[Federal Register Volume 76, Number 213 (Thursday, November 3, 2011)]
[Notices]
[Pages 68148-68154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-28537]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-972]


Certain Stilbenic Optical Brightening Agents From the People's 
Republic of China: Preliminary Determination of Sales at Less Than Fair 
Value and Postponement of Final Determination

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

DATES: Effective Date: November 3, 2011.
SUMMARY: The Department of Commerce (the ``Department'') preliminarily 
determines that certain stilbenic optical brightening agents (``OBA'') 
from the People's Republic of China (``PRC'') is being, or is likely to 
be, sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Tariff Act of 1930, as amended (``the 
Act''). The estimated margins of sales at LTFV are shown in the 
``Preliminary Determination'' section of this notice.

FOR FURTHER INFORMATION CONTACT: Shawn Higgins or Maisha Cryor, AD/CVD 
Operations, Office 4, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0679 or (202) 482-5831, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On March 31, 2011, the Department received an antidumping duty 
petition concerning imports of OBAs from the PRC and Taiwan filed in 
proper form by the Clariant Corporation (``Petitioner'').\1\ On April 
4, 2011, and April 5, 2011, the Department issued requests for 
information and clarification of certain areas of the petition, to 
which Petitioner timely filed responses on April 7, 2011, and April 8, 
2011.\2\
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    \1\ See Antidumping Duty Petitions on Certain Stilbenic Optical 
Brightening Agents from the People's Republic of China and Taiwan 
(March 31, 2011).
    \2\ See Certain Stilbenic Optical Brightening Agents from the 
People's Republic of China and Taiwan; Amendment to Petitions (April 
7, 2011); see also Certain Stilbenic Optical Brightening Agents from 
the People's Republic of China and Taiwan; Amendment to Petitions 
(April 8, 2011).
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    The Department initiated an antidumping duty investigation of OBAs 
from the PRC on April 20, 2011.\3\
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    \3\ See Certain Stilbenic Optical Brightening Agents From the 
People's Republic of China and Taiwan: Initiation of Antidumping 
Duty Investigations, 76 FR 23554 (April 27, 2011) (``Initiation 
Notice'').
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    In the Initiation Notice, the Department stated that it intended to 
select PRC respondents based on quantity and value (``Q&V'') 
questionnaires.\4\ On April 21, 2011, the Department requested Q&V 
information from 30 companies identified in the petition as potential 
producers and/or exporters of OBAs from the PRC.\5\ The Department 
received timely responses to its Q&V questionnaire from two companies, 
Zhejiang Hongda Chemicals Co., Ltd. (``Hongda'') and Zhejiang Transfar 
Whyyon Chemical Co., Ltd. (``Transfar'').\6\
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    \4\ See Initiation Notice, 76 FR at 23558.
    \5\ See Letter from Robert Bolling, Program Manager, AD/CVD 
Operations, Office 4, to All Interested Parties, ``Antidumping Duty 
Investigation of Certain Stilbenic Optical Brightening Agents from 
the People's Republic of China: Quantity and Value Questionnaire'' 
(April 21, 2011).
    \6\ See the Department's memorandum entitled, ``Respondent 
Selection in the Antidumping Duty Investigation of Certain Stilbenic 
Optical Brightening Agents from the People's Republic of China,'' 
dated May 18, 2011 (``Respondent Selection Memo'').
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    In the Initiation Notice, the Department notified parties of the 
application process by which exporters and producers may obtain 
separate-rate status in non-market economy (``NME'') investigations. 
The process requires exporters and producers to submit a separate-rate 
status application (``SRA'') \7\ and to demonstrate an absence of both 
de jure and de facto government control over their export activities. 
The SRA for this investigation was posted on the Department's Web site, 
http://ia.ita.doc.gov/ia-highlights-and-news.html, on April 21, 2011. 
The deadline for filing an SRA was June 26, 2011.\8\
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    \7\ See Policy Bulletin 05.1: Separate-Rates Practice and 
Application of Combination Rates in Antidumping Investigations 
involving Non-Market Economy Countries (April 5, 2005) (``Policy 
Bulletin 05.1''), available at http://ia.ita.doc.gov/policy/bull05-1.pdf.
    \8\ No party submitted a SRA.
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    On May 18, 2011, the Department issued antidumping questionnaires 
to Hongda and Transfar. In June and July 2011, Hongda and Transfar 
submitted timely responses to sections A, C, and D of the Department's 
antidumping questionnaire.
    The Department issued supplemental questionnaires to Hongda and 
Transfar from June to October 2011. Hongda and Transfar submitted 
timely responses to the Department's supplemental questionnaires from 
July to October 2011. From June to September 2011, Petitioner submitted 
comments to the Department regarding the submissions and/or responses 
of Hongda and Transfar.
    On May 27, 2011, the International Trade Commission (``ITC'') 
preliminarily determined that there is a reasonable indication that an 
industry in the United States is materially injured by reason of 
imports of OBAs from the PRC.\9\
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    \9\ See Investigation Nos. 731-TA-1186-1187 (Preliminary), 76 FR 
30967 (Int'l Trade Comm'n May 27, 2011).
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    On June 9, 2011, the Department issued a letter to all interested 
parties inviting comments regarding whether Harmonized Tariff Schedule 
of the United States (``HTSUS'') subheadings 2921.59.4000 and 
2921.59.8090 are appropriate for inclusion in the scope of the 
investigation.\10\ Petitioner submitted comments on June 16, 2011.\11\ 
No other party submitted comments. On July 11, 2011, the Department 
issued a memorandum detailing its decision to continue to include HTSUS 
subheadings 2921.59.4000 and 2921.59.8090 in the scope of the 
investigation.\12\
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    \10\ See Letter from Robert Bolling, Program Manager, AD/CVD 
Operations, Office 4, to All Interested Parties, (June 9, 2011).
    \11\ See Petitioner's June 16, 2011, submission.
    \12\ See Memorandum to Abdelali Elouaradia, Office Director, AD/
CVD Operations, Office 4, ``Certain Harmonized Tariff Schedule 
Numbers in the Scope of Certain Stilbenic Optical Brightening Agents 
from the People's Republic of China and Taiwan'' (July 11, 2011).
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    On July 29, 2011, Petitioner made a timely request pursuant to 
section 733(c)(1)(A) of the Act and 19 CFR 351.205(b)(2) and (e) for a 
50-day postponement of the preliminary determination. On August 10, 
2011, the Department published a postponement of the preliminary 
determination on OBAs from the PRC.\13\
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    \13\ See Certain Stilbenic Optical Brightening Agents From the 
People's Republic of China, and Taiwan: Postponement of Preliminary 
Determinations of Antidumping Duty Investigations, 76 FR 49443 
(August 10, 2011).
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Postponement of Final Determination and Extension of Provisional 
Measures

    Section 735(a)(2)(A) of the Act provides that a final determination 
may be postponed until not later than 135 days after the date of the 
publication of the preliminary determination if, in the event of an 
affirmative preliminary determination, a request for such postponement 
is made by exporters who account for a significant proportion of 
exports of the subject merchandise.

[[Page 68149]]

Section 351.210(e)(2) of the Department's regulations requires that 
exporters requesting postponement of the final determination must also 
request an extension of the provisional measures referred to in section 
733(d) of the Act from a four-month period until not more than six 
months. We received a request to postpone the final determination from 
Transfar on October 19, 2011. Transfar consented to the extension of 
provisional measures from a four-month period to not longer than six 
months. Because this preliminary determination is affirmative, and the 
request for postponement was made by an exporter who accounts for a 
significant proportion of exports of the subject merchandise, and there 
is no compelling reason to deny the respondent's request, we have 
extended the deadline for issuance of the final determination until the 
135th day after the date of publication of this preliminary 
determination in the Federal Register and have extended provisional 
measures to not longer than six months.

Period of Investigation

    The period of investigation (``POI'') is July 1, 2010, through 
December 31, 2010. This period corresponds to the two most recent 
fiscal quarters prior to the month of the filing of the petition, which 
was March 2011.\14\
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    \14\ See 19 CFR 351.204(b)(1).
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Scope of the Investigation

    The OBAs covered by this investigation are all forms (whether free 
acid or salt) of compounds known as triazinylaminostilbenes (i.e., all 
derivatives of 4,4'-bis [1,3,5- triazin-2-yl] \15\ amino-2,2'-
stilbenedisulfonic acid), except for compounds listed in the following 
paragraph. The OBAs covered by this investigation include final OBA 
products, as well as intermediate products that are themselves 
triazinylaminostilbenes produced during the synthesis of OBA products.
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    \15\ The brackets in this sentence are part of the chemical 
formula.
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    Excluded from this investigation are all forms of 4,4'-bis[4-
anilino-6-morpholino-1,3,5-triazin-2-yl] \16\ amino-2,2'-
stilbenedisulfonic acid, 
C40H40N12O8S2 
(``Fluorescent Brightener 71''). This investigation covers the above-
described compounds in any state (including but not limited to powder, 
slurry, or solution), of any concentrations of active OBA ingredient, 
as well as any compositions regardless of additives (i.e., mixtures or 
blends, whether of OBAs with each other, or of OBAs with additives that 
are not OBAs), and in any type of packaging.
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    \16\ Id.
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    These OBAs are classifiable under subheading 3204.20.8000 of the 
HTSUS, but they may also enter under subheadings 2933.69.6050, 
2921.59.4000 and 2921.59.8090. Although the HTSUS subheadings are 
provided for convenience and customs purposes, the written description 
of the merchandise is dispositive.

Non-Market Economy Country

    For purposes of the initiation, Petitioner submitted an LTFV 
analysis for the PRC as an NME.\17\ The Department's most recent 
examination of the PRC's market status determined that NME status 
should continue for the PRC.\18\ In accordance with section 
771(18)(C)(i) of the Act, the NME status remains in effect until 
revoked by the Department. The Department has not revoked the PRC's 
status as an NME country, and we have therefore treated the PRC as an 
NME in this preliminary determination and applied our NME methodology.
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    \17\ See Initiation Notice, 76 FR at 23557.
    \18\ See Memorandum for David M. Spooner, Assistant Secretary 
for Import Administration, Antidumping Duty Investigation of Certain 
Lined Paper Products from the People's Republic of China (``China'') 
China's Status as a Non-Market Economy (``NME'') (August 30, 2006) 
(memorandum is on file in the CRU on the record of case number A-
570-901).
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Surrogate Country

    When the Department is investigating imports from an NME, section 
773(c)(1) of the Act directs it to base normal value, in most 
circumstances, on the NME producer's factors of production (``FOPs'') 
valued in a surrogate market-economy country or countries considered to 
be appropriate by the Department. In accordance with section 773(c)(4) 
of the Act, in valuing the FOPs, the Department shall utilize, to the 
extent possible, the prices or costs of FOPs in one or more market-
economy countries that are at a level of economic development 
comparable to that of the NME country and are significant producers of 
comparable merchandise. The sources of the surrogate values we have 
used in this investigation are discussed under the ``Normal Value'' 
section below.
    The Department determined that Philippines, Indonesia, Ukraine, 
Thailand, Colombia, and South Africa are countries comparable to the 
PRC in terms of economic development.\19\ Once the countries that are 
economically comparable to the PRC have been identified, we select an 
appropriate surrogate country by determining whether an economically 
comparable country is a significant producer of comparable merchandise 
and whether the data for valuing FOPs is both available and 
reliable.\20\ Petitioner and Transfar submitted further comments 
regarding surrogate country selection on July 20, 2011. On July 27, 
2011, Petitioner, Transfar and Hongda submitted rebuttal comments.
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    \19\ See Memorandum from Carole Showers, Director, Office of 
Policy, to Robert Bolling, Program Manager, AD/CVD Operations, 
Office 4, ``Request for a List of Surrogate Countries for an 
Antidumping Duty Investigation of Certain Stilbenic Optical 
Brightening Agents from the People's Republic of China'' (June 23, 
2011) (``Policy Memorandum''). The Department notes that these six 
countries are part of a non-exhaustive list of countries that are at 
a level of economic development comparable to the PRC.
    \20\ See Id.
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    We have determined that it is appropriate to use Thailand as a 
surrogate country pursuant to section 773(c)(4) of the Act because we 
have found that: (1) It is at a similar level of economic development; 
(2) it is a significant producer of comparable merchandise; and (3) we 
have reliable data from Thailand that we can use to value the FOPs.\21\ 
Thus, we have calculated normal value (``NV'') using Thailand prices 
when available and appropriate to value the FOPs of the OBA producers 
under investigation. We have obtained and relied upon contemporaneous 
publicly available information wherever possible.\22\
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    \21\ See Memorandum to Abdelali Elouaradia from Shawn Higgins, 
``Certain Stilbenic Optical Brightening Agents from the People's 
Republic of China: Surrogate Country Memorandum'' (October 27, 
2011).
    \22\ See Memorandum to Abdelali Elouaradia through Robert 
Bolling re: Selection of Surrogate Values at 2, dated May 19, 2011 
(``Surrogate Value Memorandum'').
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    In accordance with 19 CFR 351.301(c)(3)(i), for the final 
determination in an antidumping investigation, interested parties may 
submit publicly available information to value the FOPs within 40 days 
after the date of publication of the preliminary determination.\23\
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    \23\ In accordance with 19 CFR 351.301(c)(1), for the final 
determination of this investigation, interested parties may submit 
factual information to rebut, clarify, or correct factual 
information submitted by any other interested party less than ten 
days before, on, or after, the applicable deadline for submission of 
such factual information. However, the Department notes that 19 CFR 
351.301(c)(1) permits new information only insofar as it rebuts, 
clarifies, or corrects information recently placed on the record. 
The Department generally will not accept the submission of 
additional, previously absent-from-the-record alternative surrogate 
value information. See Glycine from the People's Republic of China: 
Final Results of Antidumping Duty Administrative Review and Final 
Rescission, in Part, 72 FR 58809 (October 17, 2007), and 
accompanying Issues and Decision Memorandum (``IDM'') at Comment 2.

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[[Page 68150]]

Surrogate Value Comments

    Surrogate factor valuation comments and surrogate value information 
were filed on July 27, 2011, by Petitioner and Transfar. Petitioner, 
Transfar, and Hongda filed rebuttal surrogate value comments on August 
10, 2011.\24\
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    \24\ See the ``Factor Valuation'' section below; see also 
Surrogate Value Memorandum.
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Application of Adverse Facts Available

The PRC-Wide Entity and PRC-Wide Rate

    The Department issued its request for Q&V information to 30 
potential Chinese exporters of merchandise under consideration, in 
addition to posting the Q&V questionnaire on the Department's Web 
site.\25\ While information on the record of this investigation 
indicates that there are numerous producers/exporters of OBAs in the 
PRC, we received two timely filed Q&V responses. Although all exporters 
were given an opportunity to provide Q&V information, not all exporters 
provided a response to the Department's Q&V questionnaire. Therefore, 
the Department has preliminarily determined that there were exporters/
producers of the merchandise under consideration during the POI from 
the PRC that did not respond to the Department's request for 
information. We have treated these non-responsive PRC producers/
exporters as part of the PRC-wide entity because they did not 
demonstrate their eligibility for a separate rate.\26\
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    \25\ Petitioner identified 30 companies as potential producers/
exporters of OBAs from the PRC. See Respondent Selection Memo.
    \26\ See, e.g., Certain Kitchen Appliance Shelving and Racks 
from the People's Republic of China: Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final 
Determination, 74 FR 9591 (March 5, 2009), unchanged in Certain 
Kitchen Appliance Shelving and Racks From the People's Republic of 
China: Final Determination of Sales at Less Than Fair Value, 74 FR 
36656 (July 24, 2009).
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    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
or manner requested, subject to subsections 782(c)(1) and (e) of the 
Act; (C) significantly impedes a proceeding under the antidumping 
statute; or (D) provides such information but the information cannot be 
verified, the Department shall, subject to subsection 782(d) of the 
Act, use facts otherwise available in reaching the applicable 
determination.
    Information on the record of this investigation indicates that the 
PRC-wide entity was non-responsive. Specifically, certain companies did 
not respond to our questionnaire requesting Q&V information. 
Accordingly, we find that the PRC-entity: (i) Withheld information 
requested by the Department; (ii) failed to provide information in a 
timely manner and did not indicate that it was having difficulty 
providing the information nor requested that it be allowed to submit 
the information in an alternate form; and (iii) significantly impeded 
the proceeding by not submitting the requested information. As a 
result, pursuant to sections 776(a)(2)(A)-(C) of the Act, we find that 
the use of facts available is appropriate to determine the PRC-wide 
rate.\27\ Section 776(b) of the Act provides that, in selecting from 
among the facts otherwise available, the Department may employ an 
adverse inference if an interested party fails to cooperate by not 
acting to the best of its ability to comply with requests for 
information.\28\ We find that, because the PRC-wide entity did not 
respond to our requests for information, it has failed to cooperate to 
the best of its ability. Furthermore, the PRC-wide entity's refusal to 
provide the requested information constitutes circumstances under which 
it is reasonable to conclude that less than full cooperation has been 
shown.\29\ Therefore, the Department preliminarily finds that, in 
selecting from among the facts available, an adverse inference is 
appropriate.
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    \27\ See Preliminary Determination of Sales at Less Than Fair 
Value, Affirmative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen Fish Fillets from the Socialist Republic of Vietnam, 68 FR 
4986 (January 31, 2003), unchanged in Final Determination of Sales 
at Less Than Fair Value and Affirmative Critical Circumstances: 
Certain Frozen Fish Fillets from the Socialist Republic of Vietnam, 
68 FR 37116 (June 23, 2003).
    \28\ See Statement of Administrative Action, accompanying the 
Uruguay Round Agreements Act (``URAA''), H.R. Rep. No. 103-316, 870 
(1994) (``SAA''); see also Notice of Final Determination of Sales at 
Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality 
Steel Products from the Russian Federation, 65 FR 5510, 5518 
(February 4, 2000).
    \29\ See Nippon Steel Corporation v. United States, 337 F.3d 
1373, 1383 (Fed. Cir. 2003) (``Nippon Steel'') (noting that the 
Department need not show intentional conduct existed on the part of 
the respondent, but merely that a ``failure to cooperate to the best 
of a respondent's ability'' existed (i.e., information was not 
provided ``under circumstances in which it is reasonable to conclude 
that less than full cooperation has been shown'')).
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    When employing an adverse inference, section 776 of the Act 
indicates that the Department may rely upon information derived from 
the petition, the final determination from the LTFV investigation, a 
previous administrative review, or any other information placed on the 
record. In selecting a rate for adverse facts available (``AFA''), the 
Department selects a rate that is sufficiently adverse to ensure that 
the uncooperative party does not obtain a more favorable result by 
failing to cooperate than if it had fully cooperated. It is the 
Department's practice to select, as AFA, the higher of the (a) highest 
margin alleged in the petition, or (b) the highest calculated rate of 
any respondent in the investigation.\30\ The highest margin alleged in 
the petition is 203.16 percent.\31\ This rate is higher than any of the 
calculated rates assigned to individually examined companies. Thus, as 
AFA, the Department's practice would be to assign the rate of 203.16 
percent to the PRC-wide entity.
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    \30\ See Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Carbon Quality Steel Products from the People's 
Republic of China, 65 FR 34660 (May 31, 2000), and accompanying IDM, 
at ``Facts Available.''
    \31\ See Initiation Notice, 76 FR at 23558.
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Corroboration of Information

    Section 776(c) of the Act provides that, when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation as facts available, it must, to the extent 
practicable, corroborate that information from independent sources 
reasonably at its disposal. Secondary information is described as 
``information derived from the petition that gave rise to the 
investigation or review, the final determination concerning merchandise 
subject to this investigation, or any previous review under section 751 
concerning the merchandise subject to this investigation.'' \32\ To 
``corroborate'' means that the Department will satisfy itself that the 
secondary information to be used has probative value. Independent 
sources used to corroborate may include, for example, published price 
lists, official import statistics and customs data, and information 
obtained from interested parties during the particular investigation. 
To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information used.\33\
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    \32\ See Final Determination of Sales at Less Than Fair Value: 
Sodium Hexametaphosphate From the People's Republic of China, 73 FR 
6479, 6481 (February 4, 2008), and accompanying IDM at Comment 2 
(quoting SAA at 870).
    \33\ See Tapered Roller Bearings and Parts Thereof, Finished and 
Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or 
Less in Outside Diameter, and Components Thereof, From Japan; 
Preliminary Results of Antidumping Duty Administrative Reviews and 
Partial Termination of Administrative Reviews, 61 FR 57391, 57392 
(November 6, 1996), unchanged in Tapered Roller Bearings and Parts 
Thereof, Finished and Unfinished, From Japan, and Tapered Roller 
Bearings, Four Inches or Less in Outside Diameter, and Components 
Thereof, From Japan; Final Results of Antidumping Duty 
Administrative Reviews and Termination in Part, 62 FR 11825 (March 
13, 1997).

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[[Page 68151]]

    In order to determine the probative value of the margins in the 
petition for use as AFA for purposes of this preliminary determination, 
we examined information on the record and found that we were unable to 
corroborate the highest margin in the petition. Therefore, the 
Department finds that the highest transaction-specific margin of the 
mandatory respondents is sufficiently adverse to act as the AFA rate. 
With respect to AFA, for the preliminary determination, we have 
assigned the PRC-wide entity the rate of 141.08 percent, the highest 
transaction-specific margin among the mandatory respondents.\34\ No 
corroboration of this rate is necessary because we are relying on 
information obtained in the course of this investigation, rather than 
secondary information.\35\
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    \34\ See Multilayered Wood Flooring From the People's Republic 
of China: Final Determination of Sales at Less Than Fair Value, 76 
FR 64318, 64322 (October 18, 2011).
    \35\ See 19 CFR 351.308(c) and (d) and section 776(c) of the 
Act; see also Final Determination of Sales at Less Than Fair Value 
and Affirmative Determination of Critical Circumstances, in Part: 
Light-Walled Rectangular Pipe and Tube from the People's Republic of 
China, 73 FR 35652, 35653 (June 24, 2008), and accompanying Issues 
and Decision Memorandum at 1.
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Date of Sale

    19 CFR 351.401(i) states that, ``in identifying the date of sale of 
the merchandise under consideration or foreign like product, the 
Secretary normally will use the date of invoice, as recorded in the 
exporter or producer's records kept in the normal course of business.'' 
In Allied Tube & Conduit Corp. v. United States, the Court of 
International Trade (``CIT'') noted that a ``party seeking to establish 
a date of sale other than invoice date bears the burden of producing 
sufficient evidence to `satisf{y{time} ' the Department that `a 
different date better reflects the date on which the exporter or 
producer establishes the material terms of sale.' '' \36\ The date of 
sale is generally the date on which the parties agree upon all material 
terms of the sale. This normally includes the price, quantity, delivery 
terms and payment terms.\37\
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    \36\ See Allied Tube & Conduit Corp. v. United States 132 F. 
Supp. 2d 1087, 1090 (CIT 2001).
    \37\ See Carbon and Alloy Steel Wire Rod from Trinidad and 
Tobago: Final Results of Antidumping Duty Administrative Review, 72 
FR 62824 (November 7, 2007), and accompanying IDM at Comment 1; 
Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cold-Rolled Flat-Rolled Carbon Quality Steel Products from 
Turkey, 65 FR 15123 (March 21, 2000), and accompanying IDM at 
Comment 2.
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    For sales by Hongda and Transfar, we used the commercial invoice 
date as the sale date because record evidence indicates that the terms 
of sale were not set until the issuance of the commercial invoice.\38\
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    \38\ See Hongda's Preliminary Determination Analysis Memorandum, 
dated October 27, 2011; see also Transfar's Preliminary 
Determination Analysis Memorandum, dated October 27, 2011.
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Fair Value Comparisons

    To determine whether sales of OBAs to the United States by the 
respondents were made at LTFV, we compared export price (``EP'') to NV, 
as described in the ``Export Price,'' and ``Normal Value'' sections of 
this notice.

U.S. Price

Export Price

    In accordance with section 772(a) of the Act, we used EP for all 
sales reported by Hongda and Transfar. We calculated EP based on the 
packed prices to unaffiliated purchasers in, or for exportation to, the 
United States. We made deductions, as appropriate, for any movement 
expenses (e.g., foreign inland freight from the plant to the port of 
exportation, domestic brokerage, international freight to the port of 
importation) in accordance with section 772(c)(2)(A) of the Act. Where 
foreign inland freight or foreign brokerage and handling fees were 
provided by PRC service providers or paid for in renminbi, we based 
those charges on surrogate value rates.\39\
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    \39\ See ``Factor Valuation'' section below for further 
discussion of surrogate value rates.
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Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine the 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 bases 
NV on the FOPs because the presence of government controls on various 
aspects of NMEs renders price comparisons and the calculation of 
production costs invalid under the Department's normal methodologies. 
Therefore, for this preliminary determination we have 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; and (3) representative 
capital costs.\40\ In accordance with 19 CFR 351.408(c)(1), the 
Department will normally use publicly available information to find an 
appropriate surrogate value to value FOPs, but when a producer sources 
an input from a market economy (``ME'') and pays for it in a ME 
currency, the Department may value the factor using the actual price 
paid for the input.\41\
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    \40\ See Section 773(c)(3)(A)-(D) of the Act.
    \41\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly 
Components Div of Ill v. United States, 268 F.3d 1376, 1382-83 (Fed. 
Cir. 2001) (affirming the Department's use of market-based prices to 
value certain FOPs).
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Factor Valuation Methodology

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOP data reported by respondents during the POI. To calculate 
NV, we multiplied the reported per-unit factor-consumption rates by 
publicly available surrogate values (except as discussed below). In 
selecting the surrogate values, we considered the quality, specificity, 
and contemporaneity of the data.\42\ As appropriate, we adjusted input 
prices by including freight costs to make them delivered prices. 
Specifically, we added to Thai import surrogate values a Thai 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 Court of Appeals for the Federal Circuit's decision 
in Sigma Corp. v. United States, 117 F.3d 1401, 1407-08 (Fed. Cir. 
1997) (remanding to Commerce its freight expense calculation to avoid 
double-counting). A detailed description of all surrogate values used 
for Hongda and Transfar can be found in the Surrogate Value Memorandum.
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    \42\ See e.g., New Pneumatic Off-the-Road Tires from the 
People's Republic of China: Final Affirmative Determination of Sales 
at Less than Fair Value and Partial Affirmative Determination of 
Critical Circumstances, 73 FR 40485 (July 15, 2008), and 
accompanying IDM at Comment 9.
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    For the preliminary determination, in accordance with the 
Department's practice, we used data from the Thailand Customs 
Department and other publicly available sources from Thailand in order 
to calculate surrogate values for Hongda and Transfar FOPs (direct 
materials and packing materials) and certain movement expenses.\43\ In 
selecting the best available information for valuing FOPs in accordance 
with section 773(c)(1) of the Act, the Department's practice is to 
select, to the extent practicable, surrogate values

[[Page 68152]]

which are non-export average values, most contemporaneous with the POI, 
product-specific, and tax-exclusive.\44\ The record shows that data in 
Thailand's Customs Department, as well as those from the other sources 
from Thailand, are contemporaneous with the POI, product-specific, and 
tax-exclusive.\45\ In those instances where we could not obtain 
publicly available information contemporaneous to the POI with which to 
value factors, we adjusted the surrogate values using, where 
appropriate, the International Monetary Fund's Consumer Price Index for 
Thailand.\46\
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    \43\ See Surrogate Value Memorandum at 2.
    \44\ See e.g., Notice of Preliminary Determination of Sales at 
Less Than Fair Value, Negative Preliminary Determination of Critical 
Circumstances and Postponement of Final Determination: Certain 
Frozen and Canned Warmwater Shrimp From the Socialist Republic of 
Vietnam, 69 FR 42672, 42682 (July 16, 2004), unchanged in Final 
Determination of Sales at Less Than Fair Value: Certain Frozen and 
Canned Warmwater Shrimp from the Socialist Republic of Vietnam, 69 
FR 71005 (December 8, 2004).
    \45\ See Surrogate Value Memorandum at 3.
    \46\ See Surrogate Value Memorandum at 2.
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    Furthermore, with regard to Thailand's import-based surrogate 
values, we have disregarded import prices that we have reason to 
believe or suspect may be subsidized. We have reason to believe or 
suspect that prices of inputs from India, Indonesia, South Korea, and 
Thailand may have been subsidized. We have found in other proceedings 
that these countries maintain broadly available, non-industry-specific 
export subsidies and, therefore, it is reasonable to infer that all 
exports to all markets from these countries may be subsidized.\47\
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    \47\ See Notice of Final Determination of Sales at Less Than 
Fair Value and Negative Final Determination of Critical 
Circumstances: Certain Color Television Receivers From the People's 
Republic of China, 69 FR 20594 (April 16, 2004), and accompanying 
IDM at Comment 7; see also Carbazole Violet Pigment 23 from India: 
Final Results of the Expedited Five-year (Sunset) Review of the 
Countervailing Duty Order, 75 FR 13257 (March 19, 2010), and 
accompanying IDM at pages 4-5; Certain Cut-to-Length Carbon Quality 
Steel Plate from Indonesia: Final Results of Expedited Sunset 
Review, 70 FR 45692 (August 8, 2005), and accompanying IDM at page 
4; Corrosion-Resistant Carbon Steel Flat Products from the Republic 
of Korea: Final Results of Countervailing Duty Administrative 
Review, 74 FR 2512 (January 15, 2009), and accompanying IDM at pages 
17, 19-20; Final Affirmative Countervailing Duty Determination: 
Certain Hot-Rolled Carbon Steel Flat Products from Thailand, 66 FR 
50410 (October 3, 2001).
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    Further, guided by the legislative history, it is the Department's 
practice not to conduct a formal investigation to ensure that such 
prices are not subsidized.\48\ Rather, the Department bases its 
decision on information that is available to it at the time it makes 
its determination.\49\ Therefore, we have not used prices from India, 
Indonesia or South Korea in calculating Thailand's import-based 
surrogate values. Additionally, we disregarded prices from NME 
countries. Finally, imports that were labeled as originating from an 
``unspecified'' country were excluded from the average value, because 
the Department could not be certain that they were not from either an 
NME country or a country with general export subsidies.\50\
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    \48\ See Omnibus Trade and Competitiveness Act of 1988, 
Conference Report to accompany H.R. Rep. 100-576 at 590 (1988) 
reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24; see also Preliminary 
Determination of Sales at Less Than Fair Value: Coated Free Sheet 
Paper from the People's Republic of China, 72 FR 30758 (June 4, 
2007) unchanged in Final Determination of Sales at Less Than Fair 
Value: Coated Free Sheet Paper from the People's Republic of China, 
72 FR 60632 (October 25, 2007).
    \49\ See Polyethylene Terephthalate Film, Sheet, and Strip from 
the People's Republic of China: Preliminary Determination of Sales 
at Less Than Fair Value, 73 FR 24552, 24559 (May 5, 2008), unchanged 
in Polyethylene Terephthalate Film, Sheet, and Strip from the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 73 FR 55039 (September 24, 2008).
    \50\ Id.
---------------------------------------------------------------------------

    Pursuant to 19 CFR 351.408(c)(1), when a respondent sources inputs 
from an ME supplier in meaningful quantities (i.e., not insignificant 
quantities), we use the actual price paid by respondent for those 
inputs, except when prices may have been distorted by findings of 
dumping by the PRC and/or subsidies.\51\ Where we find ME purchases to 
be of significant quantities (i.e., 33 percent or more), in accordance 
with our statement of policy as outlined in Antidumping Methodologies: 
Market Economy Inputs,\52\ we use the actual purchases of these inputs 
to value the inputs. Where the quantity of the reported input purchased 
from ME suppliers is below 33 percent of the total volume of the input 
purchased from all sources during the POI, and were otherwise valid, we 
weight-average the ME input's purchase price with the appropriate 
surrogate value for the input according to their respective shares of 
the reported total volume of purchases.\53\ Where appropriate, we add 
freight to the ME prices of inputs. Transfar claimed that certain of 
its reported movement expenses were sourced from an ME country and paid 
for in U.S. dollars. However, the Department did not treat Transfar's 
ocean freight expenses as ME purchases because Transfar was unable to 
demonstrate that its PRC freight forwarder was an agent acting on 
behalf of a ME freight carrier. Specifically, information submitted by 
Transfar did not include full document traces that would show that the 
prices, including any agent fee or commission, paid by Transfar were 
set by the ME freight carrier. See Surrogate Value Memorandum at 7.
---------------------------------------------------------------------------

    \51\ See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27366 (May 19, 1997).
    \52\ See Antidumping Methodologies: Market Economy Inputs, 
Expected Non-Market Economy Wages, Duty Drawback; and Request for 
Comments, 71 FR 61716, 61717 (October 19, 2006) (``Antidumping 
Methodologies: Market Economy Inputs'').
    \53\ See Antidumping Methodologies: Market Economy Inputs, 71 FR 
at 61718.
---------------------------------------------------------------------------

    Section 773(c) of the Act provides that the Department will value 
FOP in NME cases using the best available information regarding the 
value of such factors in a ME country or countries considered to be 
appropriate by the administering authority. The Act requires that when 
valuing FOP, the Department utilize, to the extent possible, the prices 
or costs of factors of production in one or more ME countries that are 
(1) at a comparable level of economic development and (2) significant 
producers of comparable merchandise. See section 773(c)(4) of the Act.
    Previously, the Department used regression-based wages that 
captured the worldwide relationship between per capita Gross National 
Income (``GNI'') and hourly manufacturing wages, pursuant to 19 CFR 
351.408(c)(3), to value the respondent's cost of labor. However, on May 
14, 2010, the Court of Appeals for the Federal Circuit (``CAFC''), in 
Dorbest Ltd. v. United States, 604 F.3d 1363, 1372 (Fed. Cir. 2010) 
(``Dorbest''), invalidated 19 CFR 351.408(c)(3). As a consequence of 
the CAFC's ruling in Dorbest, the Department no longer relies on the 
regression-based wage rate methodology described in its regulations. On 
February 18, 2011, the Department published in the Federal Register a 
request for public comment on the interim methodology, and the data 
sources.\54\
---------------------------------------------------------------------------

    \54\ See Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor, Request 
for Comment, 76 FR 9544 (Feb. 18, 2011).
---------------------------------------------------------------------------

    On June 21, 2011, the Department revised its methodology for 
valuing the labor input in NME antidumping proceedings.\55\ In Labor 
Methodologies, the Department determined that the best methodology to 
value the labor input is to use industry-specific labor rates from the 
primary surrogate country. Additionally, the Department determined that 
the best data source for industry-specific labor rates is Chapter

[[Page 68153]]

6A: Labor Cost in Manufacturing, from the International Labor 
Organization (ILO) Yearbook of Labor Statistics (``Yearbook'').
---------------------------------------------------------------------------

    \55\ See Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor, 76 FR 
36092 (June 21, 2011) (``Labor Methodologies'').
---------------------------------------------------------------------------

    In this preliminary determination, the Department calculated the 
labor input using the data on industry specific labor cost from the 
primary surrogate country (i.e., Thailand), as described in Labor 
Methodologies. The Department relied on Chapter 6A labor cost data for 
Thailand from the International Labour Organization's (``ILO'') 
Yearbook of Labour Statistics (``Yearbook''). The Department used ILO 
Chapter 6A labor cost data for the year 2000 because this is the most 
recent Chapter 6A data available for Thailand. The Department further 
determined the two-digit description under ISIC-Revision 3-D 
(``Manufacture of Chemicals and Chemical Products'') to be the best 
available information because it is specific to the industry being 
examined and, therefore, is derived from industries that produce 
comparable merchandise. Accordingly, relying on Chapter 6A of the 
Yearbook, the Department calculated the labor input using labor cost 
data reported by Thailand to the ILO under Sub-Classification 24 of the 
ISIC-Revision 3-D, in accordance with section 773(c)(4) of the Act.\56\ 
For this preliminary determination, the calculated industry-specific 
wage rate is 66.88 baht per hour. The Department inflated this value to 
the POI. For further information on the calculation of the wage rate, 
see Surrogate Value Memorandum at 5.
---------------------------------------------------------------------------

    \56\ The Department preliminarily determined that there is no 
evidence on the record demonstrating that the cost of labor is 
overstated. Therefore, the Department did not make any adjustments 
to the calculation of the surrogate financial ratios.
---------------------------------------------------------------------------

    We valued truck freight expenses using a per-unit average rate for 
price data from the Thailand Board of Investment's 2006 publication, 
Costs of Doing Business in Thailand.\57\
---------------------------------------------------------------------------

    \57\ See Surrogate Value Memorandum at 6.
---------------------------------------------------------------------------

    We valued brokerage and handling using a price list of export 
procedures necessary to export a standardized cargo of goods in 
Thailand for 20 and 40 foot containers published in the World Bank 
publication, Doing Business 2011: Thailand.\58\
---------------------------------------------------------------------------

    \58\ See id.
---------------------------------------------------------------------------

    We valued international freight using data obtained from the 
Descartes Carrier Rate Retrieval Database (``Descartes''), which can be 
accessed via http://descartes.com/.\59\ The Descartes database is a 
web-based service, which publishes the ocean freight rates of numerous 
carriers. We find that this database is accessible to government 
agencies without charge, in compliance with Federal Maritime Commission 
regulations and, thus, is a publicly available source. In addition to 
being publicly available, the Descartes data reflect rates for multiple 
carriers, report rates on a daily basis, the price data obtained are 
based on routes that closely correspond to those used by respondents, 
and are similar to the merchandise subject to this segment. Therefore, 
the Descartes data is product-specific, publicly available, a broad-
market average, and contemporaneous with the period of the segment. 
Accordingly, the Descartes data is the best available source for 
valuing international freight on the record because it provides rates 
that are representative of the entire period of the segment and a 
broader representation of product-specificity.
---------------------------------------------------------------------------

    \59\ See id.
---------------------------------------------------------------------------

    However, while the Department finds that the Descartes data is the 
most superior source for valuing international freight on the record, 
to make the source less impractical, the Department has had to make 
certain arbitrary calls. The Department has calculated the period-
average international freight rate by obtaining rates from multiple 
carriers for a single day in each quarter of the period of the segment. 
For any rate that the Department determined was from a non-market 
economy carrier, the Department has not included that rate in the 
period-average international freight calculation. Additionally, any 
charges included in the rate that are covered by brokerage and handling 
charges that the respondent incurred and are valued by the reported 
market economy purchase or the appropriate surrogate value, the 
Department has not included these charges in the calculation.
    We valued marine insurance using a rate from RJG Consultants.\60\
---------------------------------------------------------------------------

    \60\ See id. at 7.
---------------------------------------------------------------------------

    Regarding energy, we were unable to segregate and, therefore, were 
unable to exclude energy costs from the calculation of the surrogate 
financial ratios. Accordingly, for the preliminary determination, we 
have disregarded the respondents' energy inputs (electricity, water, 
and steam for both Hongda and Transfar) in the calculation of NV, in 
order to avoid double-counting energy costs that have necessarily been 
captured in the surrogate financial ratios.\61\
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    \61\ See e.g. Citric Acid and Certain Citrate Salts From the 
People's Republic of China: Final Affirmative Determination of Sales 
at Less Than Fair Value, 74 FR 16838 (April 13, 2009) and 
accompanying IDM at Comment 2.
---------------------------------------------------------------------------

    We valued railway freight using price data from the Thailand Board 
of Investment's 2011 publication, Costs of Doing Business in 
Thailand.\62\
---------------------------------------------------------------------------

    \62\ See Surrogate Value Memorandum at 7.
---------------------------------------------------------------------------

    To value factory overhead, selling, general, and administrative 
expenses, and profit, we used audited financial statements from the 
following producer of comparable merchandise in Thailand: PTT Chemical 
Public Co. Ltd., covering the fiscal year ending December 2010.\63\ The 
Department may consider other publicly available financial statements 
for the final determination, as appropriate.
---------------------------------------------------------------------------

    \63\ See id. at 5-6.
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Currency Conversion

    Where necessary, 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.\64\
---------------------------------------------------------------------------

    \64\ See id. at 2.
---------------------------------------------------------------------------

Verification

    As provided in section 782(i)(1) of the Act, we intend to verify 
the information from Hongda and Transfar.

Combination Rates

    In the Initiation Notice, the Department stated that it would 
calculate combination rates for respondents that are eligible for a 
separate rate in this investigation.\65\ This practice is described in 
Policy Bulletin 05.1.
---------------------------------------------------------------------------

    \65\ See Initiation Notice, 76 FR at 23559.
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Preliminary Determination

    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                                Weighted
             Exporter                        Producer           average
                                                                 margin
------------------------------------------------------------------------
Zhejiang Hongda Chemicals Co., Ltd  Zhejiang Hongda Chemicals     106.22
                                     Co., Ltd.
Zhejiang Transfar Whyyon Chemical   Zhejiang Transfar Whyyon      126.25
 Co., Ltd.                           Chemical Co., Ltd.
PRC-wide Entity...................  .........................     141.08
------------------------------------------------------------------------


[[Page 68154]]

Disclosure

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

Suspension of Liquidation

    In accordance with section 733(d) of the Act, we will instruct U.S. 
Customs and Border Protection (``CBP'') to suspend liquidation of all 
appropriate entries of OBAs from the PRC as described in the ``Scope of 
Investigation'' section, entered, or withdrawn from warehouse, for 
consumption on or after the date of publication of this notice in the 
Federal Register. We will instruct CBP to require a cash deposit or the 
posting of a bond equal to the weighted-average amount by which the 
normal value exceeds U.S. price, as follows: (1) The rate for the 
exporter/producer combinations listed in the chart above will be the 
rate we have determined in this preliminary determination; (2) for all 
PRC exporters of subject merchandise which have not received their own 
rate, the cash-deposit rate will be the PRC-wide rate; and (3) 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 
exporter/producer combination that supplied that non-PRC exporter. 
These suspension-of-liquidation instructions will remain in effect 
until further notice.

International Trade Commission Notification

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

Public Comment

    Case briefs or other written comments may be submitted no later 
than seven days after the date on which the final verification report 
is issued in this proceeding, and rebuttal briefs, limited to issues 
raised in case briefs, may be submitted no later than five days after 
the deadline date for case briefs.\66\ A table of contents, list of 
authorities used and an executive summary of issues should accompany 
any briefs submitted to the Department. This summary should be limited 
to five pages total, including footnotes.
---------------------------------------------------------------------------

    \66\ See 19 CFR 351.309.
---------------------------------------------------------------------------

    In accordance with section 774 of the Act, we will hold a public 
hearing, if requested, to afford interested parties an opportunity to 
comment on arguments raised in case or rebuttal briefs. 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 after the date of publication of 
this notice.\67\ Requests should contain the party's name, address, and 
telephone number, the number of participants, and a list of the issues 
to be discussed. If a request for a hearing is made, we intend to hold 
the hearing at the U.S. Department of Commerce, 14th Street and 
Constitution Ave. NW., Washington, DC 20230, at a time and location to 
be determined.\68\ Parties should confirm by telephone the date, time, 
and location of the hearing two days before the scheduled date. Case 
briefs, rebuttal briefs and hearing requests should be submitted to the 
Department electronically via Import Administration's Antidumping and 
Countervailing Duty Centralized Electronic Service System (``IA 
Access''). Access to IA Access is available in the Central Records 
Unit, room 7046 of the main Department of Commerce building.
---------------------------------------------------------------------------

    \67\ See 19 CFR 351.310(c).
    \68\ See 19 CFR 351.310.
---------------------------------------------------------------------------

    We will make our final determination no later than 135 days after 
the date of publication of this preliminary determination, pursuant to 
section 735(a)(2) of the Act.
    This determination is issued and published in accordance with 
sections 733(f) and 777(i)(1) of the Act.

    Dated: October 27, 2011.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2011-28537 Filed 11-2-11; 8:45 am]
BILLING CODE 3510-DS-P