Import Administration, International Trade Administration, Department of Commerce.
Notice of preliminary results of antidumping duty administrative review.
In response to requests from interested parties, the Department of Commerce is conducting an administrative review of the antidumping duty order on certain folding gift boxes from the People's Republic of China. The review covers two manufacturers/exporters and the period of review is August 6, 2001, through December 31, 2002.
We have preliminarily determined that sales have been made below normal value by one of the companies subject to this review. If these preliminary results are adopted in our final results of administrative review, we will instruct the Bureau of Customs and Border Protection to assess antidumping duties on all appropriate entries.Start Printed Page 58654
October 10, 2003.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Jennifer Moats (Red Point), Yang Jin Chun (Yun Choy), or Thomas Schauer, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-5047, (202) 482-5760, and (202) 482-0410, respectively.End Further Info End Preamble Start Supplemental Information
On January 8, 2002, we published in the Federal Register the antidumping duty order on folding gift boxes from the People's Republic of China (PRC). See Antidumping Duty Order: Certain Folding Gift Boxes from the People's Republic of China, 67 FR 864 (Jan. 8, 2002).
On January 2, 2003, we published a notice of opportunity to request an antidumping duty administrative review on folding gift boxes from the PRC. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 68 FR 80 (Jan. 2, 2003). On January 30, 2003, pursuant to 19 CFR 351.213(b)(2), Red Point Paper Products Co., Ltd. (Red Point), a producer covered by the antidumping duty order, requested that the Department conduct an administrative review of the company. On January 31, 2003, pursuant to 19 CFR 351.213(b)(1), U.S. folding gift box producers Harvard Folding Box Company, Inc., and Field Container Company L.P. requested that the Department conduct an administrative review of Yun Choy Ltd. (Yun Choy), a Chinese producer and/or exporter of the subject merchandise. On February 21, 2003, in accordance with section 751(a) of the Tariff Act of 1930, as amended (the Act) and 19 CFR 351.221(c)(1)(i), we issued a notice of initiation of an antidumping duty administrative review of this order and named Red Point and Yun Choy as respondents of this review. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 68 FR 9048 (Feb. 27, 2003).
On April 14, 2003, Red Point submitted its Section A response, on April 21, 2003, its Sections C and D responses, and on June 11, 2003, its supplemental responses. Yun Choy received the original questionnaire but did not respond. See “The PRC-Wide Rate and Use of Facts Otherwise Available” section below.
Scope of Order
The products covered by this antidumping duty order are certain folding gift boxes. Certain folding gift boxes are a type of folding or knock-down carton manufactured from paper or paperboard. Certain folding gift boxes are produced from a variety of recycled and virgin paper or paperboard materials, including, but not limited to, clay-coated paper or paperboard and kraft (bleached or unbleached) paper or paperboard. The scope of the order excludes gift boxes manufactured from paper or paperboard of a thickness of more than 0.8 millimeters, corrugated paperboard, or paper mache. The scope of the order also excludes those gift boxes for which no side of the box, when assembled, is at least nine inches in length.
Certain folding gift boxes are typically decorated with a holiday motif using various processes, including printing, embossing, debossing, and foil stamping, but may also be plain white or printed with a single color. The subject merchandise includes certain folding gift boxes, with or without handles, whether finished or unfinished, and whether in one-piece or multi-piece configuration. One-piece gift boxes are die-cut or otherwise formed so that the top, bottom, and sides form a single, contiguous unit. Two-piece gift boxes are those with a folded bottom and a folded top as separate pieces. Certain folding gift boxes are generally packaged in shrink-wrap, cellophane, or other packaging materials, in single or multi-box packs for sale to the retail customer. The scope of the order excludes folding gift boxes that have a retailer's name, logo, trademark or similar company information printed prominently on the box's top exterior (such folding gift boxes are often known as “not-for-resale” gift boxes or “give-away” gift boxes and may be provided by department and specialty stores at no charge to their retail customers). The scope of the order also excludes folding gift boxes where both the outside of the box is a single color and the box is not packaged in shrink-wrap, cellophane, other resin-based packaging films, or paperboard.
Imports of the subject merchandise are classified under Harmonized Tariff Schedules of the United States (HTSUS) subheadings 4819.20.00.40 and 48220.127.116.11. These subheadings also cover products that are outside the scope of the order. Furthermore, although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of the order is dispositive.
Non-Market-Economy Country Status
The Department has treated the PRC as a non-market-economy (NME) country in all past antidumping duty administrative reviews. See, e.g., Final Results of Antidumping Duty Administrative Review: Synthetic Indigo from the People's Republic of China, 68 FR 53711, 53712 (Sep. 12, 2003), and Preliminary Results and Preliminary Partial Rescission of the Antidumping Administrative Review: Petroleum Wax Candles from the People's Republic of China, 68 FR 53109, 53114 (Sep. 9, 2003). A designation as an NME remains in effect until it is revoked by the Department. See section 771(18)(C) of the Act.
No party in this review has requested a revocation of the PRC's NME status. Therefore, we have preliminarily determined to continue to treat the PRC as an NME. When we review imports from an NME, section 773(c)(1) of the Act directs us to base the normal value (NV) on the NME producer's factors of production, valued in a market economy at a comparable level of economic development and that is a significant producer of comparable merchandise. The sources used to value individual factors are discussed in the “Factor Valuations” section, below.
In proceedings involving NME countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and thus should be assessed a single antidumping duty rate. In this case, Red Point has requested a separate company-specific rate. Red Point is a Hong King company wholly owned by non-PRC nationals. Hong Kong companies are treated as market-economy companies because it is considered as a separate customs territory within the PRC, as it was under British rule. See Application of U.S. Antidumping and Countervailing Duty Laws to Hong Kong, 62 FR 42965 (Aug. 11, 1997). Therefore, we determine that it is appropriate to calculate a separate rate for Red Point. Yun Choy did not submit any type of response to the Department's antidumping duty questionnaire. We preliminarily determine that Yun Choy did not establish its entitlement to a separate rate in this review and is therefore presumed to be part of the PRC NME entity and, as such, is subject to the PRC country-wide rate. See “The PRC-Wide Rate and Use of Facts Otherwise Available” section below. Start Printed Page 58655
The PRC-Wide Rate and Use of Facts Otherwise Available
Both respondents were given the opportunity to respond to the Department's questionnaire. As explained above, we received a questionnaire response from Red Point and we have calculated a separate rate for Red Point. The PRC-wide rate applies to all entries of subject merchandise except for entries from Red Point and Max Fortune, a producer which was excluded from the antidumping duty order.
As discussed above, Yun Choy is appropriately considered part of the PRC-wide entity. Yun Choy did not respond to the Department's questionnaire. 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 Department shall, subject to section 782(d), use the facts otherwise available in reaching the applicable determination under this title.
Because the PRC entity did not respond to the Department's questionnaire, we find that, in accordance with sections 776(a)(2)(A) and (B) of the Act, the use of total facts available is appropriate. See, e.g., Final Results of Antidumping Duty Administrative Review for Two Manufacturers/Exporters: Certain Preserved Mushrooms from the People's Republic of China, 65 FR 50183, 50184 (Aug. 17, 2000). For a more detailed discussion, see the following determinations: Preliminary Results of Antidumping Duty Administrative Review for Two Manufacturers/Exporters: Certain Preserved Mushrooms from the People's Republic of China, 65 FR 40609, 40611 (June 30, 2000); Final Determinations of Sales at Less Than Fair Value: Persulfates from the People's Republic of China, 62 FR 27222, 27224 (May 19, 1997); Preliminary Results of Antidumping Duty Administrative Review: Certain Grain-Oriented Electrical Steel from Italy, 61 FR 36551, 36552 (July 11, 1996); Final Results of Antidumping Duty Administrative Review: Certain Grain-Oriented Electrical Steel from Italy, 62 FR 2655 (Jan. 17, 1997). Because Yun Choy provided no information, sections 782(d) and (e) of the Act are not relevant to our analysis.
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 full.” See Statement of Administrative Action (SAA) accompanying the URAA, H. Doc. No. 103-316, at 870 (1994).
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.” On February 27, 2003, the Department transmitted its questionnaire to Yun Choy via Federal Express. We confirmed that Yun Choy signed for and received the questionnaire on March 3, 2003 (Hong Kong date). Yun Choy did not submit a response to our questionnaire by the due date, April 7, 2003. On April 11, 2003, the Department mailed a letter via Federal Express to Yun Choy asking it to inform the Department as to whether it has submitted or intended to submit a response to the questionnaire or whether it and its affiliates did not have any U.S. sales or shipments during the review period. Yun Choy received the letter on April 14, 2003 (Hong Kong date), but it did not respond to the letter by the due date, April 21, 2003. Because Yun Choy did not provide a response to the Department's questionnaire, the Department is unable to determine Yun Choy's eligibility for a separate rate. Thus, Yun Choy has not rebutted its presumption of government control and is presumed to be part of the PRC entity. Therefore, we determine that Yun Choy and, thereby, the PRC-entity failed to cooperate to the best of its ability, making the use of an adverse inference appropriate.
In accordance with the Department's practice, we have preliminarily assigned to the PRC entity (including Yun Choy) the rate of 164.75 percent as adverse facts available. See, e.g., Rescission of Second New Shipper Review and Final Results and Partial Rescission of First Antidumping Duty Administrative Review: Brake Rotors From the People's Republic of China, 64 FR 61581, 61584 (Nov. 12, 1999). This rate is the highest dumping margin determined in any segment of this proceeding and was established in the LTFV investigation. See Final Determination of Sales at Less Than Fair Value: Certain Folding Gift Boxes from the People's Republic of China, 66 FR 58115, 58118 (Nov. 20, 2001) (Final Determination). In selecting a rate for adverse facts available, the Department selects a rate that is sufficiently adverse “as to effectuate the purpose of the facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See Final Determination of Sales at Less Than Fair Value: Static Random Access Memory Semiconductors from Taiwan, 63 FR 8909, 8932 (Feb. 23, 1998).
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 “information 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 word “corroborate” means to determine that the information used has probative value. Id. To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. We corroborated the rate of 164.75 percent in the LTFV investigation. See Preliminary Determination of Sales at Less Than Fair Value: Certain Folding Gift Boxes From the People's Republic of China, 66 FR 40973, 40976 (Aug. 6, 2001). We have no reason to question the reliability of this data for this review and no party has argued that it is not reliable. 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. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin. For example, in Final Results of Antidumping Duty Administrative Reviews: Fresh Cut Flowers from Mexico, 61 FR 6812 (Feb. 22, 1996), the Start Printed Page 58656Department 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). None of these unusual circumstances are present here. Therefore, we consider the PRC-wide rate, which is the rate from the LTFV investigation, relevant for this review.
Furthermore, since this rate is the rate from the final determination, we established the reliability and relevance of the rate in the investigation. See Final Determination. As there is no information on the record of this review that demonstrates that this final rate from the final determination is not reliable for use as the adverse facts available rate for the PRC-wide rate, we determine that this rate has probative value and, therefore, is an appropriate basis for the PRC-wide rate to be applied in this review to exports of subject merchandise by Yun Choy.
When the Department is reviewing imports from an NME country, section 773(c)(1) of the Act directs it to base NV, in most circumstances, on the NME producer's factors of production, valued in a surrogate market-economy country or countries selected in accordance with section 773(c)(4) of the Act. In accordance with that provision, the Department shall utilize, to the extent possible, the prices or costs of factors of production in one or more market-economy countries that are at a level of economic development comparable to the NME country and are significant producers of comparable merchandise.
The Department has determined that India, Pakistan, Indonesia, Sri Lanka, and the Philippines are countries comparable to the PRC in terms of economic development. See Memorandum from Ron Lorentzen to Laurie Parkhill: Administrative Review of the Antidumping Duty Order on Folding Gift Boxes from the People's Republic of China: Request for a List of Surrogate Countries, dated June 30, 2003. Normally, the Department will select an appropriate surrogate based on the availability and reliability of data from these countries. In this case, we have found that India is a significant producer of comparable merchandise and we have reliable data from India which we can use to value the factors of production.
We have used India as the surrogate country and, accordingly, we have calculated NV using Indian prices to value the PRC producers' factors of production, when available and appropriate. See Surrogate Country Selection Memorandum to The File from Jennifer Moats dated October 3, 2003 (Surrogate Country Memorandum). We have obtained and relied upon publicly available information wherever possible. See Factor Valuation Memorandum to The File from Jennifer Moats, dated October 3, 2003 (Factor Valuation Memorandum).
In accordance with 19 CFR 351.301(c)(3)(ii), for the final results of an administrative review, interested parties may submit publicly available information to value the factors of production within 20 days after the date of publication of these preliminary results.
In accordance with section 772(a) of the Act, we used export price (EP) for Red Point because the subject merchandise was sold directly to unaffiliated customers in the United States prior to importation and because constructed export price was not otherwise warranted based on the facts of the record.
We calculated EP based on free-on-board prices to unaffiliated purchasers in the United States. We made deductions, where appropriate, for foreign inland freight from the plant to the port of exportation and for domestic brokerage and handling in accordance with section 772(c)(2)(A) of the Act. All of these services were provided by Hong Kong companies and charged in Hong Kong dollars. Therefore, valuation of these charges based on surrogate values was not necessary.
Section 773(c)(1) of the Act provides that the Department shall determine the NV using a factors-of-production methodology if (1) the merchandise is exported from an NME country and (2) the 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.
Factors of production include (1) hours of labor required, (2) quantities of raw materials employed, (3) amounts of energy and other utilities consumed, and (4) representative capital costs. We used factors of production reported by Red Point for materials, energy, labor, by-products, and packing. We valued all input factors not obtained from market economies using publicly available published information as discussed in the “Surrogate Country” and “Factor Valuations” sections of this notice.
In accordance with 19 CFR 351.408(c)(1), where a producer sources an input from a market economy and pays for it in market-economy currency, the Department employs the actual price paid for the input to calculate the factors-based NV. See also Lasko Metal Products v. United States, 437 F.3d 1442, 1445-1446 (Fed. Cir. 1994). Red Point reported that some of its inputs were purchased from market economies and paid for in market-economy currency. See “Factor Valuations” section below.
In accordance with section 773(c) of the Act, we calculated NV based on factors of production reported by Red Point for the POR. To calculate NV, we multiplied the reported per-unit factor quantities by publicly available Indian surrogate values (except as noted below). In selecting the surrogate values, we considered the quality, specificity, and contemporaneity of the data. As appropriate, we adjusted input prices by including freight costs to make them delivered prices. For a detailed description of all surrogate values used for Red Point, see the Factor Valuation Memorandum. For a detailed description of all actual values used for market-economy inputs, see the Red Point Preliminary Calculation Memorandum dated October 3, 2003.
Because we used Indian import values to value inputs purchased domestically by the Chinese producers, we added to Indian surrogate values a surrogate freight cost calculated using the shorter of the reported distance from the domestic supplier to the factory or the distance from the nearest seaport to the factory. This adjustment is in accordance with Sigma Corp. v. United States, 117 F.3d 1401, 1408 (Fed. Cir. 1997).
Except as noted below, we valued raw material inputs using the average unit import values derived from the World Trade Atlas, published by the Global Trade Information Services, Inc. See the Global Trade Information Services Web site at http://www.gtis.com/wta.htm. (The source of the data for the World Trade Atlas is the Directorate General of Commercial Intelligence and Statistics (DGCI&S) of the Indian Ministry of Commerce and Industry. The DGCI&S also releases the Monthly Statistics of Foreign Trade of India.)
As explained above, Red Point purchased certain raw material inputs Start Printed Page 58657from market-economy suppliers and paid for them in market-economy currencies. See Red Point's April 21, 2003, section D response at pages 5-6 for a description of these inputs. The evidence provided by Red Point indicated that its market-economy purchases of these inputs were paid for by Red Point in a market-economy currency. See Red Point's April 21, 2003, section D response at page 6. Therefore, in accordance with 19 CFR 351.408(c)(1), the Department has determined to use the market-economy prices as reported by Red Point to value these inputs from both market-economy and NME suppliers because the market-economy inputs represented a significant quantity of the inputs in each case and they were paid for in a market-economy currency.
To value electricity, we used the all-India average for industrial electricity as reported in Annexure 4.26 of the Annual Report (2001-02) on The Working of State Electricity Boards & Electricity Departments, published by the Planning Commission (Power & Energy Division), Government of India, in May 2002. This information is included in Exhibit 11 of Red Point's August 25, 2003, submission.
Red Point reported the following packing inputs: cartons, shrink wrap, tape, labels, keep-fresh film, and woodfree paper. We used the World Trade Atlas for Red Point to value these items. See the Factor Valuation Memorandum.
We used Indian transport information to value delivery costs for raw materials. To calculate domestic inland freight (by truck), we used a price report from Iron & Steel Newsletter for transporting material between Mumbai and Pune, Mumbai and Vapi/Daman, and Delhi and Gurgaon which was provided in Exhibit 12 of Red Point's August 25, 2003, surrogate-value submission. We used the rates between these cities because they were within 200 kilometers of each other and comparable to the distance between Red Point's factory and Hong Kong, the port of exportation. We converted the Indian Rupee value to U.S. dollars.
Red Point identified a by-product (paperboard scrap) which it claimed was sold to customers in the PRC. The Department has offset Red Point's cost of production by the value of a reported by-product where Red Point's response indicated that it was sold. See the Factor Valuation Memorandum for a complete discussion of by-product credits given and the surrogate value used.
To value factory overhead expenses, selling, general and administrative expenses (SG&A), and profit, we calculated a rate based on financial statements from an Indian producer of comparable merchandise, Rollatainers Limited. For a further discussion of the surrogate values for overhead, SG&A, and profit, see the Factor Valuation Memorandum.
For labor, consistent with 19 CFR 351.408(c)(3), we used the PRC regression-based wage rate at Import Administration's home page, Expected Wages of Selected NME Countries, revised in February 2003. See http://ia.ita.doc.gov/wages/index.html. The source of the wage-rate data on the Import Administration's Web site is the 2001 Year Book of Labour Statistics, International Labor Office (Geneva: 2001), Chapter 5B: Wages in Manufacturing.
Preliminary Results of Review
As a result of our review, we preliminarily determine the following percentage weighted-average dumping margins on folding gift boxes for the period August 6, 2001, through December 31, 2002:
|PRC-wide rate (including Yun Choy)||164.75|
Pursuant to 19 CFR 351.309(c)(ii), interested parties may submit case briefs within 30 days of the date of publication of this notice. Furthermore, as discussed in 19 CFR 351.309(d), rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed within 5 days after the time limit for filing the case brief. Parties who submit case or rebuttal briefs for this review are requested to submit with each argument (1) a statement of the issue, and (2) a brief summary of the argument (five pages maximum, including footnotes) with an electronic version included. A list of authorities used should accompany any briefs submitted to the Department. See 19 CFR 351.309(c)(2) and (d)(2).
Pursuant to 19 CFR 351.310(c), any interested party may request a hearing within 30 days of the date of publication of this notice. Issues raised in a hearing will be limited to those raised in the respective case and rebuttal briefs. If requested, a hearing will be held at the main Commerce Department building at a time and location to be determined. Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, United States Department of Commerce, Room 1870, within 30 days of the date of publication of this notice. A request should contain (1) the party's name, address, and telephone number, (2) the number of participants, and (3) a list of the issues to be discussed. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date.
The Department will publish the final results of this administrative review, including the results of its analysis of issues raised in any such written briefs. The Department will issue the final results of review within 120 days of publication of these preliminary results.
The Department shall determine, and the Bureau of Customs and Border Protection shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated, whenever possible, an exporter/importer (or customer)-specific assessment value for subject merchandise.
The following deposit requirements will be effective upon publication of the notice of final results of administrative review for all shipments of folding gift boxes entered, or withdrawn from warehouse, for consumption on or after the date of publication, as provided by section 751(a)(1) of the Act: (1) The cash-deposit rates for the reviewed companies will be the rates established in the final results of review; (2) for previously investigated or reviewed companies not listed above, the cash-deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a prior review, or the LTFV investigation, but the manufacturer is, the cash-deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash-deposit rate for all other manufacturers or exporters (except for Max Fortune, which was excluded from the antidumping duty order) will continue to be the “PRC-wide” rate from the LTFV investigation. See Final Determination.
These deposit requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.
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 Start Printed Page 58658duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Department's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of doubled antidumping duties.
These preliminary results of administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.Start Signature
Dated: October 3, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-25773 Filed 10-9-03; 8:45 am]
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