[Federal Register Volume 64, Number 238 (Monday, December 13, 1999)]
[Notices]
[Pages 69503-69509]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-32224]


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DEPARTMENT OF COMMERCE

INTERNATIONAL TRADE ADMINISTRATION

[A-570-825]


Sebacic Acid From the People's Republic of China: Final Results 
of Antidumping Duty Administrative Review

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

ACTION: Notice.

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SUMMARY: On Friday, August 6, 1999, the Department of Commerce 
published in the Federal Register the preliminary results of the 
administrative review of the antidumping duty order on sebacic acid 
from the People's Republic of China. See Sebacic Acid from the People's 
Republic of China: Preliminary Results of Antidumping Duty 
Administrative Review, 65 F.R. 42916 (Aug. 6, 1999). The administrative 
review covers four exporters of the subject merchandise to the United 
States: Tianjin Chemicals Import and Export Corporation; Guangdong 
Chemicals Import and Export Corporation; Sinochem International 
Chemicals Company, Ltd.; and Sinochem Jiangsu Import and Export 
Corporation. The period of review is July 1, 1997, through June 30, 
1998.
    We gave interested parties an opportunity to comment on our 
preliminary results. Based on our analysis of the comments received and 
the correction of certain clerical errors, we have changed our results 
from those presented in our preliminary results as described below in 
the ``Analysis of Comments Received'' section of this notice. The final 
results are listed below in the section ``Final Results of the 
Review.''

EFFECTIVE DATE: December 13, 1999.

FOR FURTHER INFORMATION CONTACT: Sunkyu Kim or Christopher Priddy, AD/
CVD Enforcement Group I, Office II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington, DC 20230; telephone: 
(202) 482-2613 or (202) 482-1130, respectively.

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 regulations at 19 CFR part 351 
(April 1998).

SUPPLEMENTARY INFORMATION:

Background

    On August 6, 1999, the Department of Commerce (the Department) 
published in the Federal Register the preliminary results of the 1997-
1998 administrative review of the antidumping duty order on sebacic 
acid from the People's Republic of China (PRC). See Sebacic Acid from 
the PRC: Preliminary Results of Antidumping Duty Administrative Review, 
64 Fed. Reg. 42916 (August 6, 1999) (Preliminary Results). On August 
26, 1999, Tianjin Chemicals Import and Export Corporation (Tianjin 
Chemicals), Guangdong Chemicals Import and Export Corporation 
(Guangdong Chemicals), and Sinochem International Chemicals Company, 
Ltd. (SICC) (collectively comprising the respondents) submitted 
additional surrogate value data. The petitioner and successor in 
interest to Union Camp Corporation, Arizona Chemical Company, filed a 
response to the respondents' submission on September 7, 1999. The 
petitioner and three of the four respondents submitted case briefs on 
September 7, 1999, and rebuttal briefs on September 13, 1999. The 
Department held a public hearing on October 27, 1999. The fourth 
respondent, Sinochem Jiangsu Import and Export Corporation, did not 
participate in this administrative review. Accordingly, the Department 
has continued to base the margin for this respondent on facts available 
for purposes of the final results.
    The Department has now completed this administrative review in 
accordance with section 751(a) of the Act.

Scope of Review

    The products covered by this order are all grades of sebacic acid, 
a dicarboxylic acid with the formula (CH2)8(COOH)2, which include but 
are not limited to CP Grade (500ppm maximum ash, 25 maximum APHA 
color), Purified Grade (1000ppm maximum ash, 50 maximum APHA color), 
and Nylon Grade (500ppm maximum ash, 70 maximum ICV color). The 
principal difference between the grades is the quantity of ash and 
color. Sebacic acid contains a minimum of 85 percent dibasic acids of 
which the predominant species is the C10 dibasic acid. Sebacic acid is 
sold generally as a free-flowing powder or flake.
    Sebacic acid has numerous industrial uses, including the production 
of nylon 6/10 which is a polymer used for paintbrush and toothbrush 
bristles and paper machine felts, plasticizers, esters, automotive 
coolants, polyamides, polyester castings and films, inks and adhesives, 
lubricants, and polyurethane castings and coatings.
    Sebacic acid is currently classifiable under subheading 
2917.13.00.30 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheading is provided for convenience and 
customs purposes, our written description of the scope of this 
proceeding remains controlling.

Export Price

    For Guangdong, SICC, and Tianjin we calculated export price (EP) in 
accordance with section 772(a) of the Act because the subject 
merchandise was sold directly to unaffiliated customers in the United 
States prior to importation and constructed export price (CEP) 
methodology was not otherwise warranted based on the facts of record. 
We calculated EP based on the same methodology used for purposes of the 
preliminary results with the exception that we used a different 
surrogate value for all respondents' ocean freight expenses. See 
Comment 7.

Normal Value

    Section 773(c)(4) of the Act requires the Department to value the 
non-market economy (NME) producer's factors of production, to the 
extent possible, in one or more market economy countries that: (1) Are 
at a level of economic development comparable to that of the NME, and 
(2) Are significant producers of comparable merchandise. As stated in 
the Preliminary Results, the Department has determined in this case 
that India meets both statutory requirements for an appropriate 
surrogate country. In the final results, we have continued to rely on 
India as the surrogate country. Accordingly, we have calculated normal 
value (NV) using Indian surrogate values for the PRC producers' factors 
of production.
    We calculated NV based on the same methodology used in the 
preliminary results with the following exceptions: (1) We adjusted the 
surrogate values of the by-product fatty acid and the co-

[[Page 69504]]

product capryl alcohol to reflect differences in concentration levels 
between these subsidiary products and their respective surrogate 
values; (2) We revised the foreign trucking surrogate value based on 
Financial Express price quotes (see Comment 3); (3) We included 
indirect labor amounts in our normal value calculations (see Comment 
4); (4) We based the octanol surrogate value on the average of twelve 
Chemical Weekly price quotes reflecting each month of the POR submitted 
by the editor of Chemical Weekly; (5) We based the activated carbon 
surrogate value on price quotes obtained from Indian companies (see 
Comment 6); (6) We valued Hengshui Dongfeng Chemical Factory's 
(Hengshui's) and Zhong He Chemical Factory's (Zhong He's) refined 
glycerine, as well as Handan Fuyang Sebacic Acid Factory's (Handan's) 
by-product crude glycerine, using Indian Import Statistics data; (7) We 
included macropore resin in Handan's normal value calculation (see 
Comment 9); (8) We corrected a certain ministerial error with respect 
to Handan's packing costs (see Comment 9); (9) We replaced incorrect 
surrogate values for activated carbon and foreign rail freight with 
proper values for certain exporters' normal value calculations; (10) We 
revised the manner in which we calculated the deduction for sales and 
excise taxes from the Chemical Weekly price quotes; (11) We valued the 
castor oil which Hengshui purchased from both market and non-market 
economy suppliers using the factory's actual purchase price from a 
market-economy supplier.

Analysis of Comments Received

Comment 1: Concentration Levels of Subsidiary Products

    The petitioner asserts that the Department erred in its normal 
value calculations by failing to adjust the values of the sebacic acid 
subsidiary products glycerine and fatty acid, as well as the co-product 
capryl alcohol, by their respective concentration levels. For Handan, 
the one manufacturer for which the Department did adjust the glycerine 
value to reflect its purity level, the petitioner asserts that the 
Department used the incorrect glycerine concentration percentage in its 
normal value calculation. Because Hengshui and Zhong He did not report 
the concentration levels at which they produce fatty acid, the 
petitioner urges the Department to use as facts available Handan's 
fatty acid concentration levels.
    The respondents argue that the Department should not adjust 
subsidiary product values to reflect differences in their concentration 
levels, as these purity levels do not affect the products' usages or 
prices. The respondents urge the Department to follow its decision in 
the final determination of the investigation by refusing to adjust 
products' surrogate values by their concentration levels in those cases 
in which the products' Indian price purity levels are unknown. See 
Notice of Final Determination of Sales at Less than Fair Value (LTFV 
Investigation): Sebacic Acid from the PRC, 59 F.R. 28053, 28059 (May 
31, 1994) (Sebacic Acid Final Determination). The respondents argue 
that there is no information on the record of this case which supports 
a determination of the purity level at which the co-product and 
subsidiary products were sold. However, should the Department decide to 
adjust the values for subsidiary products on the basis of their 
respective concentration levels, the respondents ask that the 
Department adjust sebacic acid's gross unit price to reflect the 
concentration level at which sebacic acid was sold during the period of 
review (POR).

DOC Position

    For purposes of the final results, we adjusted the surrogate values 
for the subsidiary product fatty acid and the co-product capryl alcohol 
to reflect variations between the product's reported concentration 
levels and the surrogate value's concentration level. We did not, 
however, adjust the surrogate value for the by-product glycerine.
    For purposes of the Sebacic Acid Final Determination, the 
Department stated that it would not adjust surrogate values to reflect 
purity levels when the surrogate value sources do not indicate levels 
of purity which can be used for comparison purposes. Sebacic Acid Final 
Determination, 59 F.R. 28053, 28059 (May 31, 1994). However, the 
Department may make surrogate value adjustments when information on the 
record provides a basis upon which the Department may infer Indian 
price quotes' purity percentages. Notice of Final Determination of 
Sales at Less than Fair Value: Certain Paper Clips from the People's 
Republic of China, 59 F.R. 51168, 51174 (October 7, 1994). In response 
to a November 16, 1999, inquiry regarding the concentration levels of 
Chemical Weekly price quotes, the editor of Chemical Weekly stated that 
chemical price quotes which do not mention the chemical's purity level 
are based on a one hundred percent purity level. See November 22, 1999, 
Memo to the File from Christopher Priddy. Because we based the 
surrogate values for capryl alcohol and fatty acid on Chemical Weekly 
price quotes which reflect a one hundred percent purity level, the 
Department adjusted these products' surrogate values to reflect the 
reported concentration levels at which they were produced.
    For purposes of the final results, the Department derived the 
surrogate value for glycerine from import prices published in the 
Indian Import Statistics. The Department does not have adequate 
information to determine the purity level of glycerine generated by the 
respondents and the glycerine covered by the Indian Import prices. 
Because we lack this necessary information, the Department did not make 
concentration level adjustments for glycerine. Accordingly, the 
Department revised its normal value calculations in those instances in 
which it adjusted the glycerine value by its chemical concentration 
level.
    Finally, we disagree with the respondents' argument that if we 
adjust the values for subsidiary products we should also adjust the 
respondents' reported gross unit prices of sebacic acid to reflect the 
concentration level at which the product was sold during the POR. We 
make an adjustment to the prices when there is a known difference 
between the concentration levels of the product and the price for the 
product. The respondents sold sebacic acid at a 99.5 percent 
concentration level, and the sebacic acid prices which the respondents 
reported to the Department correspond with the reported 99.5 percent 
concentration level. Therefore, the Department has no basis to make the 
type of adjustment requested by the respondents.

Comment 2: Caustic Soda Concentration Level

    The petitioner argues that the Department undervalued the cost of 
caustic soda by interpreting Chemical Weekly prices as quotes for 
caustic soda sold at one hundred percent purity concentration levels. 
The petitioner states that it provided the Department with information 
indicating that liquid caustic soda is normally sold in 50 percent 
concentration levels and urges the Department to adjust the 
respondents' caustic soda surrogate values from an original caustic 
soda concentration level of 50 percent. See Petitioner's January 25, 
1999, Surrogate Value Submission.
    The respondents assert that the Department should follow precedent 
in this case and allow reductions for caustic soda purity levels based 
on a one hundred percent purity level

[[Page 69505]]

standard. The respondents state that the Department, in the original 
investigation, based its decision regarding caustic soda prices on a 
letter from Chemical Weekly's editor reporting that Chemical Weekly 
caustic soda prices reference caustic soda at a one hundred percent 
purity level. See Sebacic Acid From the People's Republic of China; 
Final Results of Antidumping Duty Administrative Review, 59 Fed. Reg. 
28053, 28059 (May 31, 1994). The respondents argue that Chemical Weekly 
caustic soda prices reflect a one hundred percent dry basis due to 
price valuation purposes for buyers of different caustic soda purity 
percentages who do not pay for water included in liquid caustic soda. 
The respondents urge the Department to follow its precedent from the 
Sebacic Acid Final Determination and adjust caustic soda percentages 
according to Chemical Weekly caustic soda prices referencing caustic 
soda of one hundred percent purity.

DOC Position

    We agree with the respondents. On November 16, 1999, the Department 
submitted an inquiry to Chemical Weekly regarding the relationship 
between chemical purity levels and price quotes. The editor of Chemical 
Weekly responded that chemical price quotes which do not mention the 
chemical's purity level are based on a one hundred percent purity level 
and used caustic soda as an example. See November 22, 1999, Memo to the 
File from Christopher Priddy. Based on the Chemical Weekly editor's 
statement, the Department determined that the caustic soda price quote 
was based on caustic soda of one hundred percent purity. Because the 
respondents reported variances in the purity levels of the caustic soda 
used to produce sebacic acid, we have continued to adjust the 
respondents' caustic soda levels by a percentage of the one hundred 
percent purity based on Chemical Weekly caustic soda price.

Comment 3: Surrogate Value for Foreign Trucking Freight Rate

    For purposes of our preliminary results, we used a trucking rate 
derived from an April 20,1994, Times of India newspaper article to 
value foreign trucking freight. The petitioner argues that the 
Department should use trucking rates quoted in a May 18, 1998, 
Financial Express article for purposes of valuing foreign trucking 
expenses for purposes of the final results. Because the article's rates 
are contemporaneous to the POR, the petitioner claims that the 
article's trucking rates are preferable to the rates used by the 
Department for purposes of the preliminary results.
    The respondents argue that the Financial Express rates are 
aberrational, due to a temporary shortage of vehicles in India at the 
time of the trucking rate quotes. The respondents claim that the high 
freight rates were a regional phenomenon and do not represent a 
fundamental trucking freight rate increase throughout India. 
Accordingly, for purposes of the final results, the respondents request 
that the Department continue to value foreign trucking expenses with 
rates used in the preliminary results.

DOC Position

    We agree with the petitioner that the May 18, 1998, Financial 
Express trucking freight rates are more appropriate surrogate values 
for trucking expenses than the rates used for purposes of the 
preliminary results, as the Financial Express rates are contemporaneous 
to the POR. However, as noted by the respondents and discussed in the 
Financial Express article, prices for certain routes reported in the 
article, such as Mumbai to Calcutta, reflected increases resulting from 
vehicle shortages during the week prior to May 18, 1998. Because the 
trucking rate increases occurred at the end of the POR and appear to be 
related to unusual circumstances, we believe that trucking freight 
quotes effective prior to the price increase more accurately represent 
trucking freight costs during the POR. Accordingly, for purposes of the 
final results, we made adjustments to Financial Express truck rates 
based on information contained in the article to derive rates that 
would have been effective prior to the price increase. See December 6, 
1999, Final Results Factors Valuation Memorandum.

Comment 4: Indirect Labor

    The petitioner argues that the Department erroneously excluded from 
its calculation of normal value indirect labor amounts reported by the 
respondents. The petitioner claims that the Department cannot assume 
that indirect labor is included in the factory overhead surrogate 
value, as the respondents have not explained what types of work tasks 
are included in the indirect labor category. Furthermore, the 
petitioner notes that in all prior proceedings of this case, the 
Department included indirect labor as reported by the respondents in 
the calculation of normal value.
    The respondents counter by first noting that, contrary to the 
petitioner's assertion, they explained the types of indirect labor 
reported to the Department as labor such as maintenance work that is 
not directly involved in the production process. The respondents also 
claim that the Department's factory overhead calculation, based on the 
Reserve Bank of India Bulletin (RBI) data, includes an amount for 
indirect labor. Specifically, the respondents state that indirect labor 
is included in the expense line-item ``Repairs to Machinery.'' The 
respondents further argue that including indirect labor hours may lead 
to the Department's double counting of unskilled labor hours as all 
unskilled labor hours associated with the production of sebacic acid 
have been reported in the factors of production table under the field 
``Unskilled Labor Hours.''

DOC Position

    We disagree with the respondents' claim that indirect labor is 
included in the surrogate factory overhead rate; specifically, we do 
not interpret the expense line-item ``Repairs to Machinery'' as 
including indirect labor. Our examination of the RBI data indicates 
that labor costs, irrespective of whether these costs are direct or 
indirect, are reported under separate categories (i.e., ``Salaries, 
Wages and Bonuses,'' ``Provident Fund,'' and ``Employees' Welfare 
Expenses''). Therefore, we have no basis to conclude that either the 
cost element ``Repairs to Machinery'' or other cost items included in 
our factory overhead calculation contains labor costs associated with 
production.
    With respect to the respondents' concern about our double-counting 
unskilled labor hours, we first note that unskilled labor hours 
reported in the responses pertain to labor directly related to the 
production of sebacic acid. The respondents further stated that 
reported indirect labor hours include all labor hours which have not 
been included in the direct labor total. Therefore, contrary to the 
respondents' assertion, there is no reason to believe that including 
reported indirect labor hours would lead to the double-counting of 
unskilled labor factors. Moreover, as noted by the petitioner, we have 
included reported indirect labor hours in our factors of production 
calculations in prior proceedings of this case, and we have followed 
our precedent in this administrative review by including indirect labor 
hours as reported by the respondents in our normal value calculation.

[[Page 69506]]

Comment 5: Octanol Valuation

    The petitioner argues that the Department incorrectly based its 
octanol surrogate value on general category Chemical Weekly octanol 
prices rather than more product-specific Indian Import Statistics 
prices for 2-ethylhexanol. The respondents, on the other hand, assert 
that the Department correctly used Chemical Weekly ``octanol'' price 
quotes which, as a 1996 letter from Chemical Weekly's editor explains, 
are for 2-ethylhexanol. The respondents state that the Chemical Weekly 
prices for the domestically-produced 2-ethylhexanol better represent 2-
ethylhexanol's actual cost and price in the Indian domestic market than 
import prices reported in the Indian Import Statistics. According to 
the respondents, the Indian Import Statistics are not as reliable as 
the domestic Chemical Weekly prices, as the import prices are from 
three exporting countries and provide greater risk of aberrational 
sales or purity issues. The respondents argue that even though the 
Department has relied on import statistics in other administrative 
reviews, the Department should adopt domestic rather than import prices 
when deciding between two non-aberrational, contemporaneous surrogate 
values.

DOC Position

    We agree with the respondents. When the Department is deciding 
between tax- and duty-exclusive, non-aberrational domestic and import 
prices for surrogate valuation purposes, the Department's preference is 
to use domestic prices. Sulfanic Acid from the People's Republic of 
China; Final Results of Antidumping Duty Administrative Review, 63 FR 
63834, 63837-8 (Nov. 17, 1998). In this review, we have on the record a 
letter from the editor of Chemical Weekly which states that the 
Chemical Weekly octanol price corresponds to the domestic price for 2-
ethylhexanol. Because we have no claims that either the domestic or 
import surrogate value is aberrational, the Department continued to 
value octanol using Indian domestic Chemical Weekly prices for 2-
ethylhexanol. In order to have a more representative octanol price for 
this review, the Department used twelve octanol rates reflecting each 
month of the POR supplied by the editor of Chemical Weekly. See 
November 12, 1999, Letter to Chemical Weekly from Christopher Priddy; 
see also November 22, 1999, Memo to the File from Christopher Priddy.

Comment 6: Surrogate Value for Activated Carbon

    For purposes of our preliminary results, we valued activated carbon 
using September 10, 1996, Chemical Weekly export prices. The petitioner 
placed on the record published activated carbon import values 
contemporaneous to the POR and argues that, because the Department has 
stated its preference for using data that includes a range of prices 
which are within the POR, we should value activated carbon using these 
import values for purposes of our final results.
    The respondents contend that the activated carbon import prices are 
not effective for liquid phase activated carbon, which is used by the 
respondents, but, instead, represent prices for the more expensive gas 
phase activated carbon. In support of their claim, the respondents rely 
on the Department's past decision in which it found that (1) ``The 
import prices do not appear to correspond to the type of activated 
carbon used by Chinese manufacturers;'' and (2) The ``great disparity 
between the import and export prices of activated carbon suggests that 
these price quotes may be for different grades of activated carbon.'' 
Sulfanilic Acid From the People's Republic of China: Final Results of 
Antidumping Duty Administrative Review 62 FR 48597, 48600 (Sept. 16, 
1997) (Sulfanilic Acid). Accordingly, the respondents urge the 
Department to conclude in this case, as we did in Sulfanilic Acid, that 
export prices are the best available information for valuing this 
factor.

DOC Position

    We agree with the respondents that import values do not appear to 
correspond to the type of activated carbon used by the Chinese 
producers. The record of this review contains three sources of publicly 
available price data on activated carbon: Chemical Weekly import and 
export values and public price quotes obtained from Indian companies. 
Although the Chemical Weekly prices do not indicate the type or 
specification of activated carbon included in the export and import 
values, the price quotes submitted by the respondents include values 
for the ``powder'' form of activated carbon used by the manufacturers 
in this case.
    In comparing prices from the three sources we found that Indian 
producers' price quotes and export values were comparable, but that 
import values were substantially higher than these prices. As noted by 
the respondents, the Department determined in Sulfanilic Acid that the 
disparity between import and export prices appears to be attributable 
to the fact that these prices may be for different types of activated 
carbon and that export prices are more representative of the type of 
activated carbon used by the Chinese producers. In Sulfanilic Acid, we 
also cited the less than fair value investigation of Polyvinyl Alcohol 
from the PRC, in which we found that Indian export prices for activated 
carbon are more reliable than import prices. See Notice of Final 
Determination of Sales at Less Than Fair Value; Polyvinyl Alcohol From 
the People's Republic of China, 61 FR 14057 (March 29, 1996).
    Therefore, considering the above factors, we find that Chemical 
Weekly export prices and public price quotes obtained from Indian 
companies are more appropriate activated carbon surrogate values. We 
note that for purposes of our preliminary results we used Chemical 
Weekly export statistics to value activated carbon. For purposes of the 
final results, we have used public price quotes for ``powder'' 
activated carbon as the surrogate value for this production factor 
because these price quotes are supported by publicly available 
published information (i.e., the export price) and, most importantly, 
are specific to the type of activated carbon used by the Chinese 
producers.

Comment 7: Ocean Freight Surrogate Value

    The respondents argue that the Department incorrectly used a Sea-
Land Services, Ltd. (Sea-Land) ocean freight rate for the shipment of 
oxalic acid to value the respondents' international shipping expenses 
for purposes of the preliminary results. The respondents assert that 
the Sea-Land ocean freight quote is an unacceptable ocean freight 
surrogate value for several reasons. First, the respondents argue that 
the Sea-Land quote was dated November 16, 1998, and, therefore, 
reflects an ocean freight rate outside the POR. The respondents also 
state that the Department should not use a Sea-Land ocean freight rate 
for the shipment of oxalic acid to Elizabeth, New Jersey, which 
references neither this review's actual subject merchandise, sebacic 
acid, nor the actual port of destination, New York, New York.
    Moreover, the respondents maintain that Sea-Land's ocean freight 
quote is unacceptable, as it is a premium shipping company rate 
obtained through private rather than public channels for comparison and 
not commercial purposes. Because the respondents view Sea-Land's per 
metric ton rate as significantly higher than previous administrative 
reviews' ocean

[[Page 69507]]

freight surrogate values, the respondents argue that Sea-Land's quote 
does not accurately reflect ocean freight costs set by Chinese market 
forces. The respondents urge the Department to follow its precedence in 
former administrative reviews or use Federal Maritime Commission rates 
to value ocean freight. In the alternative, the respondents urge the 
Department to use ocean freight quotes provided in the respondents' 
August 26, 1999, submission from Sea-Land, Hanjin Shipping, or American 
International Cargo Services.
    The petitioner asserts that the Department correctly used the Sea-
Land ocean freight value which the petitioner submitted on January 25, 
1999. First, the petitioner states that the Sea-Land ocean freight rate 
was obtained on November 16, 1998, but was effective on May 1, 1998, 
and, therefore, was within the POR. The petitioner acknowledges that 
Sea-Land's ocean freight quote is for Elizabeth, New Jersey, a city 
geographically proximate to New York, New York, and argues that a price 
differential between the two port cities would be minimal. The 
petitioner also maintains that even though it obtained the ocean 
freight quote from a Sea-Land sales agent, the rate is publicly 
available on Sea-Land's website.
    The petitioner argues that the respondents have provided the 
Department no information to support their assertions that Sea-Land is 
a premier shipping company and that the Sea-Land container rate is only 
a comparison rate. In addressing the respondents' arguments concerning 
price disparities between Sea-Land's and prior administrative 
proceedings' ocean freight rates, the petitioner argues that because 
other Departmental proceedings' surrogate values are at least three 
years old, they are inaccurate and do not satisfy the Department's 
preference for contemporaneous surrogate values. The petitioner urges 
the Department to use the Sea-Land quote for purposes of the final 
results and cited several past Departmental proceedings in which the 
Department relied on Sea-Land shipping quotes to value ocean freight.

DOC Position

    For purposes of these final results, we used ocean freight prices 
provided to the Department by Maersk, Inc. (Maersk) as surrogate values 
for ocean freight. To ascertain the comparability of Sea-Land's and 
other international freight carriers' prices for the POR, the 
Department contacted Maersk on November 5, 1999, and requested that 
Maersk provide its POR-applicable freight quotes and the maximum number 
of pounds which Maersk can ship in a twenty-foot container. Maersk 
provided May 1, 1997, and May 1, 1998, per-container ocean freight 
rates which varied only slightly from the May 1, 1998, Sea-Land rate 
provided by the petitioner. See November 8, 1999, and November 9, 1999, 
Memos to the File from Christopher Priddy. However, the maximum number 
of pounds which Maersk reported it can ship in a twenty-foot container 
deviated significantly from the maximum number of pounds used by the 
petitioner to calculate the Sea-Land per metric ton rate in its January 
25, 1999, submission. We contacted Sea-Land but could not corroborate 
the maximum number of pounds it stated it can ship in a twenty-foot 
container with the amount used in the petitioner's ocean freight 
calculations. See November 10, 1999, Memo to the File from Christopher 
Priddy.
    Maersk's assertion of the maximum number of pounds capable of being 
shipped in a twenty-foot container is consistent with information 
previously filed with the Department. See June 20, 1997, Memo to the 
File from Charles Riggle for Antifriction Bearings (Other Than Tapered 
Roller Bearings) and Parts Thereof From Romania; Final Results of 
Antidumping Duty Administrative Review, 62 FR 32292 (June 13, 1997). 
Because we corroborated the maximum number of pounds which Maersk can 
ship to customers in a twenty-foot container, we used a per-metric ton 
ocean freight surrogate value based on the information provided by 
Maersk. The Department has relied on Maersk ocean freight rates in 
previous cases for ocean freight valuation purposes. See Tapered Roller 
Bearings from Romania, 62 FR 32232 (June 13, 1997); Manganese Metal 
From the People's Republic of China; Final Results of Second 
Antidumping Administrative Review, 64 FR 49447 (September 13, 1999); 
Notice of Preliminary Determination of Sales at Less than Fair Value 
and Postponement of Final Determination: Creatine Monohydrate from the 
PRC, 64 FR 41375 (July 30, 1999). Our decision to use Maersk 
information as the basis for an ocean freight surrogate value is also 
based on the fact that Maersk provided rates effective at both the 
beginning and end of the POR. By using an average of these two values, 
the Department adopted an ocean freight surrogate value more reflective 
of the POR than the single-month ocean freight rate supplied by Sea-
Land. Although certain respondents made shipments of sebacic acid to 
Chicago, Illinois, the Department was unable to obtain freight rates 
through to Chicago. We have accordingly used the Maersk international 
freight rate to New York in valuing the respondents' shipments to 
Chicago.

Comment 8: By-Product Glycerine Valuation

    The respondents argue that the Department should value glycerine 
for Hengshui and Zhong He using either an averaged value for refined 
and crude glycerine or the surrogate value for 95 percent refined 
glycerine. The respondents state that the Chinese sebacic acid 
manufacturers produce both crude and refined glycerine and that the 
respondents provided the refined glycerine's technical specifications. 
The respondents assert that the Department has on the record the 
factors used for producing the refined glycerine, as well as statements 
by Hengshui and Zhong He that they produce 95 percent refined 
glycerine. Accordingly, for Hengshui and Zhong He, the respondents urge 
the Department to adjust the glycerine values to 95 percent purity 
glycerine prices or use averaged crude and refined quality glycerine 
values.
    The petitioner maintains that the Department should adjust the 
glycerine surrogate value to reflect an 85 percent concentration level 
for glycerine produced by Hengshui and Zhong He and an 80 percent 
concentration level for glycerine produced by Handan. The petitioner 
argues that the respondents' technical specifications regarding refined 
glycerine are unacceptable, as the respondents only provide a statement 
concerning the 95 percent purity percentage of the produced glycerine. 
The petitioner also argues that the respondents have reported in 
neither narrative nor diagram form the glycerine refinement process and 
the stage at which this refinement occurs. Moreover, the petitioner 
alleges that the respondents have provided no information to support 
their claim that the reported glycerine production factors are for the 
95 percent refined glycerine.

DOC Position

    We agree with the respondents and used a surrogate value for 
refined glycerine to value Hengshui's and Zhong He's glycerine by-
products and a crude glycerine surrogate value for Handan's by-product 
glycerine. For purposes of this administrative review, both Hengshui 
and Zhong He reported in their technical description of the sebacic 
acid production stages that

[[Page 69508]]

glycerine was later purified by the factories to 95 percent refined 
glycerine. We believe that Hengshui's and Zhong He's statements provide 
a reasonable basis for determining that the glycerine purification 
costs were included in the factors of production which the two 
respondents reported to the Department. Furthermore, in the prior 
review of this proceeding the Department verified that Handan and 
Hengshui produced and sold refined glycerine. The Department grants a 
by-product credit based on the subsidiary product's refined value in 
those cases in which the factors of production to convert the by-
product to the refined grade have already been included in the subject 
merchandise's overall production costs. Sebacic Acid form the PRC; 
Final Results of Antidumping Duty Administrative Review, 63 FR 43373, 
43378 (Aug. 13, 1998). Because the Department concluded that costs for 
Hengshui's and Zhong He's glycerine refinement were included in the 
sebacic acid production costs and because Hengshui and Zhong He 
reported quantities of refined glycerine produced, we used the refined 
glycerine surrogate values for glycerine produced by Hengshui and Zhong 
He. We continued using the crude glycerine surrogate to value Handan's 
by-product glycerine.
    We have calculated a new refined glycerine surrogate value for 
purposes of the final results. The Department's basis for a glycerine 
surrogate value for purposes of the preliminary results was based on 
Chemical Weekly price quotes for glycerine in the Indian domestic 
market. See Preliminary Results Factors Valuation Memorandum, August 2, 
1999, at Attachment 10. For purposes of valuing refined and crude 
glycerine for the final results, we used the averages of Indian Import 
Statistics data provided by the respondents for refined and chemically 
pure as well as crude glycerine from Japan, Malaysia, the Netherlands, 
and the United States. Although the Chemical Weekly price quotes used 
for purposes of valuing glycerine in the preliminary results were 
contemporaneous to the POR, these price quotes did not reference 
glycerine type. In order to accurately value the two types of glycerine 
which the respondents reported as by-products of sebacic acid, the 
Department used Indian Import Statistics data which referenced the type 
of glycerine for which the prices were provided.

Comment 9: Ministerial Errors Alleged by the Petitioner

    The petitioner maintains that the Department should correct the 
following ministerial errors discussed in the Department's Preliminary 
Results Factors Valuation Memorandum: (1) The Department should include 
a value for sodium chloride in Zhong He's normal value calculation as 
Zhong He reported that it used this input; (2) In Handan's normal value 
calculation, the Department should include a value for macropore resin 
as Handan reported that it used this chemical; (3) The Department 
should correct Handan's total packing costs.
    The respondents disagree with the petitioner's assertion regarding 
the inclusion of a sodium chloride value in Zhong He's normal value 
calculation. The respondents assert that Zhong He stated in its 
supplemental questionnaire response that it did not use sodium chloride 
during the POR and that the Department correctly omitted sodium 
chloride from Zhong He's normal value calculation.

DOC Position

    We agree with the petitioner concerning alleged errors (2) and (3) 
and have corrected for these errors; we agree with the respondents 
concerning alleged error (1) and continued to omit sodium chloride from 
Zhong He's normal value calculation.

Final Results of the Review

    As a result of our analysis of the comments we received, we 
determine that the following weighted-average margins exist for the 
period July 1, 1997 through June 30, 1998:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Tianjin Chemicals I/E Corp.................................         2.74
Sinochem International Chemicals Corp......................         0.00
Guangdong Chemicals I/E Corp...............................         9.01
PRC-Wide Rate..............................................       243.40
------------------------------------------------------------------------

Assessment Rates

    The Department shall determine and the Customs Service shall assess 
antidumping duties on all appropriate entries. We have calculated 
importer-specific assessment rates based on the ratio of the total 
amount of antidumping duties calculated for the examined sales to the 
total estimated entered value of the examined sales. We estimated each 
exporter's entered values by subtracting international movement 
expenses from each exporter's reported gross unit prices. These rates 
will be assessed uniformly on all entries of that particular importer 
made during the POR. Pursuant to 19 CFR 351.106(c)(2), we will instruct 
the Customs Service to liquidate without regard to antidumping duties 
all entries for any importer for whom the assessment rate is deminimis 
(i.e., less than 0.50 percent). The Department will issue appraisement 
instructions directly to the Customs Service.
    Furthermore, 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)(1) of the Act: (1) The cash 
deposit rates for Tianjin Chemicals and Guangdong Chemicals will be the 
rates stated above, and the cash deposit rate for SICC will be zero; 
(2) For companies previously found to be entitled to a separate rate 
and for which no review was requested, the cash deposit rates will be 
the rate established in the most recent review of that company; (3) For 
all other PRC exporters of subject merchandise, the cash deposit rates 
will be 243.40 percent, the PRC country-wide rate; and (4) The cash 
deposit rate for non-PRC exporters of subject merchandise from the PRC 
will be the rate applicable to the PRC supplier of that exporter. These 
deposit rates, when imposed, shall remain in effect until publication 
of the final results of the next administrative review.

Notification of Interested Parties

    This notice serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). See Antidumping and 
Countervailing Duty Proceedings: Administrative Protective Order 
Procedures; Procedures for Imposing Sanction for Violation of a 
Protective Order, 63 FR 24391, 24404 (May 4, 1998). Timely written 
notification of return/destruction of APO materials or conversion to 
judicial protective order is hereby requested. Failure to comply with 
the regulations and terms of the APO is a sanctionable violation.

[[Page 69509]]

    This administrative review is issued and published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: December 6, 1999.
Richard W. Moreland,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-32224 Filed 12-10-99; 8:45 am]
BILLING CODE 3510-DS-P