[Federal Register Volume 72, Number 206 (Thursday, October 25, 2007)]
[Notices]
[Pages 60632-60636]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-21041]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-906


Final Determination of Sales at Less Than Fair Value: Coated Free 
Sheet Paper from the People's Republic of China

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

EFFECTIVE DATE: October 25, 2007.
SUMMARY: On June 4, 2007, the Department of Commerce (the 
``Department'') published its preliminary determination of sales at 
less than fair value (``LTFV'') in the antidumping investigation of 
coated free sheet paper (``CFS'') from the People's Republic of China 
(``PRC''). The period of investigation (``POI'') is April 1, 2006, 
through September 30, 2006. We invited interested parties to comment on 
our preliminary determination of sales at LTFV. 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.

FOR FURTHER INFORMATION CONTACT: Magd Zalok or Drew Jackson, Import 
Administration, International Trade Administration, U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230; telephone: (202) 482-4162 and 482-4406, respectively.

Final Determination

    We determine that CFS from the PRC is being, or is likely to be, 
sold in the United States at LTFV as provided in section 735 of the 
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.

SUPPLEMENTARY INFORMATION:

Background

    The Department published its preliminary determination of sales at 
LTFV on June 4, 2007. See Preliminary Determination of Sales at Less 
Than Fair Value: Coated Free Sheet Paper from the People's Republic of 
China, 72 FR 30758 (June 4, 2007) (``Preliminary Determination''). 
Between June 18, 2007, and July 13, 2007, the Department conducted 
verifications of the collapsed entity Gold East Co. Ltd.(Gold East 
Paper (Jiangsu) Co. Ltd., Gold Hua Sheng Paper (Suzhou Industry Park) 
Co. Ltd., and China Union (Macao

[[Page 60633]]

Commercial Offshore) Company Ltd.) (collectively ``Gold East'') and its 
U.S. affiliate, and separate rates applicant Yanzhou Tianzhang Paper 
Industry Co. Ltd. (``Yanzhou Tianzhang''), and its U.S. importer. See 
the ``Verification'' section below for additional information.
    We invited parties to comment on the Preliminary Determination. On 
August 31, 2007, petitioner,\1\ the Bureau of Fair Trade, Ministry of 
Commerce, People's Republic of China (``BOFT''), Yanzhou Tianzhang, and 
Gold East filed case briefs. Petitioner and Gold East filed rebuttal 
briefs on September 7, 2007. Additionally, on September 12, 2007, 
petitioner, Gold East, Yanzhou Tianzhang, and BOFT, along with other 
interested parties in concurrent CFS investigations, submitted comments 
regarding the scope of the instant investigation. These parties filed 
rebuttal scope comments on September 20, 2007. In response to requests 
from interested parties, the Department held a hearing on the scope of 
the investigation on September 26, 2007.
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    \1\ Petitioner in this investigation is NewPage Corporation.
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Analysis of Comments Received

    With the exception of the scope issue, all issues raised in the 
case and rebuttal briefs by parties to this investigation are addressed 
in the ``Investigation of Coated Free Sheet Paper from the People's 
Republic of China: Issues and Decision Memorandum,'' dated October 17, 
2007, which is hereby adopted by this notice (``Issues and Decision 
Memorandum''). The scope issue is addressed in a separate memorandum. 
See ``Scope Comments'' section, below. 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 Issue and 
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/frn. The paper copy and 
electronic version of the memorandum are identical in content. 
Additionally, because some of the issues that parties raised and to 
which we respond contain proprietary information, there is a separate 
proprietary version of the Issues and Decision Memorandum. See 
``Investigation of Coated Free Sheet Paper from the People's Republic 
of China: Issues and Decision Memorandum, Comments and Department of 
Commerce's Positions Containing Proprietary Information,'' dated 
October 17, 2007.

Changes Since the Preliminary Determination

    Based on our analysis of the comments received, we have changed the 
margin calculation for Gold East. Those changes include the following:
    1. We revised our calculation of the per-unit cost of Gold East's 
self-produced electricity and did not value steam used in production.
    2. Based on verification findings, (a) we revised the average 
market-economy price reported for a type of pulp; (b) recalculated the 
net unit price of constructed export price (``CEP'') sales to account 
for unreported selling expenses; (c) reclassified one export price sale 
as a CEP sale and adjusted the sale's price to reflect CEP expenses; 
and (d) based the dumping margin of one unreported sale on adverse 
facts available (``AFA'').
    3. We did not value certain reported factors based on our finding 
that these factors are used in the maintenance of machines, and are 
properly classified as overhead items.
    4. We revised surrogate values for certain factors of production.
    5. We valued certain inputs used by Gold East to treat water.
    6. We revised the surrogate values for factory overhead, selling, 
general and administrative (``SG&A''), and profit.
    7. We corrected a ministerial error involving one of Gold East's 
self-produced inputs.
    For a detailed analysis of Gold East's margin calculation, see 
``Final Determination in the Investigation of Coated Free Sheet Paper 
from the People's Republic of China: Analysis Memorandum for Gold 
East'', dated October 17, 2007.
    We assigned separate rates applicant Yanzhou Tianzhang the revised 
final margin calculated for Gold East, the only mandatory respondent to 
fully participate in this investigation.
    We assigned the PRC-wide rate, as total AFA, to Shandong Chenming 
Paper Holdings Limited (``Chenming'), because it ceased participating 
in this investigation prior to the scheduled verification and, 
consequently, did not demonstrate its entitlement to a separate rate.

Scope of Investigation

    The merchandise covered by this investigation includes coated free 
sheet paper and paperboard of a kind used for writing, printing or 
other graphic purposes. Coated free sheet paper is produced from not-
more-than 10 percent by weight mechanical or combined chemical/
mechanical fibers. Coated free sheet paper is coated with kaolin (China 
clay) or other inorganic substances, with or without a binder, and with 
no other coating. Coated free sheet paper may be surface-colored, 
surface-decorated, printed (except as described below), embossed, or 
perforated. The subject merchandise includes single- and double-side-
coated free sheet paper; coated free sheet paper in both sheet or roll 
form; and is inclusive of all weights, brightness levels, and finishes. 
The terms ``wood free'' or ``art'' paper may also be used to describe 
the imported product.
    Excluded from the scope are: (1) Coated free sheet paper that is 
imported printed with final content printed text or graphics; (2) base 
paper to be sensitized for use in photography; and (3) paper containing 
by weight 25 percent or more cotton fiber. Coated free sheet paper is 
classifiable under subheadings 4810.13.1900, 4810.13.2010, 
4810.13.2090, 4810.13.5000, 4810.13.7040, 4810.14.1900, 4810.14.2010, 
4810.14.2090, 4810.14.5000, 4810.14.7040, 4810.19.1900, 4810.19.2010, 
and 4810.19.2090 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). While HTSUS subheadings are provided for convenience and 
customs purposes, our written description of the scope of this 
investigation is dispositive.

Scope Comments

    On August 20, August 28, and September 10, 2007, the petitioner 
requested that the Department clarify the scope of the antidumping and 
countervailing duty investigations of CFS paper from Indonesia, Korea 
and the People's Republic of China. Specifically, the petitioner asked 
the Department to ``clarify that the scope of the investigation 
includes coated free sheet paper containing hardwood BCTMP.''
    Because this was a general issue pertaining to all six 
investigations, the Department set up a general issues file to handle 
this scope request. A hearing on the scope request was held on 
September 26, 2007. The hearing comprised a public session, a closed 
session for the antidumping investigation from Korea, and a closed 
session for the countervailing duty investigation from the PRC. After 
considering the comments submitted by the parties to these 
investigations, we have determined not to adopt the scope clarification 
sought by the petitioner. See Memorandum to Stephen J. Claeys, Deputy 
Assistant Secretary for Import

[[Page 60634]]

Administration, entitled ``Scope Clarification Request: NewPage 
Corporation'' dated concurrently with this notice, which is appended to 
``Issues and Decision Memorandum for the Final Determination in the 
Countervailing Duty Investigation of Coated Free Sheet Paper from the 
People's Republic of China.''

Adverse Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline, or in the form or manner 
requested, (C) significantly impedes a proceeding, or (D) provides 
information that cannot be verified, the Department shall use, subject 
to sections 782(d) and (e) of the Act, 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.
    On June 7, 2007, six days before the commencement of verification, 
counsel for Chenming informed Department officials that Chenming would 
not continue its participation in the instant investigation. See 
Memorandum to the File through Howard Smith, Program Manager, Office 4, 
concerning ``Telephone Conversation with Counsel for Shandong Chenming 
Paper Holdings Co., Ltd.,'' dated June 7, 2007; see also Chenming's 
letter to the Department, concerning, ``Coated Free Sheet Paper from 
the People's Republic of China; Withdrawal of Shandong Chenming Paper 
Holdings Limited and Withdrawal of Consent to Access Proprietary 
Information,'' dated June 11, 2007. Because Chenming ceased 
participation in the instant investigation, the Department was not able 
to conduct its scheduled verification of Chenming's responses. 
Verification is integral to the Department's analysis because it allows 
the Department to satisfy itself that it is relying upon accurate 
information and calculating dumping margins as accurately as possible. 
By failing to participate in verification, Chenming prevented the 
Department from verifying its reported information, including separate 
rates information, and significantly impeded the proceeding. Moreover, 
by not permitting verification, Chenming failed to prove that it is 
free of government control and entitled to a separate rate. 
Additionally, Chenming's refusal to participate in verification 
demonstrates that it failed to cooperate by not acting to the best of 
its ability to comply with a request from the Department. Section 
776(b) of the Act authorizes the Department to use an adverse inference 
with respect to an interested party if the Department finds that the 
party failed to cooperate by not acting to the best of its ability to 
comply with a request for information. See, e.g., Certain Welded Carbon 
Steel Pipes and Tubes From Thailand: Final Results of Antidumping Duty 
Administrative Review, 62 FR 53808, 53819-20 (October 16, 1997); see 
also Crawfish Processors Alliance v. United States, 343 F. Supp.2d 1242 
(CIT 2004) (approving use of AFA when respondent refused to participate 
in verification). Therefore, pursuant to sections 776(a)(2)(C) and (D) 
and 776(b) of the Act, we have, as AFA, treated Chenming as part of the 
PRC-wide entity and assigned Chenming the PRC-wide rate of 99.65 
percent. See the sections entitled ``The PRC-Wide Rate'' and 
``Corroboration,'' below, for a discussion of the selection and 
corroboration of the PRC-Wide rate.

Verification

    As provided in section 782(i) of the Act, we conducted 
verifications in the PRC and the United States of the information 
submitted by the respondent and the separate rate 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 Gold East 
and Yanzhou Tianzhang. 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. For the final determination, we received no 
comments and 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 
an 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. See 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 Notice of Final 
Determination of Sales at Less Than Fair Value: Silicon Carbide from 
the People's Republic of China, 59 FR 22585 (May 2, 1994) (``Silicon 
Carbide''), and Section 351.107(d) of the Department's regulations.
    In the Preliminary Determination, we found that Gold East and the 
separate rate applicant, Yanzhou Tianzhang, demonstrated their 
eligibility for separate-rate status. No party has commented on the 
eligibility of Gold East or Yanzhou Tianzhang for separate-rate status. 
For the final determination, we continue to find that the evidence 
placed on the record of this investigation by Gold East and Yanzhou 
Tianzhang demonstrate both a de jure and de facto absence of government 
control, with respect to their respective exports of the merchandise 
under investigation and thus are eligible for separate rate status.

The PRC-Wide Rate

    In the Preliminary Determination, the Department found that certain 
companies and the PRC-wide entity did not respond to our requests for 
information. In the Preliminary Determination, we treated these PRC 
producers/exporters as part of the PRC-wide entity because they did not 
demonstrate that they operate free of government control over their 
export activities. No additional information has been placed on the 
record with respect to these entities after the Preliminary 
Determination. The PRC-wide entity has not provided the Department with 
the requested information; therefore, pursuant to section 776(a)(2)(A) 
of the Act, the Department continues to find that the use of facts 
available is appropriate to determine the PRC-wide rate. Section 776(b) 
of the Act provides that, in selecting from among the facts

[[Page 60635]]

otherwise available, the Department may employ an adverse inference if 
an interested party fails to cooperate by not acting to the best of its 
ability to comply with requests for information. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon-Quality Steel Products from the Russian Federation, 
65 FR 5510, 5518 (February 4, 2000). See also, ``Statement of 
Administrative Action'' accompanying the URAA, H.R. Rep. No. 103-316, 
vol. 1, at 870 (1994). We determine that because the PRC-wide entity 
has failed to cooperate to the best of its ability because it did not 
respond to our request for information. Therefore, the Department finds 
that, in selecting from among the facts otherwise available, an adverse 
inference is appropriate for the PRC-wide entity.
    Because we begin with the presumption that all companies within a 
NME country are subject to 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., Synthetic Indigo from the 
People's Republic of China: Notice of Final Determination of Sales at 
Less Than Fair Value, 65 FR 25706 (May 3, 2000). 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).

Corroboration

    At the Preliminary Determination, we corroborated our AFA margin by 
comparing the range of control number-specific dumping margins 
calculated for the preliminary determination to the dumping margin 
alleged in the petition. For the final determination, we conducted a 
similar analysis and continue to find that the margin of 99.65 percent 
has probative value. See Memorandum to the File: ``Corroboration of the 
PRC-Wide Facts Available Rate for the Final Determination in the 
Antidumping Duty Investigation of Coated Free Sheet Paper from the 
People's Republic of China'', dated October 17, 2007. In addition, no 
party to this investigation has commented on our selection of this rate 
as AFA. Accordingly, we find that the rate of 99.65 percent is 
corroborated within the meaning of section 776(c) of the Act.

Final Determination Margins

    We determine that the following weighted-average dumping margins 
exist for the period April 1, 2006, thorough September 30, 2006:

------------------------------------------------------------------------
                                                               Weighted
                                                                Average
                    Manufacturer/Exporter                       Margin
                                                               (percent)
------------------------------------------------------------------------
GE's Collapsed Entity:......................................       21.12
(Gold East Paper (Jiangsu) Co. Ltd.-Gold Hua Sheng Paper....
(Suzhou Industry Park) Co. Ltd.-China Union.................
(Macao Commercial Offshore) Company Ltd.....................
Yanzhou Tianzhang Paper Industry Co. Ltd....................       21.12
PRC-Wide Rate...............................................       99.65
------------------------------------------------------------------------

Disclosure

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

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing U.S. Customs and Border Protection (``CBP'') to continue to 
suspend liquidation of all imports of subject merchandise that are 
entered or withdrawn from warehouse, for consumption on or after June 
4, 2007, the date of publication of the preliminary determination in 
the Federal Register. We will instruct CBP to continue to require a 
cash deposit or the posting of a bond for all companies based on the 
estimated weighted-average dumping margins shown above. The suspension 
of liquidation instructions will remain in effect until further notice.

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (``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, 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 within 
45 days of this final determination. 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.

Notification Regarding APO

    This notice also serves as a reminder to the parties subject to 
administrative protective order (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance 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: October 17, 2007.
David M. Spooner,
Assistant Secretary for Import Administration.

Appendix I

Parties' Comments
Comment 1: Whether to Reconsider China's Non-Market Economy (NME) 
Status and Whether to Treat Certain PRC Companies as Market Oriented 
Enterprises
Comment 2: Alleged Double Remedy in Concurrent NME AD and CVD 
Proceedings
Comment 3: The Appropriate Surrogate Financial Statements to use to 
Calculate Financial Ratios
Comment 4: Whether to Adjust the Financial Ratios by Allocating Wages 
and Salaries Between Non-manufacturing and Manufacturing Expenses
Comment 5: Whether to Adjust the Financial Ratios by Allocating 
``Stores and Spares'' Expenses Between Direct Material Costs and 
Overhead Expenses
Comment 6: Whether to Value Certain Materials Claimed to be Overhead 
Expenses
Comment 7: Whether to Value Self-Produced Electricity Used to Produce 
Electricity
Comment 8: Whether to Value Steam That is a By-Product of Self-Produced 
Electricity
Comment 9: Whether to Value Certain Inputs used in Treating Water
Comment 10: Whether GE Incorrectly Reported the Unit Price of Certain 
Purchases
Comment 11: Whether the Department Erred in Calculating the Value of a 
Self-Produced Input

[[Page 60636]]

Comment 12: Whether Certain Pulp Purchases Should be Treated as Market-
Economy Purchases
Comment 13: Whether it is Appropriate to Value Labor Using the Expected 
Wage Rate Calculated by the Department
Comment 14: The Appropriate Surrogate Value For A Ground Calcium 
Carbonate Input
Comments 15: The Appropriate Surrogate Value for a Proprietary Material
Comment 16: The Appropriate Surrogate Value for a Proprietary Material
Comment 17: The Appropriate Surrogate Value for Hydrochloric Acid
Comment 18: The Appropriate Surrogate Values For Other Paper Chemicals
Comment 19: The Appropriate Surrogate Value For Steam Coal
Comment 20: The Appropriate Surrogate Value for Certain PET Packing 
Materials
Comment 21: The Appropriate Surrogate Value for a Proprietary Material
Comment 22: How to Account for Certain Unreported Expenses
Comment 23: Whether the Department Should Base the Dumping Margin for 
One Unreported Sale on Total Adverse Facts Available
Comment 24: Whether to Reclassify One Sale as a CEP Sale
Comment 25: Whether to Adjust the Market-Economy Purchase Price of NBKP
[FR Doc. E7-21041 Filed 10-24-07; 8:45 am]
BILLING CODE 3510-DS-S