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Notice

Petroleum Wax Candles From the People's Republic of China; Final Results of Antidumping Duty Administrative Review

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Information about this document as published in the Federal Register.

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AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

On September 10, 2002, the Department of Commerce (“the Department”) published in the Federal Register the preliminary results of its administrative review of the antidumping duty order on petroleum wax candles from the People's Republic of China (67 FR 57384). This review covers imports of subject merchandise from Dongguan Fay Candle Co., Ltd. (Fay Candle), a PRC producer and exporter of subject merchandise, and its U.S. importers, TIJID, Inc. (TIJID) (d/b/a DIJIT Inc.), and Palm Beach Home Accents, Inc., (Palm Beach) (collectively, “respondents”). The review covers the period August 1, 2000 through July 31, 2001.

Based on our analysis of the comments received, we have made a change in the selection of an adverse facts available margin. As such, the final results differ from the preliminary results of review. The final antidumping duty margin is listed below in the section entitled “Final Results of the Review.”

EFFECTIVE DATE:

March 19, 2003.

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FOR FURTHER INFORMATION CONTACT:

Mark Hoadley at (202) 482-3148, or Jessica Burdick at (202) 482-0666, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.

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SUPPLEMENTARY INFORMATION:

Background

Since the issuance of the preliminary results of review (see Notice of Preliminary Results of Antidumping Administrative Review: Petroleum Wax Candles From the People's Republic of China, 67 FR 57384 (September 10, 2002) (Preliminary Results)), the following events have occurred. On October 4, 2002, respondents requested an extension of the due date for the case and rebuttal briefs and any hearing requests. On October 17, 2002, the Department extended the case brief and hearing request due date to November 25, 2002, and the rebuttal brief due date to December 9, 2002. On November 20, 2002, the Department extended the due date for the final results of this review (67 FR 70055). On November 21, 2002, respondents requested a hearing. On November 25, 2002, the Department received timely written case briefs from respondents and petitioner. On December 4, 2002, we received a request from petitioner to extend the December 9, 2002 rebuttal brief deadline to December 16, 2002. On December 5, 2002, respondents in this review requested the same extension. On December 6, 2002, we notified all of the interested parties in this review that, pursuant to both petitioner's and respondents' extension requests, we would be extending the deadline for all interested parties for submission of rebuttal briefs until December 16, 2002. On December 16, 2002, we received a request from petitioner to extend this rebuttal brief deadline to December 18, 2002, which we granted for all interested parties. On December 18, 2002, the Department received timely rebuttal comments from respondents and petitioner. On February 3, 2003, a public hearing was held in this proceeding. We have now completed this administrative review in accordance with section 751 of the Act.

Scope of the Antidumping Duty Order

The products covered by this order are certain scented or unscented petroleum wax candles made from petroleum wax and having fiber or paper-cored wicks. They are sold in the following shapes: tapers, spirals, and straight-sided dinner candles; rounds, columns, pillars, votives; and various wax-filled containers. The products were classified under the Tariff Schedules of the United States (TSUS) item 755.25, Candles and Tapers. The products are currently classified under the Harmonized Tariff Schedule of the United States (HTSUS) item 3406.00.00. Although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this proceeding remains dispositive.

Period of Review

The period of review (POR) is August 1, 2000 through July 31, 2001.

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this administrative review are addressed in the “Issues and Decision Memorandum for Final Results of Antidumping Duty Administrative Review of Petroleum Wax Candles from the People's Republic of China,” to Joseph A. Spetrini, Acting Assistant Secretary for Import Administration, from Barbara E. Tillman, Acting Deputy Assistant Secretary for Import Administration, dated March 10, 2003 (Decision Memorandum), which is hereby adopted by this notice. A list of the issues which parties have raised and to which we have responded, all of which are addressed in the Decision Memorandum, is attached to this notice as an appendix. Parties can find a complete discussion of all issues raised in this review and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, Room B-099 of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Results

Based on our analysis of the comments received, we have made a change in the selection of adverse facts available margin. See the section on “Application of Facts Available” below for a full discussion. In the preliminary results, we determined that Fay Candle was eligible for a separate rate. See Preliminary Results, 67 FR at 57386. We have not changed that determination in these final results.

Application of Facts Available

The Department conducted verification at Fay Candle's factory in China from July 22 through 26, 2002. On July 22, 2002, respondents presented Start Printed Page 13265corrections to their questionnaire responses. The corrections included a previously unreported production order, which amounted to a significant increase in the production for the POR. The verification team proceeded with verification of the questionnaire responses, but indicated that it would have to confer with Washington concerning whether the new information could be accepted. On July 26, 2002, after consulting with Washington, the team returned all documents relating to the new production data and halted the remainder of the verification in China. See “Memorandum Regarding Administrative Review of Petroleum Wax Candles from the Peoples Republic of China (PRC) (A-570-504): PRC Verification,” Memorandum to the File, through Sally C. Gannon, from Mark Hoadley, Brett Royce, and Jessica Burdick (August 30, 2002) (PRC Verification Report), which is on file in the Central Records Unit (CRU), room B-099 of the main Department building; “Memorandum Regarding 2000/2001 Administrative Review on Candles from the People {sic} Republic of China (A-570-504): Telephone Call Regarding Verification,” for The File from Sally C. Gannon (August 2, 2002).

The next week, the Department informed respondents that it would proceed with the U.S. portion of the verification, and the Department and respondents agreed on August 12 through 15, 2002 as the dates for this verification. See “Memorandum Regarding 2000/2001 Administrative Review on Candles from the People {sic} Republic of China (A-570-504): Telephone Call Regarding Verification & Rejection of New Factual Information,” for The File, through Sally C. Gannon, from Jessica Burdick (July 31, 2002). On August 9, 2002, respondents called and informed the Department that they had made a decision not to proceed with the U.S. portion of the verification. See “Memorandum Regarding 2000/2001 Administrative Review on Candles from the People {sic} Republic of China (A-570-504): Telephone Call Regarding Verification,” for The File, from Sally C. Gannon (August 9, 2002). On August 9, 2002, respondents also filed a letter informing the Department of their decision not to participate in the U.S. verification.

For these final results of review, we continue to find that, in accordance with section 776(a)(2)(D) of the Act, the use of facts available for respondents is appropriate. Respondents' decision not to allow the Department to conduct an on-site U.S. verification prevented necessary information from being verified as provided in section 782(i), a condition specifically listed in section 776(a)(2)(D) as mandating the use of facts available. Once the Department determines that the use of facts available is warranted, section 776(b) of the Act further permits the Department to apply an adverse inference if it makes the additional finding that “an interested party has failed to cooperate by not acting to the best of its ability to comply with a request for information.” As stated above, the Department set a date for the U.S. portion of the verification that respondents agreed was acceptable. Respondents decided not to proceed with verification. Respondents did not ask that the verification be rescheduled, but simply stated that they would not proceed with the verification. Since respondents cancelled the U.S. sales verification, the Department cannot rely on respondents' questionnaire responses to calculate a dumping margin for Fay Candle. The U.S. sales verification is integral to our calculation because, without performing the U.S. sales verification, we were unable to complete the sales reconciliation as well as verification of total quantity and value, which are principal elements of the overall verification of respondents' questionnaire responses.

Furthermore, while the Department was able to verify parts of the questionnaire responses in China, that information is inextricably linked with the information unverified in the United States. See PRC Verification Report. For example, the Department was able to verify several factors used in the production of candles. However, that information is not usable if the Department is unable to verify which products were actually sold in the United States. The Department would have been able to ascertain this if the U.S. verification had been allowed. Moreover, personnel at Fay Candle stated that some items in the factors of production portion of the response would have to be verified, at least in part, in the United States. For example, they stated that additional documents we requested to confirm the amounts of dyes, fragrances, packaging and hang tags used in production were kept in Florida. In addition, as noted above, by not performing the U.S. sales verification, we were unable to complete the sales reconciliation as well as verification of total quantity and value, which are principal elements of the overall verification of respondents' questionnaire responses. Thus, the use of facts available is mandated for the total response of Fay Candle and its importers. In other words, it is not possible to rely on respondents' questionnaire responses to calculate a margin for Fay Candle's exports, even using partial facts available “plugs” for U.S. sales data, which is the data for which respondents decided not to allow verification.

Therefore, we determine that respondents did not cooperate to the best of their ability for these final results of review and that the use of adverse facts available is appropriate under section 776(b). In the Preliminary Results, as adverse facts available, we applied the calculated margin of 95.22 percent as published in Petroleum Wax Candles from the People's Republic of China: Notice of Final Results of New Shipper Review, 67 FR 41395 (June 18, 2002) (Candles NSR). See “Memorandum Regarding Petroleum Wax Candles from the People's Republic of China (PRC): Application of Facts Available for Exports from Dongguan Fay Candle Co., Ltd.—Preliminary Results of the Administrative Review (August 1, 2001 through July 31, 2001) to Joseph A. Spetrini, Deputy Assistant Secretary for Import Administration, through Barbara E. Tillman and Sally C. Gannon, from Mark Hoadley and Brett Royce (September 3, 2002) for a complete discussion of the Department's decision in the Preliminary Results to apply adverse facts available and the choice of the rate from the new shipper review.

Since the Preliminary Results, the Department has carefully considered the arguments raised by interested parties regarding the application of adverse facts available and the choice of dumping margin. As detailed above, the Department continues to determine that the use of adverse facts available is appropriate under sections 776(a) and 776(b) of the Act. However, the Department has reconsidered the use of the Candles NSR margin in light of the arguments submitted by interested parties in this review. The 95.22 percent margin was calculated for a new shipper, a trading company, whose single sale, albeit of more than one product, during the new shipper POR was also its first sale ever to the United States. Because of the substantial difference between the two margins calculated in the new shipper review (and weight-averaged into the 95.22 percent margin) and the unusual facts surrounding the new shipper's one sale, the Department has determined that the application of the new shipper's weighted-average margin would be inappropriate. The wide range of the two margins weight averaged together in the new shipper review, given the nature of the new shipper as a start-up Start Printed Page 13266with very low sales volumes, and given other unusual proprietary facts surrounding the sale, has led us to find that it is inappropriate to use the higher of these two margins. Moreover, while the rate we have chosen (65.02 percent) is higher than the single PRC-wide rate that has been applied for the past 16 years (54.21 percent) under this order, it is still more in line with the 54.21 percent PRC-wide rate which was also based on facts available. The higher rate we have excluded is more than double that previous rate, confirming our conclusion that it is the product of circumstances not germane to this analysis. Our analysis of why the high margin and the weighted-average margin are inappropriate relies, in part, on business-proprietary information. Therefore, see “Memorandum Regarding Administrative Review of Petroleum Wax Candles from the People's Republic of China (PRC) (A-570-504): Proprietary Information Regarding Adverse Facts Available Rate,” to Barbara E. Tillman, through Sally C. Gannon, from Mark Hoadley (March 10, 2003) (AFA Memo) for a full discussion of the issue.[1]

We emphasize that we are not establishing a per se rule against using rates established in new shipper reviews as adverse facts available (as should be apparent from the fact that we are still using a rate from the new shipper review). We are excluding the high rate from this new shipper review because of the substantial difference between that rate and the other individual rate determined and because the circumstances of this particular new shipper review lead us to conclude that that difference is the result of circumstances not germane to this analysis. See AFA Memo and Decision Memorandum (Comment 4).

In addition to examining the adverse facts available margin applied to determine whether it is appropriate, we have also in the past determined to choose margins that are sufficiently adverse to encourage full cooperation in future reviews. See Japan Hot-Rolled LTFV, 64 FR at 24369, and Final Determination of Sales at Less Than Fair Value: Stainless Steel Wire Rod From Italy), 63 FR 40422, 40428 (July 29, 1998). We find the rate we have chosen, 65.02 percent, is sufficiently adverse to encourage compliance in the future. The new shipper review is the only segment of this proceeding which has resulted in a calculated rate based on information submitted by a respondent. Because the AFA rate we have chosen is a calculated rate from the new shipper review, we conclude that it is an appropriate reflection of the amount by which PRC exporters are dumping in the United States. Therefore, future respondents should not view the AFA rate as preferable to their actual dumping rates, i.e., as an underestimate of their own magnitude of dumping, and should in general find it an inducement to cooperate with the Department in calculating their own rates.

Corroboration

Section 776(c) of the Act provides that when the Department relies on 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. The Statement of Administrative Action (SAA), H.R. Doc. 103-316 (1994), states that “corroborate” means to determine that the information used has probative value. See SAA at 870. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. However, 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 calculated margins is administrative determinations. Thus, in an administrative review, if the Department chooses as total adverse facts available a calculated dumping margin from the current or a prior segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. See, e.g., Grain-Oriented Electrical Steel From Italy; Preliminary Results of Antidumping Duty Administrative Review, 61 FR 36551, 36552 (July 11, 1996).

Accordingly, we determine that the 65.02 percent rate is in accord with section 776(c)'s requirement that secondary information is reliable. The information used in the new shipper review to calculate the final margin of 95.22 percent, for which the 65.02 percent margin is an integral part of the underlying calculation, was fully verified and subject to the comments of both respondent and petitioner throughout the review. Thus, the 65.02 percent margin is ultimately based on the verified sales and production data of respondent in that review, as well as on the most appropriate surrogate value information available to the Department, chosen from submissions by the parties in that review as well as information gathered by the Department itself.

With respect to the relevance aspect of corroboration, however, the Department will consider information reasonably at its disposal to determine whether a margin continues to have relevance. In this case, as discussed above, the Department has chosen one of the margins weight-averaged in the new shipper review, the rate of 65.02 percent. We chose this margin after concluding that using the highest rate or the weighted-average margin from the new shipper review was inappropriate, due to the wide range of margins weight averaged therein. See AFA Memo.

Final Results of Review

We determine that the following percentage margin exists for the period August 1, 2000 through July 31, 2001:

Manufacturer/exporterPercent margin
Dongguan Fay Candle Co. Ltd.65.02
PRC-Wide Rate54.21

The Department will disclose calculations performed in connection with these final results of review within five days of the date of publication of this notice in accordance with 19 CFR 351.224(b).

Assessment

The Department will determine, and the U.S. Customs Service (Customs) shall assess, antidumping duties on all appropriate entries. For Fay Candle, the assessment rate will be based on the margin noted above. The Department will issue appropriate assessment instructions directly to Customs within 15 days of publication of these final results of review. We will direct Customs to assess the resulting assessment rates against the entered Customs values for the subject merchandise on each of the exporter's entries during the review period.

Cash Deposit Requirements

The following deposit requirements will be effective upon publication of these final results for this administrative review for all shipments of petroleum wax candles 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) The cash deposit rate for Fay Candle will be 65.02 percent; (2) for previously-reviewed PRC and non-PRC exporters with separate rates, the cash deposit rate will be the company-specific rate established Start Printed Page 13267for the most recent period; (3) for all other PRC exporters, the cash deposit rate will be the PRC-wide rate, which is currently 54.21 percent; and, (4) for all other non-PRC exporters, the cash deposit rate will be the rate applicable to the PRC supplier of that exporter. These deposit requirements shall remain in effect until publication of the final results of the next administrative review.

Notification of Interested Parties

This notice also serves as a final 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 the antidumping duties occurred and the subsequent assessment of double antidumping duties.

This notice also serves as a reminder to parties subject to administrative protective orders (APOs) of their responsibility concerning the return or destruction of proprietary information disclosed under APO in accordance with 19 CFR 351.305, which continues to govern business proprietary information in this segment of the proceeding. Timely written notification of the return/destruction of APO materials or conversion to judicial protective order is hereby requested. Failure to comply with the regulations and terms of an APO is a violation which is subject to sanction.

We are issuing and publishing this determination and notice in accordance with sections 751(a)(1) and 771(I) of the Act.

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Dated: March 10, 2003.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

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Footnotes

1.  All relevant calculation documentation from the new shipper review has been placed on the record of this review. See “Memorandum Regarding Final Results of Antidumping Duty Administrative Review of Petroleum Wax Candles from the People's Republic of China (PRC),” to The File, through Sally C. Gannon, from Brett Royce (March 10, 2003).

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[FR Doc. 03-6481 Filed 3-18-03; 8:45 am]

BILLING CODE 3510-DS-P