[Federal Register Volume 77, Number 136 (Monday, July 16, 2012)]
[Notices]
[Pages 41746-41754]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-17314]



[[Page 41746]]

-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-570-898]


Chlorinated Isocyanurates From the People's Republic of China: 
Preliminary Results of Antidumping Duty Administrative Review

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

SUMMARY: In response to requests from interested parties, the 
Department of Commerce (the Department) is conducting an administrative 
review of the antidumping duty (AD) order on chlorinated isocyanurates 
(chlorinated isos) from the People's Republic of China (PRC). The 
period of review (POR) for this administrative review is June 1, 2010, 
through May 31, 2011. This administrative review covers four producers/
exporters of the subject merchandise: Hebei Jiheng Chemical Co., Ltd. 
(Hebei Jiheng) and Hebei Jiheng Baikang Chemical Industry Co., Ltd. 
(Baikang) (collectively, Jiheng); Juancheng Kangtai Chemical Co., Ltd. 
(Juancheng Kangtai) and Juancheng Ouya Chemical Co., Ltd. (Ouya) 
(collectively, Kangtai); Nanning Chemical Industry Co., Ltd. (Nanning); 
and Zhucheng Taisheng Chemical Co., Ltd. (Zhucheng). Jiheng and Kangtai 
are the two producers/exporters being individually examined as 
mandatory respondents. We preliminarily determine that Jiheng made 
sales in the United States at prices below normal value (NV) and that 
Kangtai did not make sales in the United States at prices below NV. 
With respect to the two remaining respondents in this administrative 
review, we preliminarily determine that Nanning and Zhucheng have 
demonstrated that they are eligible for a separate rate, and the rate 
assigned to these companies is discussed below, in the ``Margin for 
Separate-Rate Companies'' section. If these preliminary results are 
adopted in our final results of review, we will instruct U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on entries of 
subject merchandise during the POR for which the importer-specific 
assessment rates are above de minimis. We invite interested parties to 
comment on these preliminary results.

DATES: Effective Date:
    July 16, 2012.

FOR FURTHER INFORMATION CONTACT: Emily Halle or Andrew Huston, AD/CVD 
Operations, Office 6, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-
0176 or (202) 482-4261.

SUPPLEMENTARY INFORMATION:

Background

    On July 28, 2011, the Department initiated the administrative 
review of the antidumping duty order on chlorinated isos from the PRC 
covering the period June 1, 2010, through May 31, 2011.\1\ Between 
September 26 and October 3, 2011, Jiheng, Kangtai, Nanning, and 
Zhucheng each submitted either a separate rate application or 
certification, as appropriate. Due to the large number of requests 
received, the Department limited the number of mandatory respondents 
selected for this review to the two largest exporters/producers, based 
on export volume as reported to CBP, for which a review was requested--
Jiheng and Kangtai.\2\
---------------------------------------------------------------------------

    \1\ See Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, Requests for Revocations in Part and 
Deferral of Administrative Reviews, 76 FR 45227 (July 28, 2011) 
(Initiation Notice).
    \2\ See Memorandum titled ``Administrative Review of the 
Antidumping Duty Order on Chlorinated Isocyanurates from the 
People's Republic of China: Respondent Selection,'' dated October 6, 
2011 (Respondent Selection Memorandum).
---------------------------------------------------------------------------

    On October 6, 2011, the Department issued its AD questionnaire to 
the two mandatory respondents, Jiheng and Kangtai, to which both 
respondents responded in a timely manner. On November 3, 2011, Clearon 
Corporation and Occidental Chemical Corporation (Petitioners) requested 
that the Department conduct a verification of Jiheng and Kangtai. On 
December 16, 2011, Petitioners submitted deficiency comments regarding 
Kangtai's section A questionnaire response, and on January 9, 2012, 
submitted deficiency comments regarding Kangtai's section C and D 
questionnaire responses and Jiheng's section A, C and D questionnaire 
responses.
    On February 1, 2012, the Department published a notice in the 
Federal Register extending the time limit for the preliminary results 
of review from March 1, 2012, until June 29, 2012.\3\ The Department 
issued supplemental questionnaires to Jiheng and Kangtai on February 
24, 2012, and February 28, 2012, respectively, and both respondents 
submitted responses in a timely manner. On May 3, 2012, and May 11, 
2012, the Department issued an additional supplemental questionnaire to 
Jiheng and Kangtai, respectively, to which both companies responded in 
a timely manner.
---------------------------------------------------------------------------

    \3\ See Chlorinated Isocyanurates From the People's Republic of 
China: Extension of Time Limit for the Preliminary Results of the 
Antidumping Duty Administrative Review, 77 FR 4992 (February 1, 
2012).
---------------------------------------------------------------------------

Scope of the Order

    The products covered by the order are chlorinated isocyanurates, 
which are derivatives of cyanuric acid, described as chlorinated s-
triazine triones. There are three primary chemical compositions of 
chlorinated isos: (1) Trichloroisocyanuric acid 
(Cl3(NCO)3), (2) sodium dichloroisocyanurate 
(dihydrate) (NaCl2(NCO)3(2H2O), and 
(3) sodium dichloroisocyanurate (anhydrous) 
(NaCl2(NCO)3). Chlorinated isos are available in 
powder, granular, and tableted forms. The order covers all chlorinated 
isos. Chlorinated isos are currently classifiable under subheadings 
2933.69.6015, 2933.69.6021, 2933.69.6050, 3808.40.50, 3808.50.40 and 
3808.94.50.00 of the Harmonized Tariff Schedule of the United States 
(HTSUS). The tariff classification 2933.69.6015 covers sodium 
dichloroisocyanurates (anhydrous and dihydrate forms) and 
trichloroisocyanuric acid. The tariff classifications 2933.69.6021 and 
2933.69.6050 represent basket categories that include chlorinated isos 
and other compounds including an unfused triazine ring. Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
the written description of the scope of the order is dispositive.

Respondent Selection

    In accordance with section 777A(c)(2) of the Tariff Act of 1930, as 
amended (the Act), the Department selected the two largest exporters 
(by quantity) of chlorinated isos from the PRC (i.e., Jiheng and 
Kangtai) based on the CBP data for entries of subject merchandise 
during the POR as the mandatory respondents in this review.\4\
---------------------------------------------------------------------------

    \4\ See Respondent Selection Memorandum.
---------------------------------------------------------------------------

Affiliation and Single Entity Treatment

    The Department is preliminarily determining that Hebei Jiheng and 
Baikang are affiliated parties, and Juancheng Kangtai and Ouya are 
affiliated parties within the meaning of section 771(33) of the Act. 
The evidence placed on the record of this review by Jiheng demonstrates 
that Hebei Jiheng owns five percent or more of the voting shares in 
Baikang, and that these parties are therefore affiliated under section 
771(33)(E) of the Act.\5\ The Department

[[Page 41747]]

has previously determined that Juancheng Kangtai and Ouya are 
affiliated because their owners are members of a family (siblings) and 
are affiliated under section 771(33)(A) of the Act.\6\ Based on our 
examination of the evidence presented in Kangtai's questionnaire 
responses in this instant review, we have determined that the 
underlying facts of this case have not changed since the Department 
last reviewed Kangtai.
---------------------------------------------------------------------------

    \5\ See Memorandum titled ``2010-2011 Administrative Review of 
the Antidumping Duty Order on Chlorinated Isocyanurates from the 
People's Republic of China: Affiliation of Hebei Jiheng Chemical 
Company, Ltd. (Jiheng) and Hebei Jiheng Baikang Chemical Industry 
Co., Ltd. (Baikang),'' dated June 29, 2012 (Jiheng Affiliation 
Memorandum).
    \6\ See Chlorinated Isocyanurates From the People's Republic of 
China: Final Results of June 2008 Through November 2008 Semi-Annual 
New Shipper Review, 74 FR 68575 (December 28, 2009) (Kangtai Final 
Results).
---------------------------------------------------------------------------

    The Department preliminarily determines that Hebei Jiheng and 
Baikang should be treated as a single entity (i.e., Jiheng) for 
purposes of calculating an AD margin pursuant to 19 CFR 351.401(f).\7\ 
Hebei Jiheng and Baikang produce identical merchandise and have similar 
production facilities used to produce the subject merchandise.\8\ 
Additionally, the level of affiliation between Hebei Jiheng and Baikang 
(i.e., Baikang is wholly-owned by Hebei Jiheng) demonstrates that there 
is a significant potential for manipulation of price or production.\9\ 
During the POR, all of the subject merchandise under review produced by 
Baikang was sold to Hebei Jiheng for re-sale in the home market, U.S. 
market and third country markets.
---------------------------------------------------------------------------

    \7\ See Memorandum titled ``2010-2011 Administrative Review of 
the Antidumping Duty Order on Chlorinated Isocyanurates from the 
People's Republic of China: Affiliation of Hebei Jiheng Chemical 
Company, Ltd. (Jiheng) and Hebei Jiheng Baikang Chemical Industry 
Co., Ltd. (Baikang)'' dated June 29, 2012.
    \8\ See Jiheng's November 29, 2011 section D response at D-6.
    \9\ See Jiheng's May 11, 2012 supplemental questionnaire 
response; see also Jiheng Affiliation Memorandum.
---------------------------------------------------------------------------

    The Department previously determined that Juancheng Kangtai and 
Ouya should be treated as a single entity.\10\ After examining the 
evidence placed on the record of this review by Kangtai, the Department 
determines that this instant review has the same fact pattern as the 
record of Kangtai's previous review. Specifically, the Department 
continues to find that both companies produce subject merchandise and 
therefore have similar production facilities that would not require 
substantial retooling in order to restructure manufacturing 
priorities.\11\ Additionally, as noted above, all owners of Juancheng 
Kangtai and Ouya continue to be affiliated, and, as owners and holders 
of managerial positions of both companies, have complete control and 
are in a position to exercise restraint or direction over Juancheng 
Kangtai and Ouya.\12\ Therefore, the Department preliminarily 
determines that Juancheng Kangtai and Ouya should be treated as a 
single entity (i.e., Kangtai) for purposes of calculating an AD margin 
pursuant to 19 CFR 351.401(f).
---------------------------------------------------------------------------

    \10\ See Kangtai Final Results and accompanying Issues and 
Decision Memorandum at Comment 3.
    \11\ See Kangtai's November 10, 2011 section A submission at 11.
    \12\ See Kangtai's November 10, 2011 section A submission at 
exhibit A-6.
---------------------------------------------------------------------------

Non-Market Economy Country

    In every case conducted by the Department involving the PRC, the 
PRC has been treated as a non-market economy (NME) country.\13\ 
Moreover, the Department's most recent examination of the PRC's NME 
status determined that such status should continue.\14\ In accordance 
with section 771(18)(C)(i) of the Act, any determination that a foreign 
country is an NME country shall remain in effect until revoked by the 
administering authority. The Department has not revoked the PRC's 
status as an NME country, and thus we have treated the PRC as an NME in 
these preliminary results and calculated NV in accordance with section 
773(c) of the Act, which applies to NME countries.
---------------------------------------------------------------------------

    \13\ See, e.g., Certain Kitchen Appliance Shelving and Racks 
From the People's Republic of China: Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final 
Determination, 74 FR 9591, 9593 (March 5, 2009), unchanged in 
Certain Kitchen Appliance Shelving and Racks From the People's 
Republic of China: Final Determination of Sales at Less Than Fair 
Value, 74 FR 36656 (July 24, 2009).
    \14\ See Memorandum titled ``Antidumping Duty Investigation of 
Certain Lined Paper Products from the People's Republic of China 
(China): China's Status as a Non-Market Economy (``NME''),'' dated 
August 30, 2006 (on file in the Department's Central Records Unit on 
the record of case number A-570-901).
---------------------------------------------------------------------------

Surrogate Country

    When the Department is investigating imports from an NME country, 
section 773(c)(1) of the Act directs it, in most instances, to base NV 
on the NME producer's factors of production (FOPs). The Act further 
instructs that valuation of the FOPs shall be based on the best 
available information in the surrogate market economy (ME) country or 
countries considered to be appropriate by the Department.\15\ When 
valuing the FOPs, the Department shall utilize, to the extent possible, 
the prices or costs of FOPs in one or more ME countries that are: (1) 
At a level of economic development comparable to that of the NME 
country; and (2) significant producers of comparable merchandise.\16\ 
The sources of the surrogate factor values are discussed under the 
``Normal Value'' section, below, and in the Preliminary Surrogate Value 
Memorandum,\17\ which is on file electronically via Import 
Administration's Antidumping and Countervailing Duty Centralized 
Electronic Services System (IA ACCESS). Access to IA ACCESS is 
available in the Central Records Unit, main Commerce Building, Room 
7046.
---------------------------------------------------------------------------

    \15\ See section 773(c)(1) of the Act.
    \16\ See section 773(c)(4) of the Act.
    \17\ See Memorandum titled ``2010-2011 Administrative Review of 
the Antidumping Duty Order on Chlorinated Isocyanurates from the 
People's Republic of China: Preliminary Results Surrogate Value 
Memorandum,'' dated June 29, 2012 (Preliminary Surrogate Value 
Memorandum).
---------------------------------------------------------------------------

    In examining which country to select as its primary surrogate for 
this proceeding, the Department determined that Colombia, Indonesia, 
the Philippines, South Africa, Thailand and Ukraine are countries 
comparable to the PRC in terms of economic development.\18\ Once we 
have identified the countries that are economically comparable to the 
PRC, 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 FOPs are both 
available and reliable.
---------------------------------------------------------------------------

    \18\ See Memorandum titled ``Request for a List of Surrogate 
Countries for an Administrative Review of the Antidumping Duty Order 
on Chlorinated Isocyanurates (``CLI'') from the People's Republic of 
China (``China''),'' dated September 9, 2011 (Surrogate Country 
Memorandum).
---------------------------------------------------------------------------

    Petitioners, in their December 19, 2011 comments on surrogate 
country selection, recommended that the Department select South Africa 
as the primary surrogate country, as South Africa is economically 
comparable to the PRC, is a significant producer of calcium 
hypochlorite, a comparable product identified in previous segments, and 
is likely to have reliable surrogate value data for most or all of the 
key FOPs. Petitioners also noted that Thailand may be a significant 
producer of other hypochlorites. Arch Chemicals, Inc., an interested 
party in this review, in its December 19, 2011 comments on surrogate 
country selection, states the Department should expand its definition 
of comparable merchandise to include sodium hypochlorite as there are 
financial statements for a sodium hypochlorite producer in the 
Philippines, and there are likely to be financial statements from 
sodium hypochlorite producers in Thailand as well. Also on December 19, 
2011, Kangtai suggested using either the

[[Page 41748]]

Philippines or Thailand as a surrogate country, since chloro alkali 
industries appear to be active in either country. Additionally, 
Petitioners, Jiheng and Kangtai each put data on the record of this 
proceeding to value FOPs from South Africa, the Philippines and 
Thailand on January 9, 2012, and provided rebuttal surrogate country 
comments on January 17, 2012.

Economic Comparability

    As explained in the Surrogate Country Memorandum, the Department 
considers Colombia, Indonesia, the Philippines, South Africa, Thailand 
and Ukraine equally comparable to the PRC in terms of economic 
development. Therefore, we consider all six countries as having 
satisfied this prong of the surrogate country selection criteria. 
Accordingly, unless we find that all of the countries determined to be 
equally economically comparable are not significant producers of 
comparable merchandise, do not provide a reliable source of publicly 
available surrogate data or are unsuitable for other reasons, we rely 
on data from one of these countries.

Significant Producers of Identical or Comparable Merchandise

    Section 773(c)(4)(B) of the Act requires the Department to value 
FOPs in a surrogate country that is a significant producer of 
comparable merchandise. Neither the statute nor the Department's 
regulations provide further guidance on what may be considered 
comparable merchandise. Given the absence of any definition in the 
statute or regulations, the Department looks to other sources such as 
Policy Bulletin 04.1 for guidance on defining comparable 
merchandise.\19\ Policy Bulletin 04.1 states that ``the terms 
`comparable level of economic development,' `comparable merchandise,' 
and `significant producer' are not defined in the statute.'' \20\ 
Policy Bulletin 04.1 further states that ``in all cases, if identical 
merchandise is produced, the country qualifies as a producer of 
comparable merchandise.'' \21\ Conversely, if identical merchandise is 
not produced, then a country producing comparable merchandise is 
sufficient in selecting a surrogate country.\22\ Further, when 
selecting a surrogate country, the statute requires the Department to 
consider the comparability of the merchandise, not the comparability of 
the industry.\23\ ``In cases where the identical merchandise is not 
produced, the Department must determine if other merchandise that is 
comparable is produced.'' \24\
---------------------------------------------------------------------------

    \19\ See the Department's Policy Bulletin No. 04.1, ``Non-Market 
Economy Surrogate Country Selection Process,'' (March 1, 2004) 
(Policy Bulletin 04.1), available on the Department's Web site at 
http://ia.ita.doc.gov/policy/bull04-1.html.
    \20\ See Policy Bulletin 04.1.
    \21\ Id.
    \22\ Policy Bulletin 04.1 also states that ``if considering a 
producer of identical merchandise leads to data difficulties, the 
operations team may consider countries that produce a broader 
category of reasonably comparable merchandise.'' Id. at note 6.
    \23\ See Sebacic Acid from the People's Republic of China: Final 
Results of Antidumping Duty Administrative Review, 62 FR 65674 
(December 15, 1997) and accompanying Issues and Decision Memorandum 
at Comment 1 (to impose a requirement that merchandise must be 
produced by the same process and share the same end uses to be 
considered comparable would be contrary to the intent of the 
statute).
    \24\ See Policy Bulletin 04.1, at 2.
---------------------------------------------------------------------------

    Further, the statute grants the Department discretion to examine 
various data sources for determining the best available 
information.\25\ The legislative history also states that ``the term 
``significant producer'' includes any country that is a significant net 
exporter and, if appropriate, Commerce may use a significant, net 
exporting country in valuing factors,'' \26\ and it does not preclude 
reliance on additional or alternative metrics. The record developed to 
date for these preliminary results of review does not contain 
information with respect to production volumes of identical or 
comparable merchandise in the potential surrogate countries. Therefore, 
in evaluating which countries on the list may be significant producers 
of identical or comparable merchandise, the Department examined data 
for the POR from the Global Trade Atlas (GTA) for HTSUS 2933.69, the 
primary HTSUS number included in the scope of the order. An evaluation 
of the GTA data indicates that none of the countries listed in the 
Surrogate Country Memorandum were likely producers of identical 
merchandise.\27\ Next, the Department examined whether the surrogate 
countries on the list were significant producers of comparable 
merchandise as provided by section 773(c)(4)(B) of the Act. In the 
investigation of chlorinated isos, the Department found that calcium 
hypochlorite was comparable to the subject merchandise because it has 
``similar physical characteristics, end uses, and production 
processes.'' \28\ Because, as mentioned above, the record contains no 
production data for calcium hypochlorite in any of the possible 
surrogate countries, the Department turned to the GTA export data under 
HTS 2828.10, for calcium hypochlorite. South Africa was, by far, the 
largest exporter of calcium hypochlorite among the countries listed in 
the Surrogate Country Memorandum. The remaining countries on the list 
have less than 200,000 kilograms and most have less than 100,000 
kilograms while South Africa has 3.8 million kilograms. Therefore, the 
Department is selecting South Africa as the primary surrogate country. 
The Department will continue to evaluate any additional evidence timely 
placed on the record that other countries on the surrogate country list 
produce identical or comparable merchandise, and whether there are 
other types of merchandise produced in the surrogate countries on the 
list that could be considered comparable to chlorinated isos.
---------------------------------------------------------------------------

    \25\ See section 773(c) of the Act and Nation Ford Chem. Co. v. 
United States, 166 F.3d 1373, 1377 (Fed. Cir. 1990).
    \26\ See Conference Report to the 1988 Omnibus Trade & 
Competitiveness Act, H.R. Conf. Rep. No. 576,100 Cong, 2d Sess. 
(1988), reprinted in Cong. Rec. H2032 (Daily Ed. April 20, 1988).
    \27\ See Preliminary Surrogate Value Memorandum.
    \28\ See Notice of Final Determination of Sales at Less Than 
Fair Value: Chlorinated Isocyanurates From the People's Republic of 
China, 70 FR 24502 (May 10, 2005) and accompanying Issues and 
Decision Memorandum at Comment 2.
---------------------------------------------------------------------------

Data Availability

    When evaluating surrogate value data, the Department considers 
several factors including whether the surrogate value is publicly 
available, contemporaneous with the POR, from an approved surrogate 
country, tax and duty-exclusive, and specific to the input, and 
represents a broad market average. There is no hierarchy among these 
criteria; it is the Department's practice to carefully consider the 
available evidence in light of the particular facts of each industry 
when undertaking its analysis.\29\ The record of this review does 
contain data for South Africa and Thailand, as well as some data for 
the Philippines. As noted above, because South Africa is a significant 
producer of comparable merchandise, and because there is data on the 
record from South Africa to value FOPs, we have preliminarily 
determined for purposes of these preliminary results that South Africa 
is the most appropriate surrogate country to use in this review, and, 
accordingly, have calculated NV using South African prices to value the 
respondents' FOPs, when available and appropriate (see discussion below 
regarding why certain data from South Africa would likely provide 
inaccurate surrogate values for some FOPs).\30\ We

[[Page 41749]]

have obtained and relied upon publicly available information wherever 
possible.
---------------------------------------------------------------------------

    \29\ See Policy Bulletin 04.1.
    \30\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    The Surrogate Country Memorandum further explains that the list of 
countries it provides is a ``non-exhaustive'' list of potential 
surrogate countries. Furthermore, it states that

    You may also consider other countries on the case record if the 
record provides you adequate information to evaluate them. You may 
be unable to obtain the necessary factor price information in a 
suitable surrogate country. If that is the case, you will have to 
rely on the price of comparable merchandise that is produced in a 
surrogate country and sold in other countries, including the United 
States.

Since acceptable data sources for certain inputs have not been placed 
on the record from any of the countries provided in the Surrogate 
Country Memorandum, for a limited number of FOPs, the Department must 
rely on alternative countries as sources of surrogate data.\31\ In this 
review, the only alternative data on the record for these FOPs is from 
India. These data were placed on the record by interested parties or 
were obtained from the record of the previous review in these 
proceedings. Even though India is not on the list of possible surrogate 
countries provided in the Surrogate Country Memorandum, India is a 
significant producer of comparable merchandise that has the data needed 
to calculate certain surrogate values.\32\ Accordingly, where data from 
South Africa was not available, Indian data was used.
---------------------------------------------------------------------------

    \31\ Section 773(c)(4)(A) of the Act states that the Department 
shall value FOPs using prices in a country economically comparable 
to the NME country ``to the extent possible.'' As stated in the 
Department's Policy Bulletin 04.1, ``Non-Market Economy Surrogate 
Country Selection Process,'' ``Limited data availability sometimes 
is the reason why the team will ``go off'' the OP list in search of 
a viable primary surrogate country.''
    \32\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    Indian data was used in the following circumstances. First, there 
are no acceptable financial statements from any of the potential 
surrogate countries on the record of this review for identical or 
comparable merchandise. Petitioner submitted a contemporaneous 
financial statement from an Indian company that the Department has 
previously used to calculate financial ratios. Therefore, based on the 
record of this review and the guidance provided in the Surrogate 
Country Memorandum,\33\ the Department is using financial statements 
from an Indian company to calculate the financial ratios. There are 
also several chemical inputs that are valued using specific 
concentration levels that cannot be obtained from GTA data for South 
Africa.\34\ Petitioners did place on the record data by concentration 
level for one input, sulfuric acid, from a South African chemical 
producer on the record, but because no information has been placed on 
the record of this review to value the remaining inputs using specific 
concentration levels, the Department is selecting data from the Indian 
publication, Chemical Weekly, used in the previous review of this 
order.\35\ The Department has previously determined that several inputs 
are not frequently traded internationally and face special concerns 
both in transporting and in packaging, such that GTA data cannot be 
used.\36\ The Department is therefore using data from Indian financial 
statements placed on the record of the previous review to value these 
specific inputs, as no data was placed on the record from any country 
listed in the Surrogate Country Memorandum. Finally, South Africa does 
not have labor rates from Chapter 6A: Labor Cost in Manufacturing, of 
the International Labor Organization (ILO) Yearbook of Labor Statistics 
(Yearbook), which the Department has determined to be the best source 
of data when valuing the labor input. India does have labor rates from 
Chapter 6A, so we are using Indian data to value labor as well. As 
explained below under ``Factor Valuations,'' the Department has 
inflated non-contemporaneous data to the POR.
---------------------------------------------------------------------------

    \33\ See Policy Bulletin 04.1, which states that the Department 
``may also consider other countries on the case record if the record 
provides you adequate information to evaluate them.''
    \34\ See Memorandum titled ``Preliminary Results of the 2009-
2010 Administrative Review of the Antidumping Duty Order on 
Chlorinated Isocyanurates from the People's Republic of China: 
Surrogate Value Memorandum,'' dated June 30, 2011 (2009-2010 
Surrogate Value Memorandum).
    \35\ See Preliminary Surrogate Value Memorandum. See also 2009-
2010 Surrogate Value Memorandum.
    \36\ See 2009-2010 Surrogate Value Memorandum.
---------------------------------------------------------------------------

    In accordance with 19 CFR 351.301(c)(3)(ii), interested parties may 
submit publicly available information to value FOPs until 20 days after 
the date of publication of these preliminary results.\37\
---------------------------------------------------------------------------

    \37\ In accordance with 19 CFR 351.301(c)(1), for the final 
results of this administrative review, 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 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, e.g., 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.
---------------------------------------------------------------------------

Separate Rates

    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 AD 
rate. It is the Department's policy to assign all exporters of 
merchandise subject to review 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.
    In the Initiation Notice, the Department notified parties of the 
process by which exporters and producers may obtain separate rate 
status. This process requires exporters and producers wishing to 
qualify for separate rate status in this administrative review to 
complete, as appropriate, either a separate rate application or 
certification.\38\ In particular, companies for which a review was 
requested, and which were assigned a separate rate in the most recent 
segment of the same proceeding in which they participated, need to 
certify that they continue to meet the criteria for obtaining a 
separate rate.\39\ For companies that have not previously been assigned 
a separate rate, the companies must submit a separate rate application 
demonstrating eligibility for a separate rate.
---------------------------------------------------------------------------

    \38\ See Initiation Notice, 75 FR at 44224.
    \39\ See Tapered Roller Bearings and Parts Thereof, Finished or 
Unfinished, from the People's Republic of China: Final Results of 
2005-2006 Administrative Review and Partial Rescission of Review, 72 
FR 56724 and accompanying Issues and Decision Memorandum at Comment 
2; upheld by Peer Bearing Company--Changshan v. United States, 587 
F. Supp. 2d 1319, 1324-25 (CIT 2008).
---------------------------------------------------------------------------

    Kangtai and Nanning were assigned a separate rate in the most 
recent segment of this proceeding in which they participated,\40\ and 
they timely certified in this administrative review that they continue 
to meet the criteria for obtaining a separate rate. In addition, Jiheng 
and Zhucheng timely filed separate rate applications.\41\
---------------------------------------------------------------------------

    \40\ See Kangtai Final Results and Notice of Final Determination 
of Sales at Less Than Fair Value: Chlorinated Isocyanurates From the 
People's Republic of China, 70 FR 24502 (May 10, 2005).
    \41\ See Jiheng's September 26, 2011 submission, Nanning's 
September 26, 2011 submission, Zhucheng's September 6, 2011 and 
October 3, 2011 submission, and Kangtai's October 3, 2011 
submission.
---------------------------------------------------------------------------

    In order to establish independence from the NME entity, exporters 
must demonstrate the absence of both de jure and de facto government 
control over export activities. The Department

[[Page 41750]]

analyzes each entity exporting the subject merchandise under a test 
arising from 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 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 an ME country, then a separate rate 
analysis is not necessary to determine whether it is independent from 
government control.

Separate Rate Analysis

    Jiheng, Kangtai, Nanning and Zhucheng stated that they are either 
joint ventures between Chinese and foreign companies or are wholly 
Chinese-owned companies. Thus, the Department has analyzed whether each 
of these companies has demonstrated the absence of de jure and de facto 
governmental control over their 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.\42\
---------------------------------------------------------------------------

    \42\ See Sparklers, 56 FR at 20589.
---------------------------------------------------------------------------

    The evidence Jiheng, Kangtai, Nanning and Zhucheng provided in 
their separate rate certifications and separate rate applications 
supports a preliminary finding of absence of de jure government control 
based on the following factors: (1) An absence of restrictive 
stipulations associated with the individual exporter's business and 
export licenses; (2) applicable legislative enactments decentralizing 
control of the companies; and (3) formal measures by the government 
decentralizing control of PRC companies.
b. Absence of de Facto Control
    Typically, the Department considers four factors in evaluating 
whether each respondent is subject to de facto government control of 
its export functions: (1) Whether the export prices are set by or are 
subject to the approval of a government 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.\43\ 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 government control which would preclude 
the Department from assigning separate rates.
---------------------------------------------------------------------------

    \43\ See Silicon Carbide, 59 FR 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 evidence Kangtai and Nanning provided in their separate rate 
certifications, and the evidence Jiheng and Zhucheng provided in their 
separate rate applications, supports a preliminary finding of absence 
of de facto government control based on the following factors: (1) An 
absence of restrictive government control on export prices; (2) a 
showing of authority to negotiate and sign contracts and other 
agreements; (3) a showing that Jiheng, Kangtai, Nanning and Zhucheng 
maintain autonomy from the government in making decisions regarding the 
selection of management; and (4) a showing that Jiheng, Kangtai, 
Nanning and Zhucheng retain the proceeds of their respective export 
sales and make independent decisions regarding disposition of profits 
or financing of losses.
    Ultimately, the evidence placed on the record of this 
administrative review by Jiheng, Kangtai, Nanning and Zhucheng 
demonstrates an absence of de jure and de facto government control, in 
accordance with the criteria identified in Sparklers and Silicon 
Carbide. Therefore, the Department has preliminarily granted Jiheng, 
Kangtai, Nanning and Zhucheng a separate rate.

Margin for Separate-Rate Companies

    As discussed above, the Department received timely and complete 
separate rate applications or certifications from Jiheng, Kangtai, 
Nanning and Zhucheng, all of which were exporters of chlorinated isos 
from the PRC during the POR. Nanning and Zhucheng were not selected to 
be individually examined respondents in this review. Through the 
evidence in their respective separate rate applications or 
certifications, these companies have demonstrated their eligibility for 
a separate rate. The statute and the Department's regulations do not 
address the establishment of a rate to be applied to individual 
companies not selected for examination where the Department limited its 
examination in an administrative review pursuant to section 777A(c)(2) 
of the Act. Generally, we have looked to section 735(c)(5) of the Act, 
which provides instructions for calculating the all-others rate in an 
investigation, for guidance when calculating the rate for respondents 
we did not examine in an administrative review. For the exporters 
subject to a review that were determined to be eligible for separate 
rate status, but were not selected as mandatory respondents, the 
Department generally weight-averages the rates calculated for the 
mandatory respondents, excluding any rates that are zero, de minimis, 
or based entirely on facts available.\44\ For one of the mandatory 
respondents, Kangtai, we have calculated a rate of zero for these 
preliminary results of review. Therefore, the Department is assigning 
to the separate rate companies the only rate calculated in this review 
that is not zero, de minimis, or based entirely on facts available. 
Accordingly, we are assigning to the separate rate companies the rate 
calculated for Jiheng.\45\
---------------------------------------------------------------------------

    \44\ See, e.g., Wooden Bedroom Furniture From the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, Preliminary Results of New Shipper Review and 
Partial Rescission of Administrative Review, 73 FR 8273, 8279 
(February 13, 2008) (unchanged in Wooden Bedroom Furniture from the 
People's Republic of China: Final Results of Antidumping Duty 
Administrative Review and New Shipper Review, 73 FR 49162 (August 
20, 2008)).
    \45\ See Memorandum titled ``Preliminary Results Surrogate Value 
Memorandum,'' dated June 29, 2012. See also Multilayered Wood 
Flooring From the People's Republic of China: Final Determination of 
Sales at Less Than Fair Value, 76 FR 64318 (October 18, 2011).
---------------------------------------------------------------------------

Date of Sale

    We preliminarily determine that the invoice date is the most 
appropriate date to use as the date of sale for both respondents in 
accordance with 19 CFR 351.401(i). In this regard, no interested 
parties provided evidence indicating that the material terms of sale 
were established on another date. Instead, according to the 
respondents' questionnaire responses, the material terms of the sale 
are fixed at invoice date. Thus, the Department finds that the invoice 
date is the date of sale. Evidence on the record also demonstrates 
that, with respect to Jiheng's sales to the United States, for some 
sales the shipment date occurs prior to the invoice date.\46\ In such

[[Page 41751]]

cases, we limit the date of sale to no later than shipment date.\47\
---------------------------------------------------------------------------

    \46\ See Jiheng's November 29, 2011 questionnaire response at 
13.
    \47\ See, e.g., Narrow Woven Ribbons with Woven Selvedge from 
the People's Republic of China: Preliminary Determination of Sales 
at Less Than Fair Value and Postponement of Final Determination, 75 
FR 7244, 7251 (February 18, 2010), unchanged in Narrow Woven Ribbons 
With Woven Selvedge From the People's Republic of China: Final 
Determination of Sales at Less Than Fair Value, 75 FR 41808 (July 
19, 2010).
---------------------------------------------------------------------------

Fair Value Comparisons

    To determine whether sales of chlorinated isos to the United States 
by Jiheng and Kangtai were made at less than NV, we compared export 
price (EP) to NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice, pursuant to section 771(35) of the 
Act.\48\
---------------------------------------------------------------------------

    \48\ In these preliminary results, the Department applied the 
weighted-average dumping margin calculation method adopted in 
Antidumping Proceedings: Calculation of the Weighted-Average Dumping 
Margin and Assessment Rate in Certain Antidumping Proceedings: Final 
Modification, 77 FR 8101 (February 14, 2012) (Final Modification for 
Reviews). In particular, the Department compared monthly weighted-
average export prices with monthly weighted-average normal values 
and granted offsets for non-dumped comparisons in the calculation of 
the weighted average dumping margin.
---------------------------------------------------------------------------

Export Price

    Jiheng and Kangtai sold the subject merchandise directly to 
unaffiliated purchasers in the United States prior to importation into 
the United States. Therefore, we have used EP in accordance with 
section 772(a) of the Act because the use of the constructed export 
price methodology is not otherwise indicated. We calculated EP based on 
the price, including the appropriate shipping terms, to the first 
unaffiliated purchasers reported by Jiheng and Kangtai. To this price, 
we added amounts for components that were supplied free of charge 
(Jiheng and Kangtai) or for which the respondent was separately 
reimbursed by the customer (Jiheng), where applicable, pursuant to 
section 772(c)(1)(A) of the Act and consistent with our treatment of 
Jiheng's sales in prior reviews.\49\ For free raw materials and packing 
materials, we added the surrogate values for these materials, 
multiplied by the reported FOPs for these items, to the U.S. price paid 
by Jiheng's or Kangtai's customer.\50\ The reimbursed raw materials 
were always listed separately on sales invoices, and were not included 
in the U.S. prices reported by Jiheng.\51\ Since these reimbursed items 
were raw materials, we added the amount paid by the U.S. customer for 
these materials to the U.S. price.
---------------------------------------------------------------------------

    \49\ See Memoranda titled ``Analysis for the Preliminary Results 
of the 2010-2011 Administrative Review of Chlorinated Isocyanurates 
from the People's Republic of China: Hebei Jiheng Chemical Company 
Ltd.,'' and ``Analysis for the Preliminary Results of the 2010-2011 
Administrative Review of Chlorinated Isocyanurates from the People's 
Republic of China: Juancheng Kangtai Chemical Co., Ltd.'' (Kangtai 
Preliminary Analysis Memorandum) dated June 29, 2012.
    \50\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products From the People's Republic of China, 71 
FR 53079 (September 8, 2006), and accompanying Issues and Decision 
Memorandum at Comment 17.
    \51\ See Jiheng's November 29, 2011 questionnaire response at 
20.
---------------------------------------------------------------------------

Normal Value

    Section 773(c)(1) of the Act provides that, in an NME proceeding, 
the Department shall determine NV using an FOP methodology if the 
merchandise is exported from an NME 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.
    The Department bases NV on FOPs in NMEs because the presence of 
government controls on various aspects of these economies renders price 
comparisons and the calculation of production costs invalid under the 
Department's normal methodologies. Therefore, we calculated NV based on 
FOPs in accordance with sections 773(c)(3) and (4) of the Act and 19 
CFR 351.408(c). The FOPs include: (1) Hours of labor required; (2) 
quantities of raw materials consumed; (3) amounts of energy and other 
utilities consumed; and (4) representative capital costs. We used the 
FOPs reported by the respondent for materials, energy, labor, by-
products, and packing. These reported FOPs included FOPs for various 
materials provided free of charge or reimbursed by the customer as 
discussed in the ``Export Price'' section, above.
    In accordance with 19 CFR 351.408(c)(1), the Department will 
normally use publicly available information to value the FOPs, but when 
a producer sources an input from an ME country and pays for this input 
in an ME currency, the Department may value the factor using the actual 
price paid for this input.\52\ Jiheng and Kangtai both reported that 
they did not purchase any inputs from ME suppliers for the production 
of the subject merchandise.\53\
---------------------------------------------------------------------------

    \52\ See 19 CFR 351.408(c)(1); see also Shakeproof Assembly 
Components, Div. of Illinois Tool Works, Inc. v. United States, 268 
F.3d 1376, 1382-1383 (Fed. Cir. 2001) (affirming the Department's 
use of market-based prices to value certain FOPs).
    \53\ See Jiheng's November 29, 2011 Section D response at D-12 
and Kangtai's November 28, 2011 Section D response at 7.
---------------------------------------------------------------------------

    With regard to the South African import-based surrogate values, we 
have disregarded prices that we have reason to believe or suspect may 
be subsidized, such as those imports from India, Indonesia, South 
Korea, and Thailand. We have found in other proceedings that these 
countries maintain broadly available, non-industry-specific export 
subsidies and, therefore, it is reasonable to infer that all exports to 
all markets from these countries may be subsidized.\54\ We are also 
guided by the statute's legislative history that explains that it is 
not necessary to conduct a formal investigation to ensure that such 
prices are not subsidized.\55\ Rather, the Department bases its 
decision on information that is available to it at the time it is 
making its determination. Therefore, we have not used prices from these 
countries in calculating the South African import-based surrogate 
values. Additionally, we disregarded prices from NME countries.\56\ 
Finally, imports that were labeled as originating from an 
``unspecified'' country were excluded from the average value, because 
the Department could not be certain that they were not from either an 
NME country or a country with general export subsidies.
---------------------------------------------------------------------------

    \54\ See, e.g., Frontseating Service Valves from the People's 
Republic of China: Preliminary Determination of Sales at Less Than 
Fair Value, Preliminary Negative Determination of Critical 
Circumstances, and Postponement of Final Determination, 73 FR 62952, 
62957 (October 22, 2008), unchanged in Frontseating Service Valves 
From the People's Republic of China: Final Determination of Sales at 
Less Than Fair Value and Final Negative Determination of Critical 
Circumstances, 74 FR 10886 (March 13, 2009); and China National 
Machinery Import & Export Corporation v. United States, 293 F. Supp. 
2d 1334, 1339 (CIT 2003), affirmed 104 Fed. Appx. 183 (Fed. Cir. 
2004).
    \55\ See H.R. Rep. No. 100-576 (1988), at 590.
    \56\ The list of excluded NME countries includes: Armenia, 
Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, the PRC, 
Tajikistan, Turkmenistan, Uzbekistan, and Vietnam.
---------------------------------------------------------------------------

Factor Valuations

    In accordance with section 773(c) of the Act, we calculated NV 
based on the FOPs reported by Jiheng and Kangtai for the POR. To 
calculate NV, we multiplied the reported per-unit factor quantities by 
publicly available South African surrogate values (except as noted 
below). In selecting the surrogate values, we selected, where possible, 
publicly available data, which represent an average non-export value 
and are contemporaneous with the POR, product-specific, and tax-
exclusive. As appropriate, we adjusted input prices by including 
freight costs to render them delivered prices. Specifically, we added 
to the import surrogate values a

[[Page 41752]]

surrogate freight cost using the shorter of the reported distance from 
the domestic supplier to the factory or the distance from the nearest 
seaport to the factory. This adjustment is in accordance with the 
decision of the U.S. Court of Appeals for the Federal Circuit in Sigma 
Corp. v. United States, 117 F.3d 1401, 1408 (Fed. Cir. 1997).\57\
---------------------------------------------------------------------------

    \57\ For a detailed description of all surrogate values used for 
Jiheng and Kangtai, see Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    Except as noted below, we valued raw material inputs using the 
weighted-average unit import values as reported by the South African 
Revenue Service in GTA.\58\ Where we could not obtain publicly 
available information contemporaneous with the POR with which to value 
FOPs, we adjusted the surrogate values using, where appropriate, the 
South African Consumer Price Index as published in the International 
Financial Statistics of the International Monetary Fund,\59\ or the 
Indian Wholesale Price Indexes as published by the Office of the 
Economic Advisor to the Government of India.\60\ We further adjusted 
these prices to account for freight expenses incurred between the input 
supplier and respondent.
---------------------------------------------------------------------------

    \58\ Available at http://www.gtis.com/gta/.
    \59\ A wholesale price index was not available for Thailand.
    \60\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    To value calcium chloride, barium chloride, zinc sulfate, we used 
Chemical Weekly data because South African import data by concentration 
level was unavailable in the GTA. We adjusted these values for taxes 
and to account for freight expenses incurred between the supplier and 
the respondent. We inflated the data to make it contemporaneous with 
the POR.\61\
---------------------------------------------------------------------------

    \61\ Id.
---------------------------------------------------------------------------

    To value sulfuric acid, the Department used a price list placed on 
the record by Petitioners for a South African chemical company called 
Norceline Chemicals Suppliers. The prices for sulfuric acid are for one 
specific concentration level, packaged two different ways. The 
Department took an average of the price, and, because the data is 
contemporaneous with the POR, we did not inflate the value.
    As noted above, Jiheng and Kangtai reported that a U.S. customer 
provided certain raw materials and packing materials free of charge. 
Raw materials and packing materials that are provided free of charge to 
a respondent by its customer and materials for which a respondent is 
separately reimbursed by its customer are part of the cost of 
manufacturing, and must be included when calculating NV. Thus, for 
Jiheng's and Kangtai's products that included raw materials and packing 
materials provided free of charge, consistent with the Department's 
practice and section 773(c)(1)(B) of the Act, we used the built-up cost 
(i.e., the surrogate value for these raw materials and packing 
materials multiplied by the reported FOPs for these items) in the NV 
calculation.\62\ We also added the built-up costs for the raw materials 
for which Jiheng was reimbursed by a U.S. customer to NV. Where 
applicable, we also adjusted these values to account for freight 
expenses incurred between the nearest port of entry and Jiheng's 
plants.\63\
---------------------------------------------------------------------------

    \62\ See, e.g., Notice of Final Determination of Sales at Less 
Than Fair Value, and Affirmative Critical Circumstances, In Part: 
Certain Lined Paper Products From the People's Republic of China, 
and accompanying Issues and Decision Memorandum at Comment 17.
    \63\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    Because water was used by the respondents in the production of 
chlorinated isos, the Department considers water to be a direct 
material input rather than part of overhead. We valued water using data 
from the city of Johannesburg's ``Amendment of Tariff Charges for Water 
for Water Services,'' Annexure ``A'', with tariffs effective July 1, 
2010. We did not inflate this rate since it is contemporaneous with the 
POR.\64\
---------------------------------------------------------------------------

    \64\ Available at: http://www.boi.go.th/index.php?page=utility_costs; see also Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    For packing materials, we used the per-kilogram values obtained 
from the GTA and made adjustments to account for freight expense 
incurred between the PRC supplier and the respondents' plants.\65\
---------------------------------------------------------------------------

    \65\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    Jiheng reported chlorine, hydrogen gas, ammonia gas, and sulfuric 
acid as by-products in the production of subject merchandise. We find 
in this administrative review that Jiheng has appropriately explained 
how by-products are produced during the manufacture of chlorinated isos 
and has appropriately supported its claim that a by-product offset to 
NV should be granted. We valued ammonia gas and sulfuric acid using GTA 
and Norceline Chemicals Suppliers price list data, respectively. The 
Department determined in the previous review that chlorine and hydrogen 
are rarely traded via ocean transport on an international basis, and 
used Indian financial statements to provide more representative values 
for chlorine and hydrogen gas.\66\ In the instant review, the 
Department is using data from financial statements placed on the record 
of the last review to value chlorine and hydrogen. Since this data is 
not contemporaneous with the POR, we inflated it using the wholesale 
price index from India.\67\
---------------------------------------------------------------------------

    \66\ See Chlorinated Isocyanurates From the People's Republic of 
China: Preliminary Results of Antidumping Duty Administrative 
Review, 76 FR 40690 (July 11, 2011).
    \67\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    Kangtai reported ammonium sulfate as a by-product in the production 
of subject merchandise. However, the Department has found that ammonium 
sulfate is not a by-product of the chlorinated isos production 
process.\68\ The production process does yield ammonia gas and sulfuric 
acid as by-products, which can be further produced to make ammonium 
sulfate. The Department adjusted Kangtai's reported ammonium sulfate 
by-product to calculate an ammonia gas and sulfuric acid by-
product.\69\ We valued the by-products using GTA and Norceline 
Chemicals Suppliers price list data.
---------------------------------------------------------------------------

    \68\ See Chlorinated Isocyanurates from the People's Republic of 
China: Final Results of Antidumping Duty Administrative Review, 73 
FR 52645 (September 10, 2008) and accompanying Issues and Decision 
Memorandum at Comment 6.
    \69\ See Kangtai Preliminary Analysis Memorandum for details on 
these calculations.
---------------------------------------------------------------------------

    For electricity, we used data from a South African electric public 
utility, Eskom. We used an average of the tariff rates for a 
``Megaflex'' consumer, which is for time of use electricity for an 
urban consumer, able to shift load, with a maximum demand of greater 
than one megavolt ampere, which appears to be the tariff category that 
most closely matches the category our respondents would be classified 
in. These electricity rates represent publicly-available information on 
tax-exclusive electricity rates charged to industries in South 
Africa.\70\
---------------------------------------------------------------------------

    \70\ Id.
---------------------------------------------------------------------------

    On June 21, 2011, the Department revised its methodology for 
valuing the labor input in NME AD proceedings.\71\ In Labor 
Methodologies, the Department determined that the best methodology to 
value the labor input is to use industry-specific labor rates from the 
primary surrogate country. Additionally, the Department determined that 
the best data source for industry-specific labor rates is Chapter 6A of 
the Yearbook.
---------------------------------------------------------------------------

    \71\ See Antidumping Methodologies in Proceedings Involving Non-
Market Economies: Valuing the Factor of Production: Labor, 76 FR 
36092 (June 21, 2011) (Labor Methodologies).
---------------------------------------------------------------------------

    The Department valued labor in this review using the methodology 
described

[[Page 41753]]

in Labor Methodologies. Specifically, to value the respondents' labor, 
because South Africa does not report labor rates in Chapter 6A of the 
Yearbook, the Department relied on data reported by India to the ILO in 
Chapter 6A of the Yearbook. The Department further finds the two-digit 
description under ISIC-Revision 3 (Manufacture of Chemicals and 
Chemical Products) to be the best available information on the record 
because it is specific to the industry being examined, and is therefore 
derived from industries that produce comparable merchandise. This is 
the same classification used in the prior review of this case. 
Accordingly, relying on Chapter 6A of the Yearbook, the Department 
calculated the labor input using labor data reported by India to the 
ILO under Sub-Classification 24 of the ISIC-Revision 3 standard, in 
accordance with section 773(c)(4) of the Act. Because these rates were 
in effect before the POR, we are adjusting the average value for 
inflation.\72\
---------------------------------------------------------------------------

    \72\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

    As stated above, the Department used India ILO data reported under 
Chapter 6A of the Yearbook, which reflects all costs related to labor, 
including wages, benefits, housing, training, etc. Since the financial 
statements used to calculate the surrogate financial ratios include 
itemized detail of indirect labor costs, the Department made 
adjustments to the surrogate financial ratios.\73\
---------------------------------------------------------------------------

    \73\ See Labor Methodologies and Preliminary Surrogate Value 
Memorandum for details of adjustments.
---------------------------------------------------------------------------

    We valued truck freight using an average of truck freight costs as 
reported in a July 2008 working paper titled ``Transport Prices and 
Costs in Africa: A Review of the Main International Corridors,'' 
published by the International Bank for Reconstruction and Development/
World Bank and a short-haul freight contract for transportation 
services in South Africa from October 2011. Since both sources were 
dated outside the POR, we inflated or deflated them to reach a rate 
contemporaneous with the POR.\74\
---------------------------------------------------------------------------

    \74\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

Financial Ratios

    As discussed above, there are no financial statements from South 
Africa on the record of this review, and the Department could not find 
any financial statements from South African companies producing 
identical or comparable merchandise.\75\ To calculate surrogate values 
for factory overhead, selling, general, and administrative expenses 
(SG&A), and profit for these preliminary results, we used financial 
information from Kanoria Chemicals & Industries Limited (an Indian 
producer of comparable merchandise--stable bleaching powder) for the 
fiscal year ending March 31, 2011.\76\ From this information, we were 
able to determine average factory overhead as a percentage of the total 
raw materials, labor, and energy (ML&E), average SG&A as a percentage 
of ML&E plus overhead (i.e., cost of manufacture), and an average 
profit rate as a percentage of the cost of manufacture plus SG&A.\77\
---------------------------------------------------------------------------

    \75\ See id.
    \76\ See Preliminary Surrogate Value Memorandum for a discussion 
on the selection of financial statements to value financial ratios.
    \77\ See Preliminary Surrogate Value Memorandum.
---------------------------------------------------------------------------

Currency Conversion

    Where the factor valuations were reported in a currency other than 
U.S. dollars, in accordance with section 773A(a) of the Act, we made 
currency conversions into U.S. dollars based on the exchange rates in 
effect on the dates of the U.S. sales, as certified by the Federal 
Reserve Bank.

Preliminary Results

    We preliminarily determine that the following dumping margins 
exist:

------------------------------------------------------------------------
                                                          Weight-average
                        Exporter                              margin
                                                            percentage
------------------------------------------------------------------------
Hebei Jiheng Chemical Co., Ltd..........................           82.29
Juancheng Kangtai Chemical Co., Ltd.....................            0.00
Nanning Chemical Industry Co., Ltd......................           82.29
Zhucheng Taisheng Chemical Co., Ltd.....................           82.29
------------------------------------------------------------------------

Assessment Rates

    Upon issuance of the final results, the Department will determine, 
and CBP shall assess, antidumping duties on all appropriate entries 
covered by this review. The Department intends to issue assessment 
instructions to CBP 15 days after the publication date of the final 
results of this review. If a respondent's weighted-average dumping 
margin is above de minimis in the final results of this review, we will 
calculate an importer specific (or customer-specific, if the importer 
is unknown) assessment rate on the basis of the ratio of the total 
amount of antidumping duties calculated for the importer's examined 
sales and the total entered value for those sales in accordance with 19 
CFR 351.212(b)(1).\78\
---------------------------------------------------------------------------

    \78\ In these preliminary results, the Department applied the 
assessment rate calculation method adopted in Final Modification for 
Reviews, i.e., on the basis of monthly average-to-average 
comparisons using only the transactions associated with that 
importer with offsets being provided for non-dumped comparisons.
---------------------------------------------------------------------------

    Where an importer-specific (or customer-specific) ad valorem rate 
is zero or de minimis, we will instruct CBP to liquidate appropriate 
entries without regard to antidumping duties.\79\ For the companies 
receiving a separate rate that were not selected for individual review, 
we will assign an assessment rate based on the average of the weighted-
average dumping margins we calculated for the mandatory respondents 
whose rate were not de minimis, as discussed above. We intend to 
instruct CBP to liquidate entries containing subject merchandise 
exported by the PRC-wide entity at the PRC-wide rate.
---------------------------------------------------------------------------

    \79\ See 19 CFR 351.106(c)(2).
---------------------------------------------------------------------------

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided for by section 751(a)(2)(C) of the Act: (1) For the exporter's 
listed above, the cash deposit rate will be the rate established in the 
final results of this review (except, if the rate is zero or de 
minimis, i.e., less than 0.5 percent, a zero cash deposit rate will be 
required for that company); (2) for previously investigated or reviewed 
PRC and non-PRC exporters not listed above that have separate rates, 
the cash deposit rate will continue to be the exporter-specific rate 
published for the most recent period; (3) for all PRC exporters of 
subject merchandise that have not been found to be eligible for a 
separate rate, the cash deposit rate will be the PRC-wide rate of 
285.63 percent; \80\ and (4) for all non-PRC exporters of subject 
merchandise which have not received their own rate, the cash deposit 
rate will be the rate applicable to the PRC exporter(s) that supplied 
that non-PRC exporter. These deposit requirements, when imposed, shall 
remain in effect until further notice.
---------------------------------------------------------------------------

    \80\ For an explanation on the derivation of the PRC-wide rate, 
see Notice of Final Determination of Sales at Less Than Fair Value: 
Chlorinated Isocyanurates From the People's Republic of China, 70 FR 
at 24505.
---------------------------------------------------------------------------

Disclosure and Public Comment

    We will disclose the calculations used in our analysis to parties 
to this proceeding within five days of the publication date of this 
notice, in accordance with 19 CFR 351.224(b).

[[Page 41754]]

Interested parties are invited to comment on the preliminary results. 
The schedule for filing case briefs will be provided to parties at a 
later date. Rebuttal briefs, limited to issues raised in case briefs, 
may be filed no later than five days after the time limit for filing 
the case briefs, as specified by 19 CFR 351.309(d). The Department 
requests that parties submitting case or rebuttal briefs provide an 
executive summary and a table of authorities as well as an electronic 
copy.
    Any interested party may request a hearing within 30 days of 
publication of this notice, as provided by 19 CFR 351.310(c). Hearing 
requests should contain the following information: (1) The party's 
name, address, and telephone number; (2) the number of participants; 
and (3) a list of the issues to be discussed. Oral presentations will 
be limited to issues raised in the case briefs. If a request for a 
hearing is made, parties will be notified of the time and date for the 
hearing to be held at the U.S. Department of Commerce, 14th Street and 
Constitution Avenue NW., Washington, DC 20230.
    The Department intends to issue the final results of this 
administrative review, which will include the results of its analysis 
of issues raised in any comments, within 120 days of publication of 
these preliminary results, pursuant to section 751(a)(3)(A) of the Act, 
unless otherwise extended.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) 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 Department's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    These preliminary results are issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

     Dated: June 29, 2012.
Paul Piquado,
Assistant Secretary for Import Administration.
[FR Doc. 2012-17314 Filed 7-13-12; 8:45 am]
BILLING CODE 3510-DS-P