Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65667

Tariff Act of 1930, as amended (19

U.S.C. 1675 (1995)), and section

353.213(d)(4) of the Department’s

regulations (19 CFR § 353.213(d)(4)

(1997)).

Dated: December 5, 1997.

Joseph A. Spetrini,

Deputy Assistant Secretary, Enforcement

Group III, Import Administration.

[FR Doc. 97–32630 Filed 12–12–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

A–570–802

Industrial Nitrocellulose 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 of final results of

antidumping duty administrative

review.

SUMMARY: On August 8, 1997, the

Department of Commerce (the

Department) published the preliminary

results of its administrative review of

the antidumping duty order on

industrial nitrocellulose (INC) from the

People’s Republic of China (PRC). This

review covers one producer/exporter,

China North Industries Guangzhou

Corporation (CNIGC), and entries of the

subject merchandise into the United

States during the period July 1, 1995

through June 30, 1996.

We gave interested parties an

opportunity to comment on our

preliminary results. On September 8,

1997, we received case briefs from

respondent and petitioner. On

September 15, 1997, we received

rebuttal comments from both parties.

We rejected respondent’s September 8,

1997 case brief because it contained

new information. Respondent

resubmitted its case brief on November

14, 1997. On November 21, 1997, we

placed on the record new data

concerning the price of steel drums in

Indonesia. On November 25, 1997,

respondents submitted comments on

this data. Based on our analysis of the

comments received, we have changed

the margin from that presented in our

preliminary results of review.

EFFECTIVE DATE: December 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Rebecca Trainor or Maureen Flannery,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington,

DC 20230; telephone: (202) 482–0666

and (202) 482–3020, respectively.

Applicable Statutes and Regulations:

Unless otherwise stated, all citations to

the statute are references to the

provisions effective January 1, 1995, the

effective date of the amendments made

to the Tariff Act of 1930 (the Act) by the

Uruguay Round Agreements Act. In

addition, unless otherwise indicated, all

citations to the Department’s regulations

are to the regulations as codified at 19

CFR part 353 (April 1, 1996).

SUPPLEMENTARY INFORMATION:

Background

On August 8, 1997, the Department

published in the Federal Register (62

FR 42747) the preliminary results of the

administrative review of the

antidumping duty order on INC from

the PRC (55 FR 28267, July 10, 1990).

The preliminary results indicated the

existence of a dumping margin. As we

explained in the preliminary results, we

did not grant CNIGC a separate rate.

However, because U.S. import statistics

indicate that CNIGC was the only

exporter of the subject merchandise to

the United States during the review

period, we based the PRC-wide rate on

the information submitted by CNIGC for

this review. See, Memorandum to the

File from Rebecca Trainor, dated July

23, 1997, on file in room B–099 of the

Commerce Department. We received

comments and rebuttal comments from

the petitioner and the respondent. The

Department has now completed this

administrative review in accordance

with section 751 of the Act.

Scope of the Review

Imports covered by this review are

shipments of industrial nitrocellulose

(INC) from the PRC. INC is a dry, white,

amorphous synthetic chemical with a

nitrogen content between 10.8 and 12.2

percent, and is produced from the

reaction of cellulose with nitric acid.

INC is used as a film-former in coatings,

lacquers, furniture finishes, and printing

inks. The scope of this order does not

include explosive grade nitrocellulose,

which has a nitrogen content of greater

than 12.2 percent.

INC is currently classified under

Harmonized Tariff System (HTS)

subheading 3912.20.00. While the HTS

item number is provided for

convenience and Customs purposes, the

written description remains dispositive

as to the scope of the product coverage.

The period of review (POR) is July 1,

1995 through June 30, 1996.

Changes From the Preliminary Results

1. In the preliminary results we

valued steel packing drums using the

Monthly Statistics of the Foreign Trade

of India: Imports, Volume II (Indian

import statistics) for the period of April

1995 through March 1996, and April

through June 1996. For the final results,

we have valued steel drums using

Indonesian prices contained in a

facsimile from the American embassy in

Jakarta, placed on the record for the

investigation of furfuryl alcohol from

the PRC. See Comment 4, and Final

Determination of Sales at Less than Fair

Value; Furfuryl Alcohol from the

People’s Republic of China, 60 FR 22544

(May 8, 1995) (Furfuryl Alcohol).

2. In the preliminary results, we

incorrectly converted the water usage

rate reported by respondent from tons to

kilograms. We also assigned a separate

surrogate value to water. For the final

results, we have corrected the

conversion error, and have not assigned

a separate surrogate value to water, as it

is included in the factory overhead

value we have used. See Comment 6.

3. For the distance between packing

materials suppliers and the INC factory

in the preliminary results, we used the

average distance between the supplier

and factory for all other materials. For

the final results, we have used the

actual distances between packing

materials suppliers and the respondent’s

factory, which we requested from

respondent on November 5, 1997. See

Comment 5.

4. In the preliminary results, we

applied an Indonesian factory overhead

rate which we obtained from the record

for Furfuryl Alcohol. For selling, general

and administrative (SG&A) expenses

and profit rates, we used Indonesian

data which we obtained from the record

for Certain Carbon Steel Butt-Weld Pipe

Fittings from the People’s Republic of

China, 57 FR 21058 (May 18, 1992)(Pipe

Fittings). For the final results, we have

used data obtained from the financial

statements of six Indian chemicalproducing companies. See Comment 7.

Analysis of Comments Received

We gave interested parties an

opportunity to comment on the

preliminary results. We received case

briefs and rebuttal briefs from petitioner

and respondent.

Comment 1: Surrogate country

selection: Respondent argues that the

Department should use India instead of

Indonesia as the primary surrogate

country in this review because: (1) The

volume of Indonesian exports of the

subject merchandise were very small,

unlike the volume of India’s exports; (2)
65668 Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices

1Although this administrative review is not being

conducted under these new regulations, these

regulations serve as a restatement of the

Department’s interpretation of the Act. Id. at 27378.

like India, and unlike Indonesia, China

does not import cotton linters and; (3)

the lack of Indonesian surrogate value

information for several factors sent the

Department back to India anyway, as the

‘‘secondary’’ surrogate country.

Respondent states that the Department

should use either data from the

secondary surrogate country, India, for

factory overhead, SG&A and profit

values, or use India as the primary

surrogate country and resort to

Indonesian values only for cotton

linters, since there is no Indian data on

cotton linters.

Department’s Position: We agree with

respondent in part. We have continued

to use Indonesia as the surrogate

country for the purposes of valuing all

of the raw material inputs. We have also

used Indonesian data as surrogate

values for packing materials. However,

as we discuss in Comment 7, we have

determined that Indian data is the best

information we have with which to

value factory overhead, SG&A and

profit.

In choosing the surrogate country, we

first determined that both India and

Indonesia were at a level of economic

development comparable to the PRC,

and that both are significant producers

of the subject merchandise. See

Memorandum to Maureen Flannery

from David Mueller, dated January 29,

1997, and Memorandum to the File

dated March 24, 1997, on file in Room

B–099 of the Commerce Department.

Although India is a larger exporter of

INC, we chose Indonesia as the

surrogate country because we could

obtain price data from Indonesian

sources for all of the factors of

production except for steel drums. This

was not true of India, from where no

data was available for cotton linters, one

of the primary raw materials.

Thus, contrary to respondent’s

assertion, the only surrogate value for

which we preliminarily resorted to

Indian data was for steel drums. We

note that for the final results, we valued

steel drums using an Indonesian source.

(See Comment 4.) Our preference is to

value all factors of production in a

single surrogate country, when possible.

See section 351.408(c)(2) of the

Antidumping Duties; Countervailing

Duties; Final Rule, 62 FR 27296 (May

19, 1997) (Final Rule) (‘‘Except for labor,

as provided in paragraph (d)(3) of this

section, the Secretary normally will

value all factors in a single surrogate

country.’’) 1 However, we were unable to

obtain the most reliable data from just

one country for this review, and have

relied upon Indian data for factory

overhead, SG&A and profit. We have

continued to use Indonesia as the

primary surrogate country, however,

because we can value all other inputs in

this country. This not true for India.

Furthermore, that China does not

import cotton linters is irrelevant to our

surrogate country selection. In using

surrogate values, our goal is to

substitute market-economy prices for

non-market-economy (NME) prices. We

use import data for no other reason than

that they are a reliable source of market

prices, not because the inputs may have

been imported in the respondent

country. In this case, we were unable to

value all factors in a single country;

however, our use of Indonesia as the

primary surrogate country is consistent

with this principle.

Comment 2: Surrogate Value for

Cotton Linters: Petitioner argues that the

Indonesian import statistics that the

Department used to value cotton linters

are flawed in several respects, and

advocates that the Department use U.S.

export data to either China, India or

Indonesia (see Comment 3). However,

petitioner asserts that, if the Department

must use unit values related to a

surrogate country, the Department

should use certain surrogate unit values

petitioner has identified from Indonesia

or India. First, petitioner contends, the

Indonesian import statistics are not

reliable, because the amount of cotton

linter imports they report are almost 15

times less than the amount that the U.S.

Census reports were exported to

Indonesia by the United States alone in

1995. Furthermore, the 1996 Indonesian

statistics show no imports from any

country at all, in contradiction with U.S.

export figures that show that the United

States exported 92,006 kg. to Indonesia

in the second half of the POR (January

through June 1996).

Secondly, petitioner claims that the

unit value for cotton linters derived

from the Indonesian import statistics is

aberrationally low, compared to the unit

value derived from U.S. export figures.

Petitioner asserts that it is the

Department’s normal practice to

disregard prices for factors of

production inputs which are

aberrational, and cites Final Results of

Antidumping Duty Administrative

Review; Heavy Forged Hand Tools,

Finished or Unfinished, With or Without

Handles, From the People’s Republic of

China (Hand Tools), 60 FR 49251, 49252

(September 22, 1995).

Third, petitioner claims the 1995

Indonesian import statistics show

imports of cotton linters into Indonesia

for only one month in the review period

(August). Moreover, petitioner argues,

Indonesian import statistics show no

imports of cotton linters for 1996.

Therefore, petitioner argues it is

inappropriate for the Department to use

figures based on one month of the POR

and only one month of a 24-month

period because the Indonesian import

statistics do not provide an accurate

portrayal of the import price for cotton

linters over the entire review period.

Petitioner also notes that the

Department routinely seeks to use

surrogate values ‘‘from a time period

that is contemporaneous to the period of

investigation or the period of review.’’

Hand Tools, 60 FR at 49253.

Fourth, petitioner asserts that the

Indonesian import statistics reflect

imports from Batam, which it claims is

a separate customs zone of Indonesia.

Because Batam is not a separate country

from Indonesia, petitioner reasons, the

data recorded in the Indonesian import

statistics regarding cotton linter imports

do not reflect true imports, and thus are

not eligible for use as a basis for

determining a market-economy price for

cotton linters.

Finally, petitioner states that, because

the unit values reflected in the import

statistics are low, they may represent

internal transfer prices. Moreover, they

may represent a single transaction at a

single port from a single supplier.

Petitioner points out that the

Department disregarded respondents’

data for similar reasons in Final

Determination of Sales at Less Than

Fair Value; Brake Drums and Brake

Rotors from the People’s Republic of

China, 62 FR 9160 (February 28, 1997)

(Brake Drums and Rotors).

Respondent claims that the

Indonesian import statistics do not

underreport the volume of imports of

cotton linters. Respondent points out

that the import data record imports

entered for consumption in Indonesia,

while the U.S. export data include all

exports sent into free trade zones in

Indonesia including those which are reexported without ever entering the

Indonesian domestic market. Moreover,

just because U.S. export data show

shipments of U.S. cotton linters to

China, India and Indonesia at a wide

range of prices, this does not mean that

those prices were actually paid in those

countries, which is what the statute

requires. Thus, respondent concludes,

there can be no meaningful comparison

of the two sets of data.

Respondent further argues that import

data are inherently more reliable than

export data. While there is little

incentive for accuracy on the part of the

providers of export data according to
Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65669

respondent, import data is compiled by

customs officials who use the value of

the imported merchandise to determine

the customs duties to be paid on the

merchandise. Moreover, understating

import values would subject an

importer to civil or criminal fines and

penalties. Respondent notes that there

are no similar consequences from

inaccurately or negligently reporting

U.S. export data. Therefore, it is the U.S.

export data that should be called into

question.

Assuming the accuracy of the U.S.

export data, respondent states that the

fact that the United States exports

cotton linters at a wide range of prices

that are different from the Indonesian

import values does not discredit the

latter.

Respondent argues that it is irrelevant

that import data used by the Department

were based on imports into Indonesia

during only one month of the review

period, because the data nonetheless

constitute a surrogate value that was

paid during the review period.

Moreover, respondent argues, it does

not detract from their accuracy.

Contrary to petitioner’s assertion,

respondent argues that the Indonesian

import values are true import values, as

Batam is a free trade zone. As such, the

majority of products sent to Batam from

outside Indonesia are not entered into

the Indonesian market for consumption,

but are re-exported. Those that do enter

for consumption are recorded as imports

and are assessed customs duties.

Therefore, the imports into Indonesia

through the Batam free trade zone fairly

represent the value of cotton linters in

Indonesia.

Respondent states that there is no

evidence that the Indonesian import

values represent internal transfer prices

or that they represent a single

transaction. Furthermore, the total

imported quantity of 42 tons is not so

small that the Department should

assume that it constitutes a single

transaction.

Department’s Position: We find no

evidence that the Indonesian import

data for cotton linters are aberrational or

unreliable, or that they represent a

single transaction. The data cover

imports into Indonesia from January to

November 1995, and report 42 tons of

cotton linters, not an insignificant

amount. When appropriate, we compare

surrogate value data to other available

market-economy data to test the

reliability of the data we intend to use

in the factor analysis. See, e.g. Hand

Tools. In this case, as petitioner and

respondent have acknowledged, there is

no other available data from countries

with comparable economies with which

to compare the Indonesian prices. Thus,

we have no basis on which to conclude

that the Indonesian import data is

aberrational. Other than Indonesian

import statistics or U.S. export data (see

Comment 3), the only price data that we

have been able to locate for cotton

linters are import statistics from the

United States and Canada. Such

comparisons are not meaningful here,

however, because all that they tell us is

that cotton linters imported into

Indonesia are priced lower than those

imported into two countries with very

different economies. Absent evidence

that the Indonesian values are

aberrational, to reject the Indonesian

price simply because it is ‘‘too low’’

could be an overly subjective

assumption. See Final Determination of

Sales at Less Than Fair Value: Certain

Helical Spring Lock Washers from the

People’s Republic of China, 58 FR 48833

(September 20, 1993) (‘‘We agree that

rejecting certain Indian import values

simply because those are ‘too high’ is

potentially overly subjective, but would

add that so is rejecting certain values

simply because they are ‘too low.’ ’’)

With respect to petitioner’s assertion

that the Indonesian import data are

unreliable because they do not comport

with United States export data, it stands

to reason that all of the merchandise

entering Batam would not appear as

imports in the Indonesian import

statistics, because Batam is a free trade

zone and a bonded area. As such, it is

entirely reasonable to assume that a

large proportion of imported goods are

re-exported from Batam, without ever

entering the Indonesian customs area.

Moreover, if the Batam prices were

not ‘‘true’’ imports, as petitioner

suggests, then they must represent

domestic prices in Indonesia, which are

also suitable to use as a surrogate value.

Comment 3: Use of U.S. Export Data:

Petitioner contends that instead of

Indonesian import data, the Department

should value cotton linters based on

U.S. export statistics for merchandise

exported to the PRC during the review

period. Petitioner argues that unit

values derived from U.S. export values:

(1) Provide the most realistic figure for

cotton linters; (2) are based on publicly

available information; (3) come from a

reliable source; (4) represent a large

volume of U.S. exports to China; and (5)

is on the record of this proceeding.

Petitioner emphasizes that these export

values are the most accurate prices

available because they are based on

actual prices paid by Chinese importers

for cotton linters during the POR.

Petitioner claims that it is the

Department’s longstanding practice to

use actual market-economy purchase

prices instead of surrogate values if such

market-economy prices exist for

material inputs. Therefore, the

Department should not have looked to

any surrogate value for cotton linters at

all. Petitioner maintains that there is

ample evidence that the Department

routinely uses actual prices paid by PRC

importers to U.S. suppliers. Petitioner

argues that in a non-market economy

such as the PRC, the Department’s

practice calls for using a combination of

surrogate values and actual marketeconomy prices when the latter are

available. Petitioner cites the following

determinations as evidence of the

Department’s practice of using actual

prices: Final Determination of Sales at

Less Than Fair Value; Bicycles from the

People’s Republic of China (Bicycles),

61 FR 19026, 19029 (April 30, 1996) and

Final Determination of Sales at Less

Than Fair Value; Coumarin from the

People’s Republic of China (Coumarin),

59 FR 66895, 66897 (December 28,

1994). Petitioner also cites Lasko Metal

Products, Inc. v. United States, 43 F.3d

1442 (Fed. Cir. 1994), to support its

contention that using actual prices paid

to U.S. suppliers by Chinese importers

conforms with the antidumping statute’s

intent to determine margins as

accurately as possible and to use the

‘‘best information available’’ to it.

The petitioner contends that, if the

Department determines that it must use

unit values relating to a surrogate

country, the Department should use a

price derived from U.S. export data for

cotton linters exported to either India or

Indonesia during the review period,

which petitioner claims are more

reliable than the Indonesian import data

the Department used for the preliminary

results. Petitioner notes that both

countries were determined to be

surrogate market-economy countries

and both countries produced INC.

Petitioner also notes the Department’s

reluctance to use export figures is based

on existence of subsidies and other

distorting schemes. However, petitioner

argues U.S. export statistics are the most

reliable official indicators of marketeconomy prices. Moreover, petitioner

cites to Saccharin from the People’s

Republic of China, 59 FR 58818

(November 15, 1995), and Coumarin

from the People’s Republic of China, 59

FR 66895 (December 28, 1994) as

examples where the Department used

export statistics as a reliable indicator of

price and to test the reliability of import

figures. Finally, petitioner notes that

when prices in both countries used for

comparison (Indonesia and India) were

found aberrational, the Department used
65670 Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices

the median export price to arrive at a

surrogate value.

Respondent argues that it would be

illegal to use U.S. export values to China

as a surrogate value for cotton linters,

and petitioner’s interpretation of the

court’s decision in Lasko and the

Department’s decisions in Bicycles and

Coumarin are inapposite. Respondent

points out that the Department declines

to use surrogate values for inputs only

when the manufacturer under

investigation has purchased those

inputs from a market-economy country.

Respondent also notes that it does not

use imported cotton linters to make the

subject merchandise; therefore, there are

no actual costs paid to market-economy

countries in this case. Respondent

argues that petitioner’s suggested

methodology is neither the intent of the

law, nor of Lasko, which affirmed the

Department’s use of actual marketeconomy prices paid by an NME

producer. Respondent further objects

that petitioner’s proposal to add its own

freight rates to U.S. export values would

further distort surrogate values.

Respondent further contends that the

use of U.S. export prices would

contravene section 773(c)(4) of the Act

requiring the Department to value NME

producers’ factors of production using

the prices of the factors in one or more

market-economy countries that are (A)

at a level of economic development

comparable to that of the NME country,

and (B) significant producers of

comparable merchandise, as the United

States is much more economically

developed than Indonesia.

Respondent contends that, for all of

the reasons noted above, the Department

should not use U.S. export data for

exports to India or Indonesia, as

petitioner suggests, but should use

Indian import statistics. However, if the

Department chooses to use export

values, the Department should calculate

a value that relates most closely to the

market of Indonesia, the Department’s

chosen surrogate country.

Department’s Position: As discussed

in Comment 2, we have continued to

use the Indonesian import price to value

cotton linters. We do not consider the

use of U.S. export data to be an

appropriate option in this case, when

we have an import price for a surrogate

country that is both a significant

producer and at a level of economic

development comparable to the PRC.

Furthermore, the Indonesian import

prices are derived from a range of

countries, and thus are a better indicator

of domestic market prices than would

be prices from a single country, the

United States. That the imports reflected

in the Indonesian import statistics may

come from Batam, a free trade zone,

does not contradict this, because

merchandise re-exported from Batam

into Indonesia would have originated

from a number of different countries.

Petitioner misinterprets Lasko and the

Department’s practice, articulated in

Bicycles and Coumarin, with respect to

using market-economy prices instead of

surrogate values in certain instances. In

these cases and many others, we have

established the practice of using actual

prices instead of surrogate values when

respondents have purchased certain

inputs from market-economy suppliers

and paid for them in a market-economy

currency. In Lasko at 1446, the CIT

affirmed this practice, which we

recently codified in Section

351.408(c)(1) of the Antidumping

Duties; Countervailing Duties; Final

Rule, 62 FR 27296, 27413 (May 19,

1997) (‘‘ However, where a factor is

purchased from a market economy

supplier and paid for in a market

economy currency, the Secretary

normally will use the price paid to the

market economy supplier.’’) In the

present case, the respondent specifically

stated in its questionnaire response that

it purchases cotton linters only from

PRC suppliers. Thus, there is no basis in

this case for deviating from the

surrogate value methodology used in the

preliminary determination to value

cotton linters.

Comment 4: Surrogate Value for Steel

Drums: Respondent contends that the

Department’s calculated surrogate value

for steel drums is an unreliable measure

of iron drum costs. Respondent argues

that the HTS category that the

Department used in the preliminary

results is a basket category, containing

a variety of different products besides

the galvanized iron sheet drums it used

during the review period, as evidenced

by the fact that unit values varied from

country to country by up to 2843%.

Respondent claims that the

Department’s valuation results in a perdrum dollar amount of $141.25, a figure

that is excessive and aberrational.

Respondent adds that the Department

generally rejects HTS-derived values

that are aberrational compared to other

available data, and cites Chrome-Plated

Lug Nuts from the People’s Republic of

China; Final Results of Antidumping

Duty Administrative Review, 61 FR

58514, 58517–518 (November 15, 1996)

(Lug Nuts), in which the Department

rejected steel values from a basket HTS

category as aberrational compared to

other available data. Respondent also

cites the April 22, 1996 Factors

Valuation Memorandum from the

Bicycles Team to the File, Bicycles, at

22, in which the Department used an

export value for one of the chemical

inputs because the import value had

been deemed aberrational in another

case.

Instead of the weighted average value

of all steel drum imports into India,

which the Department used in the

preliminary results, respondent suggests

that the Department use only the

collected data on imports of steel drums

into India from Indonesia. Respondent

claims that this value would be

appropriate, because it is based on two

surrogate country values, and would be

more reasonable than the $141.25 per

drum figure used in the preliminary

results.

Petitioner contends that the

Department was correct in calculating

the average unit value for steel drums,

in keeping with its preference for using

average non-export values. Petitioner

cites Lug Nuts and Final Determination

of Sales at Less Than Fair Value;

Polyvinyl Alcohol from the People’s

Republic of China, 61 FR 14057 (March

29, 1996). Petitioner points out that

respondent suggested both the source

and the HTS number that the

Department ultimately used in the

preliminary results, but now is

suggesting that the Department distort

the statistics by valuing steel drums

based on imports from just one

country—Indonesia. Petitioner claims

that to value steel drums based on

imports from only one of the several

countries listed in the Indian import

statistics would undermine the

Department’s purpose in calculating a

surrogate unit value—namely to

determine a price that would be paid by

an average Indian importer of steel

drums—and result in a skewed unit

value. Petitioner also objects to

respondent’s suggested methodology

because it would cover only one month

of the review period, even though

statistics for the full POR were available

from the same source respondent used.

Petitioner also alleges that respondent

distorted relevant information by

creating a table showing imports of steel

drums into India from only Indonesia

and Singapore, and excluding imports

from the United States, which

accounted for 90% of all steel drums

imported into India. Thus, petitioner

advocates that the Department adhere to

its preliminary weighted-average unit

value, based on all Indian imports, and

covering the entire review period.

Petitioner states that there is ample

precedent for the Department’s use of

basket categories without finding that

they lead to aberrational results.

Moreover, the Department has used

various steel drum subheadings,

including the one used in the
Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65671

preliminary results, in recent

investigations.

Department’s Position: As noted

above, for the final results we have used

an Indonesian steel drum price used in

the less than fair value (LTFV)

investigation of furfuryl alcohol from

the PRC, adjusted for inflation. These

data are superior to the Indian import

statistics that we used in the

preliminary results, because they are

from the primary surrogate country and

are for drums of approximately the same

size as those used by respondent to pack

a chemical product. These new data are

better than the basket category provided

in the Indian import statistics because

they better approximate the cost of the

input used by respondent.

We placed these data on the record of

this review after the preliminary results.

See Memorandum to the File from R.

Trainor dated November 21, 1997, on

file in room B–099 of the Commerce

Department. We received comments

from respondent supporting the use of

the Indonesian data as more reasonably

reflecting the market price of steel

drums in a country that the Department

has determined to be an accurate

surrogate country in this review. We

received no comments on the new data

from petitioner.

Comment 5: Packing Distances:

Petitioner argues that since respondent

did not report shipping distances

between packing materials suppliers

and the factory, the Department should

use as facts available the highest freight

rate and the longest of all reported

distances, instead of the simple average

of all reported distances, which the

Department used in the preliminary

results.

Department’s Position: As we stated

above, for the final results we have used

the actual distances between CNIGC’s

packing suppliers and its factory. On

November 5, 1997, we requested that

the respondent provide this information

for the final results because we had not

requested it in our questionnaires.

Petitioners were provided an

opportunity to submit comments

regarding this data but did not

comment.

Comment 6: Water Valuation:

Respondent states that the Department

miscalculated water usage in the

preliminary results, because of a

misunderstanding of the questionnaire

response. Respondent contends that the

Department understood the response to

report water usage on the basis of tons

used to produce one kilogram of subject

merchandise, when in fact, it reported

water usage in tons of water needed to

produce a ton of subject merchandise.

Thus, no conversion from tons to

kilograms was necessary.

Respondent also argues that, in past

cases, the Department has recognized

that water used in the production

process is included as part of factory

overhead, and is not separately valued

as a raw material input. Respondent

notes that water itself is not a

component of the final product, and

cites Final Determination of Sales at

Less Than Fair Value; Saccharin From

the People’s Republic of China, 59 FR

58818, 58824 (November 15, 1994)

(Saccharin). Thus, the Department

should not assign a separate factor value

to water for the final results.

Department’s Position: We agree with

respondent that we incorrectly

converted the water usage rate to

kilograms in the preliminary results,

and have corrected this error for the

final results.

We have not assigned a separate

surrogate value to water for the final

results, because the overhead value we

have used, derived from the financial

statements of six Indian chemicalproducing companies, includes water in

factory overhead, along with power and

fuel. See Comment 7.

Comment 7: Factory Overhead, SG&A

and Profit: Respondent objects to the

Indonesian data the Department used in

the preliminary results for factory

overhead, SG&A, and profit as being

outdated, unreliable, and non-industry

specific. Instead, respondent contends,

the Department should rely on data

from the April 1995 Reserve Bank of

India Bulletin (RBIB), which the

Department has used numerous times in

the past, and which represent Indian

metal and chemical industries.

Respondent argues that the

Department should not rely on the data

submitted by the petitioner, because

these data, which consist of excerpts

from the financial statements of several

Indian companies, (1) do not represent

an appropriate industry sector for

comparison to the nitrocellulose

industry; (2) were selectively handpicked by petitioner to result in high

ratios; and (3) do not allow any

judgment as to whether the companies

they represent are normally operative

companies, or if their overhead, SG&A,

and profit were abnormally high,

because petitioner did not submit the

complete financial statement for each

company. Respondent points out that,

although petitioner states that there are

three plants producing nitrocellulose in

India, it did not submit financial

statements from any of them.

Finally, respondent claims that, in

petitioner’s SG&A, overhead and profit

calculations, stores and spares

consumed should be included in the

category of ‘‘Raw Materials, Labor, and

Energy’’ instead of in factory overhead.

Petitioner denies that it was selective

in choosing the Indian financial data to

place on the record. Petitioner states

that it chose these companies because it

was unable to obtain the financial

statements of the three Indian INC

producers. Furthermore, the six

companies were identified in the

Disclosure, Inc. database as the Indian

publicly-traded companies

manufacturing products within the SIC

category that includes subject

merchandise, and for which FY 1996

annual reports were available.

Petitioner contends that, although

none of the six companies for which

petitioner submitted annual reports

manufacture the subject merchandise,

they represent a narrower category of

merchandise than do the RBIB data

submitted by respondent, which cover

the processing and manufacture of

‘‘metals, chemicals, and products

thereof.’’ Furthermore, petitioner argues,

respondent provides no support for its

assertion that the RBIB industrial group

is representative of the INC industry in

India, or that the Indian companies

upon which the data are based include

Indian INC manufacturers. Petitioner

argues that the data it submitted are

more contemporaneous as well as being

more industry-specific than the RBIB

data submitted by respondent.

In response to CNIGC’s claim that

stores and spares consumed should be

included in the category of ‘‘Raw

Materials, Labor, and Energy,’’

petitioner argues that it is the

Department’s practice to include stores

and spares consumed as an overhead

element, and cites the February 28, 1997

final analysis memorandum for the

1994–95 administrative review of

Sebacic Acid From the People’s

Republic of China, 62 FR 10530 (March

7, 1997).

Department’s Position: We agree that

the surrogate SG&A, overhead and profit

information we used in the preliminary

results was not current and not specific

to the nitrocellulose industry. We

requested more appropriate data from

the U.S. embassy in Jakarta, Indonesia,

but were unable to obtain complete data

in time for these final results. Therefore,

we have used the information provided

by petitioner, obtained from the

financial statements of six Indian

chemical-producing companies.

Although we have used the RBIB data

in other cases, as respondent points out,

we have determined that the data

submitted by petitioner is preferable in

this case, because it represents the

overhead, SG&A and profit ratios of
65672 Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices

several companies that manufacture

products of the same SIC classification

as the subject merchandise. The RBIB

ratios, on the other hand, are derived

from companies involved in the more

general category of ‘‘chemicals and

metals’’ industries.

Regardless of whether petitioner

‘‘selectively hand-picked’’ the

information it provided on the record,

this information is nonetheless more

representative of the experience of

Indian producers of comparable

merchandise than is the RBIB data.

Petitioner provided available data from

Indian companies identified with an SIC

code of 2821, which includes cellulose

nitrate resins. Furthermore, rather than

being uniformly high, the data reflect a

wide range of overhead, SG&A and

profit figures. Petitioners submitted the

relevant pages of the financial

statements, and there is no evidence on

the record that these companies’

overhead, SG&A and profit are

abnormally high.

Finally, we agree with petitioner that

stores and spares consumed should be

included in overhead, as we have done

in past cases. See, Memorandum to the

File; Certain Helical Spring Lockwashers

from the People’s Republic of China:

Factor Values Used for the Preliminary

Results, dated July 3, 1997.

Comment 8: Separate rate for CNIGC:

CNIGC argues that the Department

should grant it a separate rate. CNIGC

argues that the Department’s decision in

the preliminary results was based on

analysis done for a separate

antidumping investigation with an

entirely different record. GNIGC alleges

that information from the Brake Drums

and Rotors investigation (63 FR 42748)

was inserted into this record without

notice to counsel on March 26, 1997.

Notwithstanding, CNIGC argues that

verification reports from Brake Drums

and Rotors inserted into this record

nevertheless satisfies the Department’s

requirements of de jure and de facto

independence from government control

to warrant a separate rate. CGIGC states

that the focus of the separate rates

analysis is not on whether there might

be a general ‘‘relationship’’ between the

company and the government, but

rather on whether there is operational

independence with regard to export

sales.

Respondent argues that, in Brake

Drums and Rotors, the Department

based its decision that there is a de facto

relationship between the company and

government on two pieces of evidence.

The first was an outdated company

brochure from 1992 when CNIGC was

still a branch of China North Industries

Corporation (NORINCO). Respondent

claims that it does not know why the

brochure was given to the Department,

but speculates that company personnel

provided it in an effort to be helpful

during verification. As further proof that

the brochure was outdated, respondent

notes that it was printed before the

company’s name was changed from

China North Industries Guangzhou

Branch to China North Industries

Guangzhou Corporation, as supported

by the company’s pre-1993 and post1993 business licences. Respondent also

provides a chronology of the company’s

telephone numbers to show that the

brochure predates the review period.

CNIGC asserts that the agreement

separating it from NORINCO makes it

clear that the two entities are

completely separate, with only the

somewhat similar name suggesting their

common past. CNIGC alleges that the

Department’s verification in Brake

Drums and Rotors found no evidence

contrary to their assertion that there can

be no relationship between itself and

NORINCO with respect to any of the

relevant factors examined by the

Department.

The second piece of evidence used in

the brake drums and rotors case to deny

separate rates was the fact that national

NORINCO maintains an office in the

same building as CNIGC. Respondent

claims that many other companies,

including a major bank, have offices in

that same building. The fact that

NORINCO maintains an office there

does not translate into control over

pricing, contractual powers,

management selection, or disposition of

profits.

Department’s Position: In Brake

Drums and Rotors, we found that this

same respondent, CNIGC, had satisfied

the Department’s criteria for

establishing freedom from de jure

government control. However, we found

that other evidence supported the

conclusion that, de facto, CNIGC had

not completely severed its ties with

NORINCO, its former parent company

which, the evidence showed, was

controlled by the PRC government. We

have placed this information on the

record of this review. See,

Memorandum to the File; Industrial

Nitrocellulose from the People’s

Republic of China: Information for the

Separate Rates Determination, dated

March 26, 1997.

The fact that respondent would

weight the evidence differently does not

alter the fact that there is substantial

evidence to support the Department’s

determination. Respondent has not

provided any further evidence which

indicates that the factual circumstances

have changed and we do not find any

basis on the record of this review on

which to overturn our decision. We

have, therefore, not granted CNIGC a

separate rate in this review.

Final Results of Review

As a result of our review, we have

determined that the following margin

exists for the period July 1, 1995

through June 30, 1996.

Manufacturer/exporter Margin

(percent)

PRC-wide rate .......................... 0.00

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

U.S. price and NV may vary from the

percentage stated above. The

Department will issue appraisement

instructions directly to the Customs

Service.

Furthermore, the following deposit

requirements will be effective upon

publication of this notice of final results

of review for all shipments of INC from

the PRC entered, or withdrawn from

warehouse, for consumption on or after

the publication date, as provided by

section 751(a)(1) of the Act: for all PRC

exporters, the cash deposit rate will be

the PRC-wide rate established in these

final results of administrative review;

and (2) the cash deposit rates for nonPRC exporters of subject merchandise

from the PRC will be the rates

applicable to the PRC supplier of that

exporter. These deposit requirements,

when imposed, shall remain in effect

until publication of the final results of

the next administrative review.

Notification to Interested Parties

This notice serves as a reminder to

importers of their responsibility under

section 353.26 of the Department’s

regulations 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 353.34(d). Timely written

notification of return/destruction of

APO materials or conversion to judicial

protective order is hereby requested.
Federal Register / Vol. 62, No. 240 / Monday, December 15, 1997 / Notices 65673

Failure to comply with the regulations

and the terms of an APO is a

sanctionable violation.

This administrative review and notice

are in accordance with section 751(a)(1)

of the Act (19 U.S.C. 1675(a)(1)) and

section 353.22 of the Department’s

regulations.

Dated: December 8, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–32690 Filed 12–12–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–475–818]

Initiation of Anti-Circumvention Inquiry

on Antidumping Duty Order on Certain

Pasta From Italy

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of initiation of anticircumvention inquiry.

SUMMARY: On the basis of an application

filed with the Department of Commerce,

we are initiating an anti-circumvention

inquiry to determine whether an Italian

producer of pasta is circumventing the

antidumping duty order on certain pasta

from Italy issued July 24, 1996.

EFFECTIVE DATE: December 15, 1997.

FOR FURTHER INFORMATION CONTACT:

Edward Easton or John Brinkmann,

Import Administration, International

Trade Administration, U.S. Department

of Commerce, 14th Street and

Constitution Avenue, NW, Washington,

D.C. 20230; telephone: (202) 482–1777

or (202) 482–5288, respectively.

SUPPLEMENTARY INFORMATION:

Background

On October 23, 1997, the Department

of Commerce (‘‘the Department’’)

received an application filed by the

petitioners in the above-referenced case,

requesting that the Department conduct

an anti-circumvention investigation,

pursuant to section 781(a) of the Tariff

Act of 1930, as amended (‘‘the Act’’),

with respect to the antidumping duty

order on certain pasta from Italy (‘‘the

order’’) issued July 24, 1996 (61 FR

38547). The petitioners allege that

Barilla S.r.L. (‘‘Barilla’’) is

circumventing the order by importing

pasta into the United States in bulk,

defined as packages of greater than five

pounds (2.27 kilograms), and

repackaging the pasta into packages of

five pounds or less for resale in the

United States. Inasmuch as the scope of

the order covers only pasta in packages

of five pounds or less, the petitioners

claim that Barilla’s repackaging

operations in the United States have

allowed it to import pasta into the

United States free of any antidumping

duties. The petitioners assert that all the

elements necessary for an affirmative

determination under Section 781(a) of

the Act are present.

On November 19, 1997, Barilla filed

comments replying to the petitioners’

circumvention allegations. On

December 2, 1997, petitioners filed

comments in response to Barilla’s

November 19, 1997 submission. Barilla

rebutted the petitioners’ December 2,

1997 comments in a submission filed

December 3, 1997.

Initiation of Anti-Circumvention

Proceeding

In accordance with section 781(a) of

the Act, the Department may include

merchandise completed or assembled in

the United States within the scope of an

existing order when the following four

conditions are met: (A) The

merchandise sold in the United States is

of the same class or kind as any other

merchandise that is the subject to the

antidumping duty order; (B) such

merchandise sold in the United States is

completed or assembled in the United

States from parts or components

produced in the foreign country with

respect to which such order applies; (C)

the process of assembly or completion

in the United States is minor or

insignificant; and (D) the value of the

parts or components produced in the

foreign country to which the

antidumping duty order applies is a

significant portion of the total value of

the merchandise sold in the United

States.

In determining whether to include

parts or components in the order, the

Act states at section 781(a)(3) that the

Department must take into account: (1)

the pattern of trade, including sourcing

patterns; (2) whether the manufacturer

or exporter of the parts or components

is affiliated with the person who

assembles or completes the merchandise

sold in the United States; and (3)

whether imports into the United States

of the parts or components produced in

such foreign country have increased

after the initiation of the investigation

which resulted in the issuance of such

order or finding.

Based upon our review of the

foregoing allegations and supporting

information submitted in the

application and in Barilla’s submission,

and with respect to the preceding

criteria, we find that the application

contains all of the elements that warrant

an anti-circumvention inquiry (see,

December 8, 1997 Memorandum from

Richard Moreland to Robert S. LaRussa).

Therefore, we are initiating an anticircumvention inquiry concerning the

antidumping duty order on pasta from

Italy pursuant to section 781(a) of the

Act and 19 CFR 351.225 of the

Department’s regulations.

We intend to notify the International

Trade Commission (‘‘ITC’’) in the event

of an affirmative preliminary

determination of circumvention, in

accordance with 19 CFR 351.225(f)(7).

The Department will not order the

suspension of liquidation at this time.

However, in accordance with 19 CFR

351.225(l)(2), the Department will

instruct the U.S. Customs Service to

suspend liquidation in the event of an

affirmative preliminary determination of

circumvention.

This notice is issued pursuant to

section 781 of the Act (19 U.S.C. 1677j)

and 19 CFR 351.225.

Dated: December 8, 1997.

Richard W. Moreland,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–32629 Filed 12–12–97; 8:45 am]

BILLING CODE 3510–DS–P

DEPARTMENT OF COMMERCE

International Trade Administration

[A–475–818]

Certain Pasta From Italy; Notice of

Court Decision

AGENCY: International Trade

Administration, Import Administration,

Department of Commerce.

ACTION: Notice.

SUMMARY: On October 2, 1997, in the

case of De Cecco et al. v. United States

et al., Slip Op. 97–143 (‘‘De Cecco’’), the

United States Court of International

Trade (the CIT) granted plaintiffs’ and

plaintiff-intervenors’ motions for

judgment with respect to the extension

by the United States Department of

Commerce (‘‘Department’’) of

provisional antidumping measures for

the period May 19, 1996 through July

24, 1996. On October 23, 1997, the CIT

ordered the Department to issue

appropriate instructions to the U.S.

Customs Service to implement its

October 2, 1997, decision to grant

judgment to plaintiffs and plaintiffintervenors.

EFFECTIVE DATE: November 3, 1997.

FOR FURTHER INFORMATION CONTACT:

Edward Easton or John Brinkmann, at