[Federal Register Volume 66, Number 39 (Tuesday, February 27, 2001)]
[Notices]
[Pages 12461-12465]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-4770]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-001]


Potassium Permanganate From the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

[[Page 12462]]


ACTION: Notice of preliminary results of antidumping duty 
administrative review of potassium permanganate from the People's 
Republic of China.

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SUMMARY: In response to a timely request for an administrative review 
submitted by the respondent, Provincial Chemicals Import & Export 
Corporation (``Guizhou''), and its supplier of potassium permanganate, 
the Zunyi Chemical Factory (``Zunyi''), the Department of Commerce 
(``the Department'') is conducting an administrative review of the 
antidumping duty order on potassium permanganate from the People's 
Republic of China (``PRC''). The period of review (``POR'') is January 
1, 1999, through December 31, 1999. The Department has preliminarily 
determined that the sale of subject merchandise during the POR was made 
below normal value (``NV''). If the preliminary results are adopted in 
our final results of review, we will instruct the U.S. Customs Service 
(``Customs'') to assess antidumping duties on the entry.
    The Department invites interested parties to comment on the 
preliminary results.

EFFECTIVE DATE: February 27, 2001.

FOR FURTHER INFORMATION CONTACT: Paul Stolz or Howard Smith, AD/CVD 
Enforcement, Office 4, Group II, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-
4474 and (202) 482-5193, respectively.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended, (``the Act'') are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act. In addition, unless 
otherwise indicated, all citations to the Department's regulations are 
to the current regulations at 19 CFR part 351 (April 1999).

Background

    On January 31, 1984, the Department published in the Federal 
Register (49 FR 3897) the antidumping duty order on potassium 
permanganate from the PRC. On January 13, 2000, the Department 
published in the Federal Register (65 FR 2114) a notice of opportunity 
to request administrative reviews of this antidumping duty order. On 
January 14, 2000, one exporter and one producer of potassium 
permanganate, Guizhou and Zunyi, respectively, requested that the 
Department conduct an administrative review of Guizhou's exports of the 
subject merchandise. The Department published a notice of initiation of 
this review on February 28, 2000 (65 FR 10466).
    On March 13, 2000, the Department issued its antidumping 
questionnaire to Guizhou. Guizhou responded to the Department's 
questionnaire during May 2000, and submitted responses to the 
Department's June and August, 2000 supplemental questionnaires during 
July and August, 2000, respectively. On August 1, 2000, the petitioner, 
Carus Chemical Company (``Carus'' or ``the petitioner''), submitted 
publicly available information and comments for consideration in 
valuing the factors of production used in our NV calculations. On 
August 31, 2000, the petitioner requested that the Department rescind 
the review because the sale under review is not bona fide. For details 
regarding bona fide sale issue and the request to rescind the review, 
see the ``Recision Request and Bona Fide Sale Issue'' section of this 
notice below. On January 11, 2001, Guizhou submitted publicly available 
information and comments regarding factor values.
    Pursuant to section 751(a)(3)(A) of the Act, the Department has 
determined that it is not practicable to complete this review within 
245 days after the last day of the anniversary month of the order, and 
thus, has extended the time limit for the preliminary results until 
January 30, 2001. See Potassium Permanganate From the People's Republic 
of China: Extension of Time Limit for Preliminary Results of 
Antidumping Duty Administrative Review, 65 FR 54227, (September 7, 
2000).
    The Department is conducting this administrative review in 
accordance with section 751 of the Act.

Scope of the Review

    Imports covered by this review are shipments of potassium 
permanganate, an inorganic chemical produced in free-flowing, 
technical, and pharmaceutical grades. During the review period, 
potassium permanganate was classifiable under item 2841.60.0010 of the 
Harmonized Tariff Schedule (``HTS''). The HTS item number is provided 
for convenience and Customs purposes. The written description remains 
dispositive.

Rescission Request and Bona Fide Sale Issue

    The petitioner claims that the only sale under review is not bona 
fide, and thus, the review should be rescinded. This claim is primarily 
based upon the petitioner's allegation that the sale involved a 
fraudulent and illegal shipping scheme. On November 3, 2000, the 
Department requested that interested parties comment on discrepancies 
involving certain shipping documents and submit information regarding 
the shipment of the subject merchandise to the United States. The 
Department received parties' submissions regarding the shipment during 
November and December, 2000, and January 2001. After an examination of 
the record, we do not find sufficient evidence indicating that the sale 
under review is not a bona fide sale, and thus, preliminarily, we are 
not rescinding this administrative review. For a full discussion of 
this issue, see the memorandum: Bona Fide Sale and Rescission of 
Review, dated January 30, 2001, the public version of which is on file 
in the Central Records Unit, room B-099 of the main Department of 
Commerce building (``CRU-Public File'').

Verification

    As provided in section 782(i) of the Act, we verified sales and 
factor information provided by Guizhou and its supplier of potassium 
permanganate, Zunyi, using standard verification procedures, including 
on-site inspection of the manufacturer's facilities, examination of 
relevant sales and financial records, and selection of relevant source 
documentation as exhibits. Our verification findings are detailed in 
the report regarding the verification of Guizhou and Zunyi dated 
January 30, 2001, the public version of which is on file in the CRU-
Public File.

Separate Rates Determination

    To establish whether a company operating in a non-market economy 
(``NME'') is sufficiently independent to be entitled to a separate 
rate, the Department analyzes each exporting entity under the test 
established 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''), as amplified by 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''). 
Under this test, companies in a NME country are entitled to separate, 
company-specific margins when they can demonstrate an absence of 
government control, both in law and in fact, with respect to export 
activities. See Sparklers, 56 FR at 20589. Evidence supporting, though 
not requiring, a finding of de jure absence of government control over 
export

[[Page 12463]]

activities includes: (1) An absence of restrictive stipulations 
associated with the individual exporter's business and export licenses; 
(2) any legislative enactments decentralizing control of companies; and 
(3) any other formal measures by the government decentralizing control 
of companies. Id. De facto absence of government control over exports 
is based on four factors: (1) Whether each exporter sets its own export 
prices independent of the government and without the approval of a 
government authority; (2) whether each exporter retains the proceeds 
from its sales and makes independent decisions regarding the 
disposition of profits or financing of losses; (3) whether each 
exporter has the authority to negotiate and sign contracts and other 
agreements; and (4) whether each exporter has autonomy from the 
government regarding the selection of management. See Silicon Carbide, 
59 FR at 22587; see also Sparklers 56 FR at 20589.
    It is the Department's policy to evaluate separate rates 
questionnaire responses each time a respondent makes a separate rates 
claim, regardless of any separate rate the respondent received in the 
past. See Manganese Metal From the People's Republic of China, Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 63 FR 12441 (March 13, 1998). In the instant review, Guizhou 
submitted complete responses to the separate rates section of the 
Department's questionnaire. The evidence submitted in this review by 
Guizhou includes government laws and regulations on corporate 
ownership, business licences, and narrative information regarding the 
company's operations and selection of management. This evidence is 
consistent with the Department's findings in previous reviews and 
supports a finding that control of companies in the PRC has been 
decentralized and that the respondent company's operations are, in 
fact, autonomous from the PRC government. Therefore, we preliminarily 
find that Guizhou is entitled to a separate rate.

Fair Value Comparisons

    To determine whether the respondent's sale of subject merchandise 
was made at less than fair value, we compared the export price to the 
normal value, as described in the Export Price and Normal Value 
sections of this notice, below.

Export Price

    In accordance with section 772(a) of the Act, the Department 
calculated an export price (``EP'') for the sale to the United States 
because the subject merchandise was sold directly to an unaffiliated 
customer in the United States prior to importation and constructed 
export price methodology was not otherwise indicated. We made 
deductions from the sales price for foreign inland freight, foreign 
brokerage and handling, and domestic inland insurance. Each of these 
services was provided by a NME vendor, and thus, we based the 
deductions for these movement charges on surrogate values.
    We valued foreign brokerage and handling using Indian values that 
were reported in the public version of the questionnaire response 
placed on the record in Certain Stainless Steel Wire Rod from India; 
Preliminary Results of Antidumping Duty Administrative and New Shipper 
Review, 63 FR 48184 (September 9, 1998) (``India Wire Rod''). We valued 
domestic inland insurance using the Department's recently revised Index 
of Factor Values for Use in Antidumping Duty Investigations Involving 
Products from the PRC (available on the Department's website). We 
identify the source used to value foreign inland freight in the Normal 
Value section of this notice, below. We accounted for inflation or 
deflation between the time period that the values for movement charges 
were in effect and the POR, as described below in the Normal Value 
section of this notice.

Normal Value

    For exports from NME countries, section 773(c)(1) of the Act 
provides that the Department shall determine NV using a factors of 
production (``FOP'') methodology if: (1) the subject merchandise is 
exported from an NME country, and (2) available 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. Section 
351.408 of the Department's regulations sets forth the methodology used 
by the Department to calculate the NV of merchandise exported from NME 
countries. In every case conducted by the Department involving the PRC, 
the PRC has been treated as an NME. Since none of the parties to this 
proceeding contested such treatment, we calculated NV in accordance 
with section 773(c)(3) and (4) of the Act and section 351.408(c) of the 
Department's regulations.
    In accordance with section 773(c)(3) of the Act, the FOP utilized 
in producing potassium permanganate include, but are not limited to: 
(1) hours of labor required; (2) quantities of raw materials employed; 
(3) amounts of energy and other utilities consumed; and (4) 
representative capital costs, including depreciation. In accordance 
with section 773(c)(4) of the Act, the Department valued the FOP, to 
the extent possible, using the costs of the FOP in a market economy 
that is (1) at a level of economic development comparable to the PRC, 
and (2) a significant producer of comparable merchandise. We determined 
that India is comparable to the PRC in terms of per capita gross 
national product, the growth rate in per capita income, and the 
national distribution of labor. Furthermore, India is a significant 
producer of comparable merchandise. See Memorandum From Jeff May, 
Director, Office of Policy, to Holly Kuga, Senior Office Director, AD/
CVD Enforcement, dated March 20, 2000, which is on file in the CRU-
Public File.
    In accordance with section 773(c)(1) of the Act, for purposes of 
calculating NV, we attempted to value the FOP using surrogate values 
that were in effect during the POR. However, when we were unable to 
obtain surrogate values in effect during the POR, we adjusted the 
values, as appropriate, to account for inflation or deflation between 
the effective period and the POR. We calculated the inflation or 
deflation adjustments for all factor values, except labor, using the 
wholesale price indices (``WPI'') for India as published in the 
International Monetary Fund's (``IMF'') publication, International 
Financial Statistics. We valued the FOP as follows:
    (1) We valued the direct materials, potassium hydroxide and 
manganese dioxide used to produce potassium permanganate using price 
quotes from 1999 issues of Chemical Weekly, an Indian publication that 
lists chemical prices. We valued the direct material limestone using 
the rupee per metric ton or rupee per kilogram value of imports that 
entered India during the months of January, April, and May 1999, as 
published in the Monthly Statistics of the Foreign Trade of India, 
Volume II--Imports (``Indian Import Statistics'').\1\
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    \1\ For each of the FOP, we were able to find POR Indian import 
statistics only for the months January, April, and May, 1999.
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    (2) We valued the material, caustic soda, used to treat (soften) 
water, using price quotes from 1999 issues of Chemical Weekly. We 
valued the materials lime and alum, used to treat (soften) water, using 
the rupee per metric ton or rupee per kilogram value of imports that 
entered India during the months of April 1998 through January 1999 for 
alum, and January, April, and May 1999 for lime, as published in Indian 
Import Statistics. We adjusted

[[Page 12464]]

the value for alum to account for inflation. These materials were not 
reported in respondent's submission but were identified at verification 
(see Verification Report). 
    (3) We valued coal using the rupee per metric ton or rupee per 
kilogram value of imports that entered India during the months of 
January, April, and May 1999, as published in Indian Import Statistics. 

    (4) We valued electricity using the 1997 Indian electricity prices 
for industrial use as reported by the International Energy Agency 
(``IEA''), as adjusted for inflation. This rate is available in the IEA 
publication Energy, Prices and Taxes, 2nd Quarter 2000. 
    (5) We valued labor using a regression-based wage rate, in 
accordance with 19 CFR 351.408(c)(3). This rate is identified on the 
Import Administration's web site. See http://ia.ita.doc.gov/wages. 
    (6) We derived ratios for factory overhead, selling, general and 
administrative (``SG&A'') expenses, and profit using information 
reported for 1992-1993 in the Reserve Bank of India Bulletin of January 
1997. From this information, we were able to calculate factory overhead 
as a percentage of direct materials, labor, and energy expenses; SG&A 
expenses as a percentage of the total cost of manufacturing; and profit 
as a percentage of the sum of the total cost of manufacturing and SG&A 
expenses.
    (7) We valued packing materials, including polyethylene plastic 
bags, nylon wires, and iron drums using the rupee per metric ton or 
rupee per kilogram value of imports that entered India during the 
months of January, April, and May 1999 for polyethylene plastic bags 
and nylon wires, and during the months of April 1998 through March 1999 
for iron drums, as published in Indian Import Statistics. We adjusted 
the value for iron drums to account for inflation.
    (8) We used the following sources to value truck and rail freight 
services incurred to transport the finished product to the port and 
direct materials, packing materials, and coal from the suppliers of the 
inputs to Zunyi:
    Truck Freight: We valued truck freight services using the 1999 rate 
quotes reported by Indian freight companies. See Notice of Final 
Determination of Sales at Less Than Fair Value: Bulk Aspirin From the 
People's Republic of China, 65 FR 33805 (May 25, 2000).
    Rail Freight: We valued rail freight services using the April 1995 
rates published by the Indian Railway Conference Association, as 
adjusted for inflation. For further discussion of the surrogate values 
used in this review, see Memorandum From Timothy Finn Regarding 
Surrogate Values Used for the Preliminary Results of the Administrative 
Review of Potassium Permanganate from the People's Republic of China, 
(January 30, 2001), which is on file in the CRU-Public File.

Preliminary Results of the Reviews

    As a result of our review, we preliminarily determine that the 
following dumping margins exist for the period January 1, 1999 through 
December 31, 1999:

------------------------------------------------------------------------
                                                                Margin
                    Exporter/Manufacturer                      (percent)
------------------------------------------------------------------------
Guizhou Provincial Chemicals Import & Export Corporation....      132.11
PRC Wide-Rate...............................................      128.54
------------------------------------------------------------------------

    The Department will disclose to parties to this proceeding the 
calculations performed in reaching the preliminary results within five 
days of the date of publication of the results. An interested party may 
request a hearing within 30 days of publication of the preliminary 
results. See 19 CFR 351.310(c). Any hearing, if requested, will be held 
44 days after the publication of this notice, or the first workday 
thereafter. Interested parties may submit written comments (case 
briefs) within 30 days of the date of publication of this notice, in 
accordance with 19 CFR 351.309(c)(1)(ii). Rebuttal comments (rebuttal 
briefs), which must be limited to issues raised in the case briefs, may 
be filed not later than 37 days after the date of publication of this 
notice. Parties who submit arguments are requested to submit with the 
argument (1) a statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, the Department 
requests that parties submitting written comments provide the 
Department with a diskette containing the public version of those 
comments. The Department will publish a notice of the final results of 
this administrative review, including the results of our analysis of 
the issues raised by the parties in their comments, within 120 days of 
publication of the preliminary results.
    The final results of this review shall be the basis for the 
assessment of antidumping duties on the entry of merchandise covered by 
this review and for future deposits of estimated duties.

Duty Assessment Rate

    The Department shall determine, and Customs shall assess, 
antidumping duties on all appropriate entries. Pursuant to 19 CFR 
351.212(b)(1), we have an calculated importer-specific ad valorem duty 
assessment rate based on the ratio of the total amount of the dumping 
margin calculated for the examined sale to the total entered value of 
the sale. In order to estimate the entered value, we subtracted 
international movement expenses from the gross sales value. In 
accordance with 19 CFR 351.106(c)(2), we will instruct Customs to 
liquidate without regard to antidumping duties any entries for which 
the assessment rate is de minimis, i.e., less than 0.5 percent. The 
Department will issue appraisement instructions directly to Customs.

Cash Deposit Requirements

    The following deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of potassium permanganate from the PRC entered, or withdrawn 
from warehouse, for consumption on or after the publication date of 
this notice, as provided for by section 751(a)(1) of the Act: (1) The 
cash deposit rate for the reviewed company named above will be the rate 
established for that company in the final results of this 
administrative review; (2) for any previously reviewed PRC or non-PRC 
exporter with a separate rate not covered in this review, the cash 
deposit rate will be the company-specific rate established for the most 
recent period; (3) for all other PRC exporters, the cash deposit rates 
will be the PRC-wide rates established in the final results of this 
review; and (4) the cash deposit rates for non-PRC exporters of subject 
merchandise from the PRC will be the rates applicable to the PRC 
supplier of that exporter. These deposit requirements, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.

Notification to Interested Parties

    This notice serves as a preliminary reminder to importers of their 
responsibility under section 351.402(f) of the Department's regulations 
to file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this review period. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    We are issuing and publishing this determination in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act. Effective January 20, 
2001, Bernard T. Carreau is fulfilling the duties of the

[[Page 12465]]

Assistant Secretary for Import Administration.

    Dated: January 30, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, AD/CVD Enforcement II.
[FR Doc. 01-4770 Filed 2-26-01; 8:45 am]
BILLING CODE 3510-DS-P