[Federal Register Volume 73, Number 88 (Tuesday, May 6, 2008)]
[Notices]
[Pages 24943-24949]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-9990]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-570-898


Chlorinated Isocyanurates from the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: In response to requests from interested parties, the 
Department of Commerce (``the Department'') is conducting an 
administrative review of the antidumping duty order on chlorinated 
isocyanurates (``chlorinated isos'') from the People's Republic of 
China (``PRC''). The period of review (``POR'') for this administrative 
review is June 1, 2006, through May 31, 2007. This administrative 
review covers two producers/exporters of the subject merchandise.
    We preliminarily determine that both respondents in this 
administrative review made sales in the United States at prices below 
normal value (``NV''). If these preliminary results are adopted in our 
final results of review, we will instruct U.S. Customs and Border 
Protection (``CBP'') to assess antidumping duties on entries of subject 
merchandise during the POR for which the importer-specific assessment 
rates are above de minimis.
    We invite interested parties to comment on these preliminary 
results. Parties who submit comments are requested to submit with each 
argument a statement of the issue and a brief summary of the argument. 
We intend to issue the final results of this review no later than 120 
days from the date of publication of this notice, pursuant to section 
751(a)(3)(A) of the Tariff Act of 1930, as amended (``the Act'').

EFFECTIVE DATE: May 6, 2008.

FOR FURTHER INFORMATION CONTACT: Jennifer Moats or Charles Riggle, 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-
5047 or (202) 482-0650, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On June 24, 2005, the Department published in the Federal Register 
the antidumping duty order on chlorinated isos from the PRC.\1\ On June 
1, 2007, the Department published a notice of opportunity to request an 
administrative review of the antidumping duty order on chlorinated isos 
from the PRC for the period June 1, 2006, through May 31, 2007.\2\ On 
June 28, 2007, in accordance with 19 CFR 351.213(b)(2), Nanning 
Chemical Industry Co. Ltd. (``Nanning''), a foreign producer/exporter 
of subject merchandise, requested that the Department review its 
sale(s) of subject merchandise. On June 29, 2007, in accordance with 19 
CFR 351.213(b)(2), Hebei Jiheng Chemical Company Ltd. (``Jiheng''), a 
foreign producer/exporter of subject merchandise, requested that the 
Department review its sales of subject merchandise. On July 2, 2007, 
Clearon Corporation (``Clearon'') and Occidental Chemical Corporation 
(``OxyChem''), petitioners in the underlying investigation, and BioLab, 
Inc. (``BioLab''), a domestic producer of the like product, requested 
that the Department conduct an administrative review of Jiheng's sales 
and entries during the POR.
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    \1\ See Notice of Antidumping Duty Order: Chlorinated 
Isocyanurates From the People's Republic of China, 70 FR 36561 (June 
24, 2005).
    \2\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative 
Review, 72 FR 30542 (June 1, 2007).
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    On July 26, 2007, the Department initiated the second 
administrative review of the antidumping duty order on chlorinated isos 
from the PRC.\3\ On August 10, 2007, the Department issued its 
antidumping duty questionnaire to Jiheng and Nanning. On September 7, 
2007, the Department requested that the Office of Policy provide a list 
of surrogate countries for this review.\4\ On September 17, 2007, the 
Office of Policy issued its list of surrogate countries.\5\
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    \3\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews and Request for Revocation in Part, 72 FR 
41057 (July 26, 2007) (``Initiation Notice'').
    \4\ See Memorandum regarding ``Request for Surrogate-Country 
Selection: 2006-2007 Administrative Review of the Antidumping Duty 
Order on Chlorinated Isocyanurates from the People's Republic of 
China'' (September 7, 2007).
    \5\ See the Memorandum regarding ``Antidumping Duty 
Administrative Review of Chlorinated Isocyanurates from the People's 
Republic of China: Request for a List of Surrogate Countries'' 
(September 17, 2007) (``Surrogate Country List'').
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    On September 25, 2007, the Department issued a letter to interested 
parties seeking comments on surrogate country selection and surrogate 
values. On October 10, 2007, Jiheng submitted comments regarding the 
selection of a surrogate country. On October 22, 2007, Clearon and 
OxyChem (``Petitioners'') submitted rebuttal comments regarding 
surrogate country selection. On November 2, 2007, Jiheng and Nanning 
submitted publicly available information to value the factors of 
production (``FOP''). On November 13, 2007, Petitioners submitted 
rebuttal surrogate value comments. On February 13, 2008, Jiheng 
submitted rebuttal comments to Petitioners' surrogate value comments. 
On April 9, 2008, Jiheng submitted additional surrogate value 
information on electricity.
    On September 7, 2007, Nanning submitted its section A questionnaire 
response (``Nanning AQR''). On September 10, 2007, Jiheng submitted its 
section A questionnaire response (``Jiheng AQR''). On October 2, 2007, 
Jiheng submitted its sections C and D questionnaire responses (``Jiheng 
CQR and Jiheng DQR'', respectively). On October 4, 2007, Nanning 
submitted its sections C and D questionnaire responses (``Nanning CQR 
and Nanning DQR'', respectively). On November 8, 2007, Petitioners 
submitted comments on Nanning's AQR, CQR, and DQR. On November 28, 
2007, the Department issued supplemental questionnaires to Jiheng and 
Nanning. On December 20, 2007, Jiheng and Nanning submitted their 
supplemental questionnaire responses (``Jiheng 1\st\ SQR and Nanning 
1\st\ SQR'', respectively).
    On January 9, 2008, Department met with counsel for Jiheng to 
explain some concerns regarding Jiheng's FOP reporting methodology and 
claimed by products and to introduce questions that would be included 
in a second supplemental questionnaire issued to Jiheng. See January 
17, 2008 Memorandum to The File regarding Meeting with Counsel of Hebei 
Jiheng Chemical Company, Ltd. On January 15, 2008, the Department 
issued a second supplemental questionnaire to Jiheng. On January 24, 
2008, Petitioners submitted comments on Nanning's 1\st\ SQR. On 
February 12, 2008, the Department issued a second supplemental 
questionnaire to Nanning. On February 20, 2008, Jiheng submitted

[[Page 24944]]

its second supplemental questionnaire response (``Jiheng 2\nd\ SQR''). 
On February 25, 2008, the Department published a notice in the Federal 
Register extending the time limit for the preliminary results of review 
until April 30, 2008.\6\
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    \6\ See Chlorinated Isocyanurates from the People's Republic of 
China: Extension of Time limit for Preliminary Results of 
Antidumping Duty Administration Review, 73 FR 9990 (February 25, 
2008).
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    On March 5, 2008, Nanning submitted its second supplemental 
questionnaire response (``Nanning 2\nd\ SQR''). On March 17, 2008, 
Petitioners submitted comments on Nanning 2\nd\ SQR. On March 21, 2008, 
the Department issued a third supplemental questionnaire to Nanning. On 
April 1, 2008, Nanning submitted its third supplemental questionnaire 
response (``Nanning 3\rd\ SQR''). On April 2, 2008, Department 
officials again met with counsel to Jiheng to introduce questions that 
would be included in a third supplemental questionnaire to Jiheng 
regarding Jiheng's reported FOPs and claimed by products. See April 4, 
2008 Memorandum to The File regarding Meeting with Counsel of Hebei 
Jiheng Chemical Company, Ltd. On April 3, 2008, Petitioners submitted 
comments on Nanning's 3\rd\ SQR. On April 4, 2008, the Department 
issued a third supplemental questionnaire to Jiheng. On April 16, 2008, 
Jiheng submitted its third supplemental questionnaire response 
(``Jiheng 3\rd\ SQR'').

Scope of the Order

    The products covered by this order are chlorinated isos, as 
described below:
    Chlorinated isos are derivatives of cyanuric acid, described as 
chlorinated s-triazine triones. There are three primary chemical 
compositions of chlorinated isos: (1) trichloroisocyanuric acid 
(Cl3(NCO)3), (2) sodium dichloroisocyanurate 
(dihydrate) (NaCl2(NCO)3(2H2O), and 
(3) sodium dichloroisocyanurate (anhydrous) 
(NaCl2(NCO)3). Chlorinated isos are available in 
powder, granular, and tableted forms. This order covers all chlorinated 
isos. Chlorinated isos are currently classifiable under subheadings 
2933.69.6015, 2933.69.6021, 2933.69.6050, 3808.40.50, 3808.50.40 and 
3808.94.50.00 of the Harmonized Tariff Schedule of the United States 
(``HTSUS''). The tariff classification 2933.69.6015 covers sodium 
dichloroisocyanurates (anhydrous and dihydrate forms) and 
trichloroisocyanuric acid. The tariff classifications 2933.69.6021 and 
2933.69.6050 represent basket categories that include chlorinated isos 
and other compounds including an unfused triazine ring. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of this order is dispositive.

Non-Market Economy Country

    Jiheng and Nanning did not contest the Department's treatment of 
the PRC as a non-market economy (``NME''), and the Department has 
treated the PRC as an NME country in all past antidumping duty 
investigations and administrative reviews and continues to do so in 
this case.\7\ No interested party in this case has argued that we 
should do otherwise. Designation as an NME country remains in effect 
until it is revoked by the Department. See Section 771(18)(C)(i) of the 
Act.
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    \7\ See, e.g., Chlorinated Isocyanurates from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 73 FR 159 (January 2, 2008); and Folding Metal Tables and 
Chairs from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review, 72 FR 71355 (December 17, 
2007).
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Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it, in most instances, to base NV 
on the NME producer's FOPs. The Act further instructs that valuation of 
the FOPs shall be based on the best available information in the 
surrogate market economy country or countries considered to be 
appropriate by the Department. See section 773(c)(1) of the Act. When 
valuing the FOPs, the Department shall utilize, to the extent possible, 
the prices or costs of FOPs in one or more market economy countries 
that are: (1) at a level of economic development comparable to that of 
the NME country; and (2) significant producers of comparable 
merchandise. See section 773(c)(4) of the Act. Further, the Department 
normally values all FOPs in a single surrogate country. See 19 CFR 
351.408(c)(2). The sources of the surrogate factor values are discussed 
under the ``Normal Value'' section below and in the Surrogate Value 
Memorandum, which is on file in the Central Records Unit (``CRU''), 
Room 1117 of the main Department building.\8\
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    \8\ See Memorandum regarding ``Preliminary Results of the 2006-
2007 Administrative Review of Chlorinated Isocyanurates from the 
People's Republic of China: Surrogate Value Memorandum'' (April 29, 
2008) (``Surrogate Value Memorandum'').
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    In examining which country to select as its primary surrogate for 
this proceeding, the Department first determined that India, Indonesia, 
Sri Lanka, the Philippines, and Egypt are countries comparable to the 
PRC in terms of economic development. See Surrogate Country List, which 
is on file in the CRU. On September 25, 2007, the Department issued a 
request for interested parties to submit comments on surrogate country 
selection. On October 10, 2007, Jiheng submitted comments regarding the 
selection of a surrogate country. On October 22, 2007, Petitioners 
submitted rebuttal comments regarding surrogate country selection.
    Jiheng argues that the Department should continue to use India as a 
surrogate country for this proceeding of chlorinated isos, as it has in 
previous proceedings, because India produces comparable merchandise and 
there are publicly available data with which to value the reported FOP 
information in this case. Petitioners argue that another surrogate 
country other than India should be considered because chlorinated isos 
is not manufactured in India and the level of production of the most 
comparable product, calcium hypochlorite, should be considered. Nanning 
did not provide any comments on the Department's selection of a 
surrogate country. All parties which submitted surrogate value data 
submitted Indian sourced data for the majority of their data.
    After evaluating interested parties' comments, the Department 
determined that India is the appropriate surrogate country for use in 
this review. The Department based its decision on the following facts: 
(1) India is at a level of economic development comparable to that of 
the PRC; (2) India is a significant producer of comparable merchandise, 
i.e., calcium hypochlorite; and (3) India provides the best opportunity 
to use quality, publicly available data to value the FOPs. On the 
record of this review, we have usable surrogate financial data from 
India, but no such surrogate financial data from any other potential 
surrogate country. Additionally, a vast majority of the data submitted 
by both the respondents and Petitioners for our consideration as 
potential surrogate values are sourced from India.
    Therefore, because India best represents the experience of 
producers of comparable merchandise operating in a surrogate country, 
we have selected India as the surrogate country and, accordingly, have 
calculated NV using Indian prices to value the respondents' FOPs, when 
available and appropriate. See Surrogate Value Memorandum. We have 
obtained and relied upon publicly available information wherever 
possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may 
submit publicly available information to

[[Page 24945]]

value FOPs until 20 days after the date of publication of the 
preliminary results.

Separate Rates

    The Department has implemented an application process by which 
exporters and producers may obtain separate-rate status in NME 
administrative reviews. The process requires exporters and producers to 
submit a separate-rate status application. See also 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.\9\ 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.
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    \9\ Policy Bulletin 05.1 states: ``While 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.`` See 
Policy Bulletin 05.1 at 6 (emphasis in original).
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    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assessed a single 
antidumping duty rate. It is the Department's policy to assign all 
exporters of merchandise subject to review 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. Exporters can 
demonstrate this independence through the absence of both de jure and 
de facto government control over export activities. The Department 
analyzes each entity exporting the subject merchandise under a test 
arising from the Notice of 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 further developed in 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''). However, if the Department determines that a company is 
wholly foreign-owned or located in a market economy, then a separate-
rate analysis is not necessary to determine whether it is independent 
from government control.

Separate Rate Recipients\10\
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    \10\ All separate rate applicants receiving a separate rate are 
hereby referred to collectively as the ``SR Recipients'', which 
include the mandatory respondents as well.
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1. Wholly Foreign-Owned

    No companies reported that they are wholly owned by individuals or 
companies located in a market economy in their separate-rate 
applications. Therefore, we are not addressing wholly-foreign owned 
companies in our analysis.

2. Located in a Market Economy with No PRC Ownership

    No companies in this administrative review are located outside the 
PRC. Therefore, we are not addressing this ownership structure in these 
preliminary results of review.

3. Joint Ventures Between Chinese and Foreign Companies or Wholly 
Chinese-Owned Companies

    Jiheng and Nanning stated that they are either joint ventures 
between Chinese and foreign companies or are wholly Chinese-owned 
companies (collectively ``PRC SR Applicants''). Therefore, the 
Department must analyze whether these respondents can demonstrate the 
absence of both de jure and de facto government control over export 
activities.

a. 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; and (3) other formal 
measures by the government decentralizing control of companies. See 
Sparklers, 56 FR at 20589.
    The evidence provided by Jiheng and Nanning supports a preliminary 
finding of de jure absence of government control based on the 
following: (1) an absence of restrictive stipulations associated with 
the individual exporter's business and export licenses; (2) there are 
applicable legislative enactments decentralizing control of the 
companies; and (3) there are formal measures by the government 
decentralizing control of companies. See Jiheng's September 10, 2007, 
submission at Exhibit A-6; and Nanning's September 7, 2007, submission 
at Exhibit A-1.

b. Absence of De Facto Control

    Typically the Department considers 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 
Notice of 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 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 administrative review by 
the PRC SR Recipients demonstrates an absence of de jure and de facto 
government control with respect to each of the respondent's exports of 
the merchandise under review, in accordance with the criteria 
identified in Sparklers and Silicon Carbide. See ``Preliminary 
Results'' section below for companies marked with ``[ast]'' designating 
these companies as joint ventures between Chinese and foreign companies 
or wholly Chinese-owned companies that have demonstrated their 
eligibility for a separate rate.

B. Companies Not Receiving a Separate Rate

    The Department has determined that all parties applying for a 
separate rate in this segment of the proceeding have demonstrated an 
absence of government control both in law and in fact (see discussion 
above), and is, therefore, not denying separate-rate status to any 
applicants.

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

[[Page 24946]]

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 Secretary may use a date other than 
the date of invoice if the Secretary is satisfied that a different date 
better reflects the date on which the exporter or producer establishes 
the material terms of sale.
Jiheng
    Jiheng reported the shipment date as the date of sale because it 
claims that, for its U.S. sales of subject merchandise made during the 
POR, the material terms of sale were established on the shipment date 
and its shipment date was on or before the invoice date. We have 
preliminarily determined that the shipment date is the most appropriate 
date to use as Jiheng's date of sale in accordance with our long-
standing practice of determining the date of sale as the date on which 
the final terms of sale are established.\11\ Evidence on the record 
demonstrates that the shipment date usually occurs prior to the invoice 
date. See Jiheng's CQR. It is the Department's practice to use shipment 
date as the date of sale when the shipment date occurs prior to the 
invoice date.\12\ Moreover, the shipment date was considered the sale 
date in the prior POR.\13\
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    \11\ Notice of Final Determination of Sales at Less Than Fair 
Value and Negative Final Determination of Critical Circumstances: 
Certain Frozen and Canned Warmwater Shrimp from Thailand, 69 FR 
76918 (December 23, 2004), and accompanying Issues and Decision 
Memorandum at Comment 10; and Notice of Final Determination of Sales 
at Less Than Fair Value: Structural Steel Beams from Germany, 67 FR 
35497 (May 20, 2002), and accompanying Issues and Decision 
Memorandum at Comment 2.
    \12\ See, e.g., Notice of Final Determinations of Sales at Less 
Than Fair Value: Certain Durum Wheat and Hard Red Spring Wheat from 
Canada, 68 FR 52741 (September 5, 2003), and accompanying Issues and 
Decision Memorandum at Comment 3.
    \13\ See Chlorinated Isocyanurates from the People's Republic of 
China: Preliminary Results of Antidumping Duty Administrative 
Review, 72 FR 39053 (July 17, 2007) (unchanged in Chlorinated 
Isocyanurates from the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review, 73 FR 159 (January 2, 
2008)).
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Nanning
    Nanning's sale took place during the previous POR. However, because 
the sale entered the United States during the current POR, any 
antidumping duty liability can only be determined and assessed in the 
context of the current POR. Therefore, Nanning reported the entry date 
which coincides with the current administrative review period as its 
date of sale. We have preliminarily determined that the entry date is 
the most appropriate date to use as Nanning's date of sale in this 
circumstance. It is the Department's practice to include sales that are 
sold prior to the POR if the respondent can demonstrate the sale 
entered the United States during the POR.\14\
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    \14\ See, e.g., Stainless Steel Wire Rod from Sweden: Final 
Results of Antidumping Duty Administrative Review, 72 FR 17834 
(April 10, 2007), and accompanying Issues and Decision Memorandum at 
Comment 3.
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Fair Value Comparisons

    To determine whether sales of chlorinated isos to the United States 
by Jiheng and Nanning were made at less than NV, we compared export 
price (``EP'') to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice, pursuant to section 771(35) of the 
Act.

Export Price

    Jiheng and Nanning sold the subject merchandise to unaffiliated 
purchasers in the United States prior to importation into the United 
States. Therefore, we have used EP in accordance with section 772(a) of 
the Act because the use of the constructed export price methodology is 
not otherwise indicated. We calculated EP based on the price including 
the appropriate shipping terms to the unaffiliated purchasers reported 
by Jiheng and Nanning. From this price, we deducted amounts for foreign 
inland freight, brokerage and handling, international freight, and 
marine insurance, and added amounts for components that were supplied 
free of charge or reimbursed by the customer where applicable, pursuant 
to section 772(c)(2)(A) of the Act.\15\
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    \15\ See Memorandum regarding ``Analysis for the Preliminary 
Results of the 2006-2007 Administrative Review of Chlorinated 
Isocyanurates from the People's Republic of China: Hebei Jiheng 
Chemical Company Ltd. (April 29, 2008); see also Memorandum 
regarding ``Analysis for the Preliminary Results of the 2006-2007 
Administrative Review of Chlorinated Isocyanurates from the People's 
Republic of China: Nanning Chemical Industry Co., Ltd. (April 29, 
2008).
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    The Department used two sources to calculate a surrogate value for 
domestic brokerage expenses. The Department averaged the 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.\16\ These data were averaged with the 
July 2004-June 2005 data contained in Kejriwal Paper Ltd.'s 
(``Kejriwal'') January 9, 2006, public version response submitted in 
the administrative review of the antidumping duty order on lined paper 
products from India.\17\ The brokerage-expense data reported by Agro 
Dutch and Kejriwal in the public versions of their respective responses 
are ranged data. The Department first derived an average per-unit 
amount from each data source. We then separately adjusted each average 
rate for inflation. Finally, we averaged the two per-unit amounts to 
derive an overall average rate for the POR. See Surrogate Value 
Memorandum.
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    \16\ See Certain Preserved Mushrooms From India: Final Results 
of Antidumping Duty Administrative Review, 70 FR 37757 (June 30, 
2005); and Notice of 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, 71 FR 19695, 19704 (April 17, 
2006) unchanged in Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products From the People's Republic of China, 71 
FR 53079 (September 8, 2006).
    \17\ See Notice of Final Determination of Sales at Less Than 
Fair Value, and Negative Determination of Critical Circumstances: 
Certain Lined Paper Products from India, 71 FR 45012 (August 8, 
2006).
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    To value truck freight, we used the freight rates published by 
Indian Freight Exchange, available at http://www.infreight.com. The 
truck freight rates are for the period April 2005 through October 2005. 
Since these dates are not contemporaneous with the POR, we made an 
adjustment for inflation. See Surrogate Value Memorandum.
    Respondents who incurred international freight expenses on the 
subject merchandise reported that they used a market-economy 
international freight carrier and paid for the international freight 
expense in a market-economy currency. Therefore, we used the reported 
international freight expenses by the respondents, where necessary.
    To value marine insurance, we used an April 2005 rate quote for 
marine insurance from http://www.rjgconsultants.com. Since this date is 
not contemporaneous with the POR, we made an adjustment for inflation. 
See Surrogate Value Memorandum.
    Jiheng reported that its U.S. customer(s) provided it with certain 
raw materials and packing materials free of charge. For Jiheng's 
products that contained inputs provided free of charge by its 
customer,\18\ consistent with the Department's practice, we added to 
the U.S. price paid by the Jiheng's customer

[[Page 24947]]

the built-up cost (i.e., the surrogate value for these raw materials 
and packing materials multiplied by the reported FOPs for these 
items).\19\
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    \18\ Jiheng stated that its customer sourced materials from both 
market-economy and NME suppliers. Jiheng further stated that it does 
not know the names of the market-economy suppliers. See Jiheng's DQR 
at D-6-D-7.
    \19\ See, e.g., Notice of Final Determination of sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products from the People's Republic of China, 71 
FR 53079 (September 8, 2006), and accompanying Issues and Decision 
Memorandum at Comment 17.
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Normal Value

    Section 773(c)(1) of the Act provides that, in the case of an NME, 
the Department shall determine NV using an FOP 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 will base NV on FOPs because the presence of 
government controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under our 
normal methodologies. Therefore, we calculated NV based on FOPs in 
accordance with sections 773(c)(3) and (4) of the Act and 19 CFR 
351.408(c). The FOPs include: (1) hours of labor required; (2) 
quantities of raw materials employed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used the 
FOPs reported by respondents for materials, energy, labor, by products, 
and packing.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value the FOPs, but when 
a producer sources an input from a market-economy country and pays for 
it in market-economy currency, the Department may value the factor 
using the actual price paid for the input.\20\ Jiheng reported that it 
did not purchase any inputs from market economy suppliers for the 
production of the subject merchandise. See Jiheng's DQR at D-8. 
However, Nanning reported that it purchased all of the sodium chloride 
it consumed in the production of the subject merchandise from market 
economy suppliers and paid for its purchases in a market-economy 
currency. See Nanning's DQR at D-4.
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    \20\ See 19 CFR 351.408(c)(1); see also, Shakeproof Assembly 
Components Div. of Ill v. United States, 268 F.3d 1376, 1382-1383 
(Fed. Cir. 2001) (affirming the Department's use of market-based 
prices to value certain FOPs).
---------------------------------------------------------------------------

    With regard to both the Indian import-based surrogate values and 
the market-economy input values, we have disregarded prices that we 
have reason to believe or suspect may be subsidized, such as those from 
India, Indonesia, South Korea, and Thailand. 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.\21\ We are also guided by the statute's legislative history 
that explains that it is not necessary to conduct a formal 
investigation to ensure that such prices are not subsidized. See H.R. 
Rep. No. 100-576, at 590 (1988). Rather, the Department was instructed 
by Congress to base its decision on information that is available to it 
at the time it is making its determination. Therefore, we have not used 
prices from these countries in calculating the Indian import-based 
surrogate values.
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    \21\ See Certain Frozen Fish Fillets from the Socialist Republic 
of Vietnam: Notice of Preliminary Results and Preliminary Partial 
Rescission of Antidumping Duty Administrative Review, 70 FR 54007, 
54011 (September 13, 2005), unchanged in Certain Frozen Fish Fillets 
from the Socialist Republic of Vietnam: Final Results of the First 
Administrative Review, 71 FR 14170 (March 21, 2006); and China 
National Machinery Import & Export Corporation v. United States, 293 
F. Supp. 2d 1334 (CIT 2003), affirmed 104 Fed. Appx. 183 (Fed. Cir. 
2004).
---------------------------------------------------------------------------

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOPs reported by Jiheng and Nanning for the POR. With 
respect to Nanning, we adjusted its reported FOP for urea and 
calculated an FOP for purchased cyanuric acid consumed during the POR. 
Specifically, Nanning's reported FOP for urea incorrectly calculated an 
estimate of the up-stream urea factor for its consumption of purchased 
cyanuric acid. While the Department will value the inputs into self-
produced materials, the Department does not value inputs into purchased 
materials.\22\ Therefore, in this limited circumstance because we were 
easily able to do so based on the record information provided by 
Nanning, we made an adjustment to Nanning's reported FOP for urea, so 
that it accounts only for Nanning's reported consumption in its 
production of self-produced cyanuric acid. We also calculated an FOP 
for Nanning's consumption of purchased cyanuric acid based on its 
reported consumption amounts of this factor. To calculate NV, we 
multiplied the reported per-unit factor quantities by publicly 
available Indian surrogate values (except as noted below). In selecting 
the surrogate values, we considered the quality, specificity, and 
contemporaneity of the data. As appropriate, we adjusted input prices 
by including freight costs to render them delivered prices. 
Specifically, we added to Indian import surrogate values a surrogate 
freight cost using the shorter of the reported distance from the 
domestic supplier to the factory or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the 
decision of the U.S. Court of Appeals for the Federal Circuit in Sigma 
Corp. v. United States, 117 F. 3d 1401, 1408 (Fed. Cir. 1997). For a 
detailed description of all surrogate values used for Jiheng and 
Nanning, see the Surrogate Value Memorandum.
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    \22\ See, e.g., Final Determination of Sales at Less Than Fair 
Value: Certain Activated Carbon from the People's Republic of China, 
72 FR 9508 (March 2, 2007), and accompanying Issues and Decision 
Memorandum at Comment 21; see also Certain Cased Pencils from the 
People's Republic of China: Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 71 FR 38366 (July 6, 2006), 
and accompanying Issues and Decision Memorandum at Comment 2.
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    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values derived from the Monthly Statistics 
of the Foreign Trade of India, as published by the Directorate General 
of Commercial Intelligence and Statistics of the Ministry of Commerce 
and Industry, Government of India in the World Trade Atlas, available 
at http://www.gtis.com/wta.htm (``WTA''). Where we could not obtain 
publicly available information contemporaneous with the POR with which 
to value FOPs, we adjusted the surrogate values using, where 
appropriate, the Indian Wholesale Price Index (``WPI'') as published in 
the International Financial Statistics of the International Monetary 
Fund. See Surrogate Value Memorandum. We further adjusted these prices 
to account for freight costs incurred between the supplier and 
respondent. We used the freight rates published by Indian Freight 
Exchange available at http://www.infreight.com, to value truck freight. 
See the Surrogate Value Memorandum. We adjusted the truck and rail 
freight rates for inflation, where necessary. For a complete 
description of the factor values we used, see the Surrogate Value 
Memorandum.
    We valued calcium chloride, hydrochloric acid, barium chloride and 
sulfuric acid using Chemical Weekly because we did not have reliable 
Indian import statistics in the WTA for these factors. We adjusted 
these values for taxes and to account for freight costs incurred 
between the supplier and the respondent.
    Jiheng reported that its U.S. customer(s) provided certain raw 
materials and packing materials free of charge. For Jiheng's products 
that included raw materials and packing materials provided free of 
charge by its

[[Page 24948]]

customer, consistent with the Department's practice, we used the built-
up cost (i.e., the surrogate value for these raw materials and packing 
materials multiplied by the reported FOPs for these items) in the NV 
calculation.\23\ Where applicable, we also adjusted these values to 
account for freight costs incurred between the port of exit and 
Jiheng's plants. See Surrogate Value Memorandum, and Jiheng's 
Preliminary Analysis Memorandum.
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    \23\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products from the People's Republic of China, 71 
FR 53079 (September 8, 2006), and accompanying Issues and Decision 
Memorandum at Comment 17.
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    To value electricity, we used the 2000 electricity price data from 
International Energy Agency, Energy Prices and Taxes - Quarterly 
Statistics (First Quarter 2003), adjusted for inflation. See Surrogate 
Value Memorandum. On April 9, 2008, Arch Chemicals submitted additional 
information for selection as a surrogate value for electricity. We were 
unable to consider this information in the selection of a surrogate 
value for electricity for the preliminary results. However, we will 
review this information and any discussion of the electricity value 
included in parties' case briefs for the final results of review.
    To value water, we used the revised Maharashtra Industrial 
Development Corporation (``MIDC'') water rates for June 1, 2003, 
available at http://www.midcindia.com/water-supply, adjusted for 
inflation. See Surrogate Value Memorandum.
    To value steam coal, we used data obtained for categories B and C 
for coal reported in Tata Energy Research Institute's Energy Data 
Directory & Yearbook adjusted for inflation. See Surrogate Value 
Memorandum.
    Jiheng reported chlorine, hydrogen gas, ammonia gas, and sulfuric 
acid as by products in the production of subject merchandise. We found 
in this administrative review that Jiheng has appropriately reported 
its by products and, therefore, granted Jiheng a by-product offset for 
the quantities of these reported by products. We valued chlorine and 
hydrogen gas with Philippine import data obtained from WTA because it 
represented better information than the Indian import data for these 
factors. See Surrogate Value Memorandum.
    For direct labor, indirect labor and packing labor, consistent with 
19 CFR 351.408(c)(3), we used the PRC regression-based wage rate as 
reported on Import Administration's web site.\24\ 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 each 
respondent. See Surrogate Value Memorandum.
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    \24\ See Expected Wages of Selected NME Countries (revised 
January 2007) (available at http://ia.ita.doc.gov/wages). The source 
of these wage rate data on the Import Administration's web site is 
the Yearbook of Labour Statistics 2004, ILO, (Geneva: 2004), Chapter 
5B: Wages in Manufacturing. The years of the reported wage rates 
range from 2003 to 2004.
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    For packing materials, we used the per-kilogram values obtained 
from the WTA and made adjustments to account for freight costs incurred 
between the PRC supplier and the respondents' plants. See Surrogate 
Value Memorandum.
    For factory overhead, selling, general, and administrative expenses 
(``SG&A''), and profit values, we used information from Kanoria 
Chemicals and Industries Limited for the year ending March 31, 2007. 
From this information, we were able to determine factory overhead as a 
percentage of the total raw materials, labor and energy (``ML&E'') 
costs; SG&A as a percentage of ML&E plus overhead (i.e., cost of 
manufacture); and the profit rate as a percentage of the cost of 
manufacture plus SG&A. See Surrogate Value Memorandum for a full 
discussion of the calculation of these ratios.

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.

Preliminary Results

    We preliminarily determine that the following weighted-average 
dumping margins exist:

------------------------------------------------------------------------
                Manufacturer/Exporter                  Margin (Percent)
------------------------------------------------------------------------
Jiheng[ast].........................................               23.28
Nanning[ast]........................................               66.89
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice. See 19 CFR 351.224(b). Interested parties are invited to 
comment on the preliminary results and may submit case briefs and/or 
written comments within 30 days of the date of publication of this 
notice. See 19 CFR 351.309(c)(ii). Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in such briefs or comments, 
may be filed no later than 5 days after the time limit for filing the 
case briefs. See 19 CFR 351.309(d). The Department requests that 
parties submitting written comments provide an executive summary and a 
table of authorities as well as an additional copy of those comments 
electronically.
    Any interested party may request a hearing within 30 days of 
publication of this notice. See 19 CFR 351.310(c). Hearing requests 
should contain the following information: (1) the party's name, 
address, and telephone number; (2) the number of participants; and (3) 
a list of the issues to be discussed. Oral presentations will be 
limited to issues raised in the briefs. Any hearing, if requested, will 
be held seven days after the deadline for submission of the rebuttal 
briefs at the U.S. Department of Commerce, 14\th\ Street and 
Constitution Avenue, NW, Washington, DC 20230. See 19 CFR 351.310(d).
    The Department will issue the final results of this administrative 
review, which will include the results of its analysis of issues raised 
in any such comments, within 120 days of publication of these 
preliminary results, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
The Department intends to issue appropriate assessment instructions 
directly to CBP 15 days after the date of publication of the final 
results of this administrative review. If these preliminary results are 
adopted in our final results of review, the Department shall determine, 
and CBP shall assess, antidumping duties on all appropriate entries. 
Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-specific 
(or customer) ad valorem duty assessment rates based on the ratio of 
the total amount of dumping margins calculated for the examined sales 
to the total entered value of those same sales. We will instruct CBP to 
assess antidumping duties on all appropriate entries covered by this 
review if any importer-specific rate calculated in the final results of 
this review is above de minimis.

Cash Deposit Requirements

    Further, the following cash deposit requirements will be effective 
upon publication of the final results of this administrative review for 
all shipments of the subject merchandise entered, or

[[Page 24949]]

withdrawn from warehouse, for consumption on or after the publication 
date, as provided for by section 751(a)(2)(C) of the Act: (1) for 
Jiheng and Nanning, which have separate rates, the cash deposit rate 
will be the company-specific rate established in the final results of 
review (except, if the rate is zero or de minimis, a zero cash deposit 
will be required); (2) for previously investigated or reviewed PRC and 
non-PRC exporters not listed above that have separate rates, the cash 
deposit rate will continue to be the exporter-specific rate published 
for the most recent period; (3) for all PRC exporters of subject 
merchandise that have not been found to be entitled to a separate rate, 
the cash deposit rate will be the PRC-wide rate of 285.63 percent; and 
(4) for all non-PRC exporters of subject merchandise which have not 
received their own rate, the cash deposit rate will be the rate 
applicable to the PRC exporters that supplied that non-PRC exporter. 
These deposit requirements, when imposed, shall remain in effect until 
further notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: April 29, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-9990 Filed 5-5-08; 8:45 am]
BILLING CODE 3510-DS-S