
within the meaning of section 776(c) of the Act.
    Consequently, we are applying a single antidumping rate - the PRC-
wide rate - to producers/exporters that failed to respond to the 
Department's antidumping questionnaire, and/or the Q&V questionnaire 
and/or the separate-rate application, as applicable. This rate will 
also apply to separate-rate status applicants which 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, 25707 (May 3, 2000). The PRC-wide rate applies to 
all entries of the merchandise under investigation except for entries 
from mandatory respondents the Watanabe Group and Lian Li and from 
separate-rate applicants that received separate-rate status. These 
companies and their corresponding antidumping duty cash deposit rates 
are listed below in the ``Preliminary Determination'' section of this 
notice.

Margin for the Separate Rate Applicants

    Several exporters of CLPP from the PRC, listed above, were not 
selected as mandatory respondents in this investigation but have 
applied for separate-rate status and provided information to the 
Department for this purpose. We have established a weighted-average 
margin for all applicants that have established that they are entitled 
to a separate rate, based on the rates we calculated for the mandatory 
respondents, excluding any rates that are zero, de minimis, or based 
entirely on AFA. That rate is 135.02 percent. See ``Separate Rates 
Memorandum.'' The exporters given a separate rate are identified by 
name in the ``Preliminary Determination'' section of this notice.

Date of Sale

    Section 351.401(i) of the Department's regulations states that, in 
identifying the date of sale of the subject merchandise or foreign like 
product, the Secretary normally will use the date of invoice, as 
recorded in the exporter or producer's records kept in the normal 
course of business. However, the Department may use a date other than 
the date of invoice if the Department is satisfied that a different 
date better reflects the date on which the exporter or producer 
establishes the material terms of sale. See 19 CFR 351.401(i); See also 
Allied Tube and Conduit Corp. v. United States, 132 F. Supp. 2d 1087, 
1090-1093 (CIT 2001).
    After examining the questionnaire responses and the sales 
documentation that the Watanabe Group and Lian Li placed on the record, 
we preliminarily determine that the invoice date is the most 
appropriate date of sale except where the shipment date precedes the 
invoice date for EP sales. We made this determination based on record 
evidence which demonstrates that the Watanabe Group and Lian Li 
invoices establish the material terms of sale to the extent required by 
our regulations. We also determine that for EP sales, the terms of sale 
cannot be established after the date of shipment. Accordingly, where 
the shipment date precedes the invoice date, the Department considers 
the shipping date to be the date of sale.

Critical Circumstances

    On November 28, 2005, Petitioner requested that the Department make 
an expedited finding that critical circumstances exist with respect to 
CLPP from the PRC. Petitioner alleged that there is a reasonable basis 
to believe or suspect that critical circumstances exist with respect to 
the subject merchandise. Petitioner based its allegation on evidence of 
retailers engaging in negotiations that would cause a surge of imports 
of subject merchandise into the United States from December 2005 
through February 2006 (in advance of the preliminary determination 
date) in order to avoid duties.
    In accordance with 19 CFR 351.206(c)(2), since this allegation was 
filed more than 20 days before the scheduled date of the Department's 
preliminary determination, we must issue our preliminary critical 
circumstances determination not later than the preliminary 
determination. See Policy Bulletin 98/4 regarding Timing of Issuance of 
Critical Circumstances Determinations, 63 FR 55364 (October 15, 1998).
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if 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

[[Page 19703]]

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.
    Accordingly, we preliminarily find that critical circumstances 
exist for imports of subject merchandise from Changjiang, Hengda, 
Linqing Silver, SFTE, Wenbao Paper, Paperline, and Wah Kin. In 
addition, we preliminarily find that critical circumstances do not 
exist for Anhui Light, Chinapack, Essential Industries Limited, Excel, 
Haijing, Te Gao Te, Lian Li, MGA, Ningbo, Orient, Planet HK, Planet, 
Sunshine, Suzhou, You-You Trading, the Watanabe Group, and Yalong. See 
Memorandum to Stephen Claeys from Juanita Chen through Robert Bolling 
and Wendy Frankel: Lined Paper Products from the People's Republic of 
China: Preliminary Determination of Critical Circumstances.
    We also preliminarily find that critical circumstances exist for 
imports of CLPP for the PRC entity.

Fair Value Comparisons

    To determine whether sales of CLPP to the United States by the 
mandatory respondents were made at LTFV, we compared EP to NV, as 
described in the ``U.S. Price'' and ``Normal Value'' sections of this 
notice.

U.S. Price

    In accordance with section 772(a) of the Act, we used EP for the 
Watanabe Group and Lian Li, because the subject merchandise was first 
sold (or agreed to be sold) before the date of importation by the 
producer or exporter of the subject merchandise outside the United 
States to an unaffiliated purchaser in the United States or to an 
unaffiliated purchaser for exportation to the United States and because 
the use of constructed export price was not otherwise indicated.
    We calculated EP based on the packed F.O.B., C.I.F., or delivered 
price to unaffiliated purchasers in, or for exportation to, the United 
States. We made deductions, as appropriate, for any movement expenses 
(e.g., foreign inland freight from the plant to the port of 
exportation, domestic brokerage) in accordance with section 
772(c)(2)(A) of the Act. For a detailed description of all adjustments, 
See Memorandum to The File Through Charles Riggle, Program Manager, 
from Marin Weaver, International Trade Compliance Analyst, RE: 
Calculation of Preliminary Margin for Watanabe Paper Product (Shanghai) 
Co., Ltd., Hotrock Stationery (Shenzhen) Co., Ltd., and Watanabe Paper 
Product (Linqing) Co., Ltd. (``Watanabe Group Calc Memo'') dated April 
7, 2006, and Memorandum to The File Through Charles Riggle, Program 
Manager, from Fran Veith, International Trade Compliance Analyst, RE: 
Calculation of Preliminary Margin for Shanghai Lian Li Paper Products 
Co., Ltd., (``Lian Li Calc Memo'') dated April 7, 2006.

Normal Value

    We compared NV to weighted-average EPs in accordance with section 
777A(d)(1) of the Act. For a detailed description of all adjustments, 
See Watanabe Group Calc Memo and Lian Li Calc Memo.
    Section 773(c)(1) of the Act provides that the Department shall 
determine the NV using a factors-of-production methodology if the 
merchandise is exported from an NME and the information does not permit 
the calculation of NV using home-market prices, third-country prices, 
or constructed value under section 773(a) of the Act. The Department 
bases NV on the 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 its 
normal methodologies.
    The Department's questionnaire requires that the respondent provide 
information regarding the weighted-average factors of production across 
all of the company's plants that produce the subject merchandise, not 
just the factors of production from a single plant. This methodology 
ensures that the Department's calculations are as accurate as possible. 
See,e.g., Final Determination of Sales at Less Than Fair Value and 
Critical Circumstances: Certain Malleable Iron Pipe Fittings From the 
People's Republic of China, 68 FR 61395 (October 28, 2003), and the 
accompanying Issues and Decision Memorandum at Comment 19. The 
Department calculated the factors of production using the weighted-
average factor values for all of the facilities involved in producing 
the subject merchandise for each exporter. The Department calculated NV 
for each matching control number (CONNUM) based on the factors of 
production reported from each of the exporters' suppliers and then 
averaged the supplier-specific NV together weighted by production 
quantity to derive a single, weighted-average NV for each CONNUM 
exported by each exporter.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on factors of production reported by respondents for the POI. To 
calculate NV, we multiplied the reported per-unit factor-consumption 
rates by publicly available Indian surrogate values. 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 of production or the distance from the nearest seaport 
to the factory of production where appropriate. This adjustment is in 
accordance with the Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F. 3d 1401, 1407-1408 (Fed. Cir. 
1997).
    For this preliminary determination, in accordance with past 
practice, we used data from the Indian Import Statistics, from Indian 
Printer and Publisher, and from the Maharashtra Industrial Development 
Corporation (www.midcindia.org) to calculate surrogate values for the 
mandatory respondents' material inputs. In selecting the best available 
information for valuing factors of production in accordance with 
section 773(c)(1) of the Act, the Department's practice is to select, 
to the extent practicable, surrogate values which are non-export 
average values, most contemporaneous with the POI, product-specific, 
and tax-exclusive. See, e.g., Notice of Preliminary Determination of 
Sales at Less Than Fair Value, Negative Preliminary Determination of 
Critical Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final 
Determination of Sales at Less Than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 FR 
71005 (December 8, 2004). In selecting Indian Printer and Publisher as 
the source with which to value paper inputs, we preliminarily found 
that this source best meets the Department's stated practice of using 
``prices specific to the input in question''\11\ that are

[[Page 19704]]

contemporaneous with the POI. For the final determination, the 
Department will consider any additional information placed on the 
record regarding the appropriate surrogate value for paper inputs.
---------------------------------------------------------------------------

    \11\ See Import Administration Policy Bulletin Number: 04.1 
Topic: Non-Market Economy Surrogate Country Selection Process, dated 
March 1, 2004.
---------------------------------------------------------------------------

    Where we could not obtain publicly available information 
contemporaneous with the POI with which to value factors, we adjusted 
the surrogate values using, where appropriate, the Indian Wholesale 
Price Index as published in the Handbook on Statistics of Indian 
Economy published by the Reserve Bank of India.
    Furthermore, with regard to the Indian import-based surrogate 
values, we have disregarded import prices that we have reason to 
believe or suspect may be subsidized. We have reason to believe or 
suspect that prices of inputs from Indonesia, South Korea, and Thailand 
may have been subsidized. We have found in other proceedings that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, it is reasonable to infer that all exports to 
all markets from these countries may be subsidized. See Notice of Final 
Determination of Sales at Less Than Fair Value and Negative Final 
Determination of Critical Circumstances: Certain Color Television 
Receivers From the People's Republic of China, 69 FR 20594 (April 16, 
2004). We are also directed by the legislative history not to conduct a 
formal investigation to ensure that such prices are not subsidized. See 
H.R. Rep. 100-576 at 590 (1988). Rather, Congress directed the 
Department to base its decision on information that is available to it 
at the time it makes its determination. Therefore, we have not used 
prices from these countries in calculating the Indian import-based 
surrogate values. In instances where a market-economy input was 
obtained solely from suppliers located in these countries, we used 
Indian import-based surrogate values to value the input. In addition, 
we excluded Indian import data from NME countries from our surrogate 
value calculations.
    For a detailed description of all surrogate values used for 
respondents, See Factor-Valuation Memorandum.
    For direct, indirect, 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 2005, http://ia.ita.doc.gov/wages/index.html. 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. See Factor-Valuation 
Memorandum.
    To value electricity, we used data from the International Energy 
Agency Key World Energy Statistics (2003 edition). Because the value 
was not contemporaneous with the POI, we adjusted the rate for 
inflation. See Factor-Valuation Memorandum.
    The Department valued water using data from the Maharashtra 
Industrial Development Corporation (http://www.midcindia.org) since it 
includes a wide range of industrial water tariffs. This source provides 
386 industrial water rates within the Maharashtra province from June 
2003: 193 for the ``inside industrial areas'' usage category and 193 
for the ``outside industrial areas'' usage category. Because the value 
was not contemporaneous with the POI, we adjusted the rate for 
inflation. See Factor-Valuation Memorandum.
    We used Indian transport information in order to value the inland 
freight cost of the raw materials. The Department determined the best 
available information for valuing truck freight to be from 
www.infreight.com. This source provides daily rates from six major 
points of origin to five destinations in India during the POI. The 
Department obtained a price quote on the first day of each month of the 
POI from each point of origin to each destination and averaged the data 
accordingly. See Factor-Valuation Memorandum.
    The Department used two sources to calculate a surrogate value for 
domestic brokerage expenses. The Department averaged December 2003-
November 2004 data contained in Essar Steel's February 28, 2005, public 
version response submitted in the antidumping duty administrative 
review of hot-rolled carbon steel flat products from India with 
February 2004-January 2005 data contained in Agro Dutch Industries 
Limited's (``Agro Dutch'') May 24, 2005, public version response 
submitted in the administrative review of the antidumping duty order on 
certain preserved mushrooms from India. The brokerage expense data 
reported by Essar Steel and Agro Dutch in their public versions are 
ranged data. The Department first derived an average per-unit amount 
from each source. Then the Department adjusted each average rate for 
inflation. Finally, the Department averaged the two per-unit amounts to 
derive an overall average rate for the POI. See Factor-Valuation 
Memorandum.
    To value factory overhead, selling, general, and administrative 
expenses, and profit, we used the 2004-2005 annual report of Kanoi 
Paper & Industries Ltd., a producer of paper products from India. See 
Factor-Valuation Memorandum for a full discussion of the calculation of 
the ratios from this annual report. The Department may consider other 
publicly available financial statements for the final determination, as 
appropriate.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information from the Watanabe Group and Lian Li upon which we will 
rely in making our final determination. Additionally, we may also 
verify the information on the record submitted by selected separate-
rate applicants.

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 at 58379. This change in practice is described in Policy Bulletin 
05.1, which states:
    ``[lsqb]w[rsqb]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.

[[Page 19705]]

Preliminary Determination

    The weighted-average dumping margins are as follows:

----------------------------------------------------------------------------------------------------------------
                                                                                               Weighted-Average
                Exporter                                       Producer                          Deposit Rate
----------------------------------------------------------------------------------------------------------------
Watanabe Paper Product (Linqing) Co.,             Watanabe Paper Product (Linqing) Co., Ltd.              143.49
 Ltd...................................
Watanabe Paper Product (Linqing) Co.,                Hotrock Stationery (Shenzhen) Co., Ltd.              143.49
 Ltd...................................
Watanabe Paper Product (Linqing) Co.,           Watanabe Paper Products (Shanghai) Co., Ltd.              143.49
 Ltd...................................
Hotrock Stationery (Shenzhen) Co., Ltd.              Hotrock Stationery (Shenzhen) Co., Ltd.              143.49
Hotrock Stationery (Shenzhen) Co., Ltd.           Watanabe Paper Product (Linqing) Co., Ltd.              143.49
Hotrock Stationery (Shenzhen) Co., Ltd.         Watanabe Paper Products (Shanghai) Co., Ltd.              143.49
Watanabe Paper Products (Shanghai) Co.,         Watanabe Paper Products (Shanghai) Co., Ltd.              143.49
 Ltd...................................
Watanabe Paper Products (Shanghai) Co.,              Hotrock Stationery (Shenzhen) Co., Ltd.              143.49
 Ltd...................................
Watanabe Paper Products (Shanghai) Co.,           Watanabe Paper Product (Linqing) Co., Ltd.              143.49
 Ltd...................................
Shanghai Lian Li Paper Products Co.,               Shanghai Lian Li Paper Products Co., Ltd.               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,                         Sentian Paper Products Co., Ltd               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,            Shanghai Miaopaofang Paper Products Co., Ltd               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,         Shanghai Pudong Wenbao Paper Products Co., Ltd.               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,                  Changshu Changjiang Printing Co., Ltd.               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,                     Shanghai Loutang Stationery Factory               52.10
 Ltd...................................
Shanghai Lian Li Paper Products Co.,                Shanghai Beijia Paper Products Co., Ltd.               52.10
 Ltd...................................
Ningbo Guangbo Imports and Exports Co.      Ningbo Guangbo Plastic Products Manufacture Co.,              135.02
 Ltd...................................                                                 Ltd.
Yalong Paper Products (Kunshan) Co.,                Yalong Paper Products (Kunshan) Co., Ltd              135.02
 Ltd...................................
Suzhou Industrial Park Asia Pacific                Suzhou Industrial Park Asia Pacific Paper              135.02
 Paper Converting Co., Ltd.............                                 Converting Co., Ltd.
Sunshine International Group (HK) Ltd..           Dongguan Shipai Tonzex Electronics Plastic              135.02
                                                                         Stationery Factory;
Sunshine International Group (HK) Ltd..              Dongguan Kwong Wo Stationery Co., Ltd.;              135.02
Sunshine International Group (HK) Ltd..    Hua Lian Electronics Plastic Stationery Co., Ltd.              135.02
Suzhou Industrial Park You-You Trading                       Linqing YinXing Paper Co., Ltd.              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading              Jiaxing Seagull Paper Products Co., Ltd.              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                          Shenda Paper Product Factory              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                          Lianyi Paper Product Factory              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                       Changhang Paper Product Factory              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                        Tianlong Paper Product Factory              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                         Rugao Paper Printer Co., Ltd.              135.02
 Co., Ltd..............................
Suzhou Industrial Park You-You Trading                         Yinlong Paper Product Factory              135.02
 Co., Ltd..............................
Planet International Company Ltd.......             Shanghai Gloves & Headwear I/E Co., Ltd.              135.02
Planet International Company Ltd.......           Shanghai East Best Arts & Crafts Co., Ltd.              135.02
Planet International Company Ltd.......              Mengcheng County No. 3 Printing Factory              135.02
Planet International Company Ltd.......                 Shanghai Huhui Paper Product Factory              135.02
Planet (Hong Kong) International                    Shanghai Gloves & Headwear I/E Co., Ltd.              135.02
 Company Ltd...........................
Planet (Hong Kong) International                  Shanghai East Best Arts & Crafts Co., Ltd.              135.02
 Company Ltd...........................
Planet (Hong Kong) International          Zhejiang Arts & Crafts Imp. & Exp. Shanghai Pudong              135.02
 Company Ltd...........................                                            Co., Ltd.
Planet (Hong Kong) International           Shanghai Xin Zhi Liang Cultural Product Co., Ltd.              135.02
 Company Ltd...........................
Planet (Hong Kong) International                     Mengcheng County No. 3 Printing Factory              135.02
 Company Ltd...........................
Planet (Hong Kong) International                        Shanghai Huhui Paper Product Factory              135.02
 Company Ltd...........................
Planet (Hong Kong) International                       Shanghai Hongxiang Material Sales Co.              135.02
 Company Ltd...........................
Haijing Stationery (Shanghai) Co., Ltd.              Haijing Stationery (Shanghai) Co., Ltd.              135.02
Orient International Holding Shanghai              Yalong Paper Products (Kunshan) Co., Ltd.              135.02
 Foreign Trade Co., Ltd................
Orient International Holding Shanghai                  Shanghai Comwell Stationery Co., Ltd.              135.02
 Foreign Trade Co., Ltd................
Orient International Holding Shanghai                                Yuezhou Paper Co., Ltd.              135.02
 Foreign Trade Co., Ltd................
Orient International Holding Shanghai                Changshu Guangming Stationery Co., Ltd.              135.02
 Foreign Trade Co., Ltd................
Shanghai Foreign Trade Enterprise Co.,    Shanghai Xin Zhi Liang Culture Products Co., Ltd.;              135.02
 Ltd...................................
Shanghai Foreign Trade Enterprise Co.,          Shangyu Zhongsheng Paper Products Co., Ltd.;              135.02
 Ltd...................................
Shanghai Foreign Trade Enterprise Co.,               Shanghai Miaoxi Paper Products Factory;              135.02
 Ltd...................................
Shanghai Foreign Trade Enterprise Co.,                   Shanghai Xueya Stationery Co., Ltd.              135.02
 Ltd...................................
Anhui Light Industries International          Shanghai Pudong Wenbao Paper Products Factory;              135.02
 Co., Ltd..............................
Anhui Light Industries International                        Foshan City Wenhai Paper Factory              135.02
 Co., Ltd..............................
Fujian Hengda Group Co., Ltd.,.........                       Fujian Hengda Group Co., Ltd.,              135.02
Changshu Changjiang Printing Co., Ltd..         Changshu Changjiang Paper Industry Co., Ltd.              135.02
Jiaxing Te Gao Te Paper Products Co.,               Jiaxing Seagull Paper Products Co., Ltd.              135.02
 Ltd...................................
Jiaxing Te Gao Te Paper Products Co.,                 Jiaxing Boshi Paper Products Co., Ltd.              135.02
 Ltd...................................
Chinapack Ningbo Paper Products Co.,              Jiaxing Te Gao Te Paper Products Co., Ltd.              135.02
 Ltd...................................
Linqing Silver Star Paper Products Co.,         Linqing Silver Star Paper Products Co., Ltd.              135.02
 Ltd...................................
Wah Kin Stationery and Paper Product              Shenzhen Baoan Waijing Development Company              135.02
 Limited...............................
Shanghai Pudong Wenbao Paper Products           Shanghai Pudong Wenbao Paper ProductsFactory              135.02
 Factory...............................
Shanghai Pudong Wenbao Paper Products               Linqing Glistar Paper Products Co., Ltd.              135.02
 Factory...............................
Shanghai Pudong Wenbao Paper Products                 Changshu Changjiang Printing Co., Ltd.              135.02
 Factory...............................
Shanghai Pudong Wenbao Paper Products           Linqing Silver Star Paper Products Co., Ltd.              135.02
 Factory...............................
Paperline Limited......................        Shanghai Pudong Wenbao Paper Products Factory              135.02
Paperline Limited......................             Linqing Glistar Paper Products Co., Ltd.              135.02

[[Page 19706]]

 
Paperline Limited......................               Changshu Changjiang Printing Co., Ltd.              135.02
Paperline Limited......................         Linqing Silver Star Paper Products Co., Ltd.              135.02
Paperline Limited......................           Jiaxing Te Gao Te Paper Products Co., Ltd.              135.02
Paperline Limited......................           Yantai License Printing & Making Co., Ltd.              135.02
Paperline Limited......................               Anhui Jinhua Import & Export Co., Ltd.              135.02
Essential Industries Limited...........               Dongguan Yizhi Gao Paper Products Ltd.              135.02
MGA Entertainment (H.K.) Limited.......               Kon Dai (Far East) Packaging Co., Ltd.              135.02
PRC Entity[ast]........................  ...................................................              258.21
----------------------------------------------------------------------------------------------------------------
[ast]Including Atico and the companies that did not respond to the Q&V questionnaire.

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).

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to suspend liquidation of all 
entries of subject merchandise, entered, or withdrawn from warehouse, 
for consumption on or after the date of publication of this notice in 
the Federal Register. We will instruct CBP to require a cash deposit or 
the posting of a bond equal to the weighted-average amount by which the 
normal value exceeds U.S. price, as indicated above. The suspension of 
liquidation will remain in effect until further notice.

International Trade Commission Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of our preliminary affirmative determination of sales at LTFV. 
Because we have postponed the deadline for our final determination to 
135 days from the date of publication of this preliminary 
determination, section 735(b)(2) of the Act requires the ITC to make 
its final determination as to whether the domestic industry in the 
United States is materially injured, or threatened with material 
injury, by reason of imports of CLPP, or sales (or the likelihood of 
sales) for importation, of the subject merchandise within 45 days of 
our final determination.

Public Comment

    Case briefs or other written comments may be submitted to the 
Assistant Secretary for Import Administration no later than seven days 
after the date of the final verification report is issued in this 
proceeding and rebuttal briefs limited to issues raised in case briefs 
no later than five days after the deadline date for case briefs. A list 
of authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. If a request 
for a hearing is made, we intend to hold the hearing three days after 
the deadline of submission of rebuttal briefs at the U.S. Department of 
Commerce, 14\th\ Street and Constitution Ave, NW, Washington, DC 20230, 
at a time and location to be determined. Parties should confirm by 
telephone the date, time, and location of the hearing two days before 
the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, U.S. Department of Commerce, Room 
1870, within 30 days after the date of publication of this notice. See 
19 CFR 351.310(c). Requests should contain the party's name, address, 
and telephone number, the number of participants, and a list of the 
issues to be discussed.
    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a)(2) of the Act.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: April 7, 2006.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 06-3638 Filed 4-14-06; 8:45 am]
BILLING CODE 3510-DS-S