[Federal Register Volume 75, Number 70 (Tuesday, April 13, 2010)]
[Notices]
[Pages 18812-18819]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-8424]



[[Page 18812]]

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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-894]


Certain Tissue Paper Products From the People's Republic of 
China: Preliminary Results of the 2008-2009 Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is currently 
conducting the 2008-2009 administrative review of the antidumping duty 
order on certain tissue paper products from the People's Republic of 
China (PRC). We preliminarily determine that sales have been made below 
normal value (NV) with respect to Max Fortune Industrial Limited and 
Max Fortune (FZ) Paper Products Co., Ltd. (Max Fortune Fuzhou) \1\ 
(collectively, Max Fortune) but not with respect to Seaman Paper Asia 
Company, Ltd. (SPA).
---------------------------------------------------------------------------

    \1\ Max Fortune Fuzhou's former name is Max Fortune (FETDE) 
Paper Products Co., Ltd. (Max Fortune FETDE). Max Fortune FETDE 
changed its name to Max Fortune Fuzhou on October 31, 2008. See 
Exhibit 2 of Max Fortune's August 11, 2009, section A supplemental 
response (August 11 Response).
---------------------------------------------------------------------------

    If these preliminary results are adopted in our final results of 
this review, we will instruct U.S. Customs and Border Protection (CBP) 
to assess antidumping duties on all appropriate entries of subject 
merchandise made during the period of review (POR).
    Interested parties are invited to comment on these preliminary 
results. We will issue the final results no later than 120 days from 
the date of publication of this notice.

DATES: Effective Date: April 13, 2010.

FOR FURTHER INFORMATION CONTACT: Brian Smith or Gemal Brangman, AD/CVD 
Operations, Office 2, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
1766 or (202) 482-3773, respectively.

Case History

    On March 30, 2005, the Department published in the Federal Register 
the antidumping duty order on certain tissue paper products from the 
PRC. See Notice of Amended Final Determination of Sales at Less Than 
Fair Value and Antidumping Duty Order: Certain Tissue Paper Products 
From the People's Republic of China, 70 FR 16223 (March 30, 2005) 
(Tissue Paper Order).
    On March 2, 2008, the Department published a notice of opportunity 
to request an administrative review of the antidumping duty order on 
certain tissue paper products from the PRC. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 74 FR 9077 (March 2, 
2009).
    On March 31, 2008, the Department received a timely request from 
SPA for an administrative review of this antidumping duty order with 
respect to its exports of subject merchandise to the United States, in 
accordance with 19 CFR 351.213. On March 31, 2008, the Department also 
received a timely request from the petitioner \2\ for an administrative 
review of this order with respect to Max Fortune and Sunlake 
D[eacute]cor Co., Ltd. (Sunlake).
---------------------------------------------------------------------------

    \2\ The petitioner is the Seaman Paper Company of Massachusetts, 
Inc.
---------------------------------------------------------------------------

    On April 27, 2008, the Department published in the Federal Register 
a notice of initiation of the administrative review of the antidumping 
duty order on certain tissue paper products from the PRC for the three 
individually named firms above covering the period March 1, 2008, 
through February 28, 2009. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 74 FR 19042 (April 27, 2009) (Initiation Notice).
    On April 29, 2009, we issued Max Fortune and SPA the antidumping 
duty questionnaire.
    On June 30, 2009, the petitioner withdrew its request for an 
administrative review with respect to Sunlake. See petitioner's July 
30, 2009, letter to the Department. Also, on June 30, 2009, the 
Department requested entry documentation from CBP. See Memorandum from 
James P. Maeder, Jr., Office Director, to CBP, dated June 30, 2009.
    During June 2009, SPA submitted its responses to sections A and C 
of the antidumping duty questionnaire \3\ and Max Fortune submitted its 
response to section A of the antidumping duty questionnaire.\4\
---------------------------------------------------------------------------

    \3\ Section A of the questionnaire covers general information 
about the company and section C covers U.S. sales.
    \4\ See SPA's June 10, 2009, response to section A of the 
Department's antidumping questionnaire and June 23, 2009, response 
to section C of the Department's antidumping questionnaire; and Max 
Fortune's June 8, 2009, response to section A of the Department's 
antidumping questionnaire.
---------------------------------------------------------------------------

    On July 1, 2009, the petitioner requested a 30-day extension until 
September 17, 2009, to submit new factual information in this review in 
accordance with 19 CFR 351.302. On July 24, 2009, we granted the 
petitioner's extension request.
    On July 6, 2009, Max Fortune submitted its response to sections C 
and D \5\ of the antidumping duty questionnaire.
---------------------------------------------------------------------------

    \5\ Section D of the questionnaire covers factors of production 
(FOP).
---------------------------------------------------------------------------

    On July 16, 2009, we requested that the Import Administration's 
Office of Policy (the Office of Policy) issue a surrogate-country 
memorandum for the selection of the appropriate surrogate country in 
this review,\6\ and the Office of Policy provided us with a list of six 
countries at a level of economic development comparable to that of the 
PRC.\7\
---------------------------------------------------------------------------

    \6\ See the Department's memorandum entitled, ``Request for 
Surrogate Country Selection,'' dated July 16, 2009.
    \7\ See the Department's memorandum entitled, ``Request for a 
List of Surrogate Countries for an Administrative Review of the 
Antidumping Duty Order on Certain Tissue Paper Products From the 
People's Republic of China,'' dated July 16, 2009 (Policy 
Memorandum).
---------------------------------------------------------------------------

    On July 17, 2009, the Department invited interested parties 
participating in this review to submit comments on surrogate-country 
selection and to submit publicly-available information as surrogate 
values (SVs) for purposes of calculating NV.\8\
---------------------------------------------------------------------------

    \8\ See the Department's letter regarding, ``2008-2009 
Administrative Review of Certain Tissue Paper Products from the 
People's Republic of China,'' requesting parties to provide comments 
on surrogate-country selection and surrogate FOP values from the 
potential surrogate countries (i.e., India, Philippines, Indonesia, 
Colombia, Thailand and Peru).
---------------------------------------------------------------------------

    On July 20, 2009, SPA submitted its response to section D of the 
antidumping duty questionnaire.
    The Department issued a sections A and C supplemental questionnaire 
to SPA on July 10, 2009, and received SPA's supplemental questionnaire 
response on July 24, 2009.
    The Department issued a section D supplemental questionnaire to SPA 
on July 29, 2009, and received SPA's supplemental questionnaire 
response on August 14, 2009.
    The Department issued a section A supplemental questionnaire to Max 
Fortune on July 29, 2009, and received Max Fortune's supplemental 
questionnaire response on August 11, 2009.
    The Department issued sections C and D supplemental questionnaires 
to Max Fortune on August 7 and 17, 2009, and received Max Fortune's 
supplemental questionnaire responses on August 26 and September 21, 
2009, respectively.
    On August 24, 2009, the Department placed on the record the CBP 
data it requested from CBP on June 30, 2009. See Memorandum from Gemal

[[Page 18813]]

Brangman, Analyst, to The File, dated August 24, 2009.
    On August 25, 2009, the petitioner submitted surrogate-country 
comments in this administrative review.
    On September 10, 2009, the petitioner requested a 35-day extension 
until October 23, 2009, to submit publicly-available information (PAI) 
in this review. We granted the petitioner's extension request on 
September 15, 2009.
    On September 15, 2009, the petitioner placed on the record of this 
review a substantial amount of information supporting its allegations 
that, among other things, that Max Fortune did not report: (1) Multiple 
affiliates involved in the production and/or sale of the subject 
merchandise exported to the United States during the POR; and (2) 
multiple unaffiliated suppliers of raw materials and converting 
services involved in the production of the subject merchandise exported 
to the United States during the POR. The petitioner obtained the 
information supporting its allegations from a foreign market researcher 
(FMR).
    On October 14, 2009, the Department rescinded this review with 
respect to Sunlake. See Certain Tissue Paper Products from the People's 
Republic of China: Notice of Partial Rescission of Antidumping Duty 
Administrative Review, 74 FR 54030 (October 21, 2009).
    On October 19, 2009, Max Fortune filed a submission in which it 
denied the petitioner's September 15, 2009, allegations.
    On October 23, 2009, the petitioner submitted PAI in this 
administrative review.
    On October 26, 2009, the Department met with the petitioner's 
counsel in order to get clarification of the information on which the 
petitioner based its September 15, 2009, allegations and the 
petitioner's analysis of that information.\9\
---------------------------------------------------------------------------

    \9\ See Memorandum to The File from Brian Smith, Senior Analyst, 
entitled ``Meeting with Counsel for the Petitioner,'' dated October 
28, 2009.
---------------------------------------------------------------------------

    The Department issued additional supplemental questionnaires to SPA 
on October 29 and November 13, 2009, and received SPA's supplemental 
questionnaire responses on November 13 and 18, 2009, respectively.
    On October 29, 2009, the Department requested additional entry 
documentation from CBP. See Memorandum from James P. Maeder, Jr., 
Office Director, to CBP, dated October 29, 2009.
    On November 9, 2009, the Department issued to the petitioner a 
questionnaire seeking clarification of the information contained in its 
September 15, 2009, submission. The petitioner submitted its response 
to this questionnaire in November and December 2009.\10\
---------------------------------------------------------------------------

    \10\ See the petitioner's submissions dated November 23 and 
December 22, 2009.
---------------------------------------------------------------------------

    On November 11, 2009, the Department postponed the preliminary 
results of this review until March 31, 2010. See Certain Tissue Paper 
Products From the People's Republic of China: Extension of Time Limit 
for Preliminary Results of 2008-2009 Administrative Review, 74 FR 59132 
(November 17, 2009).
    On November 24, 2009, the Department sent Max Fortune a 
questionnaire seeking clarification and additional information and 
documentation with respect to Max Fortune's October 19, 2009, 
submission. Max Fortune submitted its response to this questionnaire on 
December 11, 2009.
    On December 2, 2009, the Department placed on the record the 
additional CBP data it requested from CBP on October 29, 2009. See 
Memorandum from Brian Smith, Senior Analyst, to The File, dated 
December 2, 2009.
    On December 16, 2009, the Department conducted an interview by 
telephone with the FMR in order to confirm the FMR's credentials, and 
the procedures conducted to obtain the information, on which the 
petitioner's September 15, 2009, allegations were based.\11\
---------------------------------------------------------------------------

    \11\ See Memorandum to The File from Gemal Brangman, Analyst, 
entitled ``Telephone Conversation with Foreign Market Researcher,'' 
dated January 5, 2010.
---------------------------------------------------------------------------

    On December 31, 2010, the Department issued verification outlines 
to Max Fortune, SPA, and another company whose information was included 
in the petitioner's September 15, 2009, submission.
    SPA submitted pre-verification corrections related to its 
questionnaire responses on January 7, 2010.
    Pursuant to section 782(i) of the Tariff Act of 1930, as amended 
(the Act), the Department conducted verification of the questionnaire 
responses submitted by Max Fortune and SPA in January 2010.\12\ 
Furthermore, the Department conducted a verification of another 
company's data included in the petitioner's September 15, 2009, 
submission.\13\ These verification reports are on file and available in 
the Central Records Unit (CRU), Room 1117 of the Department's main 
building.
---------------------------------------------------------------------------

    \12\ See Memorandum to The File from Case Analysts entitled 
``Verification of the Sales and Factors Questionnaire Responses of 
Max Fortune (FZ) Paper Products Co., Ltd. and Max Fortune Industrial 
Limited in the Antidumping Duty Administrative Review of Certain 
Tissue Paper Products from the People's Republic of China,'' dated 
April 7, 2010 (Max Fortune Verification Report); and Memorandum to 
The File from Case Analysts entitled ``Verification of the Sales and 
Factors Questionnaire Responses of Seaman Paper Asia Company Ltd. in 
the Antidumping Duty Administrative Review of Certain Tissue Paper 
Products from the People's Republic of China,'' dated April 7, 2010 
(SPA Verification Report).
    \13\ See Memorandum to The File from Case Analysts entitled 
``Verification of the Data Submitted by {Anonymous Company{time}  in 
the Antidumping Duty Administrative Review of Certain Tissue Paper 
Products from the People's Republic of China,'' dated April 7, 2010. 
This company's legal counsel has requested business proprietary 
treatment of the company's name pursuant to 19 CFR 351.105(c)(9), 
and under the circumstances presented in this case, we have agreed 
to this request. See letter dated January 7, 2010.
---------------------------------------------------------------------------

Period of Review

    The POR is March 1, 2008, through February 28, 2009.

Scope of the Order

    The tissue paper products covered by this order are cut-to-length 
sheets of tissue paper having a basis weight not exceeding 29 grams per 
square meter. Tissue paper products subject to this order may or may 
not be bleached, dye-colored, surface-colored, glazed, surface 
decorated or printed, sequined, crinkled, embossed, and/or die cut. The 
tissue paper subject to this order is in the form of cut-to-length 
sheets of tissue paper with a width equal to or greater than one-half 
(0.5) inch. Subject tissue paper may be flat or folded, and may be 
packaged by banding or wrapping with paper or film, by placing in 
plastic or film bags, and/or by placing in boxes for distribution and 
use by the ultimate consumer. Packages of tissue paper subject to this 
order may consist solely of tissue paper of one color and/or style, or 
may contain multiple colors and/or styles.
    The merchandise subject to this order does not have specific 
classification numbers assigned to them under the Harmonized Tariff 
Schedule of the United States (HTSUS). Subject merchandise may be under 
one or more of several different subheadings, including: 4802.30, 
4802.54, 4802.61, 4802.62, 4802.69, 4804.31.1000, 4804.31.2000, 
4804.31.4020, 4804.31.4040, 4804.31.6000, 4804.39, 4805.91.1090, 
4805.91.5000, 4805.91.7000, 4806.40, 4808.30, 4808.90, 4811.90, 
4823.90, 4802.50.00, 4802.90.00, 4805.91.90, 9505.90.40. The tariff 
classifications are provided for convenience and customs purposes; 
however, the written description of the scope of this order is 
dispositive.\14\
---------------------------------------------------------------------------

    \14\ On January 30, 2007, at the direction of CBP, the 
Department added the following HTSUS classifications to the AD/CVD 
module for tissue paper: 4802.54.3100, 4802.54.6100, and 
4823.90.6700. However, we note that the six-digit classifications 
for these numbers were already listed in the scope.

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

[[Page 18814]]

    Excluded from the scope of this order are the following tissue 
paper products: (1) Tissue paper products that are coated in wax, 
paraffin, or polymers, of a kind used in floral and food service 
applications; (2) tissue paper products that have been perforated, 
embossed, or die-cut to the shape of a toilet seat, i.e., disposable 
sanitary covers for toilet seats; (3) toilet or facial tissue stock, 
towel or napkin stock, paper of a kind used for household or sanitary 
purposes, cellulose wadding, and webs of cellulose fibers (HTSUS 
4803.00.20.00 and 4803.00.40.00).

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 unless an exporter 
can affirmatively demonstrate an absence of government control, both in 
law (de jure) and in fact (de facto), with respect to its export 
activities. See Final Determination of Sales at Less Than Fair Value: 
Sparklers from the People's Republic of China, 56 FR 20588, 20589 (May 
6, 1991). In this review, in support of its claim for a separate rate, 
Max Fortune and SPA each reported that it is a wholly foreign-owned 
company registered and located in Hong Kong.\15\ Our verification 
findings corroborated Max Fortune's and SPA's separate-rate claims. See 
Max Fortune Verification Report at page 7, and SPA Verification Report 
at page 4. Consequently, no additional separate-rate analysis is 
necessary for Max Fortune or SPA. See Notice of Final Determination of 
Sales at Less than Fair Value: Bicycles From the People's Republic of 
China, 61 FR 19026 (April 30, 1996).
---------------------------------------------------------------------------

    \15\ See SPA's June 10, 2009, response to section A of the 
Department's antidumping questionnaire at page A-2; and Max 
Fortune's June 8, 2009, response to section A of the Department's 
antidumping questionnaire at page 2.
---------------------------------------------------------------------------

Application of Adverse Facts Available

    For the reasons outlined below, we have preliminarily applied 
adverse facts available (AFA) to Max Fortune. 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 sections 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.
    Furthermore, section 776(b) of the Act states that if the 
Department ``finds that an interested party has failed to cooperate by 
not acting to the best of its ability to comply with a request for 
information from the administering authority * * *, the administering 
authority * * *, in reaching the applicable determination under this 
title, may use an inference that is adverse to the interests of that 
party in selecting from among the facts otherwise available.'' See also 
Statement of Administrative Action accompanying the Uruguay Round 
Agreements Act, H. Rep. No. 103-316 at 870 (1994) (SAA). It is the 
Department's practice to make an adverse inference ``to ensure that the 
party does not obtain a more favorable result by failing to cooperate 
than if it had cooperated fully.'' Id. An adverse inference may include 
reliance on information derived from the petition, the final 
determination in the investigation, any previous review, or any other 
information placed on the record. See section 776(b) of the Act.
    In cases involving NME countries, such as the instant one, the 
respondent must supply the Department with complete and accurate U.S. 
sales and factors of production (FOP) data in order for the Department 
to accurately calculate the respondent's dumping margin. Where one, or 
both, of these data sets is so incomplete that it cannot serve as a 
reliable basis for reaching the applicable determination, the 
Department may decline to consider a respondent's information in its 
entirety, and apply adverse facts available under section 776(b) of the 
Act. See, e.g., Steel Authority of India, Ltd. v. United States, 149 F. 
Supp. 2d 921, 928 (CIT 2001). Based on our verification findings and 
analysis of the record information, as summarized below, we find that 
we cannot rely upon the data submitted by Max Fortune to calculate an 
accurate dumping margin. Consequently, we find it appropriate to base 
Max Fortune's preliminary dumping margin on AFA.
    In this administrative review, the petitioner provided substantial 
information in its September 15, 2009, submission as the basis for 
alleging, among other things, that Max Fortune did not report multiple 
unaffiliated suppliers of raw materials and converting services 
involved in the production of the subject merchandise exported to the 
United States during the POR. In its submissions to the Department, 
including its October 19, 2009, submission rebutting the allegations 
made by the petitioner, Max Fortune asserted that its PRC affiliate, 
Max Fortune Fuzhou, produced all of the tissue paper it reported it 
sold to the United States during the POR. After conducting verification 
of the data submitted on the record, we found that for certain U.S. 
sales reported by Max Fortune in its U.S. sales listing which we 
selected for examination at verification, Max Fortune Fuzhou was not 
the only producer of the tissue paper sold in those transactions, 
contrary to Max Fortune's representations throughout this review. See 
Memorandum from John M. Andersen, Acting Deputy Assistant Secretary for 
AD/CVD Operations, to Ronald K. Lorentzen, Deputy Assistant Secretary 
for Import Administration, entitled ``Whether To Assign Max Fortune 
Industrial Limited (Max Fortune HK) and Max Fortune (FZ) Paper Products 
Co., Ltd. (Max Fortune Fuzhou) (collectively Max Fortune) a Margin 
Based on Adverse Facts Available in the Preliminary Results,'' dated 
April 7, 2010, for a full discussion of the Department's findings with 
respect to Max Fortune.
    Accordingly, our verification findings demonstrate that Max Fortune 
withheld critical information (i.e., the identities of additional 
tissue paper suppliers associated with the tissue paper it sold to the 
United States during the POR, and their respective FOP data), and in so 
doing, significantly impeded this proceeding and precluded the 
Department from being able to calculate an accurate antidumping margin 
for Max Fortune in this review based on its reported data. Further, 
based upon our verification of the companies, our experience in 
conducting such verifications, and our careful analysis of the record, 
we do not believe that the documentation supplied by Max Fortune can be 
the actual documents used in the transactions at issue. Therefore, the 
Department cannot state with confidence that it was able to verify any 
of Max Fortune's FOP data. Given the nature and extent of the 
information in Max Fortune's possession which Max Fortune withheld from 
disclosure (i.e., the actual documentation associated with its U.S. 
sales transactions), we preliminarily find that it failed to cooperate 
by not acting to the best of its ability to comply with the 
Department's request for information in this review. Consequently, 
pursuant to sections 776(a)(2) and (b) of the Act, we find it

[[Page 18815]]

appropriate to apply total AFA to Max Fortune for the preliminary 
results of this review. See Shanghai Taoen, International Trading 
Company v. United States, 360 F.Supp. 2d. 1339, 1344 (CIT 2005) 
(finding that the application of total AFA was warranted in light of 
evidence on the record that the respondent ``purposely withheld'' and 
provided misleading information to avoid a higher dumping margin).

Selection of Adverse Facts Available Rate

    As discussed above, section 776(b) of the Act authorizes the 
Department to use as AFA, information derived from the petition, the 
final determination in the less-than-fair-value (LTFV) investigation, 
any previous administrative review, or any information placed on the 
record. In selecting an AFA rate in reviews, the Department's practice 
has been to assign the highest margin on the record of any segment of 
the proceeding. See, e.g., Freshwater Crawfish Tail Meat from the 
People's Republic of China: Notice of Final Results of Antidumping Duty 
Administrative Review, 68 FR 19504 (April 21, 2003). The Court of 
International Trade (CIT) and the Federal Circuit have consistently 
upheld the Department's practice in this regard. See Rhone Poulenc, 
Inc. v. United States, 899 F.2d 1185, 1190 (Fed. Cir. 1990) (Rhone 
Poulenc); NSK Ltd. v. United States, 346 F. Supp. 2d 1312, 1335 (CIT 
2004) (upholding a 73.55 percent total AFA rate, the highest available 
dumping margin from a different respondent in a LTFV investigation); 
see also Kompass Food Trading Int'l v. United States, 24 CIT 678, 689 
(July 31, 2000) (upholding a 51.16 percent total AFA rate, the highest 
available dumping margin from a different, fully cooperative 
respondent); and Shanghai Taoen International Trading Co., Ltd. v. 
United States, 360 F. Supp 2d 1339, 1348 (CIT 2005) (upholding a 223.01 
percent total AFA rate, the highest available dumping margin from a 
different respondent in a previous administrative review).
    The Department's practice when selecting an adverse rate from among 
the possible sources of information is to ensure that the margin 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 Static 
Random Access Memory Semiconductors from Taiwan; Final Determination of 
Sales at Less than Fair Value, 63 FR 8909, 8932 (February 23, 1998). 
The Department's practice also ensures ``that the party does not obtain 
a more favorable result by failing to cooperate than if it had 
cooperated fully.'' See SAA at 870; see also Final Determination of 
Sales at Less than Fair Value: Certain Frozen and Canned Warmwater 
Shrimp from Brazil, 69 FR 76910 (December 23, 2004), and accompanying 
Issues and Decision Memorandum at Comment 22. In choosing the 
appropriate balance between providing respondents with an incentive to 
respond accurately and imposing a rate that is reasonably related to 
the respondent's prior commercial activity, selecting the highest prior 
margin ``reflects a common sense inference that the highest prior 
margin is the most probative evidence of current margins, because, if 
it were not so, the importer, knowing of the rule, would have produced 
current information showing the margin to be less.'' Rhone Poulenc, 899 
F.2d at 1190. Consistent with the statute, court precedent, and 
numerous other cases,\16\ as AFA, we are assigning Max Fortune the 
highest rate on the record of any segment of this proceeding, i.e., 
112.64 percent. As discussed further below, this rate has been 
corroborated.
---------------------------------------------------------------------------

    \16\ See e.g., Fresh Garlic from the People's Republic of China: 
Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review and Preliminary Results of New Shipper 
Reviews, 70 FR 69942, 69946 (November 18, 2005); and Fresh Garlic 
from the People's Republic of China: Final Results and Partial 
Rescission of Antidumping Duty Administrative Review and Final 
Results of New Shipper Reviews, 71 FR 26329, 26330 (May 4, 2006).
---------------------------------------------------------------------------

Corroboration of Secondary Information Used as AFA

    Section 776(c) of the Act provides that when the Department selects 
from among the facts otherwise available and relies on ``secondary 
information,'' the Department shall, to the extent practicable, 
corroborate that information from independent sources reasonably at the 
Department's disposal. To corroborate the information, the Department 
seeks to determine that the information used has probative value. See 
SAA at 870. The Department has determined that to have probative value, 
information must be reliable and relevant. See Certain Tissue Paper 
Products from the People's Republic of China: Final Results and Final 
Rescission, In Part, of Antidumping Duty Administrative Review, 72 FR 
58642 (October 16, 2007), and accompanying Issues and Decision 
Memorandum at Comment 6.
    To be considered corroborated, information must be found to be both 
reliable and relevant. The AFA rate of 112.64 percent that we are 
applying in the current review represents the highest rate from the 
petition in the LTFV investigation segment of this proceeding. See 
Tissue Paper Order. The Department corroborated the information used to 
calculate the 112.64 percent rate in the LTFV investigation. See Notice 
of Final Determination of Sales at Less Than Fair Value: Certain Tissue 
Paper Products from the People's Republic of China, 70 FR 7475 
(February 14, 2005). Furthermore, the AFA rate we are applying for the 
current review was applied in reviews subsequent to the LTFV 
investigation, and no information has been presented in the current 
review that calls into question the reliability of this information. 
See Certain Tissue Paper from the People's Republic of China: 
Preliminary Results and Preliminary Rescission of the 2007-2008 
Administrative Review and Intent Not to Revoke Order in Part, 74 FR 
15449 (April 6, 2009) (unchanged in Certain Tissue Paper Products from 
the People's Republic of China: Final Results and Partial Rescission of 
the 2007-2008 Antidumping Duty Administrative Review and Determination 
Not to Revoke in Part, 74 FR 52176, 52177 (October 9, 2009) (PRC Tissue 
Paper--3rd AR). Thus, the Department finds that the information is 
reliable.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal to 
determine whether a margin continues to have relevance. Where 
circumstances indicate that the selected margin is not appropriate as 
AFA, the Department will disregard the margin and determine an 
appropriate margin. See Fresh Cut Flowers from Mexico: Final Results of 
Antidumping Duty Administrative Review, 61 FR 6812, 6814 (February 22, 
1996) (where the Department disregarded the highest margin in that case 
as adverse best information available (the predecessor to facts 
available) because the margin was based on another company's 
uncharacteristic business expense, resulting in an unusually high 
margin). Similarly, the Department does not apply a margin that has 
been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 
1221 (Fed. Cir. 1997) (finding that the Department cannot use a margin 
that has been judicially invalidated in its calculations). The AFA rate 
we are applying for the instant review was calculated based on export 
price information and production data from the petition, as well as the 
most appropriate surrogate value information available to the 
Department during the LTFV investigation. As there is no

[[Page 18816]]

information on the record of this review that demonstrates this rate is 
not appropriate for use as AFA, we determine this rate has relevance.
    Because the AFA rate, 112.64 percent, is both reliable and 
relevant, we determine that it has probative value. As a result, we 
determine that the 112.64 percent rate is corroborated to the extent 
practicable for the purposes of this administrative review, in 
accordance with section 776(c) of the Act, and may reasonably be 
applied as AFA to the exports of the subject merchandise by Max 
Fortune.

Non-Market Economy Country

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as an NME country. Pursuant to 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., Freshwater Crawfish Tail Meat from 
the People's Republic of China: Notice of Preliminary Results of 
Antidumping Duty Administrative Review, 70 FR 58672 (October 7, 2005) 
(unchanged in Freshwater Crawfish Tail Meat from the People's Republic 
of China: Notice of Final Results of Antidumping Duty Administrative 
Review, 71 FR 7013 (February 10, 2006)). None of the parties in this 
administrative review has contested such treatment. Accordingly, we 
calculated NV in accordance with section 773(c) of the Act, which 
applies to NME countries.

Surrogate Country

    Section 773(c)(1) of the Act directs the Department to base NV on 
the NME producer's FOPs, valued in a surrogate market-economy (ME) 
country or countries considered to be appropriate by the Department. In 
accordance with section 773(c)(4) of the Act, in valuing the FOPs, the 
Department shall use, to the extent possible, the prices or costs of 
the FOPs in one or more ME countries that are: (1) At a level of 
economic development comparable to that of the NME country; and (2) 
significant producers of comparable merchandise. The sources of the 
surrogate factor values are discussed under the ``Normal Value'' 
section below. See also the Department's memorandum entitled, 
``Preliminary Results of the 2008-2009 Administrative Review of the 
Antidumping Duty Order on Certain Tissue Paper Products from the 
People's Republic of China: Factor Valuation for the Preliminary 
Results,'' dated April 7, 2010 (Surrogate Value Memorandum).
    The Department determined that India, the Philippines, Indonesia, 
Colombia, Thailand, and Peru are countries comparable to the PRC in 
terms of economic development. See Policy Memorandum. Customarily, we 
select an appropriate surrogate country from the Policy Memorandum 
based on the availability and reliability of data from the countries 
that are significant producers of comparable merchandise. In this case, 
we found that India is at a comparable level of economic development to 
the PRC; is a significant producer of the subject merchandise (i.e., 
tissue paper); and has publicly-available and reliable data. See April 
7, 2010, Memorandum to The File entitled ``2008-2009 Antidumping Duty 
Administrative Review on Certain Tissue Paper Products from the 
People's Republic of China: Selection of a Surrogate Country'' 
(Surrogate Country Memorandum).
    Accordingly, we selected India as the primary surrogate country for 
purposes of valuing the FOPs in the calculation of NV because it meets 
the Department's criteria for surrogate-country selection. See 
Surrogate Country Memorandum. We obtained and relied upon publicly-
available information wherever possible.
    In accordance with 19 CFR 351.301(c)(3)(ii), for the final results 
in antidumping administrative reviews, interested parties may submit 
publicly available information to value FOPs within 20 days after the 
date of publication of these preliminary results.

Fair Value Comparisons

    To determine whether sales of the subject merchandise by SPA to the 
United States were made at prices below NV, we compared SPA's export 
prices (EPs) to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice below, pursuant to section 773 of the 
Act.

Export Price

    Because SPA sold subject merchandise to an unaffiliated purchaser 
in the United States prior to importation into the United States and 
use of a constructed-export-price methodology was not otherwise 
indicated, we used EP in accordance with section 772(a) of the Act.
    We calculated EP based on the reported terms of delivery to the 
first unaffiliated purchaser in the United States. We made deductions 
from the starting price (gross unit price) for foreign inland freight 
in the PRC and U.S. customs duties, pursuant to section 772(c)(2)(A) of 
the Act.\17\ Because foreign inland freight was provided by a PRC 
service provider or paid for in renminbi, we based that charge on a 
surrogate rate from India. See ``Factor Valuations'' section below for 
further discussion of surrogate rates.
---------------------------------------------------------------------------

    \17\ See the Department's memorandum entitled, ``2008-2009 
Administrative Review of the Antidumping Duty Order on Certain 
Tissue Paper Products from the People's Republic of China: 
Preliminary Results Margin Calculation for Seaman Paper Asia Company 
Ltd.,'' dated April 7, 2010 (SPA Calculation Memo).
---------------------------------------------------------------------------

    In determining the most appropriate surrogate values (SVs) to use 
in a given case, the Department's practice is to use review period-wide 
price averages, prices specific to the input in question, prices that 
are net of taxes and import duties, prices that are contemporaneous 
with the POR, and publicly-available data. See, e.g., 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 1.
    The Department valued inland truck freight expenses using a per-
unit average rate calculated from August 2008 data on the following Web 
site: http://www.infobanc.com/logistics/logtruck.htm. The logistics 
section of this Web site contains inland freight truck rates between 
many large Indian cities. Because this average rate is contemporaneous 
with the POR, we did not adjust the rate for inflation. See Surrogate 
Value Memorandum.

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 NMEs 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).
    For purposes of calculating NV, we valued the FOPs in accordance 
with section 773(c)(1) of the Act. 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

[[Page 18817]]

costs, including depreciation. We used the FOP data reported by SPA for 
materials, energy, labor, and packing. See section 773(c)(3) of the 
Act.
    In examining SVs, we selected, where possible, the publicly-
available value, which was an average non-export value, representative 
of a range of prices within the POR or most contemporaneous with the 
POR, product-specific, and tax-exclusive. See, e.g., Notice of 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Chlorinated Isocyanurates from the 
People's Republic of China, 69 FR 75294, 75300 (December 16, 2004) 
(unchanged in Notice of Final Determination of Sales at Less Than Fair 
Value: Chlorinated Isocyanurates from the People's Republic of China, 
70 FR 24502 (May 10, 2005)). For a detailed explanation of the 
methodology used to calculate SVs, see Surrogate Value Memorandum.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOP data reported by SPA for the POR. We relied on the 
factor-specific data submitted by SPA for the production inputs in its 
questionnaire responses, where applicable, for purposes of selecting 
SVs. To calculate NV, we multiplied the reported per-unit factor 
consumption rates by publicly-available Indian SVs.
    In selecting the SVs, consistent with our past practice, we 
considered the quality, specificity, and contemporaneity of the data. 
See, e.g., Folding Metal Tables and Chairs from the People's Republic 
of China; Final Results of Antidumping Duty Administrative Review, 71 
FR 71509 (December 11, 2006), and accompanying Issues and Decision 
Memorandum at Comment 9. As appropriate, we adjusted input prices by 
including freight costs to make them delivered prices. Specifically, we 
added to Indian import SVs a surrogate freight cost using the shorter 
of the reported distance from the domestic supplier to the factory or 
the distance from the nearest seaport to the factory, where 
appropriate. This adjustment is in accordance with the decision of the 
U.S. Court of Appeals for the Federal Circuit (Federal Circuit). See 
Sigma Corp. v. United States, 117 F. 3d 1401, 1408 (Fed. Cir. 1997). 
Where necessary, we adjusted the SVs for inflation/deflation using the 
Wholesale Price Index (WPI) as published in the International Monetary 
Fund's International Financial Statistics, available at http://ifs.apdi.net/imf.
    We valued the raw material and packing material inputs using 
weighted-average unit import values derived from the Monthly Statistics 
of the Foreign Trade of India (MSFTI), as published by the Directorate 
General of Commercial Intelligence and Statistics of the Ministry of 
Commerce and Industry, Government of India, and compiled by the World 
Trade Atlas (WTA), available at http://www.gtis.com/wta.htm. The Indian 
WTA import data are reported in rupees and are contemporaneous with the 
POR.\18\ Indian SVs denominated in Indian rupees were converted to U.S. 
dollars using the applicable daily exchange rate for India for the POR. 
See http://www.ia.ita.doc.gov/exchange/index.html. Where appropriate, 
we converted the units of measure to kilograms. See Surrogate Value 
Memorandum.
---------------------------------------------------------------------------

    \18\ See Surrogate Value Memorandum at Attachment 1.
---------------------------------------------------------------------------

    Furthermore, with regard to the WTA Indian import-based SVs, we 
disregarded prices from NME countries \19\ and those we have reason to 
believe or suspect may be subsidized, because we have found in other 
proceedings that these exporting countries maintain broadly available, 
non-industry-specific export subsidies and, therefore, there is reason 
to believe or suspect that all exports to all markets from such 
countries may be subsidized.\20\ 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. 576 100th Cong., 2. Sess. 590-91 (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 excluded export prices from Indonesia, 
South Korea, Thailand, and India when calculating the Indian import-
based SVs. See Surrogate Value Memorandum. Finally, we excluded imports 
that were labeled as originating from an ``unspecified'' country from 
the average Indian import values, because we could not be certain that 
they were not from either an NME or a country with general export 
subsidies.
---------------------------------------------------------------------------

    \19\ The NME countries are Armenia, Azerbaijan, Belarus, 
Georgia, Kyrgyz Republic, Moldova, PRC, Tajikistan, Turkmenistan, 
Uzbekistan, and Vietnam.
    \20\ See Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China; Final Results of 
the 1998-1999 Administrative Review, Partial Rescission of Review, 
and Determination Not to Revoke Order in Part, 66 FR 1953 (January 
10, 2001), and accompanying Issues and Decision Memorandum at 
Comment 1; Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, from the People's Republic of China; Final Results of 
1999-2000 Administrative Review, Partial Rescission of Review, and 
Determination Not To Revoke Order in Part, 66 FR 57420 (November 15, 
2001), and accompanying Issues and Decision Memorandum at Comment 1; 
and China National Machinery Imp. & Exp. Corp. v. United States, 293 
F. Supp. 2d 1334, 1339 (CIT 2003), as affirmed by the Federal 
Circuit, 104 Fed. Appx. 183 (Fed. Cir. 2004).
---------------------------------------------------------------------------

    As discussed above, the Department valued surrogate truck freight 
cost by using a per-unit average rate calculated from August 2008 data 
on the following Web site: http://www.infobanc.com/logistics/logtruck.htm. See Polyethylene Retail Carrier Bags from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 52282, 52286 (September 9, 2008) (and 
unchanged in Polyethylene Retail Carrier Bags from the People's 
Republic of China: Final Results of Antidumping Duty Administrative 
Review, 74 FR 6857 (February 11, 2009)); and Surrogate Value Memorandum 
at Attachment 9.
    We valued water using data from the Maharashtra Industrial 
Development Corporation (MIDC) because it includes a wide range of 
industrial water tariffs. This source provides 378 industrial water 
rates within the Maharashtra province from June 2009; 189 for the 
``inside industrial areas'' usage category; and 189 for the ``outside 
industrial areas'' usage category.\21\ Because these data were not 
contemporaneous with the POR, we deflated the average value to the POR 
using the WPI. See Surrogate Value Memorandum at Attachment 6.
---------------------------------------------------------------------------

    \21\ MIDC Web site is available at http://www.midcindia.org.
---------------------------------------------------------------------------

    The Department calculated a simple average price for domestic coal 
using data obtained from the Indian Mineral Yearbook and Coal India 
Limited. Because these data were not contemporaneous with the POR, we 
adjusted the average value for inflation using WPI. See Surrogate Value 
Memorandum at Attachment 5.
    To value electricity, the Department used March 2008 electricity 
price rates from Electricity Tariff & Duty and Average Rates of 
Electricity Supply in India, published by the Central Electricity 
Authority of the Government of India. Because these data were 
contemporaneous with the POR, we did not adjust the average value. See 
Surrogate Value Memorandum at Attachment 5.
    For direct labor, indirect labor and packing labor, consistent with 
19 CFR 351.408(c)(3), we used the PRC regression-based wage rates 
reflective of the observed relationship between wages and national 
income in ME countries as reported on Import Administration's Web site. 
See

[[Page 18818]]

``Expected Wages of Selected NME Countries'' (revised December 2009) 
(available at http://www.trade.gov/ia/). For further details on the 
labor calculation, see Surrogate Value Memorandum at Attachment 8. 
Because the regression-based wage rates do not separate the labor rates 
into different skill levels or types of labor, we applied the same wage 
rate to all skill levels and types of labor reported by SPA.
    For factory overhead, selling, general, and administrative expenses 
(SG&A), and profit values, consistent with 19 CFR 351.408(c)(4), we 
used the public information from the 2008-2009 annual report of 
Pudumjee Pulp & Paper Mills Ltd. (Pudumjee).\22\ 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., COM); and the profit rate as a percentage of 
the COM plus SG&A. Where appropriate, we did not include in the 
surrogate overhead and SG&A calculations the excise duty amount listed 
in the financial report. For a full discussion of the calculation of 
these ratios, see Surrogate Value Memorandum and its accompanying 
calculation worksheets at Attachment 7.
---------------------------------------------------------------------------

    \22\ See Certain Tissue Paper Products from the People's 
Republic of China: Preliminary Results and Partial Rescission of 
Antidumping Duty Administrative Review, 73 FR 18497, 18502 (April 4, 
2008) (unchanged in Certain Tissue Paper Products from the People's 
Republic of China: Final Results and Final Rescission, in Part, of 
Antidumping Duty Administrative Review, 73 FR 58113 (October 6, 
2008) (Tissue Paper (AR2)). See also PRC Tissue Paper--3rd AR, and 
accompanying Issues and Decision Memorandum at Comment 5.
---------------------------------------------------------------------------

Verification

    As provided in section 782(i) of the Act, we verified the 
information submitted by SPA for use in our preliminary results. We 
used standard verification procedures including an examination of 
relevant accounting and production records, and original source 
documents provided by SPA. See SPA Verification Report.

Currency Conversion

    We made currency conversions into U.S. dollars, in accordance with 
section 773A(a) of the Act, based on the exchange rate in effect on the 
date of the U.S. sale, as certified by the Federal Reserve Bank. See 
http://www.ia.ita.doc.gov/exchange/index.html.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following margins exist for the period March 1, 2008, through February 
28, 2009:

               Certain Tissue Paper Products From the PRC
------------------------------------------------------------------------
  Individually reviewed exporter 2007-2008 administrative       Margin
                           review                             (percent)
------------------------------------------------------------------------
Seaman Paper Asia Company Ltd..............................         0.00
Max Fortune Industrial Ltd.................................       112.64
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the date of publication 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, limited to issues raised in the case 
briefs, will be due five days later, pursuant to 19 CFR 351.309(d). 
Parties who submit case or rebuttal briefs in this proceeding are 
requested to submit with each argument (1) a statement of the issue, 
and (2) a brief summary of the argument. Parties are requested to 
provide a summary of the arguments not to exceed five pages and a table 
of statutes, regulations, and cases cited. Additionally, parties are 
requested to provide their case brief and rebuttal briefs in electronic 
format (e.g., Microsoft Word, pdf, etc.). 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 
within 30 days of the date of publication of this notice. Requests 
should contain: (1) The party's name, address, and telephone number; 
(2) the number of participants; and (3) a list of issues to be 
discussed. See 19 CFR 351.310(c). Issues raised in the hearing will be 
limited to those raised in case and rebuttal briefs. The Department 
will issue the final results of this review, including the results of 
its analysis of issues raised in any such written briefs or at the 
hearing, if held, not later than 120 days after the date of publication 
of this notice.

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries 
covered by this review. The Department intends to issue assessment 
instructions to CBP 15 days after the publication date of the final 
results of this review.
    In accordance with 19 CFR 351.212(b)(1), for SPA, we calculated an 
importer-specific assessment rate for the merchandise subject to this 
review because SPA submitted entered value information with its U.S. 
sales reporting. Where an importer-specific ad valorem rate is zero or 
de minimis, we will instruct CBP to liquidate appropriate entries 
without regard to antidumping duties. See 19 CFR 351.106(c)(2).
    With respect to Max Fortune, we will instruct CBP to liquidate 
appropriate entries at the PRC-wide rate of 112.64 percent.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the notice of final results of the administrative review 
for all shipments of certain tissue paper products from the PRC 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication, as provided by section 751(a)(2)(C) of the Act: 
(1) A cash deposit rate of 0.00 percent will be required for certain 
tissue paper products from the PRC exported by SPA; (2) a cash deposit 
rate of 112.64 percent will be required for certain tissue paper 
products from the PRC exported by Max Fortune; (3) for previously 
reviewed or investigated companies not listed above that have separate 
rates, the cash deposit rate will continue to be the company-specific 
rate published for the most recent period; (4) for all other PRC 
exporters of subject merchandise, which have not been found to be 
entitled to a separate rate, the cash deposit rate will be PRC-wide 
rate of 112.64 percent; and (5) for all non-PRC exporters of subject 
merchandise, the cash deposit rate will be the rate applicable to the 
PRC exporter that supplied that non-PRC exporter. These deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice 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 administrative review and notice are in accordance with 
sections

[[Page 18819]]

751(a)(1) and 777(i) of the Act and 19 CFR 351.221(b)(4).

    Dated: April 7, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-8424 Filed 4-12-10; 8:45 am]
BILLING CODE 3510-DS-P