Import Administration, International Trade Administration, Department of Commerce.
The Department of Commerce (the Department) is conducting a new shipper review of the antidumping duty order on glycine from the People's Republic of China (PRC) in response to a request from Tianjin Tiancheng Pharmaceutical Co. Ltd. (TTPC). The period of review (POR) is March 1, 2001, through February 28, 2002. The preliminary results are listed below in the section titled “Preliminary Results of Review.” Interested parties are invited to comment on these preliminary results. (See the “Preliminary Results of Review” section of this notice.)
March 20, 2003.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Scot Fullerton or Matthew Renkey, Office of AD/CVD Enforcement VII, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-1386 or (202) 482-2312, respectively.
On March 29, 1995, the Department published in the Federal Register an antidumping duty order on glycine from the PRC. See Antidumping Duty Order: Glycine from the People's Republic of China, 60 FR 16116, (March 29, 1995). On March 29, 2002, the Department received a request for a new shipper review from TTPC; however, this request was not filed in accordance with section 751(a)(2)(B) of the Tariff Act of 1930, as amended (the Act) and section 351.214(c) of the Department's regulations. On April 29, 2002, the Department sent a letter to TTPC asking them to properly refile their request with the Department by May 1, 2002. The Department allowed TTPC to correct its business proprietary information (BPI) as it had done with a concurrent request for a new shipper review in another case. See the Memorandum to the File through Maureen Flannery from Matthew Renkey, Initiation of New Shipper Review of Glycine from the People's Republic of China (May 17, 2002). On May 1, 2002, the Department received a properly filed request for a new shipper review from TTPC for the antidumping duty order on glycine from the People's Republic of China. On May 24, 2002, the Department published its initiation of this new shipper review for the period March 1, 2001, through February 28, 2002. See Glycine from the People's Republic of China: Initiation of Antidumping New Shipper Review, 67 FR 36572 (May 24, 2002).
On May 24, 2002, we issued a questionnaire to TTPC. On July 11, 2002, we received TTPC's section A questionnaire response, and on July 12, 2002 we received the sections C and D questionnaire response. On November 13, 2002, we issued a supplemental questionnaire to TTPC. We received the response to this questionnaire on December 9, 2002. On February 26, 2003, we requested information from the U.S. importer of TTPC's new shipper merchandise. We have not yet received a response to this request. Any information provided by the importer will be analyzed for purposes of the final results of this new shipper review. On November 12, 2002, the Department extended the preliminary results of this new shipper review by 120 days until March 13, 2002. See Glycine from the People's Republic of China: Notice of Extension of Time Limit for Preliminary Results of Antidumping Duty New Shipper Review, 67 FR 69717 (November 19, 2002).
Scope of the Antidumping Duty Order
The product covered by this proceeding is glycine which is a free-flowing crystalline material, like salt or sugar. Glycine is produced at varying levels of purity and is used as a sweetener/taste enhancer, a buffering agent, reabsorbable amino acid, chemical intermediate, and a metal complexing agent. Glycine is currently classified under subheading 2922.49.4020 of the Harmonized Tariff Schedule of the United States (HTSUS). This proceeding includes glycine of all purity levels.
As provided in section 782(i) of the Act, we conducted verification of the questionnaire responses of TTPC and its producer, Baoding Mancheng Eastern Chemical Plant (Eastern Chemical). We used standard verification procedures, Start Printed Page 13670including on-site inspection of the production and sales facilities, and an examination of relevant sales and financial records. Our verification results are outlined in the New Shipper Review of Glycine from the People's Republic of China: Sales and Factors Verification Report for Tianjin Tiancheng Pharmaceutical Co. Ltd., dated March 6, 2003. (TTPC Verification Report), and New Shipper Review of Glycine from the People's Republic of China: Factors Verification Report for Baoding Mancheng Eastern Chemical Plant, dated March 6, 2003 (Eastern Chemical Verification Report). A public version of this report is on file in the Central Records Unit located in room B-099 of the Main Commerce Building.
TTPC requested a separate, company-specific rate. In its questionnaire response, the company stated that it is an independent legal entity.
To establish whether a company operating in a non-market economy (NME) country is sufficiently independent to be entitled to a separate rate, the Department analyzes each exporting entity under the test established in Final Determination of Sales at Less Than Fair Value: Sparklers from the People's Republic of China, 56 FR 20588 (May 6, 1991), as amplified by Final Determination of Sales at Less Than Fair Value: Silicon Carbide from the People's Republic of China, 59 FR 22585 (May 2, 1994). Under this policy, exporters in NME countries are entitled to separate, company-specific margins when they can demonstrate an absence of government control, in law and in fact, with respect to export activities. 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 an 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. De facto absence of government control over exports is based on four factors: (1) Whether each exporter sets its own export prices independently 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.
De Jure Control
With respect to the absence of de jure government control over the export activities of the company reviewed, evidence on the record supports the claim made by TTPC that its export activities are not controlled by the government. TTPC submitted evidence of its legal right to set prices independently of all government oversight. The business license of TTPC indicates that the company is permitted to engage in the exportation of glycine. We found no evidence of de jure government control restricting this company's exportation of glycine.
In general, no export quotas apply to glycine. The Administrative Regulations of the People's Republic of China for Controlling the Registration of Enterprises as Legal Persons (Legal Persons Law), issued on June 13, 1988 by the State Administration for Industry and Commerce of the PRC, the Company Law of the People's Republic of China (Company Law), adopted by the National People's Congress and promulgated by the President on December 29, 1993 and effective on July 1, 1994, and the Foreign Trade Law of the People's Republic of China (Foreign Trade Law), adopted by the National People's Congress and promulgated by the President on May 12, 1994 and effective on July 1, 1994, provided in the record of this review, all indicate a lack of de jure government control over privately-owned companies, such as TTPC. They demonstrate that control over the company rests with the enterprise itself. The Legal Persons Law, Company Law, and Foreign Trade Law provide that, to qualify as legal entities, companies must have the “ability to bear civil liability independently” and the right to control and manage their businesses. These laws also state that, as an independent legal entity, a company is responsible for its own profits and losses. (See Notice of Final Determination of Sales at Less Than Fair Value; Manganese Metal from the People's Republic of China, 60 FR 56045 (November 6, 1995) (Manganese Metal).) At verification, we saw that the business license for TTPC was granted in accordance with these laws. The results of verification support the information provided regarding these laws. See TTPC Verification Report at 2. Compliance with these laws supports a finding of de jure absence of central control. Therefore, we preliminarily determine that there is an absence of de jure control with respect to TTPC.
De Facto Control
With respect to the absence of de facto control over export activities, the information submitted on the record and reviewed at verification, indicates that the management of TTPC is responsible for the determination of export prices, profit distribution, marketing strategy, and contract negotiations. Our analysis indicates that there is no government involvement in the daily operations or the selection of management for this company. In addition, we have found that the respondent's pricing and export strategy decisions are not subject to the review or approval of any outside entity, and that there are no governmental policy directives that affect these decisions.
There are no restrictions on the use of export earnings. The general manager of TTPC has the right to negotiate and enter into contracts, and may delegate this authority to employees within the company. There is no evidence that this authority is subject to any level of governmental approval. TTPC stated that its management is selected by a board of directors and there is no government involvement in the selection process. Finally, decisions made by the respondent concerning purchases of subject merchandise from suppliers are not subject to government approval. Consequently, because evidence on the record indicates an absence of government control, both in law and in fact, over the company's activities, we preliminarily determine that a separate rate should be applied to TTPC.
Normal Value Comparisons
To determine whether the respondent's sale of the subject merchandise to the United States was made at a price below normal value (NV), we compared its United States price to NV, as described in the “United States Price” and “Normal Value” sections of this notice.
United States Price
We based the United States price on export price (EP) in accordance with section 772(a) of the Act, because the first sale to an unaffiliated purchaser was made prior to importation, and constructed export price (CEP) was not otherwise warranted by the facts on the record. We calculated EP based on the packed price from the exporter to the first unaffiliated purchaser in the United States. We deducted foreign inland freight, foreign brokerage and handling, international freight, and marine insurance expenses from the starting Start Printed Page 13671price (gross unit price) in accordance with section 772(c) of the Act.
Section 773(c)(1) of the Act provides that the Department shall determine NV using a factors-of-production methodology if (1) the merchandise is exported from a NME country, and (2) available information does not permit the calculation of NV using home-market prices, third-country prices, or constructed value under section 773(a) of the Act.
In every case conducted by the Department involving the PRC, the PRC has been treated as a NME country. Pursuant to section 771(18)(C)(i) of the Act, any determination that a foreign country is a NME country shall remain in effect until revoked by the administering authority. TTPC did not contest such treatment in this review. Accordingly, we have applied surrogate values to the factors of production to determine NV. See Surrogate Values Used for the Preliminary Results of the Antidumping Duty New Shipper Review of Glycine from the People's Republic of China, dated March 13, 2003 (Factor Values Memo).
We calculated NV based on factors of production in accordance with section 773(c)(4) of the Act and section 351.408(c) of our regulations. Consistent with the original investigation and the subsequent new shipper review of this order, we determined that India (1) is comparable to the PRC in level of economic development, and (2) is a significant producer of comparable merchandise. We valued the factors of production using publicly available information from India. We adjusted the Indian import prices and price quotes from Chemical Weekly (which publishes chemical prices in India and which has been used as a source in other antidumping duty cases) by adding foreign inland freight expenses to make them delivered prices.
We valued the factors of production as follows:
Materials and Energy
To value chloroacetic acid (also known as monochloroacetic acid), we used prices concurrent with the POR as reported in Chemical Weekly. To value liquid ammonia, we used the weighted-average unit import value derived from the Monthly Trade Statistics of Foreign Trade of India—Volume II—Imports (Indian Import Statistics) for the period March 2001 through January 2002. To value hexamine, we used prices reported in Chemical Weekly during the months coinciding with the POR. To value methanol (also known as methyl alcohol), we used the weighted-average unit import value derived from the Indian Import Statistics for the period March 2001 through January 2002. We adjusted these values to include freight costs incurred between the supplier and the factory. For transportation distances used in the calculation of freight expenses on these inputs, we added, to surrogate values from India, a surrogate freight cost using the shorter of (a) the distance between the closest PRC port and the factory, or (b) the distance between the domestic supplier and the factory. See Notice of Final Determination of Sales at Less Than Fair Value: Collated Roofing Nails From the People's Republic of China, 62 FR 51410, 51413 (October 1, 1997) (Roofing Nails).
To value coal, we relied upon Indian import data for steam coal for the period March 2001 through January 2002 from the Indian Import Statistics. We adjusted the cost of coal to include an amount for transportation. To value electricity, we used the 2001 total cost per kilowatt hour (KWH) for “Electricity for Industry” as reported in the International Energy Agency's publication, Key World Energy Statistics, 2002. For water, we relied upon public information from the October 1997 Second Water Utilities Data Book: Asian and Pacific Region, published by the Asian Development Bank. To achieve comparability of electricity and water prices to the factors reported for the POR, we adjusted these factor values to reflect inflation to the POR using the Wholesale Price Index (WPI) for India, as published in the 2002 International Financial Statistics (IFS) by the International Monetary Fund (IMF).
To value packing materials (plastic bags and cardboard drums), we relied upon Indian import data. To value plastic bags, we used data for the period March 2001 through January 2002 as reported in the Indian Import Statistics. To value cardboard drums, we used data for the period March 2001 through December 2001 from the Indian Import Statistics, which was the latest available to the Department for this factor. We adjusted the values of packing materials to include freight costs incurred between the supplier and the factory following the methodology discussed above.
For labor, we used the PRC regression-based wage rate at Import Administration's home page, Import Library, Expected Wages of Selected NME Countries, revised in September 2002, and corrected in February 2003. See http://ia.ita.doc.gov/wages/corrected00wages/ corrected00wages.htm. Because of the variability of wage rates in countries with similar per capita gross domestic products, section 351.408(c)(3) of the Department's regulations requires the use of a regression-based wage rate. The source of these wage rate data on the Import Administration's web site is the Year Book of Labour Statistics 2001, International Labour Office (Geneva: 2001), Chapter 5B: Wages in Manufacturing.
Factory Overhead, SG&A, and Profit
To value factory overhead, selling, general, and administrative expenses (SG&A), and profit, we used financial information from the most recent financial statements of two Indian chemical producers: Calibre Chemicals Pvt. Ltd. and National Peroxide Ltd. This information was used in the preliminary determination in the antidumping duty investigation of saccharin from the PRC. See Notice of Preliminary Determination of Sales at Less than Fair Value: Saccharin from the People's Republic of China, 67 FR 79049 (December 27, 2002). We applied these rates to the calculated cost of manufacture. See Factor Values Memo. Other information regarding potential surrogate values for factory overhead, SG&A, and profit has recently been placed on the record of this case. We will consider this information, and any other new surrogate information, for the final results of this review.
To value truck freight expenses we used nineteen Indian price quotes as reported in the February 14, 2000 issue of The Financial Express (an Indian business publication), which were used in the antidumping duty investigation of certain circular welded carbon-quality steel pipe from the PRC. See Notice of Final Determination of Sales at Less than Fair Value: Certain Circular Welded Carbon-Quality Steel Pipe from the People's Republic of China, 67 FR 36570 (May 24, 2002) (China Pipe). We adjusted the rates to reflect inflation to the POR using the WPI for India from the IFS.
To value foreign brokerage and handling, we used a publicly summarized version of the average value for brokerage and handling expenses reported in Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products from India, 66 FR 50406 (October 3, 2001) (Hot-Rolled from India), which was also used in China Pipe. We used the average of the Start Printed Page 13672foreign brokerage and handling expenses reported in the U.S. sales listing of the public questionnaire response submitted in the antidumping investigation of Essar Steel Ltd. in Hot-Rolled from India. Charges were reported on a per metric ton basis. We adjusted these values to reflect inflation to the POR using the WPI for India from the IFS. See Factor Values Memo.
To value marine insurance, we used marine insurance data collected in the tenth administrative review of tapered roller bearings and parts thereof, finished and unfinished, from the People's Republic of China. See Memorandum to the File: Marine Insurance Rates (June 30, 1998) included in the Factor Values Memo, and Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results of the 1996-1997 Administrative Review and New Shipper Review and Determination Not To Revoke Order in Part, 63 FR 63842 (November 17, 1998). We adjusted this value for inflation during the POR using the U.S. dollar PPI data published by the IMF.
TTPC obtained its international freight service from a market economy carrier. Therefore, we are using the amount reported by TTPC, which it incurred in U.S. dollars.
We made currency conversions pursuant to section 351.415 of the Department's regulations at the rates certified by the Federal Reserve Bank.
Preliminary Results of Review
We preliminarily determine that the following dumping margin exists:
|Baoding Mancheng Eastern Chemical Plant/Tianjin Tiancheng Pharmaceutical Co. Ltd.||3/1/01-2/28/02||43.44%|
If these preliminary results are not modified in the final results of this review, a cash deposit rate of 43.44 percent will be effective upon publication of the final results of this new shipper review for all shipments of glycine from the PRC produced by Eastern Chemical and exported by TTPC and entered, or withdrawn from warehouse, for consumption on or after publication date, as provided for by section 751(a)(2)(c) of the Act. For glycine exported by TTPC but not produced by Eastern Chemical, we will apply as the cash deposit rate the PRC-wide rate, which is currently 155.89 percent.
Upon completion of this new shipper review, 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 within 15 days of the completion of this review. For assessment purposes, we calculated importer-specific assessment rates for glycine from the PRC. Upon the completion of this review, we will direct Customs to assess the resulting ad valorem rates on each entry of the subject merchandise by the importer during the POR. For glycine exported by TTPC but not produced by Eastern Chemical, we will assess antidumping duties at the PRC-wide rate.
Schedule for Final Results of Review
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 date of publication of this notice. Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Normally, case briefs are to be submitted within 30 days after the date of publication of this notice, and rebuttal briefs, limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. Parties who submit arguments in this proceeding are requested to submit with the argument: (1) A statement of the issues, 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) of the Department's regulations.
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 to be 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. Parties will be notified of the time and location. The Department will issue the final results of this new shipper review, which will include the results of its analysis of issues raised in the briefs, within 90 days from the date of the preliminary results, unless the time limit is extended.
Notification to Importers
This notice also serves as a preliminary reminder to importers of their responsibility under 351.402(f) of the Department's regulations to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during these review periods. 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 new shipper review and this notice are published in accordance with sections 751(a)(2)(B) and 777 (i)(1) of the Act.Start Signature
Dated: March 11, 2003.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-6733 Filed 3-19-03; 8:45 am]
BILLING CODE 3510-DS-P