10530 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

trade. Further, we do not have the

information which would allow us to

examine pricing patterns of SKC’s sales

of other products, and there is no other

respondent’s or other information on the

record to analyze whether the

adjustment is appropriate.

Because the data available do not

provide an appropriate basis for making

a level-of-trade adjustment but the level

of trade in Korea for SKC is at a more

advanced stage than the level of trade of

the CEP sales, a CEP offset is

appropriate in accordance with section

773(a)(7)(B) of the Act. SKC claimed a

CEP offset, which we applied to NV. To

calculate the CEP offset, we took the

amount of home market indirect selling

expenses, and deducted this amount

from NV, on home market comparison

sales. We limited HM indirect selling

expenses to the amount of indirect

selling expenses incurred on sales in the

United States.

Fair Value Comparisons

To determine whether sales of PET

film in the United States were made at

less than fair value, we compared USP

to the NV, as described in the ‘‘United

States Price’’ and ‘‘Normal Value’’

sections of this notice. In accordance

with section 777(A) of the Act, we

calculated monthly weighted-average

prices for NV and compared these to

individual U.S. transactions.

Preliminary Results of Review

We preliminarily determine that the

following margins exist for the period

June 1, 1995 through May 31, 1996:

Manufacturer/exporter Margin

SKC ................................. 1.57

STC ................................. 0.37

Parties to this proceeding may request

disclosure within five days of

publication of this notice and any

interested party may request a hearing

within 10 days of publication. Any

hearing, if requested, will be held 44

days after the date of publication, or the

first working day thereafter. Interested

parties may submit case briefs and/or

written comments no later than 30 days

after the date of publication. Rebuttal

briefs and rebuttals to written

comments, limited to issues raised in

such briefs or comments, may be filed

no later than 37 days after the date of

publication. The Department will

publish the final results of this

administrative review, which will

include the results of its analysis of

issues raised in any such written

comments or at a hearing, within 120

days after the publication of this notice.

The Department shall determine, and

Customs shall assess, antidumping

duties on all appropriate entries.

Because the inability to link sales with

specific entries prevents calculation of

duties on an entry-by-entry basis, we

have calculated an importer specific ad

valorem duty assessment rate for the

merchandise based on the ratio of the

total amount of antidumping duties

calculated for the examined sales made

during the POR to the total customs

value of the sales used to calculate these

duties. This rate will be assessed

uniformly on all entries of that

particular importer made during the

POR. (This is equivalent to dividing the

total amount of antidumping duties,

which are calculated by taking the

difference between NV and U.S. Price,

by the total U.S. value of the sales

compared, and adjusting the result by

the average difference between U.S.

price and customs value for all

merchandise examined during the POR.)

The Department will issue appraisement

instructions directly to Customs. The

final results of this review shall be the

basis for the assessment of antidumping

duties on entries of merchandise

covered by the determination and for

future deposits of estimated duties.

Furthermore, the following deposit

requirements will be effective upon

completion of the final results of these

administrative reviews for all shipments

of PET film from the Republic of Korea

entered, or withdrawn from warehouse,

for consumption on or after the

publication date of the final results of

these administrative reviews, as

provided by section 751(a)(1) of the Act:

(1) The cash deposit rate for reviewed

firms will be the rate established in the

final results of administrative review,

except if the rate was less than 0.50

percent, and therefore, de minimis

within the meaning of 19 CFR 353.6, in

which case the cash deposit rate will be

zero; (2) for merchandise exported by

manufacturers or exporters not covered

in these reviews but covered in the

original less-than-fair-value (LTFV)

investigation or a previous review, the

cash deposit will continue to be the

most recent rate published in the final

determination or final results for which

the manufacturer or exporter received a

company-specific rate; (3) if the exporter

is not a firm covered in these reviews,

or the original investigation, but the

manufacturer is, the cash deposit rate

will be that established for the

manufacturer of the merchandise in the

final results of these reviews, or the

LTFV investigation; and (4) if neither

the exporter nor the manufacturer is a

firm covered in these or any previous

reviews, the cash deposit rate will be

4.82%, the ‘‘all others’’ rate established

in the LTFV investigation.

This notice also serves as a

preliminary reminder to importers of

their responsibility under 19 CFR

353.26(b) to file a certificate regarding

the reimbursement of antidumping

duties prior to liquidation of the

relevant entries during these review

periods. Failure to comply with this

requirement could result in the

Secretary’s presumption that

reimbursement of antidumping duties

occurred and the subsequent assessment

of double antidumping duties.

This administrative review and notice

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

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

Dated: March 3, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–5710 Filed 3–6–97; 8:45 am]

BILLING CODE 3510–DS–M

[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 of final results of

antidumping duty administrative

review.

SUMMARY: On September 3, 1996, the

Department of Commerce (the

Department) published the preliminary

results of its administrative review of

the antidumping duty order on sebacic

acid from the People’s Republic of

China (PRC). This review covers

shipments of this merchandise to the

United States during the period July 13,

1994 through June 30, 1995. We gave

interested parties an opportunity to

comment on our preliminary results.

Based upon our analysis of the

comments received we have changed

the results from those presented in the

preliminary results of review.

EFFECTIVE DATE: March 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Elizabeth Patience or Jean Kemp, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, NW., Washington, DC 20230;

telephone (202) 482–3793.

APPLICABLE STATUTE AND REGULATIONS:

Unless otherwise indicated, all citations

to the statute are references to the

provisions effective January 1, 1995, the
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices 10531

effective date of the amendments made

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

Uruguay Round Agreements Act

(URAA). In addition, unless otherwise

indicated, all citations to the

Department’s regulations are to the

current regulations, as amended by the

interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

SUPPLEMENTARY INFORMATION:

Background

On September 3, 1996, the

Department published in the Federal

Register (61 FR 46440) the preliminary

results of its administrative review of

the antidumping duty order on sebacic

acid from the PRC (59 FR 35909, July

14, 1994). We gave interested parties an

opportunity to comment on our

preliminary results and, at the request of

respondents and the petitioner, held a

public hearing on November 5, 1996.

We received written comments from

Tianjin Chemicals Import and Export

Corporation (Tianjin), Guangdong

Chemicals Import and Export

Corporation (Guangdong) and Sinochem

International Chemicals Company, Ltd.

(SICC) (collectively, respondents); and

from the petitioner, Union Camp

Corporation. On October 29, 1996, after

case and rebuttal briefs were filed,

respondents submitted ‘‘newly

discovered’’ information regarding

sebacic acid production in India. Due to

the importance of this issue in this case,

we accepted the submission over

petitioner’s argument that it was

untimely. We subsequently gave both

parties an opportunity to submit

additional information regarding the

production of sebacic acid in India. On

November 13, 1996 and November 21,

1996, both parties submitted

information and rebuttal comments

regarding this issue. We have now

completed the administrative review in

accordance with section 751 of the Act.

Scope of the 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/flake.

Sebacic acid has numerous industrial

uses, including the production of nylon

6⁄10 (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 2917.13.00.00 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 dispositive.

This review covers the period July 13,

1994, through June 30, 1995, and four

exporters of Chinese sebacic acid.

Analysis of Comments Received

Comment 1

Respondents assert that certain sales

treated by the Department in its

preliminary results as sales by

Sinochem Jiangsu Import and Export

Corporation (Jiangsu), another company

subject to this antidumping duty order,

should be considered SICC sales.

According to respondents, SICC was

acting as a sales agent for Jiangsu. In its

capacity as sales agent, SICC negotiated

the sale price with the U.S. importer, set

the price of the sales, arranged the

shipment of the merchandise to the U.S.

importer, and purchased the cargo

transportation insurance. In addition,

the U.S. importer sent the purchase

order to SICC rather than Jiangsu. Citing

Sulfanilic Acid from the People’s

Republic of China: Final Results and

Partial Recission of Antidumping Duty

Administrative Review, 61 FR 53702

(October 15, 1996) (Sulfanilic Acid) and

Final Determination of Sales at Not Less

Than Fair Value; Canned Mushrooms

from the People’s Republic of China, 48

FR 45445 (October 5, 1983) (Canned

Mushrooms), respondents argue that a

margin should be calculated for these

sales based on SICC’s data as the

exporter rather than assigning Jiangsu’s

243 percent rate to these sales.

In the alternative, respondents argue

that, if the Department determines that

these sales were Jiangsu sales, these

sales should be removed from the

calculation of SICC’s rate.

Respondents assert that in prior cases,

such as Manganese Sulfate from China,

60 FR 52155 (October 5, 1995)

(Manganese Sulfate), and Polyvinyl

Alcohol from the People’s Republic of

China, 61 FR 14057 (March 29, 1996)

(Polyvinyl Alcohol from the PRC), where

the Department has determined that

certain sales were made by another

exporter, it has dropped those sales

from the U.S. sales base of the

respondent exporter.

Respondents contend that SICC has

cooperated with the Department in each

stage of this review and that SICC’s

dealings with Jiangsu are an accepted

way of doing business in China.

Respondents assert that SICC and U.S.

importers are being punished because

SICC fully disclosed its business

dealings to the Department.

Respondents argue that the Department

is including these sales into SICC’s

dumping margin so as to curb

circumvention by Chinese exporters.

Respondents assert that Commerce’s

actions should reflect the remedial

intention on the statute. According to

respondents, the remedial purpose of

the statute is not served by applying the

country-wide rate to SICC’s sales in this

case and the Department has exceeded

its authority by doing so.

Petitioner supports the Department’s

treatment of the Jiangsu sales exported

by SICC. Petitioner argues that

respondents’ reliance on Sulfanilic Acid

to support its argument that SICC is the

seller is misplaced. In that case, the

Department decided that two producers

were the proper respondents because

the producers established the price with

the U.S. importer, not the trading

company through which the sales were

made. The trading company’s role was

limited to processing paperwork.

Petitioner argues that the same fact

pattern does not exist in the present

case. Petitioner notes that Jiangsu is not

a producer of sebacic acid but is an

export trading company that received its

own dumping margin in the LTFV

investigation.

Petitioner also argues that

respondents incorrectly rely on Canned

Mushrooms. Petitioner contends that

there is no discussion in that case on

how to value sales that an exporter

misrepresents as its own so that another

exporter can avoid a larger dumping

margin. Petitioner contends that

Manganese Sulfate is not applicable

because in that case it was clear from

documents on the record that the

trading company in question did not

have any knowledge at the time the sale

was made that the sale was destined for

the United States. Petitioner also notes

that a similar situation existed in

Polyvinyl Alcohol from the PRC where

the Department excluded certain sales

of an exporter because, at the time the

sales were made, the exporter did not

know that the sales were destined for

the United States.
10532 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

Petitioner replies that because these

two sales were blatant and admitted

attempts to circumvent the antidumping

duty order, the Department correctly

valued these two sales with the countrywide dumping margin of 243.40

percent. Petitioner argues SICC received

a commission from Jiangsu for acting as

Jiangsu’s sales agent.

Petitioner contends that, unlike in

Manganese Sulfate and Polyvinyl

Alcohol from the PRC, in the instant

case both SICC and Jiangsu knew that

the two sales were destined for the

United States. Petitioner argues in order

to enforce the antidumping duty statute,

the Department must assign the countrywide rate to the two Jiangsu sales.

Petitioner contends that SICC clearly

attempted to circumvent the

antidumping duty laws by cooperating

with Jiangsu by acting as a sales agent

for two sales of sebacic acid to a U.S.

importer. Consequently, petitioner

maintains the Department was justified

in using the country-wide antidumping

rate for those two sales. See 19 U.S.C.

Section 1677e(b).

Department Position

We disagree with respondents. It was

clear from statements made by SICC

officials at verification that SICC

considered these sales to be Jiangsu’s

sales. See SICC Verification Report at 6–

7. Therefore, it is not appropriate to

calculate a margin on these sales based

on SICC’s data as the exporter. However,

because SICC reported these sales as

their own in the questionnaire

responses and played a significant role

in the sale of this merchandise,

including identifying itself as the

exporter on U.S. Customs

documentation and accepting and

subsequently converting payment for

Jiangsu, the Department has included

these two sales in the calculation of

SICC’s margin.

However, we disagree with

petitioner’s and respondents’’

characterization of our treatment of

these sales as punitive use of facts

available to ‘‘punish’’ an uncooperative

respondent. Our use of the rate of 243

percent was not punitive. Because these

are Jiangsu sales, we applied the rate

that Jiangsu would have received on the

sales to the United States. That the rate

is 243 percent is reflective only of

Jiangsu’s failure to respond to the

Department’s questionnaire and the

Department’s application of the countrywide rate to Jiangsu consistent with its

normal practice. See Preliminary

Results, 61 FR 46442.

In this review, SICC knowingly

engaged in sales to the United States of

another respondent’s material,

according to statements by SICC at

verification, as an attempt to assist

Jiangsu in avoiding posting of Jiangsu’s

higher antidumping duty cash deposits.

Therefore, it is appropriate and

consistent with the remedial nature of

the statute, to apply the Jiangsu rate to

these transactions in calculating SICC’s

rate. SICC’s margin should reflect any

dumping on sales in which it is the

exporter of record. Respondents’’

reliance on Asociacion Columbiana de

Exportadores de Flores v. United States,

717 F.Supp. 834, 837 (1989), C.J. Tower

and Sons v. United States, 71 F.2d 438

(CCPA 1934), and Helwig v. United

States, 188 U.S. 605 (1903) is misplaced.

The Department has assigned the

Jiangsu rate to the Jiangsu sales reported

by, and entered into the United States

by SICC. The Department’s

determination to do so is a direct result

of the actions taken by SICC and Jiangsu

and should not be characterized as

punitive.

Respondents’ reliance on Sulfanilic

Acid is misguided. In that case, the

Department rejected petitioner’s

argument that a trading company should

be designated the respondent and not

the producers of the subject

merchandise. The trading company’s

role was limited to processing

paperwork. In the instant case, SICC

received a commission on the sales,

accepted payment for the sales,

converted this payment to Chinese

currency, and claimed that it was the

exporter of the merchandise to the U.S.

Customs Service. SICC’s role, therefore,

was much more extensive than simply

processing paperwork. SICC’s role in

making the sales, in combination with

its agreement with Jiangsu to sell the

merchandise to Jiangsu’s U.S. customer

at prices and terms set by Jiangsu, led

to the Department’s determination in

this case to include the Jiangsu sales in

SICC’s margin calculation.

Respondents’ reference to Canned

Mushrooms is similarly misplaced. In

that case, petitioner was arguing that the

Department should calculate purchase

price using respondent’s prices to PRC

customers instead of prices to US

customers. The Department disagreed

and based purchase price on the prices

which respondent sells the product to

US customers. This decision is not

relevant to the current discussion of

sales by one exporter made through

another in order to reduce payment of

cash deposits and antidumping duties.

Additionally, the facts of Manganese

Sulfate and Polyvinyl Alcohol from the

PRC are readily distinguishable from

this case. In contrast to the companies

in these cases, Jiangsu and SICC both

knew the subject merchandise was

being shipped to the United States. The

agreement between SICC and Jiangsu

identified the U.S. customer and

outlined which party was responsible

for export-related charges as well as

which party was responsible for

obtaining payment from the U.S.

customer. See SICC Verification Report

at 6.

Comment 2

Petitioner argues that India should not

be used as the surrogate country for

valuing factors of production in this

review because there is no production of

sebacic acid or a comparable product in

India. Petitioner contends that it would

be inconsistent with the statute to use

India as a surrogate because: (1) India is

not a producer of sebacic acid; and (2)

there is no evidence on the record to

support that India is a producer of a

comparable product. Petitioner argues

that there is no evidence on the record

to support the Department’s conclusion

that oxalic acid (1) is produced in India

or (2) is comparable to sebacic acid.

Petitioner states that while it is true that

both oxalic and sebacic acid are

dicarboxylic acids, oxalic acid has two

carbon atoms and sebacic acid has ten

carbon atoms, giving the two acids

completely different properties and

uses. Petitioner contends that the inputs

for the two acids are very different.

Additionally, petitioner argues that the

commercial values of imported sebacic

acid is nearly 20 times greater than the

imported Indian value for oxalic acid.

Petitioner suggests that the

Department should value the factors of

production based on either U.S. or

Japanese values, the only two market

economies in which sebacic acid is

produced using the caustic fusion

process. See Natural Bristle Paint

Brushes and Brush Heads from China,

50 FR 52812 (Dec. 26, 1985) (Natural

Bristle Paint Brushes) (the Department

used a U.S. import price as the foreign

market value for certain paint brushes

because there was no comparable

product in the surrogate country).

Respondents maintain that the

Department has the option to choose as

a surrogate a country that does not

produce the same, or even comparable,

merchandise if there is no country that

meets both criteria in the statute (i.e.,

comparable level of economic

development and producer of

comparable merchandise). Otherwise,

respondents contend, if Union Camp is

correct, no country in the world meets

the statutory criteria as a surrogate

country.

On October 29, 1996, respondents

submitted a letter from an Indian

chemical company offering to sell
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices 10533

sebacic acid. Respondents argue that

this is evidence that sebacic acid is

produced in India. However,

respondents argue that even if sebacic

acid is not produced in India, oxalic

acid is produced in India. Respondents

maintain that many of the inputs

required to produce sebacic acid,

including castor oil, also are produced

in India and exported to China.

Respondents contend that

interchangeableness is not needed to

make a product comparable.

Respondents state that both oxalic and

sebacic acids are used in the rubber

manufacturing industry. Additionally,

respondents quote the International

Trade Commission, stating that sebacic

acid has physical characteristics similar

to those of other dicarbolic acids in the

chemical series. See Sebacic Acid from

the People’s Republic of China, Inv. No.

731–TA–653 (Preliminary), USITC Pub.

2676 (1993) at I–4–4.

Respondents argue that petitioner’s

reference to the 1985 Natural Bristle

Paint Brushes case is inappropriate

because it was decided before the

nonmarket economy statute was

amended in 1988 to provide for a factors

of production approach. Respondents

state that since 1988, the Commerce

Department has never used the United

States or Japan as a surrogate country in

an antidumping case involving China

because they are not at a comparable

level of economic development.

Department Position

In valuing factors of production, the

Department used surrogate values from

India. In accordance with section

773(c)(4) of the Act, the Department

chose India as its surrogate because it

was most comparable to the PRC in

terms of overall economic development

based on per capita gross national

product (GNP), the national distribution

of labor, and growth rate in per capita

GNP, and because it was a significant

producer of comparable merchandise

(oxalic acid).

The statute and the regulations

instruct the Department to value factors

of production in an appropriate

surrogate country. The Department

rarely departs from use of a surrogate

value from a country comparable to the

NME in terms of overall economic

development. See Final Determination

of Sales at Less Than Fair Value:

Beryllium Metal and High Beryllium

Alloys from the Republic of Kazakstan,

62 FR 2648 (January 17, 1997).

Surrogate values from countries at a

similar level of development are

considered to be the most appropriate

and comparable for valuation of the

factors in the similarly situated

nonmarket economy country. While the

Department may use values from the

United States or other countries not at

a comparable level of development for

individual factors, its practice is to do

so only if it cannot find those values in

a comparable economy that produce

comparable merchandise. Use of the

United States, Japan or other country

not on the list of recommended

surrogate countries proposed by the

Department’s Office of Policy is the last

and least suitable option specifically

because surrogate values from countries

not at a level of economic development

comparable to that of the nonmarket

economy are not considered

representative of the nonmarket

economy country’s costs and prices. See

Memorandum from David Mueller to

Laurie Parkhill, Serbacic (sic) Acid from

the People’s Republic of China:

Nonmarket Economy Status and

Surrogate Country Selection, March 4,

1996.

The fact that sebacic acid is produced

in the United States or Japan does not

make either an appropriate surrogate. A

U.S. or Japanese value in this case is not

representative of a PRC value because

neither the U.S. nor Japan are at a level

of economic development comparable to

that of the PRC. Moreover, the

Department has concluded that using

values from India is appropriate because

India is at a comparable level of

development and is a significant

producer of comparable merchandise—

oxalic acid. Though sebacic acid and

oxalic acid may have different end uses,

both are dicarboxylic acids and both are

used in the rubber manufacturing

industry. See Petitioner’s Brief at

Exhibit 1, October 10, 1997. Many of the

inputs used to produce sebacic acid are

also used to produce oxalic acid (e.g.,

sodium hydroxide). See Petitioner’s

Brief at Exhibit 1, October 10, 1997. U.S.

import statistics for the POR indicate

that India is a significant producer of

oxalic acid. See Memorandum to the

File from Elizabeth Patience and N.

Gerald Zapiain, Analysis Memorandum

for the Final Results of the 1994/1995

Review, February 24, 1997 (Final

Analysis Memorandum). In addition, a

cable from the U.S. embassy in Bombay,

submitted during the LTFV

investigation, identifies 15 Indian

producers and nine exporters of oxalic

acid, which also indicates that India is

a significant producer of oxalic acid. See

Final Analysis Memorandum.

Petitioner’s argument that we should

value factors of production based on

either U.S. or Japanese values because

they are the only countries which use

the caustic fusion process to produce

sebacic acid is irrelevant. According to

the ITC report from the LTFV

investigation, Chinese producers do not

use caustic oxidation to produce sebacic

acid. See Sebacic Acid from the People’s

Republic of China, Inv. No. 731–TA–653

(Preliminary), USITC Pub. 2676 (1993)

at II–7. Therefore, we are not concerned

with finding the identical production

process in our chosen surrogate country.

Finally, the documents submitted by

interested parties on October 29, 1996,

November 13, 1996, and November 21,

1996, did not conclusively demonstrate

that sebacic acid was produced in India

during the period of review (POR).

Therefore, these documents were not a

basis for our decision to use India as the

surrogate country for this review.

Comment 3

Petitioner argues that the Department

should value capryl alcohol consistent

with the CIT’s decision in Union Camp

v. United States, Slip Op. 96–123 at 8,

10 (August 5, 1996). Specifically,

petitioner argues that the Department

should value capryl alcohol (octanol-2)

based on an appropriate cost of crude

octanol-2 rather than the Indian selling

price for refined octanol-1.

Petitioner argues neither of the two

surrogate prices for capryl alcohol

submitted by respondent is appropriate.

Petitioner contends that the first value,

Rs 76/kg, from Indian Chemical Weekly,

must be a value for octanol-1, not

octanol-2, because sebacic acid is not

produced in India. Petitioner contends

that because sebacic acid is not

produced in India, octanol-2 must not

be produced in India, since octanol-2 is

a subsidiary product of sebacic acid

production.

Moreover, petitioner rejects

respondents’ second surrogate price for

98 percent pure capryl alcohol, $0.68/

lb., from the Chemical Marketing

Reporter, because it is the same as

Union Camp’s offering price for refined

capryl alcohol. Petitioner contends that

crude capryl alcohol, the subsidiary

product of the sebacic acid process,

must be further processed to achieve the

98 percent purity. The Chemical

Marketing Reporter reported the market

value of octanol-1 at $0.925/lb. during

the POR. Petitioner argues that the U.S.

value of octanol-1 during the POR was

36 percent higher than the U.S. value of

refined capryl alcohol and that the value

difference between octanol-1 and crude

capryl alcohol is even larger.

Petitioner concludes that because

octanol-1 is not comparable to octanol2 either chemically or commercially, the

Department should not use octanol-1 as

a surrogate value for octanol-2.

Petitioner contends that Union Camp

and all three respondents treat octanol-
10534 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

2 as a by-product. However, because the

Department used an overvalued

publicly available, published value in

its preliminary results, the Department

determined octanol-2 to be of such a

significant value in relation to sebacic

acid that it categorized it as a co-product

rather than a by-product. Petitioner

contends that using octanol-1 values

distorts the by-product/co-product

analysis and results in artificially lower

margins for the respondents. Petitioner

offers its own by-product credit value

for crude capryl alcohol, $0.15/lb., as

the best available surrogate price for the

subsidiary product. However, petitioner

states that if the Department chooses to

use the $0.68/lb price, it should make

adjustments for input costs incurred in

converting crude capryl alcohol to

refined capryl alcohol. Petitioner

supplies such a calculation where the

resulting value is $0.1544/lb.

Respondents argue that the

Department should reject petitioner’s

submission of surrogate value

information in its case brief as it is

untimely and petitioner had

opportunities prior to the publication of

the preliminary results to submit this

information. Respondents maintain that

the surrogate value of $0.15/lb. is

unverified and that there is no support

on the record of this review that these

internal costs represent actual market

prices in the United States. Respondents

argue the Department should use the

Indian publicly available, published

value of Rs 76/kg value they submitted

for the period of review rather than the

surrogate value of Rs 56/kg that was

used in the less-than-fair-value

investigation.

Respondents contend that comparing

the $0.68/lb. octanol-2 price from the

Chemical Marketing Reporter, to the

internal Union Camp price of $0.15/lb.

supports respondents’ argument that

Union Camp’s internal costs do not

reflect the market price of these

chemicals. Respondents maintain that

Union Camp’s internal cost should not

be used as it is not from an appropriate

surrogate country and the value is not

a published or public figure.

Respondents contend that use of

unverified, internal costs does not

provide respondents with greater

certainty and predictability in the

administration of the antidumping law.

Respondents maintain that use of such

internal costs give the Chinese

respondents no opportunity to

determine their dumping margins.

Additionally, respondents contest

petitioner’s assertion that the CIT held

that octanol-1 and octanol-2 are not

comparable products. Respondents

maintain that the Court held that there

was not substantial evidence on the

record of the LTFV investigation to

support the Department’s determination

in the LTFV investigation that the two

products are comparable.

Respondents argue that the term

octanol does not necessarily mean

octanol-2. Respondents maintain that

octanol is a generic term, which

includes all isomers having eight carbon

atoms and one alcohol functional group.

Thus, respondents contend, the term

‘‘octanol’’ in the Indian Chemical

Weekly does not necessarily refer only

to octanol-1, but could also include

octanol-2. Respondents maintain that

there is no evidence on the record of

this review, and Union Camp has made

no effort to find evidence, that octanol2 is not sold in India.

Respondents argue that petitioner

made no effort to provide publicly

available, published values during the

course of this review. Therefore,

respondents maintain that the

Department should not reward

petitioner for its decision not to submit

surrogate value information by using

petitioner’s late-submitted internal

value for octanol-2. Respondents

contend that, pursuant to 19 CFR

353.37, the Department is justified in

using the Indian surrogate value for

octanol in the Indian Chemical Weekly

as the best information available.

Moreover, respondents argue that the

Department should not use petitioner’s

proposed calculation for adjusting the

Chemical Marketing Reporter octanol-2

value for additional costs. Respondents

maintain that the Chinese factorie’

factors of production already include

the labor and energy used to produce

the subsidiary products. According to

Zhong He’s March 8, 1996 submission

to the Department, Zhong He is unable

to separate these factors from those used

to produce sebacic acid. Additionally,

the verification report indicates that the

Workshop No. 2 (where sebacic acid is

produced) production report includes

all the consumption of raw materials,

and records the production of sebacic

acid and each of the three subsidiary

products.

Respondents provide additional

statements by Mr. Hoegl of Ivanhoe

Industries to state that petitioner’s

conversion of capryl alcohol to refined

capryl alcohol should possibly be higher

than $0.15/lb. Mr. Hoegl states that the

co-product of the distillation process,

methyl hexyl ketone, has a market value

of approximately $2.50/lb. Therefore,

Mr. Hoegl argues, the value of the crude

capryl alcohol stream is much greater

than $0.15/lb. and ‘‘may even be higher

than the published $0.68/lb. price for

refined capryl alcohol.’’

Department Position

In valuing factors of production, the

Department’s practice is to rely, to the

extent possible on publicly available

information. The Department prefers to

use publicly available information

because: (1) It alleviates difficulties in

obtaining, and concerns about the

quality of, cable data from embassies

and consulates (previously often used as

sources for surrogate values); (2) it

allows interested parties an opportunity

to actively submit and comment on

surrogate value data; (3) the

establishment of a clear surrogate values

hierarchy, with a preference for

surrogate values from a single country

based on publicly available information,

increases the certainty and

predictability of the outcome of the

Department’s factor valuations; (4) the

methodological framework helps to

focus comments made by petitioner and

respondent in the case and rebuttal

briefs and reduces miscellaneous

submissions throughout the course of

proceedings regarding the

appropriateness of various surrogate

values; and (5) it alleviates the

administrative burden on U.S.

embassies and consulates caused by

requests for large amounts of data. See

Final Determination of Sales at Less

Than Fair Value: Certain Carbon Steel

Butt-Weld Pipe Fittings from the

People’s Republic of China, 57 FR

21058, 21062 (May 18, 1992). In

determining which surrogate value to

use for valuing each factor of

production, therefore, the Department

selects, where possible, publicly

available information which is: (1) An

average non-export value; (2)

representative of a range of prices

within the period of review if submitted

by an interested party, or most

contemporaneous with the POR; (3)

product-specific; and (4) tax-exclusive.

In this review, the Department was

unable to locate an Indian value for

octanol-2. In addition, the Department

specifically asked interested parties to

submit any publicly available,

published values for octanol-2. Neither

the petitioner, Union Camp, nor the

respondents were able to locate an

Indian value, specifically for octanol-2.

As a result, the Department used an

Indian price for octanol-1 as a surrogate

value for octanol-2 as the best available

information after the Department

concluded that, for purposes of factor

valuation, octanol-1 was comparable to

octanol-2. We find that octanol-1 and

capryl alcohol (octanol-2) share very

similar molecular formulae though they

are not identical products. Since

product-specific price information is not
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices 10535

available from our recommended

surrogate countries, we must rely on the

price of the closest product we could

obtain to value capryl alcohol.

Additionally, we agree with

respondents that it is not clear from the

Indian Chemical Weekly whether their

listed price for ‘‘octanol’’ refers to

octanol-1, octanol-2, or a combination of

the two products.

Union Camp’s statements that

octanol-1 is derived from a process

entirely unrelated to the sebacic acid

process and that octanol-1 is a highpriced petrochemical are not necessarily

dispositive on the issue of the

comparability of octanol-1 and octanol2 for purposes of factor valuation. In a

nonmarket economy case, the

Department may need to value

anywhere from 10 to hundreds of factors

of production; in this case we needed to

value approximately 25. If we were

required to find an exact match for each

factor, the administrative burden would

be enormous and, in many instances,

the task would be impossible. Therefore,

although we strive to locate exact

surrogate matches in our preferred

surrogate country, we often are unable

to do so. In those instances, the

Department’s practice is to use the most

comparable surrogate match that meets

our publicly available information

criteria in an appropriate surrogate

country.

There is no basis in the statute or

legislative history to suggest that the

Department is required to research or

consider the production process or use

for each factor so as to locate a surrogate

match with an identical or even similar

production process or use. In valuing

factors of production, the Department is

attempting to assign a market-economy

value, i.e., a price or a cost, to some nonmarket economy factor, e.g., 50

kilograms of chemical ‘‘x’’, 12 nuts and

bolts, 3 plastic bags, 7 hours of labor.

The Department does not delve into

intricacies of the production and use of

every potential surrogate precisely

because production and use are not

necessarily relevant to valuation of

factors of production. The Department

foremost is concerned about assigning

an appropriate surrogate value to a

specific factor of production. As a

result, the Department will consider

rejecting a potential surrogate where it

has evidence that a possible surrogate

value does not reasonably reflect the

‘‘value’’ of the factor. For example, if the

Department had evidence that a

surrogate price was significantly higher

than other potential surrogate prices for

a particular factor, the Department

might find that it was not reasonable to

use that particular price as a surrogate

value.

Similarly, the Department is not

required to consider

interchangeableness in determining

whether to use a particular surrogate to

value a factor of production. The CIT’s

opinion in Union Camp suggests that

because octanol-1 and octanol-2 are not

‘‘interchangeable’’ they are not

comparable for factor valuation

purposes. If interchangeableness were a

prerequisite, however, the Department

would have extreme difficulty in

valuing factors of production. The

Department would be required to locate

precise matches between surrogates and

factors —an impracticable if not

virtually impossible task given the

amount of data the Department would

have to collect and analyze for each

factor. The very nature of chemicals, in

particular, is such that a small

difference in grade or a change in

molecular structure would preclude

ever finding two different chemicals

comparable for purposes of factor

valuation. In this case, for example, the

Department recognizes that octanol-1

and octanol-2 are two different

products, and, hence not

interchangeable. Interchangeableness,

however, is not the test for

comparability for factor valuation.

As stated in Comment 2 above, the

statutue and the regulations instruct the

Department to value factors of

production in an appropriate surrogate

country. In addition to the United States

and Japan not being appropriate

surrogate countries in this case, there is

no evidence on the record that octanol2 is sold in either country. The only U.S.

value on the record for octanol-2 is the

internal accounting cost Union Camp

assigns to octanol-2. The Department

normally would not consider using such

a value because it is not a value from an

appropriate surrogate country and the

value is not a public or published figure.

As explained above, the Department’s

practice is to use public, published

figures because, among other reasons, it

increases the certainty and

predictability of the outcome of the

Department’s factor valuations in NME

cases and it affords all interested parties

an opportunity to submit and comment

on surrogate value data. Use of an

unpublished, internal cost from a

country not on the list of recommended

surrogates is contrary to the

Department’s established practice. See

Magnesium Corp. versus United States,

938 F. Supp. 885 (CIT 1996) (‘‘It is

Commerce’s standard practice to

disregard petitioners’ costs because they

are not ‘an appropriate benchmark by

which to test the accuracy of surrogate

country values.’ ’’) Our preference is for

values from the selected surrogate

country. Additionally, there is no

conclusive evidence on the record of

this review that respondents’ octanol-1

value is not a reasonable substitute for

octanol-2 in our calculations, given the

limited public and published data from

India available to the Department.

Therefore, we are using the Rs 76/kg

value from the Indian Chemical Weekly

as a surrogate value for capryl alcohol

as the best information available to the

Department.

Comment 4

The verification report for Zhong He

includes the statement that ‘‘Zhong He

began producing sebacic acid for

outside parties in January 1995.’’

Petitioner interprets this to mean that

SICC’s six reported sales occurring prior

to January 1995 could not have been

manufactured by Zhong He. Petitioner

argues that because SICC apparently

misreported the manufacturer of its

sebacic acid for six sales during the

POR, the Department should assign the

country-wide rate of 243.40 percent to

these six sales as best information

available.

Respondents argue that the sentence

quoted in petitioner’s brief refers to

Zhong He’s toll production of sebacic

acid using Indian castor oil which had

been purchased and imported by certain

parties. This toll production began in

January 1995. Respondents maintain

that prior to and after January 1995,

Zhong He produced sebacic acid from

castor oil which it had purchased from

Chinese castor oil producers.

Respondents contend that during

verification the Department traced 1994

sales of sebacic acid from Zhong He to

SICC. Respondents maintain that there

is no indication on the record of this

review that SICC did not use Zhong He

as a supplier for these sales to the

United States.

Department Position

We agree with respondents. The

statement in the verification report

refers to Zhong He’s tolling operation in

which it accepted castor oil from

outside parties in exchange for sebacic

acid. It is this operation that did not

begin until January 1995. We verified

that Zhong He had produced and sold

sebacic acid to SICC throughout the

administrative review period. See

Memorandum to the File from Elizabeth

Patience and Rebecca Trainor:

Verification of the Response of Tianjin

Zhong He Chemical Plant With Regard

to the Factors of Production of Sebacic

Acid, August 26, 1996.
10536 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

Comment 5

Respondents contend that the

surrogate values used in our

calculations of their antidumping duty

margins should be valued on a taxexclusive basis. Respondents state that

our source for values for caustic soda,

cresol, sulfuric acid, sodium chloride

and zinc oxide, Chemical Weekly,

indicated that these values were taxinclusive. Respondents point to number

of recent cases involving the PRC in

which we excluded taxes from the

surrogate values used in our

calculations. See, e.g., Sulfanilic Acid

From the People’s Republic of China;

Final Results and Partial Rescission of

Antidumping Duty Administrative

Review, 61 FR 53702 (October 15, 1996).

Petitioner argues that if the

Department excludes Indian taxes from

the valuation of the factors of

production, it should include any

Chinese taxes applied to such factors of

production in China. Petitioner

maintains that PRC taxes that are not

rebated upon export do affect PRC sales

to the United States.

Department Position

We agree with respondents that the

surrogate values used to value the raw

materials and by-products should be

exclusive of taxes. See, e.g., Sulfanilic

Acid. The issues of Chemical Weekly

used to determine the surrogate values

of all by-products and raw materials in

the preliminary results of this review,

state that the prices reported for these

inputs are inclusive of Excise and

Maharshtra taxes. Accordingly, we have

adjusted the surrogate values of all raw

materials and by-products to exclude

taxes for the final results of review. To

adjust the prices to exclude taxes, we

have used the Central Excise Tariff of

India, 1994–95, and the Bombay Sales

Tax Act of 1959. These documents show

that the tax rates are 20 percent and 4

percent, respectively. See Memorandum

to the File from Karin Price, Analysis for

the final results of the 1994/1995

administrative review of sulfanilic acid

from the People’s Republic of China—

Yude Chemical Industry Company and

Zhenxing Chemical Industry Company,

October 7, 1996 and Final Analysis

Memorandum.

We disagree with petitioner that PRC

taxes should replace Indian taxes in our

calculations. The normal value being

calculated (by applying Indian surrogate

values to the PRC factors) is a surrogate

for material costs in the PRC for

comparison to U.S. sales of Chinese

merchandise. Therefore, Indian valueadded taxes, which do not affect PRC

sales to the United States, should be

removed from such surrogate costs.

Alternatively, PRC taxes should not be

used because they are not based on

market economy considerations. They

are also not relevant to the value of

material inputs in India. In constructing

a market-based cost for merchandise

exported to the United States, we must

recognize that virtually all countries of

the world employ indirect tax rebate

schemes to prevent double-taxation

from placing their exports at an unfair

competitive disadvantage in world

markets.

Comment 6

Respondents argue that the

Department understated the cost of

manufacturing and overstated factory

overhead and SG&A percentages.

Respondents note that, in determining

surrogate values for overhead, SG&A

expenses, and profit, the Department

used data contained in the April 1995

Reserve Bank of India Bulletin. In

making its calculation, respondents

argue that the Department arbitrarily

and without explanation allocated 50

percent of the expenses in three

categories, ‘‘provident fund,’’ ‘‘salaries,

wages and bonuses,’’ and ‘‘employees,

welfare expenses,’’ to SG&A expenses

and 50 percent to the cost of

manufacture. As a result, the cost of

manufacturing is understated and the

overhead rate, SG&A rate, and profit rate

are overstated. They contend that 100

percent of these three categories should

be applied to the cost of manufacture,

consistent with Polyvinyl Alcohol from

the PRC and Sulfanilic Acid.

Department Position

We agree with respondents that 100

percent of these labor categories should

be included in the cost of

manufacturing. In the absence of any

information to the contrary, it makes

sense that most of these expenses are

costs of manufacturing rather than to

SG&A expenses. In addition, we note

that in Polyvinyl Alcohol from the PRC,

although we did not use information

from the Reserve Bank of India Bulletin

as surrogate values for overhead, SG&A

expenses and profit, we compared

expenses from this source to values

from financial statements from Indian

producers and, as a result, in each

instance, we allocated 100 percent of

these labor-cost categories to the cost of

manufacturing. We have also

reexamined our classification of other

categories in the Reserve Bank of India

Bulletin, and have determined that

several categories were misclassified in

the preliminary results of review. This

has been corrected for the final results.

See Final Analysis Memorandum.

Comment 7

Petitioner argues that the Department

should not have valued overhead as a

percentage of cost of manufacture.

Instead, petitioner contends that

overhead should have been calculated

as a percentage of raw materials, labor,

power and fuel, the three surrogate

value categories used in the factors of

production. See Valuation

Memorandum: Final Antidumping Duty

Determination: Polyvinyl Alcohol from

the PRC at 2 and Attachment 5 (March

22, 1996).

Petitioner contends that ‘‘Stores and

Spares Consumed’’ is more properly

categorized as an overhead expense

rather than a cost of manufacture as they

are indirect materials and should be

treated as a part of factory overhead. See

Memorandum from Manganese Metal

Team to Barbara R. Stafford re:

Antidumping Investigation of

Manganese Metal from the PRC: Major

Final Determination Issues, October 16,

1995 at 7. Petitioner contends that the

new overhead ratio should be 20.18

percent.

Moreover, petitioner contends that the

Department improperly omitted ‘‘Other

expenses’’ and ‘‘Other provisions’’ from

its calculation of SG&A. Petitioner

maintains that these expenses are

integral to, and should be included in

the calculation of SG&A expenses. See

Valuation Memorandum: Preliminary

Antidumping Duty Determination:

Polyvinyl Alcohol from the PRC at 7

and Attachment 9 (October 2, 1995).

Petitioner argues that if the Department

excludes these expenses then it must

adjust the profit calculation upward by

the same amount. Petitioner states that

profit in the Reserve Bank of India

Bulletin equals revenue minus costs

(including other expenses and other

provisions). Therefore, petitioner

concludes, all costs associated with the

reported profit must be included as

overhead or SG&A, or the profit must be

increased by the value of any costs that

are excluded.

Department Position

We agree with petitioner that the

category for stores and spares consumed

should be classified as an overhead

expense. Additionally, we have

included the categories ‘‘Other

Expenses’’ and ‘‘Other Provisions’’ as

SG&A expenses, consistent with

Sulfanilic Acid. We have made

adjustments to our calculations for these

categories in our final results. However,

we disagree with petitioner’s argument

that overhead should be valued as a

percentage of raw materials, labor,

power and fuel. Instead, we calculated
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices 10537

overhead, less power and fuel, as a

percentage of cost of manufacture,

consistent with Sulfanilic Acid.

Comment 8

Respondents contend that the

Department did not properly adjust for

Hengshui Chemical factory’s use of both

purchased and self-produced castor oil

in the production of sebacic acid.

Respondents maintain that the

Department double-counted amounts for

raw material and energy inputs

consumed by Hengshui in the

production of castor oil. Respondents

propose two methods to account for the

castor oil produced by Hengshui. One

method is to not add amounts for the

inputs consumed in castor oil

production. Alternatively, respondents

recommend a methodology which they

argue more accurately reflects

Hengshui’s operations and Department

practice. See Polyvinyl Alcohol from the

PRC.

Moreover, respondents argue that the

Department used the incorrect value for

castor seed in Hengshui’s constructed

value calculation. The Department used

a value of Rs 9.36/kg for castor seed.

Respondents contend the value should

be Rs 9.23/kg.

Petitioner contends that the

Department incorrectly deducted the

value of castor seed cake as a by-product

credit from the foreign market value

calculation of sebacic acid because

Hengshui produces some of its own

castor oil. Petitioner contends that this

is an incorrect adjustment because

castor seed cake is a by-product of the

castor oil process, not the sebacic acid

process. Petitioner maintains that the

by-product adjustment should be an

adjustment to the price of castor oil and

not to the value of sebacic acid.

Department Position

We agree with respondents and

petitioner and have revised our

calculations to accurately reflect

Hengshui’s production of castor oil

consistent with Polyvinyl Alcohol from

the PRC. See Final Analysis

Memorandum. Additionally, we have

used the Rs 9.23/kg value for castor

seeds for our final results calculations.

Comment 9

Respondents argue that the

Department failed to deduct amounts for

the by-products glycerine and castor

seed cake in our calculations of

constructed value. Respondents

maintain that analysis memorandum

and notice of preliminary results, we

indicated that we would be deducting

these values but in the calculation

worksheets attached to the analysis

memorandum, no deduction was made.

See Preliminary Results, 61 FR 46440

and Memorandum from Case Analyst to

the File: Analysis Memorandum; August

27, 1996.

Department Position

We agree with respondents and

deducted these amounts in our

calculations for the final results of

review.

Comment 10

Respondents maintain that the

Department was incorrect in

individually valuing a separate value for

water. They contend that the Indian

overhead number used in our

calculations already includes a value for

water. See, e.g., Polyvinyl Alcohol from

the PRC.

Petitioner argues that the Department

correctly treated water as an input in the

sebacic acid process rather than an

overhead expense. Petitioner maintains

that respondents’ reported water

consumption factors indicate that water

is a significant factor in the production

of sebacic acid that varies directly with

output. Petitioner contends that the cost

of water for each company is greater

than the costs for certain other factors of

production so water should likewise be

separately valued. Petitioner argues,

using examples from Indian chemical

companies’ annual reports, that Indian

chemical companies typically account

for water as a direct cost in the same

manner as power and fuel. According to

petitioner, this treatment of water as a

direct expense contradicts the

Department’s past practice of presuming

that it is ‘‘normal’’ practice to include

water as an overhead item and the

Department’s past statement that there

was nothing in the Reserve Bank of

India Bulletin financial statement to

indicate that water is not included in

overhead. See, e.g., Final Determination

of Sales at Less Than Fair Value:

Disposable Pocket Lighters from the

People’s Republic of China, 60 FR

22359, 22367–68 (May 5, 1995).

The Department was unable to locate

a contemporaneous value for water in

India or Pakistan so chose to adjust the

Pakistani value used in the LTFV

investigation. Petitioner offers the value

for water from the Water Utilities Data

Book, Asian and Pacific Region, Asian

Development Bank (November 1993).

Petitioner maintains that the

Department should use an average of the

Indian water values reported, adjusted

for inflation, as a more appropriate

surrogate value than the value for

Pakistani water.

Department Position

We agree with respondents.

Consistent with Department practice,

we have presumed that the overhead

value from the Reserve Bank of India

Bulletin includes an expense for water.

Therefore, consistent with Sulfanilic

Acid and Polyvinyl Alcohol from the

PRC we have not valued water as a

separate production input.

Comment 11

Respondents note that the Department

only verified one of three respondents

in this review, Zhong He Chemical

Factory. Accordingly, respondents

contend that it was inappropriate for the

Department, in our preliminary results,

to use the weights of bags at Zhong He

in our calculations of all three

companies in place of the values

originally reported to the Department.

Respondents contend that the

Department should not assign the

packing bag weights, revised from

information gained at verification of

Zhong He, to the other factories.

Respondent argues that there is no

evidence that the packing bag weights

that they submitted for Tianjin and

Guangdong were incorrect.

Petitioner contends that the

Department correctly used the verified

weights of Zhong He’s plastic bags as

the weight for Handan’s and Hengshui’s

plastic bags. Petitioner points out that

the Department found at verification

that Zhong He had under-reported the

weight of its plastic bags. Petitioner also

points to the fact that Handan reported

the same weight as Zhong He and that

Hengshui reported even lighter weights

for plastic bags. Petitioner argues that

the Department, using the facts

available, correctly replaced the weights

of the plastic bags reported by Handan

and Hengshui with the verified weights.

Department Position

We agree with respondents. Each

responding company submitted

differing weights for its packing bags,

indicating that each company uses

different bags for packing. Therefore, for

our final results, we have used the

revised Zhong He packing bag weights

for Zhong He only. For Handan and

Hengshui, we have used packing bag

weights reported on March 22, 1996.

Comment 12

Respondents maintain that the value

we used from Chemical Weekly for

caustic soda is based on a 100 percent

purity value. Respondents contend that

the three responding factories all use

caustic soda of considerably less than

100 percent purity. Therefore,

respondents maintain that to properly

value the caustic soda used by the three
10538 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

factories, the Department should

multiply the Chemical Weekly price

(exclusive of tax) by the purity

percentage for each factory. See

Polyvinyl Alcohol from the PRC.

Department Position

We agree with respondents and have

adjusted for caustic soda purity levels.

Comment 13

Petitioner states that the Department

incorrectly used a value for Indian

oxalic acid, instead of sebacic acid, in

our by-product/co-product analysis.

Additionally, petitioner argues that the

Department erroneously misplaced the

decimal point in calculating the actual

value of oxalic acid. Petitioner

concludes that correcting this error

shows that oxalic acid should not serve

as a surrogate for sebacic acid because

of the relative value of oxalic acid

compared to the values for the three

subsidiary products. Petitioner also

protests the use of an oxalic acid value

based on imports from the PRC to India.

Petitioner argues that it is inconsistent

with Department practice to use a value

from an NME as a surrogate value. Due

to these concerns, petitioner contends

that the Department should use the

import value of sebacic acid from Japan

into India rather than the Indian oxalic

acid value from the PRC.

Respondents contend that the

Department should not use the Japanese

sebacic acid value, as suggested by

petitioner. Respondents cite the

Chemical Marketing Reporter and a fax

from Ivanhoe Industries, a U.S. importer

of subject merchandise, to argue that the

Japanese value does not reflect the

actual price of normal sebacic acid in

India. According to the Chemical

Marketing Reporter, the U.S. price for

sebacic acid is between $2.04 to $2.05

per pound. However, using the Indian

import price for sebacic acid from Japan

indicates that the price is almost

$5.00/lb. for the Japanese imports into

India. According to John Hoegl of

Ivanhoe Industries, the sebacic acid

from Japan is a special repurified grade,

which is higher in quality than either

Chinese or Union Camp products, and

is sold at premium prices to specific end

users.

Department Position

We agree with petitioner in part. It is

inconsistent with Department practice

to use a surrogate value from a nonmarket economy country (e.g., PRC).

Additionally, we agree with

respondents that the Indian import

value from Japan overstates the value of

the product. Therefore, we selected the

Indian import value for sebacic acid

from the United States as our surrogate

value for sebacic acid to determine

whether the subsidiary products are byproducts or co-products.

Comment 14

Petitioner contends that if Zhong He

used benzene sulfuric acid in its

production of sebacic acid, as the

Department found at verification, the

Department must include a value for

benzene sulfuric acid in its factors of

production calculation.

Department Position

We agree with petitioner. However, as

neither petitioner nor Zhong He

provided a publicly available value for

benzene sulfuric acid, we have used an

average value for benzene from Indian

Chemical Weekly, contemporaneous

with the POR.

Comment 15

The Department derived the value of

caustic soda from the Indian Chemical

Weekly. Petitioner states that the

selected values indicate a price of Rs

9.50/kg for the weeks between October

25, 1994 and February 1, 1995.

Petitioner also states that no other prices

are given for 1995 until April 12, 1995,

when the price for caustic soda (lye) is

reported as Rs 21.50/kg. Petitioner

argues that the Department failed to

factor this increase in the caustic soda

price. Petitioner maintains that the

Department should average the two

values and use the price of Rs 15.5/kg

in its calculations.

Respondents argue that the Chemical

Weekly price of Rs 9.5 was from five

months (October, November, and

December 1994; January and February

1995), whereas the price of Rs 21.5 was

only documented for one month, April

1995. Therefore, respondents contend

that an average accounting for the

months each value was reported should

be used, i.e., Rs 11.50/kg. Respondents

argue that this price should then be

converted to a tax-exclusive basis and

multiplied by the purity percentage

applicable to each factory.

Department Position

We examined all copies of the Indian

Chemical Weekly for the POR available

to the Department. We found 27 values

for caustic soda (lye) between October

19, 1994 and June 28, 1995. A simple

average of these values is Rs 14.59/kg.

We have used this value in our

calculations.

Comment 16

The Department based the price of

zinc oxide upon the published market

prices reported in Chemical Weekly.

See, Final Analysis Memorandum.

Respondents provided market price

information for zinc oxide on March 28,

1995. Petitioner argues that the price for

zinc oxide reported on four other dates

in Chemical Weekly are significantly

higher than the Rs 48/kg figure

submitted by respondents. Petitioner

maintains that the Department should

use the higher price of Rs 75/kg as the

surrogate price for zinc oxide as it

represents a wider range over the POR

rather than one price for one date during

the POR.

Department Position

We agree with petitioner in part and

have revised our surrogate value for zinc

oxide. We have used an average of all

reported values for zinc oxide in the

POR for our final results.

Comment 17

Petitioner contends that the value for

coal used by the Department in its

calculations is not contemporaneous

with the POR. Petitioner contends the

Department should use the steam coal

value of Rs 1461.87/mt from the

Polyvinyl Alcohol from the PRC

investigation because it is

contemporaneous to the POR and

publicly available information.

Respondents argue that the alternative

proposed by petitioner should be

rejected because it is less representative

than the Gazette of India data, used in

the preliminary results. Respondents

argue that the Polyvinyl Alcohol from

the PRC value was based on the average

value from only two Indian companies.

Respondents argue alternatively, the

Gazette of India data, based on all but

five Indian states, is much more

representative than the Polyvinyl

Alcohol from the PRC data because the

former is basically an average for the

entire country while the latter is from

just two companies (selected by

petitioner) which may be located in

high cost areas. Respondents also argue

that the Polyvinyl Alcohol from the PRC

values should be rejected because the

tax and freight status of these prices is

unknown, thereby prohibiting the

Department from making appropriate

adjustments to these coal values.

Department Position

We agree with respondents.

Consistent with Sulfanilic Acid, we

used the Gazette of India data in our

final results calculations. As we did in

our preliminary results, we are adjusting

the June 16, 1994 coal value to account

for inflation.
Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices 10539

Comment 18

In the Analysis Memorandum the

Department stated that it used an

electricity value from the July 1995

Current Energy Scene in India.

However, in the Memo to the File, the

Department included different

electricity values from ‘‘State-wise

Electricity Rates for Different Categories

of Consumers’’ from India’s Energy

Sector, Centre for Monitoring Indian

Economy (July 1995). This publication

includes three values for electricity, one

each for small, medium and large

industries. Petitioner contends that the

Department should use the value for

medium industries, Rs 1.92/kwh, rather

than the Rs 0.732/kwh used in the

preliminary results of review. Petitioner

maintains that the medium industry rate

is applicable because all respondents

reported using more than 14,600/kwh/

month (medium industries) but less

than 2,190,000/kwh/month (large

industries).

Department Position

We agree with petitioner and have

used the electricity value for medium

industries in our calculations for the

final results.

Comment 19

Petitioner maintains that, for

Hengshui, the Department used an

incorrect freight rate for plastic bags.

Petitioner contends that the Department

used a freight rate of Rs 250 rather than

the correct rate of Rs 750 listed in the

freight calculation charts.

Department Position

We agree with petitioner and have

used the rate of Rs 750 in our

calculations for the final results.

Comment 20

In its preliminary results, the

Department used ocean freight

information provided by respondents

from common rates tariff filed by

Nippon Yusen Kaisha with the Federal

Maritime Commission for rates from

China to New York. Petitioner contends

that this rate does not include

appropriate delivery destination and

fuel adjustment factor charges.

Therefore, petitioner argues that the

Department should use the rate from the

LTFV investigation because it does

include these charges and more

accurately reflects ocean freight charges.

Respondents contend that the

Department should exclude the delivery

destination charge of $485.00 except for

shipments to inland destinations.

Respondents suggest that the

Department check directly with the

Federal Maritime Commission or a

freight company to determine the freight

rates for this product.

Department Position

We contacted the Federal Maritime

Commission to request additional

information about the ocean freight

charge respondents submitted for this

review. In addition to the $1705 charge

respondents reported, our research

indicates that a $485 delivery

destination charge and a $62 fuel

adjustment factor should be included as

ocean freight expenses as they are

assessed on all shipments. We chose to

use the sum of these charges ($2252) in

our final results, rather than the rate

used in the LTFV investigation as the

new figure is contemporaneous with the

POR.

Comment 21

Petitioner contends that the

Department failed to adjust the foreign

brokerage and handling expense for

inflation.

Department Position

We agree with petitioner and have

adjusted foreign brokerage and handling

for inflation in our calculations of the

final results.

Comment 22

Petitioner maintains that if the

Department insists on categorizing

capryl alcohol as a co-product rather

than a by-product, the Department

should allocate capryl alcohol based on

its value relative to sebacic acid rather

than its quantity relative to sebacic acid.

Petitioner contends that allocations

based on quantity can lead to significant

distortions. Petitioner argues that

sebacic acid and capryl alcohol have

significantly different revenueproducing powers. Therefore, citing the

Final Determination of Sales at Less

Than Fair Value: Polyvinyl Alcohol

from Taiwan, 61 FR 14064, 14071

(March 29, 1996) (Polyvinyl Alcohol

from Taiwan), petitioner contends that

the co-product allocation should be

based on value rather than volume.

Department Position

Consistent with Polyvinyl Alcohol

from Taiwan we based our

determination of co-products and byproducts on their value relative to

sebacic acid rather than their volume.

Although that case was a market

economy case, in both that case and the

present case, sebacic acid has a

significantly higher per-unit value than

any of the subsidiary products.

Therefore, production costs should be

allocated to the co-products based upon

their relative sales values. As in

Polyvinyl Alcohol from Taiwan, we

found that basing the allocation of costs

solely on production volume ignores the

vastly different revenue-producing

powers of joint products (i.e., sebacic

acid and the co-products). See Final

Analysis Memorandum.

Final Results of Review

As a result of our review of the

comments received, we have changed

the results from those presented in our

preliminary results of review. Therefore,

we determine that the following margins

exist as a result of our review:

Manufacturer/exporter Time period Margin (percent)

Tianjin Chemicals I/E Corp. ......................................................................................................................... 7/13/94–6/30/95 0

Guangdong Chemicals I/E Corp. ................................................................................................................. 7/13/94–6/30/95 13.54

Sinochem International Chemicals Corp. .................................................................................................... 7/13/94–6/30/95 70.54

PRC Rate ..................................................................................................................................................... 7/13/94–6/30/95 243.40

The Department shall determine, and

the Customs Service shall assess,

antidumping duties on all appropriate

entries. Individual differences between

U.S. price and normal value may vary

from the percentages stated above. The

Department will issue appraisement

instructions directly to the Customs

Service.

Furthermore, the following cash

deposit requirements will be effective

upon publication of these final results

for all shipments of sebacic acid from

the PRC 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) For

Tianjin, Guangdong, and SICC, which

have separate rates, the cash deposit

rates will be the company-specific rates

stated above; (2) for the company which
10540 Federal Register / Vol. 62, No. 45 / Friday, March 7, 1997 / Notices

did not respond to our questionnaire

(Jiangsu), and for all other PRC

exporters, the cash deposit rate will be

the PRC rate stated above; (3) for nonPRC exporters of subject merchandise

from the PRC, the cash deposit rate will

be the rate applicable to the PRC

supplier of that exporter.

These deposit rates shall remain in

effect until publication of the final

results of the next administrative

review.

Notification of Interested Parties

This notice also serves as a final

reminder to importers of their

responsibility under 19 CFR 353.26 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 orders (APOs) of their

responsibility concerning the

disposition of proprietary information

disclosed under APO in accordance

with 19 CFR 353.34(d)(1). Timely

written notification of the return/

destruction of APO materials or

conversion to judicial protective order is

hereby requested. 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: February 28, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 97–5711 Filed 3–6–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–351–806]

Silicon Metal From Brazil; Extension of

Time Limit for Antidumping Duty

Administrative Review

AGENCY: International Trade

Administration, Import Administration,

Department of Commerce.

ACTION: Notice of extension of time limit

for antidumping duty administrative

review.

SUMMARY: The Department of Commerce

(the Department) is extending the time

limits for its preliminary results in the

administrative review of the

antidumping order on silicon metal

from Brazil. The review covers the

period July 1, 1995, through June 30,

1996.

EFFECTIVE DATE: March 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Alexander Braier or James Doyle, AD/

CVD Enforcement, Group III,

International Trade Administration,

U.S. Department of Commerce, 14th and

Constitution Ave. N.W., Washington,

D.C. 20230; telephone: (202) 482–3818.

SUPPLEMENTARY INFORMATION: Because it

is not practicable to complete this

review within the original time limit,

the Department is extending the time

limit for the completion of the

preliminary results to May 14, 1997, in

accordance with section 751(a)(3)(A) of

the Tariff Act of 1930, as amended by

the Uruguay Round Agreements Act

(URAA). (See Memorandum from

Joseph A. Spetrini to Robert S. LaRussa

on file in the public file of the Central

Records Unit, Room B–099 of the

Department of Commerce).

This extension is in accordance with

section 751(a)(3)(A) of the Tariff Act of

1930, as amended by the URAA (19 USC

1675(a)(3)(A)).

Dated: February 5, 1997.

Joseph A. Spetrini,

Deputy Assistant Secretary, Enforcement

Group III.

[FR Doc. 97–5626 Filed 3–6–97; 8:45 am]

BILLING CODE 3510–DS–P

[A–533–810]

Stainless Steel Bar From India:

Preliminary Results of Antidumping

Duty Administrative Review

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of

antidumping duty administrative

review: Stainless steel bar from India.

SUMMARY: The Department of Commerce

(‘‘the Department’’) is conducting an

administrative review of the

antidumping duty order on stainless

steel bar from India in response to a

request by one manufacturer/exporter,

Isibars Limited (‘‘Isibars’). This review

covers sales of the subject merchandise

to the United States during the period

August 4, 1994 through January 31,

1996.

We have preliminarily determined

that sales have not been made below

normal value (‘‘NV’). If these

preliminary results are adopted in our

final results of administrative review,

we will instruct the U.S. Customs

Service to liquidate subject entries

without regard to antidumping duties.

Interested parties are invited to

comment on these preliminary results.

Parties who submit argument are

requested to submit with the argument

(1) a statement of the issue and (2) a

brief summary of the argument.

EFFECTIVE DATE: March 7, 1997.

FOR FURTHER INFORMATION CONTACT:

Jennifer Yeske or Zak Smith, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

Avenue, N.W., Washington D.C. 20230;

telephone (202) 482–0189 or (202) 482–

1279, respectively.

Applicable Statute and Regulations

Unless otherwise indicated, 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

current regulations, as amended by the

interim regulations published in the

Federal Register on May 11, 1995 (60

FR 25130).

SUPPLEMENTARY INFORMATION:

Background

On February 29, 1996, the Department

received a request from Isibars to

conduct an administrative review of the

antidumping duty order on stainless

steel bar from India. The Department

published in the Federal Register, on

March 19, 1996, a notice of initiation of

an administrative review of Isibars

covering the period August 4, 1994

through January 31, 1996 (61 FR 11184).

In a notice published on August 20,

1996, the Department extended the time

limit for the preliminary results of the

review until February 28, 1997 (61 FR

43042). The Department is now

conducting this review in accordance

with section 751 of the Act and section

353.22 of its interim regulations.

Scope of Review

Imports covered by this review are

shipments of stainless steel bar (‘‘SSB’’).

SSB means articles of stainless steel in

straight lengths that have been either

hot-rolled, forged, turned, cold-drawn,

cold-rolled or otherwise cold-finished,

or ground, having a uniform solid cross

section along their whole length in the

shape of circles, segments of circles,

ovals, rectangles (including squares),

triangles, hexagons, octagons, or other

convex polygons. SSB includes cold-