22544 Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices

1Evidence supporting, though not requiring, a

finding of de jure absence of central control

includes: (1) An absence of restrictive stipulations

associated with an individual exporter’s business

and export licenses; (2) any legislative enactments

decentralizing control of companies; or (3) any

other formal measure by the government

decentralizing control of companies.

2See ‘‘PRC Government Findings on Enterprise

Autonomy,’’ in Foreign Broadcast Information

Service-China-93–133 (July 14, 1993) and 1992

Central Intelligence Agency Report to the Joint

Economic Committee, Hearings on Global Economic

and Technological Change: Former Soviet Union

and Eastern Europe and China, Pt. 2 (102 Cong., 2d

Sess.).

3The factors considered include: (1) Whether the

export prices are set by or subject to the approval

of a governmental authority; (2) whether the

location: Office of the Executive

Secretary, Foreign-Trade Zones Board,

U.S. Department of Commerce, Room

3716, 14th & Pennsylvania Avenue NW.,

Washington, DC 20230.

Dated: May 1, 1995.

John J. Da Ponte, Jr.,

Executive Secretary.

[FR Doc. 95–11253 Filed 5–5–95; 8:45 am]

BILLING CODE 3510–DS–P

International Trade Administration

[A–570–835]

Notice of Final Determination of Sales

at Less Than Fair Value: Furfuryl

Alcohol From the People’s Republic of

China

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: May 8, 1995.

FOR FURTHER INFORMATION CONTACT: John

Brinkmann or Greg Thompson, Office of

Antidumping Investigations, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

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

telephone: (202) 482–5288 or (202) 482–

2336, respectively.

Final Determination

We determine that furfuryl alcohol

from the People’s Republic of China

(PRC) is being, or is likely to be, sold in

the United States at less than fair value

(LTFV), as provided in section 735 of

the Tariff Act of 1930, as amended (the

Act). The estimated margins are shown

in the ‘‘Continuation of Suspension of

Liquidation’’ section of this notice.

Case History

Since the preliminary determination

of sales at LTFV on December 9, 1994,

(59 FR 65009, December 16, 1994), the

following events have occurred:

Verification of the questionnaire

responses was conducted in February

1995. Reports concerning these

verifications were issued in March 1995.

QO Chemicals, Inc. (the petitioner) as

well as Qingdao Chemicals & Medicines

& Health Products Import & Export

Company (Qingdao) and Sinochem

Shandong Import & Export Company

(Sinochem Shandong) (together referred

to as respondents) submitted case and

rebuttal briefs on March 27 and 30,

1995, respectively. A public hearing was

held on April 3, 1995. Inasmuch as the

submitted briefs contained certain

untimely, new information, the

Department of Commerce (the

Department) issued letters to the

petitioner and the respondents

concerning the redaction from the

record of this new information on April

10, 1994.

Scope of Investigation

The product covered by this

investigation is furfuryl alcohol

(C4H3OCH2OH). Furfuryl alcohol is a

primary alcohol, and is colorless or pale

yellow in appearance. It is used in the

manufacture of resins and as a wetting

agent and solvent for coating resins,

nitrocellulose, cellulose acetate, and

other soluble dyes.

The product subject to this

investigation is classifiable under

subheading 2932.13.00 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 is dispositive.

Period of Investigation

The period of investigation (POI) is

December 1, 1993 through May 31,

1994.

Separate Rates

Both of the participating exporters,

Qingdao and Sinochem Shandong have

requested a separate, company-specific

dumping margin. Their respective

business licenses indicate that they are

owned ‘‘by all the people.’’ In the Final

Determination of Sales at Less Than

Fair Value: Silicon Carbide from the

People’s Republic of China, 59 FR

22585, (May 2, 1994) (Silicon Carbide)

and the Final Determination of Sales at

Less Than Fair Value: Coumarin from

the People’s Republic of China, 59 FR

66895 (December 28, 1994) (Coumarin),

we found that the PRC central

government had devolved control of

state-owned enterprises, i.e., enterprises

‘‘owned by all the people.’’ As a result,

we determined that companies owned

‘‘by all the people’’ were eligible for

individual rates, if they met the criteria

developed in the Final Determination of

Sales at Less Than Fair Value: Sparklers

from the People’s Republic of China 56

FR 20588 (May 6, 1991) (Sparklers) and

amplified in Silicon Carbide. Under this

analysis, the Department assigns a

separate rate only when an exporter can

demonstrate the absence of both de jure

and de facto governmental control over

export activities.

De Jure Analysis 1

The PRC laws placed on the record of

this investigation establish that the

responsibility for managing companies

owned by ‘‘all the people,’’ including

the respondent companies, has been

transferred from the government to the

enterprises themselves. These laws

include: ‘‘Law of the People’s Republic

of China on Industrial Enterprises

Owned by the Whole People,’’ adopted

on April 13, 1988 (1988 Law);

‘‘Regulations for Transformation of

Operational Mechanism of State-Owned

Industrial Enterprises,’’ approved on

August 23, 1992 (1992 Regulations); and

the ‘‘Temporary Provisions for

Administration of Export

Commodities,’’ approved on December

21, 1992 (1992 Export Provisions). In

particular, the 1988 Law states that

enterprises have the right to set their

own prices (see Article 26). This

principle was restated in the 1992

Regulations (see Article IX).

The 1992 Export Provisions list

includes those products subject to direct

government control. In April 1994, the

‘‘Emergent Notice of Changes in Issuing

Authority for Export Licenses Regarding

Public Quota Bidding for Certain

Commodities’’ (1994 Quota Measure)

entered into force, superseding earlier

laws that had listed the subject

merchandise. Although furfuryl alcohol

was on the 1992 version of the Export

Provisions list, it has since been

removed. (See discussion in Comment

1.)

Consistent with Silicon Carbide, we

determine that the existence of these

laws demonstrates that Qingdao and

Sinochem Shandong, companies owned

by ‘‘all the people,’’ are not subject to

de jure control.

In light of reports 2 indicating that

laws shifting control from the

government to the enterprises

themselves have not been implemented

uniformly, our analysis of de facto

control becomes critical in determining

whether respondents are, in fact, subject

to governmental control.

De Facto Control Analysis 3

In the course of verification, we

confirmed that export prices for both
Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices 22545

respondent has authority to negotiate and sign

contracts and other agreements; (3) whether the

respondent has autonomy from the government in

making decisions regarding the selection of

management; and (4) whether the respondent

retains the proceeds of its export sales and makes

independent decisions regarding disposition of

profits or financing of losses (see, Silicon Carbide).

Qingdao and Sinochem Shandong are

not set by, nor subject to approval of,

any government authority. This point

was supported by the companies’ sales

documentation and customer

correspondence. We also confirmed,

based on examination of documents

related to sales negotiations, written

agreements and other correspondence,

that respondents have the authority to

negotiate and sign contracts and other

agreements independent of government

intervention. Moreover, the

respondents’ financial statements,

accounting records, and bank statements

support the conclusion that these

companies retain the proceeds of their

export sales and finance their losses.

Based on our examination of company

records during verification, we have

determined that both Qingdao and

Sinochem Shandong had autonomy

from the central government in making

decisions regarding the selection of

management. Qingdao’s general

manager is selected for a three-year term

by worker elections. Sinochem

Shandong’s general manager is selected

by worker elections for a term of five

years. We found no involvement by any

government entity in the selection of

management or of hiring for either

company. See the verification reports

for Qingdao (March 3, 1995) and

Sinochem Shandong (March 22, 1995).

Conclusion

For both Sinochem Shandong and

Qingdao, the record demonstrates an

absence of de jure and de facto

government control. Accordingly, we

determine that each of these exporters

should receive a separate rate. (For

further discussion, see Comment 1

below and the concurrence

memorandum, dated May 1, 1995, on

file in Room B–099 of the main

Department of Commerce Building.)

Nonmarket Economy

The PRC has been treated as a

nonmarket economy country (NME) in

all past antidumping investigations.

Given that no information has been

provided in this proceeding that would

lead us to conclude otherwise, in

accordance with section 771(18)(c) of

the Act, we continue to treat the PRC as

an NME for purposes of this

investigation.

Surrogate Country

Section 773(c)(4) of the Act requires

the Department to value the NME

producers’ factors of production, to the

extent possible, in one or more market

economy countries that are (1) at a level

of economic development comparable to

that of the NME country, and (2)

significant producers of comparable

merchandise. As stated in our

preliminary determination, the

Department has determined that

Indonesia is the most suitable surrogate

for purposes of this investigation. Based

on available statistical information,

Indonesia is at a level of economic

development comparable to that of the

PRC. Further, Indonesian government

statistics and other data indicate that the

country is a significant producer of

furfuryl alcohol. Based on available

information, Indonesia is the only

surrogate country, of those identified by

our Office of Policy, that meets both of

these criteria.

For those adjustments to United

States price that we have been unable to

value using information from Indonesia,

we have used India as the surrogate.

India is economically comparable to the

PRC and is a significant producer of

furfuryl, which is comparable to furfuryl

alcohol within the meaning of section

773(c)(1). Furfuryl is the feedstock, and

the major input, in the production of

furfuryl alcohol. (See memoranda to the

file, dated November 22, 1994 and

March 23, 1995, and memorandum from

David Mueller, Director, Office of Policy

to Gary Taverman, Acting Director,

Office of Antidumping Investigations,

dated August 2, 1994, furfuryl alcohol

from the People’s Republic of China,

Non-Market Economy Status and

Surrogate Country Selection.)

Fair Value Comparisons

To determine whether sales of

furfuryl alcohol from the PRC to the

United States by Sinochem Shandong

and Qingdao were made at less than fair

value, we compared the United States

price (USP) to the foreign market value

(FMV), as specified in the ‘‘United

States Price’’ and ‘‘Foreign Market

Value’’ sections of this notice.

United States Price

United States price was calculated on

the basis of purchase price, as described

in the preliminary determination, in

accordance with section 772(b) of the

Act. Pursuant to findings at verification,

we made minor adjustments to foreign

inland freight, sales quantities and the

date of payment for certain sales

reported by Sinochem Shandong. We

also made an adjustment for Sinochem

Shandong’s iso-tanker rental expense

(see Comment 11). In the case of

Qingdao, we adjusted its reported

amounts for ocean freight. (See

calculation memorandum, attached to

the Department’s concurrence

memorandum of May 1, 1995).

Foreign Market Value

In accordance with section 773(c) of

the Act, we calculated FMV based on

the factors of production reported by the

factories in the PRC which produced the

subject merchandise for the two

participating exporters. We calculated

FMV for this final determination as

discussed in the preliminary

determination, making adjustments for

specific verification findings and certain

revisions to surrogate values, discussed

below (see, also, calculation

memorandum attached to the

concurrence memorandum of May 1,

1995).

In our December 9, 1994, preliminary

determination, we had valued

individually the energy inputs used to

produce the subject merchandise. We

subsequently received additional

information from the U.S. Embassy in

Jakarta indicating that energy costs and

indirect labor were included in the

factory overhead rate used in our margin

calculations (see memorandum to the

file, dated March 23, 1995). Therefore,

to avoid double-counting costs, we no

longer have applied individual values

for energy inputs in the final

determination.

The Indonesian labor rates used in

our preliminary determination were

those that the Department had relied

upon in the Preliminary Determination

of Sales at Less Than Fair Value:

Disposable Pocket Lighters from the

PRC, 59 FR 64191, December 13, 1994

(Lighters). In the Final Determination of

Sales at Less Than Fair Value:

Disposable Pocket Lighters from the

PRC, signed on April 27, 1995 (Lighters

Final), the Department found that these

labor rates were not appropriate for

valuing labor factors. Therefore, for the

Lighters Final, the Department relied on

updated labor figures for skilled and

unskilled labor obtained from Doing

Business in Indonesia (1991) and the

International Labor Office’s 1994

Special Supplement to the Bulletin of

Labor Statistics. We have adopted the

revised labor rates for this investigation

as well.

Additionally, we revised the surrogate

values for the material inputs of sulfuric

acid and ammonia water because we

determined that the 1993 Indonesian

import values used in the preliminary

determination were inappropriate. (For

the details of our analysis of these
22546 Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices

values, see the calculation

memorandum attached to the

concurrence memorandum of May 1,

1995). Since the Indonesian import

values for both sulfuric acid and

ammonia water were found to be

inappropriate, we based our

calculations on the export values

derived from the Indonesian Foreign

Trade Statistical Bulletin—Exports,

November 1993.

For the primary material input,

furfuryl, we continued to rely on the

Indonesian selling price supplied by the

U.S. Embassy in Jakarta because it was

the information on the record most

contemporaneous to the POI. We

applied this value to furfuryl that was

purchased and used in the production

of furfuryl alcohol. For those factories

that also produced their own furfuryl,

we constructed a surrogate value from

verified factor data for this input. This

surrogate value was then applied to the

amount of self-produced furfuryl used

to make furfuryl alcohol during the POI

(see Comment 4).

China-Wide Rate

The Ministry of Foreign Trade and

Economic Cooperation (MOFTEC) and

the China Chamber of Metals, Minerals

& Chemical Importers & Exporters

identified what we believe to be the

only two PRC exporters of furfuryl

alcohol to the United States during the

POI. Both have responded in this

investigation. We compared the

respondents’ sales data with U.S. import

statistics for the period of investigation

and found no inconsistencies.

Accordingly, we have based the Chinawide rate on the weighted-average of the

margins calculated in this proceeding.

Verification

As provided in section 776(b) of the

Act, we verified all the information

relied upon for this final determination.

Interested Party Comments

Comment 1: Separate Rates Eligibility

The respondents contend that the

Department should uphold its

preliminary determination and issue

separate rates to both Qingdao and

Sinochem Shandong. They argue that

the information on the record, as

verified by the Department, supports

their claims regarding the lack of central

government ownership and the absence

of de jure and de facto governmental

control. Therefore, respondents assert,

they are eligible for receiving separate,

calculated margins in the final

determination.

The petitioner argues that the

respondents are subject to significant

control by the PRC government and are,

thus, ineligible to receive separate rates

in the final determination. According to

the petitioner, governmental control is

evidenced by several factors that apply

both generally and selectively to the

respondents in this investigation.

First, the petitioner argues that the

1988 Law provides an example of de

jure control by the central government.

Petitioner points to chapter VI, article

55, of the 1988 Law, which states that

the PRC government has the authority to

‘‘issue mandatory plans’’ to enterprises.

Second, the petitioner makes

reference to a 1994 World Bank report,

‘‘China Foreign Trade Reform,’’ that was

cited with approval in the Department’s

determination in Coumarin. This report

states that the foreign contract system in

the PRC has ‘‘the effect of holding local

authorities and FTCs [foreign trade

companies] to what are in effect

mandatory export targets.’’

Third, the petitioner refers to the 1992

Export Provisions which indicate that

furfuryl alcohol is subject to quotas on

exports to Japan and the European

Community (EC). According to the

petitioner, the imposition of these

export quotas had an indirect effect on

exports of furfuryl alcohol to the U.S.

market.

Fourth, the petitioner contends that

the Department has determined that if a

product is included on the 1992 Export

Provisions list, then it is subject to

mandatory plans and export targets (see

Coumarin).

Focusing specifically on Sinochem

Shandong, the petitioner alleges that

this exporter is a subsidiary of the

national trading company, China

National Chemicals Import and Export

Corporation (commonly known as

Sinochem Import & Export Corporation)

which, in turn, is under the control of

the State Council. The petitioner argues

that the linkage between these entities is

established by (a) the 1994 company

catalog of Sinochem Shandong, and (b)

the 1992 ‘‘Directory of Chinese

Enterprises for Foreign Economic

Relations and Trade’’ which suggests

that Sinochem Shandong is under the

control of the State Council.

In response, Qingdao and Sinochem

Shandong assert that the provisions of

the 1988 Law concerning mandatory

plans are not applicable to the furfuryl

alcohol industry. Furthermore, the 1992

Regulations, indicate that the

responsibility for managing enterprises

‘‘owned by all of the people’’ is with the

enterprises themselves and not with the

government.

On the subject of furfuryl alcohol

export quotas, the respondents agree

with the Department’s preliminary

determination that such quotas are not

applicable to PRC exports to the United

States. According to the respondents,

any suggestion that the quotas on

exports to the EC and Japan might have

had some distortive effect on pricing of

furfuryl alcohol exports to the United

States is ‘‘pure speculation.’’

Regarding the specific allegation

against Sinochem Shandong, that

company states that the national trading

company was dismantled during the

1992 decentralization and its former

branches made independent. It notes,

moreover, that the Department had

granted Sinochem Shandong a separate

rate in past investigations.

DOC Position

We disagree with the petitioner.

Regarding petitioner’s argument that the

1988 Law allows for the imposition of

mandatory plans, we note that (1) the

1992 Regulations, which further

devolved control from the government

to the enterprises, provides that

‘‘enterprises have the right to reject

mandatory plan targets’’ (Article VIII),

and (2) we confirmed at verification that

these exporters (a) establish their own

export prices; (b) negotiate their own

sales without guidance from any

government entities; (c) select their own

management without interference from

any government entities; and d) retain

the proceeds from the sales of the

subject merchandise.

Regarding the petitioner’s argument

about the 1992 Export Provisions, we

recognize that furfuryl alcohol was

included on the list of commodities that

were subject to export quotas. However,

as stated in the preliminary

determination, these quotas were

confined to exports to Japan and the

countries of the European Community

and were not applicable to PRC exports

to the United States. Petitioner did not

offer any explanation as to how the

quotas on exports to the EC countries

and Japan might have affected the

pricing of the PRC sales of furfuryl

alcohol to the United States. Moreover,

furfuryl alcohol is not included in the

more recent 1994 Quota Measure.

With regard to the specific allegation

concerning Sinochem Shandong, the

Department found Sinochem Shandong

eligible for a separate rate, on a de jure

basis, on the ground that the national

trading company was dismantled and its

former branches became independent

(see Sparklers and Final Determination

of Sales at Less Than Fair Value: Sulfur

Dyes From the People’s Republic of

China, 58 FR 7537–38 (February 8,

1993). The 1992 ‘‘Directory of Chinese

Enterprises for Foreign Economic

Relations and Trade’’ referenced by the
Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices 22547

petitioner is outdated; the Sinochem

national trading company was

dismantled after the directory was

compiled. As stated in the ‘‘Separate

Rates’’ section of this notice, we

therefore find that the administrative

record in this investigation supports a

final determination that there is the de

jure and de facto absence of

governmental control over the export

activities of both respondents.

Consequently, we find that these

exporters have met the criteria for

application of separate rates.

Comment 2: Assigning Separate Rates

for Different Suppliers

The respondents urge the Department

to determine separate rates for each

manufacturing respondent and to

establish dual rates for trading

companies sourcing from two

manufacturers. In support of this

request, the respondents cite to the

Final Determination of Sales at Less

Than Fair Value: Certain Cased Pencils

from the PRC, 59 FR 55625 (November

8, 1994) (Pencils).

The petitioner argues that

respondents’ reliance on Pencils is

misplaced, noting that the Department

established factory-specific rates in that

case to prevent investigated producer/

exporter combinations with no dumping

margin from becoming conduits for

merchandise produced by producers

that had been found to have positive

dumping margins. Accordingly, the

petitioner urges that respondents’

request be rejected.

DOC Position

We agree with the petitioner. The

Department’s practice is to apply

separate rates only to those exporters of

the subject merchandise who responded

to the Department’s questionnaire,

whose responses were verified on this

issue, and who satisfy the criteria of our

separate rates test. For those exporters

that have multiple suppliers, margins

are based on weighted-average FMVs

(see, Coumarin, 59 FR 66895, 66899).

In Pencils, the Department found no

dumping margin for one exporter based

upon the factors of production provided

by the suppliers of that exporter. The

Department determined that, for

purposes of exclusion from the order,

the exclusion applied only to the

exporter’s sales of merchandise

produced by those suppliers. If the

exporter sold merchandise produced by

other suppliers, that merchandise would

be subject to the order at the ‘‘Chinawide’’ rate. The Department assigned a

margin based on the weighted-average

FMV of all suppliers to other exporters

that did not qualify for exclusion. In this

investigation, because none of the

exporter-supplier combinations are

without a dumping margin, the

Department assigned each exporter a

rate based on the respective weightaverage FMV of the exporter/producer

combinations.

Comment 3: Market-Oriented Treatment

for Certain Inputs

At the preliminary determination,

respondents requested market-orientedindustry (MOI) treatment and the use of

domestic PRC prices for major inputs in

the production of furfuryl alcohol

(furfuryl and its primary material input,

corn cobs). The Department rejected

respondents’ claim. In its subsequent

briefs, the respondents argued that MOI

treatment and the use of domestic PRC

prices was appropriate for the furfuryl

alcohol itself.

The petitioner cites the Final

Determination of Less Than Fair Value:

Sulfanilic Acid from the PRC, 57 FR

29705 (July 6, 1992) (Sulfanilic Acid),

for the proposition that the MOI test is

not and should not be applied on an

input-by-input basis.

DOC Position

The Department’s practice with MOI

claims has been to require the

respondents to show that the subject

merchandise is produced within an

MOI. Showing that a respondent

purchases one input at a marketdetermined price (which we have not

concluded in this investigation) is

relevant but, alone, not sufficient to find

an MOI for the subject merchandise

(Sulfanilic Acid, 57 FR 29705).

Respondents failed to show that the

other inputs were available at marketdetermined prices. Accordingly,

respondents have not demonstrated

eligibility for MOI treatment and, in

accordance with the statute, we must

determine FMV on the basis of surrogate

market economy values for inputs

produced or purchased within the PRC.

Comment 4: Constructed Surrogate

Value for All Furfuryl

The respondents urge the Department

to use the reported factors of production

to value both self-produced and

purchased furfuryl during the POI. They

argue that, according to the Omnibus

Trade and Competitiveness Act of 1988

(1988 Act), the Department’s first

preference in determining FMV in an

NME investigation is the calculation of

the value of factors of production. Since

the Department has verified the factors

of production in the PRC, using the

actual factor inputs and surrogate values

for those inputs is the most accurate

way to value furfuryl. The respondents

assert that, at a minimum, the factors of

production of furfuryl should be used to

value both the furfuryl produced and

the furfuryl purchased for the producers

that did both during the POI.

The petitioner contends that the

respondents’ reference to the change to

using factor inputs and surrogate values

for NME investigations in the 1988 Act

is both factually and legally incorrect.

To support its assertion, the petitioner

states: (1) The Department has not

constructed a surrogate value for

furfuryl produced in the PRC as claimed

by the respondents—the factors of

production for furfuryl, based on the

few responding producers in this

investigation, are not necessarily

applicable to all furfuryl producers in

the PRC; (2) the 1988 Act requires

merely that the Department value in a

surrogate country input factors of

production of the subject merchandise;

and (3) no statutory support exists for

applying one NME producer’s factors of

production to another NME

manufacturer’s product.

DOC Position

We agree with the petitioner that the

1988 Act does not support the

respondents’ proposal. In accordance

with the statute’s direction to measure

and value ‘‘the factors of production

utilized in the production of the

merchandise,’’ we valued the inputs for

furfuryl for the factories producing

furfuryl. For those factories that

purchased furfuryl for their production

of furfuryl alcohol, we continued to

treat the purchased furfuryl as the input

to be valued on the basis of a surrogate.

Comment 5: Corn Cob Value

The petitioner argues that corn cobs,

a primary direct material of furfuryl

and, therefore, furfuryl alcohol, should

be assigned a value based on a price in

one of the surrogate countries. In the

preliminary determination the

Department, based on information

provided in a cable from the U.S.

Embassy in Indonesia, treated corn cobs

as an agricultural waste product and

only assigned corn cobs the costs

applicable to transporting corn cobs to

the factory. The petitioner contends that

it is inapposite to treat corn cobs as

agricultural waste because the

respondents have to pay for corn cobs.

If a price for corn cobs is unavailable in

Indonesia, the petitioner urges the

Department to use a price from another

surrogate country.

The respondents argue that if furfuryl

production is based on the use of market

factors, including corn cobs, then home

market prices should be used for these

factors. If, however, the Department

continues to value furfuryl production
22548 Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices

using the factor methodology, the

respondents contend that corn cobs

should be valued at Indonesian prices,

as established in the preliminary

determination.

DOC Position

We agree with the petitioner that corn

cobs should be assigned a value based

on a price in one of the surrogate

countries. However, we disagree with

the petitioner that it is inapposite to

treat corn cobs as agricultural waste

because the respondents pay for corn

cobs. In this investigation, we obtained

information relating to the value of corn

cobs in the surrogate country, Indonesia.

In Indonesia, corn cobs are treated as

agricultural waste and have no

commercial value. Inasmuch as we

valued these corn cobs on the basis of

our surrogate country methodology, the

surrogate value is appropriate.

Comment 6: Inappropriate Import Value

for Furfuryl

The petitioner contends that the

Department should rely on publicly

available information from 1992

Indonesian import statistics rather than

a price quote received from a factory in

Indonesia to value furfuryl.

DOC Position

As in the preliminary determination,

we used the respective factors of

production in our calculation of FMV

for the furfuryl that was produced by

the respondents; however, for the

furfuryl that was purchased, we based

the value on cable information received

from the U.S. Embassy in Indonesia. As

stated in the calculation memorandum

attached to the concurrence

memorandum, dated December 9, 1994,

the 1992 value that the petitioner is

referring to is publicly available, but it

is less contemporaneous with the POI

than the cable information, and

therefore, was rejected.

Comment 7: Zhucheng’s Claimed ByProduct Credit

The petitioner urges the Department

to reject Shandong Zhucheng Chemical

Company Limited’s (Zhucheng) claimed

by-product credit for a factor of

production because the information was

submitted during verification and,

therefore, constitutes an untimely

submission of data.

The respondents argue that the record

in this investigation indicates that the

petitioner improperly characterized

Zhucheng’s claimed credit as untimely.

Zhucheng indicates that it had reported

the credit in its original response to

Section D of the Department’s

questionnaire. While the respondents

acknowledge that they provided a

correction and calculation worksheet on

this topic at verification, they argue that

the documentation is fully in line with

that which the Department normally

accepts or requires at verification.

Accordingly, the respondents request

that the Department use the verified

credit information in the final margin

calculations.

DOC Position

While we agree with the respondents

that this information was not untimely,

we did not include this credit in our

final margin calculations because, as

noted in our verification report,

Zhucheng was unable to provide

documentation to support its worksheet

calculations for the credit amount of the

factor. (For a further discussion of this

issue, see our calculation memorandum

attached to the May 1, 1995,

concurrence memorandum and

Zhucheng’s verification report at page

17, dated March 22, 1995).

Comment 8: Zhucheng’s Understated

Usage of Corn Cobs

The petitioner argues that the

Department’s verification revealed that

Zhucheng underreported its

consumption of corn cobs, and that the

Department should base its final margin

calculations on the verified amounts.

According to the respondents, the

petitioner has mischaracterized the

Department’s verification findings. The

respondents suggest that the

understatement was related to

impurities, not corn cobs. The

respondents also suggest that Zhucheng

quite properly reported corn cob

consumption, not the consumption of

both the factor corn cobs and the

impurities. However, the respondents

view petitioner’s argument as irrelevant

because corn cobs are considered an

agricultural waste in the surrogate,

Indonesia.

DOC Position

We agree with the petitioner that

Zhucheng underreported its

consumption of corn cobs. Our

questionnaire requests respondents to

report the gross, not net, amount of

materials consumed in the production

of the subject merchandise. Therefore,

we have increased Zhucheng’s

consumption of this input, as verified.

Inasmuch as the surrogate information

in Indonesia assigns no monetary value

to corn cobs, this increase in

consumption will have an affect only on

the expenses to transport the corn cobs

to the furfuryl alcohol factory.

Comment 9: Zhucheng’s Reallocation of

Labor Hours

The petitioner contends that the

Department should reject Zhucheng’s

reallocation of labor hours presented at

verification because the information is

both untimely and without merit.

According to the respondents, the

petitioner has misinterpreted the record

in arguing that Zhucheng submitted

new data on labor hours in the middle

of verification. The respondents

emphasize that Zhucheng had reported

labor hours in its original questionnaire

responses to the Department. At

verification, the respondents contend

that the Department was able to review

Zhucheng’s records on labor and assess

the proper division of direct, indirect

and unrelated labor. Inasmuch as

Zhucheng’s reallocation verified

without discrepancy, the respondents

request that the Department include its

verification findings on labor in its final

margin calculations.

DOC Position

We agree with the respondents. As

noted in our verification report,

Zhucheng had overstated the amount of

labor used for producing the input

furfuryl because the reported amounts

included both indirect and unrelated

labor. Since our surrogate value for

factory overhead includes indirect labor

and it is the Department’s practice to

only include the production labor

related to the subject merchandise, we

have revised our final calculations on

labor to avoid double counting indirect

labor.

Comment 10: Zhucheng’s Self-Produced

Input, Hydrogen

Zhucheng requests that the

Department revise its valuation of

hydrogen for the final determination by

not valuing it separately. The company

argues that the costs associated with the

manufacture of this input are included

in the surrogate value for factory

overhead and that the Department’s

separate valuation of this input

constitutes double counting.

The petitioner argues that the

Department should reject Zhucheng’s

attempt to disregard hydrogen as a

direct material and assign a factor value

to the process used to produce this

input. Moreover, inasmuch as the

respondent failed to report usage rates

for this process, the petitioner urges that

the Department assign a value based

upon the best information otherwise

available.

DOC Position

We confirmed that the process

necessary to produce hydrogen is
Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices 22549

accounted for in the surrogate value for

factory overhead and that to value the

company’s input separately would

involve double counting. Therefore, we

have not assigned a separate value to

hydrogen in our calculations for the

final determination. (For a further

discussion of this issue, see our

calculation memorandum attached to

the concurrence memorandum of May 1,

1995).

Comment 11: Iso-Tanker Rental

Expense

The petitioner asserts that, in

computing movement expenses, the

Department should include a rental

expense for iso-tankers used by

Sinochem Shandong because the

Department verified that these expenses

were incurred. The petitioner argues

that it is appropriate to rely on the

public information provided in the

petition for the valuation of these

expenses in the final margin

calculations.

DOC Position

We agree with the petitioner that

Sinochem Shandong incurred a rental

expense for transporting the subject

merchandise in iso-tanker trucks during

the POI. Given that we were unable to

obtain any publicly available data, or

other information, regarding this

expense in any of our surrogate

countries, we relied on the publicly

available information in the petition for

the rental of iso-tanker trucks from

Thailand for shipments to the United

States to derive a MT per kilometer cost.

We applied this figure to the distance

between the factory and the port for

each PRC supplier of Sinochem

Shandong.

Comment 12: BIA for Sinochem

Shandong

The petitioner argues that the

Department should use BIA to calculate

a margin for Sinochem Shandong

because it failed to furnish a complete

list of suppliers that provided the

furfuryl alcohol it sold to the United

States during the POI. The petitioner

states that the reported suppliers did not

deliver furfuryl alcohol from a total of

five invoices in time for one of

Sinochem Shandong’s shipments.

Accordingly, the petitioner asserts that

Sinochem Shandong must have

purchased the furfuryl alcohol

elsewhere, and has failed to disclose

that supplier to the Department.

The respondents contend that the

petitioner’s allegation regarding

Sinochem Shandong’s sourcing is

unfounded. The respondents argue that

the integrity of Sinochem Shandong and

its suppliers are demonstrated in the

Department’s verification reports and,

therefore, there is no reason to use BIA.

To support their argument, the

respondents cite to the Department’s

verification reports.

DOC Position

We agree with the respondents that

the sales reported by Sinochem

Shandong and by its suppliers did, in

fact, correspond, and that the

discrepancy was only a result of

differences in the bookkeeping practices

of these different entities. For these

reasons, we relied on Sinochem

Shandong’s verified data and did not

resort to using BIA to calculate its

margin.

Comment 13: Additional Movement

Expenses for Qingdao

The petitioner asserts that the

Department should deduct from the

USP the additional expenses incurred

for the movement of Qingdao’s furfuryl

alcohol from the point of shipment to

the point of delivery. At verification,

Qingdao indicated that it received

partial payment for certain invoices and

that the difference between the invoiced

amounts and the actual payments

represents movement expenses. The

petitioner argues that these movement

expenses must be accounted for in the

Department’s calculations.

The respondents indicate that the

record demonstrates that these

additional charges are not those of

Qingdao and that this was affirmed at

verification. Accordingly, it would be

inappropriate to charge these additional

movement expenses to Qingdao.

DOC Position

We agree with the respondents. The

Department verified that only partial

payments for three U.S. sales had been

forwarded by the customer to Qingdao

because of a dispute over shipping

charges between the shipper and

Qingdao’s customer. Both Qingdao and

its customer acknowledge that these

charges are not the responsibility of

Qingdao. The customer stated that it

will complete payment to Qingdao as

soon as the issue with the shipper is

resolved (see Qingdao verification

report, dated March 20, 1995).

Accordingly, the Department is satisfied

that a third party, not Qingdao, is liable

for the additional movement expenses.

Comment 14: Ministerial Error on

Packing

The respondents state that the

Department should correct the

multiplication errors made in

calculating packing expenses in the

preliminary determination. Specifically,

they state that for the producers Zibo

Gaintact Chemical Company Limited

and Zhucheng, the Department

incorrectly multiplied the drum cost per

metric ton by the number of drums in

a metric ton. In addition, the

respondents state that with respect to

the producers Linzi Organic Chemicals

Co. Ltd. and Zibo, the Department

confirmed that shipment of products by

Sinochem Shandong was by iso-tanker.

Accordingly, the respondents assert that

packing material costs for these

shipments should be zero.

The petitioner notes that although the

Department’s preliminary calculation

has a mathematical error, it is not the

error alleged by the respondent. In fact,

the petitioner postulates that the

packing figures used in the preliminary

determination were partially correct.

The petitioner makes the assumption

that the Department charged all sales of

furfuryl alcohol with packing cost to

account for the packing that would be

needed for the purchased furfuryl.

Therefore, the petitioner states that all

sales should include packing cost, and

that the drum sales should have packing

cost included twice.

DOC Position

We agree with the respondents. These

were ministerial errors and have been

corrected (see calculation memorandum

attached to the concurrence

memorandum, dated May 1, 1995).

Comment 15: Labor Rates

The respondents state that, in the

preliminary determination, the

Department used unrealistically high

labor rates for both skilled and unskilled

labor, and such rates did not accurately

reflect the actual wage rates in

Indonesia.

The petitioner argues that the

Department should continue to rely on

the U.S. Department of Labor statistics

for Indonesian labor that were used in

the preliminary determination.

DOC Position

We agree with the respondents. The

labor rates used in the preliminary and

final determinations are discussed

above in the section on Foreign Market

Value.

Comment 16: Indirect Labor & Energy

The respondents state that, based on

the March 23, 1995, memorandum to

the file, the calculations for all three

manufacturers should be corrected to

eliminate indirect labor, coal, steam,

and electricity because the

memorandum states that the costs of

indirect labor and energy are included
22550 Federal Register / Vol. 60, No. 88 / Monday, May 8, 1995 / Notices

in the Indonesian surrogate value for

factory overhead.

The petitioner urges the Department

not to eliminate indirect labor and

energy, and instead use a surrogate

valuation based on a percentage of

direct materials, all labor and energy

costs. In any event, the petitioner states

that the Department should not ignore

the respondent’s energy costs.

DOC Position

We agree with the respondents. Based

on the Department’s surrogate value

methodology, Indonesia is our preferred

surrogate, and since the factory

overhead percentage for Indonesia

includes the above-mentioned items, we

have not separately valued those items

in our calculations for the final

determination.

Comment 17: Salt

The respondents state that the

Department verified that salt, not the

originally reported factor, was used by

two of the factories. To value this factor,

the respondents suggest using either the

Indonesian price, if available, or the

U.S. price. Alternatively, the

respondents state that the Department

should consider disregarding the cost of

salt altogether because it was not used

in the production process. They point to

the verification report for one of the

factories, wherein salt was referred to as

‘‘a low cost consumable’’ used for

equipment maintenance.

The petitioner argues that the

Department’s calculations of surrogate

values in the preliminary determination

were correct and should not be changed.

DOC Position

We agree with both parties, in part.

For the factory that treats salt as a ‘‘low

cost consumable,’’ we have treated these

costs as part of factory overhead and

have not valued them separately as a

factor of production. For the other

factory, there is no evidence concerning

how salt was used in the production

process or what kind of salt was used.

Therefore, we have treated salt as a

factor of production, and have

continued to use the surrogate value

that was used in the preliminary

determination.

Comment 18: Sulfuric Acid

The respondents state that the

surrogate value used for sulfuric acid in

the preliminary determination is either

erroneous or aberrational and should be

corrected. They state that a more

realistic value for sulfuric acid has been

established in the Pencils investigation,

where an Indian price was used.

The petitioner contends that the

Department should follow the surrogate

country hierarchy established in this

case.

DOC Position

We agree with both parties, in part.

We agree with the petitioner that the

Department should use the established

hierarchy. Based on our analysis, we

also agree with the respondents that a

more accurate value should be used.

Because furfuryl alcohol is not

produced in India, we based our

calculations on the export values

derived from the November 1993

Indonesian Foreign Trade Statistical

Bulletin— Exports. Because this was a

contemporaneous value, no adjustment

for inflation was needed (see calculation

memorandum attached to the

concurrence memorandum, dated May

1, 1995).

Comment 19: Valuation of Ammonia

Water

The respondents state that the

surrogate value used for ammonia water

in the preliminary determination was

aberrational and should be corrected.

The respondent cites to the

Department’s publication of an ‘‘Index

of Factor Values for Use in

Antidumping Duty Investigations

Involving Products from the People’s

Republic of China’’ which lists a price

for ammonia water in another approved

surrogate, India.

The petitioner alleges that the

respondents misuse the terms

‘‘erroneous’’ and ‘‘aberrational’’ and

completely disregard the Department’s

factor valuation hierarchy. The

petitioner urges the Department not to

change its surrogate value for this factor.

DOC Position

We agree with the respondents in

part. Based on our analysis, we

determined that the surrogate value

used in the preliminary determination

was inappropriate. (For the details of

our analysis of this value, see the

calculation memorandum attached to

the concurrence memorandum, dated

May 1, 1995.) Since the Indonesian

import value for ammonia water was

found to be inappropriate, we based our

calculations on the export values

derived from the November 1993

Indonesian Foreign Trade Statistical

Bulletin—Exports. Because this was a

contemporaneous value, no adjustment

for inflation was needed.

Continuation of Suspension of

Liquidation

In accordance with sections 733(d)(1)

and 735(c)(4)(B) of the Act, we are

directing the Customs Service to

continue to suspend liquidation of all

entries of furfuryl alcohol from the PRC,

that are entered, or withdrawn from

warehouse, for consumption on or after

the date of publication of this notice in

the Federal Register. The Customs

Service shall require a cash deposit or

posting of a bond equal to the estimated

amount by which the FMV exceeds the

USP as shown below. These suspension

of liquidation instructions will remain

in effect until further notice.

The weighted-average dumping

margins are as follows:

Manufacturer/producer/exporter

Weighted-Average

Margin

Percentage

Sinochem Shandong ...................... 43.54

Qingdao .......................................... 50.43

China-Wide ..................................... 45.27

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the

International Trade Commission (ITC) of

our determination. As our final

determination is affirmative, the ITC

will determine whether these imports

are causing material injury, or threat of

material injury, to the industry in the

United States, within 45 days. If the ITC

determines that material injury, or

threat of material injury, does not exist,

the proceeding will be terminated and

all securities posted will be refunded or

cancelled. If the ITC determines that

such injury does exist, the Department

will issue an antidumping duty order

directing Customs officials to assess

antidumping duties on all imports of the

subject merchandise entered, or

withdrawn from warehouse, for

consumption on or after the effective

date of the suspension of liquidation.

This determination is published

pursuant to section 735(d) of the Act

and 19 CFR 353.20(a)(4).

Dated: May 1, 1995.

Susan G. Esserman,

Assistant Secretary for Import

Administration.

[FR Doc. 95–11262 Filed 5–5–95; 8:45 am]

BILLING CODE 3510–DS–P

[A–791–802]

Final Determination of Sales at Less

Than Fair Value: Furfuryl Alcohol From

South Africa

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.