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Import Administration, International Trade Administration, Department of Commerce.
We preliminarily determine that polyethylene retail carrier bags from the People's Republic of China are being, or are likely to be, sold in the United States at less than fair value, as provided in section 733 of the Tariff Act of 1930, as amended. Interested parties are invited to comment on this preliminary determination. We will make our final determination not later than 135 days after the date of publication of this preliminary determination. The estimated margins of sales at less than fair value are shown in the “Suspension of Liquidation” section of this notice.
January 26, 2004.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Hermes Pinilla (Nantong), Edythe Artman (Senetex), Kristin Case (United Wah), Jeff Frank (Ming Pak), Janis Kalnins (Zhongshan), Jennifer Moats (Hang Lung), Thomas Schauer (Rally Plastics), or Dmitry Vladimirov (Glopack), Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, N.W., Washington, D.C. 20230; telephone: (202) 482-4733.End Further Info End Preamble Start Supplemental Information
The Department of Commerce (the Department) has conducted this antidumping investigation in accordance with section 733 of the Tariff Act of 1930, as amended (the Act). We preliminarily determine that polyethylene retail carrier bags (PRCBs) from the People's Republic of China (PRC) are being, or are likely to be, sold in the United States at less than fair value (LTFV), as provided in section 733 of the Act. The estimated margins of sales at LTFV are shown in the Start Printed Page 3545“Suspension of Liquidation” section of this notice.
We initiated this investigation on July 10, 2003. See Initiation of Antidumping Duty Investigations: Polyethylene Retail Carrier Bags from The People's Republic of China, Malaysia, and Thailand, 68 FR 42002 (July 16, 2003) (Initiation Notice). Since the initiation of this investigation the following events have occurred.
On July 14, 2003, we issued a letter to interested parties in this investigation providing an opportunity to comment on the characteristics that we should use in identifying the different models that the respondents sold in the United States. The petitioners and respondents in the concurrent Thailand investigation submitted comments on July 28, 2003. No other party submitted comments. After reviewing the parties' comments, we adopted the characteristics discussed in the “Fair Value Comparisons” section below in order to determine unique models of the subject merchandise.
On July 14, 2003, we sent a partial Section A questionnaire to all of the producers/exporters named in the petition and to the exporters who comprise the top 80 percent of exporters in terms of quantity imported (in thousands of units) of the subject merchandise according to data from U.S. Customs and Border Protection (CBP). We requested information on the quantity and value of merchandise sold by these exporters in order to identify potential respondents in the investigation. We received responses from 39 firms which reported exports of subject merchandise during the period of investigation (POI). In addition, a number of firms indicated that they did not export subject merchandise to the United States during the POI. We did not receive responses from a number of firms in the PRC although the record indicates that these companies received our July 14, 2003, questionnaire. On August 1, 2003, we sent a letter to these firms to reiterate our request for a response to the July 14, 2003, questionnaire. We received no responses from these firms.
On August 4, 2003, the U.S. International Trade Commission (ITC) issued its affirmative preliminary determination that there is a reasonable indication that an industry in the United States is materially injured by reason of imports of the subject merchandise from the PRC, Malaysia, and Thailand. See Polyethylene Retail Carrier Bags From China, Malaysia, and Thailand, 68 FR 47609 (August 11, 2003).
On August 14, 2003, the Department selected the following nine mandatory respondents: Hang Lung Plastic Manufactory Limited (Hang Lung); Dongguan Huang Jiang United Wah Plastic Bag Factory (United Wah); Nantong Huasheng Plastic Products Company, Limited (Nantong); Rally Plastics Company, Limited (Rally Plastics); Senetex Trading Limited (Senetex); Shanghai Glopack Packing Company Limited and Sea Lake Polyethylene Enterprise Limited (collectively Glopack); Tai Chiuan Plastic Products Company, Limited (Tai Chiuan); Xiamen Ming Pak Plastics Company, Limited (Ming Pak); Zhongshan Dongfeng Hung Wai Plastic Bag Manufactory (Zhongshan). See Memorandum from Laurie Parkhill to Jeff May regarding selection of respondents dated August 14, 2003.
On August 14, 2003, the Department issued its full antidumping questionnaire to the mandatory respondents. All of the companies responded to the questionnaire except Tai Chiuan. In addition, we received section A responses from the following companies: Beijing Lianbin Plastics and Printing Company Limited (Beijing Lianbin); Dongguan Zhongqiao Combine Plastic Bag Factory (Dongguan Zhongqiao); Good-in Holdings Limited (Good-in Holdings); Guangdong Esquel Packaging Company, Limited (Guangdong Esquel); Nan Sing Plastics, Limited (Nan Sing); Ningbo Fanrong Plastic Products Company Limited (Ningbo Fanrong); Ningbo Huansen Plasthetics Company, Limited (Ningbo Huansen); Rain Continent Shanghai Company Limited (Rain Continent); Shanghai Dazhi Enterprise Development Company, Limited (Shanghai Dazhi); Shanghai Fangsheng Coloured Packaging Company Limited (Shanghai Fangsheng); Shanghai Jingtai Packaging Material Company, Limited (Shanghai Jingtai); Shanghai Light Industrial Products Import and Export Corporation (Shanghai Light Industrial); Shanghai Minmetals Development Limited (Shanghai Minmetals); Shanghai New Ai Lian Import and Export Company Limited (Shanghai New Ai Lian); Shanghai Overseas International Trading Company, Limited (Shanghai Overseas); Shanghai Yafu Plastics Industries Company Limited (Shanghai Yafu); Weihai Weiquan Plastic and Rubber Products Company, Limited (Weihai Weiquan); Xiamen Xingyatai Industry Company, Limited (Xiamen Xingyatai); Xinhui Henglong.
We issued supplemental questionnaires to the mandatory respondents which submitted full questionnaire responses. We received responses to all of the supplemental questionnaires except from Senetex. On December 3, 2003, Senetex submitted a letter in which it stated that it no longer wished to participate in the investigation.
On October 6, 2003, we requested publicly available information for valuing the factors of production and comments on surrogate-country selection. On November 20, 2003, we received comments from the petitioners on surrogate-country selection. On the same day, we received information for factor valuations from the petitioners and the mandatory respondents.
On October 16, 2003, the petitioners requested that the Department postpone its preliminary determination by 50 days. In accordance with section 733(c)(1)(A) of the Act, we postponed our preliminary determination by 50 days. See Notice of Postponement of Preliminary Determinations in Antidumping Duty Investigations: Polyethylene Retail Carrier Bags From the People's Republic of China, Malaysia, and Thailand, 68 FR 61656 (October 29, 2003).
Postponement of Final Determination and Extension of Provisional Measures
Section 735(a)(2)(A) of the Act provides that a final determination may be postponed until no later than 135 days after the date of the publication of the preliminary determination if, in the event of an affirmative preliminary determination, a request for such postponement is made by exporters who account for a significant proportion of exports of the subject merchandise. In accordance with 19 CFR 351.210(e)(2), the Department requires that exporters requesting postponement of the final determination must also request an extension of the provisional measures in section 733(d) of the Act from a four-month period until not more than six months.
We received requests to postpone the final determination from United Wah, Hang Lung, Rally Plastics, Glopack, and Ming Pak. In their requests, these respondents consented to the extension of provisional measures to no longer than six months. This preliminary determination is affirmative, the requests for postponement have been made by exporters that account for a significant proportion of exports of the subject merchandise, and there is no compelling reason to deny the respondents' requests. Therefore, we have extended the deadline for issuance of the final determination until 135 days after the date of publication of this Start Printed Page 3546preliminary determination in the Federal Register and have extended provisional measures to no longer than six months.
Period of Investigation
The POI corresponds to the two most recent fiscal quarters prior to the filing of the petition, i.e., October 1, 2002, through March 31, 2003.
In accordance with the preamble to our regulations (see Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 19, 1997)), we set aside a period of time for parties to raise issues regarding product coverage and encouraged all parties to submit comments within 20 calendar days of publication of the Initiation Notice. Interested parties submitted such comments by August 5, 2003.
Pursuant to the Department's solicitation of scope comments in the Initiation Notice, Regal Import Packaging, an importer of PRCBs, requested on August 4, 2003, that bags that are “four dimensional,” bags with handles made of a material that differs from the bag itself, and custom-printed bags where the bag order is of 50,000 bags or less be excluded from the scope of the investigation. The importer asserted that these types of bags were not manufactured in the United States and therefore should be excluded from the scope of the investigation. On August 12, 2003, the petitioners commented that the bags in question were manufactured in the United States and requested that the investigation not exclude these types of bags. We have not adopted the changes in the scope of the investigation requested by Regal Import Packaging because we find the petitioners have placed sufficient evidence on the record to show that the bags in question are manufactured in the United States and fall within the scope of the petition.
Scope of Investigation
The merchandise subject to this investigation is PRCBs which may be referred to as t-shirt sacks, merchandise bags, grocery bags, or checkout bags. The subject merchandise is defined as non-sealable sacks and bags with handles (including drawstrings), without zippers or integral extruded closures, with or without gussets, with or without printing, of polyethylene film having a thickness no greater than .035 inch (0.889 mm) and no less than .00035 inch (0.00889 mm), and with no length or width shorter than 6 inches (15.24 cm) or longer than 40 inches (101.6 cm). The depth of the bag may be shorter than 6 inches but not longer than 40 inches (101.6 cm).
PRCBs are typically provided without any consumer packaging and free of charge by retail establishments (e.g., grocery, drug, convenience, department, specialty retail, discount stores, and restaurants) to their customers to package and carry their purchased products. The scope of the investigation excludes (1) polyethylene bags that are not printed with logos or store names and that are closeable with drawstrings made of polyethylene film and (2) polyethylene bags that are packed in consumer packaging with printing that refers to specific end-uses other than packaging and carrying merchandise from retail establishments (e.g., garbage bags, lawn bags, trash-can liners).
Imports of the subject merchandise are classified under statistical category 3923.21.0090 of the Harmonized Tariff Schedule of the United States (HTSUS). This subheading also covers products that are outside the scope of this investigation. Furthermore, although the HTSUS subheading is provided for convenience and customs purposes, our written description of the scope of this investigation is dispositive.
Selection of Respondents
Section 777A(c)(1) of the Act directs the Department to calculate individual dumping margins for each known exporter and producer of the subject merchandise. Section 777A(c)(2) of the Act gives the Department discretion, when faced with a large number of producers or exporters, to limit its examination to a reasonable number of such companies if it is not practicable to examine all companies.
On July 14, 2003, the Department sent a partial Section A questionnaire to all producers/exporters of the subject merchandise named in the petition and to the exporters who represent 80 percent of exporters of subject merchandise in terms of quantity imported (in thousands of units) into the United States according to data from CBP. We also sent the partial questionnaire to the Chinese government and asked for its assistance in delivering the questionnaire to all producers and exporters of the subject merchandise. We received responses from 39 firms that reported exports of subject merchandise during the POI.
There is no data on the record that indicates conclusively the number of producers or exporters from the PRC which exported the subject merchandise to the United States during the POI. Having received 39 responses from producers or exporters to our partial Section A questionnaire, we determined that we had the resources to examine a maximum of nine of the companies. We found it appropriate to select the largest producers/exporters of the subject merchandise from the 39 companies in order to cover the greatest possible export volume of the merchandise. Thus, we selected Hang Lung, United Wah, Nantong, Rally Plastics, Senetex, Glopack, Tai Chiuan, Ming Pak, and Zhongshan as our mandatory respondents. See Memorandum from Laurie Parkhill to Jeff May regarding selection of respondents, dated August 14, 2003.
Non-Market-Economy Country Status
The Department has treated the PRC as a non-market-economy (NME) country in all past antidumping investigations (see, e.g., Final Determination of Sales at Less Than Fair Value: Creatine Monohydrate from the People's Republic of China, 64 FR 71104 (December 20, 1999), and Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushrooms from the People's Republic of China, 63 FR 72255 (December 31, 1998)). 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 investigation has requested a revocation of NME status for the PRC. Therefore, we have preliminarily determined to continue to treat the PRC as an NME. When we investigate imports from an NME, section 773(c)(1) of the Act directs us to base the normal value on the NME producer's factors of production, valued in a market economy that is 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 deposit rate. In this case, the mandatory respondents Hang Lung, United Wah, Nantong, Rally Plastics, Senetex, Glopack, Ming Pak, and Zhongshan have requested separate company-specific rates. In addition, Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, Guangdong Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial, Start Printed Page 3547Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have requested separate rates.
It is the Department's policy to treat Hong Kong companies as market-economy companies. See Application of U.S. Antidumping and Countervailing Duty Laws to Hong Kong, 62 FR 42965 (August 11, 1997). Based on a review of the Section A responses, we have concluded that Good-in Holdings, Hang Lung, United Wah, Nan Sing, Rally Plastics, and Zhongshan are companies based in Hong Kong. Therefore, we determine that no separate-rate analysis is required for these companies.
Shanghai Glopack Packing Limited (Shanghai Glopack), an exporter with no PRC ownership, reported that it is affiliated with Sea Lake Polyethylene Enterprise Limited (Sea Lake), a Hong Kong-based company with no PRC ownership. Shanghai Glopack is controlled by the Law family, the family that also owns Sea Lake. See Glopack's Section A Response, dated September 11, 2003, at page 2. Because of these circumstances, we determine that no separate-rate analysis is required for Glopack.
In its Section A Response, dated September 11, 2003, on page A-4, Senetex claimed that it was not a PRC entity. We asked for documentation of company ownership in the November 20, 2003, supplemental questionnaire that we issued to that company. Instead of filing a response to the questionnaire, Senetex filed a letter on December 3, 2003, in which it stated that it no longer wished to participate in the investigation, including verification of the company's responses. Because the record does not establish clearly that Senetex is a non-PRC entity and because we are unable to verify information on this matter, we do not find that Senetex is entitled to a separate rate.
With respect to the companies based in China, in order to establish whether a company operating in an NME country is sufficiently independent to be eligible for a separate rate, it must establish an absence of governmental control on both a de jure and a de facto basis. In determining whether a company meets this requirement, 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) (Silicon Carbide). Under this test, the Department assigns separate rates in NME cases only if an exporter can demonstrate the absence of both de jure and de facto governmental control over its export activities. See Silicon Carbide.
De Jure Control
In determining whether there is an absence of de jure government control, the Department considers the following: (1) an absence of restrictive stipulations associated with an individual exporter's business and export licenses; (2) any legislative enactments decentralizing control of companies; (3) any other formal measures by the government decentralizing control of companies. See id. In this case, the mandatory respondents Nantong and Ming Pak provided evidence on the record that indicates that their export activities are not controlled by the government. In addition, evidence on the record indicates that the export activities of the following companies are also not controlled by the government: Beijing Lianbin, Dongguan Zhongqiao, Guangdong Esquel, Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial, Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong (collectively the Section A respondents).
The respondents have placed a number of documents on the record to demonstrate absence of de jure government control, including “Foreign Trade Law of the People's Republic of China” (Foreign Trade Law), “Company Law of the PRC” (Company Law), the “Administrative Regulations of the People's Republic of China Governing the Registration of Legal Corporations” (Administrative Regulations), and the “Law of the People's Republic of China on Industrial Enterprises Owned by the Whole People” (Industrial Enterprise Law). These laws indicate that the government lacks control over privately owned companies, such as Nantong or Ming Pak, and that these enterprises retain control over themselves.
The Department has analyzed these laws in prior cases and found that they establish an absence of de jure control. See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Partial-Extension Steel Drawer Slides With Rollers From the People's Republic of China, 60 FR 29571 (June 5, 1995), and Final Determination of Sales at Less Than Fair Value: Certain Preserved Mushrooms From the People's Republic of China, 63 FR 72255 (December 31, 1998). We have no new information in this proceeding which would cause us to reconsider this determination.
Accordingly, we preliminarily determine that there is an absence of de jure government control over export pricing and marketing decisions of the respondents identified in paragraph one of this section.
De Facto Control
The Department typically considers the following four factors in evaluating whether each respondent is subject to de facto governmental control of its export functions: (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; (4) whether each exporter has autonomy from the government regarding the selection of management. See id.
With respect to the absence of de facto government control over the export activities of the companies investigated and those which applied for a separate rate, evidence on the record indicates that the government has no involvement in the determination of export prices, profit distribution, marketing strategy, and contract negotiations with regard to Nantong, Ming Pak, or any of the Section A respondents. Our analysis indicates that there is no government involvement in the daily operations or the selection of management for these companies. In addition, we found that these companies' pricing and export strategy decisions are not subject to any governmental review or approval and that there are no governmental policy directives that affect these decisions.
Consequently, because evidence on the record indicates an absence of government control, both in law and in fact, over the export activities of all the companies named above, we preliminarily determine that these companies have met the requirements for receiving a separate rate for purposes of this investigation.
Margins for Cooperative Exporters Not Selected
Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, Guangdong Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial, Start Printed Page 3548Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong have requested separate company-specific rates. These parties responded to Section A of the Department's antidumping questionnaire but were not selected as respondents in this investigation. They provided information to the Department, in a timely manner, for a separate-rate analysis. Although we are unable to calculate a company-specific rate for these companies due to administrative constraints (see Memorandum from Laurie Parkhill to Jeff May regarding selection of respondents, dated August 14, 2003), they cooperated in providing the information that we requested. Thus, we have calculated a weighted-average margin for these companies based on the rates we calculated for the selected respondents (see Memorandum from Thomas Schauer to the File regarding calculation of the adverse-facts-available and non-adverse-facts-available margins dated January 16, 2004). See, e.g., Notice of Final Determination of Sales at Less Than Fair Value: Freshwater Crawfish Tail Meat From the People's Republic of China, 62 FR 41347, 41350 (August 1, 1997). Companies receiving this “all others” rate of 12.71 percent are identified by name in the “Suspension of Liquidation” section of this notice.
The PRC-Wide Rate
All exporters were given the opportunity to respond to the Department's questionnaire. As explained above, we received responses to the full questionnaire from Hang Lung, United Wah, Nantong, Rally Plastics, Senetex, Glopack, Ming Pak, and Zhongshan. We have received responses to Section A of our questionnaire from Beijing Lianbin, Dongguan Zhongqiao, Good-in Holdings, Guangdong Esquel, Nan Sing, Ningbo Fanrong, Ningbo Huansen, Rain Continent, Shanghai Dazhi, Shanghai Fangsheng, Shanghai Jingtai, Shanghai Light Industrial, Shanghai Minmetals, Shanghai New Ai Lian, Shanghai Overseas, Shanghai Yafu, Weihai Weiquan, Xiamen Xingyatai, and Xinhui Henglong. Tai Chiuan, a mandatory respondent, did not respond to our full questionnaire and withdrew itself from this investigation on September 8, 2003; its response to our July 14, 2003, questionnaire indicated it exported the subject merchandise to the United States during the POI. Another mandatory respondent, Senetex, responded to our full questionnaire but then refused to file a response to a supplemental questionnaire and withdrew its participation in the investigation. Thus, we preliminarily determine that these two PRC exporters of PRCBs failed to respond to our requests for information. Moreover, we assume that the firms which received our July 14, 2003, questionnaire but did not respond to it (see the “Case History” section above) also exported the subject merchandise to the United States during the POI. In addition, we obtained data from CBP that indicated that a number of these companies may have exported the subject merchandise to the United States during the POI. Consequently, we are applying a single antidumping rate the PRC-wide rate to all other exporters in the PRC based on our presumption that those respondents which failed to demonstrate entitlement to a separate rate constitute a single enterprise under common control by the Chinese government. See, e.g., Final Determination of Sales at Less Than Fair Value: Synthetic Indigo from the People's Republic of China, 65 FR 25706, 25707 (May 3, 2000). The PRC-wide rate applies to all entries of subject merchandise except for entries from companies which we have preliminarily determined to have met the requirements for receiving a separate rate for purposes of this investigation.
Use of Facts Otherwise Available
Section 776(a)(2) of the Act provides that, if an interested party withholds information that has been requested by the Department, fails to provide such information in a timely manner or in the form or manner requested, significantly impedes a proceeding under the antidumping statute, or provides such information but the information cannot be verified, the Department shall, subject to sections 782(d) and (e) of the Act, use facts otherwise available in reaching the applicable determination.
Section 776(a)(2)(B) of the Act requires the Department to use facts available when a party does not provide the Department with information by the established deadline or in the form and manner requested by the Department. In addition, 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 that party as facts otherwise available.
As explained above, the exporters comprising the single PRC-wide entity failed to respond to the Department's requests for information. Pursuant to section 776(a) of the Act, in reaching our preliminary determination, we have used total facts available for the PRC-wide rate because we did not receive the data needed to calculate a margin for that entity. Also, because the exporters comprising the PRC-wide entity failed to respond to our requests for information, we have found that the PRC-wide entity failed to cooperate to the best of its ability. Therefore, pursuant to section 776(b) of the Act, we have used an adverse inference in selecting from the facts available for the margin for that entity. As adverse facts available, we have recalculated the four margins that the petitioners alleged in their June 20, 2003, petition using the surrogate values that we selected for the preliminary determination and selecting the highest of the four margins, since the margins derived from the information in the petition exceed those we calculated for the respondent companies. For details on this calculation, see the Memorandum from Thomas Schauer to the File regarding calculation of the adverse-facts-available and non-adverse-facts-available margins dated January 16, 2004.
In addition, we have determined that the use of a partial adverse inference is warranted for certain U.S. sales reported by Zhongshan. On January 12, 2004, four days before the due date of our preliminary determination, Zhongshan submitted information in which it disclosed that an affiliation relationship existed between it and a Hong Kong reseller. Because the timing of Zhongshan's submission precluded us from analyzing this affiliation completely or from requesting additional information pertaining to the matter for purposes of this preliminary determination, we found that Zhongshan had failed to cooperate to the best of its ability in responding to our requests for information. Accordingly, we have applied the adverse-facts-available rate, as described above, to all of Zhongshan's sales of subject merchandise through this Hong Kong reseller in our calculations for this preliminary determination. The Department will evaluate whether the submitted information should be used for purposes of the final determination. For a detailed discussion of this matter, see the calculation memorandum with respect to Zhongshan dated January 16, 2004.
We have preliminarily determined to use facts otherwise available for all sales reported by Nantong. In our original and supplemental questionnaires, we requested that Nantong report its factors-of-production information on a product-specific basis. On January 12, 2004, Nantong clarified that its usual Start Printed Page 3549business practices did not permit it to allocate its use of inputs on this basis and that, therefore, it could only provide factor information on a more generalized basis. We have concluded that we are unable to calculate a margin because, as provided, the factor information is distortive of the amount of raw material inputs used in the production of the various reported products. Thus, pursuant to section 776(a) of the Act, we have determined to use total facts available for Nantong's sales. We have found that an adverse inference is not warranted in the selection of the facts available since Nantong provided timely responses to all of our requests for information and, without evidence to the contrary, acted to the best of its ability to provide the requested factors-of-production information. Therefore, pending our findings at verification, we have concluded that an adverse inference, pursuant to section 776(b) of the Act, is not warranted. Consequently, we have applied the “all others” rate to Nantong's sales as the facts otherwise available. For a more detailed discussion of this matter, see the calculation memorandum with respect to Nantong dated January 16, 2004.
Section 776(c) of the Act provides that, where the Department selects from among the facts otherwise available and relies on “secondary information,” such as the petition, the Department shall, to the extent practicable, corroborate that information from independent sources reasonably at the Department's disposal. The Statement of Administrative Action accompanying the URAA, H.R. Doc. No. 103-316 (1994) (SAA), states that “corroborate” means to determine that the information used has probative value. See SAA at 870.
The petitioners' methodology for calculating the export price and normal value in the petition is discussed in the initiation notice. See Initiation Notice, 68 FR at 42003. To corroborate the recalculated margin of 80.52 percent, we compared that margin to the margins we found for one of the respondents.
As discussed in the Memorandum to the File regarding the corroboration of facts available, dated January 16, 2004, we found that the margin of 80.52 percent has probative value. Accordingly, we find that the highest margin, based on petition information and adjusted as described above, of 80.52 percent is corroborated within the meaning of section 776(c) of the Act.
Accordingly, for the preliminary determination, the PRC-wide rate is 80.52 percent. Because this is a preliminary margin, the Department will consider all margins on the record at the time of the final determination for the purpose of determining the most appropriate final PRC-wide margin.
When the Department is investigating imports from an NME country, section 773(c)(1) of the Act directs that normal value, in most circumstances, be based 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 sources of the surrogate factor values are discussed in the “Normal Value” section below.
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 regarding surrogate-country selection dated August 25, 2003. Customarily, we 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 that we have reliable data from India that we can use to value the factors of production. Furthermore, every party that submitted factor-valuation data provided data from India and no party argued that we should use another country as the surrogate country.
We have selected India as the surrogate country and, accordingly, we have calculated normal value using Indian prices when available and appropriate to value the factors of production of the PRCBs producers. We have obtained and relied upon publicly available information wherever possible. See the Memorandum from Jeff Frank to the File regarding surrogate-country selection and factor valuations dated January 16, 2004 (Factor Valuation Memorandum).
In accordance with section 351.301(c)(3)(i) of the Department's regulations, for the final determination in an antidumping investigation, interested parties may submit publicly available information to value factors of production within 40 days of the date of publication of this preliminary determination.
Fair Value Comparisons
To determine whether sales of PRCBs to the United States were made at less than fair value, we compared export price or constructed export price to normal value, as described in the “U.S. Price” and “Normal Value” sections of this notice below. In accordance with section 777A(d)(1)(A)(i) of the Act, we calculated weighted-average export prices and constructed export prices.
In making the product comparisons, we determined what products constituted a unique model based on the following physical characteristics reported by the respondents: 1) quality, 2) bag type, 3) length, 4) width, 5) gusset, 6) thickness, 7) percent of high-density polyethylene resin, 8) percent of low-density polyethylene resin, 9) percent of low-linear-density polyethylene resin, 10) percent of color concentrate, 11) percent of ink coverage, 12) number of ink colors, 13) number of sides printed.
In accordance with section 772(a) of the Act, we used export price for Hang Lung, Rally Plastics, Ming Pak, and Zhongshan 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 indicated. In accordance with section 772(b) of the Act, we used constructed export price for United Wah and Glopack because the subject merchandise was sold in the United States after the date of importation by a U.S. seller affiliated with the producer. In accordance with section 777A(d)(1)(A)(i) of the Act, we compared POI-wide weighted-average export prices and constructed export prices to the normal values.
We calculated export price and constructed export price based on the packed F.O.B., C.I.F., or delivered price to unaffiliated purchasers in, or for exportation to, the United States. We made deductions, as appropriate, for discounts and rebates. We also made deductions for any movement expenses in accordance with section 772(c)(2)(A) of the Act.
In accordance with section 772(d)(1) of the Act and the SAA at 823-824, we calculated the constructed export price by deducting selling expenses associated with economic activities occurring in the United States, which includes commissions, direct selling expenses, and indirect selling expenses. For United Wah, we also deducted the cost of further manufacturing in accordance with section 772(d)(2) of the Start Printed Page 3550Act. Finally, we made an adjustment for profit allocated to these expenses in accordance with section 772(d)(3) of the Act.
Section 773(c)(1) of the Act provides that the Department shall determine the normal value 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 normal value 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 reported factors of production for materials, energy, labor, 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 normal value. See also Lasko Metal Products v. United States, 43 F.3d 1442, 1445-1446 (Fed. Cir. 1994). A number of respondents reported that some of their inputs were purchased from market economies and paid for in market-economy currency. See the “Factor Valuations” section below.
In accordance with section 773(c) of the Act, we calculated normal value based on factors of production reported by respondents for the POI. To calculate normal value, we multiplied the reported per-unit factor quantities by publicly available Indian surrogate values (except as described 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 respondents, see the Factor Valuation Memorandum. For a detailed description of all actual values used for market-economy inputs, see the company-specific calculation memoranda dated January 16, 2004.
Because we used Indian import values to value inputs purchased domestically by the Chinese producers, we added surrogate freight costs to the calculated surrogate values. We calculated the freight costs by selecting the shorter of the reported distances from a domestic supplier to the factory or the distance from the nearest seaport to the factory in accordance with the decision by the Court of Appeals for the Federal Circuit in Sigma Corp. v. United States, 117 F. 3d 1401 (Fed. Cir. 1997). Because some of the values were not contemporaneous with the POI, we adjusted those values for inflation using wholesale price indices published in the International Monetary Fund's International Financial Statistics.
Except as described below, we valued raw material inputs using the weighted-average unit import values derived from Indian import data available from the World Trade Atlas (Internet Version, maintained by Global Trade Information Services, Incorporated) (Indian Import Statistics) for the period October 2002 through March 2003.
As explained above, a number of respondents purchased certain raw material inputs from market-economy suppliers and paid for them in market-economy currencies. The respondents provided evidence that indicated they paid for their market-economy purchases of inputs in a market-economy currency. Therefore, in accordance with 19 CFR 351.408(c)(1), the Department has determined to use the market-economy prices as reported by the respondents in order to value these inputs in instances where the inputs were obtained from both market-economy and NME suppliers because the market-economy inputs represent a significant quantity of the inputs and they were paid for in a market-economy currency.
Furthermore, with regard to both the Indian import-based surrogate values and the market-economy input values, we have disregarded prices that we have reason to believe or suspect may be subsidized. We have reason to believe or suspect that prices of inputs from India, Indonesia, South Korea, and Thailand may have been subsidized. We have found in other proceedings that these countries maintain broadly available, non-industry-specific export subsidies and, therefore, it is reasonable to infer that all exports to all markets from these countries are subsidized. See Certain Helical Spring Lock Washers from the People's Republic of China; Final Results of Administrative Review, 61 FR 66255 (December 17, 1996), at Comment 1. We are also directed by the legislative history not to conduct a formal investigation to ensure that such prices are not subsidized. See H.R. Rep. 100-576 at 590 (1988). Rather, the Department was instructed by Congress to base its decision on information that is available to it at the time it is making its determination. Therefore, we have not used prices from these countries either in calculating the Indian import-based surrogate values or in calculating market-economy input values. In instances where a market-economy input was obtained solely from suppliers located in these countries, we used Indian import-based surrogate values to value the input.
Rally Plastics, Hang Lung, and Ming Pak reported the use of recycled resin scrap in the production of its subject merchandise. Because the scrap represented the re-use of purchased raw materials, we only valued the labor and electricity used to recycle the scrap when valuing this input.
Zhongshan reported amounts of resin scrap produced as a result of the production of subject merchandise. We valued the scrap by using Indian Import Statistics for imports of polyethylene scrap and thereby granted a by-product offset for the scrap. We intend to examine the issue of this offset more closely at verification.
To value electricity, we used data from the International Energy Agency's Key World Energy Statistics (2003 edition). Submitted by the petitioners in Exhibit 5 of their November 20, 2003, submission, this information is contemporaneous with the POI.
The respondents also reported packing inputs. We used Indian Import Statistics data from the period October 2002 through March 2003 to value these inputs except where respondents obtained the inputs from market-economy suppliers and paid for them in a market-economy currency.
We used Indian transport information in order to value the transportation of raw materials. To calculate domestic inland freight for trucking services, we selected the week of January 1, 2003, the week in the middle of the POI, and obtained freight values from the website www.infreight.com. We converted the Indian Rupee value into U.S. dollars. To calculate domestic inland freight for rail services, we relied upon a rate used in the Final Results of Antidumping Administrative Review of Bulk Aspirin from the People's Republic of China, 68 FR 48337 (August 13, 2003). We adjusted the rate for inflation and converted the Rupee value to U.S. dollars. Some inputs were transported by market-economy transportation firms and paid for in a market-economy currency. Where this was the case, we added the actual market-economy Start Printed Page 3551transportation expense to the valuation of the factor of production.
For NME-supplied marine insurance, we relied upon a rate calculated in the LTFV investigation of certain color television receivers from the PRC. See the Calculations Performed for Xiamen Overseas Chinese Electronic Company, Limited, Memorandum, dated November 21, 2003, at Attachment IX. Because the rate we used is contemporaneous with the POI and in U.S. dollars, we did not need to adjust it for our calculations. As is customary in the marine insurance industry, we applied the rate to 110 percent of the value of the cargo.
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, Smitabh Intercon Ltd. For a detailed 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 website, http://ia.ita.doc.gov/wages/corrected00wages/corrected00wages.htm. The source of the wage-rate data on the Import Administration's website is the International Labour Organization's Yearbook of Labour Statistics 2001.
We made currency conversions into U.S. dollars in accordance with section 773A(a) of the Act based on the exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank.
As provided in section 782(i) of the Act, we will verify the information upon which we will rely in making our final determination.
Suspension of Liquidation
In accordance with section 733(d) of the Act, we are directing CBP to suspend liquidation of all imports of subject merchandise from the PRC that are entered, or withdrawn from warehouse, for consumption on or after the date of publication of this notice in the Federal Register. We will instruct CBP to require a cash deposit or the posting of a bond equal to the weighted-average amount by which the normal value exceeds the export price or the constructed export price, as indicated in the chart below except for Hang Lung. Because the estimated weighted-average amount for Hang Lung is de minimis, we are not directing CBP to suspend liquidation of entries of its merchandise. In this instance, the Department shall not require a deposit or posting of bond. These suspension-of-liquidation instructions will remain in effect until further notice. The weighted-average dumping margins are as follows:
|Exporter or Producer||Weighted-average percent margin|
|Shanghai Light Industrial||12.71|
|Shanghai New Ai Lian||12.71|
The PRC-wide rate applies to all entries of the subject merchandise produced in the PRC except for entries from exporters or producers that are identified individually above.
International Trade Commission Notification
In accordance with section 733(f) of the Act, we have notified the ITC of our determination of sales at LTFV. Section 735(b)(2) requires that the ITC make a final determination before the later of 120 days after the date of the Department's preliminary determination or 45 days after the Department's final determination whether the domestic industry in the United States is materially injured, or threatened with material injury, by reason of imports, or sales (or the likelihood of sales) for importation, of the subject merchandise. Because we have postponed the deadline for our final determination to 135 days from the date of publication of this preliminary determination, the ITC will make its final determination within 45 days of our final determination.
Case briefs or other written comments may be submitted to the Assistant Secretary for Import Administration no later than seven days after the date of the final verification report issued in this proceeding and rebuttal briefs, limited to issues raised in case briefs, no later than five days after the deadline date for case briefs. A list of authorities Start Printed Page 3552used and an executive summary of issues should accompany any briefs submitted to the Department. This summary should be limited to five pages total, including footnotes. In accordance with section 774 of the Act, we will hold a public hearing, if requested, to afford interested parties an opportunity to comment on arguments raised in case or rebuttal briefs. Tentatively, any hearing will be held three days after the deadline for submission of the rebuttal briefs at the U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230, at a time and location to be determined. Parties should confirm by telephone the date, time, and location of the hearing two days before the scheduled date. 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, U.S. Department of Commerce, Room 1870, within 30 days of the date of publication of this notice. See 19 CFR 351.310(c). Requests 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. At the hearing, each party may make an affirmative presentation only on issues raised in that party's case brief and may make rebuttal presentations only on arguments included in that party's rebuttal brief. See 19 CFR 351.310(c).
We will make our final determination no later than 135 days after the date of publication of the preliminary determination.
This determination is issued and published in accordance with sections 733(f) and 777(i)(1) of the Act.Start Signature
Dated: January 16, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-1574 Filed 1-23-04; 8:45 am]
BILLING CODE 3510-DS-S