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 Department of Commerce International Trade Administration [A-570-951]
 AGENCY: Import Administration, International Trade Administration, Department of Commerce.
 DATES: *Effective Date:*
                         February 3, 2010.
 SUMMARY: The Department of Commerce (the Department) preliminarily determines that certain woven electric blankets (woven electric blankets) from the People's Republic of China (PRC) are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733 of the Tariff Act of 1930, as amended (the Act). The estimated dumping margins are shown in the “Preliminary Determination” section of this notice.
 FOR FURTHER INFORMATION CONTACT: Drew Jackson or Howard Smith, AD/CVD Operations, Office 4, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-4406 or 482-5193, respectively.


SUPPLEMENTARY INFORMATION:  Background On June 30, 2009, the Department received an antidumping duty petition concerning imports of woven electric blankets from the PRC filed in proper form by Jarden Consumer Solutions (Petitioner). 
                    *See*
                     Petition for the Imposition of Antidumping Duties: Certain Woven Electric Blankets from the People's Republic of China, dated June 30, 2009 (Petition). The Department initiated an antidumping duty investigation of woven electric blankets from the PRC on July 20, 2009. 
                    *See Certain Woven Electric Blankets From the People's Republic of China: Initiation of Antidumping Duty Investigation,*74 FR 37001 (July 27, 2009) (
                    *Initiation Notice*). On July 20, 2009, the Department requested quantity and value (Q&V) information from the 30 companies that are identified in the petition as potential producers or exporters of woven electric blankets from the PRC. 
                    *See*
                     “Respondent Selection in the Antidumping Duty Investigation of Woven Electric Blankets From the People's Republic of China,” dated September 3, 2009 (Respondent Selection Memorandum). The 
                    ( print page 5568)
                    Department received timely responses to its Q&V questionnaire from the following companies: Hung Kuo Electronic (Shenzhen) Company Limited (Hung Kuo); Ningbo Zhonglei Maofangzhi Ranzheng Co., Ltd. (Ningbo Zhonglei); Zhejiang Hewei Knitting Technology Co., Ltd.; Ningbo Jifa Electrical Appliances Co., Ltd. (Jifa); Ningbo Jinchun Electric Appliances Co., Ltd. (Jinchun); [1]
                    
                     Ningbo V.K. Industry & Trading Co., Ltd. (Ningbo V.K.); and Chengdu Rainbow Appliance (Group) Sharers Co., Ltd. The Department confirmed that 19 of the 30 companies received the Q&V questionnaire, while the international courier service shipment tracking results showed that DHL had arranged for delivery of the Department's Q&V questionnaire to an additional 10 companies. 
                    *See*
                     “Respondent Selection Memorandum.” Additionally, one of the Department's Q&V questionnaires was returned to the Department due to an incorrect address provided by Petitioner. Only the above-named companies responded to the Department's Q&V questionnaire. On August 13, 2009, the International Trade Commission (ITC) preliminarily determined that there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of woven electric blankets from the PRC. 
                    *See Woven Electric Blankets From China, Investigation No. 731-TA-1163 (Preliminary),*74 FR 42323 (August 21, 2009). Also, in August 2009, Petitioner submitted comments to the Department regarding the physical characteristics of subject merchandise that it argued should be used in comparing sales prices with normal value (NV). On September 3, 2009, the Department selected Hung Kuo as the mandatory respondent and issued an antidumping questionnaire to the company. 
                    *See*
                     “Respondent Selection Memorandum.” Hung Kuo submitted timely responses to the Department's questionnaire on September 3, 2009, October 16, 2009, and October 27, 2009. On September 25, 2009, the Department received properly filed separate-rate applications from Jifa, Jinchun, and Ningbo V.K. The Department issued supplemental questionnaires to, and received responses from Hung Kuo, Jifa, Jinchun, and Ningbo V.K. from October through January 2010. Petitioner submitted comments to the Department regarding Hung Kuo's questionnaire and supplemental questionnaire responses from June 2009, through January 2010. On October 30, 2009, the Department released a memorandum to interested parties which listed potential surrogate countries and invited interested parties to comment on surrogate country and surrogate value selection. During November and December 2009, and January 2010, Petitioner and Hung Kuo submitted comments on the appropriate surrogate country and surrogate values. The submitted surrogate value data submitted by Petitioner and Hung Kuo are for India. On November 5, 2009, Petitioner requested postponement of the preliminary determination. On November 16, 2009, the Department extended this preliminary determination by fifty days. 
                    *See Certain Woven Electric Blankets From the People's Republic of China: Postponement of Preliminary Determination of Antidumping Duty Investigation,*74 FR 60236 (November 20, 2009). On January 14, 2010, Hung Kuo requested that the Department extend the final determination in this case. 
                    *See*
                     the “Postponement of Final Determination” section of this notice below. Period of Investigation The period of investigation (POI) is October 1, 2008, through March 31, 2009. This period corresponds to the two most recently completed fiscal quarters prior to the month in which the petition was filed (
                    *i.e.,*
                     June 2009). 
                    *See*19 CFR 351.204(b)(1). Scope of the Investigation The scope of this investigation covers finished, semi-finished, and unassembled woven electric blankets, including woven electric blankets commonly referred to as throws, of all sizes and fabric types, whether made of man-made fiber, natural fiber or a blend of both. Semi-finished woven electric blankets and throws consist of shells of woven fabric containing wire. Unassembled woven electric blankets and throws consist of a shell of woven fabric and one or more of the following components when packaged together or in a kit: (1) Wire; (2) controller(s). The shell of woven fabric consists of two sheets of fabric joined together forming a “shell.” The shell of woven fabric is manufactured to accommodate either the electric blanket's wiring or a subassembly containing the electric blanket's wiring (
                    *e.g.,*
                     wiring mounted on a substrate). A shell of woven fabric that is not packaged together, or in a kit, with either wire, controller(s), or both, is not covered by this investigation even though the shell of woven fabric may be dedicated solely for use as a material in the production of woven electric blankets. The finished, semi-finished and unassembled woven electric blankets and throws subject to this investigation are currently classifiable under subheading 6301.10.0000 of the Harmonized Tariff Schedule of the United States (HTSUS). Although the HTSUS subheading is provided for convenience and customs purposes, only the written description of the scope is dispositive. Scope Comments In accordance with the preamble to the Department's regulations, we set aside a period of time in our 
                    *Initiation Notice*
                     for parties to raise issues regarding product coverage, and encouraged all parties to submit comments within 20 calendar days of the signature date of that notice. 
                    *See Antidumping Duties; Countervailing Duties; Final Rule,*62 FR 27296, 27323 (May 19, 1997), 
                    *see also**Initiation Notice.*
                     Before the Department initiated the instant investigation, interested parties submitted comments regarding the proposed scope of the investigation; however, the Department made no changes to the proposed scope of the investigation. 
                    *See Initiation Notice.*
                     After initiation, the Department received no additional comments concerning the scope of the woven electric blankets antidumping duty investigation, and, therefore, the Department has not modified the scope. Non-Market Economy Treatment The Department considers the PRC to be a non-market economy (NME) country. In accordance with section 771(18)(C)(i) of the Act, any determination that a country is an NME country shall remain in effect until revoked by the administering authority. 
                    *See, e.g.,**Tapered Roller Bearings and Parts Thereof (TRBs), Finished and Unfinished, From the People's Republic of China: Preliminary Results of 2001-2002 Administrative Review and Partial Rescission of Review,*68 FR 7500 (February 14, 2003), unchanged in 
                    *TRBs, Finished and Unfinished, From the People's Republic of China: Final Results of 2001-2002 Administrative Review and Partial Rescission of Review,*68 FR 70488 (December 18, 2003). The Department has not revoked the PRC's status as an NME country. Therefore, in this preliminary 
                    ( print page 5569)
                    determination, we have treated the PRC as an NME country and applied our current NME methodology. Surrogate Country and Value Comments On October 30, 2009, the Department released a Policy Memorandum to interested parties identifying potential surrogate countries and provided parties with an opportunity to submit comments regarding the selection of a surrogate country in the instant investigation. 
                    *See*
                     Memorandum to Howard Smith, Program Manager, AD/CVD Operations Office 4, from Kelly Parkhill, Acting Director for Policy, Office of Policy, “Request for A List of Surrogate Countries for an Antidumping Duty Investigation of Certain Woven Electric Blankets (WEB) from the People's Republic of China (PRC),” dated October 28, 2009 (Office of Policy Surrogate Country List Memorandum). The countries identified in that memorandum as being at a level of economic development comparable to the PRC for the specified POI are India, Indonesia, the Philippines, Colombia, Thailand, and Peru. On November 20, 2009, the Department received comments on surrogate country selection and surrogate value information from Petitioner and Hung Kuo. On December 4, 2009, Petitioner and Hung Kuo submitted rebuttal comments. Both Petitioner and Hung Kuo assert that the Department should select India as the appropriate surrogate country. No other interested parties commented on the selection of a surrogate country. For a detailed discussion of the selection of the surrogate country, 
                    *see*
                     the “Surrogate Country” section below. Surrogate Country When the Department is investigating imports from an NME, section 773(c)(1) of the Act directs it to base NV, in most circumstances, on the NME producer's factors of production (FOP) valued in a surrogate market-economy country or countries considered to be appropriate by the Department. In accordance with section 773(c)(4) of the Act, in valuing the FOP, the Department shall utilize, to the extent possible, the prices or costs of FOP in one or more market-economy countries that are at a level of economic development comparable to that of the NME country and are significant producers of comparable merchandise. The sources of the surrogate values we have used in this investigation are discussed under the “Normal Value” section below. The Department determined that India, the Philippines, Indonesia, Colombia, Thailand and Peru are countries comparable to the PRC in terms of economic development. 
                    *See*
                     “Office of Policy Surrogate Country List Memorandum.” Once the countries that are economically comparable to the PRC have been identified, we select an appropriate surrogate country by determining whether an economically comparable country is a significant producer of comparable merchandise and whether the data for valuing FOP is both available and reliable. 
                    *See id.*
                     In their November 20, 2009, submissions, Hung Kuo and Petitioner stated that the Department should select India as a surrogate country because it satisfies the statutory requirements for the selection of a surrogate country since it is at a level of economic development that is comparable to the PRC, and is a significant producer of merchandise comparable to the merchandise under investigation. Hung Kuo and Petitioner also put information on the record demonstrating that the Department can value the major FOP for subject merchandise using reliable, publicly available data from Indian sources. 
                    *See*
                     Hung Kuo's and Petitioner's November 20, 2009, surrogate country and surrogate value comments. No other party provided comments on the record concerning the surrogate country. Based on evidence placed on the record, we have determined that it is appropriate to use India as a surrogate country pursuant to section 773(c)(4) of the Act based on the following: (1) It is at a level of economic development comparable to the PRC pursuant to section 773(c)(4) of the Act; (2) it is a significant producer of comparable merchandise; and (3) we have reliable data from India that we can use to value the FOP. 
                    *See*
                     Hung Kuo's and Petitioner's November 20, 2009, surrogate country and surrogate value comments; 
                    *see also*
                     Hung Kuo's and Petitioner's December 4, 2009, surrogate country and surrogate value rebuttal comments. Thus, to calculate NV, we are using Indian prices, when available and appropriate, to value the FOPs of Hung Kuo, the mandatory respondent. We have obtained and relied upon publicly available information wherever possible. 
                    *See*
                     Surrogate Value Memorandum, dated January 26, 2010 (Surrogate Value Memorandum). In accordance with 19 CFR 351.301(c)(3)(i), for the final determination in an antidumping duty investigation, interested parties may submit publicly available information to value the FOP within 40 days after the date of publication of the preliminary determination.[2] Separate Rates In the 
                    *Initiation Notice,*
                     the Department notified parties of the application process by which exporters and producers may obtain separate-rate status in NME investigations. The process requires exporters and producers to submit a separate-rate status application.[3] In proceedings involving NME countries, the Department has a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. It is the Department's policy to assign all exporters of merchandise subject in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate. Exporters can demonstrate this independence through the absence of both 
                    *de jure*
                     and 
                    *de facto*
                     governmental control over export activities. The Department analyzes each entity exporting the subject merchandise under a test arising from the 
                    *Notice of Final Determination of Sales at Less 
                        ( print page 5570)
                        Than Fair Value: Sparklers From the People's Republic of China,*56 FR 20588 (May 6, 1991) (
                    *Sparklers*), as further developed in 
                    *Notice of Final Determination of Sales at Less Than Fair Value: Silicon Carbide From the People's Republic of China,*59 FR 22585 (May 2, 1994) (
                    *Silicon Carbide*). However, if the Department determines that a company is wholly foreign-owned or located in a market economy, then a separate-rate analysis is not necessary to determine whether it is independent from government control. A. Separate Rate Applicants [4] 1. Wholly Foreign-Owned Hung Kuo, the mandatory respondent, reported that it is wholly owned by individuals or companies located in a market economy in its separate rate application. 
                    *See*
                     Hung Kuo's September 29, 2009, Section A questionnaire response at 6. Therefore, because the record indicates that it is wholly foreign-owned, and we have no evidence otherwise indicating that it is under the control of the PRC government, in accordance with Department practice, we determined that further separate rates analysis is not necessary to determine whether this company is independent from government control. 
                    *See, e.g.,**Notice of Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate From the People's Republic of China,*64 FR 71104-05 (December 20, 1999) (where the respondent was wholly foreign-owned and, thus, qualified for a separate rate). Accordingly, we have preliminarily granted a separate rate to Hung Kuo Electronics (Shenzhen) Company Limited. 2. Wholly Chinese-Owned One separate rate applicant, Ningbo V.K., stated that it is a wholly Chinese-owned company. 
                    *See*
                     Ningbo V.K.'s September 25, 2009 Separate Rate Application (Ningbo V.K.'s SRA) at 7-10. Therefore, the Department must analyze whether this respondent can demonstrate the absence of both 
                    *de jure*
                     and 
                    *de facto*
                     governmental control over export activities. 3. Joint Ventures Between Chinese and Foreign Companies Two companies, Jifa and Jinchun, submitted a combined separate rate application. In the separate rate application, Jifa reported that it is a joint venture company invested by one Chinese legal person and one Hong Kong individual; Jinchun reported that it is wholly-owned by a Hong Kong individual. 
                    *See*
                     Jifa and Jinchun's September 25, 2009, separate rate application (Jifa/Jinchun's SRA) at 8. Jifa and Jinchun also reported that they are affiliated through common ownership and that they share the same board members and general managers. 
                    *See*
                     Jifa and Jinchun's November 19, 2009, supplemental questionnaire response, at 1-2. Thus, the record supports a preliminary finding that Jifa and Jichun meet the definition of affiliated parties pursuant to sections 771(33)(G) of the Act. Further, pursuant to 19 CFR 351.401(f)(1), we preliminarily find that it is appropriate to treat Jifa and Jinchun as a single entity because: (1) They have production facilities for similar or identical products that would not require substantial retooling of either facility in order to restructure manufacturing priorities; and (2) there is a significant potential for the manipulation of price or production. In accordance with 19 CFR 351.401(f)(2) we preliminarily find that a significant potential for the manipulation of price or production exists because Jifa and Jinchun share a high level of common ownership, share a general manager and a board member, and share production facilities and employees. Because the Jifa/Jinchun collapsed entity is a joint venture between a PRC and a foreign (
                    *i.e.,*
                     Hong Kong) company, the Department has also analyzed whether the Jifa/Jinchun collapsed entity has demonstrated the absence of 
                    *de jure*
                     and 
                    *de facto*
                     governmental control over its respective export activities. a. Absence of 
                    *De Jure*
                     Control The Department considers the following 
                    *de jure*
                     criteria in determining whether an individual company may be granted a separate rate: (1) An absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) other formal measures by the government decentralizing control of companies. 
                    *See Sparklers,*
                     at 20589. Ningbo V.K. and the collapsed Jifa/Jinchun entity provided evidence demonstrating the following: (1) An absence of restrictive stipulations associated with each exporter's business and export licenses; (2) there are applicable legislative enactments decentralizing control of each company; and (3) and there are formal measures by the government decentralizing control of each company. 
                    *See*
                     Ningbo V.K.'s SRA at 7-10. 
                    *See also*
                     Jifa/Jinchun's SRA at 7-10. Accordingly, based on this record evidence, we preliminarily find that Ningbo V.K. and the collapsed Jifa/Jinchun entity have demonstrated an absence of 
                    *de jure*
                     governmental control. b. Absence of 
                    *De Facto*
                     Control Typically the Department considers four factors in evaluating whether each respondent is subject to 
                    *de facto*
                     governmental control of its export functions: (1) Whether the export prices are set by or are subject to the approval of a governmental agency; (2) whether the respondent has authority to negotiate and sign contracts and other agreements; (3) whether the respondent has autonomy from the government in making decisions regarding the selection of management; and (4) whether the respondent retains the proceeds of its export sales and makes independent decisions regarding disposition of profits or financing of losses. 
                    *See Silicon Carbide*
                     at 22586-87; 
                    *see also**Notice of Final Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From the People's Republic of China,*60 FR 22544, 22545 (May 8, 1995). The Department has determined that an analysis of 
                    *de facto*
                     control is critical in determining whether respondents are, in fact, subject to a degree of governmental control which would preclude the Department from assigning separate rates. We have determined that the evidence on the record supports a preliminary finding of 
                    *de facto*
                     absence of governmental control with respect to Ningbo V.K., and the collapsed Jifa/Jinchun entity, based on record statements and supporting documentation showing that the companies: (1) Set their own export prices independent of the government and without the approval of a government authority; (2) retain the proceeds from their sales and make independent decisions regarding disposition of profits or financing of losses; (3) have the authority to negotiate and sign contracts and other agreements; and (4) have autonomy from the government regarding the selection of management. 
                    *See*
                     Ningbo V.K.'s SRA at 10-17; Jifa/Jinchun's SRA at 11-18; 
                    *see also*
                     Ningbo V.K's November 10, 2009, supplemental questionnaire response. The evidence placed on the record of this investigation by Hung Kuo, Ningbo V.K., and the collapsed Jifa/Jinchun entity, demonstrate an absence of ownership by NME residents or entities, and an absence of 
                    *de jure*
                     and 
                    *de facto*
                     government control with respect to the 
                    ( print page 5571)
                    exporters' exports of the merchandise under investigation, in accordance with the criteria identified in 
                    *Sparklers*
                     and 
                    *Silicon Carbide.*
                     Therefore, we have preliminarily granted Hung Kuo, Ningbo V.K., and the collapsed Jifa/Jinchun entity, separate rate status. Consistent with Department practice, we calculated a company-specific dumping margin for Hung Kuo and assigned this margin to Ningbo V.K., and the collapsed Jifa/Jinchun entity. 
                    *See, e.g.,**Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances, in Part: Light-Walled Rectangular Pipe and Tube From the People's Republic of China,*73 FR 5500 (January 30, 2008), unchanged in 
                    *Final Determination of Sales at Less Than Fair Value and Affirmative Determination of Critical Circumstances, in Part: Light-Walled Rectangular Pipe and Tube From the People's Republic of China,*73 FR 35652 (June 24, 2008) (
                    *LWR from the PRC*). The PRC-Wide Entity The Department has data indicating that there were more exporters of woven electric blankets from the PRC than those responding to our request for Q&V information during the POI. 
                    *See*
                     “Respondent Selection Memorandum.” We issued our request for Q&V information to 30 potential Chinese exporters of the merchandise under investigation, in addition to posting the Q&V questionnaire on the Department's website. While information on the record of this investigation indicates that there are other producers/exporters of woven electric blankets in the PRC, we received only seven timely filed Q&V responses. 
                    *See id.*
                     Although all exporters were given an opportunity to provide Q&V information, not all exporters provided a response to the Department's Q&V letter. Therefore, the Department has preliminarily determined that there were exporters/producers of the merchandise under investigation during the POI from the PRC that did not respond to the Department's request for information. We have treated these PRC producers/exporters as part of the PRC-wide entity because they did not qualify for a separate rate. 
                    *See, e.g., Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Preliminary Partial Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof From the People's Republic of China,*70 FR 77121, 77128 (December 29, 2005), unchanged in 
                    *Final Determination of Sales at Less Than Fair Value and Final Partial Affirmative Determination of Critical Circumstances: Diamond Sawblades and Parts Thereof From the People's Republic of China,*71 FR 29303 (May 22, 2006). Section 776(a)(2) of the Act provides that the Department shall, subject to subsection 782(d) of the Act, use facts otherwise available in reaching the applicable determination if an interested party: (A) Withholds information that has been requested by the Department; (B) fails to provide such information in a timely manner or in the form or manner requested, subject to subsections 782(c)(1) and (e) of the Act; (C) significantly impedes a proceeding under the antidumping statute; or (D) provides such information but the information cannot be verified. As noted above, the PRC-wide entity withheld information requested by the Department. As a result, pursuant to section 776(a)(2)(A) of the Act, we find it appropriate to base the PRC-wide dumping margin on facts otherwise available. 
                    *See Notice of Preliminary Determination of Sales at Less Than Fair Value, Affirmative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen Fish Fillets From the Socialist Republic of Vietnam,*68 FR 4986 (January 31, 2003), unchanged in 
                    *Notice of Final Antidumping Duty Determination of Sales at Less Than Fair Value and Affirmative Critical Circumstances: Certain Frozen Fish Fillets From the Socialist Republic of Vietnam,*68 FR 37116 (June 23, 2003). Section 776(b) of the Act provides that, in selecting from among the facts otherwise available, the Department may employ an adverse inference if an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information. 
                    *See Statement of Administrative Action,*
                     accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316, Vol. I at 843 (1994) (
                    *SAA*), reprinted in 1994 U.S.C.C.A.N. 4040 at 870. 
                    *See also, Notice of Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products From the Russian Federation,*65 FR 5510, 5518 (February 4, 2000). Because the PRC-wide entity did not respond to the Department's requests for information, the Department has concluded that the PRC-wide entity has failed to cooperate to the best of its ability. Therefore, the Department preliminarily finds that, in selecting from among the facts available, an adverse inference is appropriate. Section 776(b) of the Act authorizes the Department to rely upon, as adverse facts available (AFA): (1) Information derived from the petition; (2) the final determination from the LTFV investigation; (3) a previous administrative review; or (4) any other information placed on the record. In selecting a rate for AFA, the Department selects one that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” 
                    *See Notice of Final Determination of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors From Taiwan,*63 FR 8909 (February 23, 1998). It is the Department's practice to select, as AFA, the higher of: (a) The highest margin alleged in the petition or (b) the highest calculated rate for any respondent in the investigation, to the extent that it can be corroborated (assuming the rate is based on secondary information). 
                    *See Final Determination of Sales at Less Than Fair Value: Certain Cold-Rolled Flat-Rolled Carbon Quality Steel Products From the People's Republic of China,*65 FR 34660 (May 31, 2000), and accompanying Issues and Decisions Memorandum at Facts Available. In the instant investigation, as AFA, we have preliminarily assigned to the PRC-wide entity, the highest corroborated margin alleged in the Petition, which is 174.85 percent. The dumping margin for the PRC-wide entity applies to all entries of the merchandise under investigation except for entries of subject merchandise produced and exported by Hung Kuo, Ningbo V.K., and Jifa/Jinchun. Companies Not Receiving a Separate Rate In the 
                    *Initiation Notice,*
                     the Department requested that all companies wishing to qualify for separate rate status in this investigation submit a separate rate status application. 
                    *See Initiation Notice.*
                     Two exporters, Zhejiang Hewei Knitting Technology Co., Ltd. and Ningbo Zhonglei Maofangzhi Ranzheng Co., submitted timely responses to the Department's Q&V questionnaire but did not provide separate rate applications, and, therefore, have not demonstrated their eligibility for separate rate status in this investigation. As a result, the Department is treating these Chinese exporters as part of the PRC-wide entity. Corroboration of Information Section 776(c) of the Act provides that, when the Department relies on 
                    ( print page 5572)
                    secondary information rather than on information obtained in the course of an investigation as facts available, it must, to the extent practicable, corroborate that information from independent sources reasonably at its disposal. Secondary information is described as “information derived from the petition that gave rise to the investigation or review, the final determination concerning merchandise subject to this investigation, or any previous review under section 751 concerning the merchandise subject to this investigation.” [5]
                    
                     To “corroborate” means simply that the Department will satisfy itself that the secondary information to be used has probative value. Independent sources used to corroborate may include, for example, published price lists, official import statistics and customs data, and information obtained from interested parties during the particular investigation. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information used.[6] The AFA rate that the Department used for the PRC-wide entity is from the Petition. Based on our examination of information on the record, including United States price and NV, we find that there is a sufficient basis to find that the Petition margin selected as the AFA rate, 174.85 percent, has probative value. In this case, we have selected a margin that is not so much greater than the highest CONNUM-specific margin calculated for Hung Kuo in this proceeding that it can be considered not to have probative value. 
                    *See*
                     “Hung Kuo Analysis Memorandum.” Petitioners' methodology for calculating the United States price and NV in the Petition is discussed in the 
                    *Initiation Notice.*
                     Accordingly, we conclude that, using Hung Kuo's highest CONNUM-specific margin as a limited reference point, the highest Petition margin that can be corroborated within the meaning of the statute is 174.85 percent, which is sufficiently adverse so as to induce cooperation such that an uncooperative party does not benefit from its failure to cooperate.[7] Fair Value Comparisons In accordance with section 777(A) of the Act, to determine whether Hung Kuo, the mandatory respondent, sold woven electric blankets to the United States at LTFV, we compared the weighted-average constructed export price (CEP) of the woven electric blankets to the NV of the woven electric blankets, as described in the “U.S. Price,” and “Normal Value” sections of this notice. U.S. Price Constructed Export Price Although Hung Kuo reported that it made both export price (EP) and CEP sales to the United States during the POI, the Department has preliminarily determined that all of Hung Kuo's reported sales were, in fact, CEP sales. 
                    *See*
                     Hung Kuo's October 16 2009, Section C Questionnaire Response at 8-9. According to section 772(a) of the Act, if the foreign producer or exporter makes a sale to the first unaffiliated U.S. customer prior to importation of subject merchandise into the United States, then the sale shall be classified as an EP sale. However, pursuant to section 772(b) of the Act, if the subject merchandise is first sold (or agreed to be sold) in the United States before or after the date of importation by or for the account of the producer or exporter of such merchandise or by a seller affiliated with the producer or exporter, to a purchaser not affiliated with the producer or exporter, then the sale shall be classified as a CEP sale. Additionally, CEP sales can be made by either the foreign producer/exporter or the foreign producer/exporter's U.S. affiliate, while EP sales “can only be made by the producer or exporter of the merchandise,” (sales “made by a U.S. affiliate can only be CEP”). 
                    *See AK Steel v. United States,*
                     226 F.3d 1361 (Fed. Cir. 2000). Accordingly, the primary focus of the analysis the Department undertakes to determine whether a sale is properly classified as EP or CEP is: (1) Whether the sale or transaction takes place inside or outside the United States; and (2) whether the sale or transaction is made by an exporter's United States affiliate. 
                    *See id*
                     at 1370. The record indicates that the first sales or transactions to an unaffiliated customer occurred in the United States. 
                    *See*
                     Hung Kuo's December 4, 2009, supplemental questionnaire response at Exhibit 4. Additionally, the record also indicates that such sales or transactions to unaffiliated customers were made by Hung Kuo's U.S. affiliate, Biddeford Blankets. 
                    *See id.*
                     For a discussion of the proprietary details of Hung Kuo's reported EP transactions, 
                    *see*
                     “Hung Kuo Analysis Memorandum,” dated January 26, 2010. Accordingly, although Hung Kuo reported certain sales as EP transactions, rather than CEP transactions, because we determined, based on the record evidence, that all first sales to unaffiliated customers occurred in the United States and were between Biddeford Blankets and the unaffiliated U.S. customers, pursuant to section 772(b) of the Act, we classified all reported EP sales as CEP sales for the purposes of this preliminary determination. In accordance with section 772(c)(2)(A) of the Act, we calculated CEP by deducting, where applicable, the following expenses from the starting price (gross unit price) charged to the first unaffiliated customer in the United States: sales discounts, foreign inland freight from plant to the port of exportation, foreign brokerage and handling, ocean freight, marine insurance, U.S. inland freight from port to the warehouse, U.S. customs duty, other U.S. transportation costs, and U.S. brokerage and handling. Further, in accordance with section 772(d)(1) of the Act and 19 CFR 351.402(b), where appropriate, we deducted from the starting price the following selling expenses associated with economic activities occurring in the United States: credit expenses, inventory carrying costs, warranty expenses, other direct selling expenses, and indirect selling expenses. We calculated Hung Kuo's credit expenses and inventory carrying costs based on a short-term interest rate for commercial and industrial loans by commercial banks published by the Federal Reserve. We reduced movement expenses, where appropriate, by the amount of freight revenue paid by the customer to Hung Kuo's U.S. affiliate, Biddeford Blankets. In accordance with our practice in the recently completed administrative review of polyethylene retail carrier bags from the PRC, we capped the amount of freight revenue deducted at no greater than the amount of movement expenses in the U.S. market. 
                    *See Polyethylene Retail Carrier Bags from the People's Republic of China: Final Results of Antidumping Duty Administrative Review,*74 FR 6857 (February 11, 2009). In addition, 
                    ( print page 5573)
                    pursuant to sections 772(d)(3) and 772(f) of the Act, we made an adjustment to the starting price for CEP profit. We note that Petitioner argued that the Department should deduct, as a direct selling expense, the value of Hung Kuo's reported accommodation returns and defective returns, which Hung Kuo reported as quantity adjustments. 
                    *See*
                     Petitioner's December 10, 2009, submission to the Department. Based on record evidence and in accordance with the Department's treatment of warranty expenses, we have preliminarily determined that it is appropriate to deduct, as a direct selling expense, the full value of refunds issued to customers for Hung Kuo's reported defective returns. 
                    *See*
                     Hung Kuo's January 20, 2010, supplemental questionnaire response. With respect to Hung Kuo's reported accommodation returns, however, there is no record evidence that Hung Kuo or its U.S. affiliate incurs any direct selling expense attributable to these returns, other than repacking expenses associated with re-entering the merchandise into inventory for resale. Therefore, the Department has only deducted repacking expenses from the starting price to account for these returns. 
                    *See id.*
                     at 2-6. For a detailed description of all adjustments, 
                    *see*
                     “Hung Kuo Analysis Memo,” dated January 26, 2010. Normal Value Section 773(c)(1) of the Act provides that the Department shall determine NV using an FOP methodology if the merchandise is exported from a NME country and the information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act. Thus, in accordance with section 773(c) of the Act, because available information did not permit the NV to be determined under section 773(a) of the Act, we constructed NV from the FOPs employed by Hung Kuo to manufacture subject merchandise during the POI. Specifically, we calculated NV by adding together the value of the FOPs, general expenses, profit, and packing costs. We relied upon the FOPs reported by Hung Kuo with the exception of the per-unit consumption of woven textile reported for king size blankets. Our review of the record indicates that the per-unit consumption of woven textile for king size blankets has been misreported (
                    *i.e.,*
                     the per-unit consumption rate of king size was less than that of blankets of a smaller size). Thus, pursuant to section 776(a) of the Act, as facts otherwise available, we replaced the per-unit consumption of woven textile reported by Hung Kuo for king size blankets with an average per-unit consumption that is based on the per-unit consumption of woven textile reported by Hung Kuo for queen, twin, and full size blankets adjusted to account for differences between the dimensions of these products and the dimensions of the king size blanket. 
                    *See*
                     “Hung Kuo Analysis Memorandum”; 
                    *see also*
                     Hung Kuo's January 13, 2010 submission to the Department at Exhibit 2. We valued the FOPs using prices and financial statements from the surrogate country, India. If market economy suppliers, who were paid in a market economy currency, supplied over 33 percent of the total volume of a material input purchased from all sources during the POI, pursuant to Department practice, we based the input value on the actual price charged by the supplier. 
                    *See Antidumping Methodologies: Market Economy Inputs, Expected Non-Market Economy Wages, Duty Drawback; and Request for Comments,*71 FR 61716 (October 19, 2006); 
                    *see also*
                     “Hung Kuo Analysis Memorandum.” In selecting surrogate values, we followed, to the extent practicable, the Department's practice of choosing values which are non-export average values, contemporaneous with, or closest in time to, the POI, product-specific, and tax-exclusive. 
                    *See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Negative Preliminary Determination of Critical Circumstances and Postponement of Final Determination: Certain Frozen and Canned Warmwater Shrimp From the Socialist Republic of Vietnam,*69 FR 42672, 42682 (July 16, 2004), unchanged in 
                    *Final Determination of Sales at Less Than Fair Value: Certain Frozen and Canned Warmwater Shrimp from the Socialist Republic of Vietnam,*69 FR 71005 (December 8, 2004). We also considered the quality of the source of surrogate information in selecting surrogate values. 
                    *See, e.g., Tapered Roller Bearings and Parts Thereof, Finished or Unfinished, from the People's Republic of China: Preliminary Results of the 2007-2008 Administrative Review of the Antidumping Duty Order,*74 FR 32539 (July 8, 2009), unchanged in 
                    *Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China: Final Results of the 2007-2008 Administrative Review of the Antidumping Duty Order,*75 FR 844 (January 6, 2010). We valued material inputs and packing by multiplying the amount of the factor consumed in producing subject merchandise by the average unit value of the factor. In addition, we added freight costs to the surrogate costs that we calculated for material inputs. We calculated freight costs by multiplying surrogate freight rates by the shorter of the reported distance from the domestic supplier to the factory that produced the subject merchandise or the distance from the nearest seaport to the factory that produced the subject merchandise, as appropriate. This adjustment is in accordance with the Court of Appeals for the Federal Circuit's decision in 
                    *Sigma Corp.*
                     v. 
                    *United States,*
                     117 F. 3d 1401, 1407-1408 (Fed. Cir. 1997). 
                    *See*
                     “Hung Kuo Analysis Memorandum.” Where we could only obtain surrogate values that were not contemporaneous with the POI, we inflated (or deflated) the surrogate values using the Indian Wholesale Price Index (WPI) as published in the International Financial Statistics of the International Monetary Fund. Further, in calculating surrogate values from Indian imports, we disregarded imports from Indonesia, South Korea, and Thailand because in other proceedings the Department found that these countries maintain broadly available, non-industry-specific export subsidies. 
                    *See Notice of Amended Final Determination of Sales at Less Than Fair Value: Certain Automotive Replacement Glass Windshields From the People's Republic of China,*67 FR 11670 (March 15, 2002); 
                    *see also**Notice of Final Determination of Sales at Less Than Fair Value and Negative Final Determination of Critical Circumstances: Certain Color Television Receivers From the People's Republic of China,*69 FR 20594 (April 16, 2004).[8]
                    
                     Therefore, it is reasonable to infer based on information available that all exports to all markets from these countries may be subsidized, and we have not used prices from these countries in calculating the Indian import-based surrogate values. Consistent with Department practice, we valued raw materials and packing 
                    ( print page 5574)
                    materials using Indian import statistics that are contemporaneous with the POI, except as noted below. We valued electricity using price data for small, medium, and large industries, as published by the Central Electricity Authority of the Government of India in its publication entitled “Electricity Tariff & Duty and Average Rates of Electricity Supply in India”, dated March 2008. These electricity rates represent actual countrywide, publicly available information on tax-exclusive electricity rates charged to industries in India. As the rates listed in this source became effective on a variety of different dates, we are not adjusting the average value for inflation. 
                    *See*
                     “Surrogate Value Memorandum.” We valued fuel oil/diesel using the prices for petrol from Indian Oil Corp. Ltd. from June 2007, after inflating the value using the WPI for the POI. 
                    *See*
                     “Surrogate Value Memorandum.” For direct labor, indirect labor, and packing labor, consistent with 19 CFR 351.408(c)(3), we valued labor using the PRC regression-based wage rate as reported on Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in December 2009, available at 
                    *http://ia.ita.doc.gov/​wages/​index.html.*
                     Since this regression-based wage rate does not separate the labor rates into different skill levels or types of labor, we have applied the same wage rate to all skill levels and types of labor reported by Hung Kuo. 
                    *See*
                     “Surrogate Value Memorandum.” We valued truck freight expenses using a per-unit average rate calculated from data on the infobanc Web site: 
                    *http://www.infobanc.com/​logistics/​logtruck.htm.*
                     The logistics section of this Web site contains inland freight truck rates between many large Indian cities. The value is contemporaneous with the POI. 
                    *See*
                     “Surrogate Value Memorandum.” We valued brokerage and handling using a simple average of the brokerage and handling costs reported in public submissions filed in three antidumping duty cases. Specifically, we averaged the public brokerage and handling expenses reported by Navneet Publications (India) Ltd. in the 2007-2008 administrative review of certain lined paper products from India, Essar Steel Limited in the 2006-2007 antidumping duty administrative review of hot-rolled carbon steel flat products from India, and Himalaya International Ltd. in the 2005-2006 administrative review of certain preserved mushrooms from India. Since the resulting value is not contemporaneous with the POI, we inflated the rate using the WPI. 
                    *See*
                     “Surrogate Value Memorandum.” We valued international freight and marine insurance using purchase prices. 
                    *See*
                     “Surrogate Value Memorandum.” We valued factory overhead, selling, general, and administrative (SG&A) expenses, and profit, using the 2007-2008 audited financial statements provided by Hung Kuo for Bawa Woollen and Spinning Mills, Ltd. and Prakash Woollen Mills, Ltd., producers of non-electric blankets. 
                    *See*
                     “Surrogate Value Memorandum.” Petitioner submitted the financial statement of Videocon Industries Ltd. (Videocon), a producer of consumer electronics and home appliances that is also involved in the production of crude oil and natural gas. 
                    *See*
                     Petitioner's November 20, 2009, surrogate value submission at Exhibit 9. Videocon's statement indicates that, in addition to the production of crude oil and natural gas, it produces, 
                    *inter alia,*
                     color televisions, video products, washing machines, refrigerators, and air conditioners. We have not included Videocon's financial data in our financial expense calculation because we have preliminarily determined that the products produced by Bawa Woollen and Spinning Mills, Ltd., and Prakash Woollen Mills, Ltd., are more comparable products to the subject merchandise produced by Hung Kuo than the production and fossil fuel extraction activities of Videocon. Thus, in accordance with section 773(c)(1) of the Act, the financial statements of Bawa Woollen and Spinning Mills, Ltd. and Prakash Woollen Mills, Ltd. represent the best information available to the Department for this preliminary determination. In accordance with 19 CFR 351.301(c)(3)(i), interested parties may submit publicly available information with which to value FOP in the final determination within 40 days after the date of publication of the preliminary determination. Verification As provided in section 782(i)(1) of the Act, we intend to verify the information upon which we will rely in making our final determination. Combination Rates In the 
                    *Initiation Notice,*
                     the Department stated that it would calculate combination rates for certain respondents that are eligible for a separate rate in this investigation. 
                    *See Initiation Notice.*
                     This change in practice is described in 
                    *Policy Bulletin 05.1: Separate Rates Practice and Application of Combination Rates in Antidumping Investigations Involving Non-Market Economy Countries,*
                     available at 
                    *http://ia.ita.doc.gov/​.* Preliminary Determination The weighted-average dumping margins are as follows: Exporter & producer
Weighted-average margin
                             percentHung Kuo Electronic (Shenzhen) Company Limited Produced by: Hung Kuo Electronic (Shenzhen) Company Limited
90.32Ningbo V.K. Industry & Trading Co., Ltd. Produced by: Ningbo V.K. Industry & Trading Co., Ltd
90.32Ningbo Jifa Electrical Appliances Co., Ltd. or Ningbo Jinchun Electric Appliances Co., Ltd. Produced by: Ningbo Jifa Electrical Appliances Co., Ltd. or Ningbo Jinchun Electric Appliances Co., Ltd
90.32PRC-Wide Rate
174.85
 Disclosure We will disclose the calculations performed within five days of the date of publication of this notice to parties in this proceeding in accordance with 19 CFR 351.224(b). Suspension of Liquidation In accordance with section 733(d) of the Act, we will instruct CBP to suspend liquidation of all entries of woven electric blankets from the PRC as described in the “Scope of Investigation” section, entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the 
                    **Federal Register.**
                     We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the NV exceeds U.S. price, as indicated above. International Trade Commission Notification In accordance with section 733(f) of the Act, we have notified the ITC of our preliminary affirmative determination of sales at LTFV. Section 735(b)(2) of the Act requires the ITC to make its final determination as to whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports of woven electric blankets, or sales (or the likelihood of sales) for importation, of the subject merchandise under investigation within 45 days of our final determination.
                    ( print page 5575) Public Comment Case briefs or other written comments may be submitted to the Assistant Secretary for Import Administration no later than seven days after the date the final verification report is issued in this proceeding and rebuttal briefs, limited to issues raised in case briefs, no later than five days after the deadline for submitting case briefs. 
                    *See*19 CFR 351.309(c)(1)(i) and (d)(1). A list of authorities used and an executive summary of issues should accompany any briefs submitted to the Department. This summary should be limited to five pages total, including footnotes. In accordance with section 774 of the Act, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. If a request for a hearing is made, we intend to hold the hearing three days after the deadline of submission of rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Ave, NW., Washington, DC 20230, at a time and in a room to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date. Interested parties that wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, U.S. Department of Commerce, Room 1870, within 30 days after the date of publication of this notice. 
                    *See*19 CFR 351.310(c). Requests should contain the party's name, address, and telephone number, the number of participants, and a list of the issues to be discussed. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief and may make rebuttal presentations only on arguments included in that party's rebuttal brief. Postponement of Final Determination and Extension of Provisional Measures Pursuant to section 735(a)(2) of the Act, on January 14, 2010, Hung Kuo requested that in the event of an affirmative preliminary determination in this investigation, the Department postpone its final determination by 60 days. Additionally, on January 15, 2010, Hung Kuo requested that the Department extend the application of the provisional measures prescribed under 19 CFR 351.210(e)(2) from a 4-month period to a 6-month period. In accordance with section 733(d) of the Act and 19 CFR 351.210(b), we are granting the request and are postponing the final determination until no later than 135 days after the publication of this notice in the 
                    **Federal Register**
                     because: (1) Our preliminary determination is affirmative, (2) the requesting exporter accounts for a significant proportion of exports of the subject merchandise, and (3) no compelling reasons for denial exist. Suspension of liquidation will be extended accordingly. This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act. Dated: January 26, 2010. Ronald K. Lorentzen, Deputy Assistant Secretary for Import Administration.


# Footnotes

1.
    
                         Jifa and Jinchun submitted a combined Q&V response. These companies stated that they should be collapsed for purposes of this investigation. 
                        *See*
                         Jifa and Jichun's August 11, 2009, Q&V response. For further discussion of this issue, see the section entitled, “Separate Rates,” below. Back to Citation
 2.
    
                         In accordance with 19 CFR 351.301(c)(1), for the final determination of this investigation, interested parties may submit factual information to rebut, clarify, or correct factual information submitted by an interested party less than ten days before, on, or after, the applicable deadline for submission of such factual information. However, the Department notes that 19 CFR 351.301(c)(1) permits new information only insofar as it rebuts, clarifies, or corrects information recently placed on the record. The Department generally will not accept the submission of additional, previously absent-from-the-record alternative surrogate value information pursuant to 19 CFR 351.301(c)(1). 
                        *See Glycine from the People's Republic of China: Final Results of Antidumping Duty Administrative Review and Final Rescission, in Part,*72 FR 58809 (October 17, 2007), and accompanying Issues and Decision Memorandum at Comment 2. Back to Citation
 3.
    
                         
                        *See Policy Bulletin 05.1: Separate-Rates Practice and Application of Combination Rates in Antidumping Investigations involving Non-Market Economy Countries (April 5, 2005),*
                         available at 
                        *http://ia.ita.doc.gov,*
                         which states: “While continuing the practice of assigning separate rates only to exporters, all separate rates that the Department will now assign in its NME investigations will be specific to those producers that supplied the exporter during the period of investigation. Note, however, that one rate is calculated for the exporter and all of the producers which supplied subject merchandise to it during the period of investigation. This practice applied both to mandatory respondents receiving an individually calculated separate rate as well as the pool of non-investigated firms receiving the weighted-average of the individually calculated rates. This practice is referred to as the application of “combination rates” because such rates apply to specific combinations of exporters and one or more producers. The cash-deposit rate assigned to an exporter will apply only to merchandise both exported by the firm in question and produced by a firm that supplied the exporter during the period of investigation.” Back to Citation
 4.
    
                         All separate rate applicants receiving a separate rate are hereby referred to collectively as the “SR Recipients.” Back to Citation
 5.
    
                         
                        *See Final Determination of Sales at Less Than Fair Value: Sodium Hexametaphosphate From the People's Republic of China,*73 FR 6479, 6481 (February 4, 2008), quoting SAA at 870. Back to Citation
 6.
    
                         
                        *See Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Preliminary Results of Antidumping Duty Administrative Reviews and Partial Termination of Administrative Reviews,*61 FR 57391, 57392 (November 6, 1996), unchanged in 
                        *Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From Japan, and Tapered Roller Bearings, Four Inches or Less in Outside Diameter, and Components Thereof, From Japan; Final Results of Antidumping Duty Administrative Reviews and Termination in Part,*62 FR 11825 (March 13, 1997). Back to Citation
 7.
    
                         
                        *See Wire Decking from the People's Republic of China: Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination*75 FR 1597, 1603 (January 12, 2010). Back to Citation
 8.
    
                         In addition, we note that legislative history explains that the Department is not required to conduct a formal investigation to ensure that such prices are not subsidized. 
                        *See*
                         Omnibus Trade and Competitiveness Act of 1988, Conference Report to accompany H.R. Rep. 100-576 at 590 (1988) reprinted in U.S.C.C.A.N. 1547, 1623-24. As such, it is the Department's practice to base its decision on information that is available to it at the time it makes its determination. 
                        *See e.g.**Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of China: Preliminary Determination of Sales at Less than Fair Value,*73 FR 24552 (May 5, 2008), unchanged in 
                        *Polyethylene Terephthalate Film, Sheet, and Strip from the People's Republic of China: Final Determination of Sales at Less than Fair Value,*73 FR 55039 (September 24, 2008). Back to Citation


[FR Doc. 2010-2309 Filed 2-2-10; 8:45 am] BILLING CODE 3510-DS-P