[Federal Register Volume 73, Number 231 (Monday, December 1, 2008)]
[Notices]
[Pages 72767-72770]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-28458]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-570-882
Refined Brown Aluminum Oxide 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 a request from an interested party, the
Department of Commerce (the Department) is conducting the 2006-2007
administrative review of the antidumping duty order on refined brown
aluminum oxide (RBAO) from the People's Republic of China (PRC). The
review covers one exporter, Qingdao Shunxingli Abrasives Co. Ltd.
(Qingdao Shunxingli). The period of review (POR) is November 1, 2006,
to October 31, 2007.
We have preliminarily determined that sales have been made at
prices below normal value by Qingdao Shunxingli. If these preliminary
results are adopted in our final results of administrative review, we
will instruct U.S. Customs and Border Protection (CBP) to assess
antidumping duties on all appropriate entries.
We invite interested parties to comment on these preliminary
results. Parties who submit comments in this review are requested to
submit with each argument (1) a statement of the issue and (2) a brief
summary of the argument.
EFFECTIVE DATE: December 1, 2008.
FOR FURTHER INFORMATION CONTACT: David Goldberger or Kate Johnson, AD/
CVD Operations, Office 2, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
4136 or (202) 482-4929, respectively.
SUPPLEMENTARY INFORMATION:
Background
On November 1, 2007, the Department published a notice of
opportunity to request an administrative review of the antidumping duty
order on, inter alia, RBAO from the PRC. See Antidumping or
Countervailing Duty Order, Finding, or Suspended Investigation;
Opportunity to Request Administrative Review, 72 FR 61859 (November 1,
2007). In response, Fujimi Corporation (Fujimi), an importer of the
subject merchandise, timely requested an administrative review of the
antidumping duty order on RBAO from the PRC for entries of the subject
merchandise during the POR from two PRC producers/exporters: Henan
Yilong High and New Materials Co., Ltd. (Henan Yilong), and Qingdao
Shunxingli.
On December 27, 2007, the Department initiated a review on Henan
Yilong and Qingdao Shunxingli. See Initiation of Antidumping and
Countervailing Duty Administrative Reviews, 72 FR 73315 (December 27,
2007).
The Department issued antidumping duty questionnaires to Henan
Yilong and Qingdao Shunxingli on January 7, 2008. We received responses
to these questionnaires in March 2008. We issued a supplemental
questionnaire to Henan Yilong in April 2008 and received a response
later that month. We issued supplemental questionnaires to Qingdao
Shunxingli in March, May, and July 2008. We received responses to these
supplemental questionnaires in April, May, and July 2008, respectively.
On May 23, 2008, Fujimi withdrew its request for review of Henan
Yilong and requested that the Department rescind the review with
respect to this company. In accordance with 19 CFR 351.213(d)(1), we
granted Fujimi's request and rescinded this administrative review with
respect to Henan Yilong. In addition, we extended the due date for
completion of these preliminary results until not later than December
1, 2008. See Refined Brown Aluminum Oxide from the People's Republic of
China: Notice of Partial Rescission of Antidumping Duty Administrative
Review and Extension of Time Limit for Preliminary Results, 73 FR 38173
(July 3, 2008).
Scope of the Order
The merchandise covered by this order is ground, pulverized or
refined artificial corundum, also known as brown aluminum oxide or
brown fused alumina, in grit size of 3/8 inch or less. Excluded from
the scope of the order is crude artificial corundum in which particles
with a diameter greater than 3/8 inch constitute at least 50 percent of
the total weight of the entire batch. The scope includes brown
artificial corundum in which particles with a diameter greater than 3/8
inch constitute less than 50 percent of the total weight of the batch.
The merchandise under investigation is currently classifiable under
subheadings 2818.10.20.00 and 2818.10.20.90 of the Harmonized Tariff
Schedule of the United States (HTSUS). Although the HTSUS subheading is
provided for convenience and customs purposes, the written description
of the merchandise covered by the order is dispositive.
NME Country Status
In every case conducted by the Department involving the PRC, the
PRC has been treated as a non-market-economy (NME) country. In
accordance with section 771(18)(C)(i) of the Tariff Act of 1930, as
amended (the Act), any determination that a foreign country is an NME
country shall remain in effect until revoked by the administering
authority. See Brake Rotors From the People's Republic of China:
Preliminary Results and Partial Rescission of the 2004/2005
Administrative Review and Notice of of Intent to Rescind the 2004/2005
New Shipper Review, 71 FR 26736, (May 8, 2006); unchanged in Brake
Rotors From the People's Republic of China: Final Results and Partial
Rescission of the 2004/2005 Administrative Review and Notice of
Rescission of 2004/2005 New Shipper Review, 71 FR 66304 (November 14,
2006). None of the parties to this proceeding has contested such
treatment. Accordingly, we have calculated normal value in accordance
with section 773(c) of the Act, which applies to NME countries.
[[Page 72768]]
Separate Rates
As explained above, a designation of a country as an NME remains in
effect until it is revoked by the Department. See section 771(18)(C) of
the Act. Accordingly, there is a rebuttable presumption that all
companies within the PRC are subject to government control and, thus,
should be assessed a single antidumping duty rate. It is the
Department's standard policy to assign all exporters of the merchandise
subject to review in NME countries a single rate unless an exporter can
affirmatively demonstrate an absence of government control, both in law
(de jure) and in fact (de facto), with respect to exports. See Policy
Bulletin 05.1 entitled ``Separate Rate Practice and Application of
Combination Rates in Antidumping Duty Investigations Involving Non-
Market Economy Countries,'' dated April 5, 2005. To establish whether a
company is sufficiently independent to be entitled to a separate,
company-specific rate, the Department analyzes each exporting entity in
an NME country under the test established in the Final Determination of
Sales at Less Than Fair Value: Sparklers from the People's Republic of
China, 56 FR 20588 (May 6, 1991) (Sparklers), as amplified by the
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).
The Department's separate-rate test determines whether the
exporters are independent from government control and does not
consider, in general, macroeconomic or border-type controls, e.g.,
export licenses, quotas, and minimum export prices, particularly if
these controls are imposed to prevent dumping. The test focuses,
rather, on controls over the investment, pricing, and output decision-
making process at the individual firm level. See, e.g., Notice of Final
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length
Carbon Steel Plate From Ukraine, 62 FR 61754, 61757 (November 19,
1997).
Qingdao Shunxingli provided complete separate-rate information in
its responses to our original and supplemental questionnaires. Qingdao
Shunxingli is a wholly Chinese-owned company. Therefore, the Department
must analyze whether Qingdao Shunxingli can demonstrate the absence of
both de jure and de facto governmental control over export activities.
Absence of De Jure Control
The Department considers the following de jure criteria in
determining whether an individual company may be granted a separate
rate: (1) an absence of restrictive stipulations associated with an
individual exporter's business and export licenses; (2) any legislative
enactments decentralizing control of companies; and (3) other formal
measures by the government decentralizing control of companies. See
Sparklers at Comment 1. As discussed below, our analysis shows that the
evidence on the record supports a preliminary finding of an absence of
de jure government control for Qingdao Shunxingli based on each of
these factors.
The evidence provided by Qingdao Shunxingli supports a preliminary
finding of de jure absence of governmental control based on the
following facts: (1) an absence of restrictive stipulations associated
with the individual exporter's business and export licenses; (2) there
are applicable legislative enactments decentralizing control of the
companies; and (3) there are formal measures by the government
decentralizing control of companies. See, e.g., ``The Company Law of
the People's Republic of China,'' submitted as Exhibit A-2 to Qingdao
Shunxingli's March 5, 2008, response to Section A of the Department's
questionnaire (QRA).
Absence of De Facto Control
Typically, the Department considers four factors in evaluating
whether a respondent is subject to de facto government control of its
export functions: (1) whether the export prices are set by, or subject
to, the approval of a government authority; (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 its management; and (4) whether
the respondent retains the proceeds of its export sales and makes
independent decisions regarding disposition of profits or financing of
losses. See Silicon Carbide at 22586-87; see also Notice of Final
Determination of Sales at Less Than Fair Value: Furfuryl Alcohol From
the People's Republic of China, 60 FR 22544, 22545 (May 8, 1995). The
Department has determined that an analysis of de facto control is
critical in determining whether respondents are, in fact, subject to a
degree of governmental control which would preclude the Department from
assigning separate rates.
With respect to de facto control, Qingdao Shunxingli reported that:
(1) it independently set prices for sales to the United States through
negotiations with customers and these prices are not subject to review
by any government organization; (2) it did not coordinate with other
exporters or producers to set the price or to determine to which market
it will sell subject merchandise; (3) the PRC Chamber of Commerce did
not coordinate its export activities; (4) its staff has the authority
to contractually bind it to sell subject merchandise; (5) its
management is selected without any government control or review; (6)
there is no restriction on its use of export revenues; (7) its
management ultimately determines the disposition of respective profits,
and Qingdao Shunxingli has not had a loss on its export sales in the
last two years; and (8) none of its managers is a government official.
See QRA at pages A-2 - A-11. Furthermore, our analysis of Qingdao
Shunxingli's questionnaire responses reveals no other information
indicating government control of its export activities. Therefore,
based on the information on the record, we preliminarily determine that
there is an absence of de facto government control with respect to
Qingdao Shunxingli's exports.
In summary, the evidence placed on the record of this review by
Qingdao Shunxingli demonstrates an absence of de jure and de facto
government control with respect to its exports of the merchandise under
review, in accordance with the criteria identified in Sparklers and
Silicon Carbide.
Surrogate Country
When the Department analyzes imports from an NME country, section
773(c)(1) of the Act directs it to base normal value, in most
circumstances, on the NME producer's factors of production (FOP),
valued in a surrogate market-economy country or countries considered to
be appropriate by the Department. In accordance with section 773(c)(4)
of the Act, in valuing the FOP, the Department shall use, to the extent
possible, the prices or costs of FOP in one or more market-economy
countries that are at a level of economic development comparable to
that of the NME country and that are significant producers of
comparable merchandise. On January 14, 2008, the Department's Office of
Policy issued a memorandum identifying India, the Philippines, Colombia
and Thailand as being at a level of economic development comparable to
the PRC for the POR. See Memorandum entitled ``Administrative Review of
the Antidumping Order on
[[Page 72769]]
Refined Brown Aluminum Oxide from the People's Republic of China (PRC):
Request for a List of Surrogate Countries,'' dated January 14, 2008.
After consideration of the relevant factors for surrogate country
selection, the Department determined that India is the appropriate
surrogate country for this review. See Memorandum entitled
``Administrative Review of the Antidumping Duty Order on Refined Brown
Aluminum Oxide from the People's Republic of China: Selection of a
Surrogate Country,'' dated February 12, 2008. The sources of the
surrogate factor values are discussed under the ``Normal Value''
section below and in the Memorandum entitled ``Preliminary Results
Valuation Memorandum'' (Valuation Memo), dated contemporaneously with
this notice.
U.S. Price
A. Export Price
In accordance with section 772(a) of the Act, we based U.S. price
on the export price (EP) for sales to the United States made by Qingdao
Shunxingli because the first sale to an unaffiliated party was made
before the date of importation and the use of constructed EP was not
otherwise warranted. We calculated EP for Qingdao Shunxingli based on
the prices to unaffiliated purchasers in the United States.
In accordance with section 772(c) of the Act, we deducted from the
price to unaffiliated purchasers, where appropriate, foreign inland
freight, brokerage and handling, and international freight expenses.
As foreign inland freight and brokerage and handling services were
provided by NME service providers, we valued these services using
surrogate values. See Valuation Memo. For those international freight
services that were provided by a market-economy provider and for which
Qingdao Shunxingli paid in a market-economy currency, we deducted the
actual expenses incurred. For those international freight services that
were provided by an NME provider, we valued them using the weighted-
average of the international freight expenses charged by market-economy
providers, as described in the Valuation Memo.
Normal Value
A. Methodology
Section 773(c)(1)(B) of the Act provides that the Department shall
determine the normal value using a FOP methodology if the merchandise
is exported from a NME country and the information does not permit the
calculation of normal value using home-market prices, third-country
prices, or constructed value under section 773(a) of the Act. The
Department bases normal value on the FOP because the presence of
government controls on various aspects of NME countries renders price
comparisons and the calculation of production costs invalid under the
Department's normal methodologies. See Tapered Roller Bearings and
Parts Thereof, Finished or Unfinished, From the People's Republic of
China: Preliminary Results of Antidumping Duty Administrative Review
and Notice of Intent to Rescind in Part, 70 FR 39744 (July 11, 2005)
(unchanged in Tapered Roller Bearings and Parts Thereof, Finished and
Unfinished, from the People's Republic of China: Final Results of 2003-
2004 Administrative Review and Partial Rescission of Review, 71 FR 2517
(January 17, 2006)).
The FOP for RBAO include the following elements: (1) quantities of
raw materials employed; (2) hours of labor required; (3) amounts of
energy and other utilities consumed; (4) representative capital and
selling costs; and (5) packing materials. We used the FOP reported by
Qingdao Shunxingli for materials, labor, energy, and packing. Where
appropriate, we adjusted the surrogate prices by including freight
costs to make them delivered prices.
B. FOP Valuation
In accordance with section 773(c) of the Act, we calculated normal
value based on the FOP reported by Qingdao Shunxingli for the POR. To
calculate normal value, we multiplied the reported per-unit factor-
consumption rates by publicly available surrogate values, in accordance
with 19 CFR 351.408(c)(1). In selecting the surrogate values, we
considered the quality, specificity, and contemporaneity of the data.
Consistent with the Department's practice, we calculated price-
index adjustors to inflate or deflate, as appropriate, surrogate values
that are not contemporaneous with the POR using the wholesale price
index or equivalent for the subject country. See, e.g., Chlorinated
Isocyanurates from the People's Republic of China: Preliminary Results
of Antidumping Duty Administrative Review, 73 FR 24943 (May 6, 2008);
unchanged in Chlorinated Isocyanurates from the People's Republic of
China: Final Results of Antidumping Duty Administrative Review, 73 FR
52645 (September 10, 2008). The methodology which we applied in this
review is detailed in the Valuation Memo.
We were unable to identify an appropriate surrogate value from
India for the crude brown aluminum oxide raw material input. Therefore,
we used a weighted-average U.S. price, derived from the data reported
in the Defense Logistics Agency FY2000 Annual Report. Our selection of
this value is further discussed in the Valuation Memo. The sources and
data we used to determine the surrogate values for the other FOP, as
well as the surrogate financial ratios for factory overhead, selling,
general and administrative expenses (SG&A), and profit, are discussed
in detail in the Valuation Memo.
Preliminary Results of the Review
As a result of our review, we preliminarily determine that the
following percentage weighted-average dumping margin exists for the
period November 1, 2006, through October 31, 2007:
------------------------------------------------------------------------
Manufacturer/Exporter Percent Margin
------------------------------------------------------------------------
Qingdao Shunxingli Abrasives Co. Ltd................ 54.62
------------------------------------------------------------------------
Comments
We will disclose the calculations used in our analysis to parties
in this review within five days of the date of publication of this
notice in accordance with 19 CFR 351.224(b). Interested parties may
submit publicly available information to value factors no later than 20
days after the date of publication of these preliminary results of
review. See 19 CFR 351.301(c)(3)(ii). Any interested party may request
a hearing within 30 days of the date of publication of this notice. See
19 CFR 351.310(c). Interested parties who wish to request a hearing or
to participate in a hearing if a hearing is requested must submit a
written request to the Assistant Secretary for Import Administration
within 30 days after the date of publication of this notice. See 19 CFR
351.310(c). Requests should contain the following: (1) the party's
name, address, and telephone number; (2) the number of participants;
and (3) a list of issues to be discussed. Issues raised in the hearing
will be limited to those raised in the case and rebuttal briefs. See 19
CFR 351.310(c). Case briefs from interested parties may be submitted
not later than 30 days after the date of publication of this notice of
preliminary results of review. See 19 CFR 351.309(c)(1)(ii). Rebuttal
briefs from interested parties, limited to the issues raised in the
case briefs, may be
[[Page 72770]]
submitted not later than five days after the time limit for filing the
case briefs. See 19 CFR 351.309(d)(1). If requested, any hearing will
be held two days after the scheduled date for submission of rebuttal
briefs. See 19 CFR 351.310(d). Parties who submit case briefs or
rebuttal briefs in this proceeding are encouraged to submit with each
argument a statement of the issue, a summary of the arguments not
exceeding five pages, and a table of statutes, regulations, and cases
cited. See 19 CFR 351.309(c)(2).
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
such written briefs or at the hearing, if held, not later than 120 days
after the date of publication of this notice. See section 751(a)(3)(A)
of the Act.
Assessment Rates
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries. The Department intends to issue
assessment instructions to CBP 15 days after the date of publication of
the final results of review.
Pursuant to 19 CFR 351.212(b)(1), we will calculate importer-
specific ad valorem duty assessment rates based on the ratio of the
total amount of the dumping margins calculated for the examined sales
to the total entered value of those same sales. We will instruct CBP to
assess antidumping duties on all appropriate entries covered by this
review if any importer-specific assessment rate calculated in the final
results of this review is above de minimis. The final results of this
review shall be the basis for the assessment of antidumping duties on
entries of merchandise covered by the final results of this review and
for future deposits of estimated duties, where applicable.
Cash-Deposit Requirements
The following cash deposit requirements will be effective upon
publication of the notice of final results of the administrative review
for all shipments of RBAO from the PRC entered, or withdrawn from
warehouse, for consumption on or after the date of publication, as
provided by section 751(a)(2)(C) of the Act: (1) for subject
merchandise exported by Qingdao Shunxingli, the cash-deposit rate will
be that established in the final results of review; (2) for previously
reviewed or investigated companies not listed above that have separate
rates, the cash-deposit rate will continue to be the company-specific
rate published for the most recent period; (3) for all other PRC
exporters of subject merchandise, which have not been found to be
entitled to a separate rate, the cash-deposit rate will be PRC-wide
rate of 135.18 percent; and (4) for all non-PRC exporters of subject
merchandise, the cash-deposit rate will be the rate applicable to the
PRC exporter that supplied that exporter. These deposit requirements,
when imposed, shall remain in effect until further notice.
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 Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
This administrative review and this notice are in accordance with
sections 751(a)(1) and 777(i) of the Act.
Dated: November 21, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-28458 Filed 11-28-08; 8:45 am]
BILLING CODE 3510-DS-S