[Federal Register Volume 77, Number 44 (Tuesday, March 6, 2012)]
[Notices]
[Pages 13284-13294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-5448]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-929]


Small Diameter Graphite Electrodes From the People's Republic of 
China: Preliminary Results and Partial Rescission of Administrative 
Review

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

SUMMARY: In response to requests from interested parties, the 
Department of Commerce (the Department) is conducting the 
administrative review of the antidumping duty order on small diameter 
graphite electrodes (graphite electrodes) from the People's Republic of 
China (PRC), covering the period February 1, 2010, through January 31, 
2011. The Department has preliminarily determined that during the 
period of review (POR) respondents in this proceeding have made sales 
of subject merchandise at less than normal value (NV). If these 
preliminary results are adopted in our final results of review, we will 
instruct U.S. Customs and Border Protection (CBP) to assess antidumping 
duties on all appropriate entries of subject merchandise during the 
POR. The Department is also rescinding this review for those exporters 
for which requests for review were timely withdrawn.\1\ Furthermore, we 
determine that 16 companies for which a review was requested have not

[[Page 13285]]

demonstrated entitlement to a separate rate.\2\ As a result, we have 
preliminarily determined that they are part of the PRC-wide entity, and 
are subject to the PRC-wide entity rate.\3\
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    \1\ See ``Partial Rescission of the Administrative Review'' 
section below.
    \2\ See ``Separate Rates'' section below.
    \3\ See ``PRC-Wide Entity'' section below.
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    Interested parties are invited to comment on these preliminary 
results. We will issue final results no later than 120 days from the 
date of publication of this notice, pursuant to section 751(a)(3)(A) of 
the Tariff Act of 1930, as amended (the Act).

DATES: Effective Date: March 6, 2012.

FOR FURTHER INFORMATION CONTACT: Dmitry Vladimirov or Minoo Hatten, AD/
CVD Operations, Office 1, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington DC 20230; telephone: (202) 482-0665 
or (202) 482-1690, respectively.

Background

    On February 26, 2009, we published in the Federal Register the 
antidumping duty order on graphite electrodes from the PRC.\4\ On 
February 1, 2011, we published a notice of opportunity to request an 
administrative review of this order.\5\ On February 25 and February 28, 
2011, we received timely review requests in accordance with 19 CFR 
351.213(b) from Fushun Jinly Petrochemical Carbon Co., Ltd. (Fushun 
Jinly), Xinghe County Muzi Carbon Co., Ltd. (Muzi Carbon), Sichuan 
Guanghan Shida Carbon Co., Ltd. (Shida Carbon), and Beijing Fangda 
Carbon Tech Co., Ltd., Chengdu Rongguang Carbon Co., Ltd., Fangda 
Carbon New Material Co., Ltd., Fushun Carbon Co., Ltd., and Hefei 
Carbon Co., Ltd. (collectively, the Fangda Group). On February 25, 
2011, the Department also received a timely request for an 
administrative review of 117 companies from SGL Carbon LLC and Superior 
Graphite Co. (the petitioners). On March 31, 2011, we initiated an 
administrative review of the antidumping duty order on graphite 
electrodes from the PRC with respect to 160 companies.\6\
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    \4\ See Antidumping Duty Order: Small Diameter Graphite 
Electrodes from the People's Republic of China, 74 FR 8775 (February 
26, 2009).
    \5\ See Antidumping or Countervailing Duty Order, Finding, or 
Suspended Investigation; Opportunity to Request Administrative 
Review, 76 FR 5559 (February 1, 2011).
    \6\ In Initiation of Antidumping Duty Administrative Reviews, 
Requests for Revocation in Part, and Deferral of Administrative 
Review, 76 FR 17825 (March 31, 2011) (Initiation Notice), we listed 
additional names by which certain companies are also known, or were 
known formerly, as reflected in the petitioners' February 25, 2011, 
review request.
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    On April 4, 2011, we released to interested parties CBP data 
covering POR imports of graphite electrodes from the PRC and invited 
comments on the Department's selection of respondents for individual 
examination.\7\ On May 6, 2011, we selected Jilin Carbon Import and 
Export Company (Jilin Carbon) and Fushun Jinly for individual 
examination in this review.\8\
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    \7\ See the Department's memorandum to ``All Interested 
Parties,'' dated April 4, 2011.
    \8\ See the Department's memorandum entitled ``Small Diameter 
Graphite Electrodes from the People's Republic of China: Selection 
of Respondents for Individual Examination,'' dated May 6, 2011 
(Respondent Selection Memo).
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    On May 11, 2011, we sent the antidumping duty questionnaire to 
Jilin Carbon and Fushun Jinly. On May 31, 2011, we received separate-
rate certifications from the Fangda Group and Muzi Carbon, and a 
separate-rate application from Shida Carbon.\9\ On June 13, 2011, and 
June 14, 2011, the petitioners submitted comments concerning separate-
rate certifications provided by Muzi Carbon and the Fangda Group, 
respectively. On June 14, 2011, and June 27, 2011, in response to our 
requests for information, Muzi Carbon clarified certain information in 
its separate-rate certification. On June 30, 2011, the petitioners 
submitted comments concerning the separate-rate application provided by 
Shida Carbon. On July 20, 2011, in response to our request for 
information, Shida Carbon clarified certain information in its 
separate-rate application.
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    \9\ See ``Separate Rates'' section below.
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    On June 29, 2011, the petitioners filed a timely request for 
rescission of review with respect to 134 of the 160 companies for which 
the Department initiated a review.\10\ Between June 15 and November 29, 
2011, Fushun Jinly responded to the Department's original and 
supplemental questionnaires. Jilin Carbon did not respond to the 
Department's questionnaire.
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    \10\ See ``Partial Rescission of the Administrative Review'' 
section below.
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    On November 1, 2011, and February 7, 2012, we extended the time 
limit for the preliminary results of review by 120 days as allowed 
under section 751(a)(3)(A) of the Act to February 28, 2012.\11\
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    \11\ See Small Diameter Graphite Electrodes From the People's 
Republic of China: Extension of Time Limit for Preliminary Results 
of Antidumping Duty Administrative Review, 76 FR 67411 (November 1, 
2011), and Small Diameter Graphite Electrodes from the People's 
Republic of China: Extension of Time Limit for Preliminary Results 
of Antidumping Duty Administrative Review, 77 FR 6060 (February 7, 
2012).
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Scope of the Order

    The merchandise covered by the order includes all small diameter 
graphite electrodes of any length, whether or not finished, of a kind 
used in furnaces, with a nominal or actual diameter of 400 millimeters 
(16 inches) or less, and whether or not attached to a graphite pin 
joining system or any other type of joining system or hardware. The 
merchandise covered by the order also includes graphite pin joining 
systems for small diameter graphite electrodes, of any length, whether 
or not finished, of a kind used in furnaces, and whether or not the 
graphite pin joining system is attached to, sold with, or sold 
separately from, the small diameter graphite electrode. Small diameter 
graphite electrodes and graphite pin joining systems for small diameter 
graphite electrodes are most commonly used in primary melting, ladle 
metallurgy, and specialty furnace applications in industries including 
foundries, smelters, and steel refining operations. Small diameter 
graphite electrodes and graphite pin joining systems for small diameter 
graphite electrodes that are subject to the order are currently 
classified under the Harmonized Tariff Schedule of the United States 
(HTSUS) subheading 8545.11.0000. The HTSUS number is provided for 
convenience and customs purposes, but the written description of the 
scope is dispositive.

Partial Rescission of the Administrative Review

    Pursuant to 19 CFR 351.213(d)(1), the Secretary will rescind an 
administrative review, in whole or in part, if a party that requested 
the review withdraws the request within 90 days of the date of 
publication of the initiation notice.
    For 152 of the companies for which the Department initiated an 
administrative review, the petitioners were the only party that 
requested the review. On June 29, 2011, the petitioners timely withdrew 
their review requests for 134 of those 152 companies. Further, on May 
17, 2011, Muzi Carbon clarified its request for review in which Muzi 
Carbon was named erroneously as Xinghe Muzi Carbon Co., Ltd.\12\ 
Therefore, in accordance with 19 CFR 351.213(d)(1), we are rescinding 
this administrative review with respect to 135 companies named as 
follows in the Initiation Notice:
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    \12\ The petitioners did not request a review on Xinghe Muzi 
Carbon Co., Ltd.

    1. 5-Continent Imp. & Exp. Co., Ltd.
    2. Acclcarbon Co., Ltd.
    3. Allied Carbon (China) Co., Limited
    4. AMGL

[[Page 13286]]

    5. Anssen Metallurgy Group Co., Ltd.
    6. Beijing Xinchengze Inc.
    7. Beijing Xincheng Sci-Tech. Development Inc.
    8. Brilliant Charter Limited
    9. Chang Cheng Chang Electrode Co., Ltd.
    10. Chengdelh Carbonaceous Elements Factory
    11. Chengdu Jia Tang Corp.
    12. China Industrial Mineral & Metals Group
    13. China Shaanxi Richbond Imp. & Exp. Industrial Corp. Ltd.
    14. China Xingyong Carbon Co., Ltd.
    15. CIMM Group Co., Ltd.
    16. Dalian Carbon & Graphite Corporation
    17. Dalian Hongrui Carbon Co., Ltd.
    18. Dalian Honest International Trade Co., Ltd.
    19. Dalian Horton International Trading Co., Ltd.
    20. Dalian LST Metallurgy Co., Ltd.
    21. Dalian Shuangji Co., Ltd.
    22. Dalian Thrive Metallurgy Imp. & Exp. Co., Ltd.
    23. Datong Carbon
    24. Datong Carbon Plant
    25. Datong Xincheng Carbon Co., Ltd.
    26. De Well Container Shipping Corp.
    27. Dewell Group
    28. Dignity Success Investment Trading Co., Ltd.
    29. Double Dragon Metals and Mineral Tools Co., Ltd.
    30. Fangda Lanzhou Carbon Joint Stock Company Co. Ltd.
    31. Foset Co., Ltd.
    32. GES (China) Co., Ltd.
    33. Guangdong Highsun Yongye (Group) Co., Ltd.
    34. Haimen Shuguang Carbon Industry Co., Ltd.
    35. Handan Hanbo Material Co., Ltd.
    36. Hebei Long Great Wall Electrode Co., Ltd.
    37. Heilongjiang Xinyuan Carbon Products Co., Ltd.
    38. Heilongjiang Xinyuan Metacarbon Company, Ltd.
    39. Henan Sanli Carbon Products Co., Ltd.
    40. Hopes (Beijing) International Co., Ltd.
    41. Huanan Carbon Factory
    42. Hunan Mec Machinery and Electronics Imp. & Exp. Corp.
    43. Hunan Yinguang Carbon Factory Co., Ltd.
    44. Inner Mongolia QingShan Special Graphite and Carbon Co., 
Ltd.
    45. Inner Mongolia Xinghe County Hongyuan Electrical Carbon 
Factory
    46. Jiang Long Carbon
    47. Jiangsu Yafei Carbon Co., Ltd.
    48. Jiaozuo Zhongzhou Carbon Products Co., Ltd.
    49. Jichun International Trade Co. Ltd. of Jilin Province
    50. Jiexiu Juyuan Carbon Co., Ltd./Jiexiu Ju-Yuan & Coaly Co., 
Ltd.
    51. Jilin Songjiang Carbon Co Ltd.
    52. Jinneng Group
    53. Jinyu Thermo-Electric Material Co., Ltd.
    54. Kaifeng Carbon Company Ltd.
    55. KASY Logistics (Tianjin) Co., Ltd.
    56. Kimwan New Carbon Technology and Development Co., Ltd.
    57. Kingstone Industrial Group Ltd.
    58. L & T Group Co., Ltd.
    59. Laishui Long Great Wall Electrode Co. Ltd.
    60. Lanzhou Carbon Co., Ltd./Lanzhou Carbon Import & Export 
Corp.
    61. Lanzhou Hailong Technology
    62. Lanzhou Ruixin Industrial Material Co., Ltd.
    63. LH Carbon Factory of Chengde
    64. Lianxing Carbon Qinghai Co., Ltd.
    65. Lianxing Carbon Science Institute
    66. Lianxing Carbon (Shandong) Co., Ltd.
    67. Lianyungang Jianglida Mineral Co., Ltd.
    68. Lianyungang Jinli Carbon Co., Ltd.
    69. Liaoyang Carbon Co. Ltd.
    70. Linghai Hongfeng Carbon Products Co., Ltd.
    71. Linyi County Lubei Carbon Co., Ltd.
    72. Maoming Yongye (Group) Co., Ltd.
    73. Nantong Falter New Energy Co., Ltd.
    74. Nantong River-East Carbon Co., Ltd.
    75. Nantong River-East Carbon Joint Stock Co., Ltd.
    76. Nantong Yangtze Carbon Corp. Ltd., Orient (Dalian) Carbon 
Resources Developing Co., Ltd.
    77. Peixian Longxiang Foreign Trade Co. Ltd.
    78. Qingdao Grand Graphite Products Co., Ltd.
    79. Quingdao Haosheng Metals & Minerals Imp. & Exp. Co., Ltd.
    80. Qingdao Haosheng Metals Imp. & Exp. Co., Ltd.
    81. Qingdao Likun Graphite Co., Ltd.
    82. Qingdao Liyikun Carbon Development Co., Ltd.
    83. Qingdao Ruizhen Carbon Co., Ltd.
    84. Rt Carbon Co., Ltd.
    85. Ruitong Carbon Co., Ltd.
    86. Shandong Basan Carbon Plant
    87. Shandong Zibo Contient Carbon Factory
    88. Shanghai Carbon International Trade Co., Ltd.
    89. Shanghai GC Co., Ltd.
    90. Shanghai Jinneng International Trade Co., Ltd.
    91. Shanghai P.W. International Ltd.
    92. Shanghai Shen-Tech Graphite Material Co., Ltd.
    93. Shanghai Topstate International Trading Co., Ltd.
    94. Shenyang Jinli Metals & Minerals Imp. & Exp. Co., Ltd.
    95. Shanxi Datong Energy Development Co., Ltd.
    96. Shanxi Foset Carbon Co. Ltd.
    97. Shanxi Jiexiu Import and Export Co., Ltd.
    98. Shanxi Jinneng Group Co., Ltd.
    99. Shanxi Yunheng Graphite Electrode Co., Ltd.
    100. Shenyang Jinli Metals & Minerals Imp. & Exp. Co., Ltd.
    101. Shijaizhuang Carbon Co., Ltd.
    102. Shijiazhuang Huanan Carbon Factory
    103. Sichuan 5-Continent Imp. & Exp. Co., Ltd.
    104. Sichuan GMT International Inc.
    105. SMMC Group Co., Ltd.
    106. Tangshan Kimwan Special Carbon & Graphite Co., Ltd.
    107. Tengchong Carbon Co., Ltd.
    108. Tianjin (Teda) Iron & Steel Trade Co., Ltd.
    109. Tianjin Kimwan Carbon Technology and Development Co., Ltd.
    110. Tianzhen Jintian Graphite Electrodes Co., Ltd.
    111. Tianjin Yue Yang Industrial & Trading Co., Ltd.
    112. Tielong (Chengdu) Carbon Co., Ltd.
    113. UK Carbon & Graphite
    114. United Carbon Ltd.
    115. United Trade Resources, Inc.
    116. Weifang Lianxing Carbon Co., Ltd.
    117. World Trade Metals & Minerals Co., Ltd.
    118. XC Carbon Group
    119. Xinghe Muzi Carbon Co., Ltd
    120. Xinghe Xingyong Carbon Co., Ltd.
    121. Xinghe Xinyuan Carbon Products Co., Ltd.
    122. Xinyuan Carbon Co., Ltd.
    123. Xuanhua Hongli Refractory and Mineral Company
    124. Xuchang Minmetals & Industry Co., Ltd.
    125. Xuzhou Carbon Co., Ltd.
    126. Xuzhou Electrode Factory
    127. Xuzhou Jianglong Carbon Manufacture Co., Ltd.
    128. Yangzhou Qionghua Carbon Trading Ltd.
    129. Yixing Huaxin Imp & Exp Co. Ltd.
    130. Youth Industry Co., Ltd.
    131. Zhengzhou Jinyu Thermo-Electric Material Co., Ltd.
    132. Zibo Continent Carbon Factory
    133. Zibo DuoCheng Trading Co., Ltd.
    134. Zibo Lianxing Carbon Co., Ltd.
    135. Zibo Wuzhou Tanshun Carbon Co., Ltd.

Non-Market Economy Country Status

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (NME) country.\13\ In 
accordance with section 771(18)(C)(i) of the Act, any determination 
that a country is an NME country shall remain in effect until revoked 
by the administering authority. None of the parties to this proceeding 
has contested such treatment.
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    \13\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination: Coated Free 
Sheet Paper from the People's Republic of China, 72 FR 30758, 30760 
(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).
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Separate Rates

    In proceedings involving NME countries, the Department has a 
rebuttable presumption that all companies within the country are 
subject to government control and thus should be assigned a single 
antidumping duty rate.\14\ It is the

[[Page 13287]]

Department's policy to assign all exporters of merchandise subject to 
review in an NME country this single rate unless an exporter can 
demonstrate that it is sufficiently independent so as to be entitled to 
a separate rate. Exporters can demonstrate this independence through 
the absence of both de jure and de facto government control over export 
activities. The Department analyzes each entity exporting the subject 
merchandise under a test articulated in the Final Determination of 
Sales at Less Than Fair Value: Sparklers From the People's Republic of 
China, 56 FR 20588 (May 6, 1991) (Sparklers), as further developed in 
the Notice of Final Determination of Sales at Less Than Fair Value: 
Silicon Carbide From the People's Republic of China, 59 FR 22585 (May 
2, 1994) (Silicon Carbide). If the Department determines, however, that 
a company is wholly foreign-owned or located in a market economy (ME), 
then a separate-rate analysis is not necessary to determine whether it 
is independent from government control.
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    \14\ See, e.g., Certain Coated Paper Suitable for High-Quality 
Print Graphics Using Sheet-Fed Presses From the People's Republic of 
China: Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Postponement of Final Determination, 75 FR 24892, 
24899 (May 6, 2010), unchanged in Certain Coated Paper Suitable for 
High-Quality Print Graphics Using Sheet-Fed Presses From the 
People's Republic of China: Final Determination of Sales at Less 
Than Fair Value, 75 FR 59217 (September 27, 2010).
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    In order to demonstrate separate-rate status eligibility, the 
Department normally requires entities for whom a review was requested, 
and who were assigned a separate rate in a previous segment of this 
proceeding, to submit a separate-rate certification stating that they 
continue to meet the criteria for obtaining a separate rate.\15\ For 
entities that were not assigned a separate rate in the previous segment 
of a proceeding, to demonstrate eligibility for such, the Department 
requires a separate-rate application.\16\
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    \15\ See Initiation Notice, 76 FR at 17826.
    \16\ See id.
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    In this administrative review, of the 23 companies not selected for 
individual examination \17\ and for which the review has not been 
rescinded or for which the Department does not intend to rescind the 
review, only three entities, the Fangda Group, Shida Carbon, and Muzi 
Carbon, submitted separate-rate information. The remaining 16 companies 
under review provided neither a separate rate application nor separate 
rate certification, as applicable. Therefore, the Department 
preliminarily determines that there were exports of merchandise under 
review from 16 PRC exporters that did not demonstrate their eligibility 
for separate rate status. As a result, the Department is treating these 
16 PRC exporters as part of the PRC-wide entity, subject to the PRC-
wide rate.\18\ Additionally, we received a complete response to Section 
A of the NME antidumping questionnaire from Fushun Jinly, which 
contained information pertaining to the company's eligibility for a 
separate rate.\19\
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    \17\ These companies are the Fangda Group (comprising five 
collapsed companies), Shida Carbon, Muzi Carbon, Dechang Shida 
Carbon Co., Ltd., Fushun Carbon Plant, Fushun Jinli Petrochemical 
Carbon Co., Ltd., Guanghan Shida Carbon Co., Ltd., Jilin Carbon 
Graphite Material Co., Ltd., Lanzhou Hailong New Material Co., 
Liaoning Fangda Group Industrial Co., Ltd., Shida Carbon Group, 
Sichuan Dechang Shida Co., Ltd., Sichuan Shida Trading Co., Ltd., 
Sinosteel Anhui Co., Ltd., Sinosteel Corp., Sinosteel Jilin Carbon 
Co., Ltd., Sinosteel Jilin Carbon Imp. & Exp. Co., Ltd., Sinosteel 
Sichuan Co., Ltd., and Xinghe County Muzi Carbon Plant.
    \18\ See ``PRC-Wide Entity'' section below.
    \19\ See Fushun Jinly's Section A questionnaire response, dated 
June 15, 2011.
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Absence of De Jure Control

    The Department considers the following de jure criteria in 
determining whether an individual company may be granted a separate 
rate: (1) An absence of restrictive stipulations associated with an 
individual exporter's business and export licenses; (2) any legislative 
enactments decentralizing control of companies; and (3) other formal 
measures by the government decentralizing control of companies.\20\
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    \20\ See Sparklers, 56 FR at 20589.
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    The evidence provided by the Fangda Group, Fushun Jinly, Muzi 
Carbon, and Shida Carbon supports a preliminary finding of de jure 
absence of government control based on the following: (1) An absence of 
restrictive stipulations associated with the individual exporter's 
business and export licenses; (2) there are applicable legislative 
enactments decentralizing control of the companies; and (3) there are 
formal measures by the government decentralizing control of the 
companies.\21\
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    \21\ See Fushun Jinly's Section A questionnaire response, dated 
June 15, 2011; the Fangda Group's and Muzi Carbon's separate rate 
certifications, dated May 31, 2011, and Shida Carbon's separate rate 
application, dated May 31, 2011.
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Absence of De Facto Control

    Typically the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a government agency; (2) whether the 
respondent has authority to negotiate and sign contracts and other 
agreements; (3) whether the respondent has autonomy from the government 
in making decisions regarding the selection of management; and (4) 
whether the respondent retains the proceeds of its export sales and 
makes independent decisions regarding disposition of profits or 
financing of losses.\22\
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    \22\ See Silicon Carbide, 59 FR at 22586-87; see also Notice of 
Final Determination of Sales at Less Than Fair Value: Furfuryl 
Alcohol From the People's Republic of China, 60 FR 22544, 22545 (May 
8, 1995).
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    The Department has determined that an analysis of de facto control 
is critical in determining whether respondents are, in fact, subject to 
a degree of government control over export activities which would 
preclude the Department from assigning separate rates. For the Fangda 
Group, Fushun Jinly, Muzi Carbon, and Shida Carbon we determine that 
the evidence on the record supports a preliminary finding of de facto 
absence of government control based on record statements and supporting 
documentation showing that each respondent: (1) Sets its own export 
prices independent of the government and without the approval of a 
government authority; (2) retains the proceeds from its sales and makes 
independent decisions regarding disposition of profits or financing of 
losses; (3) has the authority to negotiate and sign contracts and other 
agreements; and (4) has autonomy from the government regarding the 
selection of management.\23\
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    \23\ See Fushun Jinly's Section A questionnaire response, dated 
June 15, 2011; the Fangda Group's and Muzi Carbon's separate rate 
certifications, dated May 31, 2011, and Shida Carbon's separate rate 
application, dated May 31, 2011.
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    The evidence placed on the record of this review by the Fangda 
Group, Fushun Jinly, Muzi Carbon, and Shida Carbon demonstrates an 
absence of de jure and de facto government control with respect each 
company's respective exports of the merchandise under review, in 
accordance with the criteria identified in Sparklers and Silicon 
Carbide. Therefore, we are preliminarily granting the Fangda Group, 
Fushun Jinly, Muzi Carbon, and Shida Carbon each a separate rate.

Separate-Rate Comments

    The petitioners assert that the Fangda Group and Shida Carbon do 
not qualify for separate-rate status because these entities did not 
have the requisite knowledge of destination of their respective sales. 
Specifically, the petitioners contend that because neither the Fangda 
Group nor Shida Carbon knew at the time of sale and shipment to U.S. 
ports whether their shipments would be entered for consumption in the 
United States during the POR, the Fangda Group and Shida Carbon did not

[[Page 13288]]

have any U.S. sales, as defined in the statute.
    We preliminarily find that the petitioners' allegations with regard 
to the Fangda Group's and Shida Carbon's knowledge of destination are 
speculative and not supported by record evidence. It is the 
Department's policy to assign a separate rate to an exporter that can 
demonstrate that it is sufficiently independent from government 
control. See Initiation Notice, 76 FR at 17826. Moreover, 19 CFR 
351.213(e)(1)(i) specifically instructs that an administrative review 
may cover ``entries, exports or sales of the subject merchandise'' 
during the POR. Because the Fangda Group and Shida Carbon were not 
selected as mandatory respondents, the companies were not required and 
did not report their U.S. sales information to the Department. Record 
evidence does indicate, however, that both the Fangda Group and Shida 
Carbon had reviewable U.S. transactions during the POR.\24\ Because the 
Fangda Group and Shida Carbon had reviewable U.S. transactions during 
the POR, irrespective of their knowledge of U.S. entry, and because 
both companies also demonstrated their independence from the PRC 
government, we preliminarily conclude that the Fangda Group and Shida 
Carbon are both eligible to receive a separate rate.
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    \24\ See the Department's memorandum entitled ``Administrative 
Review of the Antidumping Duty Order on Small Diameter Graphite 
Electrodes from the People's Republic of China: Identification of 
Reviewable Transactions for Certain Companies Under Review,'' dated 
concurrently with this notice. See also Small Diameter Graphite 
Electrodes from the People's Republic of China: Final Results of the 
First Administrative Review of the Antidumping Duty Order and Final 
Rescission of the Administrative Review, in Part, 76 FR 56397 
(September 13, 2011), and accompanying Issues and Decision 
Memorandum at Comment 2 (finding that, because respondents properly 
reported their sales as export price sales, the knowledge test did 
not apply).
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    The petitioners assert that the Department cannot consider Muzi 
Carbon's separate-rate request in this review. Specifically, the 
petitioners argue that because Muzi Carbon submitted a separate-rate 
certification instead of a separate-rate application, Muzi Carbon's 
submission is untimely. The petitioners assert that the Department's 
separate-rate instructions require the submission of a separate-rate 
application if an exporter underwent changes in corporate structure, 
ownership, or official company name. The petitioners also contend that 
Muzi Carbon had a change in ownership during the POR and, thus, was 
required to submit a separate-rate application. Information on the 
record indicates that Muzi Carbon's separate rate certification 
illuminated that the proprietor of Muzi Carbon acquired the remaining 
three percent of the value of outstanding shares that he did not 
already own from his nephew, thus becoming the sole shareholder of Muzi 
Carbon.\25\ While this event established a change in the make-up of 
Muzi Carbon's shareholder structure, we find that it does not 
constitute a change in the company's ownership because the ownership 
stayed within the family and the control of the company remained with 
its proprietor. We therefore preliminarily find Muzi Carbon's filing of 
a separate-rate certification to be sufficient.
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    \25\ See Muzi Carbon's submission, dated May 31, 2011, at 5.
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Rate for Non-Selected Companies

    In accordance with section 777A(c)(2)(B) of the Act, the Department 
employed a limited examination methodology, as it did not have the 
resources to examine all companies for which a review request was made. 
We selected Fushun Jinly and Jilin Carbon as mandatory respondents in 
this review. See Respondent Selection Memo. As discussed above, the 
Fangda Group, Muzi Carbon, and Shida Carbon are exporters of graphite 
electrodes from the PRC that demonstrated their eligibility for a 
separate rate, but which were not selected for individual examination 
in this review. The statute and the Department's regulations do not 
directly address the establishment of a rate to be applied to 
individual companies not selected for individual examination where the 
Department limited its examination in an administrative review pursuant 
to section 777A(c)(2) of the Act. The Department's practice in cases 
involving limited selection based on exporters accounting for the 
largest volumes of trade has been to look to section 735(c)(5) of the 
Act for guidance, which provides instructions for calculating the all-
others rate in an investigation. Section 735(c)(5)(A) of the Act 
instructs that we are not to calculate an all-others rate using any 
zero or de minimis margins or any margins based entirely on facts 
available. Section 735(c)(5)(B) of the Act also provides that, where 
all margins are zero rates, de minimis rates, or rates based entirely 
on facts available, we may use ``any reasonable method'' for assigning 
the rate to non-selected respondents. In this instance, we have 
calculated a rate above de minimus for Fushun Jinly and determined a 
rate for Jilin Carbon based entirely on facts available.
    Consistent with the Department's practice, as the separate rate, we 
have established a margin for the Fangda Group, Muzi Carbon, and Shida 
Carbon based on the rate we calculated for the mandatory respondent, 
Fushun Jinly, excluding, where appropriate, any rates that were zero, 
de minimis, or based entirely on adverse facts available (AFA).\26\
---------------------------------------------------------------------------

    \26\ See, e.g., Preliminary Determination of Sales at Less Than 
Fair Value and Partial Affirmative Determination of Critical 
Circumstances: Certain Polyester Staple Fiber from the People's 
Republic of China, 71 FR 77373, 77377 (December 26, 2006), unchanged 
in Final Determination of Sales at Less Than Fair Value and Partial 
Affirmative Determination of Critical Circumstances: Certain 
Polyester Staple Fiber from the People's Republic of China, 72 FR 
19690 (April 19, 2007).
---------------------------------------------------------------------------

PRC-Wide Entity

    We have preliminarily determined that 16 companies did not 
demonstrate their eligibility for a separate rate and are properly 
considered part of the PRC-wide entity.\27\ As explained above in the 
``Separate Rates'' section, all companies within the PRC are considered 
to be subject to government control unless they are able to demonstrate 
an absence of government control with respect to their export 
activities. Such companies are thus assigned a single antidumping duty 
rate distinct from the separate rate(s) determined for companies that 
are found to be independent of government control with respect to their 
export activities. We consider the influence that the government has 
been found to have over the economy to warrant determining a rate for 
the entity that is distinct from the rates found for companies that 
have provided sufficient evidence to establish that they operate freely 
with respect to their export activities.\28\
---------------------------------------------------------------------------

    \27\ These companies are Dechang Shida Carbon Co., Ltd., Fushun 
Carbon Plant, Fushun Jinli Petrochemical Carbon Co., Ltd., Guanghan 
Shida Carbon Co., Ltd., Jilin Carbon Graphite Material Co., Ltd., 
Lanzhou Hailong New Material Co., Liaoning Fangda Group Industrial 
Co., Ltd., Shida Carbon Group, Sichuan Dechang Shida Co., Ltd., 
Sichuan Shida Trading Co., Ltd., Sinosteel Anhui Co., Ltd., 
Sinosteel Corp., Sinosteel Jilin Carbon Co., Ltd., Sinosteel Jilin 
Carbon Imp. & Exp. Co., Ltd., Sinosteel Sichuan Co., Ltd., and 
Xinghe County Muzi Carbon Plant.
    \28\ See Notice of Final Determination of Sales at Less Than 
Fair Value, and Affirmative Critical Circumstances, In Part: Certain 
Lined Paper Products From the People's Republic of China, 71 FR 
53079, 53082 (September 8, 2006).
---------------------------------------------------------------------------

Use of Facts Available and AFA

    Section 776(a) of the Act provides that the Department shall apply 
``facts otherwise available'' if (1) necessary information is not on 
the record or (2) an interested party or any other person (A) withholds 
information that has been requested, (B) fails to provide

[[Page 13289]]

information within the deadlines established, or in the form and manner 
requested by the Department, subject to subsections (c)(1) and (e) of 
section 782 of the Act, (C) significantly impedes a proceeding, or (D) 
provides information that cannot be verified as provided by section 
782(i) of the Act.
    Furthermore, section 776(b) of the Act provides that the Department 
may use an adverse inference in applying the facts otherwise available 
when a party has failed to cooperate by not acting to the best of its 
ability to comply with a request for information. Such an adverse 
inference may include reliance on information derived from the 
petition, the final determination, a previous administrative review, or 
other information placed on the record.

Application of Total AFA to the PRC-Wide Entity

    Jilin Carbon did not respond to the Department's antidumping 
questionnaire. Accordingly, we preliminarily determine that this 
company withheld information requested by the Department in accordance 
with sections 776(a)(2)(A) and (B) of the Act. Furthermore, this 
company's refusal to participate in the review significantly impeded 
the proceeding in accordance with section 776(a)(2)(C) of the Act. 
Specifically, had this company participated in the review, the 
Department would have been able to calculate an appropriate dumping 
margin.
    Further, because there is no information on the record 
demonstrating this company's entitlement to a separate rate in 
accordance with section 776(a) of the Act, the Department has 
preliminarily treated Jilin Carbon as part of the PRC-wide entity.
    Because Jilin Carbon did not respond to the Department's 
antidumping questionnaire, and is part of the PRC-wide entity, the PRC-
wide entity's refusal to provide any information constitutes 
justifiable grounds under which the Department can conclude that less 
than full cooperation has been shown.\29\ Hence, pursuant to section 
776(b) of the Act, the Department has determined that, when selecting 
from among the facts otherwise available, an adverse inference is 
warranted with respect to the PRC-wide entity.
---------------------------------------------------------------------------

    \29\ See Notice of Final Determination of Sales at Less than 
Fair Value: Static Random Access Memory Semiconductors From Taiwan, 
63 FR 8909, 8911 (February 23, 1998); see also Brake Rotors From the 
People's Republic of China: Final Results and Partial Rescission of 
the Seventh Administrative Review; Final Results of the Eleventh New 
Shipper Review, 70 FR 69937, 69939 (November 18, 2005), and Uruguay 
Round Agreements Act, Statement of Administrative Action, H.R. Doc. 
No. 103-316, vol. 1, at 870 (1994) (SAA).
---------------------------------------------------------------------------

Selection of AFA Rate

    In deciding which facts to use as AFA, section 776(b) of the Act 
and 19 CFR 351.308(c)(1) authorize the Department to rely on 
information derived from: (1) The petition; (2) a final determination 
in the investigation; (3) any previous review or determination; or (4) 
any information placed on the record. In reviews, the Department 
normally selects as AFA the highest rate determined for any respondent 
in any segment of the proceeding.\30\ The Court of International Trade 
(CIT) and the Court of Appeals for the Federal Circuit (Federal 
Circuit) have consistently upheld the Department's practice.\31\ The 
Department's practice, when selecting an AFA rate from among the 
possible sources of information, has been to ensure that the margin is 
sufficiently adverse ``as to effectuate the statutory purposes of the 
adverse facts available rule to induce respondents to provide the 
Department with complete and accurate information in a timely manner.'' 
\32\ 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.'' \33\ 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 the rule, would have produced current information 
showing the margin to be less.'' \34\ Consistent with the statute, 
court precedent, and its normal practice, the Department has assigned 
159.64 percent to the PRC-wide entity, including Jilin Carbon, as AFA, 
which is the PRC-wide rate determined in the investigation and the rate 
currently applicable to the PRC-wide entity.\35\
---------------------------------------------------------------------------

    \30\ 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, 19507 (April 21, 2003).
    \31\ See KYD, Inc. v. United States, 607 F.3d 760, 766-67 (Fed. 
Cir. 2010) (KYD); 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 less-than-fair-value investigation); 
Kompass Food Trading Int'l v. United States, 24 CIT 678, 684 (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).
    \32\ SAA at 870.
    \33\ Id.; see also Notice of Final Determination of Sales at 
Less than Fair Value: Certain Frozen and Canned Warmwater Shrimp 
From Brazil, 69 FR 76910, 76912 (December 23, 2004), and D&L Supply 
Co. v. United States, 113 F.3d 1220, 1223 (Fed. Cir. 1997).
    \34\ KYD, 607 F.3d at 766 (citing Rhone Poulenc, 899 F.2d at 
1190) (emphasis in original).
    \35\ See Final Determination of Sales at Less Than Fair Value 
and Affirmative Determination of Critical Circumstances: Small 
Diameter Graphite Electrodes from the People's Republic of China, 74 
FR 2049, 2054-55 (January 14, 2009) (Graphite Electrodes Final 
Determination).
---------------------------------------------------------------------------

    The Department preliminarily determines that this information is 
the most appropriate from the available sources to effectuate the 
purposes of AFA. The Department's reliance on the PRC-wide rate from 
the original investigation to determine an AFA rate is subject to the 
requirement to corroborate secondary information.\36\
---------------------------------------------------------------------------

    \36\ See section 776(c) of the Act and the ``Corroboration of 
Secondary Information'' section.
---------------------------------------------------------------------------

Corroboration of Secondary 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 or review, it shall to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``information derived from the petition that 
gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' \37\ The SAA explains 
that ``corroborate'' means to determine that the information used has 
probative value.\38\ The Department has determined that to have 
probative value, information must be reliable and relevant.\39\ The SAA 
also explains that

[[Page 13290]]

independent sources used to corroborate such evidence may include, for 
example, published price lists, official import statistics and customs 
data, and information obtained from interested parties during the 
particular investigation.\40\
---------------------------------------------------------------------------

    \37\ SAA at 870.
    \38\ Id.
    \39\ 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).
    \40\ See SAA at 870; see also Notice of Final Determination of 
Sales at Less Than Fair Value: Live Swine From Canada, 70 FR 12181, 
12183 (March 11, 2005).
---------------------------------------------------------------------------

    As stated above, we are applying as AFA to the PRC-wide entity the 
highest rate from any segment of this administrative proceeding, which 
is the PRC-wide rate of 159.64 percent. The 159.64 percent is the 
highest rate on the record of any segment of the antidumping duty 
order. In the investigation, the Department relied upon our pre-
initiation analysis of the adequacy and accuracy of the information in 
the petition.\41\ During our pre-initiation analysis, we examined the 
information used as the basis of export price and NV in the petition, 
and the calculations used to derive the alleged margins. Also, during 
our pre-initiation analysis, we examined information from various 
independent sources provided either in the petition or, based on our 
requests, in supplements to the petition, which corroborated key 
elements of the export price and NV calculations.\42\ Since the 
investigation, the Department has found no other corroborating 
information available in this case, and received no comments from 
interested parties as to the relevance or reliability of this secondary 
information. Based upon the above, for these preliminary results, the 
Department finds that the rates derived from the petition are 
corroborated to the extent practicable for purposes of the AFA rate 
assigned to the PRC-wide entity, including Jilin Carbon.
---------------------------------------------------------------------------

    \41\ See Graphite Electrodes Final Determination, 74 FR at 2054, 
and Small Diameter Graphite Electrodes from the People's Republic of 
China: Initiation of Antidumping Duty Investigation, 73 FR 8287 
(February 13, 2008) (Graphite Electrodes Investigation Initiation); 
see also Notice of Final Determination of Sales at Less Than Fair 
Value and Affirmative Final Determination of Critical Circumstances: 
Circular Welded Carbon Quality Steel Pipe from the People's Republic 
of China, 73 FR 31970, 31972 (June 5, 2008) (where the Department 
relied upon pre-initiation analysis to corroborate the highest 
margin alleged in the petition).
    \42\ See Graphite Electrodes Investigation Initiation, 73 FR at 
8288-8290.
---------------------------------------------------------------------------

    Because these are the preliminary results of review, the Department 
will consider all margins on the record at the time of the final 
results of review for the purpose of determining the most appropriate 
final margin for the PRC-wide entity.\43\
---------------------------------------------------------------------------

    \43\ See Notice of Preliminary Determination of Sales at Less 
Than Fair Value: Solid Fertilizer Grade Ammonium Nitrate From the 
Russian Federation, 65 FR 1139, 1141 (January 7, 2000), unchanged in 
Notice of Final Determination of Sales at Less Than Fair Value; 
Solid Fertilizer Grade Ammonium Nitrate From the Russian Federation, 
65 FR 42669 (July 11, 2000).
---------------------------------------------------------------------------

Surrogate Country

    When the Department conducts an antidumping duty administrative 
review of imports from an NME country, section 773(c)(1) of the Act 
directs the Department to base NV, in most cases, on the NME producer's 
factors of production (FOP), valued in a surrogate ME country or 
countries considered appropriate by the Department. In accordance with 
section 773(c)(4) of the Act, the Department will value FOPs using ``to 
the extent possible, the prices or costs of the FOPs in one or more ME 
countries that are: (A) At a level of economic development comparable 
to that of the NME country, and (B) significant producers of comparable 
merchandise.'' \44\ Once the Department has identified the countries 
that are economically comparable to the PRC, it identifies those 
countries which are significant producers of comparable merchandise. 
From the countries which are found to be both economically comparable 
to the PRC and significant producers of comparable or identical 
merchandise, the Department will then select a primary surrogate 
country based upon whether the data for valuing FOPs are both available 
and reliable.
---------------------------------------------------------------------------

    \44\ See the Department's Policy Bulletin No. 04.1, regarding, 
``Non-Market Economy Surrogate Country Selection Process,'' (March 
1, 2004), available on the Department's Web site at http://ia.ita.doc.gov/policy/bull04-1.html.
---------------------------------------------------------------------------

    In the instant review, the Department has identified Colombia, 
Indonesia, the Philippines, South Africa, Thailand, and Ukraine as 
countries that are at a level of economic development comparable to the 
PRC.\45\ Therefore, we consider all six of these countries as having 
satisfied the first prong of the surrogate-country selection criteria 
of section 773(c)(4) of the Act.
---------------------------------------------------------------------------

    \45\ See the Department's memorandum entitled ``Request for a 
List of Surrogate Countries for an Administrative Review of the 
Antidumping Duty Order on Small Diameter Graphite Electrodes from 
the People's Republic of China,'' dated August 29, 2011 (Surrogate 
Country Memo).
---------------------------------------------------------------------------

    With respect to the Department's selection of a surrogate country, 
the petitioners commented that Ukraine is the appropriate surrogate 
country from which to derive surrogate factor values for the PRC 
because Ukraine is most economically comparable to the PRC and is also 
a significant producer of graphite electrodes.\46\ The petitioners 
suggested we use the 2010 publicly available financial statements for 
JSC Ukrainsky Grafit, a major Ukrainian producer of graphite 
electrodes, in order to derive surrogate financial ratios and placed 
such financial statements on the record. The petitioners also comment 
that Ukraine is a major importer of the inputs consumed in the 
production of graphite electrodes and placed the relevant POR Ukrainian 
import statistics on the record.
---------------------------------------------------------------------------

    \46\ See the petitioners' submission, dated September 22, 2011.
---------------------------------------------------------------------------

    Fushun Jinly commented that, consistent with the Department's 
determination in the original investigation and in the 2008-2010 
administrative review, India should be selected as the surrogate 
country.\47\ Fushun Jinly commented that although India is not one of 
the countries identified by the Department as economically comparable 
to the PRC, the list identified by the Department is neither exclusive 
nor exhaustive. Fushun Jinly commented that World Bank's 2011 World 
Development Report (the source of 2009 Gross National Income (GNI) data 
used by the Department) classifies both the PRC and India as ``lower 
middle income countries,'' and while the PRC is at the higher end of 
the ``lower middle income'' scale and India is at the lower end of that 
scale, World Bank classifies both countries within the same economic 
grouping. Further, Fushun Jinly asserts that the economic growth trends 
shared by the PRC and India also support a finding that India is 
economically comparable to the PRC.
---------------------------------------------------------------------------

    \47\ See Fushun Jinly's submission, dated September 22, 2011.
---------------------------------------------------------------------------

    In Steel Wheels \48\ we stated that, unless we find that all of the 
countries determined to be equally economically comparable are not 
significant producers of comparable merchandise, do not provide a 
reliable source of publicly available surrogate data, or are unsuitable 
for use for other reasons, we will rely on data from one of these 
countries. Because we found that one of the six countries listed in the 
Surrogate Country Memo meets the selection criteria, as explained 
below, we are not considering India as the primary surrogate country.
---------------------------------------------------------------------------

    \48\ See Certain Steel Wheels From the People's Republic of 
China: Notice of Preliminary Determination of Sales at Less Than 
Fair Value, Partial Affirmative Preliminary Determination of 
Critical Circumstances, and Postponement of Final Determination, 76 
FR 67703 (November 2, 2011) (Steel Wheels).
---------------------------------------------------------------------------

    Because we were unable to find the actual production data to 
evaluate the significance of production of subject merchandise with 
respect to potential surrogate countries, we relied on export data as a 
proxy for overall production data in this review. From the countries

[[Page 13291]]

that we identified to be economically comparable to the PRC, only 
Ukraine and South Africa exported significant quantities of graphite 
electrodes during the POR based on Global Trade Atlas (GTA) data for 
exports under HTS 8545.11.00.\49\ As such, we find that Ukraine and 
South Africa meet the ``significant producer'' requirement of Section 
773(c)(4) of the Act.
---------------------------------------------------------------------------

    \49\ See the Department's memorandum entitled ``Administrative 
Review of the Antidumping Duty Order on Small Diameter Graphite 
Electrodes from the People's Republic of China: Selection of 
Surrogate Values,'' dated concurrently with this notice (Factor 
Valuation Memorandum), at Exhibit 1.
---------------------------------------------------------------------------

    Like the PRC, Ukraine has a broad and diverse production base, and 
we have reliable data from Ukraine that we can use to value the FOPs 
and derive surrogate financial ratios.\50\ Unlike the data for Ukraine, 
we do not have the financial statements from the producers of graphite 
electrodes in South Africa or any data concerning certain freight 
expenses and electricity. Therefore, we have determined that it is 
appropriate to use Ukraine as a surrogate country for the purposes of 
this administrative review, pursuant to section 773(c)(4) of the Act, 
based on the following: (1) It is at a comparable level of economic 
development to the PRC; (2) it is a significant producer of comparable 
merchandise, and (3) we have reliable data from Ukraine that we can use 
to value the FOPs. Accordingly, we have calculated NV using Ukrainian 
prices to value Fushun Jinly's FOPs.\51\
---------------------------------------------------------------------------

    \50\ See Factor Valuation Memorandum.
    \51\ See Factor Valuation Memorandum; see also ``Factor 
Valuations'' section, below.
---------------------------------------------------------------------------

Fair Value Comparisons

    To determine whether Fushun Jinly's sales of subject merchandise 
were made at less than NV, we compared the NV to individual export 
price transactions in accordance with section 777A(d)(2) of the Act. 
See ``Export Price'' and ``Normal Value'' sections of this notice, 
below.

Export Price

    In accordance with section 772(a) of the Act, export price is ``the 
price at which subject merchandise is first sold (or agreed to be sold) 
before the date of importation by the producer or exporter of the 
subject merchandise outside of the United States to an unaffiliated 
purchaser in the United States or to an unaffiliated purchaser for 
exportation to the United States,'' as adjusted under section 772(c) of 
the Act. For Fushun Jinly, we used export price methodology, in 
accordance with section 772(a) of the Act, for sales in which the 
subject merchandise was first sold prior to importation by the exporter 
outside the United States directly to an unaffiliated purchaser in the 
United States and for sales in which constructed export price was not 
otherwise indicated.
    We based export price on the price to unaffiliated purchasers in 
the United States. In accordance with section 772(c)(2)(A) of the Act, 
where appropriate, we made deductions from the starting price (gross 
unit price) for foreign inland freight and foreign brokerage and 
handling. We valued brokerage and handling using a price list of export 
procedures necessary to export a standardized cargo of goods from 
Ukraine. The price list is compiled based on a survey case study of the 
procedural requirements for trading a standard shipment of goods by 
ocean transport from Ukraine as reported in World Bank Group's Doing 
Business 2011--Ukraine; Trading Across Borders.\52\
---------------------------------------------------------------------------

    \52\ See Factor Valuation Memorandum.
---------------------------------------------------------------------------

Normal Value

    Section 773(c)(1) of the Act provides that the Department shall 
determine NV using an FOP methodology if: (1) The merchandise is 
exported from an NME country; and (2) 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. When determining 
NV in an NME context, the Department will base NV on FOPs because the 
presence of government controls on various aspects of these economies 
renders price comparisons and the calculation of production costs 
invalid under our normal methodologies. Under section 773(c)(3) of the 
Act, FOPs include but are not limited to: (1) Hours of labor required; 
(2) quantities of raw materials employed; (3) amounts of energy and 
other utilities consumed; and (4) representative capital costs. We used 
FOPs reported by Fushun Jinly for direct materials, energy, labor, 
packing and by-products.

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on FOPs reported by Fushun Jinly for the POR. In accordance with 
19 CFR 351.408(c)(1), the Department will normally use publicly 
available information to find an appropriate surrogate value (SV) to 
value FOPs, but when a producer sources an input from a ME and pays for 
it in ME currency, the Department normally will value the factor using 
the actual price paid for the input if the quantities were meaningful 
and where the prices have not been distorted by dumping or 
subsidies.\53\ To calculate NV, we multiplied the reported per-unit 
factor-consumption rates by publicly available SVs (except as discussed 
below). In selecting SVs, we considered the quality, specificity, and 
contemporaneity of the data.\54\ As appropriate, we adjusted input 
prices by including freight costs to make them delivered prices. 
Specifically, we added to import SVs 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 Federal 
Circuit's decision in Sigma Corp. v. United States, 117 F.3d 1401, 
1407-08 (Fed. Cir. 1997).
---------------------------------------------------------------------------

    \53\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly 
Components, Div of Ill. Tool Works, Inc. v. United States, 268 F.3d 
1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's use of 
market-based prices to value certain FOPs).
    \54\ See, e.g., Fresh Garlic From the People's Republic of 
China: Final Results of Antidumping Duty New Shipper Review, 67 FR 
72139 (December 4, 2002), and accompanying Issues and Decision 
Memorandum at Comment 6, and Final Results of First New Shipper 
Review and First Antidumping Duty Administrative Review: Certain 
Preserved Mushrooms From the People's Republic of China, 66 FR 31204 
(June 11, 2001), and accompanying Issues and Decision Memorandum at 
Comment 5.
---------------------------------------------------------------------------

    On September 8, 2011, we invited all interested parties to submit 
publicly available information to value FOPs for our consideration in 
the preliminary results of this review. On September 22, 2011, and 
October 6, 2011, the petitioners and Fushun Jinly submitted, 
respectively, publicly available information to value FOPs for the 
preliminary results. See Factor Valuation Memorandum for a detailed 
description of all SVs used in this review.
    For these preliminary results, in accordance with our practice, 
except where indicated below, we used data from the Ukrainian import 
statistics in the GTA and other publicly available Ukrainian sources in 
order to calculate SVs for Fushun Jinly's reported FOPs (i.e., direct 
materials, energy, and packing materials) and certain movement 
expenses. In selecting the best available information for valuing FOPs 
in accordance with section 773(c)(1) of the Act, our practice is to 
select, to the extent practicable, SVs which are non-export average 
values, most contemporaneous with the POR, product-specific, and tax-
exclusive.\55\

[[Page 13292]]

The record shows that data in the Ukrainian import statistics, as well 
as those from the other Ukrainian sources, are contemporaneous with the 
period of investigation, product-specific, and tax-exclusive.\56\ In 
those instances where we could not obtain publicly available 
information contemporaneous to the POR with which to value factors, we 
adjusted the SVs using, where appropriate, the Ukrainian Wholesale 
Price Index (WPI) or, where appropriate, Consumer Price Index (CPI), as 
published in the International Monetary Fund's International Financial 
Statistics.\57\
---------------------------------------------------------------------------

    \55\ 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).
    \56\ See Factor Valuation Memorandum.
    \57\ 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, 9600 (March 5, 2009) (Kitchen Racks 
Prelim), 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) (Kitchen Racks 
Final).
---------------------------------------------------------------------------

    As explained in the legislative history of the Omnibus Trade and 
Competitiveness Act of 1988, the Department continues to apply its 
long-standing practice of disregarding SVs if it has a reason to 
believe or suspect the source data may be subsidized.\58\ In this 
regard, the Department has previously found that it is appropriate to 
disregard such prices from India, Indonesia, South Korea and Thailand 
because we have determined that these countries maintain broadly 
available, non-industry specific export subsidies.\59\ Based on the 
existence of these subsidy programs that were generally available to 
all exporters and producers in these countries at the time of the POR, 
we find that it is reasonable to infer that all exporters from India, 
Indonesia, South Korea and Thailand may have benefitted from these 
subsidies. Additionally, we disregarded prices from NME countries.\60\ 
Finally, imports that were labeled as originating from an 
``unspecified'' country were excluded from the import average value, 
because we could not be certain that they were not from either an NME 
country or a country with generally available export subsidies.\61\
---------------------------------------------------------------------------

    \58\ Omnibus Trade and Competitiveness Act of 1988, Conf. Report 
to Accompany H.R. 3, H.R. Rep. No. 576, 100th Cong., 2nd Sess. 
(1988) at 590, reprinted in 1988 U.S.C.C.A.N. 1547, 1623-24.
    \59\ See, e.g., 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 Issues and Decision Memorandum at 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 Issues and Decision Memorandum at 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 Issues and Decision 
Memorandum at 17, 19-20; Final Affirmative Countervailing Duty 
Determination: Certain Hot-Rolled Carbon Steel Flat Products From 
Thailand, 66 FR 50410 (October 3, 2001), and accompanying Issues and 
Decision Memorandum at 23.
    \60\ See, e.g., Kitchen Racks Prelim, 74 FR at 9600, unchanged 
in Kitchen Racks Final.
    \61\ See id.
---------------------------------------------------------------------------

    Fushun Jinly reported that certain of its raw material inputs were 
sourced from an ME country and paid for in ME currencies. When a 
respondent sources inputs from an ME supplier in meaningful quantities, 
we use the actual price paid by respondent for those inputs, except 
when prices may have been distorted by dumping or subsidies.\62\ Where 
we found 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,\63\ we used the 
actual purchases of these inputs to value the inputs.
---------------------------------------------------------------------------

    \62\ See Antidumping Duties; Countervailing Duties; Final Rule, 
62 FR 27296, 27366 (May 19, 1997).
    \63\ 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).
---------------------------------------------------------------------------

    Accordingly, we valued certain of Fushun Jinly's inputs using the 
ME prices paid for in ME currencies for the inputs where the total 
volume of the input purchased from all ME sources during the POR 
exceeds or is equal to 33 percent of the total volume of the input 
purchased from all sources during the period. Where appropriate, we 
added freight to the ME prices of inputs.\64\
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    \64\ For a detailed description of the actual values used for 
the ME inputs reported, see the Department's memorandum entitled, 
``Administrative Review of the Antidumping Duty Order on Small 
Diameter Graphite Electrodes from the People's Republic of China: 
Preliminary Results Analysis Memorandum for Fushun Jinly 
Petrochemical Carbon Co., Ltd.,'' dated concurrently with this 
notice.
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    We valued truck freight expenses using a per-unit average rate we 
calculated from the data we obtained from budmo.org, as suggested by 
the petitioners. This Web site is an online provider of container 
shipping, logistics, and freight forwarding services. The Web site 
provides freight rates for transporting goods in containers by road 
from major ports in Ukraine to many large Ukrainian cities.\65\ Because 
data reported in this source were current as of March, 2011, and, thus, 
not contemporaneous with the POR, we adjusted the value for inland 
truck freight using the Ukrainian WPI deflator.
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    \65\ See Factor Valuation Memorandum.
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    We valued electricity using the electricity tariff data for 
corporate consumers, as published by the National Electricity 
Regulatory Commission of Ukraine, an administrative body of the 
government of Ukraine, at www.nerc.gov.ua. These electricity rates were 
furnished by major power distribution companies in Ukraine and 
represent actual, country-wide, publicly-available information on tax-
exclusive basis.\66\ We obtained electricity tariffs for each month of 
the POR and computed a single POR-average rate.\67\
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    \66\ See id.
    \67\ See, e.g., Wire Decking from the People's Republic of 
China: Final Determination of Sales at Less Than Fair Value, 75 FR 
32905 (June 10, 2010), and accompanying Issues and Decision 
Memorandum at Comment 3.
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    To calculate the labor input, we based our calculation on the 
methodology which the Department enunciated on June 21, 2011 in 
Antidumping Methodologies in Proceedings Involving Non-Market 
Economies: Valuing the Factor of Production: Labor, 76 FR 36092 (June 
21, 2011) (Labor Methodologies). Prior to 2010, the Department used 
regression-based wages that captured the worldwide relationship between 
per capita GNI and hourly manufacturing wages, pursuant to 19 CFR 
351.408(c)(3). On May 3, 2010, the Federal Circuit, in Dorbest Ltd. v. 
United States, 604 F.3d 1363, 1372 (Fed Cir. 2010) (Dorbest), 
invalidated part of that regulation. As a consequence of the Federal 
Circuit's ruling in Dorbest, the Department no longer relies on the 
regression-based methodology described in 19 CFR 351.408(c)(3).
    In Labor Methodologies, the Department explained that the best 
methodology to value the labor input is to use industry-specific labor 
rates from the primary surrogate country.\68\ Additionally, the 
Department determined that the best data source for industry-specific 
labor rates is Chapter 6A: Labor Cost in Manufacturing, from the 
International Labor Organization (ILO) Yearbook of Labor 
Statistics.\69\
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    \68\ See Labor Methodologies, 76 FR at 36093.
    \69\ See id. 76 FR at 36093-94.
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    We could not identify Chapter 6A labor data for Ukraine pertaining 
to the industry specific to subject

[[Page 13293]]

merchandise. In Labor Methodologies, the Department explained that, 
``if there is no industry-specific data available for the surrogate 
country within the primary data source, i.e., ILO Chapter 6A data, the 
Department will then look to national data for the surrogate country 
for calculating the wage rate.'' \70\ The latest year for which ILO 
Chapter 6A reports national data for Ukraine is 2006. We selected this 
monthly labor value, converted it to an hourly basis, and inflated it 
to 2010 (the majority of the POR) using the Ukrainian CPI.
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    \70\ Id. 76 FR at 36094, n.11.
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    We find that the ILO Chapter 6A data constitute the best available 
information on the record with which to value labor costs in this 
review on the basis that it accounts for all direct and indirect labor 
costs, such as, for example, wages, benefits, housing, training, etc., 
and, thus, more accurately reflective of the actual labor costs in 
Ukraine.\71\ For more details on this calculation, see the Factor 
Valuation Memorandum.
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    \71\ See id. 76 FR at 36093-94.
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    Because the financial statements used to calculate the surrogate 
financial ratios do not include itemized detail of labor costs, we did 
not make adjustments to certain labor costs in the surrogate financial 
ratios.\72\
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    \72\ See id. 76 FR at 36094.
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    To value factory overhead, selling, general and administrative 
expenses and profit, we used the ratios we derived using the 2010 
publicly available financial statements for JSC Ukrainsky Grafit, a 
major Ukrainian producer of graphite electrodes.\73\
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    \73\ See Factor Valuation Memorandum.
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    Fushun Jinly reported that it recovered certain by-products in its 
production of subject merchandise and successfully demonstrated that 
all of them have commercial value. Therefore, we have granted a by-
product offset for the quantities of Fushun Jinly's reported by-
products. We valued the by-product using Ukrainian GTA data.\74\
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    \74\ See id.
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Currency Conversion

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

Preliminary Results of Review

    The Department has determined that the following preliminary 
dumping margins exist for the period February 1, 2010, through January 
31, 2011:

------------------------------------------------------------------------
                                                                Margin
                           Company                             (percent)
------------------------------------------------------------------------
Fushun Jinly Petrochemical Carbon Co., Ltd..................       36.87
Xinghe County Muzi Carbon Co., Ltd..........................       36.87
Sichuan Guanghan Shida Carbon Co., Ltd......................       36.87
Beijing Fangda Carbon Tech Co., Ltd.........................       36.87
Chengdu Rongguang Carbon Co., Ltd...........................       36.87
Fangda Carbon New Material Co., Ltd.........................       36.87
Fushun Carbon Co., Ltd......................................       36.87
Hefei Carbon Co., Ltd.......................................       36.87
PRC-wide entity [dagger]....................................     159.64
------------------------------------------------------------------------
* Part of PRC-wide entity.
[dagger] The PRC-wide entity includes the following companies: Dechang
  Shida Carbon Co., Ltd., Fushun Carbon Plant, Fushun Jinli
  Petrochemical Carbon Co., Ltd., Guanghan Shida Carbon Co., Ltd., Jilin
  Carbon Graphite Material Co., Ltd., Jilin Carbon Import and Export
  Company, Lanzhou Hailong New Material Co., Liaoning Fangda Group
  Industrial Co., Ltd., Shida Carbon Group, Sichuan Dechang Shida Co.,
  Ltd., Sichuan Shida Trading Co., Ltd., Sinosteel Anhui Co., Ltd.,
  Sinosteel Corp., Sinosteel Jilin Carbon Co., Ltd., Sinosteel Jilin
  Carbon Imp. & Exp. Co., Ltd., Sinosteel Sichuan Co., Ltd., and Xinghe
  County Muzi Carbon Plant.

Disclosure and Public Comment

    The Department intends to disclose to parties to this proceeding 
the calculations performed in reaching the preliminary results within 
five days of the date of publication of these preliminary results.\75\ 
Interested parties may submit written comments (case briefs) within 30 
days of publication of the preliminary results and rebuttal comments 
(rebuttal briefs) within five days after the time limit for filing case 
briefs.\76\ Pursuant to 19 CFR 351.309(d)(2), rebuttal briefs must be 
limited to issues raised in the case briefs. Parties who submit 
arguments are requested to submit with the argument: (1) A statement of 
the issue; (2) a brief summary of the argument; and (3) a table of 
authorities.
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    \75\ See 19 CFR 351.224(b).
    \76\ See 19 CFR 351.309(c)(1)(ii) and 351.309(d)(1).
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    Interested parties, who wish to request a hearing, or to 
participate if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, filed electronically using Import Administration's 
Antidumping and Countervailing Duty Centralized Electronic Service 
System (IA ACCESS). An electronically filed document must be received 
successfully in its entirety by the Department's electronic records 
system, IA ACCESS, by 5 p.m. Eastern Standard Time within 30 days after 
the date of publication of this notice.\77\ 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 will inform parties of the scheduled date for 
the hearing which will be held at the U.S. Department of Commerce, 14th 
Street and Constitution Avenue NW., Washington, DC 20230, at a time and 
location to be determined.\78\ Parties should confirm by telephone the 
date, time, and location of the hearing.
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    \77\ See 19 CFR 351.310(c).
    \78\ See 19 CFR 351.310.
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    Unless the deadline is extended pursuant to section 
751(a)(2)(B)(iv) of the Act, the Department will issue the final 
results of this administrative review, including the results of our 
analysis of the issues raised by the parties in their comments, within 
120 days after issuance of these preliminary results.

Deadline for Submission of Publicly Available Surrogate Value 
Information

    In accordance with 19 CFR 351.301(c)(3), the deadline for 
submission of publicly available information to value FOPs under 19 CFR 
351.408(c) is 20 days after the date of publication of these 
preliminary results. In accordance with 19 CFR 351.301(c)(1), if an 
interested party submits factual information less than ten days before, 
on, or after (if the Department has extended the deadline), the 
applicable deadline for submission of such factual information, an 
interested party may submit factual information to rebut, clarify, or 
correct the factual information no later than ten days after such 
factual information is served on the interested party. 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 cannot accept in 
rebuttal the submission of additional, previously absent-from-the-
record alternative SV information pursuant to 19 CFR 351.301(c)(1).\79\ 
Furthermore, the Department generally will not accept business 
proprietary information in either the SV submissions or the rebuttals 
thereto, as the regulation regarding the submission of SVs allows only 
for the submission of publicly available information.
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    \79\ See, e.g., 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 at Comment 2.

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[[Page 13294]]

Assessment Rates

    Upon issuing the final results of the review, the Department shall 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. The Department intends to issue assessment instructions to CBP 
15 days after the date of publication of the final results of review.
    Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-
specific ad valorem duty assessment rates based on the ratio of the 
total amount of the dumping margins calculated for the examined sales 
to the total entered value of those same sales. We will instruct CBP to 
assess antidumping duties on all appropriate entries covered by this 
review if any importer-specific assessment rate calculated in the final 
results of this review is above de minimis. However, the final results 
of this review shall be the basis for the assessment of antidumping 
duties on entries of merchandise covered by the final results of this 
review and for future deposits of estimated duties, where applicable.

Cash Deposit Requirements

    The following cash deposit requirements, when imposed, will apply 
to all shipments of subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication of the final 
results of this administrative review, as provided by section 
751(a)(2)(C) of the Act: (1) The cash deposit rate for Fushun Jinly, 
Muzi Carbon, Shida Carbon, and the companies comprising the Fangda 
Group will be the rate established in the final results of this 
administrative review; (2) for any previously reviewed or investigated 
PRC or non-PRC exporter, not covered in this administrative review, 
with a separate rate, the cash deposit rate will be the company-
specific rate established in the most recent segment of this 
proceeding; (3) for all other PRC exporters, the cash deposit rate will 
continue to be the PRC-wide rate (i.e., 159.64 percent); and (4) the 
cash-deposit rate for any non-PRC exporter of subject merchandise from 
the PRC will be the rate applicable to the PRC exporter that supplied 
that exporter. These cash 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 751(a)(1) and 777(i) of the Act and 19 CFR 351.213.

    Dated: February 28, 2012.
Ronald K. Lorentzen,
Acting Assistant Secretary for Import Administration.
[FR Doc. 2012-5448 Filed 3-5-12; 8:45 am]
BILLING CODE 3510-DS-P