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

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Import Administration, International Trade Administration, Department of Commerce.


Notice of preliminary results of antidumping duty administrative review.


In response to a request by the petitioner, Diamond Sparkler Company (“Diamond”), the Department of Commerce (“the Department”) is conducting an administrative review of the antidumping duty order on sparklers from the People's Republic of China (“PRC”). The review covers three manufacturers/exporters of this merchandise to the United States, Guangxi Native Produce Import & Export Corporation, Beihai Fireworks and Firecrackers Branch (“Guangxi”); Hunan Provincial Firecrackers & Fireworks Import & Export (Holding) Start Printed Page 18060Corporation, Liling City Fireworks Bomb Fty. (“Hunan”); and Jiangxi Native Produce Import & Export Corporation, Guangzhou Fireworks Company (“Jiangxi”) (collectively “the respondents”). The period covered is June 1, 1998, through May 31, 1999. As a result of the review, the Department has preliminarily determined that dumping margins exist for the respondents for the covered period.

We invite interested parties to comment on these preliminary results. Parties who submit argument in this proceeding are requested to submit with the argument (1) a statement of the issue and (2) a brief summary of the arguments.


April 6, 2000.

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Paige Rivas or Nithya Nagarajan, Antidumping/Countervailing Duty Enforcement, Office IV, Group II , Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: (202) 482-0651 or 482-5253, 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 (“URAA”). In addition, all references to the Department's regulations are to 19 CFR part 351 (April 1999).


On June 18, 1991, the Department published in the Federal Register the antidumping duty order on sparklers from the PRC, see, Antidumping Duty Order: Sparklers from the People's Republic of China, 56 FR 27946 (June 18, 1991), as amended by from the People's Republic of China: Adverse Decision and Amendment to Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order in Accordance with Decision on Remand, 58 FR 40624 (July 29, 1993). On June 9, 1999, the Department published in the Federal Register a notice of opportunity to request an administrative review of the antidumping duty order on sparklers from the PRC covering the period June 1, 1998, through May 31, 1999. Antidumping and Countervailing Duty Order, Finding or Suspended Investigation: Opportunity to Request Administrative Review, 64 FR 30962 (June 9, 1999). On June 30, 1999, the petitioner requested, in accordance with 19 CFR § 351.213, that we conduct an administrative review of exports to the United States by three manufacturers/exporters of sparklers from the PRC. We published a notice of initiation of this antidumping duty administrative review on July 29, 1999. Notice of Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 64 FR 41074 (July 29, 1999).

Under section 751(a)(3)(A) of the Act, the Department may extend the deadline for issuing a preliminary determination in an administrative review if it determines that it is not practicable to complete the preliminary review within the statutory time limit of 245 days. On March 7, 2000, the Department published a notice of extension of the time limit for the preliminary results in this case to March 31, 2000. See Sparklers from the People's Republic of China: Time Limit, 65 FR 11985 (March 7, 2000).

The Department is now conducting that review in accordance with section 751 of the Act.

Period of Review

The period of review (POR) is June 1, 1998 through May 31, 1999.

Scope of Review

The products covered by this administrative review are sparklers from the People's Republic of China. Sparklers are fireworks, each comprising a cut-to-length wire, one end of which is coated with a chemical mix that emits bright sparks while burning. Sparklers are currently classifiable under subheading 3604.10.00 of Harmonized Tariff Schedules (“HTS”). The HTS subheadings are provided for convenience and customs purposes. The written description remains dispositive as to the scope of this proceeding.

Separate Rates Determination

In previous reviews, the Department has treated the PRC as a non-market economy (“NME”) country. We have no evidence suggesting that this determination should be changed. Accordingly, the Department has determined that NME treatment is appropriate in this review. See 19 U.S.C. 1677(18)(c)(i).

To establish whether a company operating in a NME is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in the Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991) (“Sparklers”), as amplified by the Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994) (“Silicon Carbide”). Under this test, NMEs are entitled to separate, company-specific margins when they can demonstrate an absence of government control, both in law and in fact, with respect to export activities. Sparklers, 56 FR at 20589. Evidence supporting, though not requiring, a finding of de jure absence of government control over export activities includes: (1) An absence of restrictive stipulations associated with the individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; and (3) any other formal measures by the government decentralizing control of companies. Id. De facto absence of government control over exports is based on four factors: (1) Whether each exporter sets its own export prices independent of the government and without the approval of a government authority; (2) whether each exporter retains the proceeds from its sales and makes independent decisions regarding the disposition of profits or financing of losses; (3) whether each exporter has the authority to negotiate and sign contracts and other agreements; and (4) whether each exporter has autonomy from the government regarding the selection of management. See Silicon Carbide, 59 FR at 22587.

In the instant review, none of the three respondents named above submitted responses to the separate rates section of the Department's questionnaire. We therefore preliminarily determine that these companies did not establish their entitlement to a separate rate.

Use of Facts Otherwise Available

On October 14, 1999, the Department sent each of the respondents a questionnaire and cover letter, explaining the review procedures, by air mail through FedEx International Airway Bill. A response to the questionnaire, which covered exports to the United States for the period of review, was due by November 27, 1999. We did not receive responses by the due date. On January 12, 2000, we sent a follow-up letter regarding the past due dates for the questionnaire responses and noting the necessity of relying on facts available. Because we have received no responses and have not been contacted by the respondents, we determine that the use of facts available is appropriate. Start Printed Page 18061

Section 776(a)(2) of the Act provides that “if an interested party or any other person (A) withholds information that has been requested by the administering authority; (B) fails to provide such information by the deadlines for the submission of the information or in the form and manner requested, subject to subsections (c)(1) and (e) of section 782; (C) significantly impedes a proceeding under this title; or (D) provides such information but the information cannot be verified as provided in section 782(i), the administering authority shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.”

Because all three respondents have failed to respond to the original questionnaires and have refused to participate in this administrative review, we find that, in accordance with sections 776(a)(2)(A) and (C) of the Act, the use of total facts available is appropriate. See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Persulfates from The People's Republic of China, 62 FR 27222, 27224 (May 19, 1997); and Certain Grain-Oriented Electrical Steel From Italy: Final Results of Antidumping Duty Administrative Review, 62 FR 2655 (Jan. 17, 1997) (for a more detailed discussion, see Certain Grain-Oriented Electrical Steel From Italy: Preliminary Results of Antidumping Duty Administrative Review, 61 FR 36551, 36552 (July 4, 1996)) (Grain-Oriented Electrical Steel from Italy).

Section 776(b) of the Act provides that, if the Department finds that an interested party “has failed to cooperate by not acting to the best of its ability to comply with a request for information,” the Department may use information that is adverse to the interests of the party as facts otherwise available. Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action (“SAA”) accompanying the URAA, H.R. Doc. No. 103-316, at 870 (1994). Furthermore, “an affirmative finding of bad faith on the part of the respondent is not required before the Department may make an adverse inference.” See Antidumping Duties; Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997) (Final Rule). Section 776(b) of the Act authorizes the Department to use as adverse facts available information derived from the petition, the final determination from the less than fair value (“LTFV”) investigation, a previous administrative review, or any other information placed on the record.

Under section 782(c) of the Act, a respondent has a responsibility not only to notify the Department if it is unable to provide requested information, but also to provide a “full explanation and suggested alternative forms.” The respondents failed to respond to our requests for information, thereby failing to comply with this provision of the statute. Therefore, we determine that respondents failed to cooperate to the best of their ability, making the use of an adverse inference appropriate. In this proceeding, in accordance with Department practice, as adverse facts available we have preliminarily assigned the respondents the rate of 93.54 percent, which is the highest margin determined in any segment of this proceeding. See Extruded Rubber Thread from Malaysia: Final Results of Antidumping Duty Administrative Review, 65 FR 6140,6141 (February 8, 2000) (Extruded Rubber Thread from Malaysia). As adverse facts available, the Department uses the highest rate ever determined for any respondent in any segment of the proceeding because it assumes that if a respondent could demonstrate that its actual margins were lower, it would participate in the review and do so. See Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1190-91 (Fed. Cir. 1990). Moreover, respondents are not benefitting by their failure to cooperate because they are receiving the highest rate ever calculated, which is higher than the petition rate. Furthermore, we have no evidence that indicates any other rate is appropriate.

Section 776(c) of the Act provides that where the Department selects from among the facts otherwise available and relies on “secondary information,” the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. Secondary information is described in the SAA as “[i]nformation derived from the petition that gave rise to the investigation or review, the final determination concerning the subject merchandise, or any previous review under section 751 concerning the subject merchandise.” See SAA at 870. The SAA states that “corroborate” means to determine that the information used has probative value. See id. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. A respondent's own current rate has probative value. In this case, respondents already are subject to a PRC-wide cash deposit rate of 93.54 percent. It is reasonable to assume that if they could have demonstrated that their actual dumping margins are lower, they would have participated in this review and attempted to do so.

In addition, unlike other types of information, such as input costs or selling expenses, there are no independent sources for calculated dumping margins. The only source for margins is administrative determinations. Thus, in an administrative review, if the Department chooses as total adverse facts available a calculated dumping margin from a prior segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. See Grain-Oriented Electrical Steel from Italy, 61 FR at 36552. Also, with respect to the relevance aspect of corroboration, the Department will consider information reasonably at its disposal to determine whether a margin has relevance. In this case, if any of the respondents could have demonstrated its actual margins were lower (and that it qualifies for a separate rate), we presume it would have done so. Further, assigning a lower rate would reward these exporters for their failure to cooperate. Thus, these exporters' own current rate is relevant.

We also note that the Department will disregard the margin and determine an appropriate margin where circumstances indicate that the selected margin is not appropriate as adverse facts available. For example, in Fresh Cut Flowers from Mexico: Final Results of Antidumping Administrative Review, 61 FR 6812 (February 22, 1996), the Department disregarded the highest margin in that case as adverse best information available (the predecessor to facts available) because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin. Similarly, the Department does not apply a margin that has been discredited. See D & L Supply Co. v. United States, 113 F.3d 1220, 1221 (Fed. Cir. 1997) (the Department will not use a margin that has been judicially invalidated); see also Borden Inc. v. United States, 4 F. Supp. 2d 1221, 1246-48 (CIT 1998) (the Department may not use an uncorroborated petition margin that is high when compared to calculated margins for the period of review). None of these unusual circumstances are present here. Moreover, there is no evidence on the record indicating that the selected margin is not appropriate as adverse facts available. Start Printed Page 18062

Suspension of Liquidation

As a result of our review, we preliminarily determine that the following margin exists for the period June 1, 1998, through May 31, 1999:

Exporter/manufacturerWeighted-average margin percentage

Cash Deposit

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) For previously reviewed or investigated companies that have a separate rate and for which no review was requested, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (2) for all other PRC exporters, the cash deposit rate will be the rate established in the final results of this administrative review; and (3) the cash deposit rate for non-PRC exporters will be the rate applicable to the PRC supplier of the exporter. These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative reviews.

Pursuant to 19 CFR 351.224(b), the Department will disclose to parties to the proceeding any calculations performed in connection with these preliminary results within five days after the publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Case briefs must be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, must be submitted no later than five days after the time limit for filing case briefs. Parties who submit argument in this proceeding are requested to submit with the argument: (1) A statement of the issue, and (2) a brief summary of the argument. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f). Also, pursuant to 19 CFR 351.310, within 30 days of the date of publication of this notice, interested parties may request a public hearing on arguments raised in the case and rebuttal briefs. Unless the Secretary specifies otherwise, the hearing, if requested, will be held two days after the date for submission of rebuttal briefs, that is, thirty-seven days after the date of publication of these preliminary results. The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any case or rebuttal brief or at a hearing, not later than 120 days after the date of publication of these preliminary results, unless this time period is extended.


The Department shall determine, and the U.S. Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to the U.S. Customs Service.

Notification to Parties

This notice also serves as a preliminary 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 administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

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Dated: Dated: March 31, 2000.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

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[FR Doc. 00-8563 Filed 4-5-00; 8:45 am]