Antidumping: Sebacic acid from China,
[Federal Register: December 13, 1999 (Volume 64, Number 238)]
[Notices]
[Page 69503-69509]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13de99-45]
DEPARTMENT OF COMMERCE
INTERNATIONAL TRADE ADMINISTRATION
[A-570-825]
Sebacic Acid From the People's Republic of China: Final Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration, Department of Commerce.
ACTION: Notice.
SUMMARY: On Friday, August 6, 1999, the Department of Commerce published in the Federal Register the preliminary results of the administrative review of the antidumping duty order on sebacic acid from the People's Republic of China. See Sebacic Acid from the People's Republic of China: Preliminary Results of Antidumping Duty Administrative Review, 65 F.R. 42916 (Aug. 6, 1999). The administrative review covers four exporters of the subject merchandise to the United States: Tianjin Chemicals Import and Export Corporation; Guangdong Chemicals Import and Export Corporation; Sinochem International Chemicals Company, Ltd.; and Sinochem Jiangsu Import and Export Corporation. The period of review is July 1, 1997, through June 30, 1998.
We gave interested parties an opportunity to comment on our preliminary results. Based on our analysis of the comments received and the correction of certain clerical errors, we have changed our results from those presented in our preliminary results as described below in the ``Analysis of Comments Received'' section of this notice. The final results are listed below in the section ``Final Results of the Review.''
EFFECTIVE DATE: December 13, 1999.
FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or Christopher Priddy, AD/ CVD Enforcement Group I, Office II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-2613 or (202) 482-1130, respectively.
APPLICABLE STATUTE AND REGULATIONS: Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to the Department's regulations are to the regulations at 19 CFR part 351 (April 1998).
SUPPLEMENTARY INFORMATION:
Background
On August 6, 1999, the Department of Commerce (the Department) published in the Federal Register the preliminary results of the 1997- 1998 administrative review of the antidumping duty order on sebacic acid from the People's Republic of China (PRC). See Sebacic Acid from the PRC: Preliminary Results of Antidumping Duty Administrative Review, 64 Fed. Reg. 42916 (August 6, 1999) (Preliminary Results). On August 26, 1999, Tianjin Chemicals Import and Export Corporation (Tianjin Chemicals), Guangdong Chemicals Import and Export Corporation (Guangdong Chemicals), and Sinochem International Chemicals Company, Ltd. (SICC) (collectively comprising the respondents) submitted additional surrogate value data. The petitioner and successor in interest to Union Camp Corporation, Arizona Chemical Company, fileda response to the respondents' submission on September 7, 1999. The petitioner and three of the four respondents submitted case briefs on September 7, 1999, and rebuttal briefs on September 13, 1999. The Department held a public hearing on October 27, 1999. The fourth respondent, Sinochem Jiangsu Import and Export Corporation, did not participate in this administrative review. Accordingly, the Department has continued to base the margin for this respondent on facts available for purposes of the final results.
The Department has now completed this administrative review in accordance with section 751(a) of the Act.
Scope of Review
The products covered by this order are all grades of sebacic acid, a dicarboxylic acid with the formula (CH2)8(COOH)2, which include but are not limited to CP Grade (500ppm maximum ash, 25 maximum APHA color), Purified Grade (1000ppm maximum ash, 50 maximum APHA color), and Nylon Grade (500ppm maximum ash, 70 maximum ICV color). The principal difference between the grades is the quantity of ash and color. Sebacic acid contains a minimum of 85 percent dibasic acids of which the predominant species is the C10 dibasic acid. Sebacic acid is sold generally as a free-flowing powder or flake.
Sebacic acid has numerous industrial uses, including the production of nylon 6/10 which is a polymer used for paintbrush and toothbrush bristles and paper machine felts, plasticizers, esters, automotive coolants, polyamides, polyester castings and films, inks and adhesives, lubricants, and polyurethane castings and coatings.
Sebacic acid is currently classifiable under subheading 2917.13.00.30 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this proceeding remains controlling.
Export Price
For Guangdong, SICC, and Tianjin we calculated export price (EP) in accordance with section 772(a) of the Act because the subject merchandise was sold directly to unaffiliated customers in the United States prior to importation and constructed export price (CEP) methodology was not otherwise warranted based on the facts of record. We calculated EP based on the same methodology used for purposes of the preliminary results with the exception that we used a different surrogate value for all respondents' ocean freight expenses. See Comment 7.
Normal Value
Section 773(c)(4) of the Act requires the Department to value the non-market economy (NME) producer's factors of production, to the extent possible, in one or more market economy countries that: (1) Are at a level of economic development comparable to that of the NME, and (2) Are significant producers of comparable merchandise. As stated in the Preliminary Results, the Department has determined in this case that India meets both statutory requirements for an appropriate surrogate country. In the final results, we have continued to rely on India as the surrogate country. Accordingly, we have calculated normal value (NV) using Indian surrogate values for the PRC producers' factors of production.
We calculated NV based on the same methodology used in the preliminary results with the following exceptions: (1) We adjusted the surrogate values of the by-product fatty acid and the co-
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product capryl alcohol to reflect differences in concentration levels between these subsidiary products and their respective surrogate values; (2) We revised the foreign trucking surrogate value based on Financial Express price quotes (see Comment 3); (3) We included indirect labor amounts in our normal value calculations (see Comment 4); (4) We based the octanol surrogate value on the average of twelve Chemical Weekly price quotes reflecting each month of the POR submitted by the editor of Chemical Weekly; (5) We based the activated carbon surrogate value on price quotes obtained from Indian companies (see Comment 6); (6) We valued Hengshui Dongfeng Chemical Factory's (Hengshui's) and Zhong He Chemical Factory's (Zhong He's) refined glycerine, as well as Handan Fuyang Sebacic Acid Factory's (Handan's) by-product crude glycerine, using Indian Import Statistics data; (7) We included macropore resin in Handan's normal value calculation (see Comment 9); (8) We corrected a certain ministerial error with respect to Handan's packing costs (see Comment 9); (9) We replaced incorrect surrogate values for activated carbon and foreign rail freight with proper values for certain exporters' normal value calculations; (10) We revised the manner in which we calculated the deduction for sales and excise taxes from the Chemical Weekly price quotes; (11) We valued the castor oil which Hengshui purchased from both market and non-market economy suppliers using the factory's actual purchase price from a market-economy supplier.
Analysis of Comments Received
Comment 1: Concentration Levels of Subsidiary Products
The petitioner asserts that the Department erred in its normal value calculations by failing to adjust the values of the sebacic acid subsidiary products glycerine and fatty acid, as well as the co-product capryl alcohol, by their respective concentration levels. For Handan, the one manufacturer for which the Department did adjust the glycerine value to reflect its purity level, the petitioner asserts that the Department used the incorrect glycerine concentration percentage in its normal value calculation. Because Hengshui and Zhong He did not report the concentration levels at which they produce fatty acid, the petitioner urges the Department to use as facts available Handan's fatty acid concentration levels.
The respondents argue that the Department should not adjust subsidiary product values to reflect differences in their concentration levels, as these purity levels do not affect the products' usages or prices. The respondents urge the Department to follow its decision in the final determination of the investigation by refusing to adjust products' surrogate values by their concentration levels in those cases in which the products' Indian price purity levels are unknown. See Notice of Final Determination of Sales at Less than Fair Value (LTFV Investigation): Sebacic Acid from the PRC, 59 F.R. 28053, 28059 (May 31, 1994) (Sebacic Acid Final Determination). The respondents argue that there is no information on the record of this case which supports a determination of the purity level at which the co-product and subsidiary products were sold. However, should the Department decide to adjust the values for subsidiary products on the basis of their respective concentration levels, the respondents ask that the Department adjust sebacic acid's gross unit price to reflect the concentration level at which sebacic acid was sold during the period of review (POR).
DOC Position
For purposes of the final results, we adjusted the surrogate values for the subsidiary product fatty acid and the co-product capryl alcohol to reflect variations between the product's reported concentration levels and the surrogate value's concentration level. We did not, however, adjust the surrogate value for the by-product glycerine.
For purposes of the Sebacic Acid Final Determination, the Department stated that it would not adjust surrogate values to reflect purity levels when the surrogate value sources do not indicate levels of purity which can be used for comparison purposes. Sebacic Acid Final Determination, 59 F.R. 28053, 28059 (May 31, 1994). However, the Department may make surrogate value adjustments when information on the record provides a basis upon which the Department may infer Indian price quotes' purity percentages. Notice of Final Determination of Sales at Less than Fair Value: Certain Paper Clips from the People's Republic of China, 59 F.R. 51168, 51174 (October 7, 1994). In response to a November 16, 1999, inquiry regarding the concentration levels of Chemical Weekly price quotes, the editor of Chemical Weekly stated that chemical price quotes which do not mention the chemical's purity level are based on a one hundred percent purity level. See November 22, 1999, Memo to the File from Christopher Priddy. Because we based the surrogate values for capryl alcohol and fatty acid on Chemical Weekly price quotes which reflect a one hundred percent purity level, the Department adjusted these products' surrogate values to reflect the reported concentration levels at which they were produced.
For purposes of the final results, the Department derived the surrogate value for glycerine from import prices published in the Indian Import Statistics. The Department does not have adequate information to determine the purity level of glycerine generated by the respondents and the glycerine covered by the Indian Import prices. Because we lack this necessary information, the Department did not make concentration level adjustments for glycerine. Accordingly, the Department revised its normal value calculations in those instances in which it adjusted the glycerine value by its chemical concentration level.
Finally, we disagree with the respondents' argument that if we adjust the values for subsidiary products we should also adjust the respondents' reported gross unit prices of sebacic acid to reflect the concentration level at which the product was sold during the POR. We make an adjustment to the prices when there is a known difference between the concentration levels of the product and the price for the product. The respondents sold sebacic acid at a 99.5 percent concentration level, and the sebacic acid prices which the respondents reported to the Department correspond with the reported 99.5 percent concentration level. Therefore, the Department has no basis to make the type of adjustment requested by the respondents.
Comment 2: Caustic Soda Concentration Level
The petitioner argues that the Department undervalued the cost of caustic soda by interpreting Chemical Weekly prices as quotes for caustic soda sold at one hundred percent purity concentration levels. The petitioner states that it provided the Department with information indicating that liquid caustic soda is normally sold in 50 percent concentration levels and urges the Department to adjust the respondents' caustic soda surrogate values from an original caustic soda concentration level of 50 percent. See Petitioner's January 25, 1999, Surrogate Value Submission.
The respondents assert that the Department should follow precedent in this case and allow reductions for caustic soda purity levels based on a one hundred percent purity level
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standard. The respondents state that the Department, in the original investigation, based its decision regarding caustic soda prices on a letter from Chemical Weekly's editor reporting that Chemical Weekly caustic soda prices reference caustic soda at a one hundred percent purity level. See Sebacic Acid From the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 59 Fed. Reg. 28053, 28059 (May 31, 1994). The respondents argue that Chemical Weekly caustic soda prices reflect a one hundred percent dry basis due to price valuation purposes for buyers of different caustic soda purity percentages who do not pay for water included in liquid caustic soda. The respondents urge the Department to follow its precedent from the Sebacic Acid Final Determination and adjust caustic soda percentages according to Chemical Weekly caustic soda prices referencing caustic soda of one hundred percent purity.
DOC Position
We agree with the respondents. On November 16, 1999, the Department submitted an inquiry to Chemical Weekly regarding the relationship between chemical purity levels and price quotes. The editor of Chemical Weekly responded that chemical price quotes which do not mention the chemical's purity level are based on a one hundred percent purity level and used caustic soda as an example. See November 22, 1999, Memo to the File from Christopher Priddy. Based on the Chemical Weekly editor's statement, the Department determined that the caustic soda price quote was based on caustic soda of one hundred percent purity. Because the respondents reported variances in the purity levels of the caustic soda used to produce sebacic acid, we have continued to adjust the respondents' caustic soda levels by a percentage of the one hundred percent purity based on Chemical Weekly caustic soda price.
Comment 3: Surrogate Value for Foreign Trucking Freight Rate
For purposes of our preliminary results, we used a trucking rate derived from an April 20,1994, Times of India newspaper article to value foreign trucking freight. The petitioner argues that the Department should use trucking rates quoted in a May 18, 1998, Financial Express article for purposes of valuing foreign trucking expenses for purposes of the final results. Because the article's rates are contemporaneous to the POR, the petitioner claims that the article's trucking rates are preferable to the rates used by the Department for purposes of the preliminary results.
The respondents argue that the Financial Express rates are aberrational, due to a temporary shortage of vehicles in India at the time of the trucking rate quotes. The respondents claim that the high freight rates were a regional phenomenon and do not represent a fundamental trucking freight rate increase throughout India. Accordingly, for purposes of the final results, the respondents request that the Department continue to value foreign trucking expenses with rates used in the preliminary results.
DOC Position
We agree with the petitioner that the May 18, 1998, Financial Express trucking freight rates are more appropriate surrogate values for trucking expenses than the rates used for purposes of the preliminary results, as the Financial Express rates are contemporaneous to the POR. However, as noted by the respondents and discussed in the Financial Express article, prices for certain routes reported in the article, such as Mumbai to Calcutta, reflected increases resulting from vehicle shortages during the week prior to May 18, 1998. Because the trucking rate increases occurred at the end of the POR and appear to be related to unusual circumstances, we believe that trucking freight quotes effective prior to the price increase more accurately represent trucking freight costs during the POR. Accordingly, for purposes of the final results, we made adjustments to Financial Express truck rates based on information contained in the article to derive rates that would have been effective prior to the price increase. See December 6, 1999, Final Results Factors Valuation Memorandum.
Comment 4: Indirect Labor
The petitioner argues that the Department erroneously excluded from its calculation of normal value indirect labor amounts reported by the respondents. The petitioner claims that the Department cannot assume that indirect labor is included in the factory overhead surrogate value, as the respondents have not explained what types of work tasks are included in the indirect labor category. Furthermore, the petitioner notes that in all prior proceedings of this case, the Department included indirect labor as reported by the respondents in the calculation of normal value.
The respondents counter by first noting that, contrary to the petitioner's assertion, they explained the types of indirect labor reported to the Department as labor such as maintenance work that is not directly involved in the production process. The respondents also claim that the Department's factory overhead calculation, based on the Reserve Bank of India Bulletin (RBI) data, includes an amount for indirect labor. Specifically, the respondents state that indirect labor is included in the expense line-item ``Repairs to Machinery.'' The respondents further argue that including indirect labor hours may lead to the Department's double counting of unskilled labor hours as all unskilled labor hours associated with the production of sebacic acid have been reported in the factors of production table under the field ``Unskilled Labor Hours.''
DOC Position
We disagree with the respondents' claim that indirect labor is included in the surrogate factory overhead rate; specifically, we do not interpret the expense line-item ``Repairs to Machinery'' as including indirect labor. Our examination of the RBI data indicates that labor costs, irrespective of whether these costs are direct or indirect, are reported under separate categories (i.e., ``Salaries, Wages and Bonuses,'' ``Provident Fund,'' and ``Employees' Welfare Expenses''). Therefore, we have no basis to conclude that either the cost element ``Repairs to Machinery'' or other cost items included in our factory overhead calculation contains labor costs associated with production.
With respect to the respondents' concern about our double-counting unskilled labor hours, we first note that unskilled labor hours reported in the responses pertain to labor directly related to the production of sebacic acid. The respondents further stated that reported indirect labor hours include all labor hours which have not been included in the direct labor total. Therefore, contrary to the respondents' assertion, there is no reason to believe that including reported indirect labor hours would lead to the double-counting of unskilled labor factors. Moreover, as noted by the petitioner, we have included reported indirect labor hours in our factors of production calculations in prior proceedings of this case, and we have followed our precedent in this administrative review by including indirect labor hours as reported by the respondents in our normal value calculation.
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Comment 5: Octanol Valuation
The petitioner argues that the Department incorrectly based its octanol surrogate value on general category Chemical Weekly octanol prices rather than more product-specific Indian Import Statistics prices for 2-ethylhexanol. The respondents, on the other hand, assert that the Department correctly used Chemical Weekly ``octanol'' price quotes which, as a 1996 letter from Chemical Weekly's editor explains, are for 2-ethylhexanol. The respondents state that the Chemical Weekly prices for the domestically-produced 2-ethylhexanol better represent 2- ethylhexanol's actual cost and price in the Indian domestic market than import prices reported in the Indian Import Statistics. According to the respondents, the Indian Import Statistics are not as reliable as the domestic Chemical Weekly prices, as the import prices are from three exporting countries and provide greater risk of aberrational sales or purity issues. The respondents argue that even though the Department has relied on import statistics in other administrative reviews, the Department should adopt domestic rather than import prices when deciding between two non-aberrational, contemporaneous surrogate values.
DOC Position
We agree with the respondents. When the Department is deciding between tax- and duty-exclusive, non-aberrational domestic and import prices for surrogate valuation purposes, the Department's preference is to use domestic prices. Sulfanic Acid from the People's Republic of China; Final Results of Antidumping Duty Administrative Review, 63 FR 63834, 63837-8 (Nov. 17, 1998). In this review, we have on the record a letter from the editor of Chemical Weekly which states that the Chemical Weekly octanol price corresponds to the domestic price for 2- ethylhexanol. Because we have no claims that either the domestic or import surrogate value is aberrational, the Department continued to value octanol using Indian domestic Chemical Weekly prices for 2- ethylhexanol. In order to have a more representative octanol price for this review, the Department used twelve octanol rates reflecting each month of the POR supplied by the editor of Chemical Weekly. See November 12, 1999, Letter to Chemical Weekly from Christopher Priddy; see also November 22, 1999, Memo to the File from Christopher Priddy.
Comment 6: Surrogate Value for Activated Carbon
For purposes of our preliminary results, we valued activated carbon using September 10, 1996, Chemical Weekly export prices. The petitioner placed on the record published activated carbon import values contemporaneous to the POR and argues that, because the Department has stated its preference for using data that includes a range of prices which are within the POR, we should value activated carbon using these import values for purposes of our final results.
The respondents contend that the activated carbon import prices are not effective for liquid phase activated carbon, which is used by the respondents, but, instead, represent prices for the more expensive gas phase activated carbon. In support of their claim, the respondents rely on the Department's past decision in which it found that (1) ``The import prices do not appear to correspond to the type of activated carbon used by Chinese manufacturers;'' and (2) The ``great disparity between the import and export prices of activated carbon suggests that these price quotes may be for different grades of activated carbon.'' Sulfanilic Acid From the People's Republic of China: Final Results of Antidumping Duty Administrative Review 62 FR 48597, 48600 (Sept. 16, 1997) (Sulfanilic Acid). Accordingly, the respondents urge the Department to conclude in this case, as we did in Sulfanilic Acid, that export prices are the best available information for valuing this factor.
DOC Position
We agree with the respondents that import values do not appear to correspond to the type of activated carbon used by the Chinese producers. The record of this review contains three sources of publicly available price data on activated carbon: Chemical Weekly import and export values and public price quotes obtained from Indian companies. Although the Chemical Weekly prices do not indicate the type or specification of activated carbon included in the export and import values, the price quotes submitted by the respondents include values for the ``powder'' form of activated carbon used by the manufacturers in this case.
In comparing prices from the three sources we found that Indian producers' price quotes and export values were comparable, but that import values were substantially higher than these prices. As noted by the respondents, the Department determined in Sulfanilic Acid that the disparity between import and export prices appears to be attributable to the fact that these prices may be for different types of activated carbon and that export prices are more representative of the type of activated carbon used by the Chinese producers. In Sulfanilic Acid, we also cited the less than fair value investigation of Polyvinyl Alcohol from the PRC, in which we found that Indian export prices for activated carbon are more reliable than import prices. See Notice of Final Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol From the People's Republic of China, 61 FR 14057 (March 29, 1996).
Therefore, considering the above factors, we find that Chemical Weekly export prices and public price quotes obtained from Indian companies are more appropriate activated carbon surrogate values. We note that for purposes of our preliminary results we used Chemical Weekly export statistics to value activated carbon. For purposes of the final results, we have used public price quotes for ``powder'' activated carbon as the surrogate value for this production factor because these price quotes are supported by publicly available published information (i.e., the export price) and, most importantly, are specific to the type of activated carbon used by the Chinese producers.
Comment 7: Ocean Freight Surrogate Value
The respondents argue that the Department incorrectly used a Sea- Land Services, Ltd. (Sea-Land) ocean freight rate for the shipment of oxalic acid to value the respondents' international shipping expenses for purposes of the preliminary results. The respondents assert that the Sea-Land ocean freight quote is an unacceptable ocean freight surrogate value for several reasons. First, the respondents argue that the Sea-Land quote was dated November 16, 1998, and, therefore, reflects an ocean freight rate outside the POR. The respondents also state that the Department should not use a Sea-Land ocean freight rate for the shipment of oxalic acid to Elizabeth, New Jersey, which references neither this review's actual subject merchandise, sebacic acid, nor the actual port of destination, New York, New York.
Moreover, the respondents maintain that Sea-Land's ocean freight quote is unacceptable, as it is a premium shipping company rate obtained through private rather than public channels for comparison and not commercial purposes. Because the respondents view Sea-Land's per metric ton rate as significantly higher than previous administrative reviews' ocean
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freight surrogate values, the respondents argue that Sea-Land's quote does not accurately reflect ocean freight costs set by Chinese market forces. The respondents urge the Department to follow its precedence in former administrative reviews or use Federal Maritime Commission rates to value ocean freight. In the alternative, the respondents urge the Department to use ocean freight quotes provided in the respondents' August 26, 1999, submission from Sea-Land, Hanjin Shipping, or American International Cargo Services.
The petitioner asserts that the Department correctly used the Sea- Land ocean freight value which the petitioner submitted on January 25, 1999. First, the petitioner states that the Sea-Land ocean freight rate was obtained on November 16, 1998, but was effective on May 1, 1998, and, therefore, was within the POR. The petitioner acknowledges that Sea-Land's ocean freight quote is for Elizabeth, New Jersey, a city geographically proximate to New York, New York, and argues that a price differential between the two port cities would be minimal. The petitioner also maintains that even though it obtained the ocean freight quote from a Sea-Land sales agent, the rate is publicly available on Sea-Land's website.
The petitioner argues that the respondents have provided the Department no information to support their assertions that Sea-Land is a premier shipping company and that the Sea-Land container rate is only a comparison rate. In addressing the respondents' arguments concerning price disparities between Sea-Land's and prior administrative proceedings' ocean freight rates, the petitioner argues that because other Departmental proceedings' surrogate values are at least three years old, they are inaccurate and do not satisfy the Department's preference for contemporaneous surrogate values. The petitioner urges the Department to use the Sea-Land quote for purposes of the final results and cited several past Departmental proceedings in which the Department relied on Sea-Land shipping quotes to value ocean freight.
DOC Position
For purposes of these final results, we used ocean freight prices provided to the Department by Maersk, Inc. (Maersk) as surrogate values for ocean freight. To ascertain the comparability of Sea-Land's and other international freight carriers' prices for the POR, the Department contacted Maersk on November 5, 1999, and requested that Maersk provide its POR-applicable freight quotes and the maximum number of pounds which Maersk can ship in a twenty-foot container. Maersk provided May 1, 1997, and May 1, 1998, per-container ocean freight rates which varied only slightly from the May 1, 1998, Sea-Land rate provided by the petitioner. See November 8, 1999, and November 9, 1999, Memos to the File from Christopher Priddy. However, the maximum number of pounds which Maersk reported it can ship in a twenty-foot container deviated significantly from the maximum number of pounds used by the petitioner to calculate the Sea-Land per metric ton rate in its January 25, 1999, submission. We contacted Sea-Land but could not corroborate the maximum number of pounds it stated it can ship in a twenty-foot container with the amount used in the petitioner's ocean freight calculations. See November 10, 1999, Memo to the File from Christopher Priddy.
Maersk's assertion of the maximum number of pounds capable of being shipped in a twenty-foot container is consistent with information previously filedwith the Department. See June 20, 1997, Memo to the File from Charles Riggle for Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Romania; Final Results of Antidumping Duty Administrative Review, 62 FR 32292 (June 13, 1997). Because we corroborated the maximum number of pounds which Maersk can ship to customers in a twenty-foot container, we used a per-metric ton ocean freight surrogate value based on the information provided by Maersk. The Department has relied on Maersk ocean freight rates in previous cases for ocean freight valuation purposes. See Tapered Roller Bearings from Romania, 62 FR 32232 (June 13, 1997); Manganese Metal From the People's Republic of China; Final Results of Second Antidumping Administrative Review, 64 FR 49447 (September 13, 1999); Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination: Creatine Monohydrate from the PRC, 64 FR 41375 (July 30, 1999). Our decision to use Maersk information as the basis for an ocean freight surrogate value is also based on the fact that Maersk provided rates effective at both the beginning and end of the POR. By using an average of these two values, the Department adopted an ocean freight surrogate value more reflective of the POR than the single-month ocean freight rate supplied by Sea- Land. Although certain respondents made shipments of sebacic acid to Chicago, Illinois, the Department was unable to obtain freight rates through to Chicago. We have accordingly used the Maersk international freight rate to New York in valuing the respondents' shipments to Chicago.
Comment 8: By-Product Glycerine Valuation
The respondents argue that the Department should value glycerine for Hengshui and Zhong He using either an averaged value for refined and crude glycerine or the surrogate value for 95 percent refined glycerine. The respondents state that the Chinese sebacic acid manufacturers produce both crude and refined glycerine and that the respondents provided the refined glycerine's technical specifications. The respondents assert that the Department has on the record the factors used for producing the refined glycerine, as well as statements by Hengshui and Zhong He that they produce 95 percent refined glycerine. Accordingly, for Hengshui and Zhong He, the respondents urge the Department to adjust the glycerine values to 95 percent purity glycerine prices or use averaged crude and refined quality glycerine values.
The petitioner maintains that the Department should adjust the glycerine surrogate value to reflect an 85 percent concentration level for glycerine produced by Hengshui and Zhong He and an 80 percent concentration level for glycerine produced by Handan. The petitioner argues that the respondents' technical specifications regarding refined glycerine are unacceptable, as the respondents only provide a statement concerning the 95 percent purity percentage of the produced glycerine. The petitioner also argues that the respondents have reported in neither narrative nor diagram form the glycerine refinement process and the stage at which this refinement occurs. Moreover, the petitioner alleges that the respondents have provided no information to support their claim that the reported glycerine production factors are for the 95 percent refined glycerine.
DOC Position
We agree with the respondents and used a surrogate value for refined glycerine to value Hengshui's and Zhong He's glycerine by- products and a crude glycerine surrogate value for Handan's by-product glycerine. For purposes of this administrative review, both Hengshui and Zhong He reported in their technical description of the sebacic acid production stages that
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glycerine was later purified by the factories to 95 percent refined glycerine. We believe that Hengshui's and Zhong He's statements provide a reasonable basis for determining that the glycerine purification costs were included in the factors of production which the two respondents reported to the Department. Furthermore, in the prior review of this proceeding the Department verified that Handan and Hengshui produced and sold refined glycerine. The Department grants a by-product credit based on the subsidiary product's refined value in those cases in which the factors of production to convert the by- product to the refined grade have already been included in the subject merchandise's overall production costs. Sebacic Acid form the PRC; Final Results of Antidumping Duty Administrative Review, 63 FR 43373, 43378 (Aug. 13, 1998). Because the Department concluded that costs for Hengshui's and Zhong He's glycerine refinement were included in the sebacic acid production costs and because Hengshui and Zhong He reported quantities of refined glycerine produced, we used the refined glycerine surrogate values for glycerine produced by Hengshui and Zhong He. We continued using the crude glycerine surrogate to value Handan's by-product glycerine.
We have calculated a new refined glycerine surrogate value for purposes of the final results. The Department's basis for a glycerine surrogate value for purposes of the preliminary results was based on Chemical Weekly price quotes for glycerine in the Indian domestic market. See Preliminary Results Factors Valuation Memorandum, August 2, 1999, at Attachment 10. For purposes of valuing refined and crude glycerine for the final results, we used the averages of Indian Import Statistics data provided by the respondents for refined and chemically pure as well as crude glycerine from Japan, Malaysia, the Netherlands, and the United States. Although the Chemical Weekly price quotes used for purposes of valuing glycerine in the preliminary results were contemporaneous to the POR, these price quotes did not reference glycerine type. In order to accurately value the two types of glycerine which the respondents reported as by-products of sebacic acid, the Department used Indian Import Statistics data which referenced the type of glycerine for which the prices were provided.
Comment 9: Ministerial Errors Alleged by the Petitioner
The petitioner maintains that the Department should correct the following ministerial errors discussed in the Department's Preliminary Results Factors Valuation Memorandum: (1) The Department should include a value for sodium chloride in Zhong He's normal value calculation as Zhong He reported that it used this input; (2) In Handan's normal value calculation, the Department should include a value for macropore resin as Handan reported that it used this chemical; (3) The Department should correct Handan's total packing costs.
The respondents disagree with the petitioner's assertion regarding the inclusion of a sodium chloride value in Zhong He's normal value calculation. The respondents assert that Zhong He stated in its supplemental questionnaire response that it did not use sodium chloride during the POR and that the Department correctly omitted sodium chloride from Zhong He's normal value calculation.
DOC Position
We agree with the petitioner concerning alleged errors (2) and (3) and have corrected for these errors; we agree with the respondents concerning alleged error (1) and continued to omit sodium chloride from Zhong He's normal value calculation.
Final Results of the Review
As a result of our analysis of the comments we received, we determine that the following weighted-average margins exist for the period July 1, 1997 through June 30, 1998:
Margin Manufacturer/exporter
(percent)
Tianjin Chemicals I/E Corp.................................
2.74 Sinochem International Chemicals Corp......................
0.00 Guangdong Chemicals I/E Corp...............................
9.01 PRC-Wide Rate.............................................. 243.40
Assessment Rates
The Department shall determine and the Customs Service shall assess antidumping duties on all appropriate entries. We have calculated importer-specific assessment rates based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total estimated entered value of the examined sales. We estimated each exporter's entered values by subtracting international movement expenses from each exporter's reported gross unit prices. These rates will be assessed uniformly on all entries of that particular importer made during the POR. Pursuant to 19 CFR 351.106(c)(2), we will instruct the Customs Service to liquidate without regard to antidumping duties all entries for any importer for whom the assessment rate is deminimis (i.e., less than 0.50 percent). The Department will issue appraisement instructions directly to the Customs Service.
Furthermore, the following cash deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rates for Tianjin Chemicals and Guangdong Chemicals will be the rates stated above, and the cash deposit rate for SICC will be zero; (2) For companies previously found to be entitled to a separate rate and for which no review was requested, the cash deposit rates will be the rate established in the most recent review of that company; (3) For all other PRC exporters of subject merchandise, the cash deposit rates will be 243.40 percent, the PRC country-wide rate; and (4) The cash deposit rate for non-PRC exporters of subject merchandise from the PRC will be the rate applicable to the PRC supplier of that exporter. These deposit rates, when imposed, shall remain in effect until publication of the final results of the next administrative review.
Notification of Interested Parties
This notice serves as a final reminder to importers of their responsibility under 19 CFR 351.402(f) 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 notice also serves as a reminder to parties subject to administrative protective order (APO) of their responsibility concerning the disposition of proprietary information disclosed under APO in accordance with 19 CFR 351.305(a)(3). See Antidumping and Countervailing Duty Proceedings: Administrative Protective Order Procedures; Procedures for Imposing Sanction for Violation of a Protective Order, 63 FR 24391, 24404 (May 4, 1998). Timely written notification of return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of the APO is a sanctionable violation.
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This administrative review is issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.
Dated: December 6, 1999. Richard W. Moreland, Acting Assistant Secretary for Import Administration.
[FR Doc. 99-32224Filed12-10-99; 8:45 am]
BILLING CODE 3510-DS-P
